Recently, the U.S. Department of Homeland Security (DHS) issued new regulations governing the process employers must undertake to verify the work authorization of their new hires, commonly known as the Form I-9 process. DHS announced that it will now be allowing qualified employers who use E-Verify to inspect new employees’ identity and work authorization documents remotely. DHS also announced that it will be conducting a “pilot program” to allow other, non-E-Verify participants to verify work authorization remotely in order to gather error and fraud data, hinting that policy-makers are considering permitting an even broader group of employers to use the more relaxed verification practice long-term. Additionally, DHS issued a new version of Form I-9 that became available for employers to begin using last month.
The rule was issued immediately after DHS formally ended its temporary policy to allow employers to conduct work authorization verification (specifically, the inspection of identity and work authorization documents) remotely because of the Covid-19 pandemic. As a result of this reversion, all employers that inspected their new hires remotely since the Covid-19-related flexibilities were put in place are now required to re-inspect the identity and work authorization documents in-person or via the new “alternative procedure” authorized by the rule by August 30, 2023.
Background
Section 274A(a)(1)(B) of the Immigration and Nationality Act requires employers to verify the employment authorization of any individual they hire to work in the United States, primarily by completing a Form I-9 and examining documents establishing both employment authorization and the identity of the individual. The implementing regulations at 8 C.F.R. § 274a.2(b)(1)(ii)(A) require that every employer “[p]hysically examine” and then attest that the documents appear to be genuine and relate to the person presenting them. If the individual submits a document that does not reasonably appear to be genuine or to relate to him or her, the employer must reject that document and may then request that the individual present other acceptable documents to satisfy the requirements of Form I-9.
Individuals must also attest on the Form I-9, under penalty of perjury, that they are citizens or nationals of the United States, aliens lawfully admitted for permanent residence, or aliens authorized under the INA or by DHS to be hired, recruited, or referred for employment. Employers are required to retain the completed Form I-9 and make it available for inspection by DHS or the U.S. Department of Labor for up to three years after the date of the individual’s hiring or one year after the date the individual’s employment is terminated, whichever is later.
As a response to the Covid-19 pandemic, DHS has permitted many employers to defer the physical examination of identity and work authorization documents by inspecting such documents remotely (e.g., over video or email) within three days of the employee’s first day of employment. DHS initially applied this guidance only to employers and workplaces that were operating remotely, but permitted remote document verification for any recent hire who worked exclusively in a remote setting due to Covid-19-related precautions until they undertook non-remote employment on a regular, consistent, or predictable basis, regardless of whether the workplace was operating entirely remotely. DHS extended these leniencies repeatedly through FY 2022, and ended the policy on July 31, 2023.
DHS’s New Work Authorization Verification Rule
In its July 2023 rulemaking, DHS amended its regulations to provide that the secretary of Homeland Security may authorize “alternative documentation examination procedures” with respect to some or all employers. Under this rule, the secretary may only authorize such procedures either through the creation of a pilot program or as a “temporary measure to address a public health emergency” declared by the secretary of Health and Human Services or a national emergency declared by the president, consistent with applicable law and authorized via a notice published in the Federal Register. This authorization is further conditioned on a determination by the secretary of Homeland Security that such alternative procedures offer an “equivalent” level of security “as indicated by, for instance, observed measures of system integrity (such as error or fraud rates) or the procedure’s capacity for confirming certain documents or information.
The new rule also provided a new permissible “optional alternate procedure” to the standard Form I-9 process that is available only to employers who are enrolled and participate in good standing in E-Verify. E-Verify is an internet-based system administered by DHS and the Social Security Administration that provides employers with a quick and easy way to verify whether an individual is authorized to work in the United States. E-Verify requires employers to enter the same information provided by applicants on the Form I-9 onto the online portal, and then the program validates applicant details by comparing them against millions of federal and state government identification, Social Security, and immigration records. To date, E-Verify is the best means available to verify employment authorization of newly hired employees because it virtually eliminates Social Security mismatches, improves wage and tax reporting accuracy, and helps employers maintain a legal workforce, thereby protecting citizen and authorized workers from unfair employment competition and employers from identity fraud.
The “optional alternative procedure” created by this rule allows these employers to continue to verify new hires remotely (within three business days of an employee’s first day) so long as they check a box on the new Form I-9 to indicate that they have remotely examined the new worker’s documents and retain clear and legible copies of all documents presented by the employee seeming to establish their identity and work authorization. Employers either may apply these procedures to all new employees or only to new employees who will work remotely and continue to apply physical examination procedures to all employees who work onsite or in a hybrid capacity, but may not otherwise discriminate against their workforce.
Finally, DHS issued a new, shorter Form I-9 to accompany these policy changes. While employers are able to begin using the new version of the Form I-9 immediately, employers may continue using the prior edition of Form I-9 through October 31, 2023.
New Pilot Program
Concurrently, DHS is also proposing the creation of a “pilot program” to allow employers who are not enrolled in E-Verify to engage in remote work authorization verification, similar to the “optional alternative procedure” offered to E-Verify participants. ICE explained that the pilot is intended to help the agency “identify the potential effects of [the] specific Pilot procedure on the security of the employment verification system. ICE will evaluate a range of potential effects on system integrity, (such as error or fraud rates and discrimination, between physical examination of the Form I–9 documents and remote examination pursuant to the Pilot procedure ... .).”
ICE said participation in the pilot program is available to most employers, but employers must apply in order to participate and eligibility is limited to only those who employ 500 or fewer employees. The agency noted that it will request feedback and data from these employers no more than twice a year and will require a subset of the volunteers to undertake fraudulent document training.
The creation of this pilot suggests that DHS is considering a return to allowing widespread remote inspection of identity and work authorization documents, even for those employers who choose to not use E-Verify to confirm the legitimacy of the documents presented to them. Conducting a pilot program to collect data on relevant aspects of this practice will help ICE comply with the Administrative Procedure Act (APA), which generally requires agencies to supply a “reasoned decisionmaking by providing an adequate explanation for its decision”, when issuing, repealing, or amending a rule. Under the APA, the U.S. Supreme Court has held that agencies are required to provide the “essential facts upon which the administrative decision was based” and explain what justifies the determination with actual evidence beyond a “conclusory statement”. Accordingly, conducting a pilot program designed to collect relevant data is one step ICE can take to protect the policy from being set aside by a judge as arbitrary and capricious in violation of the APA.
The concern here, of course, is that no employer who intends to violate the law by hiring unauthorized workers will sign up to participate in this pilot program. As a result, the pilot may provide data on earnest employers’ ability to detect fraud, but will be entirely unhelpful in determining whether the more lenient procedures will be easy to exploit by employers who do intend (whether recklessly or knowingly) to hire unauthorized workers, and who may have a significant financial interest to do so. Accordingly, the data collected from participants will never provide an accurate sample of reality, but DHS may nevertheless use it to justify widespread implementation of a less secure policy permanently, without pandemic or other emergency conditions to justify the accommodation.
The Problems with Remote Verification
While alleviating the need for remote employees to travel to a worksite in order to present identity and work authorization documentation does offer obvious financial and practical benefits to businesses, most employers are not trained to verify the authenticity of government-issued identification or work authorization documents. As a result, most employers must generally accept documents as valid when presented to them by recent hires. After the initial inspection, an incredibly few completed work authorization documents are ever revisited for audit compliance. This means that even the standard Form I-9 verification process is vulnerable to fraud and abuse by both unauthorized workers and unscrupulous employers intending to exploit unauthorized labor.
Remote document examination increases these vulnerabilities by increasing the likelihood that an employee will present fraudulent documents to support their claim of work authorization. Equally troubling, the remote verification flexibilities will give corrupt employers additional cover to knowingly hire unauthorized workers in violation of statute.
While responding to comments from the public, DHS itself recognized that “physically examining identity and employment authorization documents offers important security benefits to help evaluate whether the document reasonably appears to be valid and to relate to the person who presents it”. The agency further explained, “Employers who physically examine identity and employment authorization documents can touch and more clearly see identification security features like holograms and microprinting, as well as the card stock on which certain documents are printed. Remote document examination, by itself does not provide this level of detailed inspection.”
These problems are compounded by the Biden administration’s lax enforcement policies. While DHS stated that it will “monitor and evaluate data and other information from its own Form I-9 audits to assess any measurable impacts” the new policies may pose, since 2021 DHS has taken numerous steps to lessen ICE’s reach to monitor and audit employers or initiate enforcement actions. These steps include reducing the agency’s worksite enforcement efforts; restricting which aliens ICE may target in enforcement actions through DHS’s extremely restrictive enforcement guidelines; and expanding prohibitions on even where ICE may engage in enforcement-related activities, including audits and monitoring.
As a result of these policies, ICE officers are fundamentally barred from engaging in any enforcement action in the interior of the country with regard to most unauthorized workers and in places that are located in or near locations that DHS has identified as “protected places”. Such places include recreation centers, schools, places of worship or religious study, locations that offer vaccinations (such as pharmacies), community-based organizations, any locations that host weddings (such as a civic center, hotel, or park), any locations with a school bus stop, any places “where children gather”, and many more sites that are also common places of employment. Under this policy, officers are also prohibited from enforcing the law anywhere “near” these locations, an imprecise standard that has “no bright-line definition”.
In a press release announcing the new Form I-9 rule, DHS conceded that it will not be devoting significant enforcement resources to ensuring employers who may no longer defer in-person inspection of their employees’ documents actually come into compliance with the new rules. “If an employer is otherwise compliant with the law and regulation — and had followed the COVID-19 flexibility guidance — [ICE] will generally not focus its limited enforcement resources on Form I-9 verification violations for failing to complete physical document examination by August 30, 2023, particularly where the employer can show that it has taken timely steps to complete physical document examination within a reasonable period of time.” In reality, given the extensive restrictions that the Biden administration has put in place at DHS to engage in worksite enforcement, few employers — if any — will have make this demonstration.
It is wrong, however, to assume that only potential unauthorized employees (and not employers) participate in unauthorized employment schemes. Corrupt employers also have a lot to gain, at U.S. and foreign workers’ expense, for hiring unauthorized workers, including significant cost savings and the ability to abuse more easy-to-exploit populations.
That is why requiring document fraud detection training alone is not sufficient to protect the workforce against unauthorized employment schemes. CIS generally supports providing fraud-detection training to employers, and believes that such a training requirement would benefit both employers and workers. Such training would likely bolster employers’ confidence in adjusting to an online verification system, increase employers’ competence in identifying fraud, and reduce discrimination, although it may also increase the administrative costs associated with the verification process. Expanding the E-Verify mandate, however, is the most efficient and cost-effective way to reduce identity and employment fraud, and must be a part of any reform intended to modernize the Form I-9 process, as unlawful employer practices connected with improper E-Verify use are easier to detect than unlawful Form I-9 practices. The availability of training should not be the primary safeguard against identity or employment authorization fraud in exchange for more lenient verification policies.
DHS Should Modernize the Work Authorization Process with “G-Verify”
Congress or the Biden administration should enact a reform known as G-Verify (for “Government Verification”) to simplify employers’ on-boarding obligations while simultaneously strengthening the integrity of the work authorization verification process. A G-Verify-style reform would impose a single online filing requirement through legislation or regulatory changes, respectively, to replace employers’ Form W-2, Form I-9, and E-Verify obligations. By simply requiring employers to submit the same information already required for these forms to the government electronically, G-Verify would relieve employers of the need to store the paper copies of the forms for future audits and, like E-Verify, would provide employers with nearly instant confirmation that a new hire may lawfully be employed in the United States. G-Verify reforms could also deter identity theft and make unlawful employment schemes easier for DHS to uncover.
Why Strong Work Authorization Verification Policies Matter
Robust worksite enforcement efforts are necessary to ensure the integrity of labor and immigration laws, and promote a fair and healthy domestic labor market. As civil-rights icon Barbara Jordan — chairwoman of the Clinton administration's Commission on Immigration Reform — explained in 1994, “Employment continues to be the principal magnet attracting illegal aliens to this country. As long as U.S. businesses benefit from the hiring of unauthorized workers, control of unlawful immigration will be impossible.” For this reason, the commission concluded that “both employer sanctions and enhanced labor standards enforcement are essential components of a strategy to reduce the job magnet”. Additionally, by reducing incentives to enter or remain in the United States illegally, effective worksite enforcement likewise allows ICE to focus its resources on its stated enforcement priorities: criminal aliens and aliens who pose threats to border or national security.
Any robust worksite enforcement endeavor cannot be effective so long as DHS continues to broadly prohibit ICE officers from engaging in enforcement actions. DHS’s minimal worksite enforcement does nothing but embolden corrupt employers to hire unauthorized workers and degrade working conditions in the United States. As many American workers understand too well, employers who hire unauthorized workers often violate other employment and labor laws, including those related to antidiscrimination, children, health, and safety.
DHS itself acknowledged in its October 12, 2021, memorandum that “These employers engage in illegal acts ranging from the payment of substandard wages to imposing unsafe working conditions and facilitating human trafficking and child exploitation. Their culpability compels the intense focus of our enforcement resources.” Equally important, unchecked unauthorized employment causes substantial economic hardship to U.S. workers who may face unfair labor competition, wage suppression, and reduced working conditions as a result of contending against an illegal and unregulated labor market.