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Record retention is complex and time consuming. However, in addition to complying with various federal and state laws, keeping good, well-organized records can be very helpful in documenting and supporting an organization’s employment actions.
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This special report will discuss how you can ensure your records are in good order, and establish a record-retention policy.

Topics covered:
1. Hiring Records
2. Employment Relationships
3. Termination Records
4. Litigation Issues
5. Electronic Information Issues
6. Tips for Better Recordkeeping
7. A List of Legal Requirements

Make sure you have the information you need to know to keep your records in order.

June 16, 2008
Remedies Available for Employers That May Have Hired Illegal Aliens

By Jennifer G. Parser, Ward and Smith, P.A.

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The U.S. Immigration and Customs Enforcement (ICE) was established in 2003 as the investigative arm of the Department of Homeland Security (DHS). On April 16, 2008, ICE arrested over 280 foreign nationals employed at Pilgrim's Pride Processing Centers for both immigration violations and identity theft, underlining the increased activities by ICE and the countervailing need for employers to adhere to correct hiring and record maintenance procedures. While the ICE website maintains that its agents prioritize workforce enforcement to areas involving critical infrastructure and national security, their raids and audits seem to include facilities requiring the employment of relatively modestly paid workers in all types of manufacturing, agricultural, and food production businesses.

"Worksite enforcement actions target a key component of the illicit support structure that enables illegal immigration to flourish," says Julie L. Myers, Assistant Secretary for Homeland Security , ICE, underscoring ICE's approach towards enforcement. "No employer, regardless of industry or location is immune from complying with the nation's laws. ICE and our law enforcement partners will continue to bring all of our authorities to bear in this fight using criminal charges, asset seizures, administrative arrests and deportations."

The ICE-generated graph below demonstrates the increasing frequency of arrests from 2002 through 2007.

graph of worksite arrests

The law is clear--employers have an affirmative duty to verify that each of their employees is authorized to work in the United States . The Form I-9, Employment Eligibility Verification, was developed for verifying that persons are eligible to work in the United States. Employers must have a completed Form I-9 for every employee, regardless of citizenship or national origin, hired after November 6, 1986.

The Form I-9 contains three sections. The employee must complete Section 1 (Employee Information and Verification) at the time of hire. The employer must complete Section 2 (Employer Review and Verification) and Section 3 (Updating and Reverification). Section 2 must be completed within 3 business days after the employee's date of hire. Employers must retain the Form I-9 for each employee either for 3 years after the date of hire or for one year after employment is terminated, whichever is later. Upon request, all Form I-9s must be made available to an authorized agent of ICE.

Common Mistakes in the Form I-9

Since the development of the Form I-9, employers time and time again seem to make the same mistakes:

  • Failure of the employee to provide all information requested in Section 1--No employee should be allowed to commence or continue employment before all of the information in Section 1 of the Form I-9 is provided, including the employee's designation of employment-authorized status. This requirement applies to all employees hired after November 6, 1986, even to United States citizen employees. An employer must consider that a terminated employee may not be available later on to complete Section 1, so it is imperative that Section 1 be completed after the date of hire.
  • Failure of the employer to require the necessary documentation as proof of an employee's identity--Section 2 of the Form I-9 requires employers to examine evidence of an employee's identity and employment eligibility. Many employers make the mistake of requiring only a state-issued driver's license as documentary proof of an employee's identity. If an employee provides a driver's license, the employee also must provide a document that establishes employment eligibility. An employer should refer to the list of acceptable documentation which is attached as part of the Form I-9 and be certain that the document proffered by the employee is on that list.
  • Inconsistency regarding the documentation supporting the Form I-9--Some employers are not consistent in the way they maintain their Form I-9s--that is, they attach supporting documentation to some I-9s, but not to others. While failure to attach supporting documentation is not an ICE violation, it can be considered to be discriminatory if an employer is not consistent in this regard. It is important to note, however, that during a raid, ICE agents may inspect only the Form I-9s. Therefore, employers should maintain the documentation supporting the Form I-9s separate from the Forms themselves. Should ICE agents want to view other documents, speak to employees, or tour the facilities, they must obtain a subpoena or warrant.
  • Neglect of Section 3--Section 3 of the Form I-9 requires an employer to reverify work authorization when one or more of the documents provided by an employee expires. This Section is signed by the employer and is one of the first things that ICE agents check during a raid or audit. The employee must present a document that shows either an extension of the employee's initial employment authorization or a new work authorization. The employer may not request documentation that is in addition to that used to complete the original Form I-9, as such a request may be considered discriminatory.

Paperwork violations such as those described above can carry civil fines of $110 to $1,100 per employee. While such fines are mandatory under the law, certain factors may be taken into account in determining the amount of the fine, such as whether the employee was, in fact, not work authorized; whether the employer has a record of previous violations; the size of the employer's business; and good faith shown by the employer.


Although the Form I-9 is mandatory for every employee hired after November 6, 1986, proper completion of the Form does not protect employers that hire employees who present identification documentation obtained through fraud or identity theft. E-Verify is an online Social Security number/visa confirmation system that is offered by the Social Security Administration (SSA) and DHS. Use of E-Verify helps an employer defend against an ICE accusation that the employer had "constructive knowledge" of an employee's false documentation. While E-Verify is mandatory for government contractors, it still is voluntary for all other employers. Nevertheless, approximately 16,000 employers nationwide have registered for E-Verify.

When Swift & Co. had six facilities raided in late 2006, ICE arrested 1,282 illegal immigrants and instituted 200 criminal charges for using false documentation through identity theft. The fact that Swift had signed up voluntarily for participation in E-Verify was viewed by ICE as a good faith effort on its part to hire only employment-authorized aliens.

In addition to E-Verify, DHS recently introduced the ICE Mutual Agreement between Government and Employers (IMAGE) program. The purpose of IMAGE is to assist employers in developing a more secure and stable workforce and to enhance fraudulent document awareness through education and training. Employers that register for IMAGE, among other things, enroll in E-Verify and voluntarily allow ICE to audit their workforce.

The Definition of Constructive Knowledge

A determination that an employer has constructive knowledge that an employee is not work authorized can result in employer liability in the event of an ICE raid or audit. Constructive knowledge is defined as knowledge that can be fairly inferred through the existence of particular facts and/or circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition. Unfortunately, constructive knowledge in this context can be imputed to an employer who fails to complete or improperly completes the Form I-9; acts with reckless and wanton disregard for the legal consequences of permitting individuals to introduce an unauthorized alien into its workforce or to act on its behalf; and fails to take reasonable steps after receiving information that the employee may be an alien who is not work authorized, such as:

  • An employee requests the employer to file a labor certification or employment-based visa petition for that employee;
  • After reporting an employee's earnings on Form W-2, the employer receives notice from the SSA by a "no-match letter" that the employee's name and corresponding Social Security number fail to match SSA records; or
  • The employer receives notice from DHS/ICE by a "notice of suspect documents" that the immigration status document or employment authorization document presented or referenced by the employee in completing the Form I-9 is assigned to another person or that there is no agency record that the document has been assigned to any person.

The no-match letter and the notice of suspect documents operate as indicia of constructive knowledge and can expose the employer to liability.Receipt of either of these letters requires an employer to follow safe harbor procedures in order not to have constructive knowledge that an employee is an illegal alien .

While an employer may be tempted to terminate the employment of an employee based upon receipt of either letter, this action could be discriminatory and could result in lawsuits filed by the terminated employee or by the Equal Employment Opportunity Commission (EEOC), or both. An employer has no obligation to follow up on a no-match letter or notice of suspect documents if the employee is no longer working for the employer.

New Legislation Protects Employer though Safe Harbor Procedures

How does an employer protect itself in the event it receives a no-match letter or a notice of suspect documents? To date, an employer still can be held liable if it has received such a letter due to its constructive knowledge that the documentation being presented is false. To alleviate this situation, the DHS issued a new regulation in August 2007 to soften this finding of constructive knowledge. The new regulation set forth safe harbor procedures for employers who receive such a letter, and DHS prepared an insert to these letters to guide employers on their related affirmative obligations:

  • Within 30 days after receipt of a letter, the employer must check its records to ensure that the mismatch was not the result of an employer error.
  • If this does not resolve the problem, the employer must request the employee to confirm the accuracy of the information the employee provided to the employer.
  • The employer should ask the employee to resolve the issue with the SSA within 90 days.
  • If these steps lead to resolution of the problem, the employer should contact the SSA pursuant to the instructions in the no-match letter to correct the error by using the SSN Verification Service, and should retain a record of the time and date of verification. The SSN Verification Service can be contacted at
  • If none of the above resolves the matter within 90 days after receipt of the no-match letter, the employer should complete a new Form I-9 within 3 days without relying on any documentation that relies upon the questionable Social Security number. The new document also must include a photo.

These steps also should also be applied in the event of an ICE/DHS-generated notice of suspect documents, with the employee consulting with the DHS or SSA as applicable.

In 2007, the American Federation of Labor and Congress of Industrial Unions and others filed suit seeking to prevent the implementation of these new regulations on the ground that they exceed the DHS's authority. On October 10, 2007 , the United States District Court for the Northern District of California issued a preliminary injunction enjoining DHS and SSA from implementing the safe harbor procedures contained in the regulation. The DHS has responded that it has modified the new regulation, which may appear shortly in the Federal Register.

In the meantime, if an employer does not terminate an employee when it knows the employee is not work authorized, ICE can impose a fine of up to $11,000 per worker and a jail sentence of up to 6 months. In the first three quarters of 2007, ICE obtained criminal fines, restitutions, and civil judgments in excess of $30 million. In criminal cases, ICE pursues charges of harboring illegal aliens, money laundering, and knowingly hiring illegal aliens. Harboring illegal aliens is a felony with a potential 10-year prison sentence.

At this point in time, the best protection for employers is: (1) to require complete Form I-9s, (2) to use E-Verify; and, (3) in the event of a no-match letter or notice of suspect documents, to follow the safe harbor procedures outlined above.

© 2008, Ward and Smith, P.A.

Ward and Smith, P.A. provides a multi-specialty approach to the representation of technology companies and their officers, directors, employees, and investors. For further information, please contact Jennifer Parser at 919-865-8370 or at Jennifer Parser practices in the Labor and Employment Section and Immigration Practice Group of Ward and Smith, P.A., where she concentrates her immigration practice on business immigration, particularly investor visas. Jennifer's practice is limited to Federal Immigration and Naturalization Law. She currently is licensed in New York only.

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