New Immigration Law Employment Concerns
Kegler Brown Labor + Employee Relations Newsletter February 1, 2005
Wal-Mart learned a new lesson about the IRS law (Immigration Reform and Control Act), when the government raided its offices last fall. This is the law that concerns the eligibility of non-employees to work in the U.S. and which includes, among other things, the now-familiar I-9 form requirements.
The law requires employers to verify a person's identity and employment eligibility at the time of hire. With the exception of the possible situation where it is unclear whether an individual is an "employee" (where eligibility verification is required) or an "independent contractor" (where it is not), the requirement of the statute is pretty straightforward.
However, another part of the law is less well-known. Under IRCA a company may not "knowingly" use the services of an unauthorized alien, even where the worker is not an employee and is employed by a subcontractor of the company. Therefore, if you have a subcontractor, like a cleaning company or security service, and you are aware that employees of that contractor are unauthorized workers, you have violated the federal law. 8 U.S.C. §1324a(a)(1)(4).
The IRCA Regulations provide that "knowing" use of unauthorized services or labor includes (a) actual knowledge, and (b) knowledge which can be inferred because of awareness of facts or circumstances that would lead a reasonable person to know that the workers were unauthorized ("constructive knowledge"). See, 8 C.F.R. §274a1(1). These types of circumstances could include situations where the company is aware that the subcontractor does not comply with the I-9 verification requirements, or when it is aware that a subcontractor's worker is not authorized to work in the U.S.
Monetary penalties under IRCA can be significant, and criminal sanctions are also possible. Short of requiring I-9 verification for all of the employees of every person who performs any services that benefit the company, the most apparent preventative steps that a company can take are (a) including a provision in all contracts to the effect that the contractor will comply with IRCA, and will indemnify the company against any liabilities for failure to meet the requirements of the law, and (b) instructing your staff to immediately report any information that they may learn which questions the eligibility of any such workers, so that you can investigate further to resolve or remedy the situation.