Hiring Foreign Nationals: Legal Matters
Keep up with federal regulations on hiring workers from other countries to protect yourself and your company from costly legal challenges.
Phillip M. Perry (Nov 07)

Faced with a dwindling supply of available workers, you may be among the many employers looking to fill your ranks with workers from other nations. Today, though, employers need to tread more carefully over what has become rougher legal terrain. As the nation's headlines attest, employers can be hit with stiff penalties when errors are made hiring foreign nationals who are in the United States, either temporarily or permanently.

Federal regulations are tightening up in ways that target employers of undocumented workers. And that's only the start. State governments around the country are creating a confusing patchwork of laws related to the hiring of foreign nationals, following the failure of Congress to pass comprehensive legislation reform last summer. "The states are having to pick up where the federal government did not come through," says David Kotick, managing partner of Aspan Law Group, an immigration law firm in New York.

Even municipalities are getting into the act. "Many local communities are fighting illegal immigration by targeting businesses," says Kotick. "Employers who hire undocumented aliens face steep fines and the loss of their business licenses. Some laws even mandate jail time for repeat offenders."

Verify Eligibility
Whatever your location in the United States, you are subject to federal regulations that require you to verify the employment eligibility of anyone you hire. "Every individual, once hired, must be asked for documents that prove their identity and their work authorization," says Carlina Tapia-Ruano, partner at Tapia-Ruano & Gunn, an immigration law firm in Chicago. An employer must have each new hire fill out an I-9 form, titled "Employment Eligibility Verification," issued by the U.S. Citizen and Immigration Services (USCIS), a division of the Department of Homeland Security. To avoid any appearance of discrimination, the law requires that you have individuals complete this form only after being hired, not during the recruitment process.

• On Part 1 of the I-9 form, the employee enters basic information, such as name, address, Social Security number, and date of birth. Just as important is the section on the employment status of the individual. There are only three choices here: a U.S. citizen; a legal permanent resident; or an alien authorized to work until a given date. The employee must sign and date the form.
• On Part 2 of the form, the employer must verify that the company has made sure the documents provided by the employee establish the individual's identity and employment authorization. There is an extensive list on the back of the I-9 form of acceptable paperwork - a passport and a permanent resident card are just two examples. Additionally, there are nearly two dozen documents that have been certified as proof of one of the two criteria.
• Part 3 of the form provides space for updating the employee's information after the worker's previous work authorization has expired.

"The law requires that the signatures and the information be completed within three days of the employee's hire date," says Tapia-Ruano. She recommends that employers attach photocopies of the reviewed documents to each I-9 form to help protect the business in the event of an audit.

Avoid Errors
Gathering documents is one thing. Making sure they are authentic and that all of the blanks are filled in correctly is another. Failure to do so can be costly. Penalties for errors can range from $1,000 to $10,000 per violation. "The penalties can accumulate very quickly even with a single I-9 form if there are numerous violations," cautions Tapia-Ruano.

Even employers who make innocent mistakes can be fined. "If a receptionist or whoever is assisting employees in completing the I-9 forms makes mistakes, then even if the workers are U.S.-born citizens, the employer is subject to fines," says Tapia-Ruano. She suggests that employers should make sure that everyone who helps employees fill out I-9 forms be trained to avoid as many errors as possible.

While the I-9 form may appear simple, attorneys caution employers to avoid these common errors: • Illegal bias: Avoid charges of discrimination by requiring every employee - not just the ones you believe are from another country because of their appearance or speech - to fill out an I-9 form.
• Entry errors: One of the more common errors is incorrect indication of the employee's immigration status. An employee with a work visa, for example, may have erroneously filled in "permanent resident." Such a mistake is significant even if done innocently. "It is the employer's duty to make sure the entries are accurate," says Tapia-Ruano.
• Over-restrictive documentation: Avoid requiring documents that are more restrictive than what the law mandates. An employer might be tempted to do this to simplify record-keeping, but it is illegal and can lead to fines as well as charges of discrimination. Tapia-Ruano notes that the I-9 provides a list of documents that are acceptable as proof. "You must accept the employee's decision as to which of the listed documents to provide," she cautions.
• Failure to assess authenticity: The employer must not accept documents that a reasonable person would suspect are fraudulent, either because they look doctored or look like duplicates.
• Procrastination: Another mistake is to put off the task of examining the employee's documents and getting the I-9 in order.
• Ignoring expiration dates: Many employees have permission to work for only a limited period of time. Prior to the expiration date, ask the employee to present new verification documents.

Tapia-Ruano also suggests that employers retain these I-9 forms in a safe place: "At any time, the Department of Homeland Security or the U.S. Department of Labor may come around and perform what they call an `employment audit' of I-9s."

Safe Harbor
The U.S. Social Security Administration (SSA) has long been in the practice of sending "no match" letters to employers when workers' names and Social Security numbers on W-2 forms do not match the SSA records. In the past, employers had never been sure what to do after receiving these letters. Should a worker who cannot reconcile the discrepancy be fired?

"In many cases, employers have kept the employees on board, fearing that a termination decision based on a `no match' letter might lead to charges of discrimination," says Angelo A. Paparelli, managing partner of Paparelli & Partners, an immigration law firm with offices in New York and California. "After all, there can be legitimate reasons why a `no match' occurs. A female employee may have gotten married, for example, and changed her name to her husband's without notifying the Social Security Administration. Or the Social Security Administration could have misspelled the name."

Indeed, the website of the U.S. Department of Immigration and Customs Enforcement states that "an employer who takes action against an employee based on nothing more substantial than a mismatch letter may, in fact, violate the law."

Times, though, are changing. Today's employers face more severe fines for hiring illegal immigrants and there is a general national mood shift against undocumented foreign nationals. Many observers, therefore, are concerned that employers will opt to risk discrimination lawsuits rather than the federal government's civil and criminal penalties. "The fear is that many people will be terminated based on foreign appearance and name," says Paparelli.

As partial mitigation for this problem, as of August 2007, the Department of Homeland Security issued new regulations intended to clarify matters while providing a "safe harbor" for employers who hire foreign nationals. The regulations define what steps employers must take within what time frames to avoid legal liability for hiring undocumented workers. (See sidebar.)

Employers still face the costly task of checking and double-checking documents. And safe-harbor regulations carry their own heightened risk of financial penalty. "The procedures defined in the rules are not really voluntary," says Paparelli. "The employer who fails to carry out the defined steps risks being charged with `constructive knowledge' of the employment of workers who lack the right to work. This would put the employer in violation of immigration laws."

If more is expected of the employer than ever before, though, it only highlights the need to maintain vigilance in hiring procedures. As the face of America's work force changes, employers can be sure there will be additional changes in federal, state, and local regulations.

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