The Immigration Reform and Control Act of 1986 (IRCA) requires all employers to verify the employment eligibility of their employees and imposes significant penalties for employing unauthorized workers. See 8 U.S.C. § 1324a. The challenge for employers is that they may neither ask too many questions, nor too few. Failing to ask for enough information exposes employers to penalties under IRCA. Asking impermissible questions concerning an employee’s ethnic heritage or national origin exposes employers to damages under the discrimination laws. With the number of government investigations steadily increasing, the purpose of this article is to highlight IRCA compliance in order to strike the proper balance.

Completing the I-9 Form

Compliance with IRCA begins and ends with the accurate completion and retention of I-9 forms. Even an employer not shown to have hired undocumented workers is subject to fines under IRCA for any errors or blank sections on the I-9 form. A completed I-9 form must be retained for all employees (citizens and noncitizens) hired after Nov. 6, 1986. The form I-9 verification process must begin after an applicant has accepted a job offer.

To properly complete Section One of Form I-9, the employee must first attest that he or she is a U.S. citizen, lawful permanent resident, a noncitizen national or alien authorized to work in the United States. The employee must also indicate whether the employment authorization expires and, if so, provide an expiration date. Critically, an employer may not request documentation to verify the information provided by the employee in Section One. See Handbook for Employers, Instructions for Completing the Form I-9 (M-274) at www.uscis.gov/files/form/m-274.pdf. If the employer seeks more information than it is permitted to seek or possess, it may be in violation of the Immigration and Nationality Act’s anti-discrimination provision, which prohibits employers from placing additional burdens on work-authorized employees during the hiring and employment eligibility verification process, based on their citizenship status or national origin.

Typically, the employment verification process must be completed by the employer within three business days of the employee’s first day of work. 8 C.F.R. § 274a.2(b)(1)(ii). The first step of the verification process requires an employee to present an original document or documents evidencing his or her identity and authorization to work in the United States. The employer or employer’s representative must review the documents presented in person to confirm that they belong to the presenting employee and to make certain that the documents are consistent with the information provided by the employee in Section One. The employee must be allowed to choose from the list of acceptable documents set forth on the I-9 Form and cannot be required to provide a specific document.

In section two of Form I-9, the employer must attest that the required documents were inspected and appeared to be genuine on their face. For each document presented, the employer must record the type of document, its source and its expiration date. Failure to prepare an I-9 at all is among the most serious paperwork violations. See United States v. Reyes, 4 OCAHO no. 592, 1, 10 (1994).

Employers are permitted, but not required, to retain copies of documents presented and attach them to the completed I-9 form. There are both pros and cons for retaining copies of the documents. On the one hand, a copy of the documents presented may be used to show that the employer reasonably believed the employee was authorized to work in the United States. On the other hand, the documentation could be used against the employer to show the proper documents were not presented. Under either scenario, it is important that an employer apply the policy in a consistent manner to all employees, citizens and noncitizens alike.

Reverification

Some employment authorizations for noncitizens expire. Employers are required to reverify employment authorizations for all employees with time-limited employment authorizations. An employer will be deemed to have constructive knowledge that it is continuing to employ an unauthorized worker if it fails to conduct a reverification. As a matter of practice, employers should keep track of when an employee’s employment authorization expires so that re-verification occurs no later than the date the employment authorization expires.

Retention

Acompleted Form I-9 must be kept on file for all current employees. Once the person’s employment has terminated, an employer must keep a copy of the completed Form I-9 for either three years from the date of hire, or one year after the date of termination, whichever is later . I-9 forms should be maintained in a separate file apart from an employee’s personnel documents. Separate I-9 files facilitate responding to government audits, performing reverifications and internal audits.

An employer may retain I-9 forms in paper format, electronically or a combination of paper and electronic system. Employers are permitted to complete, sign and store I-9 forms electronically. The electronic storage system used must include: 1) reasonable controls to ensure the integrity, accuracy and reliability of the electronic storage system; 2) reasonable controls designed to prevent and detect the unauthorized or accidental creation of, addition to, alteration of, deletion of, or deterioration of an electronic Form I-9, including the electronic signature, if used; 3) an inspection and quality assurance program that regularly evaluates the electronic generation or storage system and includes periodic checks of electronically stored I-9′s, including the electronic signature, if used; 4) a retrieval system that includes an indexing system that permits searches by any data element; and 5) the ability to reproduce legible paper copies. See 8 CFR §§ 274a.2(e)-(i). Employers should carefully review the specific security guidelines for electronic retention and completion of I-9 forms.

E-Verify

E-Verify is an Internet-based program that provides employers with access to government databases to check for employment eligibility of new hires. Employers are not currently required to participate in the E-Verify program; however, given that several states, including Arizona, Mississippi, South Carolina and Utah, require all employers to participate in E-Verify, mandatory nationalization of E-Verify is potentially on the horizon. In Chambers of Commerce of the United States of America v. Whiting , No. 09-115 (May 26, 2011), the U.S. Supreme Court upheld the Legal Arizona Works Act (LAWA). LAWA prohibits the unauthorized employment of workers in the state and requires that all employers doing business in Arizona use E-Verify for verification of all new hires. The penalty for employers that violate LAWA includes the suspension of their business license.

I-9 Inspections

Normally, inspections are conducted by Immigration and Customs Enforcement (ICE). Unless the ICE agent presents a warrant, ICE must provide an employer a minimum of three days’ prior notice of an inspection. The inspection process typically starts when ICE issues an employer a Notice of Inspection which requests that the employer produce certain documentation which may include I-9 forms and payroll records. See ICE Fact Sheet: Form I-9 Inspection Overview at www.ice.gov/news/library/factsheets/i9-inspection.htm.

After the inspection, ICE may issue a notice of technical or documentation violation and allow the employer to rebut the notice. However, if ICE determines that the employer knowingly hired or continued to employ undocumented workers, the employer may be fined or subject to criminal prosecution.

Penalties

If an investigation reveals that an employer knowingly hired or continued to employ an unauthorized alien, or failed to comply with the employment eligibility verification requirements, the employer may face civil penalties and/or criminal sanctions. In criminal investigations, a finding that the employer engaged in a “pattern or practice” of hiring unauthorized workers is a misdemeanor punishable by up to six months imprisonment and a fine of up to $3,000 for each unauthorized worker. Knowingly hiring 10 or more unauthorized workers for a period of a year or more is considered a felony and punishable by up to five years imprisonment and/or a fine.

Employers may also face civil penalties which include up to $3,200 for the first offense, and not less than $4,300 or more than $16,000 for each unauthorized alien for subsequent offenses. The following are factors used to determine the amount of the penalty issued: 1) the size of the business; 2) whether there was a good-faith effort to comply; 3) the seriousness of the violation; 4) whether the violation involved undocumented workers; and 5) the history of previous violations.

Best Practices

The good news is that if the foregoing procedures are followed very carefully, an employer who does not know that an employee is not legally permitted to work is immune from liability. To ensure that employers have the benefit of that defense, it is recommended that they conduct, at a minimum, yearly internal audits and training for those employees responsible for I-9 compliance. In addition, employers should establish a clear I-9 compliance policy that serves as guidance for all hiring personnel and maintain a notification procedure for when employment eligibility is due to expire. Employers should consult with counsel if there are any questions or situations that need clarification.