Overview
On November 20, 2014, President Barack Obama issued an Executive Order expanding the number of individuals who qualify under the Deferred Action for Childhood Arrivals ("DACA") program; since 2012, DACA has allowed thousands of previously ineligible individuals to obtain employment authorization. The President's Executive Order also sought to provide relief from deportation, as well as employment authorization, to undocumented immigrants who are parents of U.S. citizens or of permanent legal residents through Deferred Action for Parents of Americans and [of] Lawful Permanent Residents ("DAPA"). This January, the U.S. Citizenship and Immigration Service ("USCIS") announced that it would start accepting applications for expanded DACA, although that initiative has since been suspended in response to an injunction issued by a federal judge in Texas. Adding further to the mix, the Department of Homeland Security ("DHS") has announced that certain H-4 dependent spouses of H-1B workers will be able to apply for employment authorization starting May 26, 2015. (In April 2015, a group representing U.S. computer workers filed a lawsuit in the U.S. District Court for the District of Columbia challenging this initiative as robbing them of their domestic labor protections. Save Jobs USA v. U.S. Department of Homeland Security, case number 1:15-cv-00615.)
The increased number of "Employment Authorization Documents" or "EADs" in the labor pool, particularly in the cases of workers who were previously not authorized to be employed, may prove problematic for some employers. First, employers must be diligent in updating their I-9 records to ensure that there are no gaps in employment authorization. Second, despite employers' best efforts, there are likely to be instances of gaps in employment authorization, which raise a number of issues regarding how to handle those gaps. Third, and likely the most difficult challenge, is how to address workers who now disclose that when they were hired, they were not authorized to work. This QuickCounsel will address each of these challenges.
I-9 Reverification
The Immigration Reform and Control Act of 1986 (P.L. 99-603), 100 Stat. 3359 (Nov. 6, 1986), 1986 S. 1200) ("IRCA"), Immigration and Nationality Act §274A-274C, requires all U.S. employers to verify the identity and employment authorization status of all employees hired after November 6, 1986. This verification is performed by requiring all new hires to complete Section 1 of Form I-9 no later than the first date of hire and present documentation confirming their identity and authorization to work no later than three days after the date of hire which the employer must record in Section 2 of Form I-9.
INA § 274A(a)(2) provides that it is unlawful for an employer, after hiring an alien for employment, to continue to employ the alien, knowing the alien is or has become unauthorized to work. Employers are required to reverify the employment authorization of an employee whose List A or List C employment authorization document expires (except in the case of I-551 Permanent Resident Cards). An EAD (Form I-688A, Form I-688B, or Form I-766) is a List A document, which requires reverification upon expiration. The USCIS Employer's Handbook provides that when an employee's work authorization expires, the employer may either complete Section 3 of the original Form I-9 or prepare a new Form I-9, including Section 1. The employer should keep a tickler list to remind the employee to file an application to renew his/her work authorization well in advance (180 to 120 days) of the expiration date of the current document because of the time taken by the USCIS to issue new documents. The employer should ask the employee, no later than the last day of the term of the current employment authorization document, to present documents of his or her choice, evidencing continued employment authorization. Depending upon the changes that may have occurred in the employee's situation, the employee may also need to modify the response to the Section 1 attestation regarding United States citizenship, lawful permanent residence, or employment authorized status. If a change to Section 1 is needed, the employee should initial and date the change in the margin.
Gaps in Employment Authorization
EAD applications frequently take up to 120 days for processing. As such, failure to make a new application at least 120 days before expiration of the current EAD is likely to lead to gaps in employment authorization. The Form I-9 receipt rules for EAD also can be confusing for employers, further complicating this issue. For the vast majority of expiring EADs, a receipt for an extension is not acceptable evidence for Form I-9. The exceptions to this rule are Temporary Protected Status ("TPS") and STEM OPT. TPS is available to individuals from countries that have been designated unsafe for their nationals to return. Individuals granted TPS may remain in the US and work as long as TPS remains in effect for their country, the person remains eligible, and the person timely files for extensions. When extending TPS, DHS may issue a blanket extension of all EADs for those individuals. In such cases, documentation regarding the extension is adequate for I-9 reverification. Likewise, the regulations for STEM OPT allow for continued employment while the EAD extension is in process. For all other EADs, including DACA and DAPA EADs, the EAD must be valid during all periods of employment.
The potential gaps in employment authorization caused by EAD renewals raise the question of how employers should handle employees with such gaps. Essentially, the two options available are Leave of Absence and Termination/Rehire. IRCA defines employment as providing services or labor for an employer for wages or other remuneration; this definition permits an unpaid leave of absence since the employee is not providing services or labor during this period. In fact, the U.S. Court of Appeals for the 9th Circuit has held that a leave of absence should be granted for a reasonable period of time for such gaps in employment authorization. Incalza v. Fendi North America, Inc., 479 F.3d 1005 (9th Cir. 2007). The decision stemmed from a California state law that requires good cause for termination. The 9th Circuit held that a gap in employment authorization did not constitute good cause for termination because a leave of absence was a viable alternative and is consistent with IRCA. While this decision only controls in the 9th Circuit, it may inform other jurisdictions.
As the obligation to complete Form I-9 is triggered by the provision for services in exchange for compensation or expectation for such compensation, we believe that the prohibition on further employment when a work authorization document expires should be interpreted as a prohibition on continuing to (i) provide services, and (ii) receiving remuneration for such services. An employee who is suspended, and therefore neither providing services nor receiving remuneration for such services, should be deemed not to be "employed" for those purposes.
By contrast, there are arguments as to why Termination and Rehire are more appropriate. First, there is a clear separation from the employee at the time employment authorization ends. This makes for a cleaner record and puts the burden on the employee to request rehire once the issue is resolved. Otherwise, an employer could have an employee on leave indefinitely waiting or the employment authorization issue to be resolved. Leaves of absence also raise benefits questions, such as medical insurance and COBRA. In the context of indefinite leave, for example, there may be some question as to when a COBRA qualifying event takes place. Specifically, it may be difficult to ascertain at what point the individual is no longer employed. If such an employee is in a car accident while on leave of absence, the insurance company may determine that the employee was not covered based on his employment status and deny coverage. In this case, the employer may be liable for not having provided COBRA notice.
Previously Unauthorized Workers
One increasingly common issue for employers is how to handle employees who disclose unlawful status to the employer. If an employee admits to providing false I-9 identification, should the employer terminate the employee or merely accept the new documentation? The USCIS I-9 Employer's Handbook provides as follows: "In cases where an employee has worked for you using a false identity but is currently work authorized, the I-9 rules do not require termination of employment. However, there may be other laws, contractual obligations, or company policies that you should consider prior to taking action." Such employee may be terminated only if doing so is in compliance with an existing written honesty policy implemented indiscriminately and consistently throughout the entire organization. Please bear in mind that an employer who terminates an employee pursuant to an existing honesty policy, which is consistently administered may still be sued by a terminated employee alleging national origin discrimination.
In the absence of an honesty policy, the employee should be given an opportunity to present other acceptable I-9 documentation. The I-9 Handbook states as follows: "You may encounter situations other than a legal change of name where an employee informs you or you have reason to believe that his or her identity is different from that previously used to complete the Form I-9 For example, an employee may have been working under a false identity, has subsequently obtained a work authorized immigration status in his or her true identity, and wishes to regularize his or her employment records. In that circumstance, you should complete a new Form I-9, write the original hire date in Section 2, and attach the new Form I-9 to the previously completed Form I-9 and include a written explanation." If the employee provides alternate Form I-9 documentation, the employer may accept the documentation and have the employee complete a new Form I-9. The new Form I-9 should be attached to the old one. If the employee fails to present new documentation, the employer may terminate. Before taking any adverse personnel action, the employer should consult legal counsel.
Conclusion
While DHS new regulations and guidelines providing EADs to DACA recipients and certain H-4 spouses is a welcome development to employers as they have the effect of potentially expanding the labor market pool, they present myriad challenges for employers. Employers can better avoid these pitfalls and challenges by establishing and maintaining effective policies and procedures and administering them in a uniform manner.
Additional Resources
Employment Authorization for Certain H-4 Dependent Spouses, U.S. Citizenship and Immigration Service
Completing Section 3, Reverification and Rehires, U.S. Citizenship and Immigration Service
An Employer's Guide to Group Health Continuation Coverage Under COBRA, U.S. Department of Labor
President to Expand, Create Programs for Undocumented Workers, Jackson Lewis P.C.
USCIS to Accept Expanded Deferred Action for Childhood Arrivals Applications Starting February 18, 2015, Jackson Lewis P.C.
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