This is so much to read and digest but it may affect your pocket or someone
you know sooner or later:
-Laye
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[Federal Register: August 15, 2007 (Volume 72, Number 157)]
[Rules and Regulations]
[Page 45611-45624]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15au07-1]
=======================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
=======================================================================
[[Page 45611]]
DEPARTMENT OF HOMELAND SECURITY
8 CFR Part 274a
[ICE 2377-06; DHS Docket No. ICEB-2006-0004]
RIN 1653-AA50
Safe-Harbor Procedures for Employers Who Receive a No-Match
Letter
AGENCY: U.S. Immigration and Customs Enforcement, DHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: U.S. Immigration and Customs Enforcement is amending the
regulations relating to the unlawful hiring or continued employment of
unauthorized aliens. The amended regulation describes the legal
obligations of an employer, under current immigration law, when the
employer receives a no-match letter from the Social Security
Administration or receives a letter regarding employment verification
forms from the Department of Homeland Security. It also describes
``safe-harbor'' procedures that the employer can follow in response to
such a letter and thereby be certain that the Department of Homeland
Security will not use the letter as any part of an allegation that the
employer had constructive knowledge that the employee referred to in
the letter was an alien not authorized to work in the United States.
The final rule adds two more examples to the current regulation's
definition of ``knowing'' to illustrate situations that may lead to a
finding that an employer had such constructive knowledge. These
additional examples involve an employer's failure to take reasonable
steps in response to either of two events: The employer receives a
written notice from the Social Security Administration (such as an
``Employer Correction Request'' commonly known as an employer ``no
match letter'') that the combination of name and Social Security
account number submitted to the Social Security Administration for an
employee does not match agency records; or the employer receives
written notice from the Department of Homeland Security that the
immigration status or employment-authorization documentation presented
or referenced by the employee in completing Form I-9 was not assigned
to the employee according to Department of Homeland Security records.
(Form I-9 is retained by the employer and made available to DHS
investigators on request, such as during an audit.) The rule also
states that DHS will continue to review the totality of relevant
circumstances in determining if an employer had constructive knowledge
that an employee was an unauthorized alien in a situation described in
any of the regulation's examples. The ``safe-harbor'' procedures
include attempting to resolve the no-match and, if it cannot be
resolved within a certain period of time, verifying again the
employee's identity and employment authorization through a specified
process.
DATES: This rule is effective September 14, 2007.
FOR FURTHER INFORMATION CONTACT: Ron Shelkey, Office of Investigations,
Worksite Enforcement Unit, U.S. Immigration and Customs Enforcement,
Department of Homeland Security, 425 I Street, NW., Room 1000; division
3, Washington, DC 20536. Telephone: (202) 514-2844 (not a toll-free
number).
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. History of the Rulemaking
B. The Issue Presented
C. Final Rule
II. Comments and Responses
A. Authority to Promulgate the Rule
B. Changes in Legislation
C. Constructive Knowledge
D. Fourteen-Day and Sixty-Day Time Frames
E. Practical Application
1. Letters Sent to Employers
2. Labor Certification or an Application for Prospective
Employer
3. Written Notice From SSA
4. Written Notice From DHS
5. Clarity and Reasonable Steps
6. Verification and Recordkeeping
7. Mechanics of Form I-9 Verification
8. Other Employer Responsibilities
F. Discrimination
G. Firing of Employees
H. Economic Impact
I. SSA and DHS Database Issues
J. Cost to the Government
K. General Impact
L. Privacy
M. Proposed Changes in Form I-9
III. Regulatory Requirements
A. Regulatory Flexibility Act
B. Unfunded Mandates Reform Act of 1995
C. Small Business Regulatory Enforcement Fairness Act of 1996
D. Executive Order 12866 (Regulatory Planning and Review)
E. Executive Order 13132 (Federalism)
F. Executive Order 12988 (Civil Justice Reform)
G. Paperwork Reduction Act
Part 274a--Control of employment of Aliens
I. Background
A. History of the Rulemaking
The Department of Homeland Security (DHS) published a proposed rule
in the Federal Register on June 14, 2006, that would amend the
regulations relating to the unlawful hiring or continued employment of
unauthorized aliens. 71 FR 34,281 (proposed Jun. 14, 2006). A sixty-day
public comment period ended on August 14, 2006.
A number of commenters, in comments and separate communications,
requested that DHS extend the comment period beyond the normal sixty-
day period established in the proposed rule. After careful
consideration of the requests, DHS believes that the sixty-day comment
period was reasonable and sufficient for the public to review the
proposed rule and provide any comments. Accordingly, DHS has declined
to extend the comment period.
DHS received approximately 5,000 comments in response to the
proposed rule from a variety of sources, including labor unions, not-
for-profit advocacy organizations, industry trade groups, private
attorneys, businesses, and other interested organizations and
individuals. The comments varied considerably; some commenters strongly
supported the rule as proposed, while others were critical of the
proposed rule and suggested changes.
A number of comments had no bearing on the proposed rule or
criticized the rule for not addressing other immigration-law issues.
Comments seeking changes in United States statutory laws, changes in
[[Page 45612]]
regulations or forms unrelated to or not addressed by the proposed
rule, changes in procedures of agencies other than DHS, or resolution
of other issues were not within the scope of the rulemaking or the
authority of DHS, and are not addressed in this final rule.
The comments frequently repeated specific issues (including
specific text). Approximately 4,800 comments in several mass mailings
were received. Several organizations also submitted identical or nearly
identical comments.
At the request of a broad-based coalition of national business and
trade associations, DHS met with representatives of the organization
and its constituent organizations on June 20, 2006. A summary of that
meeting including a list of attendees has been placed on the docket for
this rulemaking.
Each comment received was reviewed and considered in the
preparation of this final rule. This final rule addresses the comments
by issue rather than by referring to specific commenters or comments.
All of the comments received electronically or on paper may be reviewed
at the United States Government's electronic docket system,
www.regulations.gov, under docket number ICEB-2006-0004.
B. The Issue Presented
Employers annually send the Social Security Administration (SSA)
millions of earnings reports (W-2 Forms) in which the combination of
employee name and social security number (SSN) does not match SSA
records. In some of these cases, SSA sends a letter, such as an
``Employer Correction Request'', that informs the employer of the
mismatch. The letter is commonly referred to as an employer ``no-match
letter.'' There can be many causes for a no-match, including clerical
error and name changes. One potential cause may be the submission of
information for an alien who is not authorized to work in the United
States and who may be using a false SSN or a SSN assigned to someone
else. Such a letter may be one indicator to an employer that one of its
employees may be an unauthorized alien.
U.S. Immigration and Customs Enforcement (ICE) sends a similar
letter (currently called a ``Notice of Suspect Documents'') after it
has inspected an employer's Employment Eligibility Verification forms
(Forms I-9) during an investigation audit and after unsuccessfully
attempting to confirm, in agency records, that an immigration status
document or employment authorization document presented or referenced
by the employee in completing the Form I-9 was assigned to that person.
(After a Form I-9 is completed by an employer and employee, it is
retained by the employer and made available to DHS investigators on
request, such as during an audit.)
This regulation describes an employer's current obligations under
immigration laws, and its options for avoiding liability, after
receiving such a letter from either SSA or DHS. The regulation
specifies step by step actions that can be taken by the employer that
will be considered by DHS to be a reasonable response to receiving a
no-match letter--a response that will eliminate the possibility that
the no-match letter can be used as any part of an allegation that an
employer had constructive knowledge that it was employing an alien not
authorized to work in the United States, in violation of section
274A(a)(2) of the Immigration and Nationality Act (INA), 8 U.S.C.
1324a(a)(2) . This provision of the INA states:
It is unlawful for a person or other entity, after hiring an
alien for employment in accordance with paragraph (1), to continue
to employ the alien in the United States knowing the alien is (or
has become) an unauthorized alien with respect to such employment.
[Emphasis added.]
Both regulation and case law support the view that an employer can
be in violation of section 274A(a)(2), 8 U.S.C. 1324a(a)(2) by having
constructive rather than actual knowledge that an employee is
unauthorized to work. A definition of ``knowing'' first appeared in the
regulations on June 25, 1990 at 8 CFR 274a.1(l)(1). See 55 FR 25,928.
That definition stated:
The term ``knowing'' includes not only actual knowledge but also
knowledge which may fairly be inferred through notice of certain
facts and circumstances which would lead a person, through the
exercise of reasonable care, to know about a certain condition.
As noted in the preamble to the original regulation, that
definition, which is essentially the same as the definition adopted in
this rule, is consistent with the Ninth Circuit's holding in Mester
Mfg. Co. v. INS, 879 F.2d 561, 567 (9th Cir. 1989) (holding that when
an employer who received information that some employees were suspected
of having presented a false document to show work authorization, such
employer had constructive knowledge of their unauthorized status when
the employer failed to make any inquiries or take appropriate
corrective action). The court cited its previous opinion explaining
``deliberate failure to investigate suspicious circumstances imputes
knowledge.'' Id. at 567 (citing United States v. Jewell, 532 F.2d 697
(9th Cir. 1976) (en banc)). See also New El Rey Sausage Co. v. INS, 925
F.2d 1153, 1158 (9th Cir. 1991).
The preceding regulatory language also begins the current
regulatory definition of ``knowing,'' which is still at 8 CFR
274a.1(l)(1). In the current definition, additional language follows
this passage, describing situations that may involve constructive
knowledge by the employer that an employee is not authorized to work in
the United States. This language was added on August 23, 1991. See 56
FR 41,767. The current definition contains an additional, concluding
paragraph, which specifically precludes use of foreign appearance or
accent to infer that an employee may be unlawful, and to the documents
that may be requested by an employer as part of the verification system
that must be used at the time of hiring, as required by INA section
274A(a)(1)(B), 8 U.S.C. 1324a(a)(1)(B). This paragraph will be
described in greater detail below. The verification system referenced
in this paragraph is described in INA section 274A(b), 8 U.S.C.
1324a(b).
C. Final Rule
The final rule amends the definition of ``knowing'' in 8 CFR
274a.1(l)(1), in the portion relating to ``constructive knowledge.''
First, it adds two more examples to the existing examples of
information available to an employer indicating that an employee could
be an alien not authorized to work in the United States. It also
explicitly states the employer's obligations under current law after
receiving a no-match letter or the other information identified in 8
CFR 274a.1. If the employer fails to take reasonable steps after
receiving such information, and if the employee is in fact not
authorized to work in the United States, the employer may be found to
have had constructive knowledge of that fact. The final rule also
states explicitly another implication of the employer's obligation
under current law--whether an employer would be found to have
constructive knowledge in particular cases of the kind described in
each of the examples (the ones in the current regulation and in the new
regulation) depends on the ``totality of relevant circumstances''
present in the particular case. This standard applies in all cases.
The additional examples are:
(1) Written notice to an employer from SSA, e.g. an ``Employer
Correction Request,'' that the combination of name and SSN submitted
for an employee does not match SSA records; and
[[Page 45613]]
(2) Written notice from DHS that the immigration status document,
or employment authorization document, presented or referenced by the
employee in completing Form I-9 was assigned to another person, or that
there is no agency record that the document was assigned to anyone.
The regulation also describes more specifically the steps that an
employer might take after receiving a no-match letter, steps that DHS
considers reasonable. By taking these steps in a timely fashion, an
employer would avoid the risk that the no-match letter would be used as
any part of an allegation that the employer had constructive knowledge
that the employee was not authorized to work in the United States. The
steps that a reasonable employer may take include the following:
(I) A reasonable employer checks its records promptly after
receiving a no-match letter to determine whether the discrepancy
results from a typographical, transcription, or similar clerical error
in the employer's records, or in its communication to the SSA or DHS.
If there is such an error, the employer corrects its records, informs
the relevant agencies; verifies that the name and number, as corrected,
match agency records--in other words, verifies with the relevant agency
that the information in the employer's files matches the agency's
records; and makes a record of the manner, date, and time of the
verification. ICE would consider a reasonable employer to have acted
promptly if the employer took such steps within thirty days of receipt
of the no-match letter.
(II) If such actions do not resolve the discrepancy, a reasonable
employer would promptly request that the employee confirm that the
employer's records are correct. If they are not correct, the employer
would take the actions needed to correct them, inform the relevant
agencies (in accordance with the letter's instructions, if any), and
verify the corrected records with the relevant agency. If the records
are correct according to the employee, the reasonable employer would
ask the employee to pursue the matter personally with the relevant
agency, such as by visiting a local SSA office, bringing original
documents or certified copies required by SSA, which might include
documents that prove age, identity, citizenship or alien status, and
other relevant documents, such as proof of a name change, or by mailing
these documents or certified copies to the SSA office, if permitted by
SSA. ICE would consider a reasonable employer to have acted promptly if
the employer took such steps within thirty days of receipt of the no-
match letter. The regulation provides that a discrepancy will be
considered resolved only if the employer verifies with SSA or DHS, as
the case may be, that the employee's name matches in SSA's records the
number assigned to that name, or, with respect to DHS letters, verifies
the authorization with DHS that DHS records indicate that the
immigration status document or employment authorization document was
assigned to the employee. In the case of a number from SSA, the valid
number may be the number that was the subject of the no-match letter or
a different number, for example a new number resulting from the
employee's contacting SSA to resolve the discrepancy. Employers may
verify a SSN with SSA by telephoning toll-free 1-800-772-6270, weekdays
from 7 a.m. to 7 p.m. EST. See http://www.ssa.gov/employer/
ssnvadditional.htm. For information on SSA's online verification
procedure, see http://www.ssa.gov/employer/ssnv.htm. Employers should
make a record of the manner, date, and time of any such verification,
as SSA may not provide any documentation.
(III) The regulation also describes a verification procedure that
the employer may follow if the discrepancy is not resolved within
ninety days of receipt of the no-match letter. This procedure would
verify (or fail to verify) the employee's identity and work
authorization. If the described procedure is completed, and the
employee is verified, then even if the employee is in fact not
authorized to work in the United States, the employer will not be
considered to have constructive knowledge of that fact based on receipt
of the no-match letter. This final rule, however, will not provide a
safe harbor for employers that for some other reason have actual or
constructive knowledge that they are employing an alien not authorized
to work in the United States.
If the discrepancy referred to in the no-match letter is not
resolved, and if the employee's identity and work authorization cannot
be verified using a reasonable verification procedure, such as that
described in this regulation, then the employer must choose between:
(1) Taking action to terminate the employee, or
(2) Facing the risk that DHS may find that the employer had
constructive knowledge that the employee was an unauthorized alien and
therefore, by continuing to employ the alien, violated INA section
274A(a)(2), 8 U.S.C. 1324a(a)(2).
The procedure to verify the employee's identity and work
authorization described in the rule involves the employer's and
employee's completing a new Form I-9, Employment Eligibility
Verification Form, using the same procedures as if the employee were
newly hired, as described in 8 CFR 274a.2, with certain restrictions.
The regulation identifies these restrictions:
(1) Under the regulation, both Section 1 (``Employee Information
and Verification'') and Section 2 (``Employer Review and
Verification'') would need to be completed within ninety-three days of
receipt of the no-match letter. Therefore, if an employer and employee
tried to resolve the discrepancy described in the no-match letter for
the full ninety days provided for in the regulation, they have an
additional three days to complete a new Form I-9. Under current
regulations, three days are provided for the completion of the form
after a new hire. 8 CFR 274a.2(b)(1)(ii).
(2) No document containing the SSN or alien number that is the
subject of the no-match letter, and no receipt for an application for a
replacement of such a document, may be used to establish employment
authorization or identity or both.
(3) No document without a photograph may be used to establish
identity (or both identity and employment authorization). (This is
consistent with the documentary requirements of the United States
Citizenship and Immigration Services' Electronic Employment
Verification System (EEVS) (formerly called the ``Basic Pilot
Program''). See http://uscis.gov/graphics/services/SAVE.htm.)
Employers should apply these procedures uniformly to all of their
employees having unresolved no-match indicators. If they do not do so,
they may violate applicable anti-discrimination laws. The regulation
also amends the last paragraph of the current definition of
``knowing.'' The existing regulations provide, in relevant part, that--
Nothing in this definition should be interpreted as permitting
an employer to request more or different documents than are required
under section 274[A](b) of the Act or to refuse to honor documents
tendered that on their face reasonably appear to be genuine and to
relate to the individual.
The final rule clarifies that this language applies to employers
that receive no-match letters, but that employers who follow the safe
harbor procedures set forth in this rule uniformly and without regard
to perceived national origin or citizenship status as required by the
provisions of
[[Page 45614]]
274B(a)(6) of the INA will not be found to have engaged in unlawful
discrimination. This clarification is accomplished by adding the
following language after ``individual'':
Except a document about which the employer has received written
notice described in paragraph (l)(1)(iii) of this section and with
respect to which the employer has received no verification as
described in paragraphs (l)(2)(i)(C) or (l)(2)(ii)(B) of this
section.
Alternative documents that show work authorization are specified in
8 CFR 274a.2(b)(1)(v). Examples are a United States passport (unexpired
or expired), a United States birth certificate, or any of several
documents issued to lawful permanent resident aliens or to
nonimmigrants with work authorization.
There may be other procedures a particular employer could follow in
response to a no-match letter, procedures that would be considered
reasonable by DHS and inconsistent with a finding that the employer had
constructive knowledge that the employee was an unauthorized alien. But
such a finding would depend on the totality of relevant circumstances.
An employer that followed a procedure other than the ``safe-harbor''
procedures described in the regulation would face the risk that DHS may
not agree.
It is important that employers understand that the proposed
regulation describes the meaning of constructive knowledge and
specifies ``safe-harbor'' procedures that employers could follow to
avoid the risk of being found to have constructive knowledge that an
employee is not authorized to work in the United States based on
receipt of a no-match letter. The regulation would not preclude DHS
from finding that an employer had actual knowledge that an employee was
an unauthorized alien. An employer with actual knowledge that one of
its employees is an unauthorized alien could not avoid liability by
following the procedures described in the proposed regulation. The
burden of proving actual knowledge would, however, be on the
government. Further, DHS may find that the employer had constructive
notice from other sources. Finally, it is important that employers
understand that the resolution of discrepancies referenced in a no-
match letter, or other information that an employee's SSN presented to
an employer matches the records for the employee held by the SSA, does
not, in and of itself, demonstrate that the employee is authorized to
work in the United States. For example, an alien not authorized to work
in the United States may present a fraudulent name and matching
fraudulent SSN, and this rule does not address such fraud.
II. Comments and Responses
A. Authority to Promulgate the Rule
Several commenters suggested that DHS does not have the authority
to adopt the proposed rule. Different commenters suggested that DHS was
intruding on the authority of the SSA, the Department of Justice (DOJ),
or the Internal Revenue Service (IRS). These comments seem to indicate
a lack of understanding of the nature of the rule, DHS's role in
employer sanctions, and the relationship of authority among the
agencies. DOJ, the IRS, and SSA all were involved in the promulgation
of the proposed rule.
DHS has the authority to investigate and pursue sanctions against
employers who knowingly employ or continue to employ unauthorized
aliens or who do not properly verify employees' employment eligibility.
Section 274A of the INA, 8 U.S.C. 1324a, requires all United States
employers, agricultural associations, agricultural employers, farm
labor contractors, or persons or other entities who recruit or refer
persons for employment for a fee, to verify the employment eligibility
and identity of all employees hired to work in the United States. To
comply with the law, an employer, or a recruiter or referrer for a fee,
must complete an Employment Eligibility Verification form (Form I-9)
for all employees, including United States citizens. 8 CFR 274a.2.
Forms I-9 are not routinely filed with any government agency. Employers
are responsible for maintaining these records, which ICE may request
from them. See 71 FR 34,510 (June 15, 2006).
DHS may conduct investigations for violations of section 274A of
the INA either on its own initiative or in response to third-party
complaints that have a reasonable probability of validity. If DHS
determines after investigation that an employer has violated section
274A of the INA by knowingly employing unauthorized aliens, DHS may
issue and serve a Warning Notice or may commence administrative
proceedings against the employer by issuing and serving a Notice of
Intent to Fine (Form I-763). See 8 CFR 274a.9(a)-(d). An employer who
wishes to contest the fine may request a hearing before a DOJ
administrative law judge. See 8 CFR 274a.9(e); 28 CFR part 68.
DHS's authority to investigate and pursue sanctions against
employers who knowingly employ or continue to employ unauthorized
aliens necessarily includes the authority to decide not to pursue
sanctions against employers who follow the DHS-recommended procedure.
In essence, this final rule limits DHS's discretion to use an
employer's receipt of a particular written notice from SSA or DHS as
evidence of constructive knowledge for those employers who follow the
DHS procedure. See, e.g., Lopez v. Davis, 531 U.S. 230, 240-41 (2001)
(upholding categorical limitation of discretion through rulemaking).
The rule does not affect the authority of the SSA to issue no-match
letters, the authority of the IRS to impose and collect taxes, or the
authority of DOJ to enforce the anti-discrimination provisions of the
INA or adjudicate notices of intent to fine employers.
DOJ also has an enforcement role in the context of employer
sanctions. In addition to adjudicating Notices of Intent to Fine, DOJ--
through its Office of Special Counsel for Immigration-Related Unfair
Employment Practices--is responsible for enforcing the anti-
discrimination provisions of section 274B of the INA, 8 U.S.C. 1324b.
See 28 CFR part 44. While charges of unfair immigration-related
employment practices may be filed by any DHS officer, they are
primarily brought by individuals who believe that they are victims of
discriminatory practices. See 28 CFR 44.300. Although individuals
generally bring charges on their own behalf, DOJ and DHS may
nevertheless file such charges.
SSA, by contrast, does not have an immigration enforcement role.
Instead, SSA collects employee earnings reports from employers through
IRS Wage and Tax Statements (Forms W-2) in order to properly administer
Social Security benefits. See 26 CFR 31.6051-2(a). SSA receives over
250 million earnings reports from employers each year. The vast
majority of these reports are successfully matched with individual
earnings records, which are then used to calculate future Social
Security benefits, such as retirement, disability, and survivors'
benefits. Every year, however, the SSA is unable to post some wage
reports to individual earnings records because some employees' reported
combinations of names and SSNs do not match SSA records. As mentioned
earlier, there are many causes for such a no-match, including clerical
error and name change. One cause is the submission of information for
an alien who is not authorized to work in the United States and is
using a false SSN or an SSN assigned to someone else. For example, in
2002 the SSA was unable to match almost 9 million wage reports,
representing $56 billion in earnings. At
[[Page 45615]]
the end of tax year 2003, the Earnings Suspense File (ESF) contained
approximately 255 million wage reports, representing $519.6 billion in
earnings. The ESF is an electronic holding file for wage items reported
on Forms W-2 that cannot be matched to the earnings records of
individual workers. These wage reports have accumulated since the
beginning of the program and date back as far as 1936. One method SSA
relies on to resolve these mismatches is issuing employers an
``Employer Correction Request''--more commonly known as an SSA employer
``no-match letter.''
One commenter suggested that DHS lacks authority to promulgate
regulations related to Form I-9 verification and acceptable documents,
claiming that this authority is vested in the Attorney General and the
DOJ. This comment misinterprets the division of authority under the
Homeland Security Act of 2002 (HSA), Public Law 107-296, 116 Stat. 2135
(Nov. 25, 2002). The HSA abolished the Immigration and Naturalization
Service (INS) and transferred its functions to DHS, including those
functions relating to employer sanctions. See HSA sections 441, 471, 6
U.S.C. 251, 291; INA section 103(a)(1), 8 U.S.C. 1103(a)(1). The HSA
required a division of regulatory authority between DOJ and the newly
created DHS, commensurate with the transfer of functions of the former
INS from DOJ to DHS. That transfer included the functions of the
employment verification system and the regulations for the
administration of that system. See 68 FR 10,353 (March 5, 2003).
Some commenters mistakenly believed that this rule results in
changes to the employment verification system that would require
congressional notification. See INA section 274A(d), 8 U.S.C. 1324a(d).
This rule merely clarifies current standards related to constructive
knowledge. It does not change the verification system, so the
notification requirements are inapplicable. Nor does this rule affect
the EEV Program, so any limitations that apply to changes in the EEV
Program do not apply to this rule.
Other commenters suggested that DHS lacks authority to regulate SSA
notices. This final rule only addresses how DHS will treat an
employer's knowledge of the name and SSN discrepancy from a written
notice from the SSA, such as an ``Employer Correction Request'' or no-
match notice, in investigating the unlawful hiring or continued
employment of unauthorized aliens. SSA and DHS, as coordinating
agencies within the Executive Branch, are each taking steps to improve
the no-match process and the public's understanding of that no-match
process in the immigration context.
Finally, one commenter suggested that this rule grants DHS access
to tax information covered by section 6103 of the Internal Revenue Code
of 1986, 26 U.S.C. 6103. Under section 6103, the IRS, and any other
official or employee who acquires the information from the IRS in the
course of official duties, may not provide tax returns or tax
information to outside agencies or others except under certain
circumstances. The same information, however, in the hands of an
individual employer is not subject to any restrictions by section 6103.
Tax information in the hands of the originator of that information (the
employer) is frequently and unquestionably subject to demand in
criminal, civil, and regulatory matters by federal, state, and local
law enforcement officials. This rule does not provide DHS with access
to any tax information governed by section 6103 of the Internal Revenue
Code. This rule affects only DHS consideration of SSA no-match letters
sent by the SSA to an employer and in the hands of the employer during
an investigation of the employer's records, and that letter in the
hands of the recipient does not qualify as tax information covered by
section 6103.
B. Changes in Legislation
Many commenters argued that a regulatory change is unwise in light
of the congressional debate over comprehensive immigration reform. As
the President has indicated, the Administration supports comprehensive
immigration reform that will secure the border, strengthen enforcement
of immigration laws in the nation's interior, and create a temporary
worker program, address the millions of undocumented immigrants in the
country without providing amnesty, and promote the assimilation of
newcomers. DHS believes that worksite enforcement is a critical
component of comprehensive immigration reform, and supports mandating
an employment eligibility verification system in a manner that is not
overly burdensome for American employers. Accordingly, DHS supports
legislative provisions that strengthen document verification and
related requirements, and that provide a safe harbor for those
employers who in good faith comply with the law.
Although DHS is working with Congress to enact such legislation,
DHS cannot predict when Congress will pass such legislation. The
further development of regulations under existing law is quite common
and regulatory action continues when Congress is considering
legislative proposals. In the interim, however, this rule will provide
employers with the information they need to respond to receipt of the
no-match letters.
Others argue that the regulation should wait because it may prove
to be inconsistent with, or superfluous to, future legislation, and
that this might cause confusion on the part of employers. DHS believes
that there is an immediate benefit to providing this rule change. If
future legislation requires an adjustment, the regulation can be
amended.
C. Constructive Knowledge
A number of commenters suggested that the proposed rule
impermissibly expands the concept of constructive knowledge. DHS
disagrees.
The current regulations provide that ``The term knowing includes
not only actual knowledge but also knowledge which may fairly be
inferred through notice of certain facts and circumstances which would
lead a person, through the exercise of reasonable care, to know about a
certain condition.'' 8 CFR 274a.1(l)(1). This rule will revise the
structure of the definition to separate references to actual knowledge
from constructive knowledge, but it will retain the same definition of
constructive knowledge: ``[c]onstructive knowledge is knowledge that
may fairly be inferred through notice of certain facts and
circumstances that would lead a person, through the exercise of
reasonable care, to know about a certain condition.''
This is consistent with the common definition that ``constructive
knowledge'' is ``[k]nowledge that one using reasonable care or
diligence should have, and therefore that is attributed by law to a
given person.'' Black's Law Dictionary (8th ed. 2004). The use of the
term and its meaning is common, although the application to specific
facts is subject to interpretation. See, e.g., Metro-Goldwyn-Mayer
Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (company's
liability for product that facilitates copyright infringement); Harris
Trust and Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238 (2000)
(transferee's liability under ERISA for prohibited transaction);
Faragher v. City of Boca Raton, 524 U.S. 775 (1998) (employer's
vicarious liability for sexual harassment in workplace). DHS is
including an illustrative definition in the regulations to more clearly
distinguish ``constructive notice'' from actual notice without changing
the meaning of either term.
[[Page 45616]]
Courts have long held that constructive knowledge is applicable in
situations involving employment of unauthorized aliens. In Mester
Manufacturing v. INS, 879 F.2d 561, 566 (9th Cir. 1989), the INS
notified an employer that immigration status documents presented by
certain employees for completion of Forms I-9 were fake, yet the
employer took no action. Analogizing to the criminal law, the Ninth
Circuit held that the INS demonstrated Mester had knowledge because
Mester ``failed to take appropriate corrective action'' after
``receiv[ing] specific information that several of his employees were
likely to be unauthorized.'' Id. at 566-67. The Ninth Circuit invoked
constructive knowledge again in New El Rey Sausage Co. v. INS, 925 F.2d
1153, 1158 (9th Cir. 1991), in which it pointed out that ``employers,
far from being allowed to employ anyone except those whom the
government had shown to be unauthorized, have an affirmative duty to
determine that their employees are authorized.''
A number of commenters have argued that the present rule
impermissibly expands the reach of constructive knowledge, citing
Collins Food Int'l v. INS, 948 F.2d 549 (9th Cir. 1991). In Collins
Food, the Ninth Circuit held that a finding of constructive knowledge
could not be based on (1) The employer's extending an offer of
employment prior to conducting a Form I-9 verification, and (2) the
employer's accepting a Social Security card as evidence of employment
authorization when the back of the card did not match the Social
Security card pictured in the INS Handbook for Employers. Id. at 552,
554. In doing so, the court applied the doctrines set out in Mester and
New El Rey Sausage but cautioned against an expansive application of
constructive knowledge:
[The Immigration Reform and Control Act of 1986], as we have
pointed out, is delicately balanced to serve the goal of preventing
unauthorized alien employment while avoiding discrimination against
citizens and authorized aliens. The doctrine of constructive
knowledge has great potential to upset that balance, and it should
not be expansively applied.
948 F.2d 554-55.
Some commenters have argued that Collins Food limits findings of
constructive knowledge to situations in which employers have been
explicitly warned by DHS that an employee may be an unauthorized alien.
Thus, they suggest, DHS is impermissibly expanding constructive
knowledge by including receipt of written notice from SSA as an example
of a situation that may lead to a finding of constructive knowledge.
This is an incorrect reading of Collins Food. Indeed, Collins Food
distinguished Mester and New El Rey Sausage precisely because ``Collins
Food did not have the kind of positive information that the INS had
provided in Mester and New El Rey Sausage.'' 948 F.2d at 555. Nothing
in Collins Food--or any other case cited by the commenters--suggests
that such ``positive information'' indicating certain employees may be
unauthorized aliens must come from DHS and not from SSA.
Additionally, these comments do not distinguish between an
affirmative obligation to resolve the issues raised by the no-match
letters and the ``safe harbor'' from use of the no-match letter as part
of a determination of constructive knowledge. This final rule does not
require an employer to take any particular action; the rule simply
provides a clear method for employers to exercise reasonable care in
addressing ``no-match'' letters.
Nor does this rule require that employers avail themselves of the
safe-harbor procedure. As many commenters point out, receipt of written
notice from DHS resulting from a Form I-9 audit creates a duty to
investigate, whereas receipt of an SSA no-match letter may create such
a duty depending on the totality of the circumstances. DHS acknowledges
that an SSA no-match letter by itself does not impart knowledge that
the identified employees are unauthorized aliens.
DHS is aware that SSA no-matches may occur due to a name change or
typographical error. In some situations a listed SSN is facially
suspect, such as when the first three numbers of an employee's claimed
SSN are ``000,'' or are in ``800'' or ``900'' series, which are not
used. DHS believes that the initial submission of Form I-9 with
facially incorrect information is problematic, and that this type of
information cannot be created by an innocent transcription or
typographic error. A letter from DHS or SSA stating that such a number
has been checked and does not match agency records reinforces the
suspect nature of the original information. In other situations, an SSA
no-match letter sent to the employer may be the first indication of a
suspect number, and when combined with other evidence known to the
employer, ``would lead a person, through the exercise of reasonable
care, to know'' that the employee is not authorized to work. 8 CFR
274a.1(l)(1).
A number of commenters have suggested that SSA no-match letters
issued in the past claim to make no statement about an individual's
immigration status, and employers are confused about their obligations
under the civil rights laws. To the extent employers were confused,
this rule should provide clear guidance.
One commenter requested that DHS clarify whether employers who
follow the procedures herein will be protected from all claims of
constructive knowledge, or just claims of constructive knowledge based
on the letters for which the employers followed the safe-harbor
procedure. DHS has amended the language in the final rule at paragraphs
(l)(2)(i) and (l)(2)(ii) to clarify that (1) An employer who follows
the safe-harbor procedure will be considered to have taken reasonable
steps in response to the notice, and (2) the employer's receipt of the
written notice will therefore not be used as evidence of constructive
knowledge. If, in the totality of the circumstances, other independent
evidence exists to prove that an employer has constructive knowledge,
the employer may still face liability. This could be unusual, however,
in the situation where an employer carefully follows the safe-harbor
procedures provided in this regulation and has no information
suggesting that the employee is using another person's identity. Also,
as noted in the proposed rule, this safe-harbor procedure does not
protect an employer who has actual, as opposed to constructive,
knowledge that an employee is an unauthorized alien.
D. Fourteen-Day and Sixty-Day Time Frames
Several commenters suggested that the fourteen calendar-day time
frame in the proposed rule was insufficient for employers to review
their records to determine if a typographical or other error caused the
no-match, correct their records and verify the corrected information to
attempt to resolve a discrepancy in an SSA letter or a question raised
in a DHS letter. The commenters proposed a range of alternatives, from
fifteen business days to one hundred and twenty days. After careful
consideration, DHS is extending the initial fourteen-day time frame to
thirty calendar days. 8 CFR 101(h). DHS believes that this provides
sufficient time for employers to take certain reasonable steps to
resolve the problem.
Many commenters also suggested that the sixty-day time frame in the
proposed rule for an employee to resolve the no-match with DHS and SSA
was insufficient. Most argued for an extension by claiming that SSA
would be unable to resolve discrepancies
[[Page 45617]]
between names and SSNs and that DHS would be unable to resolve
questions about immigration status within this time frame. DHS has
consulted with SSA throughout this rulemaking and on this particular
issue. SSA has informed DHS that, if employer and employee act in a
timely manner, a 90-day timeframe will be sufficient for all but the
most difficult cases. DHS has extended the time to ninety calendar
days.
This rule does not create a new requirement that an employer
resolve a discrepancy within ninety days. Instead, the rule creates a
safe harbor from use of the no-match letter as part of an allegation of
constructive knowledge if the employer takes certain steps to resolve
the discrepancy. In situations not covered by this rule, constructive
knowledge will continue to be based on a number of factors, including
whether the employer made a good-faith but ultimately unsuccessful
attempt to comply with the safe-harbor procedure.
Some commenters requested that the time frame be tolled in certain
circumstances--for example, fourteen days from the date the
``appropriate human resource staff'' at the employer reads the letter.
DHS declines to adopt such a proposal because it would add too much
inconsistency and unpredictability. In addition, since the time period
has been extended to thirty days, the concern about misdirected mail is
somewhat mitigated. Moreover, the employer can control the receipt of
the no-match letter in the same manner as it controls all related
correspondence through the address that it submits on its filings.
Others have asked that DHS create special rules for special
circumstances, such as seasonal workers, teachers on sabbatical, and
employees who are out of the office for an extended period due to
excused absence or disability. DHS recognizes that there may be
situations where employers may not be able to avail themselves of the
safe-harbor procedure as described herein. This rule provides an
option, not a requirement. DHS is attempting to provide a safe-harbor
procedure with as much general application as possible for employers.
In these types of special circumstances, an employer should make a good
faith effort to resolve the situations as rapidly as practicable, and
keep a file documenting such efforts.
Some have complained that the proposed rule did not clarify what
steps employers must complete within the fourteen-day time frame. To
provide more clarity, DHS has amended the text of this final rule to
provide that employers must check and resolve any discrepancies within
their own records within thirty calendar days of receiving notice from
SSA, or contact the local DHS office within thirty days of receiving
notice from DHS. If an employer receives, for example, an SSA
``Employer Correction Request'' notice and determines that the
discrepancy referenced is not due to the employer's records, the
employer must promptly ask employees to check their own records,
confirm the information in the employer's records, and follow up with
SSA as appropriate. Although this action need not occur within thirty
days, employers must nevertheless act within a reasonable time frame in
order to satisfy this promptness requirement. It is also important for
employers to notify employees promptly if further action is required so
they have a reasonable amount of time to contact the appropriate
agency, and so that the agency can correct its records within the
ninety-day time frame.
The steps and time frames are illustrated, as in the proposed and
final rules, in the following table:
Comparison of Timing of Actions Under Proposed and
Final Rules
----------------------------------------------------------------------------------------------------------------
Action Proposed
rule Final rule
----------------------------------------------------------------------------------------------------------------
Employer receives letter from SSA or Day
0.............................. Day 0.
DHS indicating mismatch of employee,
name and Social Security number.
Employer checks own records, makes any 0-14
days.......................... 0-30 days.
necessary corrections of errors, and
verifies corrections with SSA or DHS.
If necessary, employer notifies 0-60
days.......................... 0-90 days.
employee and asks employee to assist
in correction.
If necessary, employer corrects own 0-60
days.......................... 0-90 days.
records and verifies correction with
SSA or DHS.
If necessary, employer performs special 60-63
days......................... 90-93 days.
I-9 procedure.
----------------------------------------------------------------------------------------------------------------
Some commenters have asked about the employee's status and the
employer's liability while an employer is following the safe-harbor
procedure. An employer is prohibited from knowingly employing
unauthorized aliens, so an employer may not continue to employ an
individual if the employer obtains actual knowledge during the safe-
harbor procedure that the individual is an unauthorized alien. If the
employer does not obtain actual knowledge during the safe-harbor
process, and instead merely has information that could lead to a
finding of constructive knowledge from the no-match letter, the
employer may continue to employ the individual until all of the steps
in the safe-harbor procedure are completed. This, of course, only
speaks to an employee's immigration status and the employer's liability
under the immigration laws, and does not speak to what actions an
employer could or should take under its own internal personnel
policies--for example, termination of employment based on an employee's
failure to show up for work or an employee's false statements to the
employer.
E. Practical Application
1. Letters Sent to Employers
Several commenters questioned how the rule would apply when a no-
match letter is sent to the employee, rather than the employer. DHS
agrees that greater detail is warranted and has amended paragraphs
(l)(iii)(B) and (C) of the final rule to clarify that the rule applies
to ``[w]ritten notice to the employer from the [SSA or DHS].''
(Emphasis added.) The rule now explicitly states that the examples of
constructive knowledge and the safe-harbor procedure apply only to
written notice that is issued directly to the employer. Some commenters
have requested that the time frame be tolled until the letter is
received by a particular person designated by the employer. As stated
previously, no rule of this nature can fit every circumstance and DHS
declines to make such a series of changes. Moreover, the employer
controls the flow of mail within its business and can determine the
office within its organization that becomes the recipient of all mail
from DHS and SSA.
Others have asked whether this safe-harbor procedure applies to
information employers receive from SSA through sources other than no-
match letters. DHS is not extending the safe-harbor procedures that
far. For example, the rule does not extend to instances where SSA
provides optional SSN verification methods that are described at http:/
/
[[Page 45618]]
www.ssa.gov/employer/ssnv.htm. If an employer uses one of these
verification tools and learns that an employee's combination of name
and SSN do not match SSA records, this safe-harbor procedure
technically does not apply. Nor does this rule extend to information
received through participation in the USCIS' EEV Program or ICE Mutual
Agreement between Government and Employers (IMAGE) program. In an
effort to clarify this, DHS has amended (l)(1)(iii)(B) to specifically
reference, as an example, earnings on Form W-2. However, DHS fully
considers all of an employer's attempts to verify employment
authorization status and to employ only authorized workers in
determining whether to pursue sanctions. All of these good-faith
efforts militate against such sanctions. The rule provides a distinct
safe-harbor provision if an employer follows the specified procedures
in those instances where the employer has been contacted by SSA or DHS.
The final rule addresses only the limited situation in which the
employer receives a no-match letter from SSA or DHS. DHS, however, may
exercise its prosecutorial discretion favorably for employers who take
other affirmative steps to ensure that they do not employ aliens who
are not authorized to work in the United States, such as the
affirmative use of:
SSA's Social Security Number Verification System (SSNVS)
(see http://www.ssa.gov/employer/ssnv.htm),
USCIS' Systematic Alien Verification for Entitlements
(SAVE) Program and EEV (see https://www.vis-dhs.com/
EmployerRegistration), or
ICE's IMAGE program (http://www.ice.gov/partners/opaimage/
index.htm).
Employers should always document their efforts to ensure that they
do not employ aliens who are not authorized to work in the United
States. SSA and EEV do not routinely provide documentary evidence of
internet or other verification attempts, but employers can print
screens to record their actions and both SSA and DHS computer systems
record all transactions. The employer's best interest lies in recording
its own efforts so that such documentation can be provided in any later
inspections.
2. Labor Certification or an Application for Prospective Employer
Other commenters suggested clarifying the ``Labor Certification or
an Application for Prospective Employer'' example in paragraph
(l)(1)(iii)(A) of the proposed rule. The proposed rule adopted this
language directly from the existing 8 CFR 274a.1(l)(1)(ii), which is in
turn based on United States v. American McNair, Inc., 1 OCAHO 1846 (No.
285; Jan. 8, 1991). In American McNair, an administrative law judge
upheld the INS's finding of constructive knowledge because the employer
knew a particular employee was ``ineligible for amnesty'' and the
employer filed a labor certificate and employment-based visa petition
in order ``to get [the employee] legalized.'' Id. at 1846, 1854-55. As
some commenters pointed out, however, the language in the proposed rule
could be confusing and it does not refer to any particular named
documents or forms. Accordingly, DHS has adopted one commenter's
suggested revision. The rule now includes language providing that
``[a]n employee's request that the employer file a labor certification
or employment-based visa petition on behalf of the employee'' as an
example of a situation that may, depending on the totality of relevant
circumstances, require an employer to take reasonable steps in order to
avoid a finding by DHS that the employer has constructive knowledge
that the employee is an unauthorized alien. DHS recognizes, though,
that not all situations involving such a request will be evidence of
constructive knowledge--for example, employers may have work-authorized
employees who are seeking permanent residency.
3. Written Notice From SSA
Some commenters also suggested clarifying an employer's duties
under the proposed safe-harbor provision at (l)(2)(i)(A)(2), stating
that the rule should not indicate that employers are responsible for
advising employees how to resolve the discrepancy with SSA or
determining what documentation employees may need to resolve the
discrepancy. DHS agrees that the employer's obligation under the safe-
harbor procedure does not extend this far. DHS has therefore amended
the text of the final rule to state that employers need only advise the
employee of the time within which the discrepancy must be resolved and
share with the employee any guidance the SSA notice may provide on how
the discrepancy might be resolved.
4. Written Notice From DHS
A number of commenters pointed out that paragraph (l)(2)(ii) of the
proposed rule, which sets forth a procedure to follow after receiving
written notice from DHS, only speaks of an employer's responsibilities
to address the questions about employment authorization raised in the
DHS notice, and does not mention what role an employee has in resolving
these questions. These DHS letters, which are generally issued by ICE
on behalf of DHS, usually contain guidance on steps the employer should
take to avoid sanctions from DHS and provide a point of contact within
DHS if the employer has questions or believes the letter has been
issued in error. The particular steps that an employer or employee
would take to resolve any error or discrepancy may depend on the facts
and circumstances of each case. Thus, DHS agrees that employees may
have a role in resolving discrepancies if the letter is issued in
error, but declines to amend the DHS safe-harbor procedure.
5. Clarity and Reasonable Steps
A number of commenters expressed concern that the proposed rule
does not provide enough clarity because it includes too many optional
steps and references to vague notions of reasonableness. For example,
paragraph (l)(2)(A)(1) of the proposed rule lists an employer's
obligations under the SSA safe-harbor procedure, but begins by stating
that an employer must ``take[ ] reasonable steps, within 14 days, to
attempt to resolve the discrepancy; such steps may include * * *.''
Since the purpose of the rule is to provide employers with clarity, DHS
has amended the safe-harbor procedure to provide clearer steps for
employers to take and particular time frames in which the employers
should complete the steps. DHS has removed the references to
``reasonable steps'' in the safe-harbor procedure because this
procedure is itself a combination of reasonable steps. As noted in the
proposed rule, there may be other reasonable steps. This regulation,
however, identifies the combination of reasonable steps that DHS has
approved for resolution of notices from SSA and DHS, and it is the only
combination of steps that will guarantee that DHS will not use the
employer's receipt of the notices from SSA and DHS as evidence of the
employer's constructive knowledge that its employee is an unauthorized
alien.
6. Verification and Recordkeeping
Some commenters have expressed concern over the recordkeeping
requirements under the safe-harbor procedure. For example, paragraphs
(l)(2)(i)(A)(1) and (l)(2)(i)(A)(2) of the proposed rule required
employers to make records, but the proposed rule did not specify the
manner of recordkeeping for verified resolutions of SSA discrepancies.
Also, the recordkeeping requirements for the Form I-9 verification
under (l)(2)(iii) suggested to some that employers would need to
[[Page 45619]]
retain the new Form I-9 for a different period of time than the
employers would need to retain the old Form I-9. DHS has amended the
rule in response.
The safe-harbor procedure requires employers, in some
circumstances, to ``verify with the Social Security Administration that
the employee's name and social security account number, as corrected,
match Social Security Administration records.'' Employers may do so in
any manner they choose. For example, http://www.ssa.gov/employer/
ssnv.htm describes how employers may verify this information over the
internet, and http://www.ssa.gov/employer/ssnvadditional.htm describes
other methods, such as an SSA 1-800 number.
The final rule provides for employers to store records of verified
resolutions along with the employee's Form I-9. This may be
accomplished by updating the employee's Form I-9 or completing a new
Form I-9 to the extent that verified resolutions demonstrate
inaccuracies in the employee's initial Form I-9. As noted elsewhere,
Form I-9 completion and retention options have recently been expanded.
71 FR 34,510 (June 15, 2006).
Similarly, the final rule clarifies the safe harbor's retention
requirements for the Form I-9 verification under (l)(2)(iii) so that
the new Form I-9 will be retained for the same period as the original
Form I-9. The date of hire for purposes of section 274A(b)(3) of the
INA, 8 U.S.C. 1324a(b)(3), and 8 CFR 274a.2(b)(2)(i) is still the same
date, even though the safe-harbor procedure under (l)(2)(iii) requires
that the employer complete a new Form I-9 ``using the same procedures
as if the employee were newly hired.'' (Emphasis added). For example,
an employer completes a Form I-9 when an employee is hired in September
1998, and then completes a new Form I-9 verification under (l)(2)(iii)
in July 2007 after learning that the employee is the subject of an
unresolved SSA no-match letter. The employee then accepts another
position on February 1, 2008, at which point the employment contract
terminates. In this example, the employer would need to retain both
Forms I-9 until February 1, 2009.
Employers are encouraged to document telephone conversations, in
addition to retaining all SSA correspondence, computer-generated
printouts, e-mails and SSNVS screen prints evidencing that the
discrepancy has been corrected. Lastly, employers should confirm and
document that the discrepancy referenced in the no match letter has
been resolved via SSNVS or the SSA 1-800 number.
7. Mechanics of Form I-9 Verification
Some commenters requested that DHS clarify how an employer can
complete a new Form I-9 verification when an employee insists that the
disputed SSN and name are correct. If an employee insists that the
disputed SSN number and name are correct, the employee should contact
SSA and correct SSA's records. The rule contemplates that employees
will be able to correct the SSA's records within ninety days of the
employer's receipt of the notice. If the employee insists that the SSN
is correct but takes no action during those ninety days to resolve the
SSA notice, employers wishing to receive the benefits of the safe
harbor must proceed with the special Form I-9 verification procedure,
which provides the employer with assurance that the employee is not an
unauthorized alien. During this Form I-9 verification, the employer may
not rely on documents containing the disputed SSN, but can and should
rely on other documents listed in 8 CFR 274a.2(b)(1)(v) that do not
contain a SSN but that can nevertheless demonstrate identity and
employment authorization--for example, a United States passport, DHS
Permanent Resident Card, or other specified DHS immigration documents.
Employers who continue to employ an employee without resolving the
discrepancy and without successfully completing the Form I-9
verification in (l)(2)(iii) will not qualify for the safe-harbor
provision.
Other commenters asked what DHS expects employers to do when they
follow the procedure in (l)(2)(i) but an employee with an unmatched SSN
fails to resolve the discrepancy with SSA. Under the safe harbor
procedures of this rule, employers should complete the special I-9
verification at this point. The safe-harbor procedure, however, is
merely one way for employers to avoid liability under the INA for
knowingly hiring or continuing to employ unauthorized aliens. Employers
are free to develop other reasonable methods for resolution of SSA
notices, although they face the risk that DHS may not agree that their
methods are reasonable. To gain the benefits of this safe-harbor
procedure, however, the employer must proceed to the special Form I-9
verification stage described in (l)(2)(iii). If this special Form I-9
verification is unsuccessful, or if the employee refuses to participate
in the Form I-9 verification, the employer risks being deemed to have
constructive knowledge of unlawful employment of workers in a
subsequent enforcement action. As discussed below, however, it is
important that employers not administer the Form I-9 verification on a
discriminatory basis. Thus, an employer who wishes to follow the safe-
harbor procedure should require a Form I-9 verification of all
employees who fail to resolve SSA discrepancies, and apply a uniform
policy to all employees who refuse to participate or whose Form I-9
verification is unsuccessful.
Some asked for clarification whether the Form I-9 verification
stage is optional--in other words, whether employers would be able to
terminate employment after sixty [now ninety] days with no resolution
and without conducting the Form I-9 verification described in
(l)(2)(iii). The Form I-9 verification step in the procedure offers the
employee one last chance to show the employer that he or she is not an
unauthorized alien. Employers who follow the safe harbor procedure and
complete the I-9 verification should not be tempted to mistakenly
terminate employment for citizens and authorized aliens. See also
section III.G. The procedures in this rule provide only a safe harbor
in limited circumstances and do not prohibit an employer from
terminating the employment relationship.
This Form I-9 verification does not include verifying with SSA that
the name and SSN match SSA's records. Because the Form I-9 verification
will only be performed when discrepancies are not resolved within the
ninety-day period, the name and SSN listed on the new Form I-9 will not
match SSA's records. This mismatch will still occur despite the fact
that the Form I-9 verification should provide the employer with
additional, documentary evidence of the employee's authorization to
work. Employers may request, however, that the employee continue to
pursue resolution of the discrepancy and inform the employer when the
discrepancy is resolved, so that the employer can ensure that another
SSA no-match letter will not be generated the following year. Without
pursuing resolution of the mismatch, employees' earnings will not be
properly credited to their individual earning records.
Some commenters have suggested that the Form I-9 verification
described in (l)(2)(iii) may constitute document abuse. ``A person's or
other entity's request, for purposes of satisfying the requirements of
[INA section 274A(b), 8 U.S.C. 1324a(b),] for more or different
documents than are required under such section or refusing to honor
documents tendered that on their face reasonably
[[Page 45620]]
appear to be genuine shall be treated as an unfair immigration-related
employment practice if made for the purpose or with the intent of
discriminating against an individual in violation of [INA section
274B(a)(1), 8 U.S.C. 1324b(a)(1)].'' INA section 274B(a)(6), 8 U.S.C.
1324b(a)(6). This section is referring to the employment verification
requirements under section 274A(b) of the INA, 8 U.S.C. 1324a(b), for
persons or entities ``hiring, recruiting, or referring an individual
for employment.''
The safe-harbor procedure described in the present rule, however,
does not concern the employment verification requirements under section
274A(b) of the INA, 8 U.S.C. 1324a(b). Instead, it relates to section
274A(a)(2) of the INA, 8 U.S.C. 1324a(a)(2), and whether an employer's
actions in response to a no-match letter will lead to a finding that
the employer knowingly continued to employ unauthorized aliens. Unlike
employers who are conducting an initial Form I-9 verification at the
time of hire or a reverification under 8 CFR 274a.2(b)(1)(vii),
employers performing a Form I-9 verification under paragraph
(l)(2)(iii) as part of the safe-harbor procedure will be determining
whether they may continue to employ an individual after receiving
notification from SSA or DHS of a problem that remains unresolved.
Also, any document presented that contained a suspect SSN or alien
registration number would not be facially valid. Under these
circumstances, employers can properly require the employee to present a
document that does not contain the suspect SSN or alien number,
treating all similarly situated individuals in the same manner without
regard to their perceived national origin or citizenship status,
without committing document abuse under section 274B(a)(6) of the INA,
8 U.S.C. 1324b(a)(6).
Moreover, DHS is not persuaded that the panel opinion's logic in
Zamora v. Elite Logistics, Inc., 449 F.3d 1106 (10th Cir. 2006),
affects this analysis. In Zamora, a panel of the Tenth Circuit stated,
in a footnote, that the document abuse provision at section 274B(a)(6)
of the INA, 8 U.S.C. 1324b(a)(6), might apply to continuing-to-employ
situations, but the court also pointed out that the district court held
otherwise and that the appeals court would not reach the issue because
plaintiff did not appeal that portion of the decision. See 449 F.3d at
1113 & n.7. This language was merely dicta, and it does not prevent DHS
from promulgating this safe-harbor procedure. As discussed below, the
panel opinion no longer has any precedential value. Moreover, in the
context of the special verification procedures in paragraph (l)(2)(iii)
the employer would be determining whether a document is facially valid
(and whether they may continue to employ an individual) after not
merely receipt of a no-match letter, but several failed attempts to
resolve the discrepancy over more than 90 days after receiving
notification from SSA or DHS of the discrepancy. Under ICE's considered
interpretation of the relevant statutory provisions (which included
consultation with the Department of Justice), section 274B(a)(6) of the
INA does not prohibit employers from taking the steps outlined in this
regulation and preamble uniformly and without regard to perceived
national origin or citizenship status.
8. Other Employer Responsibilities
Some commenters expressed concerns about employers'
responsibilities in certain situations that are not specifically
addressed by the proposed rule. This rule is not intended to provide
bright-line guidance for all possible situations that may arise when
employers try to resolve problems raised by SSA or DHS notices. While
these safe-harbor provisions provide guidance on what employer actions
will not lead to a finding of constructive knowledge of an employee's
unauthorized status in certain situations, failure to adhere to the
guidance will not necessarily constitute constructive knowledge,
either. Rather, the benchmark of constructive knowledge is
reasonableness. The rule states that whether an employer will be found
to have constructive knowledge that an employee is an unauthorized
alien will depend on the totality of relevant circumstances.
Accordingly, the safe-harbor provisions establish one course of
action that an employer may take after receiving a notice from SSA or
DHS. The provisions contemplate that the particular steps undertaken by
the employer in response to an SSA or DHS notice, along with the time
the employer takes to act and follow up with appropriate inquiries,
will be relevant considerations in the determination of whether the
employer took reasonable steps to avoid a finding of constructive
knowledge under 8 CFR 274a.1. The ultimate determination of whether an
employer will be found to have knowingly employed an unauthorized alien
will be based on the totality of the circumstances. The safe-harbor
procedure is simply one way for employers to avoid liability under the
INA for knowingly employing unauthorized aliens after receiving SSA or
DHS notices.
Employers may wish to consider enrolling in USCIS's EEV Program
(described at http://www.uscis.gov/graphics/services/SAVE.htm), ICE's
IMAGE program (described at http://www.ice.gov/partners/opaimage/
index.htm), or other programs administered by private companies that
offer electronic Form I-9 completion and retention along with automatic
verification through SSA and DHS databases. Employers may find that
their use of these programs to verify employment authorization for all
new hires reduces problems resulting from discrepancies between
employees' Forms I-9 and information in SSA and DHS databases.
F. Discrimination
Several commenters have cited Zamora v. Elite Logistics, Inc.,
supra, to argue that the rule conflicts with the anti-discrimination
provisions of section 274B of the INA, 8 U.S.C. 1324b. The panel
opinion in Zamora, which the Tenth Circuit has vacated, would have held
only that the district court erred in granting summary judgment to the
employer, concluding that a reasonable jury could find that the stated
reasons for the employer's conduct were, in fact, a pretext for
unlawful discriminatory treatment. Zamora v. Elite Logistics, Inc., 316
F.Supp.2d 1107, 1116, 1117-21 (D.Kan. 2004) (granting summary judgment
and dismissing case), rev'd 449 F.3d at 1115, 1117 (facts not
uncontroverted; summary judgment reversed), vacated 478 F.3d 1160 (10th
Cir. Feb. 26, 2007) (en banc) (affirming judgment of the district court
by an equally divided court; affirming judgment). The court of appeals,
sitting en banc, affirmed by an equally divided court the district
court's summary judgment in favor of the employer as to Zamora's claim
that his suspension violated Title VII of the Civil Rights Act of 1964,
42 U.S.C. 2000e, and affirmed the district court's summary judgment in
favor of the employer as to Zamora's claim that his termination
violated Title VII.
An argument that Zamora illustrates a conflict between this rule
and the antidiscrimination provisions reads too much into the record in
Zamora. Zamora involved a nationality discrimination claim under Title
VII of the Civil Rights Act of 1964, not an unfair immigration related
employment practice claim under section 274B of the INA, 8 U.S.C.
1324b. See 449 F.3d at 1111. We agree that the concurrences and dissent
in the en banc decision make much of the issue, but the issue
[[Page 45621]]
remains dicta as the court affirmed the district court on narrow
grounds arising only under Title VII. The opinions issued in this
litigation do not indicate that the receipt of a no-match letter formed
the basis for any action by the employer. Zamora illustrates the need
for clear procedures on mismatches and this rule provides one such
clarification. This rule does not, as the commenters suggest, conflict
with the anti-discrimination provisions of the INA or title VII.
Employers must comply with all federal statutes in making employment
decisions.
G. Firing of Employees
Many commenters argued that the rule would result in employers'
immediately firing an employee upon receipt of a no-match letter. The
firing of any employee or ``churning'' of the workforce because of the
receipt of a no-match letter is speculative, and is neither required by
nor a logical result of the rule being adopted. If, in fact, an
employer obtains actual knowledge that a specific employee is an
unauthorized alien as a result of the no-match letter--for example, the
employee tells the employer so--then the employer should terminate
employment. If the employer is concerned about constructive knowledge
rather than actual knowledge, however, this safe-harbor procedure is
simply one method of resolving the problem while ensuring that DHS does
not use the employer's receipt of a DHS or SSA notice as evidence of
constructive knowledge.
Some commenters have suggested that promulgation of this final rule
will lead to massive firings across the nation. Indeed, one commenter
suggested that this safe-harbor procedure will cause employers to
``precipitously and indiscriminately'' fire employees who are the
subject of an SSA no-match letter before the employees are given an
opportunity to resolve the problem. As numerous commenters point out,
however, employers in the past have been confused about their
responsibilities when they receive SSA no-match letters, and this has
occasionally resulted in unwarranted termination of work-authorized
individuals. This final rule is an attempt to reduce confusion
regarding employers' responsibilities under immigration law by
providing them a DHS-approved method for resolving Social Security
mismatches. This rule should not result in the firing of legally
authorized workers.
Moreover, concern over ``massive firings'' appears to be directed
at the issuance of SSA no-match letters themselves, rather than the
application of this safe-harbor procedure. For example, some commenters
claimed that SSA no-match letters will be used as a pretext for
discriminatory firings or retaliation against workers who exercise
their workplace rights. As noted above, DHS will not be directing the
SSA to issue (or not issue) a no-match letter to an employer. DHS is
simply providing guidance to employers on how they may avoid a
constructive knowledge finding as they try to resolve the mismatch if
they should receive such a notice, and how they may acquire a safe
harbor from the use of that letter as evidence of constructive
knowledge in establishing liability under the INA.
Commenters were also concerned that the rule puts employers in a
``no-win situation,'' in which they would be liable for discrimination
if they terminate an employee who is the subject of a no-match letter,
but could also be liable for continuing to employ an alien with
constructive knowledge that the alien is unauthorized if they retain
the employee. The rule does not impose upon employers any new
responsibilities that do not already exist under current law. With or
without this rule, employers who have constructive knowledge that
certain employees are unauthorized aliens should terminate employment
or risk sanctions from DHS. Moreover, employers will not be engaging in
unlawful discrimination by uniformly following the procedures of this
regulation without regard to perceived national origin or citizenship
status.
By contrast, other commenters suggested that the rule will have no
impact because employees in the low-wage service industry will simply
switch employers if their current employer receives a no-match letter.
Changing jobs is not a costless endeavor, however, and an alternative
to leaving undisturbed an illegal employment relationship is
unacceptable. To the extent the employees referenced in these comments
are authorized to work, the employees have an incentive to correct the
no-match situation. If such a situation stands uncorrected the
employees may not receive credit for their earnings.
H. Economic Impact
A number of commenters suggested that the rule would have a
substantial economic impact on specific sectors of the economy and the
economy broadly. After reviewing these comments, DHS concludes that the
suggested impact is speculative. The commenters provided no specific
evidence or analysis to support this conclusion. In addition, DHS has
found no evidence in the record that substantially supports the notion
that the rule will have such an impact. For example, an agriculture
association noted the amount of production acreage being moved to
Mexico and suggested that its members were required to do so by a lack
of labor to cultivate and harvest crops. The reasons that growers may
change their acreage under cultivation and where they cultivate are not
driven by whether they may find a safe harbor under this rule from
possible sanctions for employing aliens not authorized to work. DHS
does not believe that this rule has any such economic impact.
Other commenters disagreed over whether the most significant impact
would be on large or small businesses--some arguing that corporate
structure would impede rapid resolution under the proposed time frame,
and others arguing that small businesses would not have the resources
to respond to the no-match letters. DHS does not believe that either
argument warrants a change in the rule. All employers have the ability
to establish their own mailing addresses for personnel management
operations and do so routinely in filings with United States
governmental agencies. Small employers incrementally have smaller
numbers of employees and less difficulty controlling this process.
Moreover, both types of commenters misapprehended the rule as an
affirmative requirement, rather than an offer of a safe harbor from
potential sanctions.
Another commenter expressed concern that these safe-harbor
provisions would be too burdensome in the temporary labor context
because employers will have difficulty resolving the SSA no-match after
the individual is no longer an employee. This rule does not impose on
employers a duty to resolve all SSA no-match letters. If the individual
is no longer an employee at the time the employer receives the no-match
letter, the employer need not act on the SSA no-match letter because
the employer is no longer employing the individual.
Some commenters expressed concern that resolution of the SSA no-
match letters places too heavy a burden on businesses in general. This
concern, however, relates to requirements that currently exist. This
regulation does not impose any new duties upon employers, who already
have an obligation to avoid liability for inaccurate wage reporting
under the Internal Revenue Code. Under existing law, the IRS is
authorized to fine employers $50 for each failure to file a complete
and accurate wage reporting form (Form W-2), up to a maximum of
$100,000 or $250,000. 26
[[Page 45622]]
CFR 301.6721-1(a). Employees have an obvious interest in accurate
reporting as well. Accurate wage reporting through the use of a Form W-
2 allows the SSA to match reported wages to an individual's earnings
record, and these reported wages are then used to determine eligibility
and amounts for Social Security retirement, disability, and survivors'
benefits. The present rule simply provides guidance to employers about
what steps they may take in order to avoid being found to have
constructive knowledge that an employee is an unauthorized alien.
I. SSA and DHS Database Issues
Several commenters argued that the rule is unwise because the SSA
or DHS records may contain inaccuracies or missing information, or
because the SSA records are not designed to be used for immigration
enforcement. DHS recognizes that studies from the Governmental
Accountability Office and other sources describe challenges that must
be addressed. However, the rule does not rely on the SSA no-match
letters as anything more than indicators of a potential problem--
whether that problem is that the employer's records and wage reporting
are inaccurate, that the employee is not receiving credit through the
SSA for wages earned, or that the employee is potentially an
unauthorized alien. The rule merely provides a safe-harbor from a
finding of constructive knowledge of employing unlawful workers based
on the no-match letter. Accordingly, DHS does not believe that these
issues warrant changes in the rule as proposed.
J. Cost to the Government
Several comments expressed concern about the costs that the rule
would impose on DHS and SSA. For example, some comments suggested that
DHS and SSA would be required by this rule to make a ``massive
investment'' in educational programs. DHS does not believe that an
outreach program would cost a substantial amount. None of the comments
provided specific data on which DHS can rely and that provide a
reasonable basis for generating specific costs. Although DHS
appreciates the concern expressed, DHS believes that any costs can be
resolved through the regular fiscal budgeting for the Executive Branch.
K. General Impact
Some commenters argue that the rule will have no effect on illegal
immigration, and will simply encourage unauthorized aliens to find jobs
in the unregulated underground cash economy. This again misunderstands
the purpose of the rule. DHS is promulgating this rule to provide
guidance to those employers who want to know how they can comply with
employment verification requirements after receiving notices from DHS
and SSA. This rule will likely have no effect on those employers who
are willing to risk civil and criminal penalties in order to hire and
exploit unauthorized aliens. DHS also does not view this rule as an
easy fix to end employment of unauthorized aliens, but rather as one
piece of a comprehensive strategy to resolve a complicated problem.
Similarly, commenters' concerns about diminished tax revenue as a
result of illegal employment practices and increased costs to DHS and
SSA as a result of this final rule have been considered but do not
warrant changes in the rule.
Some commenters suggested that the Form I-9 verification procedure
under paragraph (l)(2)(iii) would further encourage widespread identity
theft and/or document fraud, as undocumented aliens seek ways to avoid
the law. For example, an unauthorized alien could simply produce
another false document, perhaps one that contains a different SSN or
alien registration number. This reasoning does not withstand scrutiny.
First, DHS does not believe that its regulations create the market
for such criminal conduct. Instead, this market is fueled by a number
of factors, such as a desire by some aliens to work in the United
States without regard to United States immigration laws, a high demand
for inexpensive labor in certain sectors of the economy, limitations in
the existing employment eligibility verification framework,
unscrupulous employers willing to exploit unauthorized aliens for
profit, and fraudulent document preparers willing to violate the law.
Second, the safe-harbor procedure also deters identity theft,
document fraud, and similar crimes by providing employers with notice
of a potential problem. The rule provides a last-resort Form I-9
verification procedure to verify an employee's employment authorization
and identity. In the event that the employer is unable to verify within
ninety days of receiving the SSA or DHS notice that a document, alien
number, or SSN is assigned to the employee, this procedure may help
expose a larger identity theft problem. Under paragraph
(l)(2)(iii)(A)(2), the employer may not accept another document to
establish work authorization that contains the same number that is or
was the subject of a no-match notification from SSA or DHS. An employee
who produces different documents with different numbers, then,
depending on the circumstances, may put the employer on notice that the
employee has committed document fraud. Thus, an employee who provides
such notification would not only face general policies that the
employer applies to employees suspected of criminal conduct, see, e.g.,
Contreras v. Cascade Fruit Co., 9 OCAHO No. 1090 (Feb. 4, 2003), but
the employee could also face federal prosecution for fraudulently
completing a Form I-9. Facing possible termination or prosecution, it
is unlikely that undocumented aliens will be ``encouraged'' by the
amended rule to continue to commit such crimes to gain employment.
L. Privacy
Some commenters argued that the proposed rule will not make the
world safer or enhance the freedom of citizens; rather, it will lead to
neighbors spying on neighbors and the criminalization of good citizens.
DHS disagrees. Effective worksite enforcement plays an important role
in the fight against illegal immigration and in protecting our
homeland. Unauthorized workers employed at sensitive sites and critical
infrastructure facilities--such as airports, seaports, nuclear plants,
chemical plants, and defense facilities--pose serious homeland security
threats. Moreover, DHS has been charged with enforcing United States
laws prohibiting employment of unauthorized aliens.
The purpose of the proposed safe-harbor procedure is not to
encourage unlawful spying or criminalize the legitimate actions and
behavior of good citizens. The rule will provide clarity for employers
trying to comply with the law. Employers have a legal obligation under
existing law to hire only authorized workers. Employers may not
knowingly employ unauthorized aliens and must take action when the
federal government notifies them that they may have employed
unauthorized aliens or risk being found to have constructive knowledge
of that unauthorized employment. Those employers who abuse the
immigration system and break the law must be held accountable for their
actions. Those employers who were unaware of the facts but act in a
reasonable manner to take corrective action when necessary after
receiving an SSA or DHS notice will not be found to have violated their
legal obligations of the INA.
M. Proposed Changes in Form I-9
Several commenters suggested that the list of documents that are
acceptable
[[Page 45623]]
proof of employment authorization and other aspects of Form I-9 be
improved. DHS recognizes the need to update the list of acceptable
documents and make other changes. For example, DHS has also adopted
regulations permitting employers to retain and store Form I-9 in
electronic format. 71 FR 34,510 (June 15, 2006). DHS will review these
recommendations further and may make additional improvements in the
future.
III. Regulatory Requirements
A. Regulatory Flexibility Act
The Secretary of Homeland Security, in accordance with the
Regulatory Flexibility Act, 5 U.S.C. 605(b), has reviewed this
regulation and, by approving it, certifies that this rule would not
have a significant economic impact on a substantial number of small
entities. This rule would not affect small entities as that term is
defined in 5 U.S.C. 601(6). This rule describes when receipt by an
employer of a no-match letter from SSA or DHS may result in a finding
that the employer has constructive knowledge that it is employing an
alien not authorized to work in the United States. The rule also
describes steps that DHS would consider a reasonable response by an
employer to receipt of a no-match letter. The rule does not mandate any
new burdens on the employer and does not impose any new or additional
costs on the employer, but merely adds specific examples and a
description of a ``safe-harbor'' procedure to an existing DHS
regulation for purposes of enforcing the immigration laws and providing
guidance to employers.
B. Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in one year, and it would not significantly or uniquely
affect small governments. Therefore, no actions were deemed necessary
under the provisions of the Unfunded Mandates Reform Act of 1995,
Public Law 104-4, 109 Stat. 48 (1995), 2 U.S.C. 1501 et seq.
C. Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by section 804 of the
Small Business Regulatory Enforcement Act of 1996, Public Law 104-121,
804, 110 Stat. 847, 872 (1996), 5 U.S.C. 804. This rule will not result
in an annual effect on the economy of $100 million or more; a major
increase in costs or prices; or significant adverse effects on
competition, employment, investment, productivity, innovation, or on
the ability of United States-based companies to compete with foreign-
based companies in domestic or foreign markets.
D. Executive Order 12866 (Regulatory Planning and Review)
DHS considers this rule a ``significant regulatory action'' under
Executive Order No. 12,866, 58 FR 51,735 (Sept. 30, 1993) as amended.
Under Executive Order 12,866, a significant regulatory action is
subject to an Office of Management and Budget (OMB) review and to the
requirements of the Executive Order. The Executive Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may (1) have an annual effect on the economy of $100 million
or more or adversely affect in a material way the economy, a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities; (2) create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) materially alter
the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights or obligations of recipients thereof; or (4)
raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order. Because this rule describes what specific steps an employer that
has received a no-match letter could take that will eliminate the
possibility that DHS will find that the employer has constructive
knowledge that it is employing an unauthorized alien, this rule raised
novel policy issues.
E. Executive Order 13132 (Federalism)
This rule does not have substantial direct effects on the States,
on the relationship between the National Government and the States, or
on the distribution of power and responsibilities among the various
levels of government. Therefore, in accordance with section 6 of
Executive Order No. 13,132, 64 FR 43,255 (Aug. 4, 1999), this rule does
not have sufficient federalism implications to warrant the preparation
of a federalism summary impact statement.
F. Executive Order 12988 (Civil Justice Reform)
This rule meets the applicable standards set forth in sections 3(a)
and 3(b)(2) of Executive Order No. 12,988, 61 Fed. Reg. 4729 (Feb. 5,
1996).
G. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, et seq.,
all Departments are required to submit to OMB, for review and approval,
any reporting requirements inherent in a rule. This rule does not
impose any additional information collection burden or affect
information currently collected by ICE.
List of Subjects in 8 CFR Part 274a
Administrative practice and procedure, Aliens, Employment,
Penalties, Reporting and recordkeeping requirements.
0
Accordingly, part 274a of chapter I of title 8 of the Code of Federal
Regulations is amended as follows:
PART 274a--CONTROL OF EMPLOYMENT OF ALIENS
0
1. The authority citation for part 274a continues to read as follows:
Authority: 8 U.S.C. 1101, 1103, 1324a; 8 CFR part 2.
0
2. Section 274a.1(l) is revised to read as follows:
Sec. 274a.1 Definitions.
* * * * *
(l)(1) The term knowing includes having actual or constructive
knowledge. Constructive knowledge is knowledge that may fairly be
inferred through notice of certain facts and circumstances that would
lead a person, through the exercise of reasonable care, to know about a
certain condition. Examples of situations where the employer may,
depending on the totality of relevant circumstances, have constructive
knowledge that an employee is an unauthorized alien include, but are
not limited to, situations where the employer:
(i) Fails to complete or improperly completes the Employment
Eligibility Verification, Form I-9;
(ii) Acts with reckless and wanton disregard for the legal
consequences of permitting another individual to introduce an
unauthorized alien into its work force or to act on its behalf; and
(iii) Fails to take reasonable steps after receiving information
indicating that the employee may be an alien who is not employment
authorized, such as--
(A) An employee's request that the employer file a labor
certification or employment-based visa petition on behalf of the
employee;
(B) Written notice to the employer from the Social Security
Administration reporting earnings on a Form W-2 that employees' names
and corresponding social security account numbers fail to
[[Page 45624]]
match Social Security Administration records; or
(C) Written notice to the employer from the Department of Homeland
Security that the immigration status document or employment
authorization document presented or referenced by the employee in
completing Form I-9 is assigned to another person, or that there is no
agency record that the document has been assigned to any person.
(2)(i) An employer who receives written notice from the Social
Security Administration as described in paragraph (l)(1)(iii)(B) of
this section will be considered by the Department of Homeland Security
to have taken reasonable steps--and receipt of the written notice will
therefore not be used as evidence of constructive knowledge--if the
employer takes the following actions:
(A) The employer must check its records to determine whether the
discrepancy results from a typographical, transcription, or similar
clerical error. If the employer determines that the discrepancy is due
to such an error, the employer must correct the error and inform the
Social Security Administration of the correct information (in
accordance with the written notice's instructions, if any). The
employer must also verify with the Social Security Administration that
the employee's name and social security account number, as corrected,
match Social Security Administration records. The employer should make
a record of the manner, date, and time of such verification, and then
store such record with the employee's Form I-9(s) in accordance with 8
CFR 274a.2(b). The employer may update the employee's Form I-9 or
complete a new Form I-9 (and retain the original Form I-9), but the
employer should not perform a new Form I-9 verification. The employer
must complete these steps within thirty days of receiving the written
notice.
(B) If the employer determines that the discrepancy is not due to
an error in its own records, the employer must promptly request that
the employee confirm that the name and social security account number
in the employer's records are correct. If the employee states that the
employer's records are incorrect, the employer must correct, inform,
verify, and make a record as set forth in paragraph (l)(2)(i)(A) of
this section. If the employee confirms that its records are correct,
the employer must promptly request that the employee resolve the
discrepancy with the Social Security Administration (in accordance with
the written notice's instructions, if any). The employer must advise
the employee of the date that the employer received the written notice
from the Social Security Administration and advise the employee to
resolve the discrepancy with the Social Security Administration within
ninety days of the date the employer received the written notice from
the Social Security Administration.
(C) If the employer is unable to verify with the Social Security
Administration within ninety days of receiving the written notice that
the employee's name and social security account number matches the
Social Security Administration's records, the employer must again
verify the employee's employment authorization and identity within an
additional three days by following the verification procedure specified
in paragraph (l)(2)(iii) of this section.
(ii) An employer who receives written notice from the Department of
Homeland Security as described in paragraph (l)(1)(iii)(C) of this
section will be considered by the Department of Homeland Security to
have taken reasonable steps--and receipt of the written notice will
therefore not be used as evidence of constructive knowledge--if the
employer takes the following actions:
(A) The employer must contact the local Department of Homeland
Security office (in accordance with the written notice's instructions,
if any) and attempt to resolve the question raised by the Department of
Homeland Security about the immigration status document or employment
authorization document. The employer must complete this step within
thirty days of receiving the written notice.
(B) If the employer is unable to verify with the Department of
Homeland Security within ninety days of receiving the written notice
that the immigration status document or employment authorization
document is assigned to the employee, the employer must again verify
the employee's employment authorization and identity within an
additional 3 days by following the verification procedure specified in
paragraph (l)(2)(iii) of this section.
(iii) The verification procedure referenced in paragraphs
(l)(2)(i)(B) and (l)(2)(ii)(B) of this section is as follows:
(A) The employer completes a new Form I-9 for the employee, using
the same procedures as if the employee were newly hired, as described
in section 274a.2(a) and (b) of this part, except that--
(1) The employee must complete Section 1 (``Employee Information
and Verification'') and the employer must complete Section 2
(``Employer Review and Verification'') of the new Form I-9 within
ninety-three days of the employer's receipt of the written notice
referred to in paragraph (l)(1)(iii)(B) or (C) of this section;
(2) The employer must not accept any document referenced in any
written notice described in paragraph (l)(1)(iii)(C) of this section,
any document that contains a disputed social security account number or
alien number referenced in any written notice described in paragraphs
(l)(1)(iii)(B) or (l)(1)(iii)(C) of this section, or any receipt for an
application for a replacement of such document, to establish employment
authorization or identity or both; and
(3) The employee must present a document that contains a photograph
in order to establish identity or both identity and employment
authorization.
(B) The employer must retain the new Form I-9 with the prior
Form(s) I-9 in accordance with 8 CFR 274a.2(b).
(3) Knowledge that an employee is unauthorized may not be inferred
from an employee's foreign appearance or accent. Nothing in this
definition should be interpreted as permitting an employer to request
more or different documents than are required under section 274A(b) of
the Act or to refuse to honor documents tendered that on their face
reasonably appear to be genuine and to relate to the individual, except
a document about which the employer has received written notice
described in paragraph (l)(1)(iii) of this section and with respect to
which the employer has received no verification as described in
paragraphs (l)(2)(i)(C) or (l)(2)(ii)(B) of this section.
Michael Chertoff,
Secretary.
[FR Doc. E7-16066 Filed 8-14-07; 8:45 am]
BILLING CODE 4410-10-P
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