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Employers Are Liable for Illegal Workers

One of the core purposes of the United States immigration laws is to protect the U.S. labor market. The Immigration and Nationality Act requires employers to verify the employment eligibility of all of its employees and imposes penalties upon any company that fails to verify eligibility or hires workers who have no legal authority to work in the U.S.

Q: What law addresses the employment of foreign workers? 
The Immigration Reform and Control Act (IRCA) was added to the Immigration Nationality Act in 1986 to make it illegal for companies to hire anyone who is not authorized to work in the United States. The Immigration and Naturalization Service, the predecessor to the current U.S. Citizenship and Immigration Service (U.S.C.I.S.), created an Employment Eligibility Verification form (Form I-9) that employers now use to document the employment eligibility of every person who is hired. Before 1986, employers were not required to verify worker authorization of foreign nationals or U.S. workers.
Q: What are the penalties for not verifying work authorization? 
A company that does not complete, or does not correctly complete, an I-9 Form on behalf of each employee within the first three days of employment faces possible penalties of $110 to $1,100 for each violation. In addition, an employer who signs an I-9 form containing false statements may be charged with perjury. 

Q: Where can I find a current I-9 form and guidance on how to complete it? 
 Form I-9 and the accompanying employer handbook (M-274) were recently updated and the updated versions must now be used. The new I-9 form and employer handbook can be downloaded from the U.S.C.I.S. website at Employers should study the handbook, especially to find out what documentation is now required to verify workers’ eligibility.

Q: What are the penalties for employing someone who is not legally authorized to work in the U.S.? 
According to the Immigration Nationality Act, a company that “knowingly” uses illegal workers can be fined as much as $10,000 per worker. The employer also can face up to six months in jail if a pattern of violating the law is found. Also, a conviction for “harboring” illegal workers (knowingly employing 10 or more individuals with illegal status in a 12-month period) can lead to imprisonment of up to 10 years.
Q: Has immigration enforcement increased recently?
Yes. The creation of Immigration and Customs Enforcement (ICE) in 2003 as part of the Department of Homeland Security signaled an increased emphasis on enforcement, not only for illegal workers but also for their employers.

Q:  I received a letter from the Social Security Administration telling me that the name of one of our workers does not match the Social Security number that he provided. Can he continue to work for us?
 This is a difficult question. An employer must do two things to avoid liability: fill out the I-9 form correctly and not “knowingly” use illegal workers. Receiving one of these “no-match” letters about a foreign worker may result from a typo, name change confusion, a computer glitch, or from someone using another’s Social Security number (or a non-existent number) to work illegally. Such a letter also may be received for a U.S. citizen when, for example, the person neglects to update the Social Security Administration with a name change following a marriage or divorce, creating an inconsistency between current W-2 and other government records.

Although ICE has been contending that receipt of a “no-match” letter should be evidence of a “knowing” violation of IRCA, the courts generally have concluded that mere failure to investigate potentially fake documents (except in serious circumstances) is not enough to establish a “knowing” violation. It remains to be seen how this issue will be resolved.

Q: Can an employer be responsible for a contractor’s illegal workers? 
 Yes. The wording of IRCA explicitly makes anyone who knowingly “uses” illegal workers liable, even if a formal employer/employee relationship does not exist. In 2005, Wal-Mart paid $11 million in a lawsuit settlement because one of its contractors used illegal workers. Wal-Mart lost its argument that it should not be responsible since Wal-Mart did not directly employ the workers.
Q: Can companies verify the work authorization of an individual with the federal government?
 Yes. To help employers, the U.S.C.I.S. has implemented the “E-Verify” program. This (currently voluntary) program allows a registered employer to login to a website and check whether an employee’s name matches his or her Social Security number. Also, a “Photo Screen” system is being developed that allows employers to compare the photograph on a piece of U.S.C.I.S.-issued identification against a database maintained by U.S.C.I.S. An employer can call ICE’s toll free number at 888-464-4218 for more information.


Law You Can Use is a weekly consumer legal information column provided by the Ohio State Bar Association (OSBA). This article was originally prepared by Sherry Neal, a partner in the Cincinnati office of Hammond Law Group. It was updated by Jeffrey Moeller, a partner in the Cleveland office of Hermann, Cahn & Schneider.  

Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

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