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Criminalizing Employer Sanctions: Employers Walk a Tightrope
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By Stanley Mailman and Stephen Yale-Loehr** Newspapers have abounded recently with reports of sanctions against companies that have hired foreign workers who are not authorized to work in the United States, including over 400 criminal charges this year alone. After years of relative inactivity on the employer sanctions enforcement front, how did we get here? What are the trend lines? And how can employers make sure they are complying with the law? This article explores the background and the issues, and provides tips for employers on how to comply with immigration rules without violating antidiscrimination laws. Employer Sanctions Background Until 20 years ago it was not illegal for an employer to hire an undocumented worker. That changed with enactment of the Immigration Reform and Control Act of 1986 (IRCA). With respect to employers, IRCA essentially does three things. First, it prohibits employers from knowingly hiring a noncitizen who is not authorized to work for them. Second, an employer must verify the identity and work eligibility of all employees, even if they are U.S. citizens, on an I-9 form, and refuse them employment if they fail to comply with the verification requirements. Third, IRCA's antidiscrimination provisions prohibit an employer from intentionally discriminating in hiring or firing on the basis of an individual's national origin or citizenship status. Immigration and Nationality Act (INA) §§ 274A-274B, 8 U.S.C. § 1324a-1324b. See generally Maurice Roberts & Stephen Yale-Loehr, Employers as Junior Immigration Inspectors: The Impact of the 1986 Immigration Reform and Control Act, 21 Int'l Law. 1013 (1987). We generally refer to these rules as "employer sanctions." Fines for violating the employer sanctions provisions range from $100 for first-time paperwork violations to criminal sanctions (including up to six months in jail) for repeat offenders. INA §§ 274A(e)(5), 274A(f)(1), 8 U.S.C. §§ 1324a(e)(5), 1324a(f)(1). The former Immigration and Naturalization Service (INS) focused its employer sanctions enforcement efforts on administrative fines, not criminal prosecutions. Even those efforts waned over time. For example, the number of notices of intent to fine issued to employers for knowingly hiring unauthorized workers or improperly completing I-9 forms, never a high number, decreased from 417 in fiscal year 1999 to just three in fiscal year 2004. U.S. Government Accountability Office, No. GAO-05-822T, Immigration Enforcement: Preliminary Observations on Employment Verification and Worksite Enforcement Efforts, at 4 (June 21, 2005), at http://www.gao.gov/new.items/d05822t.pdf. Recent Employer Sanctions Prosecutions Everyone agrees that the current system for verifying workers' identity and work eligibility is broken. Congress has proposed significant changes to the employer sanctions regime as part of comprehensive immigration reform legislation. See generally Stanley Mailman & Stephen Yale-Loehr, Immigration Reform: Balancing Workers and Enforcement, N.Y.L.J., Aug. 22, 2005, at 3, reprinted in 10 Bender's Immigr. Bull. 1403 (Sept. 15, 2005). The administration has also signaled its intent to get tough on employer sanctions violators. U.S. Immigration and Customs Enforcement (ICE) has begun what Department of Homeland Security (DHS) Secretary Michael Chertoff calls a "strategic shift" in enforcement by focusing on employers that knowingly or recklessly hire illegal immigrants. Those employers will face criminal charges -- including money-laundering charges -- and seizure of assets rather than administrative fines. "We found that [administrative] fines were not an effective deterrent," Julie L. Myers, Assistant Secretary for ICE, told the New York Times. "Employers treated them as part of the cost of doing business." Julia Preston, U.S. Puts Onus on Employers of Immigrants, N.Y. Times, July 31, 2006, at A6. While the former INS brought 25 criminal charges against employers in 2002, ICE has already arrested 445 employers this year. Id. "Companies that utilize cheap, illegal alien labor as a business model should be on notice. ICE is dramatically enhancing its enforcement efforts against employers that knowingly employ illegal aliens," said Ms. Myers. "Criminal indictments . . . are the future of worksite enforcement." Paul Cuadros, The New Tactics of Immigration Enforcement, Time Magazine, Aug. 7, 2006, at http://www.time.com/time/nation/article/0,8599,1223600,00.html. See generally Thomas C. Green & Ileana M. Ciobanu, Deputizing - and Then Prosecuting - America's Businesses in the Fight Against Illegal Immigration, 43 Am. Cr. L. Rev. 1203 (2006). Proposed DHS SSA "No-Match" Rule Does the new emphasis on prosecuting the worst employer sanctions violators mean that other companies can breathe easy? Not necessarily. Supporting the continuing shift to make all employers more responsible for complying with immigration laws, the DHS recently published proposed regulations addressing what employers should do if they receive a notice from the Social Security Administration (SSA) indicating that an employee's name or social security number doesn't jibe with SSA records. The proposed rule is at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/E6-9303.htm. Each year the SSA sends these notices, known as "no-match" letters, to thousands of U.S. employers. See generally Stanley Mailman & Stephen Yale-Loehr, Social Security "Mismatch Letters" Jeopardize Jobs, N.Y.L.J., June 24, 2002, at 3, reprinted in 7 Bender's Immigr. Bull. 773 (July 1, 2002). Until recently, employers faced few problems if they failed to react to no-match letters. Under the proposed rule, however, no-match letters could serve as "constructive knowledge" that an employee is not authorized to work in the United States. Such a finding would expose employers to employer sanctions penalties. The proposed rule would add two examples of constructive knowledge situations to the existing regulations: where the employer receives written notice from the (1) SSA that the combination of name and SSN submitted for an employee does not match SSA records; or (2) DHS that documentation presented by an employee in completing an I-9 form is invalid. The proposed rule specifies the steps an employer would have to take to constitute a reasonable response to a no-match letter. These "safe harbor" procedures would not always be easy to follow. They include a requirement that employers take specific steps to resolve any discrepancies within 14 days of receipt of the letter, complete a new I-9 form within 60 days of receipt if they fail to resolve the discrepancies, and verify the new information within 63 days of receipt. Otherwise, employers would risk a finding of constructive knowledge that an employee is not authorized to work. The DHS received a number of comments opposing the proposed rule. For example, the American Immigration Lawyers Association (AILA) noted the danger in basing worksite enforcement on a federal database ill-designed for this purpose, particularly given the lack of SSA mechanisms for correcting data discrepancies and the short deadlines given. AILA also argued that the new rule would invite discrimination, in that while it would pressure employers to discharge employees, it failed to provide corresponding immunity against charges of citizenship discrimination even though they resulted from good faith efforts to comply with the safe harbor provisions. AILA, Comment on DHS Docket No. ICEB-2006-0004, Safe-Harbor Procedures for Employers Who Receive a No-Match Letter (Aug. 11, 2006), at http://www.aila.org/content/fileviewer.aspx?docid=20259&linkid=149857. Making many of the same criticisms, the U.S. Chamber of Commerce pointed out that the proposed rule could result in massive firings and the shutdown of businesses around the country. The Chamber also claimed that the rule was premature in view of pending legislation that could obviate the need for such action by establishing a temporary worker program. U.S. Chamber of Commerce, Comment on DHS Docket No. ICEB-2006-0004 - Rulemaking Proceedings on Safe-Harbor Procedures for Employers Who Receive a No-Match Letter (Aug. 14, 2006), at http://bibdaily.com/pdfs/DHS%20No-Match%20Proposed%20Rule%20Comments%208-14-06.pdf. Antidiscrimination Concerns Employers must be careful in complying with employer sanctions. On the one hand, they face government fines or even criminal prosecution if any of their employees are not authorized to work. On the other hand they face possible lawsuits if they ask employees for too much information. A recent case shows the tightrope employers must walk. In Zamora v. Elite Logistics, Inc., 449 F.3d 1106 (10th Cir. 2006), the employer, Elite Logistics, rechecked its employees' documents in anticipation of an immigration investigation. Ramon Zamora, originally from Mexico, had provided a social security card when he was hired months earlier. However, Elite Logistics demanded that Zamora produce I-9 documentation again when it discovered that someone else had used Zamora's social security number in California in 1989, 1995, and 1997. When Zamora produced more documents, including a naturalization certificate, Elite Logistics refused to accept them and suspended Zamora until he produced proof that he was using the correct social security number. Zamora did so, but was fired when he asked for an apology before returning to work. Zamora sued for wrongful discharge, claiming national origin discrimination. The Tenth Circuit held that Zamora had produced enough evidence to go to trial because a jury could determine that Elite Logistics' actions weren't motivated solely by a desire to comply with I-9 requirements. According to the Tenth Circuit, a jury could determine that Elite Logistics was motivated at least in part by Zamora's Mexican heritage. The case was remanded to the trial court, where a jury will decide whether Zamora is entitled to damages. Tips for an Employer Sanctions Compliance Program Here are some tips for employers to toe the line between employer sanctions compliance and antidiscrimination law: • Be pro-active. Set up internal protocols for how your company will handle I-9 forms, including ongoing training. Do regular audits of your I-9 forms. • Do not request specific documents to verify employment eligibility. Instead, let new hires choose from the list of acceptable documents attached to the I-9 form. • Complete section one of the I-9 form on the first day an employee begins work. Do this for all new employees, even if you are convinced they are U.S. citizens. • The remainder of the I-9 form must be completed within three business days. If workers fail to bring the documentation required by the I-9 (or a receipt for replacement documents if they were lost) within that time, you may fire them. • If an employee provides a document that does not satisfy the I-9 requirements, simply return the document and ask for another one from the I-9 list. • Don't accept any documents that are not originals, except as stated on the I-9 form. • If you discover that you didn't receive I-9 forms from all employees, get the proper documentation immediately and only from those people who are actually missing information. Initial any changes. Don't throw out the old I-9 form and do a new form with the old date. • If the documentation provided at hire looks to be genuine on its face, you may not ask for more proof. Doing so can subject you to a national origin discrimination claim. • If you discover evidence that would lead you to believe an employee isn't legal, question her, and provide her with another chance to present proper documentation. • Review your I-9 forms on a regular basis and develop a tracking system for any employment authorization documents that may expire. Update and reverify information. • Treat all employees and job applicants equally. Create a routine drill for all employees, and follow it every time. • Keep all I-9s for three years after the date of hire or one year after the date of dismissal, whichever is later. • When in doubt always consult counsel to avoid exposure and liability. Other resource materials are on the Internet. See, e.g., American Immigration Lawyers Foundation, Resource Lists: Employer Sanctions and "Know Your Rights" (May 1, 2006), at http://www.aila.org/Content/default.aspx?docid=19204 (document no. 06042569). Conclusion Complying with IRCA's employer sanctions provisions has never been easy. See generally Stanley Mailman & Stephen Yale-Loehr, The Complexity of Verifying Work Authorization, N.Y.L.J., Oct. 27, 1997, at 3, reprinted in 2 Bender's Immigr. Bull. 943 (Nov. 15, 1997). Now, facing the specter of criminal prosecution and other enforcement tools, employers can no longer shrug off the immigration rules. The DHS is sending a clear message: exploiters of undocumented labor will face aggressive enforcement. Even companies that observe the verification rules routinely will find the process more taxing as the DHS steps up its regulatory efforts with such enforcement tools as the SSA no-match letters. But lawyers remain aware that unless the government refines its regulations, too many authorized workers will lose their jobs and some employers will inevitably violate the antidiscrimination statutes.. _______________ ** Stanley Mailman and Stephen Yale-Loehr are co-authors of Immigration Law and Procedure, published by LexisNexis Matthew Bender. Mr. Mailman is counsel to Satterlee Stephens Burke & Burke in New York City. Mr. Yale-Loehr is of counsel at Miller Mayer in Ithaca, N.Y., and teaches immigration and asylum law at Cornell Law School.
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