Finally, Some Guidance on Electronic I-9s

Electronic I-9s, thanks to a Freedom of Information Act request from LawLogix, a memorandum from the Executive Associate Director of Homeland Security Investigations (HSI) that provides guidance to all HSI field offices on the collection of electronically generated I-9 forms and the minimum electronic audit trail requirements for use in contemplating civil fines was released to the public.

As background, every electronically generated or stored I-9, electronic I-9s must meet all of the requirements for electronic I-9 found in the regulations. One requirement is the form must be accompanied by an audit trail.   The HSI memorandum states in part that whenever an electronic Form I-9 record is created, completed, updated, modified, altered or corrected, a security and permanent record must be created (audit trail) that establishes the date accessed, who accessed it and what action was taken.  The HSI memorandum attaches a flow chart and example audit trial to illustrate the minimum acceptable standards for electronically generated I-9 forms.

The HSI memorandum also states that, in addition to the audit trail, special agents or auditors must request the name of the software product being utilized and any internal business practices and protocols related to the generation of, use of, storage of, security of, and inspection and quality assurance programs for the electronically generated Forms I-9.

Moreover, the HSI memorandum states that the employer being audited should provide the indexing system identifying how the electronic information contained in the Form I-9 is linked to each employee and documentation of the system used to capture the electronic signature, including the identity and attestation of the individual electronically signing the Form I-9, or electronic I-9s.

Finally, the HSI memorandum recommends that special agents or auditors request access to the electronic system for a demonstration of the generation of an electronic I-9 form.

What is the take away?  Recall that HSI has very clearly stated in the past that it would hold employers responsible for the mistakes and errors of their electronic I-9 vendors, buyer beware.  While HSI agents and auditors may not have dug into the dirty details of these systems during past audits, the days of employers getting a pass due to a lack of guidance or knowledge have past.  If an employer is unsure if its electronic I-9 vendors system is in compliance with this guidance and the applicable regulations, now is the time to find out.

If you would like a copy of this memorandum, please contact us and we will be happy to send it your way.

How will DHSs Deferred Action (DACA) process affect Alabama Employers?

Lets first discuss new employees.  Alabama employers now have a segment of new potential employees.  Deferred Action for Childhood Arrivals (DACA) beneficiaries are eligible for employment authorization if they file a petition for employment authorization (USCIS Form I-765) and receive their Employer Authorization Document I-766 (EAD).  Absent this, they are not authorized to work in the United States.

Next, lets discuss current employees.  If an existing employee informs his or her employer that he or she has filed for DACA consideration, this means that the employee is currently not authorized to work in the United States, which in turns means the employer has knowledge or at least constructive knowledge of the employees lack of work authorization, because only individuals who are not lawfully present in the United States may apply for DACA consideration.  To comply with the law, the employer must terminate employment immediately.

Why would the employee tell his or her employer that he or she has filed for DACA consideration?  Consider this scenario: Employee comes to HR department and asks for a letter or documentation to confirm that he or she has been working for the employer for a specified period of time. When asked what will this information be used for, the employee states that he or she is applying for DACA.   Ooops!

Adding to the risk associated with continuing to employ the individual who is currently applying for DACA consideration is the fact that any employment information provided by a DACA petitioner may be shared with ICE, which might lead to an investigation or audit into the hiring practices of the employer.

To B-1, Or Not To B-1? Or Is That The Question? Palmer v. Infosys Technologies.

Imagine your worst compliance nightmare, then rest assured that folks (present and former) at Infosys have endured worse in the case of Palmer v. Infosys Technologies Ltd., Inc., M.D. Ala. 2:11-cv-217.  Civil jury selection is set to begin August 20 in U.S. District Judge Myron Thompsons courtroom in Montgomery, Alabama.  Criminal grand jury proceedings are referenced in the civil filings, but the criminal investigation record is not open to the public.  The claimant has asserted, in detail, a massive, corporate-directed visa fraud and tax evasion scheme, the purpose of which, he says, was to run our governments H-1B visa blockade by certifying that Indian software developers, database administrators and other skilled IT professionals, assigned to work on client projects here, were but temporary, B-1 business visitors.   Material differences include the uncertainty, delay and cost of an H-1B visa (months, thousands of dollars, if granted), the ineligibility of a B-1 visa holder to engage in local employment or labor for hire, and their consequent  exclusion from tax-withholding payrolls.  A business visitor is supposed to come to the meeting here, then go home.  According to the whistleblower in this case, Infosys forced him and others to write false, fill-in-the-blank welcome letters affirming B-1 eligibility, to be offered to support B-1 visa issuance.  Perhaps worse, Infosys allegedly coached the visa holders how to conceal and falsify the employment purpose of their travel to the United States.  As the Ginsu knife guy always said, But wait, theres more!

The whistleblower says that corporate HR and legal department managers admitted to him that the scheme existed and that it was illegal.  Initally, they planned to investigate and clean it up.  But they were over-ruled and either quit or fell in line, the whistleblower says.  Some of those who quit are named as witnesses for the whistleblower.  Both inside and outside Infosys counsel have been deposed and may be called to testify at trial.  In short, says the whistleblower, his reports first internally, then to the feds started a battle among executives that the bad guys won.

While generally denying the visa fraud scheme, Infosys lawyers defending the suit are seeking to have it dismissed on grounds irrelevant to the alleged scheme.  They say that, even if all those allegations are true, the whistleblower was not, due to his reports, subjected to sufficient, Infosys-directed retaliation to justify his legal claims.  For example, Infosys says that the evidence fails to prove a material reduction of the whistleblowers compensation or that the threats (including death threats) he received were made by an agent of the company in the course and scope of employment.  Briefing of the defense motion concluded June 15, 2012.   Unless the motion is granted entirely, it seems that Judge Thompson will begin jury selection on August 20.

Infosys, headquartered in Bangalore, India, is a global provider of tech-enabled business solutions.  Many U.S. companies have relied on Infosys to staff critical projects with skilled people who are in very short supply here such as Oracle software developers and database administrators.  This case appears to be a morality tale about the stark, unappealing options of a whistleblowers superior, but it also exposes the broken, dysfunctional H-1B visa program and its potentially catastrophic consequences for U.S. businesses.

Will the Supreme Courts decision in the Arizona case impact the employment provisions of Alabamas Immigration Law?

There have been many headlines regarding the United States Supreme Court’s decision in Arizona v. U.S .  The question before Alabama employers is what will be the practical impact of this decision on the employment provisions  of Alabama’s immigration law?

Before coming to any conclusions, the Arizona case must be considered in combination with Chamber of Commerce v. Whiting, another recent Supreme Court case.  In Whiting, the Supreme Court upheld Arizona’s mandate that all Arizona employers use E-Verify and upheld Arizona’s authority to impose penalties such as the suspension or revocation of the business licenses of in-state employers that employ unauthorized aliens. The Supreme Court held that “While IRCA [the federal law]  prohibits States from imposing ‘civil or criminal sanctions’ on those who employ unauthorized aliens, it preserves state authority to impose sanctions ’through licensing and similar laws.’” §1324a (h) (2).”

Remember that under section 15 of Alabama’s immigration law, which remained unchanged after recent amendments to the law, employers are  subject to penalties if they knowingly employ, hire for employment or continue to employ unauthorized workers within Alabama. The penalties for hiring unauthorized aliens range from temporary suspension of business licenses and permits for the first violation to permanent revocation of the business licenses statewide for multiple violations.  Furthermore, employers that are found to have violated the law will have to comply with additional reporting requirements for up to three years after discovery of a violation.  As well, Alabama employers who fail to register and use E-Verify will lose the safe harbor protection with respect to the hiring of employees whose employment authorization has been verified through the program.

So what does this all mean? The Arizona decision makes absolutely clear that the Immigration Reform and Control Act of 1986 (“IRCA”) is a comprehensive framework that covers all aspects of enforcement related to the employment of unauthorized workers. It thus calls into question  the states’ ability to impose any penalties not directly related to “licensing or similar laws” on employers for the hiring of unauthorized workers. However, as Pepper mentioned in an earlier post, even with the sweeping preemption language found in the Arizona decision, the Court does not call into question its earlier decision in the Chamber case. Therefore, some of the sections of Alabama’s immigration law, such as the E-Verify mandate and the penalties imposed against those employers that knowingly hire unauthorized aliens, may likely survive legal challenges.

On the other hand, other employment-related provisions of Alabama’s immigration law  like section 17 that provides a claim for discrimination and wrongful termination and section 16 that disallows a tax deduction for the expense associated with employing unauthorized workers (both of which are currently enjoined by lower courts) may be more likely to be preempted by federal law under the rationale the Supreme Court used in the Arizona decision.

Effects of Arizona v. US Supreme Court Decision on the Mississippi Employment Protection Act

Having just read Arizona v. U.S (June 25, 2012) and having re-read in its light the Mississippi Employment Protection Act, Miss. Code Ann. 71-11-3 (2008), and the Supreme Court’s 2011 Chamber of Commerce v. Whiting opinion, it seems clear that part of Mississippi’s law cannot be enforced and that another part is imperiled, but that Mississippi’s E-Verify mandate still should survive a preemption challenge.

Criminalization of Unlawful Work

Like the Arizona law, Miss. Code Ann. 71-11-3 (8) (c) (i) imposes criminal penalties on an alien who works without USCIS authorization.  The Supreme Court deems that a transgression of Congressional authority because Congress decided to impose only civil penalties.

 

Discrimination Liability

Another section of Mississippi’s law is called fairly into question by the Supreme Court’s majority reasoning.   A state law imposing immigrant hiring penalties upon employers is subject both to express preemption analysis under 8 U.S.C. 1324a (h) (2) and to the sweeping (perhaps ahistorical, see Justice Scalia’s dissent) implied preemption analysis used by Justice Kennedy in holding Arizona law section 5(C) preempted.  Section 1324a (h) (2) permits states to impose on employers of illegals penalties “through licensing and similar laws,” but forbids other “civil or criminal sanctions.”   Miss. Code Ann. 71-11-3 (4) (d) imposes employment discrimination liability on an employer that dismisses an authorized worker while retaining an unauthorized worker.  This would appear to be a preempted civil sanction.

E-Verify Mandate

In Chamber of Commerce v. Whiting (2011), the Supreme Court approved Arizona legislation making immigration law compliance and E-Verify use a condition of state business licenses, due to the preemption carve-out of 8 U.S.C. §  1324a (h) (2).   While the preemption reasoning in this week’s opinion is sweeping, it does not appear to call that 2011 decision into question.   Thus, Mississippi should remain able to enforce its E-Verify mandate for state contractors, a contract being a quasi-license.  And Mississippi employers other than state contractors still face the prospect of business license loss if they employ an illegal alien and have not used E-Verify.