Limiting Liability for Certain Technical and Procedural Violations of Paperwork Requirements

DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Part 274a

[INS No. 1819-96]

RIN 1115-AE70

Limiting Liability for Certain Technical and Procedural

Violations of Paperwork Requirements

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule proposes to amend the regulations of the Immigration

and Naturalization Service (Service) by limiting liability for certain

technical and procedural violations of paperwork requirements for those

employers that have made a good faith attempt to comply with a

particular employment verification requirement. This rule is necessary

to implement section 411 of the Illegal Immigration Reform and

Immigrant Responsibility Act of 1996 (IIRIRA) Public Law 104-208.

DATES: Written comments must be submitted on or before June 8, 1998.

[[Page 16910]]

ADDRESSES: Please submit written comments, in triplicate, to the

Director, Policy Directives and Instructions Branch, Immigration and

Naturalization Service, 425 I Street, NW., Room 5307, Washington, DC

20536. To ensure proper handling please reference INS No. 1819-96 on

your correspondence. Comments are available for public inspection at

the above address by calling (202) 514-3048 to arrange for an

appointment.

FOR FURTHER INFORMATION CONTACT:

Angelo Sorrento, Senior Special Agent, Immigration and Naturalization

Service, HQINV, 425 I Street, NW., Washington, DC 20536; telephone

(202) 514-2998.

SUPPLEMENTARY INFORMATION:

What is the Purpose of This Rule?

This rule proposes to amend Service regulations to implement

section 411 of IIRIRA, which was enacted on September 30, 1996. This

legislation significantly amended the Immigration and Nationality Act

(Act) by allowing employers who have made a good faith attempt to

comply with a particular employment verification requirement to correct

technical or procedural failures to meet the verification requirement

before such failures are deemed to be violations of the Act. This

proposed rule ensures that the good faith compliance provision relieves

employers from strict liability with respect to minor, unintentional

violations of the employment verification requirements, but does not

provide a shield for employers to avoid the requirements of the Act.

Isn't the Service Preparing to Change the Form I-9? How Will That

Affect This Rule?

This proposed rule applies to technical or procedural verification

failures with respect to the current Form I-9 (11/21/91 version). On

February 2, the Service published a proposed rule, INS# 1890-97,

Reduction in the Number of Acceptable Documents and Other Changes to

Employment Verification Requirements (63 FR 5287). A draft revision to

the Form I-9 was published for comment with that proposed rule. That

revision was intended to simplify and clarify the verification

requirements, and the Service hopes that improvements to the form will

help employers avoid inadvertent violations. Any changes to the good

faith compliance regulations which are required by a future revision of

the Form I-9 will be published with appropriate notice and comment

periods.

What is the Good Faith Compliance Provision? Does it Apply in all

Circumstances?

The good faith compliance provision amends section 274A(b) of the

Act by adding a new provision, found in sections 274A(b)(6)(A), (B),

and (C) of the Act. Section 274A(b)(6)(A) of the Act provides that a

person or entity that has made a good faith attempt to comply with an

employment verification requirement of section 274A(b) of the Act will

be considered to have complied with the requirement, notwithstanding a

technical or procedural failure to meet such requirement. This holds

true unless one of two exceptions applies. First, section 274A(b)(6)(B)

of the Act provides that a person or entity will be considered not to

have complied with the requirement if: (1) the Service or other

enforcement agency has explained to the person or entity the basis for

the failure; (2) the person or entity has been provided a period of not

less than 10 business days, beginning after the date of the

explanation, within which to correct the failure; and (3) the person or

entity has not corrected the failure within such period. Second,

section 274A(b)(6)(C) of the Act provides that a person or entity will

be considered not to have complied with the requirement if the person

or entity is engaging in a pattern or practice of knowing hire or

continuing to employ violations of sections 274A(a)(1)(A) or 274A(a)(2)

of the Act.

When does the Good Faith Compliance Provision Take effect?

Section 411 of IIRIRA applies to failures occurring on or after

September 30, 1996. Except for timeliness failures, failures to meet a

verification requirement continue from the first day the requirement

must be met until: (1) the day that the failures are corrected; (2) the

day that the failures can no longer be corrected, such as when the

Service or other enforcement agency inspects the employer's Employment

Verification Forms (Form I-9); or (3) the day that the duty to meet the

requirement ceases. Continuing failures that persist on or after

September 30, 1996, therefore, fall within the purview of section 411

of IIRIRA, even if the failures first occurred on Form I-9 prepared

before the date of enactment. The Service has determined that section

411 of IIRIRA will apply to cases arising out of inspections conducted

on or after September 30, 1996. For failures associated with timely

completion of the Form I-9, section 411 of IIRIRA will not apply if the

requirement to complete the Form I-9 should have been met before

September 30, 1996.

What Does This Proposed Rule do?

This proposed rule defines the term technical or procedural failure

to meet such requirement, clairifes when an employer has not made a

good faith attempt to comply with the requirement, and describe show an

employer who is notified of technical or procedural failures is

required to correct such failures to bring himself or herself into

compliance with the employment verification requirements of the Act.

What are Technical or Procedural Verification Failures?

Because the good faith compliance provision applies to technical or

procedural failures to comply with a particular verification

requirement rather than the verification requirements as a whole, the

Service must identify the substantive and technical or procedural

components of each statutory verification requirement in section 274(b)

of the Act in order to form the basis for the proposed rule.

This rule proposes to define the term technical or procedural

failure to meet such requirement as the failure of a person or entity

to: (1) ensure that an individual provides his or her maiden name,

address, or birth date in section 1 of the Form I-9; (2) ensure that an

individual provides his or her Alien number on the line next to the

phrase in section 1 of the Form I-9, ``A Lawful permanent Resident,''

but only if the Alien number is provided in sections 2 or 3 of the Form

I-9 (or on a legible copy of a document retained with the Form I-9 (or

on a legible copy of a document retained with the Form I-9 and

presented at the I-9 inspection); (3) ensure that an individual

provides his or her Alien number or Admission number on the line

provided under the phrase in section 1 of the Form I-9, ``An alien

authorized to work until'' but only if the Alien number or Admission

number is provided in sections 2 or 3 of the Form I-9 (or on a legible

copy of a document retained with the Form I-9 and presented at the I-9

inspection); (4) ensure that an individual dates section 1 of the Form

I-9; (5) ensure that an individual completes section 1 of the Form I-9

timely by dating section 1 of the Form I-9 at the time of hire, if the

time of hire occurred on or after September 30, 1996; (6) ensure that a

preparer and/or translator provides his or her name, address,

signature, or date; (7) provide the document title, identification

number(s) and/or expiration date(s) of a proper List A document or

proper List B and List C

[[Page 16911]]

documents in section 2 of the Form I-9, but only if a legible copy of

the document(s) is retained with the Form I-9 and presented at the I-9

inspection; (8) provide the title, business name and business address

in section 2 of the Form I-9; (9) provide the date of hire in the

attestation portion of section 2 of the Form I-9; (10) date section 2

of the Form I-9; (11) complete section 2 of the Form I-9 timely by

dating section 2 of the Form I-9 within 3 business days of the date the

individual is hired or, if the individual is hired for 3 business days

or less, at the time of hire if the date on which section 2 had to be

completed occurred on or after September 30, 1996; (12) provide the

document title, identification number(s), and/or expiration date(s) of

a proper List A or List C document in section 3 of the Form I-9, but

only if a legible copy of the document is retained with the Form I-9

and presented at the I-9 inspection; or (13) provide the date of rehire

in section 3 of the Form I-9.

What are the Principal Verification Requirements That are not

covered by This Definition?

Section 274A(b) of the Act delineates three principal employment

verification requirements: (1) individual attestation of employment

authorization on a verification form; (2) employer attestation on a

verification form after examination of identity and employment

eligibility documents; and (3) retention of the verification form. The

list of technical or procedural failures defined in this proposed rule

reflects those components of the statutory provision and current

regulations that fall outside the principal components.

The principal components of the individual attestation are

identified as the subject matter of the attestation, namely, the

individual's identification of whether he or she is a citizen or

national of the United States, Lawful Permanent Resident or alien

authorized to work until a specified date, and the individual's

signature. The principal components of the employer attestation are

identified as the subject matter of the attestation, namely, the

examination of proper identity and employment authorization documents,

and the employer's signature. The principal components of the retention

requirements are identified as completion of the Form I-9 itself and

maintenance of the Form I-9 for the periods specified in the Act since,

without either the Form I-9 or its retention, the employment

verification requirements would be ineffectual.

How does the Proposed Rule Address Good Faith Attempts to Comply?

The term good faith attempt to comply with the requirement is not

directly defined in this proposed rule. Rather, this proposed rule

clarifies when an employer has not made a good faith attempt to comply

with a particular requirement and, thus, does not gain the benefit of

the notification and correction period requirements of section

274A(b)(6) of the Act.

When has an Employer not Made a Good Faith Attempt to Comply?

An employer has not made a good faith attempt to comply with a

particular requirement when: (a) the employer committed the technical

or procedural failure to intentionally avoid the verification

requirement or knowingly relied on the good faith compliance provision;

(b) the employer corrected or attempted to correct the failure with

knowledge, or in reckless disregard of the fact that the correction or

the attempted correction contains false information or a material

misrepresentation; (c) the employer prepared the Form I-9 with

knowledge or in reckless disregard of the fact that the Form I-9

contains false information or a material misrepresentation; or (d) the

type of failure was previously the subject of a Warning Notice, Notice

of Intent to Fine, or notification of technical or procedural failures.

Intentional avoidance of the requirements can be demonstrated

circumstantially through such evidence as a large number of

unauthorized aliens in the employer's work force combined with a

pattern of failures with respect to those unauthorized aliens, or

failure of the employer to prepare Forms I-9 for his or her employees

until after the Service notifies the employer through the Notice of

Inspection that the Service intends to conduct an I-9 inspection. This

proposed rule is not intended to provide a shield for employers to

avoid the requirements of the Act.

How can Employers Correct Technical or Procedural Verification

Failures?

This rule proposes a mechanism for employers to correct technical

or procedural failures for which they have been notified. To be deemed

to have properly corrected a technical or procedural failure identified

in section 1 of the Form I-9, the employer must ensure that the

individual, preparer, and/or translator corrects the failure on the

Form I-9, initials the correction, and dates the correction. To be

deemed to have properly corrected a technical or procedural failure

identified in sections 2 or 3 of the Form I-9, the employer must

correct the failure on the Form I-9, and then initial and date the

correction.

The Service recognizes that the correction of technical or

procedural failures is sometimes impossible, whether due to the nature

of the failure, such as a timeliness failure, or to the inability of

the employer to access the necessary information, such as when the

information has been independently destroyed or is inaccessible due to

termination of the individual's employment. This rule proposes that,

where the employer's explanation of an inability to correct a technical

or procedural failure is reasonable, the employer will be deemed to

have complied with the requirement, notwithstanding the inability to

correct the failure.

This proposed rule in no way affects the Service's authority to

enforce verification failures that are not characterized as technical

or procedural.

What About the Other Employment-Related IIRIRA Provisions?

This is one of four rules the Service is proposing to implement

IIRIRA amendments to section 274A of the Act. In addition to this rule,

we are developing and publishing proposed rules to:

(a) Implement sections 412(a), 412(d), and 416 of the IIRIRA by:

(1) eliminating certain documents currently used in the employment

eligibility verification (Form I-9) process; (2) including any branch

of the Federal Government in the definition of entity for employer

sanctions purposes; and (3) clarifying the Service's authority to

compel by subpoena the appearance of witnesses and production of

evidence when investigating possible violations of section 274A of the

Act. This proposed rule and a proposed revision to the Form I-9 were

published for comment on February 2. This proposed rule includes

numerous changes intended to simplify the verification procedures;

(b) Implement changes to the application process for obtaining

employment authorization from the Service. This proposed rule will

include a revision to the Form I-765, Application for Employment

Authorization, and revisions to Subpart B of Part 274a; and

(c) Implement section 412(b) of IIRIRA, which permits an employer

which is a member of an association of two or more employers that hires

an individual who is a member of a collective bargaining unit and is

employed under a collective bargaining agreement entered into between

one or

[[Page 16912]]

more employee organizations and the association to use the Form I-9

completed for that individual within 3 years (or, if less, the period

of time that the individual is authorized to be employed in the United

States) by a prior employer which is a member of the same association.

Regulatory Flexibility Act

The Commissioner, in accordance with the Regulatory Flexibility Act

(5 U.S.C. 605(b)), has reviewed this regulation and, by approving it,

certifies that this rule does not have a significant economic impact on

a substantial number of small entities. This rule eases the burden on

small businesses by ensuring that employers who make a good faith

effort to comply with the employment verification provisions are not

penalized for technical and procedural failures.

Unfunded Mandates Reform Act of 1995

This rule will not result in the expenditure by State, local and

tribal governments, in the aggregate, or by the private sector, of $100

million or more in any 1 year, and it will not significantly or

uniquely affect small governments. Therefore, no actions were deemed

necessary under the provisions of the Unfunded Mandates Reform Act of

1995.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by section 804 of the

Small Business Regulatory Enforcement Fairness Act of 1996. This rule

will not result in an annual effect on the economy of $100 million or

more; a major increase in costs or prices; or significant adverse

effects on competition, employment, investment, productivity,

innovation, or on the ability of United States-based companies to

compete with foreign-based companies in domestic and export markets.

Executive Order 12866

This rule is considered by the Department of Justice, Immigration

and Naturalization Service, to be a ``significant regulatory action''

under Executive Order 12866, section 3(f), Regulatory Planning and

Review. Accordingly, this regulation has been submitted to the Office

of Management and Budget for review.

Executive Order 12612

The regulation adopted herein will not have substantial direct

effects on the States, on the relationship between the National

Government and the States, or on the distribution of power and

responsibilities among the various levels of government. Therefore, in

accordance with Executive Order 12612, it is determined that this rule

does not have sufficient federalism implications to warrant the

preparation of a Federalism Assessment.

Executive Order 12988 Civil Justice Reform

This proposed rule meets the applicable standards set forth in

sections 3(a) and 3(b)(2) of E.O. 12988.

Paperwork Reduction Act

This proposed rule does not impose any new reporting or

recordkeeping requirements. The information collection requirements

contained in this rule were previously approved for use by the Office

of Management and Budget (OMB). The OMB control number for these

collections is contained in 8 CFR 299.5, Display of control numbers.

List of Subjects in 8 CFR Part 274a

Administrative practice and procedure, Aliens, Employment,

Penalties, Reporting and recordkeeping requirements.

Accordingly, part 274a of chapter I of title 8 of the Code of

Federal Regulations is proposed to be amended as follows:

PART 274a--CONTROL OF EMPLOYMENT OF ALIENS

1. The authority citation for part 274a continues to read as

follows:

Authority: 8 U.S.C. 1101, 1103, 1324a; 8 CFR part 2.

2. Section 274a.1 is amended by:

a. Removing the ``.'' at the end of paragraph (1)(2) and replacing

it with a ``;'' and by

b. Adding a new paragraph (n) to read as follows:

Sec. 274a.1 Definitions

* * * * *

(n) The term technical or procedural failure to meet such

requirement means failure of a person or entity to:

(1) In section 1 of the Form I-9:

(i) Ensure that an individual hired or recruited or referred for a

fee provides his or her maiden name, address, or birth date;

(ii) Ensure that an individual provides his or her Alien number on

the line next to the phrase ``A Lawful Permanent Resident'', but only

if the Alien number is provided in sections 2 or 3 of the Form I-9 (or

on a legible copy of a document retained with the Form I-9 and

presented at the I-9 inspection);

(iii) Ensure that an individual provides his or her Alien number or

Admission number on the line provided under the phrase ``An alien

authorized to work until'', but only if the Alien number or Admission

number is provided in sections 2 or 3 of the Form I (or on a legible

copy of a document retained with the Form I-9 and presented at the I-9

inspection);

(iv) Ensure that an individual dates section 1 of the Form I-9;

(v) Ensure that an individual completes section 1 of the Form I-9

timely by dating section 1 of the Form I-9 at the time of hire, if the

time of hire occurred on or after September 30, 1996; and

(vi) Ensure that a preparer/translator provides his or her name,

address, signature, and date.

(2) In section 2 of the Form I-9:

(i) Provide the document title, identification number(s) and/or

expiration date(s) of a proper List A document or proper List B and

List C documents, but only if a legible copy of the document(s) is

retained with the Form I-9 and presented at the I-9 inspection;

(ii) Provide the title, business name, and business address;

(iii) Provide the date of hire in the attestation portion;

(iv) Date section 2 of the Form I-9; and

(v) Complete section 2 of the Form I-9 timely by dating section 2

of the Form I-9 within 3 business days of the date the individual is

hired or, if the individual is hired for 3 business days or less, at

the time of hire, if the date on which section 2 had to be completed

occurred on or after September 30, 1996.

(3) In section 3 of the Form I-9:

(i) Provide the document title, identification number(s), and/or

expiration date(s) of a proper List A or List C document, but only if a

legible copy of the document is retained with the Form I-9 and

presented at the I-9 inspection; and

(ii) Provide the date of rehire.

3. Section 274a.2 is amended by adding a new paragraph (e) to read

as follows:

Sec. 274a.2 Verification of employment eligibility.

* * * * *

(e) Good faith compliance with the employment verification

requirements notwithstanding technical or procedural failures. (1) In

the case of I-9 inspections conducted on or after September 30, 1996,

an employer or recruiter or referrer for a fee will not be subject to

civil monetary penalties under Sec. 274a.10(b) for technical or

[[Page 16913]]

procedural failures to meet a requirement of section 274A(b) of the Act

if the employer or recruiter or referrer for a fee made a good faith

attempt to meet such requirement. An employer or recruiter or referrer

for a fee will not be considered to have made a good faith attempt to

meet such requirement when:

(i) The technical or procedural failure was committed with the

intent to avoid a requirement of the Act, as demonstrated by the

totality of circumstances including but not limited to the substantial

presence of unauthorized aliens hired by the employer combined with a

pattern of repeated failures in the completion of the Form I-9 with

respect to such unauthorized aliens, or failure of the employer to

prepare the Form I-9 until after the employer is served with a Notice

of Inspection;

(ii) The technical or procedural failure was committed in knowing

reliance on section 274A(b)(6) of the Act;

(iii) The employer or recruiter or referrer for a fee corrected or

attempted to correct the technical or procedural failure with knowledge

or in reckless disregard of the fact that the correction or attempted

correction contained a false, fictitious, or fraudulent statement or

material misrepresentation, or has no basis in law or fact;

(iv) The employer or recruiter or referrer for a fee prepared the

Form I-9 with knowledge or in reckless disregard of the fact that the

Form I-9 contained a false, fictitious, or fraudulent statement or

material misrepresentation, or has no basis in law or fact; or

(v) The type of failure was previously the subject of a Warning

Notice described in Sec. 274a.9(c) or Notice of Intent to Fine

described in Sec. 274a.9(d), or a notice of technical or procedural

failures.

(2) An employer or recruiter or referrer for a fee will be subject

to civil money penalties under Sec. 274a.10(b) notwithstanding

paragraph (e)(1) of this section if, after receiving notice of the

technical or procedural failure(s), the employer or recruiter or

referrer for a fee does not voluntarily correct the failure(s) on the

Form I-9 by the date specified in the notice. The date specified in the

notice must be at least 10 days after the date the notice is received

in the case of personal service and 15 days after the date on the

notice in the case of service by certified or regular mail. No penalty

will apply if the failure could not reasonably be corrected, and the

employer or recruiter or referrer for a fee provides a Service officer

with an explanation of why the failure(s) cannot reasonably be

corrected by the date specified in the notice. This explanation may be

written or oral at the discretion of the Service officer. The employer

or recruiter or referrer for a fee will be deemed to have properly

corrected a technical or procedural failure where the employer or

recruiter or referrer for a fee:

(i) In the case of a failure in section 1 of the Form I-9, ensures

that the individual, preparer and/or translator corrects the failure on

the Form I-9, initials the correction, and dates the correction; or

(ii) In the case of a failure in sections 2 or 3 of the Form I-9,

corrects the failure on the Form I-9, initials the correction, and

dates the correction.

Dated: March 29, 1998.

Doris Meissner,

Commissioner, Immigration and Naturalization Service.

[FR Doc. 98-8969 Filed 4-6-98; 8:45 am]

BILLING CODE 4410-10-M