The Immigration and Customs Enforcement, a division of the by xln10969


									        The Immigration and Customs Enforcement, a division of the Department of Homeland
Security, has amended its regulations relating to the unlawful hiring or continued employment of
unauthorized individuals.1 The new regulations – which take effect September 14, 2007 - have
two major provisions. First, they expand the definition of “constructive knowledge” of
unauthorized employment. Second, they describe reasonable steps that an employer should take
after receiving written notice from the Social Security Administration or the Department of
Homeland Security so the receipt of the written notice will not be used as evidence of
constructive knowledge of unauthorized employment.

Background on Unauthorized Employment and “No-Match” Letters:

The Law Prohibiting Unauthorized Employment:

        The Immigration Act of 1986 prohibits employers from unlawfully hiring an individual
not authorized to work or continuing to employ a worker whose employment authorization
expired.2 Specifically, the pertinent part of section 274A (a) of the Immigration and Nationality
Act states:

                 It is unlawful for a person or other entity ----
                          (A)     to hire, or to recruit or refer for a fee, for employment in the
                                  United States an alien knowing the alien is an unauthorized
                                  Alien….with respect to such employment, or
                          (B)     (i) to hire for employment in the United States an individual
                                  without complying with the requirements of [the I-9 employment
                                  verification process]3

        It is also unlawful for a person or other entity, after hiring a person for employment, to
continue to employ the person in the United States knowing the person is (or has become) an
unauthorized with respect to such employment.4 Thus, the law prohibits any form of
unauthorized employment – whether it is known at the time of hiring or during the employment.

        The law prohibits the “knowing” employment of unauthorized employees but it includes
not only “actual knowledge” but also “constructive knowledge”.5 Actual knowledge is first-hand

  The Regulations are available online at
  Pub. L. No. 99-603, 100 Stat. 3359 (Nov. 6, 1986).
  INA § 274A(a)(1).
  INA § 274A(a)(2).
  8 C.F.R. §274a(l)(1).
information that the employer receives either directly from the employee or from the employees’
documentation. Some examples of actual knowledge include the following:6

    1.   The employee tells the employer that he or she is not present in the United States legally;
    2.   The employee that he or she does not have work authorization;
    3.   The employee asks the employer where he can obtain work documents;
    4.   The employer is aware that an employee’s work authorization document has expired and
         that the employee has not obtained renewal documents.

Constructive knowledge is second-hand knowledge which may lead an employer to reasonably
infer that a person is not legally authorized to work in the U.S.7

         The penalties for unauthorized employment are substantial. They include the following:

         1.       Cease and Desist: The government can order a company to cease and desist from
                  any further unauthorized employment;8
         1.       Civil Penalties: An employer can be fined civil penalties ranging from $275 to
                  $2,200 per unauthorized individual for the first violation, $2,200 to $5,500 per
                  unauthorized individual for the second violation and the $3,300 to $11,000 per
                  unauthorized worker for employers with more than two violations; 9
         2.       Criminal Penalties: An employer can also face criminal penalties up to $3,000
                  per unauthorized individual and/or up to 6 months in person if the government
                  finds that there is a “pattern or practice” of unauthorized employment;10 an
                  employer can face up to 5 years in prison if it has actual knowledge of
                  unauthorized employment of at least 10 employees in a 12 month period;11
         3.       Civil Penalties for I-9 Violations: An employer can be fined $110 to
                  $1,100 per person for failing to properly complete the I-9, Employment
                  Verification Form;12
         4.       Asset Forfeiture: The government can seize any assets that an employer used in
                  connection with the unauthorized employment as well as gross proceeds from the
                  services of the unauthorized employee.13

A “No-Match” Letter from the Social Security Administration:

         The Social Security Administration (SSA) collects employee earning reports from
employers through the IRS Wage and Tax statements (Form W-2) so that it can properly
administer social security benefits. When the reports are successfully matched with individual
earnings records, the SSA can calculate future social security benefits such as retirement,
disability and survivor’s benefits.

 See Frequently Asked Questions (FAQ) from Immigration and Customs Enforcement, available online at
  8 C.F.R. § 274a.1(1).
  INA § 274A(e)(4).
  INA § 274A(e)(4).
   INA § 274A(f).
   INA § 274A(a)(3).
   INA § 274A(e)(5).
   INA §274(b)(1).
        Every year, the Social Security Administration (SSA) informs thousands of employers
via an Employer Request Document (a “no-match” letter) that certain employee’s names and
corresponding social security numbers provided on forms W-2 do not match social security
records. The Social Security Administration estimates that as many as 4% of the approximately
250 million wage reports that the SSA receives each year belong to employees whose names and
corresponding social security numbers do not match SSA records.14

       A “no-match” is not an indication that an employee is working illegally. In fact, the “no-
match” can be a result of various factors including the following:15

        1. A clerical error on the part of the employer in reporting the information to the social
            security administration;
        2. A clerical error on the part of the employee in reporting the information to the
        3. A clerical error on the government on putting the data into the system;
        4. Name change of the individual due to marriage or other reason for name change;
        5. A social security number used by an individual not authorized to work in the United
        6. A social security number assigned to someone else but used by someone not
            authorized to work in the U.S.

Until the current regulations, employers had very little guidance on how to respond when it
receives a “no-match” letter from the Social Security Administration.

Impact of the New Regulations:

Expansion of Constructive Knowledge:

          The new regulations expand the definition of constructive knowledge. The regulations
have always provided that constructive knowledge could include, but not be limited to, failure t
complete or properly complete the Employment Eligibility Verification Form (I-9) or acting with
reckless and wanton disregard for the legal consequences of permitting another individual to
introduce an unauthorized alien who is not employment authorized.16 Now, the regulations also
deem that an employer can have constructive knowledge of unauthorized employment when it
fails to take reasonable steps to ascertain employment authorization after receiving the following
information that the employee may not be employment authorized: 17

     1. An employee’s request that the employer file a labor certification or employment-based
        visa petition on behalf of the employee;
     2. Written notice to the employer from the Social Security Administration….that
        employee’s names and corresponding social security account numbers fail to match
        Social Security Administration records; or
     3. Written notice to the employer from the Department of Homeland Security that the
        immigration status document or employment authorization document….is assigned to

   See comments to regulations, available
   See Frequently Asked Questions (FAQ) from Immigration and Customs Enforcement, available online at
   8 C.F.R. 274a.1(l)(1).
   8 C.F.R. 274a.1(l)(1)(iii).
           another person, or that there is no agency record that the document has been assigned to
           any person.

Safe Harbor Procedures:

         The regulations make it clear that if an employer ignores the “no-match” letter it will be
viewed as constructive knowledge of unauthorized employment. The regulations provide
guidance (referred to as safe harbor procedures) for an employer that receives a “no-match” letter
from the Social Security Administration. The steps and the timeframe for the employer are
illustrated in the following table:18

Action                                                                      Timeframe
Employer receives letter from SSA indicating mismatch of employees          Day 0
name and social security number
Employer checks its own records to see if it was a clerical error on its    0 – 30 days
part. If it is, the employer must make the necessary correction and
inform SSA. The employer should also verify that SSA makes the
correction (the verification can be done through the verification tool of
the SSA, called SSVNS)
If the employer does not find an error in its own records, the employer     0 – 90 days
must notify the employee and ask the employee to assist in a correction.
     a). If the employee acknowledges the error and provides the
         correction then the employer must submit that correction to the
         SSA and verify that the records at the SSA are updated with the
         correct information;
     b). If the employee says the records are correct then the employer
         must inform the employee to resolve the discrepancy with the
         SSA within 90 days of receipt of the “no-match” letter
If the employer is unable to verify through the SSA within 90 days of       90-93 days
receiving the written notice that the employee’s name and social
security account number matches the SSA records, the employer must
verify the employee’s employment authorization and identity within
three days of the 90 days after receiving the initial written notice from
SSA. In the re-verification process the employer can NOT accept any
of the following as proof of employment authorization or identity:
    a) A document referenced in the written notice from DHS;
    b) A document that contains a disputed social security number or
       alien number referenced in any written notice from SSA or DHS;
    c) A receipt for an application for a replacement document

        An employer may receive notice not only from the SSA, but also from the Department of
Homeland Security (DHS). The DHS issues a “Notice of Suspect Documents” it if finds during
an I-9 audit that the employee’s documents used for I-9 purposes do not match the DHS records.

        The regulations instruct employers to follow the instructions on the notice from the DHS
and attempt to resolve the issue about the immigration status documents or the employment
authorization document. The employer must contact the DHS and attempt to resolve the question
within 30 days of the written notice. If the employer is unable to verify the employment

     8 C.F.R. §274a.1(l)(2).
eligibility within 90 days, it must re-verify identity and employment eligibility (via the I-9
process noted above) within 93 days of the receipt of the written notice. The employer should
read the notice from the DHS carefully in case the written notice provides for a shorter

Employment Verification Tools:

         The government has various employment verification tools which are designed to assist
employers in verifying the social security number and employment eligibility of employees. The
verification tools include the following:

     1. The Social Security Number Verification Service (SSNVS) which is administered by the
        Social Security Administration and available by telephone at 1-800-772-6270 or at;
     2. E-Verify system, administered by the U.S. Citizenship and Immigration Service and
        available at\E-Verify;19
     3. The IMAGE Program administered by the Immigration and Customs Enforcement,
        available at\partners/opaimage\index.htm.

         The safe harbor procedures of the new regulations do not protect an employer solely by
use of the verification tools. However, DHS can consider all of the employer’s attempts to verify
employment authorization and the employer’s use of the verification tools can help to limit any
damages that the government may impose.

Tips for Employer:

        The government’s new regulations and the continued emphasis on immigration
enforcement by the Immigration Customs Enforcement is a reminder for employers to be diligent
in verifying the work authorization of employees. The employers should keep in mind the
following tips:

     1. An employer should follow the safe harbor procedures outlined in the regulations when
        an employer receives a “no-match” letter from the SSA;
     2. An employer should follow the written instructions in the Notice of Suspect Documents
        request from the DHS;
     3. An employer should handle all allegations in a similar manner without regard to national
        origin or ethnicity;
     4. An employer should terminate employment if the employee admits to the employer that
        the employment documents are fraudulent or that the employee does not have
        authorization to work (this amounts to “actual knowledge”);
     5. An employer should use the government verification tools such as SSNVS and E-verify
        as a way to limit damages by the government;
     6. An employer should take reasonable steps if an employee asks the employer to file a
        labor certification or visa petition if the employees documents submitted in regard to the
        I-9 form imply that a labor certification or visa petition is not necessary;
     7. An employer should review any previously issued social security “no-match” letters and
        consider following the safe harbor procedures immediately in regard to those letters.
        While the regulations are not retroactive and do not require an employer to take any

 The E-verify system is a re-branding of its predecessor the Basic Pilot/Employment Eligibility
Verification Program.
      action on previously issued “no-match” letters, it is wise for an employer to do so
      because it may reduce the penalties if an employer is found liable for unauthorized
   8. An employer should be consistent in following the same procedures for all employees;
   9. An employer should make sure that the I-9 is completed within 3 business days of hire
      and re-verification occurs before employment authorization expires.

        The enforcement of our immigration laws is an important component of our immigration
system. It is incumbent upon employers to comply. However, employers need to also be mindful
of the Title VII anti-discrimination provisions and the immigration law’s nondiscriminatory
provisions. Whenever an employer has a doubt about the unauthorized employment of an
employee or receives notice from the SSA or DHS, it’s important to seek legal advice from an
immigration attorney.

By Sherry Neal, Partner
Hammond Law Group, LLC
(513) 381-2011

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