Hiring is a compliance minefield. Laws, rules, and regulations loom at every turn to trip employers up. The process involved in verifying a person’s employment authorization is no different. Most employers know how to fill out an initial I-9 when taking on a new hire; but they often have questions about other aspects of I-9 compliance, such as:

1)      When may/must I audit my current employees’ I-9s? and

2)      What may/must I do if I have reason to believe my current employees are not actually work-authorized?

(If you missed part 1 of this article, click here to get caught up.) Before getting to these questions, it is helpful to know what counts as a violation of the law against hiring unauthorized workers.

Hiring or Continuing to Employ

Hopefully you are already aware that, no matter what your political views on the issue are, you cannot hire or continue to employ an individual who is not authorized to work in the United State (e.g. an illegal immigrant). (8 USC § 1324a(a)(1) and (2)) You violate this law when you “know” that the individual you hire or employ is not authorized to work.

But as long as you comply with I-9 requirements, you have a legal defense to hiring an unauthorized employee. (8 USC § 1324a(a)(3)) In other words, “[i]f you can show that you have, in good faith, complied with Form I-9 requirements, then you [] have established a ‘good faith’ defense with respect to a charge of knowingly hiring an unauthorized alien, unless the government can show that you had actual knowledge of the unauthorized status of the employee.” (Handbook, 11.7.1 and 14.0 Q.5) This defense does not apply if you’ve complied with I-9 procedures outwardly but you secretly know that an employee is unauthorized. (And this defense only applies to hiring an unauthorized individual, not continuing to employ them, because once you know an individual is unauthorized, the law requires that you stop employing them. (8 USC § 1324a(a)(3))

Levels of Knowledge

By regulation, “knowing” includes actual knowledge as well as constructive knowledge. Constructive knowledge is a legal term that essentially means that the facts and circumstances are such that you should have known something.[1] This means you cannot turn a blind eye to indicators that you are violating the law.

For example, judges have repeatedly held that an employer has constructive knowledge when it receives "specific information that casts doubt on the employment authorization of an employee, and the employer continues to employ the individual without taking adequate steps to re-verify the individual's employment eligibility."[2] Although “[t]he statute ‘does not require that the knowledge come to the employer in any specific way’,” receiving any sort of notice from a government agency, such as the Department of Homeland Security (DHS), informing you that your employee’s work authorization is being questioned will typically count as giving you constructive notice.[3]

Note that the Immigration and Naturalization Service (INS) used to be the agency that would audit employer’s I-9 compliance, but that agency no longer exists. Its functions were transferred to the U.S. Citizenship and Immigration Service (USCIS), the U.S. Immigration and Customs Enforcement (ICE), and the U.S. Customs and Border Protection (CBP), which all exist under the umbrella of the DHS. So if you receive notice from USCIS, ICE, or CBP that one of your employees may not be authorized to work, you must take the tip seriously. If it comes out that the employee really is unauthorized, a court may say that because you receive notice from a government agency, you should have known that you were committing a violation of law by employing them without investigating further.

Responding to Notice or Tips About an Employee’s Authorization

Once you receive notice that an employee may be unauthorized, how should you respond? Back in December 2015, the DHS and the Department of Justice jointly issued “Guidance for Employers Conducting Internal Employment Eligibility Verification Form I-9 Audits” (Guidance). The Guidance cautioned employers against “responding to tips that have no indicia of reliability, such as unsubstantiated, retaliatory, or anonymous tips. Heightened scrutiny of a particular employee’s Form I-9 or the request for additional documentation from the employee based on unreliable tips may be unlawful, particularly if the tip was made based upon retaliation, the employee’s national origin or perceived citizenship status.” The Guidance also states that “[w]hile tips concerning an employee’s immigration status may lead to the discovery of an unauthorized employee, tips and leads should not always be presumed to be credible.” (Guidance page 5)

According to the Guidance, an employer is allowed to reexamine an employee’s I-9 documentation in response to a reliable, nondiscriminatory tip. And in fact, “an employer's examining and proffering [authorization documents] other than those originally presented when the employee was hired, to prove the employee is authorized for employment” can help an employer prove that it did not have constructive knowledge if it later comes out that the employee was, in fact, unauthorized.[4]

The Guidance does not say whether an employer needs to reverify or only review the I-9 for an employee it has reason to believe may not be documented. (See part 1 for the difference between I-9 reverification and review.) The statute that defines actual and constructive knowledge directs employers to exercise “reasonable care” in investigating tips. So the amount of investigation an employer should do in response to a tip will depend on the strength of the tip:

• If you receive a tip from a government agency, for example, you should reverify the employee’s documents by updating Section 3 of his or her I-9.

• If you receive a tip from a reliable but less official source, a simple review will likely suffice.

• But if you receive an anonymous phone call at 2:30 AM from someone who sounds an awful lot like an employee you just fired, you are probably safe to ignore it.

Internal Audits

The Guidance also explains that employers are allowed, but not required, to conduct internal audits of their employees’ I-9s. During these audits, you “may choose to review all Forms I-9 or a sample of Forms I-9 selected based on neutral and non-discriminatory criteria.” (Guidance page 1) But take extra care to avoid audits that are, or that could appear to be, discriminatory. For example, “[i]nternal audits should not be conducted on the basis of an employee’s citizenship status or national origin, or in retaliation against any employee or employees for any reason.” (Guidance page 1)

An internal audit involves examining I-9s and the picture or photocopies of the documents that were presented when the I-9s were first submitted. Internal audits are used to detect missing or incomplete I-9s, to check for expired work authorization, and to get rid of I-9s that the employer is no longer required to retain.

When auditing your employees’ I-9s, use the same standard you use when examining an initial I-9, i.e. accept original form I-9 documentation that “reasonably appears to be genuine and to relate to the individual presenting the documentation.” If you think the documentation fails this test, you should discreetly address your concerns with the employee and give him or her the opportunity to choose different documentation from the Lists of Acceptable Documents. If you find errors or insufficient documentation during an audit, discreetly ask the employee to fill out a new I-9 and present documentation. Then staple the new form to the old form along with a signed and dated explanation of the corrective action taken. Do not fire an employee unless and until that employee cannot demonstrate identity and/or work authorization.

An employer may not conclude without foundation that a photocopy of an employee’s Form I-9 documentation is not genuine or does not relate to the individual. In the context of an internal audit, for an employer that has photocopied Form I-9 documentation, it should recognize that it may not be able to definitively determine the genuineness of Form I-9 documentation based on photocopies of the documentation. An employer should not request documentation from an employee solely because photocopies of documents are unclear. (Guidance page 3)

Transparency and documentation are vital: document any action you take in correcting, altering, or redoing an I-9.

E-Verification and I-9 Audits

You should not use E-Verify to review I-9s either in response to a credible tip or during an internal audit. (Guidance page 5) The Guidance reiterates the general principle that E-Verify cannot be used for existing employees. So if you enroll in E-Verify and then later perform an I-9 internal audit, you “should not go back and create cases for any employees hired during the time there was deliberate non-use of E-Verify.” (Guidance page 5)

If, after enrolling in E-Verify, you discover that you made no E-Verify case for an employee who was hired after you started using E-Verify, then, and only then, should you “bring [your]self into compliance immediately by creating a case for the employee.” You also may not use the Social Security Number Verification Service during an internal audit. (Guidance page 6)

System-Wide Problems

If you discover a deficiency in your operations that calls the integrity of all your I-9 forms into question, then you may require all existing employees to complete new I-9 forms instead of conducting an internal audit. However, “[w]ithout sufficient justification, requiring an existing employee to complete a new Form I-9 may raise discrimination concerns. Where new Forms I-9 are completed for existing employees, they should be stapled to the original Forms I-9, and not backdated. Finally, the same discrimination, retaliation and intimidation concerns implicated by conducting internal audits also apply to obtaining new Forms I-9 from existing employees.” (Guidance page 4) Again, E-Verify should not be used and you should document the deficiency, the reason for the new I-9 forms, and so on.

Employee Admissions

Finally, if in response to an I-9 audit, an employee discloses that he or she is unauthorized, you must terminate that employee in order to stay compliant. If, however, you spot a discrepancy or deficiency in an employee’s documentation during a reverification, review, or audit, you should not immediately discharge the employee. First, give the employee a reasonable amount of time to fix the problem. (Guidance page 4) If an employee admits that he/she was not authorized to work at the time of hire but has since become authorized, you are not required to discharge the employee. Instead, have the employee complete a new I-9 and “attach the new Form I-9 to the previously completed Form I-9 together with a signed and dated explanation.” (Guidance page 5)

Summary

In summary, you are not required to perform internal I-9 audits, to redo all of your employees’ I-9s, or to review I-9s in response to an unreliable or unsubstantiated tip. But you are allowed to do those things under the circumstances discussed above. If you receive reliable information that, upon reasonable investigation, could lead to knowledge of an employee’s unauthorized status, you could be liable if you do not exercise “reasonable care” to investigate, and it turns out that the employee is actually not authorized to work in the United States.

If you have questions about this article or other I-9 compliance issues, call Crook & Taylor Law at 801.326.1943 to speak with a lawyer.

This article was written for informational and educational purposes only. It is not intended as legal advice or as a substitute for legal advice. Reading this article does not create a lawyer-client relationship between the reader and Crook & Taylor or any attorney. The rules and recommendations discussed in this article are valid as of the date this article was published or last modified, if applicable.

Resources

• Form I-9 from the U.S. Citizenship and Immigration Services

• E-Verify User Manual from E-Verify.gov

• Questions and Answers on E-Verify.gov

• Guidance for Completing Form I-9  from the U.S. Citizenship and Immigration Services

• M274 Employer Handbook from the U.S. Citizenship and Immigration Services

References

[1]    8 CFR § 274A.1(l)(1)) defines constructive knowledge as “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.”

[2]    Split Rail Fence, 852 F.3d at 1240, 43

[3]    Split Rail Fence, 852 F.3d at 1243; See, e.g., New El Rey Sausage Co., Inc. v. INS, 925 F.2d at 1158-59 (employer failed to investigate when the INS informed it that certain authorization documents provided by employees were invalid); Aramark Facility Servs. v. Serv. Emps. Int'l Union, Local 1877, 530 F.3d 817, 828 (9th Cir. 2008)(explaining notice "that the government suspects the workers of using fraudulent documents" is "positive information . . . [that] provide[s] constructive notice" of unauthorized status (quotations omitted)); Noel Plastering, Stucco, Inc. v. OCAHO, 15 F.3d 1088, *1 (holding "written notice from the [INS] that the employees were likely unlawfully employed aliens . . . [was] sufficient to give an employer constructive knowledge of a violation"); United States v. Aid Maint. Co., 1997 OCAHO LEXIS 55, *11, 7 OCAHO 951 ("Constructive knowledge is most readily proven when it is shown that the employer had positive information supplied by the INS, [as shown through a Warning Notice or NSD], that some of its employees are unauthorized for employment in the United States, and subsequently fails to take reasonable steps to re-verify the employment eligibility of those employees.”).

[4]    Split Rail Fence, 852 F.3d at 1241.

- By Taylor Cutler