Many employers are justifiably confused as to whether they may accept a receipt notice showing that an employee has applied for a particular document that is acceptable for I-9 employment eligibility verification purposes. With U.S. Immigration and Customs Enforcement (“ICE”) serving an additional 1,000 Notices of Inspection to employers for I-9 audits in June 2011 alone, it is a good time to refresh your understanding about the use of receipts for initial verification, reverification and to correct errors found in the course of self-audits.

As a general rule, a receipt notice showing an application for an initial period of employment or for an extension of an expiring employment authorization period is not acceptable during the initial I-9 verification or a subsequent reverification. There are, however, exceptions. An employer must accept a receipt during the I-9 process in place of one of the otherwise accepted documents – known as a List A, List B or a List C document – set forth on the instructions accompanying the Form I-9 in the following circumstances:
 

1. Any employee may present a receipt showing that an application for a replacement List A, B, or C document has been submitted because the document was lost, stolen, or damaged. The receipt notice serves to verify the individual’s employment authorization for 90 days from the date of hire, or, in the case of reverification, the date the employment authorization expires. Upon the expiration of the receipt period, the employee must present the actual document for which the receipt was obtained.
2. An employee who is a lawful permanent resident may present a receipt that constitutes an arrival card which is a portion of Form I-94 or Form I-94A which contains a temporary I-551 stamp (and photograph). This temporary I-551 stamp placed on the I-94 card, which is found within the employee’s passport, is considered the receipt. This type of receipt is considered valid as long as it is submitted for I-9 purposes before the expiration date listed on the temporary I-551 stamp. If there is no listed expiration date on the I-551 stamp, the receipt expires within one year from the date of issue.
3. An employee who is a refugee may present a receipt that constitutes Form I-94 or Form I-94A with an unexpired refugee admission stamp. The receipt notice serves to verify the individual’s employment authorization for 90 days from the date of hire, or, in the case of reverification, the date the employment authorization expires. Upon the expiration of the receipt period, the employee must present an unexpired employment authorization document (i.e., Form I-766, Form I-688B) or an unrestricted Social Security Card combined with a valid List B document.
4. Certain employees who hold non-immigrant visas and who are authorized to work for a specific employer incident to status (e.g., E, H, L, O, P, and TN) may continue to work for their sponsoring employers up to 240 days following the expiration of their authorized period of stay. In order for this rule to apply, the application or petition for an extension of status must be filed in good faith and before the expiration of the original status. In these cases, a USCIS receipt showing that a timely extension application or petition was filed (i.e., Form I-797) must be accepted for reverification purposes.
5. Individuals holding valid H-1B visas for another employer may “port” or work for another employer once the new or prospective employer has timely filed an H-1B portability petition on behalf of the individual. An application is generally considered “filed” once it is accepted for processing by the U.S. Citizenship and Immigration Services (USCIS). A copy of the Receipt Notice for the filed H-1B portability petition, together with the copy of the alien’s unexpired I-94 card can be accepted as evidence of employment authorization for employment verification purposes. Once the H-1B portability petition is approved, the employer should update the I-9 by reviewing the passport with the newly issued H-1B Approval Notice for the employee at issue.
6. In April 2008, USCIS issued a rule specifically pertaining to F-1 students. Under the rule, if a student in lawful F-1 status is the beneficiary of a timely filed H-1B petition requesting a change of status (from F-1 to H-1B), the student’s status is extended, along with any grant of optional practical training (“OPT”) work authorization, until October 1. In these cases, the employer may accept the expired OPT work authorization document combined with an endorsed Form I-20 that demonstrates that the student’s employment work authorization – OPT – has been extended and is still valid, and the USCIS Receipt Notice (Form I-797) showing receipt of the timely filed H-1B Petition.

Employers should also be aware of the following additional considerations:

• A receipt showing an employee has applied for an employment authorization document – whether it is for an initial grant of work authorization or a renewal – cannot be accepted as sufficient evidence of work authorization for I-9 purposes.
• A receipt is never acceptable for employment lasting less than 3 days.
• An employer’s failure to honor a receipt in one of the circumstances or exceptions set forth above may constitute document abuse and is prohibited under the Immigration and Nationality Act. 

Immigration and Customs Enforcement (“ICE”), the enforcement unit of the U.S. Immigration Service, is continuing its vigorous efforts to police the Immigration Reform and Control Act (“IRCA”), with a particular emphasis on employer audits and enforcement actions. IRCA prohibits employers from knowingly hiring or employing unauthorized workers, and requires employers to verify the work authorization of employees through the Form I-9 employment verification process at the time of initial employment.  Under the current Administration, ICE has dramatically ramped up I-9 audits and enforcement actions. In the fiscal year ending September 30, 2010, ICE conducted over 2,000 employer audits, compared to only 250 just three years ago. The dollar value of penalties assessed and the number of debarments of federal contractors for IRCA violations has also significantly increased.

ICE’s aggressive approach was highlighted last month by two investigations. First, a national retail clothing company agreed to pay a $1 million fine based on an ICE audit of its electronic I-9 verification system. While the audit did not reveal any evidence of the employment of unauthorized workers, there were systemic deficiencies in the employer’s compliance program that motivated ICE to demand the substantial fine.

In addition to seeking civil penalties and potential debarment from federal contracts, ICE has pursued criminal charges against employers and company officers. IRCA authorizes criminal penalties for employers that engage in a “pattern or practice” of knowingly employing unauthorized workers. In one recent case, ICE identified 16 unauthorized workers through an I-9 audit of company records. The company advised ICE that the employees had been terminated, but a subsequent investigation revealed that at least two of the workers remained on the payroll and had been advised by the business owner to “go out and get good social security numbers.” The business owner and the company vice president now face criminal charges for knowingly continuing to employ unauthorized aliens.

These enforcement actions derive from ICE’s 2009 comprehensive strategy to reduce the demand for illegal employment and protect employment opportunities for lawful workers. Under this strategy, ICE focuses its resources on the auditing and investigation of employers suspected of knowingly employing illegal workers. In conjunction with this initiative, ICE has conducted high-profile, targeted audits of employers with connections to public safety and national security, as well as those employers identified during ICE investigations as potential employers of unauthorized workers.

The aggressive enforcement attitude of ICE should be an urgent reminder to senior human resources personnel to: (i) re-evaluate I-9 procedures; (ii) conduct self-audits of I-9 records; (iii) remain alert to circumstances that may suggest an issue with an employee’s work authorization; and (iv) avoid any conduct that could be interpreted by ICE as encouragement of, acquiescence in, or constructive knowledge of, fraudulent I-9 documentation.
 

As all employers know, the Immigration and Nationality Act (“INA”) makes it unlawful for an employer to employ an individual who is not authorized to work in the United States. However, the non-discrimination provisions of the INA prohibit an employer from discriminating against certain individuals based on national origin or citizenship status with respect to, among other things, hiring and termination. As a result, employers are often faced with a dilemma: how far can an employer go to obtain information regarding an applicant’s immigration status during the hiring process without violating the INA. This dilemma may appear to be particularly difficult when making an employment decision based on an individual’s need for visa sponsorship. But, as explained below, that problem can be solved relatively simply.

Only certain “protected individuals” are protected from citizenship status discrimination under the INA. The term “protected individuals” has been defined to include: United States citizens, United States nationals, temporary residents, recent lawful permanent residents, refugees and asylees. The Department of Justice Office of Special Counsel for Immigration Related Unfair Employment Practices (“OSC”), the entity responsible for enforcing the employment discrimination provisions of the INA, has specifically opined that an employer has no obligation to sponsor an individual’s visa application.

Further, the OSC has advised that temporary visa holders are not “protected individuals” under the statute, and therefore, not protected from citizenship status discrimination. This includes, but is not limited to, any non-immigrant visa holders such as H-1Bs, TNs or F-1 visas with Optional Practical Training (“OPT”) work authorization. Therefore, the OSC has stated that employment decisions based solely on an applicant’s need for visa sponsorship, either currently or in the future, would generally not be actionable under the INA.

Because temporary visa holders are not subject to INA’s citizenship status discrimination provisions, OSC has stated that an employer may ask about an applicant’s need for visa sponsorship during the hiring process and has approved the use of the following questions on employment applications or in employment interviews:

1. Are you legally authorized to work in the United States? ____ Yes ____ No

2. Will you now or in the future require sponsorship for employment visa status (e.g., H-1B, TN, etc.)? ____ Yes ____ No

Despite OSC’s approval of such questions, it is important to note that the New York State Division of Human Rights has not expressly indicated whether this type of question would be a lawful or unlawful interview question.

If an employer does decide to include a question regarding visa sponsorship on its employment application or to ask a corresponding question during the employment interview, it is advisable to develop an internal policy that describes the circumstances, if any, under which the employer will consider potential visa sponsorship for an individual applicant and/or employee. Further, if there are specific job titles or categories for which the Company does not intend to sponsor any individual, either now or in the future, this fact should also be made clear during the hiring process (for example, by including visa sponsorship guidelines in the advertising materials, and informing all applicants about visa sponsorship guidelines at the beginning of the interview process, etc.).
 

Foreign nationals frequently approach employers with a request to sponsor them for permanent residency based on employment. As many employers know, the first step in the sponsorship process consists of obtaining an approved labor certification application from the U.S. Department of Labor (DOL). This permanent labor certification program (often referred to as the “PERM” program) was redesigned by the federal government in 2005 and contains very specific rules and regulations detailing how employers must conduct any recruiting for a permanent residency position.

One requirement for obtaining certification is proof that there are no minimally qualified U.S. workers for a specific job vacancy within a specific job pool. In order to satisfy that requirement, it is very important for the employer to clearly and properly define the qualification threshold below which the employer is not willing to hire any job applicant - the employer's actual minimum requirements for the position. As a result, PERM recruiting differs significantly from the normal hiring practices of most employers, who seek the most qualified candidate for the job, not just one that meets the job's minimum requirements. Employers should strictly comply with DOL’s regulations and keep the following points in mind when drafting minimum job requirements.
 

The General Rule for Stating Minimum Requirements

Job requirements must adhere to what is customarily required for the U.S. occupation and may not be tailored to the foreign national’s qualifications. In addition, the employer must be able to demonstrate that it has not hired workers with lesser educational qualifications or experience for substantially comparable positions. In other words, the employer must establish that the job opportunity has been described without the use of unduly restrictive job requirements, unless the employer can demonstrate that the job requirements arise out of “business necessity." The concept of business necessity comes into play when an employer’s minimum requirements exceed what DOL thinks are the appropriate minimum requirements for the position. To establish business necessity, an employer must demonstrate that the job duties and requirements bear a reasonable relationship to the occupation in the context of the employer’s business and are essential to perform the job in a reasonable manner. The employer should prepare business necessity documentation prior to submitting the labor certification application for processing.

Foreign Language Requirements

An employer should not specify a foreign language as a minimum requirement for the position, unless it is prepared to justify this requirement on business necessity grounds. As a general rule, DOL selects for audit cases requiring knowledge of foreign language. In order for the case to be approved, DOL requires the employer to justify knowledge of a foreign language requirement on business necessity grounds. This standard is difficult to satisfy. It can, however, be shown by proof of a need to communicate with a large majority of the employer’s customers, contractors, or employees who cannot communicate effectively in English.

Experience Gained With the Employer

In defining the minimum requirements of the job, employers often include experience that the foreign national gained while in its employ. For example, if the sponsoring employer employed the foreign national for three years prior to filing the labor certification application, the employer may think it is appropriate to identify three years of experience in the position as the minimum requirement for the job. The DOL regulations, however, do not permit using experience gained with the sponsoring employer as a qualification for the position, unless: (1) the foreign national gained the experience while working for the sponsoring employer in a position not substantially comparable to the position for which the certification is being sought; or (2) the employer can demonstrate that it is no longer feasible to train a worker to qualify for the position.

Documenting the Foreign National’s Experience and/or Educational Credentials

Finally, where an employer specifies a certain degree or requires prior work experience, it should carefully examine the foreign national’s credentials prior to starting the labor certification application process to ensure that the foreign national actually meets the stated criteria. Prior experience, for instance, should be documented through “experience letters” obtained from the foreign national’s former employers. The letters should identify the exact period of employment, and include a detailed description of the duties performed and the skills acquired. To document educational requirements, the employer should carefully examine the foreign national’s degrees and/or certificates to ensure that they match the degree(s) specified as the minimum educational requirement for the position. If the foreign national’s degree does not specify a field of study, the employer should require the foreign national to obtain an official letter and transcripts from his college or university to confirm his field of study.
 

U.S. employers continue to rely upon the H-1 B Specialty Occupation Worker category to facilitate the temporary employment of foreign nationals in professional positions.  In 2010, the U.S. Citizenship and Immigration Services ("USCIS") is authorized to issue 65,000 H-1 B approvals for those beneficiaries who possess at least a bachelor's degree, and an additional 20,000 approvals for those beneficiaries who have obtained a master's or higher degree from a college or university in the United States. These limits are often referred to as the "H-1B cap." These approvals authorize employment beginning October 1, 2010 (the beginning of the federal government's fiscal year).

Pursuant to federal regulations, interested U.S. employers may file H-1 B petitions six months in advance of the start of the fiscal year. This means that the earliest that a U.S. employer may submit a petition for a new H-1B worker, who has not already been counted against the H-1B cap, is April 1, 2010.
 

Over the past several years, the USCIS reached its 65,000 H-1B cap in two days, having received almost twice as many petitions as the allotted quota by April 2. Further, it took approximately four weeks for the USCIS to reach the H-1 B quota for master's level candidates. The remaining H-1 B cases were rejected.

While the H-1 B cap for 2009 was not fully exhausted until December 2009, we nevertheless anticipate a strong influx of H-1B filings this year. Employers are well advised to file their petitions for new H-1 B employees on April 1, 2010 to avoid being closed out of consideration by the H-1B cap.

In April 2009, the U.S. Department of Labor ("DOL") implemented a new electronic process for filing the Labor Condition Application ("LCA"), a necessary component of the H-1 B petition dealing with prevailing wage issues. Prior to April 2009, employers and their legal representatives could instantaneously certify the LCA. Since the LCA can no longer be automatically certified, the application must now be manually verified by the DOL. This new verification system, known as i-CERT, can take a minimum of seven (7) days to be completed by the DOL. Accordingly, additional time is needed to prepare this portion of the H-1 B petition.
 

The Office of Fraud Detection and National Security (“FDNS”) is part of the United States Citizenship and Immigration Services. FDNS’s mission is to detect, deter, and combat immigration benefit fraud. FDNS consists of approximately 650 Immigration Officers, Intelligence Research Specialists, and Analysts located in field offices throughout the United States. In addition, FDNS has contracted with multiple private investigation firms to conduct site visits on its behalf. In 2010, FDNS intends to increase its H-1B site audits to 25,000 – a fivefold increase. If you are unlucky enough to be chosen for one of those 25,000 site audits, what should you do? The American Immigration Lawyers Association has provided suggestions.  This post contains some of those site audit basics and recommendations for preparation.

What Happens During an H-1B Site Audit?

H-1B site audits are usually unannounced, and take place at either the employer’s principal place of business or the foreign national’s physical work-site location. During the site visit the investigator will often ask to speak with the employer representative who signed the H-1B Petition. If this person is unavailable, the investigator usually requests, as an alternative, to speak with a Human Resources representative. During the audit, the investigator will typically ask specific questions to verify the representations made by the employer in the H-1B Petition, and may also request a tour of the facility. In addition, the investigator may ask to interview the H-1B employee about his/her job title, duties, responsibilities, employment dates, position locations, academic background and previous employment experience. Finally, the investigator may request the opportunity to speak with colleagues and/or managers of the H-1B employee.

How Should an Employer Respond to the Audit?

If an employer is subject to an unannounced H-1B site visit, the employer should immediately request that its immigration attorney be present. Even though the investigator will not reschedule a site visit so that an attorney may be present, the investigator will allow counsel to be present by phone. The employer should also have procedures in place to ensure that the investigator is directed to a designated company official. That designated official should request the name, title, and contact information for the site investigator. If the investigator introduces himself/herself as a contractor of FDNS, the employer’s representative should request a business card and confirm the investigator’s identity before permitting the individual to enter the employer’s premises, and before providing any detailed information about the employer’s business.

The employer should have at least two employer representatives accompany the investigator during the site visit. One representative should be the primary spokesperson on behalf of the employer. The second representative should take detailed notes of all information requested by and provided to the investigator, the locations visited, pictures taken, and/or any other relevant information from the site visit.

If the employer has strict policies regarding audio recording, photography, or video recording, the employer should advise the investigator accordingly. If the investigator requests information from the employer and the employer cannot provide accurate information without further research, the employer should so inform the investigator, and offer to contact the investigator as soon as the requested information is obtained. Under no circumstances should the employer “guess” about any information requested during the site visit.

Prepare for Site Visits Before They Occur.

An adverse assessment by the FDNS could be used to deny a petition, if the site visit occurs during re-adjudication, could result in a revocation of a previously approved petition in the post-adjudication process, and/or could be referred to U.S. Immigration and Customs Enforcement (“ICE”) for further investigation. A referral to ICE could lead to civil or criminal penalties and prosecution. Given the potential consequences of an adverse audit, and because most H-1B site visits are unannounced, employers must be prepared for such visits well in advance.

Ensuring that required documentation is up-to-date and is easily accessible is the best way to prepare for a site visit. Specifically, employers should retain complete copies of all submitted I-129 petitions and supporting documents in confidential files, and be familiar with and ensure the accuracy of the representations made in the I-129 petitions. With respect to each filed H-1B Petition, the employer must maintain a public access file. Employers should also ensure they are in compliance with any mandatory employment posting obligations to prepare for the possibility the investigator will request a tour of the facility.

To better prepare the designated official for possible questioning by the investigator, consider staging a mock visit under the supervision and direction of counsel and subject to the attorney-client privilege. To prepare the beneficiary for potential questioning, employers can consider providing a redacted copy of the I-129 Petition and supporting documents to the beneficiary, including information on the nature of the job opportunity, the terms and conditions of employment, and the beneficiary’s education and prior work history. A mock interview of the beneficiary, with counsel present, can also be helpful.
 

In a final rule published today in the Federal Register, the Department of Homeland Security (“DHS”), has rescinded its controversial “no-match” letter regulation promulgated during the Bush administration. The action has been anticipated ever since it was initially announced in July, and completes a process which commenced with the publication of a proposed rule on August 19, 2009. The Bush era regulation never went into effect because its enforcement was preliminarily enjoined by a federal district court.  The significance of the rescission is explained below.

A no-match letter can be generated by the Social Security Administration (“SSA”) when a combination of employee name and Social Security Number (“SSN”) on a W-2 form does not match SSA records. This can occur for a variety of entirely innocent reasons, but can also occur when someone not authorized to work in the U.S. uses a false SSN or someone else’s SSN. The Bush era regulation would have required employers receiving such letters to take particular actions to resolve the discrepancy and verify the individual’s employment eligibility or face potential liability for employing an unauthorized alien.

Rescission of the regulation does not mean that SSA will stop issuing no-match letters. Moreover, in the text addressing public comments on the rescission, DHS has made it clear that receipt of a no-match letter will continue to count in a totality of the circumstances determination of whether an employer knowingly hired or continued to employ an unauthorized alien. As a result, employers that receive such letters should continue to investigate them with the employees to whom they apply. DHS states that the prudent employer will: check its own records for errors; ask the employee to review the information; and allow the employee a reasonable amount of time to resolve the no-match with SSA.

In order to avoid potential liability under the anti-discrimination provisions of 8 U.S.C.§ 1324b, employers who receive a no-match letter should also refrain from taking precipitous action against the affected employee. DHS states unequivocally that employers should not use a no-match letter alone as a basis for firing an employee. The Justice Department’s Civil Rights Division provides guidance to employers on how to respond to a no-match letter without engaging in prohibited discrimination.
 

E-Verify is a free, Internet-based system operated by the Department of Homeland Security (“DHS”) and the U.S. Citizenship and Immigration Services (“USCIS”) in partnership with the Social Security Administration (“SSA”). E-Verify enables participating employers to electronically verify the employment eligibility of their employees based upon electronic information and records maintained by the DHS and SSA databases. As of September 8, 2009, many federal contractors and subcontractors are required to use the E-Verify system to confirm whether their employees are eligible to work in the United States. This change is the result of the final version of the applicable Federal Acquisition Regulation (“FAR”). The scope of coverage of the new rule is described below. DHS, SSA and USCIS have a variety of informational resources on E-Verify on the USCIS website, www.uscis.gov.

 

E-Verify and Federal Contracts and Subcontracts

Prior to September 8, 2009, the use of E-Verify was voluntary and applied only to new hires. As of September 8, 2009, however, the final rule requires the insertion of the E-Verify clause into applicable federal contracts. If the contract contains the E-Verify clause, federal contractors are obligated to use the E-Verify system not only for all new hires, but for all existing employees “assigned to the federal contract.” That includes any employee hired after November 6, 1986, who is directly performing work in the United States under a contract that includes the clause committing the contractor to use E-Verify. An employee is not considered to be directly performing work under the contract if the employee normally performs support work, such as indirect or overhead functions, and does not perform any substantial duties under the contract.

Not all federal contractors and/or subcontractors are subject to this new E-Verify requirement.  The final rule calls for inclusion of the E-Verify clause in prime federal contracts with a performance period of more than 120 days and a value of more than $100,000. With respect to subcontractors, the E-Verify clause will normally be included in subcontracts if: (i) the prime contract includes the clause; and (ii) the subcontract is for services or for construction with a value of more than $3,000. In addition, the final rule does not apply to contracts that include only commercially available off-the-shelf (“COTS”) items (or minor modifications to a COTS item) and related services. Nor does it apply to contracts where all work is performed outside the United States.

The final rule also recognizes some exceptions to the requirement to use E-Verify for all new hires. For instance, institutions of higher education, state and local governments, federally recognized Indian tribes, and sureties operating under a takeover agreement with a Federal agency pursuant to a performance bond may choose to only use E-Verify for those new hires who are assigned to perform work on the covered federal contract.

Participation in E-Verify has some benefit to the contractor. While it does not a provide safe harbor from work site enforcement, it does create a rebuttable presumption that the federal contractor or subcontractor has not knowingly hired an unauthorized alien. In this regard, contractors are responsible for monitoring the E-Verify system and following-up with employees if a non-verification response is received from the E-Verify system.

Overview of the E-Verify Employment Verification Process

Companies awarded a contract with the E-Verify clause after September 8, 2009, will be required to enroll in E-Verify within 30 days of the contract award date. After enrolling, federal contractors have up to 90 days to initiate verification queries for all new hires, whether employed on a federal contract or not, as well as existing employees who are working directly on the federal contract.

After the 90-day phase-in period, the federal contractors will be required to initiate verification of each newly-hired employee within 3 business days after the employee’s start date. Federal contractors may choose to initiate the verification of a newly-hired employee prior to the start of employment. However, the federal contractor may only verify an individual’s employment eligibility if the following conditions have been met: (i) the individual has been offered the position; (ii) the individual has accepted the job offer; and (iii) the individual has completed the Employment Eligibility Verification Form I-9.

Posting Requirement

Contractors participating in E-Verify are required to post the notice provided by DHS indicating the employer’s participation in the E-Verify program, as well as the anti-discrimination notice issued by the Office of Special Counsel for Immigration-Related Unfair Employment Practices at the Department of Justice. These postings must be placed in prominent locations that are clearly visible to prospective employees and all employees who are to be verified through the E-Verify system.

Pending Litigation

Mandatory use of E-Verify by federal contractors and subcontractors has been challenged in the courts. In August 2009, the District Court of Maryland upheld the legality of the final rule in Chamber of Commerce, et al. v. Napolitano (Aug. 26, 2009). The district court’s decision has been appealed.