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Troy recently left his job to start his own contracting business in Southern California. When the time came for hiring employees, Troy found a willing and experienced labor market in the large Latino community. But after hearing nightmarish tales from other trades about businesses that lost money or even went out of business because of hiring illegal immigrants, Troy is afraid of hiring the wrong people. He has no idea how to ensure he's hiring people who can legally work in the U.S., or where to go for help.
Given the dwindling supply of available workers, you may likely find yourself in Troy's shoes. Hiring immigrants, after all, has long been a valued practice for getting the job done in America. Today, though, employers need to tread more carefully over what has become rougher legal terrain. Federal regulations are tightening up in ways that target employers of undocumented workers. And that's only the start: Following the failure of Congress to pass comprehensive immigration reform last summer, state governments around the country are creating a confusing patchwork of laws related to the hiring of foreign nationals.
Even municipalities are getting into the act. "Many local communities are fighting illegal immigration by targeting businesses," cautions David Kotick, managing partner of New York-based immigration law firm Apsan Law Group. "Employers who hire undocumented aliens face steep fines and the loss of their business licenses. Some laws even mandate jail time for repeat offenders."
So, naturally, it's important to follow the proper steps in hiring foreign nationals. Following are things you can do when hiring to reduce your liability when hiring employees.
Verify Eligibility
Whatever your location, 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," explains Carlina Tapia-Ruano, partner at Chicago-based Tapia-Ruano & Gunn, an immigration law firm. The employer must have each hired individual fill out an I-9 form, titled "Employment Eligibility Verification," issued by the U.S. Citizen and Immigration Services, which is a division of the Department of Homeland Security (DHS). 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. You can download a copy of an I-9 form at www.uscis.gov. Click on "Immigration Forms" and then "Employment Eligibility Verification" or "I-9," toward the bottom of the list.
On part one 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: The individual is either 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.
In part two of the form, you must certify that you have 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 that shows which documents are acceptable. Any one document from a list of 10 is acceptable as proof of both identity and employment eligibility. (A passport and a permanent resident card are two examples.) Additionally, there are nearly two dozen additional documents that have been certified as proof of one of the two criteria.
Part three provides space for updating the form's information after a 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," Tapia-Ruano notes. "Many attorneys recommend that employers attach photocopies of the reviewed documents to each I-9 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. Penalties for errors can range from $1,000 to $10,000 per violation. Even employers who make innocent mistakes can be fined.
Employers should make sure everyone who helps employees fill out I-9 forms is trained to avoid as many errors as possible, Tapia-Ruano suggests. "And I would encourage internal audit of I-9s on a periodic basis. Don't wait for an audit by the Department of Homeland Security," she adds.
While the I-9 form looks simple, attorneys caution employers about making these common errors:
Illegal bias: Avoid charges of discrimination by requiring every employee (not just the ones you think are from another country because of their appearance or their 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.
Over-restrictive documentation: Avoid requiring documentation that is more restrictive than what the law mandates, such as requiring a birth certificate along with a Social Security card and valid driver's license. 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.
Failure to assess authenticity: The employer must not accept documents that a reasonable person would suspect were 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. Waiting more than three days can result in fines.
Allowing expiration dates to slip by: 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.
It's important to keep I-9 forms in a safe place. At any time, the DHS or the U.S. Department of Labor may come around and perform an "employment audit" of I-9s.
Safe Harbor Rules
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 nomatch letter might lead to charges of discrimination," notes Angelo A. Paparelli, managing partner of Paparelli & Partners, an immigration law firm with offices in New York City and Irvine, Calif. "After all, there can be legitimate reasons why a no-match occurs. A female employee might have gotten married, for example, and changed her name to her husband's without notifying the SSA. Or the SSA could have misspelled the name."
Indeed, the Web site of the U.S. Immigration and Customs Enforcement division of the DHS states "an employer who takes action against an employee based on nothing more substantial than a no-match 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. This has raised concerns that employers will opt to risk discrimination lawsuits over the federal government's civil and criminal penalties for employment of undocumented workers. "The fear is that many people will be terminated based on foreign appearance and name," Paparelli cautions.
As partial mitigation for this problem, in August of 2007 the DHS 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.
Stay Informed
Recent changes in federal regulations are seen by some as an attempt to shift the border control effort from the government to the private sector. "Employers feel an unreasonable burden is being placed on their shoulders to control undocumented employees," TapiaRuano says.
However this burden is perceived, employers could potentially face steep fines and jail time unless they take the necessary precautions to protect themselves when hiring foreign nationals.
By following legal developments in the hiring process and being vigilant about proper documentation, employing immigrants doesn't have to be the risky business that so many small-business owners fear.