Hiring immigrants has long been a valued American way of getting the job done. Today, however, employers need to tread more carefully over what's become rougher legal terrain.

Federal regulations are tightening up in ways that target employers of undocumented workers. Worse, state governments are creating a confusing patchwork of laws that penalize employers who hire undocumented foreign nationals. Even municipalities are getting into the act.

“Employers who hire undocumented aliens face steep fines and the loss of their business licenses. Some laws even mandate jail time for repeat offenders,” says David Kotick, managing partner of Apsan Law Group, an immigration law firm in New York.

Whatever your state, “Every individual, once hired, must be asked for documents that prove their identity and work authorization,” says Carlina Tapia-Ruano, partner at Chicago-based Tapia-Ruano & Gunn, an immigration law firm (www.trgpc.com). Each hired individual must fill out an I-9 form, titled “Employment Eligibility Verification,” issued by the U.S. Citizen and Immigration Services (USCIS), a Department of Homeland Security (DHS) division. (To avoid any appearance of discrimination, the law requires individuals to complete this form only after being hired, not during the recruitment process.)

Download the 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 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 individual's employment status. There are only three choices: 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 2, employers must certify the employee-provided documents that establish the individual's identity and employment authorization. The back of the I-9 form lists the 10 acceptable documents. Any one document is acceptable as proof of both identity and employment eligibility. Additionally, there are nearly two dozen additional documents that have been certified as proof of one of the two criteria.

  • Avoid errors

    Part 3 provides space for updating the form's information after a worker's previous work authorization has expired.

“The law requires the signatures and the information be completed within three days of the hire date,” notes Tapia-Ruano. “Many attorneys recommend employers attach photocopies of the reviewed documents to each I-9 to help protect the business in the event of an audit.”

Gathering documents is one thing. Making sure they're authentic and filled in correctly is another. Penalties for errors can range from $1,000 to $10,000/violation.

“The penalties can accumulate very quickly even with a single I-9 form if there are numerous violations. Some employers have been hit with hundreds and thousands of dollars in penalties and fines,” cautions Tapia-Ruano. Even employers who make innocent mistakes can be fined.

Employers should ensure anyone who helps employees fill out I-9s is trained to avoid errors, she says. She also encourages an internal audit of I-9s on a periodic basis. “Don't wait for a DHS audit,” she says.

While the I-9 form looks simple, attorneys caution against these common errors:

  • Safe-harbor rules

    Illegal bias. Avoid charges of discrimination by requiring every employee to fill out an I-9 form, not just those whose appearance or speech is suspect.

  • Entry errors. “Any mistakes can or will result in fines,” cautions Tapia-Ruano. Incorrectly indicating the employee's immigration status is a common error. An employee with a work visa, for example, may have erroneously filled in “permanent resident.” Such a mistake is significant even if done innocently.

  • Over-restrictive documentation. Avoid requiring documentation more restrictive than what the law mandates. It's illegal and can lead to fines, as well as charges of discrimination. “The I-9 provides a list of documents acceptable as proof,” notes Tapia-Ruano. “You must accept the employee's decision as to which of the listed documents to provide.”

  • Failure to assess authenticity. The employer must not accept documents a reasonable person would suspect were fraudulent.

  • Procrastination. Don't delay examining the employee's documents and getting the I-9 in order. “It's not uncommon for employers to wait more than three days,” notes Tapia-Ruano. “Again, that can result in fines.”

  • Allowing expiration dates to slip by. Many employees have permission to work for only a limited period. “You need a system to continue to verify the employment status of an individual throughout the period of employment,” cautions Tapia-Ruano. Ask the employee for new verification documents before they expire.

It's important to retain these I-9 forms in a safe place. “At any time, DHS or the U.S. Department of Labor may come around and perform what they call an ‘employment audit’ of I-9s,” adds Tapia-Ruano.

The U.S. Social Security Administration (SSA) may send a “no-match” letter to an employer when a worker's name and social security number on their W-2 Forms don't match SSA records. In the past, employers were unsure of what to do upon receiving such a letter.

Getting help

“In many cases, employers have kept the employees on board, fearing a termination decision based on a no-match letter might lead to discrimination charges,” notes Angelo A. Paparelli, managing partner of Paparelli & Partners, an immigration law firm with offices in New York City and Irvine, CA (www.entertheusa.com). “There can be legitimate reasons why a no-match occurs. A female employee may have gotten married, for example, and changed her name without notifying SSA. Or SSA could have misspelled the name.”

Indeed, the DHS Immigration and Customs Enforcement division's website 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.”

In August 2007, DHS issued new regulations intended to clarify matters while providing a “safe harbor” for employers who hire foreign nationals (see “Let The Games Begin,” page 44, August 2007, BEEF). The regulations define what steps employers must take within what time frames to avoid legal liability for hiring undocumented workers:

  1. Within 30 days, check records to ensure the mismatch wasn't a clerical error.

  2. If this doesn't resolve the problem, ask the employee to confirm the accuracy of the employer's records.

  3. Ask the employee to resolve the issue with the SSA within 90 days from the date the employer received the no-match letter.

  4. If the employee successfully resolves the mismatch, ensure the instructions in the SSA letter have been followed.

  5. If the issue is still unresolved, initiate another verification round as if the employee were newly hired.

An injunction by a federal court in late 2007 delayed implementation of the new regulations, but the government intends to reissue the safe-harbor rules in revised form to satisfy the court's concerns. This delay provides employers with additional time to study the proposed rules. To stay abreast of developments, visit www.ice.gov.

Many feel that recent changes in federal regulations represent an attempt to shift the border-control effort from government to the private sector. As the face of America's workforce changes, employers can be sure there will be additional changes in federal, state and local regulations.

Phillip M. Perry is a New York-based writer on business management, workplace psychology and employment law.

Some legal-assistance resources on immigration law: