The unique role of an entrepreneur requires a diverse skill set all in play simultaneously: visionary, innovator, implementer, financial and business strategist and negotiator, public relations resource, and last but certainly not least, employer. The swift and often erratic growth of an entrepreneurial business often leaves little time to focus on more mundane yet critical concerns. Following are a few immigration-related questions that I encounter when working with entrepreneurs. Simple answers follow that I hope will be helpful to ensure that your growing business complies with US immigration law.
You know if your workforce is legal if, within three days of their being hired, new employees are able to fully complete a Form I-9 and, in doing so, show both a valid proof of identity and employment authorization from the list of acceptable documents on the reverse side of the I-9.
Several other procedural issues surrounding completion of Form I-9 should be mentioned in order to comply with relevant labor and employment law. First, you may not use the I-9 process to “screen” employees or as part of the hiring process. This is considered discriminatory and grounds for an applicant to file a complaint with the Department of Justice’s Office of Special Counsel for Immigration Related Unfair Employment Practices. Also, the I-9 should not be kept with an employee’s personnel files. In the event of an Immigration and Customs Enforcement (ICE) investigation – or worse, raid – it is best to have the I-9’s segregated within easy access and not to have other information available that is not relevant and may prove to be harmful. An example of harmful information would be I-9 attachments showing that different standards are used for documentation required in verifying employment authorization, suggesting discrimination. Third, the I-9 must be kept for three years after the date of hire or for one year after employment is terminated, whichever is longer.
If an employee is not employment authorized through permanent US resident visa status known as holding a “green card,” is not a US citizen, and is not the spouse of a non-immigrant on an L or E visa, then you as an employer must sponsor that individual for a visa. If the prospective employee is a recent graduate from a US college, he or she may be able to work at your company on his or her F-1 student visa for up to 27 months as part of an optional practical training period. Once this period expires, the employee must change to another visa status.
The essential visa options for employers are the H-1B for a so-called specialty occupation or the foreign equivalent of a US bachelor’s degree; an L visa if your company is part of a multinational organization in a requisite relationship with your US company, the individual possesses certain qualifications, and is being transferred from a foreign office to the US; the E-1 or E-2 visa if there is a treaty of “commerce and navigation” between the US and the country of nationality of the ownership of or source of investment in your company, with the foreign job applicant sharing that same nationality; the TN for certain professions available to Canadian and Mexican nationals under the North American Free Trade Agreement, the H-1B1 for qualified Singaporeans and Chileans; the E-3 for qualifying Australians; the J-1 for interns or trainees; and the O for outstandingly qualified individuals.
The I-9 process is the easiest way to ensure that you have a legal workforce. However, further steps can be taken. The Department of Homeland Security (DHS) has partnered with the Social Security Administration (SSA) in implementing a free internet-based enrollment system called E-Verify. E-Verify electronically verifies employment eligibility of new hires. As of January 2009, over 100,000 employers are participating in E-Verify. In over 96% of all requests, the employee being verified is designated as employment-authorized.
The DHS recently has encouraged the use of E-Verify and further employer initiatives to obtain a higher comfort level for employers by certifying an employer as I E-Verified. The DHS will certify an employer who is I E-Verify compliant, has submitted to a voluntary audit by ICE, and is committed to following ICE best practices. Best practices means the employer:
- has entered into an agreement called IMAGE, the acronym for ICE Mutual Agreement between Government and Employers;
- has agreed to utilize E-Verify;
- has developed and implemented an internal training program for employees involved in the hiring process;
- requires secondary review of the completed I-9;
- has established an internal tip line;
- has a policy and procedure to report criminal violations to ICE or other law enforcement;
- uses a fair and consistent procedure to verify that names and Social Security numbers on Form W-2 match;
- conducts an annual audit by an external third party, such as an attorney or trained employee outside the hiring process, to review all Forms I-9;
- has established policies and procedures that prohibit discrimination;
- promotes the IMAGE partnership with other business partners; and
- submits an annual report to track results.
In return for an employer signing onto IMAGE, ICE will provide a minimum two year deferral of Form I-9 inspections.
It is worth noting here that E-Verify is now mandatory for federal contractors and subcontractors who have contracts in excess of $3,000. E-Verify has also become mandatory in certain states.
There are a number of common, but easily preventable, mistakes made by employers when processing Form I-9. First, the employer frequently fails to notice that the employee may not have provided all information requested in Section 1. This requirement applies to all employees hired after November 6, 1986, even US citizens. Employers sometimes mistakenly assume that US citizens do not need to complete an I-9.
Failure of the employer to require the documentation necessary to prove an employee’s identity and employment authorization is another problem. Too frequently, employers make the mistake of requiring only a state-issued driver’s license as proof of an employee’s identity which obviously does not prove employment eligibility. An employer must also be conscious of the fact that a terminated employee may be unavailable to complete Section 1 so it is important to get the required information promptly upon hiring.
Inconsistent maintenance of Form I-9 can also create problems. While an employer is not required to attach supporting documentation, if they do so for one employee, they must do so for all so as not to be considered discriminatory. During an inspection or raid, ICE agents may only inspect Form I-9s. Supporting documentation attached to the I-9 can and will be reviewed by ICE: if that documentation looks fraudulent on its face, the employer can be imputed with constructive knowledge that the employee was not employment-authorized.
Neglect of Section 3 can be an issue. This section requires that an employer re-verify employment authorization if one of the documents provided by the employee expires. For this reason, an employer needs to keep a “tickler” system to ensure that expiring supporting documentation is renewed and Section 3 is completed. The employer should not request documentation different than that used to complete Form I-9 originally as this can be considered discriminatory. These so-called paperwork violations carry fines ranging from $110 to $1100 per employee.
Any employer can be audited or investigated by ICE. The DHS has recently issued a statement advising that it will focus on industries involving critical infrastructure or public safety, which are security-related. Recent ICE activity has included raids on employers with a large unskilled workforce, frequently in the agribusiness, food or hospitality industries.
ICE may investigate an employer’s practices through a notice to inspect or make a raid, based upon background investigation and/or anonymous tips. ICE has been known to take years as it gathers evidence before initiating a raid against an employer whom it believes may be employing individuals who are not work authorized. Employers need to be aware that ICE can initiate action through the cooperation of an HR employee who agrees to becomes a confidential informant so as to avoid personal liability.
ICE has indicated it will increase pressure on employers through aggressive use of sanctions such as criminal penalties including fines, property forfeiture and imprisonment, all as a means to discourage illegal job creation. The fines that can be imposed are harsh and can be levied against executives and managers individually, not just the company, depending upon the executive’s or manager’s knowledge of illegal hiring practices. Fines nationwide rose from $70,000 to over $30 million in four years. In fact, harboring illegal aliens -- which may include warning employees who are not work authorized of an impending ICE visit -- can result in employer sanctions of up to 10 years imprisonment per violation and the greater of $250,000 or two times financial gain per violation
An employer must act if it receives a no-match letter from the SSA stating that an employee’s name and corresponding social security number fail to match SSA records. Receipt by an employer of such a letter, also known as EDCOR for “Educational Correspondence,” is considered to be constructive knowledge that an employee may not be employment authorized. By the same token, however, receipt of a no-match letter in and of itself does not indicate that the employee or employer has intentionally used an incorrect social security number. Unfortunately, the safe harbor provisions on how to proceed in the event of a no- match letter promulgated by the Department of Homeland Security in an effort to provide employer guidance have been found to be unconstitutional. This leaves the employer in a real dilemma. While an employer may be tempted to terminate the employee whose social security number is the subject of a no-match letter, this is illegal and could result in the employee suing or the Equal Employment Opportunity Commission investigating the employer. As a result, an employer must have in place clear, fair and consistent written policies on how it deals with no-match letters.
Actually, the SSA has recently stopped sending no-match letters to employers as it is conducting a study to assess the accuracy of its Master Earning File. About 70 employers nationwide will be contacted to participate in a survey. The 70 employers selected are spread over the following regions: Boston, New York, Kansas City, Dallas, Denver and Seattle. The SSA has assured the public that any information being acquired is not to be used for data mining or communicated to ICE for enforcement. There is no indication when no-match letters will be sent again; however, employees may continue to receive the employee equivalent of a no-match letter called a DECOR letter (standing for “Decentralized Correspondence”).
Once the no-match letters commence being sent again to employers, one way to avoid the receipt of the same is for an employer to register online with the Social Security Number Verification System (SSNVS). While helpful in verifying an employee’s social security number, like E-Verify, the SSNVS may not be used as a precursor to hiring an employee nor for credit check and other reasons, including any punitive action against an employee whose social security number is the subject of a no-match letter.
We hope that the above is helpful to you in avoiding time-consuming and costly mistakes that can be easily avoided through pro-active compliance with relevant immigration law. The visa options for hiring foreign talent is necessarily discussed only on a very cursory level.