The Immigration Puzzle

The sound and fury surrounding the illegal immigration/undocumented-worker debate understandably is making some remodelers nervous. With the specter of the Department of Homeland Security (DHS) and ICE, DHS’s somewhat ominously named investigative branch (it stands for Immigration and Customs Enforcement) peering into their hiring practices, who can blame them?

To add to the apprehension, several states, impatient with federal inaction, have passed tough laws that could revoke business licenses or even make immigration-related hiring infractions a felony.

The mix of federal agencies involved — some of which have undergone name changes under the DHS umbrella — can be frustrating and intimidating to the uninitiated.

The good news is that remodelers who have consistently followed the rules and kept up to date with federal and state requirements don’t necessarily see the issue as overwhelming.

“If you have systems in place and do background checks on everyone that you hire, it’s not really an issue. It’s more of an issue for people who aren’t doing background checks as a normal part of their hiring process,” says Chris Lattuada of B-Line Construction Inc. in Sacramento.

Lattuada says his firm routinely fills out I-9 employment eligibility verification forms for all hires and has a third-party agency do a background check.

Another California remodeler, Philip Anderson, president of HDR Remodeling in Berkeley, says, while there is a significant Hispanic presence in the workforce in his area, the immigration issue doesn’t show up as something that he sees as a pressing problem. He says the consensus of contractors in his area is that they have “gotten off easy” so far in that regard and have not experienced significant problems.

Anderson does, however, verify the employment eligibility of his hires as a matter of routine procedure. He adds that he is not having difficulty maintaining his workforce because of immigration issues.

One small New Jersey remodeler, who asked that his name not be used, reports several Social Security no-match issues, at least one of which resulted in the termination of the employee. An earlier no-match situation became moot when the crew was terminated for business reasons unrelated to their work eligibility. The remodeler notes that no action was taken against him as an employer in either case.

While tales of extreme compliance or enforcement dilemmas seem rare, remodelers would do well to keep informed of current requirements as well as of stricter sanctions that may impend.

No-Match Letters

Social Security Administration (SSA) no-match letters — which many remodelers have never seen because SSA only sends letters to firms with 10 or more instances in which Social Security numbers on W-2 forms do not match SSA’s records — is one issue that bears watching. Even though only 9 percent of those responding to a Qualified Remodeler survey report receiving such notifications, use of the letters as an enforcement tool may become more widespread.

The no-match letters themselves are nothing new. What is new is a ruling by DHS that receipt of such a letter constitutes “constructive knowledge” that an employee is unauthorized to work in the United States. The Social Security Administration for years has included a disclaimer that its no-match letter made no statement about the immigration status of the employee named.

The DHS rule, “Safe-Harbor Procedures for Employers Who Receive a No-Match Letter,” was promptly challenged in court by the AFL-CIO and other labor and immigrant rights organizations in August 2007. The court issued an injunction in the case, but the DHS issued a supplemental proposed rule, little changed from the initial rule, which may go into effect soon unless similarly challenged.

As of this writing, there was no effective date for the ruling. However, George Kuck, president of the American Immigration Lawyers Association (AILA), predicted that an effective-date determination was imminent. A new lawsuit challenging the rule cannot be filed until an effective date was set, he added.

State Sanctions

In addition, many states have taken it upon themselves to initiate their own legislation. In the first quarter of 2008, over 1,000 immigration-related bills have been considered, with 44 laws enacted, according to the National Council of State Legislatures (NCSL).

Adding to the uncertainty is whether state and local governments have the authority to enforce immigration laws, which traditionally has been solely the responsibility of the federal government. It appears certain that many of the newly passed state laws will be the focus of litigation.

State legislation pertaining to employment runs a gamut of issues, from employer sanctions for hiring unauthorized workers to the use of federal employment-eligibility programs. Arizona, for example, requires employers to use E-Verify, an Internet-based system operated by U.S. Citizenship and Immigration Services (USCIS) in partnership with the Social Security Administration. Illinois, on the other hand, passed legislation prohibiting employers from using the very same system. DSH promptly sued Illinois over the law; litigation is pending.

The state sanctions for violating immigration laws so far have tended to be more severe than the fines imposed under existing federal law. Both Arizona and Tennessee provide for revocation of business licenses, a likely death sentence for a business.

Obviously, remodelers are advised to check the legal requirements in their individual states and, if necessary, consult with a lawyer.


E-Verify (formerly known as the Basic Pilot/Employment Eligibility Verification Program), as mentioned, is an Internet-based system operated by the Department of Homeland Security (specifically the DHS’s U.S. Citizenship and Immigration Services [USCIS] department) and the Social Security Administration (SSA) that allows employers to verify the employment eligibility of newly hired employees.

Employers use E-Verify by entering information captured on the Employment Eligibility Verification Form (I-9). E-Verify compares employee information against the SSA and DHS databases. Currently, 93 percent of an employer’s queries are instantly verified as work authorized, according to USCIS.

USCIS has launched a photo screening tool allowing employers to check photos on employment authorization documents (EAD) or permanent resident cards (green cards) against images stored in USCIS databases.

An employer who verifies work authorization under E-Verify has established a “rebuttable presumption that it has not knowingly hired an unauthorized alien.” Participation in the program does not provide a “safe harbor” from work site enforcement, however, according to the USIC.

One of the most frequently heard criticisms of any of the electronic verification schemes is that they all rely on the SSA database, which critics say has a high rate of false findings.

National Efforts

While E-Verify currently is a voluntary program, with the noted exception of those states that require its use to determine the worker eligibility, there is sentiment in the United States Congress to make it - or a similar system — mandatory nationwide.
The Secure America Through Verification and Enforcement (SAVE) Act, HR 4088, sponsored by Rep. Tom Tancredo (D-CO) and Rep. Heath Shuler (D-NC) would do just that.

Another enforcement bill introduced was the New Employee Verification Act of 2008, HR 5515, which like the Shuler-Tancredo bill, would mandate an electronic eligibility verification system (EEVS). Critics complain that it relies on the same flawed database as does the Shuler bill, but would be administered by the Social Security Administration instead of by DHS, creating additional problems for an already overburdened agency.

The SSA database has an error rate of 7 to 10 percent, according to Kuck. The Social Security system, he says, is two years behind on disability claims alone and is facing an influx of thousands of Baby Boomers who will be claiming benefits in the near future. Basing a verification system on the SSA database will “overwhelm the Social Security Administration” and “cause workers who are legally authorized to work to be fired,” he says.

IRCA & I-9s

While E-Verify, the interpretation of SSA no-match letters as immigration enforcement tools, and a panoply of state laws may be the latest thing on the horizon, employers have long been required to verify the identity and work authorization status of employees. And they should continue, experts agree.

The Immigration Reform and Control Act of 1986 (IRCA) requires the I-9 Employment Verification Form be completed by each employee. That requirement hasn’t changed. The I-9 form itself was updated in 2007, but the basic regulations remain the same.

Nevertheless, a large number of companies, because of lack of knowledge or lack of enforcement, fail to conform. “How many small employers have done their I-9s?” Kuck asks rhetorically. “Not enough,” is his answer.

“There’s already a system in place to go after employers who don’t obey the law,” Kuck notes. “It’s called the [IRCA] employer sanctions provision; have ICE come in and do an audit,” he suggests. He says that current laws are perfectly legal and enforceable but enforcement is poorly funded.

Jorge Lopez of Littler Mendelson P.C., a national employment and labor law firm, also emphasizes the importance of the I-9s. “You have to get your I-9s in order and make sure whoever does it is trained in the process; that’s step one,” says Lopez, who is headquartered in Miami.

“There hasn’t been a lot of credibility given to that process because of lack of enforcement,” he adds. “Now employers are playing catch up.”

Lopez notes that the I-9 is a one-page document that doesn’t appear to be too complicated, but “you’d be surprised how easy it is to make errors,” he says.

The complication comes from the list of acceptable documents that establish identity, employment eligibility, or both. These documents often come in a variety of forms, sometimes depending on their date of issue, which can confuse an employer.

Lopez notes there is a variety of training resources available, including many issued by the agencies involved and available online (see Resources). “It’s not going to be that difficult to get up to speed, and it doesn’t have to cost a lot,” he adds.

Because of the small size of most remodeling firms and the lack of resources of enforcement agencies, small remodelers may not be at the top of the list of those scrutinized. Increased funding for staffing and hiring auditors by immigration agencies, however, may change that, Lopez cautions.

He suggests conducting an audit of I-9 compliance procedures to identify problem areas and making corrections before an ICE inspection. If a remodeler is uncertain of the law, Lopez suggests hiring an attorney or consulting firm that specializes in these matters.

Discrimination Dangers

Remodelers shouldn’t be complacent, but being overzealous could have an equally negative impact. An investigation could be triggered by an employee who claims, legitimately or not, that he has been fired or denied employment as a result of immigration-related practices.

Employers understandably see this as a Catch-22. If they’re lax in compliance, they face fines or worse. If they overdo enforcement and carry it beyond allowable legal bounds, they could face discrimination charges.