Employer Sanctions

By Ronald J Tasoff of Law Office of Tasoff & Tasoff
November 6, 1996 marks the 10th anniversary of the Immigration Reform and Control Act (IRCA). Although the legislation may be best remembered for its generous "amnesty" for undocumented aliens, of more lasting import were the employer sanction provisions. For the first time the law mandated that all U.S. employers must prepare and maintain certain paperwork regarding newly hired employees' right to work in the United States and penalized employers who knowingly hired or continued to employ aliens who did not have employment authorization from the Immigration and Naturalization Service (INS). IRCA also provided anti-discrimination provisions which took aim at employers who might try to play it safe by not hiring foreign born or foreign looking job applicants despite proper documentation of their right to work in the U.S.

Although well intentioned, ten years later the legislation has done little to ease illegal immigration or document fraud, but has increasingly put U.S. employers at risk for both civil and criminal penalties and financial ruin from work force shut downs, despite their good faith attempts to comply with the law. Simply put, the law requires employers to be deputy INS agents without providing a means for adequate employment authorization verification and penalizes those who are over zealous, sloppy, or too lazy to master the technical rules of INS paperwork completion and the Byzantine world of INS documentation.

The Basics of Employer Sanctions and Anti-Discrimination

All employers regardless of size must verify the identity and employment eligibility of every employee, including U.S. citizens, hired after November 6, 1986 by use of INS "Form I-9".

The paperwork must be properly completed and retained for three years after the termination of employment or one year after termination if the employee was employed for more than three years. I-9s must be made available for inspection by the INS upon three days written notice by INS. Fines for "paperwork" violations range from $100 to $1,000 per employee, whether or not the employee had the legal right to work in the U.S. Additionally, if the employer knows, or has constructive knowledge that an alien does not have (or continues to have) the right to work in the U.S., then the employer can be fined on a first violation from $250 to $2,000 for each unauthorized alien. Fines for subsequent offenses increase to $10,000 per unauthorized alien. However, the threat of criminal prosecution for document fraud, perjury, harboring or a "pattern and practice" of knowingly hiring or continuing to hire unauthorized aliens is far more serious.

There is a administrative procedure for review of civil fines, however often by the time the INS audits the employer's I-9s and has issued subpoenas for other employment records there are only limited avenues for corrective action and fine mitigation available.

On the other hand, both IRCA and Title VII of the Civil Rights Act of 1964 prohibit employment discrimination. Employers with 4 or more employees are prohibited from discriminating against any person (other than an unauthorized alien) in hiring, discharging, or recruiting or referring for a fee because of a person's national origin, or citizenship status. In practice this means that an employer must treat all employees equally when completing Form I-9 or verifying documentation. The employee can choose which acceptable documents they wish to present and an employer cannot require an employee to present more or different documents than required or refuse to accept documents which on their face reasonably appear to be genuine and relate to the person presenting them.

Also employers cannot refuse to hire an alien because the employment authorization document has an expiration date. Fines for the 1st offense range from $250 to $2,000 per individual worker and increase up to $10,000 for subsequent violations. Also back pay, attorneys fees and other penalties can be imposed.

The Last Decade

For the first few years after IRCA was signed into law, the INS focused on educational programs for employers and often gave out warning notices in lieu of fines. However, by 1990 any grace period was over and serious enforcement efforts began. Although complaints are generated from numerous sources including random audits, applications filed with INS, other government agencies, and disgruntled employees, investigations often targeted industries which traditionally rely on undocumented workers (e.g.: the garment industry, hotels and restaurants, construction trades, etc.).

Nevertheless, many of the cases which resulted in fines did not involve the employment of illegal aliens. One employer was fined $144,800 for paperwork violations alone. In another case, a car wash equipment manufacturing company was fined $36,000 because 362 out of 850 employees had not shown adequate proof of employment authorization. And in 1993 Disneyland was assessed nearly $400,000 in fines solely for paperwork violations, although a settlement was reached for payment of a lesser amount.

More recently INS has coordinated efforts with other government agencies such as the Department of Labor, State Employment Offices, and local law enforcement. Not only have second and third time offenders been revisited and fined higher penalties but there have been an increasing number of criminal prosecutions for document fraud, perjury, obstruction of justice, harboring and pattern and practice violations.

However, despite the more serious consequences now encountered for "worksite" violations, employers must be aware of the increased potential for significant fines resulting from violations of the anti-discrimination provisions. By 1993 nearly 3,000 cases were filed by the Office of Special Counsel and over $1,000,000 in back pay was ordered. More recently, several cases have involved settlements in "six figure" amounts.

Given this situation, the employer has found himself in a tighter and tighter squeeze. One of the major problems is that there are numerous types of legal documentation issued by INS which grants employment authorization and there is no central index or agency that an employer can use to verify a document. Compounding the problem, document fraud is now rampant. In some industries employers who have in good faith tried to comply with the law often discover that a significant proportion of their work force is unauthorized after the INS has done a "worksite survey".

They must act in a reasonable manner, take corrective action and terminate all employees who cannot prove that they have the legal right to work. However, INS and Social Security data systems are not infallible. Even more complexing is the situation when the employer has a suspicion that the worker is not authorized - a notice from Social Security or the IRS that the employee's social security number does not match their records - or the employee presents a new document now claimed to is bona fide, admitting that previously submitted documentation was fraudulent. There are no easy answers.

The Future

Both INS and Congress have recognized that IRCA has not worked out as well as it was hoped. The INS for its part has requested and Congress has granted substantial increased funding for worksite enforcement. In FY 1996 INS received a 24% increase in enforcement funding with a substantial portion allocated to employer sanctions enforcement. Proposals promise another 500 to 900 investigators over the next 3 years plus additional staff to beef up prosecutions.

The INS has also set up several new programs. In Orange County the INS has established a pilot program originally set up for 200 Southern California companies to use a computer tie-in to verify whether new employees are legally authorized to work. "Operation Jobs" in Dallas, Texas involves INS helping cooperating employers identify undocumented workers on their payroll and assists them in locating legal workers. Both programs have received good reviews from the business community are a likely to be expanded.

However, Congress may have some even more drastic changes in store. Proposals include a reduction in the number of documents acceptable for I-9 verification from 29 to 6; voluntary and/or mandatory INS employment authorization verification procedures giving compliant employers a safe haven from anti-discrimination claims; increased civil and criminal penalties for employer sanctions and document fraud violations; and asset forfeiture provisions allowing the government to seize property of any employer who violates certain provisions of the law.

Although well intentioned, employer sanctions have failed to accomplish the goal of reducing illegal immigration by eliminating the lure of attractive jobs in the U.S. Although it is unlikely that in today's political climate the law will be repealed, at least the trend toward higher fines and increased criminalization should be reversed. Lock up the alien smugglers and document counterfeiters, and deport those who violate our immigration laws, but let us remember that the American employer is not a criminal for creating attractive employment opportunities and the duty to "protect our borders" should be shared by all.

TEN TIPS ON COMPLETING FORM I-9

1. COMPLETE I-9 ONLY AFTER EMPLOYMENT OFFER IS MADE.
Although job applicants should be advised that proof of legal right to work in the U.S. will be required before they can start employment, they should only complete the I-9 and be required to present documentation after they are offered the job. Otherwise, a claim could be made that information on the I-9 was used to improperly to discriminate against them in the selection process.

2. MAKE SURE THAT EVERY ITEM IN SECTION 1 IS COMPLETED, SIGNED AND DATED BY EMPLOYEE AT THE TIME EMPLOYMENT BEGINS.
Make sure that every item in Section 1 is completed by the employee at the employment begins and that it is signed and dated.

3. TELL THE TRUTH.
Willfully providing false information on the form is perjury and the employee and employer can also be cited with civil and/or criminal document fraud if they knowingly use or rely on fraudulent documentation.

4. A LAWFUL PERMANENT RESIDENT'S STATUS IS VALID INDEFINITELY.
The employee must complete one of the three boxes indicating citizenship/immigration status. A lawful permanent resident should mark the second box which does not specify an expiration date since their status is valid indefinitely even though their alien registration receipt card ("green card") has an expiration date on it. However conditional permanent residents should mark the third box and state the date their conditional status terminates.

5. KEEP A TICKLER SYSTEM.
The employer should keep a tickler system to warn him prior to the termination of an employee's employment authorization (as stated in Box 3 in Section 1). The employee must provide evidence that the status has been extended prior to expiration (except aliens in A, E, H, J, L, and TN non-immigrant status have an automatic 240 day extension of employment authorization upon filing a timely application for extension).

6. COMPLETE SECTION 2 WITHIN 3 BUSINESS DAYS OF HIRE.
Within 3 business days of hire the employer or its representative must complete, sign and date Section 2 of Form I-9 indicating that acceptable documentation was presented and reviewed by the employer. Copying and attaching the documents is not sufficient. An employer cannot insist upon certain types of documentation or more documentation than is required.

7. THE EMPLOYER CANNOT SPECIFY WHAT ACCEPTABLE DOCUMENTATION THE EMPLOYEE CAN USE.
If the document provided by the employee reasonably appears on its face to be genuine and relates to the person presenting it, the employer must accept it or risk a charge on unlawful discrimination. An employee has up to 90 days to present a document if he presents a receipt within 3 days that an application has been made for the document. However, making an application for employment authorization or legal immigration status from the INS is not acceptable until the authorization or status is granted.

8. MAKE SURE THAT ALL REQUIRED INFORMATION IS STATED ON THE I-9.
Make sure that all required information is stated on the form. Employers can be fined for each I-9 which contains a "technical" error such as not specifying the name of the State issuing a listed driver's license or omitting the name and address of the employer's business.

9. EXEMPTED WORKERS:
Employees hired before November 6, 1986, independent contractors, employees of subcontractors and "persons employed for casual domestic work in a private home on a sporadic, irregular, or intermittent basis" are exempted.

10. TREAT ALL JOB APPLICANTS AND EMPLOYEES EQUALLY
Treat all job applicants and employees equally when it comes to completing the I-9, verifying documentation, hiring criteria and termination of employment.

* Ron Tasoff, a partner in the Encino Law Office of Tasoff and Tasoff, is a certified immigration specialist** and past chair of the Southern California Chapter of the American Immigration Lawyers Association. He is also a trustee of the SFVBA and Editor of Lawyers World.

** State Bar of California Board of Legal Certification

Reprinted with permission, "Lawyers World" magazine, September/October 1996 issue.


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