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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)
(page 2 of 2)
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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