Immigration is once again creeping to the forefront of the national agenda. This week while the Senate was busy debating its 2010 Homeland Security appropriations measure, immigration activists continued to call for comprehensive immigration reform. The White House has also urged Congress to overhaul the immigration laws within the coming year. And decisions yesterday by the Department of Homeland Security on implementing E-Verify for federal contractors, on the one hand, while killing the Social Security “no match” letters to businesses on the other has sparked renewed and vigorous debate on worksite enforcement issues.
The original Senate version of the appropriations bill reauthorizes E-Verify for three years, in line with the Obama Administration budget request, but did not make it mandatory for federal contractors or any employers. Senator Jeff Sessions, (R-Ala.), however, offered an amendment yesterday morning making the E-Verify system mandatory for all federal contractors. The amendment, which also requires a reverification of a contractor’s existing workforce, passed by a voice vote.
Currently the DHS regulation, formulated by the Bush Administration, mandating E-Verify for all federal contractors, is set to take effect on September 8, 2009. The regulation, however, is the subject of federal court litigation and its implementation has been postponed four times. Notably, DHS Secretary Janet Napolitano commented on the future of the Federal Contractor regulation by “announcing the Administration’s support for a regulation that will award federal contracts only to employers who use E-Verify to check employee work authorization.” There is still a great deal of speculation over whether DHS will rewrite any portion of the regulation prior to its effective date of September 9, 2008.
The Senate version of the bill must be reconciled with the Houses’ version which provided only a two-year extension of E-verify. Accordingly, the two chambers will first need to work out their differences before anything becomes law.
It is unclear what will happen with the ongoing federal litigation surrounding the federal contractor rule, but much will depend on what happens in this House-Senate conference. If the bill does become law, the lawsuit may become moot since the Executive Order and Federal Contractor regulation, introduced by the Bush Administration, would no longer conflict with each other or with the statute. This legislation could provide the legal basis for the federal contractor rule which, arguably, is currently missing.
E-Verify is an internet-based system administered by DHS with the cooperation of the Social Security Administration (SSA). It allows employers to check the work authorization of their newly hired employees, and is considered a best practice for immigration compliance by DHS. E-Verify verifies the information an employee provides on their immigration Form I-9 against databases maintained by SSA and DHS. When the information matches, the system provides an automatic confirmation that the employee is authorized to work. When the information does not match what is contained in the government’s records, the worker is given a “tentative non-confirmation” (TNC) notice and then afforded an opportunity to contact DHS and/or SSA to resolve the no-match problem. Although E-Verify has undergone major improvements in the past few years, including the addition of the photo tool, the system is still extremely susceptible to identity theft fraud.
Within minutes of the voice vote on the E-Verify legislation, DHS also announced its intention to rescind the SSA “No-Match” Rule in a press release. The DHS press release stated that DHS will be proposing a new regulation rescinding the 2007 No-Match Rule, which was blocked by court order shortly after issuance and has never taken effect.” The No-Match rule established procedures that employers could follow if they receive No-Match letters or notices from DHS that call into question work eligibility information provided by employees. These notices inform an employer that an employee’s name and Social Security Number provided for a W-2 earnings report do not match SSA records-often due to typographical errors or unreported name changes.
The Obama administration appears to think that E-Verify may be a good vehicle to use to replace the purpose of the No-Match regulation. DHS also argued that “E-Verify addresses data inaccuracies that can result in No-Match letters in a more timely manner and provides a more robust tool for identifying unauthorized individuals and combating illegal employment.” Of course things are fluid here with the Senate continuing their debate this morning on amendments to the Homeland Security spending bill. They approved, through a voice vote, Senator Vitter’s (R-La.) No-Match amendment (1375). Sen. Vitter’s amendment would prohibit any funds being used from the DHS Appropriations Act from being used to change the final no-match rule. The business community is now concerned about the impact this amendment could have, if codified into law, on the Administration’s stated goal of withdrawing the No-Match Rule.
In the interim what is an employer to do?
With an enormous amount of scrutiny being placed on employers, under the advice of counsel, many employers in the U.S. started implementing their own internal Social Security No-Match policies even while the No-Match litigation was pending. Employers have taken this action in light of DHS’ rulemaking combined with their own heightened awareness of the penalties and liabilities associated with hiring and continuing to employ unauthorized workers.
Although it now appears that DHS will no longer mandate the supposedly “safe harbor process” to respond to “No-Match letters,” it may not be time to throw the No-Match policy out altogether. Logic dictates that the SSA will reactivate its policy of notifying employers of problems with withholding taxes even without the regulation. And Immigration and Customs Enforcement (ICE) will continue to use receipt of these letters as evidence against employers in a worksite enforcement action.
Therefore it is imperative for employers to continue to consider implementing internal compliance policies and immigration-related standard operating procedures that include specific guidelines on how to address receipt of the No-Match letters.
With the recent notifications of 652 Immigration and Customs Enforcement (ICE) I-9 inspections, the government is making good on its promise to target employers by stepping up criminal enforcement actions as well as administrative reviews and I-9 audits. Legacy INS, the agency that accepted pennies on the dollar for I-9 fines, is long gone and ICE is no longer interested in negotiating fines.
Federal Contractor Rule
While it remains unclear whether the Federal Contractor E-Verify rule (i.e., forcing employers to E-Verify all existing workers assigned to a contract) will be softened by the Administration, companies should take the opportunity to review their obligations under the rule and develop a better understanding of how the requirements will affect their businesses.
If implemented without change, government contractors, and their subcontractors who are subject to the rule, will be forced to review Forms I-9 that date back to 1986. Employers will then need to make substantive updates and changes to the form. In many cases, an entirely new I-9 will need to be completed. Such a process is tedious and time consuming. For larger employers, the timelines outlined in the rule may be close to impossible to meet. Timing is critical as is the importance of contacting an experienced professional to prepare an individualized and realistic strategy for your company.
Editors Note: Ms. Lurie practices law for Greenberg Traurig LLP, which also employs the lead attorneys for the plaintiffs in the No-Match litigation discussed in this post.