[Federal Register Volume 63, Number 21 (Monday, February 2, 1998)]
[Proposed Rules]
[Pages 5287-5314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2124]


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DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Parts 274a and 299

[INS No. 1890-97]
RIN 1115-AE94


Reduction in the Number of Acceptable Documents and Other Changes 
to Employment Verification Requirements

agency: Immigration and Naturalization Service, Justice.

action: Proposed rule.

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summary: The Illegal Immigration Reform and Immigrant Responsibility 
Act of 1996 (IIRIRA) amended existing law by eliminating certain 
documents currently used in the employment eligibility verification 
(Form I-9) process. This rule proposes to shorten the list of documents 
acceptable for verification. Currently, newly hired individuals may 
choose from among 29 documents to establish their identity and 
eligibility to work in the United States. The proposed rule cuts that 
number approximately in half. In addition, the proposed rule clarifies 
and expands the receipt rule, under which individuals may present a 
receipt instead of a required document in certain circumstances. It 
also explains that employers may complete the Form I-9 before the time 
of hire or at the time of hire, so long as they have made a commitment 
to hire and provided that the employer completes the Form I-9 at the 
same point in the employment process for all employees. The proposed 
rule also details reverification requirements and includes a proposal 
for a new employment eligibility reverification form (Form I-9A), adds 
the Federal Government to the definition of ``entity,'' and clarifies 
the Immigration and Naturalization Service's (Service or INS) subpoena 
authority. In addition to making those changes, the Service proposes to 
restructure the rule to make it easier to

[[Page 5288]]

understand, use, and cite. A copy of the draft Form I-9, which includes 
the proposed Form I-9A and an expanded instruction sheet, is being 
published as an attachment to this rule. This rule is intended to 
simplify and clarify the verification requirements.

dates: Written comments must be submitted on or before April 3, 1998. 
Comments received after this date will be considered if it is practical 
to do so, but the Service is able to ensure consideration only for 
comments received on or before this date.

addresses: Written comments: Please submit written comments, one 
original and two copies, 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. 1890-97 on your correspondence. 
Comments are available for public inspection at the above address by 
calling (202) 514-3048 to arrange for an appointment.
    To assist reviewers, where possible, comments should reference the 
specific section or paragraph which the comment addresses. Although 
this is not required, it would assist reviewers if, in addition to the 
requested copies, a copy of the comments is provided on a floppy disk 
in plain text or WordPerfect 5.1 format. Written comments should be 
specific, should be confined to issues pertinent to the rule, and 
should explain the reason for any recommended change.
    Electronic comments: With this proposed rule, the Service is 
testing for the first time the possibility of accepting comments 
electronically. Comments may be sent using electronic mail (email) to: 
[email protected]. The need to submit copies of the comments is waived 
for comments submitted by email. Electronically filed comments that 
conform to the guidelines of this paragraph will be considered part of 
the record and accorded the same treatment as comments submitted on 
paper. Comments should reference INS No. 1890-97 in the subject line 
and the body of the message. The comments should appear either in the 
body of the message or in a WordPerfect 5.1 attachment. The Service 
cannot guarantee consideration of attachments submitted in other 
formats. Comments submitted electronically must also contain the 
sender's name, address, and telephone number for possible verification.

for further information contact: Marion Metcalf, Policy Analyst, HQIRT, 
425 I Street NW., Washington, DC, 20536; (202) 514-2764; or email at 
[email protected]. Please note that the email address is for 
further information only and may not be used for the submission of 
comments.

supplementary information:

Why is the Service Proposing These Changes?

    The Service is proposing these changes in response to recent 
legislation, IIRIRA, and as a result of an ongoing review which was 
triggered by the rule's having been in effect for 10 years. Many of the 
proposed changes represent the culmination of a long-term effort to 
reduce the number of documents acceptable for employment verification.

Which IIRIRA Provisions Does This Rule Implement?

    IIRIRA, enacted on September 30, 1996, makes several amendments to 
the employer sanctions provisions of section 274A of the Act. This rule 
proposes to implement the amendments in:
    (1) Section 412(a) of IIRIRA, which requires a reduction in the 
number of documents that may be accepted in the employment verification 
process;
    (2) Section 412(d) of IIRIRA, which clarifies the applicability of 
section 274A of the Act to the Federal Government; and
    (3) Section 416 of IIRIRA, which clarifies the Service's authority 
to compel by subpoena the appearance of witnesses and the production of 
evidence prior to the filing of a complaint.

What About the Other Employment-Related IIRIRA Amendments?

    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, 
the Service is developing and will publish proposed rules to:
    (1) Implement changes to the application process for obtaining 
employment authorization from the Service. The proposed rule will 
include a revision to the Application for Employment Authorization, 
Form I-765, revisions to Subpart B of Part 274a, and employment 
verification requirements for F-1 students authorized to work on 
campus;
    (2) Implement section 411(a) of IIRIRA, which allows employers who 
have made a good faith attempt to comply with a particular employment 
verification requirement to correct technical or procedural failures 
before such failures are deemed to be violations of the Act;
    (3) Implement section 412(b) of IIRIRA, which applies to employers 
that are members of an association of two or more employers. For an 
individual who is a member of a collective bargaining unit and is 
employed under a collective bargaining agreement between one or more 
employee organizations and the multi-employer association, the employer 
can use a Form I-9 completed by a prior employer that is a member of 
the same association, within 3 years (or, if less, the period of time 
that the individual is authorized to work in the United States).

What is the Ten-Year Review the Service Is Conducting?

    Section 610 of the Regulatory Flexibility Act (RFA) requires 
agencies to review rules which have a significant economic impact on a 
substantial number of small entities every 10 years. Service 
regulations at 8 CFR 274a, Subpart A--Employer Requirements, fall under 
this review requirement.
    Section 610 of the RCA requires a review of regulations ``to 
minimize any significant economic impact of the rule on a substantial 
number of small entities in a matter consistent with the stated 
objectives of applicable statutes.'' The RFA requires consideration of 
five factors: (1) Continued need for the rule; (2) nature of complaints 
or comments received from the public; (3) complexity of the rule; (4) 
extent to which the rule overlaps, duplicates, or conflicts with other 
Federal rules and, to the extent feasible, with State and local 
governmental rules; and (5) length of time since the rule has been 
evaluated or the degree to which technology, economic conditions, or 
other factors have changed in the area affected by the rule.
    The Service concluded that it would be in the public interest to 
conduct the required review in conjunction with implementing the IIRIRA 
amendments. By coordinating the publication of this notice with the 
publication of a proposed rule, the Service can give the public a 
clearer indication of the kinds of changes under consideration and 
provide an opportunity to submit a single set of comments. The Service 
began by conducting an internal review of the regulations at 8 CFR part 
274a. The Service reviewed past public comment, questions asked of the 
Service's Office of Business Liaison, issues surfaced by field offices, 
and similar sources. Through this process, the Service identified areas 
in the regulations for reconsideration. The results of that internal 
review are reflected in the proposed rule. This proposed rule, 
therefore, reflects a

[[Page 5289]]

comprehensive reinvention effort, including a restructuring and other 
changes intended to address concerns raised by the public during the 10 
years that these requirements have been in effect.

How Does This Rule Relate to the Service's Earlier Document Reduction 
Proposals?

    The Immigration Reform and Control Act (IRCA), enacted in 1986, 
amended the Act to require persons or entities to hire only persons who 
are eligible to work in the United States. The Act, as amended, 
requires persons or entities to verify the work-eligibility and 
identity of all new hires. The Employment Eligibility Verification 
form, Form I-9, was designated for that purpose. Newly hired 
individuals must attest to the status that makes them eligible to work 
and present documents that establish their identity and eligibility to 
work. Employers, and recruiters or referrers for a fee (as defined in 
section 274A(a)(1)(B)(ii) of the Act and 8 CFR 274a.2(a)), must examine 
the documents and attest that they appear to be genuine and to relate 
to the individual. They may not specify a document or combination of 
documents that the individual must present. To do so may violate 
section 274B of the Act.
    The statutory framework, currently implemented by regulation at 8 
CFR 274a.2, provides for three lists of documents: documents that 
establish both identity and employment eligibility (List A documents), 
documents that establish identity only (List B documents), and 
documents that establish work eligibility only (List C documents).
    When the law was new, a consensus emerged that a long, inclusive 
list of documents would ensure that all persons who are eligible to 
work could easily meet the requirements. When the Service first 
published implementing regulations in 1987, the Supplementary 
Information noted that List B, in particular, had been expanded in 
response to public comment. As early as 1990, however, there was 
evidence that some employers found the list confusing. In its third 
review of the implementation of employer sanctions, the General 
Accounting Office (GAO) reported that employer confusion over the 
``multiplicity'' of acceptable documents contributed to discrimination 
against authorized workers. See Immigration Reform: Employer Sanctions 
and the Question of Discrimination, March 29, 1990, General Accounting 
Office (GAO/GGD-90-62.
    The first step the Service took to correct this problem was to 
ensure that the complete list of documents appeared on the Form I-9 
when the form was revised in 1991. In 1993, the Service published a 
proposed rule to reduce the number of documents acceptable for 
verification. That proposed rule eliminated numerous identity documents 
from List B and two employment eligibility documents from List C. 
Response to the proposed rule among the approximately 35 comments was 
mixed. Some commenters expressed support for the changes. Others 
questioned the need to reduce the lists, suggesting that confusion over 
the lists had been addressed by listing all the documents on the Form 
I-9.
    In 1995, the Service published a supplement to the proposed rule. 
The supplement proposed a few additional changes to the lists of 
documents and responded to public comments concerning updating and 
reverification procedures for the Form I-9. The supplement received 
only five public comments.
    The legislative history for IIRIRA indicates that Congress believed 
that the changes proposed in the proposed rule and supplement did not 
go far enough, stating:

    The number of permissible documents has long been subject to 
criticism. The INS published a proposed regulation in 1993 (with a 
supplement published on June 22, 1995) to reduce the number of 
documents from 29 to 16. This proposal, however, does not reflect 
the consensus of opinion that documents should be reduced even 
further, and that documents that are easily counterfeited should be 
eliminated entirely. (See H.R. Rep. No. 104-469, at 404-05 (1996).)

    Congress recognized that the Service's ability to reduce the list 
of documents further was constrained by the number of documents listed 
in the law. In IIRIRA, Congress eliminated several documents while 
giving the Attorney General discretion to amend the list by regulation. 
These changes are discussed in more detail in the sections pertaining 
to the proposed lists of acceptable documents.
    On September 4, 1996, the Service published a partial final rule at 
61 FR 46534 which added the Employment Authorization Document, Form I-
766 (the I-766 EAD), a new, counterfeit-resistant card, to List A. The 
Service began to issue the I-766 EAD in February 1997. The final rule 
did not provide sunset dates for any existing List A documents. It did, 
however, reinstate a provision at 8 CFR 274a.14, which had been stayed 
and suspended, and that terminated miscellaneous employment 
authorization documentation issued by the Service prior to June 1, 
1987. The latter step was necessary because in the years prior to IRCA, 
some of the temporary, non-standard employment authorization documents 
issued by the Service did not bear an expiration date. Although the 
Service believes that few, if any, individuals were still in 1996 
relying upon pre-1987 temporary documents, this action ensures that 
such documents are no longer valid.
    Comments in response to both the 1993 and 1995 proposals asked the 
Service to delay publication of a final rule, citing the potential for 
congressional action. This proposed rule implements section 412(a) of 
IIRIRA and is separate from the 1993 proposed rule and 1995 supplement. 
The 1993 proposed rule and 1995 supplement will not be finalized.
    On September 30, an interim rule was published in the Federal 
Register at 62 FR 5100. The interim rule was a stopgap measure, 
required by the effective date provision for section 412(a) of IIRIRA. 
The amendments to the list of documents were to take effect ``with 
respect to hiring (or recruitment or referral) occurring on or after 
such date (not later than 12 months after the date of enactment of 
[IIRIRA] as the Attorney General shall designate.'' Because 12 months 
after the date of enactment of IIRIRA was September 30, 1997, the 
interim rule designated September 30, 1997, as the effective date for 
the amendments. The goal of the interim rule was to maintain the status 
quo to the extent possible under the IIRIRA document provision. On 
October 6, 1997, President Clinton signed legislation) Pub. L. 105-54) 
extending the deadline for the designation of the effective date from 
12 months to 18 months. Congress and the administration took this 
action in the interest of minimizing disruption and confusion in the 
business community. The Service considered withdrawing the interim 
rule. It decided, however, that the goal of minimizing confusion was 
better served by leaving the interim rule in place. The Service is 
withholding enforcement of violations related to the changes while the 
interim rule is in place.

What Changes are Made by This Proposed Rule?

    This proposed rule contains provisions to implement three IIRIRA 
sections and other amendments to subpart A of part 274a. It also 
proposes to restructure the regulation to make it easier to use and 
cite. The Provisions currently contained in subpart A are proposed to 
be reorganized into the following sections.


[[Page 5290]]


    Section 274a.1  Definitions.
    Section 274a.2  Why is employment verification required and what 
does it involve?
    Section 274a.3  What documents are acceptable for employment 
verification?
    Section 274a.4  How long are employers and recruiters or 
referrers required to retain the Form I-9 and what must be retained 
with it?
    Section 274a.5  Under what circumstances may employers and 
recruiters or referrers rely on a Form I-9 that an individual 
previously completed?
    Section 274a.6  What happens when the Government asks to inspect 
Forms I-9?
    Section 274a.7  What is the prohibition on hiring or contracting 
with unauthorized aliens and what defense can be claimed?
    Section 274a.8  what are the requirements of state employment 
agencies that choose to verify the identity and employment 
eligibility of individuals referred for employment by the agency?
    Section 274a.9  Can a person or entity require an individual to 
provide a financial guarantee or indemnity against potential 
liability related to the hiring, recruiting, or referring of the 
individual?
    Section 274a.10  How are investigations initiated and employers 
notified of violations?
    Section 274a.11  What penalties may be imposed for violations?

    This reorganization is intended to make the regulation easier to 
use, understand, and cite. For example, the paragraph that explains 
that a parent or guardian may attest to the identity minor under 18 who 
cannot present an identity document is currently found at 8 CFR 
274a.2(b)(1)(v)(B)(3). The citation for this paragraph becomes 8 CFR 
274a.3(b)(2) in the proposed reorganization, a much shorter citation. A 
table providing a cross-reference from the new to the old sections 
appears at the end of this supplementary information section for ease 
of reference.
    The Service welcomes comment on this restructuring and suggestions 
for other ways to make the regulation easier to use and understand. The 
Service recognizes the widespread impact of this regulation and is 
committed to making the requirements as straightforward as possible. 
The public is invited to submit alternative outlines for consideration 
or to suggest other ways to approach the restructuring.
    The Service has taken several steps to adopt a ``plain English'' 
approach to this regulation. This effort was focused more intensely on 
the verification provisions currently at Sec. 274a.2 than on the 
remainder of the regulation, and the Service is open to comments 
concerning whether additional changes would be helpful. In addition, 
the public is encouraged to comment on the practice of using question-
and-answer format in the regulation. The proposed rule states the 
section headings in question form. The Service seeks comments on 
whether this practice is useful to persons who use the regulation and 
whether it should be extended to subheadings.
    In addition, this proposal encompasses substantive changes intended 
to:
    (1) Include the Federal Government in the definition of ``entity;''
    (2) Clarify the definition of ``recruit for a fee;''
    (3) Clarify the timing permitted for completion of the Form I-9;
    (4) Specify reverification requirements, in response to public 
comment received on the 1993 proposed document reduction rule and 1995 
supplement;
    (5) Clarify and expand the receipt rule, under which work-eligible 
individuals who are unable to present a required document may present a 
receipt under certain circumstances;
    (6) Shorten the list of documents acceptable for verification;
    (7) Require the attachment and retention of copied documentation to 
the Form I-9; and
    (8) Add a reference to the Service's authority to compel by 
subpoena the attendance of witnesses and production of evidence prior 
to the filing of a complaint.
    The remainder of this supplementary information describes the 
changes in the order in which they appear in the proposed rule.

Section 274a.1--Definitions

Entity
    The employer sanctions provisions apply to persons and entities. 
Section 412(d) of IIRIRA includes any branch of the Federal Government 
in the term ``entity.'' Accordingly, this proposed rule amends the 
definition of ``entity'' currently in the regulations at 8 CFR 
274a.1(b) to include the Federal Government.
Recruit for a Fee
    The proposed rule amends the definition of the term ``recruit for a 
fee'' at 8 CFR 274a.1(e) to remove overlap between the definitions of 
``recruit for a fee'' and ``refer for a fee.'' Currently, the 
definition of ``recruit for a fee'' includes the act of soliciting a 
person, as well as the act of referring a person, with the intent of 
obtaining employment for that person. Thus, for a person or entity to 
be deemed to be recruiting, the person or entity must both solicit a 
person and refer that person. This overlap clouds the distinction 
between the two terms that is carefully maintained in the Act. The 
amendment eliminates the overlap by limiting the definition of 
``recruit for a fee'' to the act of soliciting a person for a fee with 
the intent of obtaining employment for that person.
Recruiter or Referrer for a Fee
    The proposed rule adds to 8 CFR 274a.1 a definition for the term 
``recruiter or referrer for a fee.'' This language is being moved from 
8 CFR 274a.2(a) and does not represent a substantive change.
Employer
    The definition of ``employer'' at 8 CFR 274a.1(g) remains 
unchanged. However, language from this definition pertaining to an 
agent or anyone acting directly or indirectly in the interest of the 
employer is currently repeated in Sec. 274a.2 in certain instances 
where the term ``employer'' is used. This rule eliminates such language 
because it is already a part of the definition of employer and, 
therefore, unnecessary to repeat.

Section 274a.2--Why is Employment Verification Required and What Does 
It Involve?

    This section now contains a discussion of why verification must be 
completed on Form I-9, an overview of the verification process, 
specifications of the time for completing the Form I-9, and 
reverification requirements.
    This rule proposes to amend the general discussion in 8 CFR 
274a.2(a) introducing the employment verification requirements in 
several respects. As proposed, the rule:
    (1) Adds references to a form proposed for reverification, the 
Employment Eligibility Reverification form, Form I-9A. This proposal is 
discussed in further detail in the reverification discussion;
    (2) Adds the information that the Form I-9 may now be downloaded 
from the Service World Wide Web site; and
    (3) Updates the discussion of the beginning date for the 
verification requirements in 1987.
    Section 274a.2(b) previously covered all of the verification 
process. It now contains only an overview of the process and sets forth 
the basic requirements for completing Form I-9. It contains language 
reinforcing that the employee has the choice of which of the acceptable 
documents to present.
What Are the Requirements for Preparers and Translators?
    The rule proposes to simplify the requirements for preparers and 
translators who assist employees in completing section 1 of the Form I-
9.

[[Page 5291]]

Current regulations provide that preparers or translators must read the 
Form I-9 to the individual. The rule proposes to amend the current 
regulations by providing that the preparer or translator must provide 
such assistance as is necessary for the individual to understand and 
complete the form. This change provides needed flexibility for 
preparers and translators to adequately assist individuals completing 
section 1 of the Form I-9.
What Are the General Requirements for Documents That May Be Presented 
in the Verification Process?
    The proposed rule includes the statement that only original, 
unexpired documents that appear on their face to be genuine and to 
relate to the individual presenting the documents can be accepted by 
employers and recruiters or referrers for a fee. These requirements 
apply to all three lists of documents, as well as to acceptable 
receipts. Currently, the regulations permit use of expired United 
States passports and expired identity documents. The proposed rule will 
require any document presented to be unexpired.
Why Is the Service Proposing To Permit Only Unexpired Documents in All 
Cases?
    The Service notes that many states have taken steps to improve the 
integrity of their document-issuance procedures and the fraud-
resistance of the documents they issue. The United States Department of 
State has taken similar steps with respect to passport issuance. If 
individuals are allowed to present expired documents, the verification 
process gains no benefit from those measures. The Service believes that 
the integrity of the verification process will be improved by a 
requirement that employees present only unexpired documents.
    The Service recognizes that the requirement that individuals 
present unexpired documents may impose a cost on persons seeking 
employment. The Service anticipates and encourages public comment on 
this point. The Service is especially interested in the views of 
employers and recruiters or referrers for a fee concerning whether such 
a requirement simplifies verification for them, and of persons involved 
in assisting welfare recipients in transitioning to work concerning the 
burden imposed by the requirement. To that end, what follows is some of 
the analysis underlying our decision.
    Replacing an expired United States passport is expensive ($55, plus 
an additional $30 for expedited service). Because a passport remains 
valid for 10 years, however, some employers have questioned whether an 
expired passport is a reliable identification document. They note that 
a person's appearance can change a great deal in 10 years. In addition, 
the Service does not believe that continuing to permit employees to 
present expired passports would be of help to most low income 
individuals, those for whom the cost of replacement documents would be 
the most serious issue, because they would be unlikely to have obtained 
a passport in the first place. Finally, the Service believes that most 
employers would prefer a simple requirement that documents be unexpired 
to a list that included exceptions to the rule.
    The Service also researched the cost of obtaining an identity 
document in 10 states representing a wide range geographically and in 
population size. The cost of an identification card was the primary 
focus, because an individual who needs to drive must have an unexpired 
driver's license for that purpose, and otherwise an individual would 
not need to obtain a driver's license solely for verification purposes. 
In all but one of the states contacted, the cost of an identification 
card is lower than the cost of a driver's license. The charge for the 
card in those states ranges from $4 to $15 and averages around $10. In 
four states, the identification card does not expire, so it represents 
a one-time cost and the requirement that documents be unexpired would 
not be an issue.

Sec. 274a.2(c)--Time for Completing Form I-9

    This section states when the Form I-9 must be completed, with 
separate paragraphs discussing employers, hires for duration of less 
than 3 days, recruiters and referrers, and receipts.
May an Employer Require Completion of Form I-9 Before an Employee 
Starts To Work? Must an Employer Always Give Employees 3 Days To 
Present Documentation?
    This section contains one addition pertaining to when the Form I-9 
must be completed. The regulations require section 1 of the Form I-9 to 
be completed by the individual at the time of hire and section 2 of the 
Form I-9 to be completed by the employer, or recruiter or referrer for 
a fee, within 3 business days of the date of hire (unless the duration 
of employment is less than 3 business days).
    Current regulations are silent as to whether an employer, or 
recruiter or referrer for a fee, may complete the Form I-9 prior to the 
date that the individual is hired. in the past, employers have asked if 
they are permitted to require individuals to present the necessary 
documentation at the time of hire rather than within 3 business days of 
the hire. Service policy has been stated in the Handbook for Employers, 
the M-274. The Handbook for Employers states that an employer may 
complete the Form I-9 before the day that an individual starts work, 
but after the individual has been offered employment and has accepted 
the job, provided that the employer completes the Form I-9 at the same 
point in the employment process for all employees. The proposed rule 
incorporates in the regulations this longstanding Service 
interpretation of the employment verification requirements. The 
proposed rule permits the employer, or recruiter or referrer for a fee, 
to complete the Form I-9 prior to the date that an individual begins 
work, so long as the Form I-9 is completed after the hiring commitment 
is made and this practice is uniformly applied to all employees.

Section 274a.2(d)--Reverification of Employment Eligibility When 
Employment Authorization Expires

    Current regulations require employers and recruiters or referrers 
for a fee to reverify on the Form I-9 if an individual's employment 
authorization expires. Reverification on the Form I-9 must occur no 
later than the date work authorization expires. The Service receives 
numerous questions from the public concerning this requirement. In 
response to questions and comments, the Service is attempting to 
clarify the reverification requirements in this proposed rule.
What Is the Form I-9A?
    The Service proposes creation of the Form I-9A as a supplement to 
the Form I-9 which may be used for reverification. Form I-9A is 
structured similarly to the Form I-9, in that it has a section to be 
completed by the employee, a preparer/translator block, and a section 
to be completed by the employer. Form I-9A is shorter, however, 
containing only the information needed for reverification. The form 
provides blocks for two reverifications and may be duplicated as 
needed.
Why Is the Service Proposing Creation of Form I-9A?
    The Service does not seek to impose an increased burden on the 
public by proposing this supplemental form. Rather, the Service is 
attempting to respond to earlier comments from employers. Currently, 
the updating and

[[Page 5292]]

reverification section on the Form I-9 contains an attestation for the 
employer only. In response to the 1993 proposed rule, several employers 
expressed the belief that the employee also should be required to 
attest to his or her continuing eligibility to be employed. This 
suggestion was incorporated in the Service's 1995 supplement. Adding an 
employee attestation to the updating and reverification section, 
however, also made it necessary to add a preparer/translator block. The 
result was a form that was crowded and difficult to complete. The 
Service considered simply requiring employers to complete a new Form I-
9 when they reverified. Before doing so, however, the Service wished to 
obtain suggestions from employers concerning whether a reverification 
form would be more convenient. It seemed possible that a reverification 
form would help employers better understand when reverification is--and 
is not--required. For example, some employers apparently reverify 
identity documents when they expire, even though this is not required. 
Form I-9A provides no space for entering information about identity 
documents, which helps to reinforce that they need not be reverified.
    Although Form I-9A is intended to simplify reverification, the 
Service seeks comment on whether employers would prefer to use the Form 
I-9 for reverification as well as verification at the time of hire. The 
proposed rule makes it clear that employers may elect to either use 
Form I-9A or complete a new Form I-9 for verification. The Service 
would appreciate comment on whether employers have a preference. If the 
comments reveal a strong and clear preference to use Form I-9 for 
reverification, and against creation of an additional form, the Service 
will not promulgate Form I-9A.
Who Is Exempt From Reverification?
    The proposed rule also makes it clear that reverification does not 
apply to United States citizens or nationals or to lawful permanent 
residents. There is one exception: lawful permanent residents who 
present a foreign passport with a temporary I-551 stamp must present 
the actual Form I-551 when the stamp expires. However, under no other 
circumstance is reverification necessary for lawful permanent 
residents, even if their Alien Registration Receipt Card or Permanent 
Resident Card, Form I-551 expires or they naturalize.
How Does an Employer Know When Work Authorization Expires?
    The proposed rule also states that an expiration date for work 
authorization, triggering the reverification requirement, may appear in 
either section 1 or section 2 of the Form I-9 or Form I-9A. Some 
employers have expressed uncertainty about whether they are responsible 
for information in both sections of the form.

Section 274a.3--What Documents Are Acceptable for Employment 
Verification?

    To implement section 412(a) of IIRIRA, and meet the Service's 
longstanding document-reduction objectives, this rule proposes to amend 
the current regulations governing the lists of documents acceptable in 
the employment verification process.

Section 274a.3(a)--Documents That Establish Both Identity and 
Employment Authorization (List A)

How Does IIRRA Affect List A Documents?
    Section 412(a) of IIRIRA amends section 274A(b)(1)(B) of the Act, 
which governs the documents that individuals may present to establish 
both identity and employment eligibility (List A). Section 412(a) of 
IIRIRA eliminates three documents from the statutory list: (1) 
Certificate of United States citizenship; (2) certificate of 
naturalization; and (3) an unexpired foreign passport with an 
endorsement that indicates eligibility for employment. The documents 
remaining on the list by statute are: a United States passport, 
resident alien card, alien registration card, or other document 
designated by the Attorney General.
What Conditions Must a Document Meet To Be Added to List A?
    IIRIRA restricts the Attorney General's authority to add documents 
to List A. Each document designated by the Attorney General must meet 
three conditions. The document must:
    (1) Bear a photograph and personal identification information;
    (2) Constitute evidence of employment authorization, and
    (3) Contain ``security features to make it resistant to tampering, 
counterfeiting, and fraudulent use.''
What Documents Will Be on List A Under the Proposed Rule?
    The Service proposes to amend the current regulations to limit the 
documents that establish both identity and employment authorization to 
the following documents. Documents preceded by an asterisk are proposed 
to be added by regulation. The other documents are listed in the law, 
as amended by IIRIRA. Documents proposed for List A are:
    (1) A United States passport;
    (2) An Alien Registration Receipt Card or Permanent Resident Card, 
Form I-551;
    *(3) A foreign passport with a Temporary I-551 stamp;
    *(4) An employment authorization document issued by the Service 
which contains a photograph (Form I-766, For I-688, For I-688A, or Form 
I-688B); and,
    *(5) In the case of a nonimmigrant alien authorized to work only 
for a specific employer, a foreign passport with an Arrival-Departure 
Record,--Form I-94, bearing the same name as the passport and 
containing an endorsement of the alien's nonimmigrant status and the 
name of the approved employer with whom employment is authorized, so 
long as the period of endorsement has not yet expired and the proposed 
employment is not in conflict with any restrictions or limitations 
identified on the Form I-94.
What is the Service's Basis for including INS-Issued Employment 
Authorization Documents?
    This proposed rule designates an employment authorization document, 
Forms I-766, I-688, I-688A, and I-688B, as an acceptable List A 
document. Forms I-766, I-688, I-688A, and I-688B meet the three 
statutory conditions that limit the Attorney General's authority to 
designate additional List A documents. First, these Service-issued 
forms all contain a photograph and additional identifying information 
of the bearer, including a fingerprint of the bearer and the bearer's 
date of birth. Second, the forms are evidence that the Service has 
granted employment authorization to the bearer. Third, the Service has 
designed each of the forms to contain security features that make them 
resistant to tampering, counterfeiting, and fraudulent use.
What Is the Service's Basis for Including Foreign Passports?
    The Service proposes in this rule to designate foreign passports as 
acceptable evidence of identity and employment authorization, but 
limited to two instances. The first relates to aliens lawfully admitted 
for permanent residence under section 101(a)(20) of the Act. Persons 
newly admitted for or adjusted to lawful permanent residence may 
receive evidence of that status through a stamp in their passports. The 
stamp serves as temporary evidence of

[[Page 5293]]

permanent resident status until the individual receives Form I-551 from 
the Service. If the stamped endorsement includes an expiration date, 
the document must be reverified
    In the newest versions of the Form I-551, the cards also bear an 
expiration date but need not be reverified when the card expires. Only 
the stamp must be reverified when expired. (See the discussion of the 
receipt rule, below, for discussion of the temporary I-551 stamp when 
it is placed on Form I-94 instead of a foreign passport.)
    The second instance in which a foreign passport is designated as a 
List A document is when it is presented with Form I-94 indicating 
authorization to work for a specific employer. This will be an 
acceptable document only for persons whose employment is incident to 
status and authorized with a specific employer, and may be accepted 
only by the employer for whom the individual is authorized to work.
    Aliens in classes identified in Sec. 274a.12(b) are authorized 
employment incident to status with a specific employer. The Service 
does not currently require aliens in these classes to obtain a List A 
employment authorization document--i.e., an I-688B or I-766 EAD, and 
does not plan to implement such a requirement at this time. The 
proposed rule specifies the documentation the Service will issue to 
nonimmigrant alien classes that will not be issued an I-766 EAD. This 
documentation will be the Form I-94, with an endorsement that specifies 
the employer with which work is authorized. The Service will modify its 
procedures for endorsing the departure portion of nonimmigrants' Form 
I-94, so that the name of the approved employer will appear on the 
document. The employer's name will also be noted on the arrival portion 
of the Form I-94 and entered into Service databases for verification 
and record-keeping purposes.
    The IIRIRA provides that the Attorney General ``may prohibit or 
place conditions on'' a specific document if the Attorney General finds 
that the document ``does not reliably establish [employment] 
authorization of identity or is being used fraudulently to an 
unacceptable degree.'' The Service finds that documentation issued to 
or used by nonimmigrants in these classes does not reliably establish 
work eligibility except for employment with a specific employer. The 
proposed rule, therefore, restricts the foreign passport with an I-94 
bearing employer-specific work authorization, stipulating that it may 
be used only for purposes of establishing eligibility to work for the 
approved employer. This restriction does not relieve employers of the 
requirement to abide by any terms or conditions specified on any 
documentation issued by the Service. Similarly, the restrictions do not 
permit employers to require individuals to present a specific document. 
The restrictions do mean that a Form I-94 endorsed to permit employment 
with a specific employer may not be accepted as evidence of eligibility 
to work for other employers.
    The Service finds that, in those two instances, foreign passports 
meet the three conditions that authorize the Attorney General to add 
documents to List A. First, foreign passports bear a photograph and 
identifying information (such as the birthdate and physical 
characteristics of the bearer). Second, they are evidence of employment 
authorization when they bear a temporary I-551 stamp or are presented 
with a Form I-94 endorsed to authorize employment with a specific 
employer. Finally, foreign passports contain security features to make 
them resistant to tampering, counterfeiting, and fraudulent use. 
Temporary I-551 stamps are made with secure ink and meet internal 
Service standards. An I-94 is acceptable with a foreign passport only 
in employer-specific situations in which the employer examining the I-
94 for employment verification purposes is the same employer named on 
the I-94. The Service also notes that, in both these instances, the 
employers are required to reverify the individual's eligibility to work 
when the stamped authorization bears an expiration.
    The proposed restrictions on Form I-94 pose special issues for two 
categories of nonimmigrants, students (F-1) and exchange visitors (J-
1). Documentation for those categories will be addressed further in the 
forthcoming proposed amendments to Part 274a, Subpart B.
If the Service Has a New Employment Authorization Document, Why Are the 
Older Ones Still on This list?
    The Service has been planning for several years to phase out use of 
three documents: (1) Temporary Resident Card, Form I-688; (2) 
Employment Authorization Card, Form I-688A; and (3) Employment 
Authorization Document, Form I-688B. As noted, on September 4, 1996, 
the Service published a final rule adding Form I-766 to List A and 
began to issue the I-766 EAD in February 1997. Through forthcoming 
proposed amendments to 8 CFR 274a, Subpart B, the Service will discuss 
its plans to consolidate card production. This consolidation will allow 
the Service to replace Forms I-688, I-688A, and I-688B with the I-766 
EAD as the earlier documents expire. The Service anticipates phasing 
out these documents through the normal card replacement process. No 
document recall is planned. Based upon comments received in response to 
the 1993 proposed rule and 1995 supplement, the Service is not 
proposing a termination date for the validity of those documents at 
this time. The documents remain on List A in this proposed rule. At the 
appropriate time in the future, the Service will remove these documents 
from List A through rulemaking and update the Form I-9.
What Documents Are Being Removed From List A and Why?
    The proposed rule does not designate the certificate of United 
States citizenship, certificate of naturalization, re-entry permit, and 
refugee travel document as acceptable List A documents. These documents 
were removed by the interim rule. The Service does not believe that 
these documents meet the three conditions required for the Attorney 
General to designate them as List A documents. Holders of these 
documents can easily obtain other acceptable documents which are more 
readily recognized by employers. Naturalized citizens are eligible for 
the same documents as other United States citizens, such as a passport 
and unrestricted social security card. Lawful permanent residents and 
refugees are eligible for an unrestricted social security card and, 
respectively, Form I-551 and Form I-688A or Form I-766.
What Happened to the Earliest Versions of the ``Green Card,'' Form I-
151?
    The Service phased out Form I-151, Alien Registration Receipt Card, 
as evidence of status as a lawful permanent resident effective March 
20, 1996. Currently, Form I-551 is the only valid evidence of lawful 
permanent resident status. Employers are not required to reverify 
employees who were hired prior to March 20, 1996, and who presented 
Form I-151. However, employers and recruiters or referrers for a fee 
should not have accepted Form I-151 from employees hired after that 
date.

Section 274a.3(b)--Documents That Establish Identity Only (List B)

Does IIRIRA Affect List B Documents?
    The IIRIRA made no statutory changes to List B documents.
    Section 274A(b)(1)(D) of the Act specifies the following documents 
as acceptable documents for establishing identity:

[[Page 5294]]

    (1) A driver's license or similar identification document issued by 
a state that contains a photograph or other identifying information, or
    (2) For individuals under the age of 16 or in a state that does not 
issue an appropriate identification document, documentation of personal 
identity found by the Attorney General to be reliable.
    Despite this limited list, current regulations permit a wide range 
of acceptable documents. List B currently is the longest of the three 
lists, and many of the documents either are unfamiliar to many 
employers or vary widely in appearance and the features they contain. 
In this proposed rule, the Service is retaining documents previously 
added to List B by regulation only in instances where there is an 
identifiable class for which elimination of the document could leave 
the class without an acceptable document to establish identity.
What Documents Will Be on List B Under the Proposed Rule?
    The Service proposes to amend the regulations by reducing the list 
to the following documents:
    (1) A state-issued driver's license or identification card;
    (2) A Native American tribal document; and
    (3) In the case of a Canadian nonimmigrant authorized to work 
incident to status with a specific employer, a Canadian driver's 
license or provincial identification card.
What Documents Are Begin Retained on List B by Regulation and Why?
    The Service identified two documents previously added to List B by 
regulation for which there is an identifiable class that could be left 
without an acceptable document to establish identity if the document 
were removed from the list. The documents are: (1) A Native American 
tribal document and (2) a Canadian driver's license or provincial 
identification card.
Why Are Native American Tribal Documents Included on List B?
    The proposed rule retains Native American tribal documents on both 
List B and List C (documents evidencing work authorization only). The 
removal of Native American tribal documents from the list of acceptable 
documents would pose a particular problem for Canadian-born American 
Indians who continue to reside in Canada, but who enter the United 
States temporarily for employment purposes under the terms of section 
289 of the Act. These individuals are not required to present a 
passport for admission to the United States and would not necessarily 
have other identification documents acceptable for employment 
verification requirements.
    Over the years, the Service has received many inquiries concerning 
why these documents appear on both List B and List C instead of List A. 
Until the enactment of IIRIRA, the Attorney General lacked the 
authority to designate List A documents beyond those specifically 
listed in the Act. Section 412(a) of IIRIRA extends this authority to 
the Attorney General. However, as noted, documents added to List A must 
meet three conditions, including that the document must contain 
security features. The number of authorities issuing tribal documents 
is too numerous, and the documentation too varied, for the Service to 
make a finding that tribal documents, as a class, meet all three 
conditions. Therefore, the Service is continuing the existing practice 
of including those documents on both List B and List C.
Why are Canadian Driver's Licenses and Identification Documents 
Included on List B?
    The proposed rule includes on List B a driver's license or 
identification card issued by a Canadian Government authority. This 
rule proposes to make such documents acceptable only in the case of a 
Canadian nonimmigrant authorized to work incident to status with a 
specific employer. Through reciprocal international agreements and 
under Service regulations at 8 CFR 212.1(a), a visa generally is not 
required of Canadian nationals and aliens having a common nationality 
with nationals of Canada, and a passport is required of these aliens 
only when traveling from outside the Western Hemisphere. However, the 
Service controls and documents the arrival of Canadian nationals and 
aliens having a common nationality with nationals of Canada who 
establish admissibility in a nonimmigrant classification which entitles 
them to work with a specific employer (for example, as a professional 
under the North American Free Trade Agreement [TN], or as an 
intracompany transferee [L-1], or as a temporary worker [H-2B].) The 
Service issues the Form I-94 to these aliens as a record of lawful 
admission and as evidence of authorization to work in the United States 
with a specific employer. The Service also issues the Form I-94 to 
nationals of all other countries to document and control admission of 
nonimmigrants. The Form I-94 is generally placed in the passport of the 
nonimmigrant alien.
    Because aliens of Canadian nationality are not required to present 
a passport for admission to the United States except when traveling 
from outside the Western Hemisphere, the Service is retaining on List B 
identity documents issued by Canadian authorities. However, to avoid 
confusion about the eligibility of Canadian nationals to engage in 
employment in the United States, the Service is adding language to make 
it clear that Canadian identification documents may be used only in the 
limited instance of a Canadian national admitted as a nonimmigrant who 
is authorized to work incident to nonimmigrant status with a specific 
employer. In other situations, authorized Canadian nationals would have 
other acceptable documentation. For instance, Canadian nationals who 
are lawful permanent residents would have been issued a Form I-551.
    Over the years, the Service has received many inquiries concerning 
why Mexican driver's licenses are not included on List B. No reciprocal 
agreements exist between the United States and Mexico which would 
permit the use of Mexican driver's licenses or identification cards as 
List B documents.
What Documents Are Being Removed From List B and Why?
    The Service proposes to remove the following documents from List B:
    (1) An identification card issued by Federal or local authorities;
    (2) A school identification card with a photograph;
    (3) A voter's registration card;
    (4) A United States military card or draft record;
    (5) A military dependent's identification card;
    (6) A United States Coast Guard Merchant Mariner Card; and
    (7) For individuals under age 18 who are unable to produce an 
identity document, a school record or report card, clinic doctor or 
hospital record, and daycare or nursery school record.
    When the Service published the 1993 proposed rule and 1995 
supplement, several comments expressed concern about the elimination of 
specific documents and the special list for minors. Current 
regulations, however, were developed when not all states issued a non-
driver's identification card. At present, all states do so. Therefore, 
this justification for an expanded list no longer exists. The Service 
believes that the proposed list will greatly reduce confusion for 
employers while enabling all work-eligible individuals to establish 
their identity for verification purposes.

[[Page 5295]]

Will It Still Be Possible for Someone Else To Attest to the Identity of 
a Minor or Person With a Disability if They Cannot Present an 
Acceptable Identity Document?
    Yes. Current regulations permit employers, and recruiters or 
referrers for a fee, to accept an attestation concerning the identity 
of minors under the age of 18 and persons with disabilities who are 
unable to produce one of the acceptable identity documents. The Service 
is proposing no substantive changes to these provisions. Because the 
provision for persons with disabilities was developed prior to passage 
of the Americans with Disabilities Act (ADA), however, the proposed 
rule replaces terminology that pre-dates the ADA with the terms and 
definition used in the ADA.

Section 274a.3(c)--Documents That Establish Employment Authorization 
Only (List C)

How Does IIRIRA Affect List C Documents?
    Section 412(a) of IIRIRA amends section 274A(b)(1)(C) of the Act by 
removing the certificate of birth in the United States (or other 
certificate found acceptable by the Attorney General as establishing 
United States nationality at birth) from the list of acceptable 
documents that may be used to establish employment authorization for 
compliance with the employment verification requirements. Acceptable 
List C documents are: a social security account number card (other than 
one which specifies on its face that the issuance of the card does not 
authorize employment in the United States) or other documentation found 
acceptable by the Attorney General that evidences employment 
authorization.
What Documents Will Be on List C Under the Proposed Rule?
    The Service proposes to limit acceptable List C documents to the 
following:
    (1) A social security account number care (other than such a card 
which specifies on the face that the issuance of the card does not 
authorize employment in the United States);
    (2) A Native American tribal document; and
    (3) In the case of a nonimmigrant alien authorized to work only for 
a specific employer, an Arrival-Departure Record, Form I-94, containing 
an endorsement of the alien's nonimmigrant status and the name of the 
approved employer with whom employment is authorized, so long as the 
period of endorsement has not yet expired and the proposed employment 
is not in conflict with any restrictions or limitations identified on 
the Form I-94.
Why Is the Service Changing the Language Describing an Acceptable 
Social Security Card?
    Current regulations designate the ``social security number card 
other than one which has printed on its face `not valid for employment 
purposes' '' as an acceptable List C document. In accordance with 
section 412(a) of IIRIRA this proposed rule retains the social security 
account number card on List C. The proposed rule, however, amends the 
language in the regulations so that it mirrors the statutory language. 
The proposed rule changes the term, ``social security number card,'' to 
``social security account number card,'' as is stated in the Act and 
IIRIRA. In addition, the proposed rule replaces the phrase, ``other 
than one which has printed on its face `not valid for employment 
purposes,''' with the statutory language, ``(other than such a card 
which specifies on the face that the issuance of the card does not 
authorize employment in the United States).''
    The Social Security Administration (SSA) issues cards with the 
legend stated in the regulations, ``not valid for employment 
purposes,'' to individuals from other countries who are lawfully 
admitted to the United States without work authorization, but who need 
a number because of a Federal, state, or local law requiring a social 
security number to get a benefit or service. In 1992, SSA began issuing 
cards that bear the legend ``valid for work only with INS 
authorization'' to people who are admitted to the United States on a 
temporary basis with authorization to work. This proposed rule amends 
the language in the regulations to mirror the language in the Act and 
IIRIRA and to clarify that cards bearing either restrictive legend are 
not acceptable List C documents.
What Documents Are Being Added to List C by Regulation and Why?
    Under section 274A(b)(1)(C)(ii) of the Act, as amended, it is 
within the Attorney General's authority to designate ``other 
documentation evidencing authorization of employment in the United 
States which the Attorney General finds, by regulation, to be 
acceptable for purposes of this section.'' Exercising that authority, 
the Service finds that the Native American tribal document and Form I-
94 with endorsement of employment authorization are acceptable List C 
documents. As noted in the discussion of Native American tribal 
documents under List B, elimination of the documents from List C could 
leave certain Native Americans without an acceptable document to 
establish their eligibility to work. As noted in the discussion of Form 
I-94 under List A, Form I-94 will be the document issued to 
nonimmigrant aliens who are authorized to work only for a specific 
employer. Only the employer for whom the work is authorized will be 
permitted to accept the document.
What Documents Are Being Removed From List C and Why?
    The Service proposes to eliminate the following documents as 
acceptable for establishing employment authorization:
    (1) A Certification of Birth Abroad issued by the Department of 
State, Form FS-545;
    (2) A Certification of Birth Abroad issued by the Department of 
State, Form DS-1350;
    (3) A birth certificate issued by a State, county, municipal 
authority or outlaying possession of the United States bearing an 
official seal;
    (4) A United States citizen Identification Card, INS Form I-197;
    (5) An Identification card for use of a resident citizen in the 
United States, INS Form I-179; and
    (6) An unexpired employment authorization document issued by the 
Service.
    The IIRIRA provides for additions to List C by regulation of 
``other documentation found acceptable by the Attorney General that 
evidences employment authorization.'' The Service recognizes that 
elimination of the birth certificate, in particular, may generate 
public comment.
    The Service notes, however, that Congress specifically eliminated 
this document from the list, based on its concern that, ``Birth 
certificates, even if issued by lawful authority, may be fraudulent in 
that they do not belong to the person who has requested that one be 
issued. This problem is exacerbated by the large number of 
authorities--numbering in the thousands--that issued birth 
certificates.'' (See H.R. Rep. No. 104-469, at 404-05 (1996).)
    In addition to believing that eliminating the birth certificate is 
consistent with Congressional intent, the Service has additional 
reasons for taking this action. Service officers have expressed concern 
by the lack of uniform controls among the states over the issuance of 
replacement birth certificates.
    Officers are encountering situations in which unauthorized aliens 
have used fraudulently obtained birth certificates

[[Page 5296]]

to falsely claim United States citizenship and gain employment.
    The other documents proposed for removal also pose burdens to 
employers because it can be difficult for employers to assess whether 
they appear genuine on their face. The certifications of birth abroad, 
issued by the State Department, are not commonly recognized documents 
with which the general public is familiar. The Service no longer issues 
the citizen identification cards which were on the list. Legitimate 
holders of the documents being removed are all eligible for an 
unrestricted social security card, which allows them to establish their 
eligibility to work in the United States. The Service believes that 
employers will find a shorter list of documents easier to work with.
    In this proposed rule, the existing general category of documents 
characterized as ``employment authorization documents issued by the 
Service'' is no longer designated as an acceptable List C document. 
This general category was included in the current regulations while the 
Service was taking steps to standardize the employment authorization 
documents that it issues. The Service has taken several steps to issue 
uniform documentation. The Service introduced the I-688B EAD in 1989. 
The I-766 EAD, introduced in February of 1997, represents further 
improvement because the centralized process is more secure and 
efficient. These documents are List A documents which establish both 
identity and eligibility to work. Moreover, with his proposed rule, the 
Service announces additional steps, such as the endorsement of Form I-
94 when it is issued to a nonimmigrant who is authorized to work for a 
specific employer. The Service believes that a general category for 
Service-issued employment authorization documents is no longer 
necessary.

Section 274a.3(d)--Receipts

    Current regulations permit individuals to present a receipt showing 
that they have applied for a replacement document if the individual is 
unable to provide a required document or documents at the time of hire. 
This provision provides flexibility in situations where, for example, 
an individual has lost a document. The Service has received numerous 
questions about the applicability of this provision to various 
situations. The proposed rule attempt to clarify the circumstances in 
which a receipt may be accepted.
    The interim rule amended the receipt rule to designate three 
instances in which receipts are acceptable and extended the receipt 
rule to reverification. The proposed rule restructures the receipt rule 
and moves this provision to the section of the regulations containing 
the lists of acceptable documents.
    Employers have asked whether they must accept a receipt if an 
employee presents one. In the new structure, receipts are discussed in 
the same section as Lists A, B, and C to emphazie that the same 
standards that apply to List A, B, and C documents also apply to 
receipts. Further, the rule indicates that an employee has the choice 
of which documents to present. Just as with List A, B, and C documents, 
if the receipt appears to be genuine and to relate to the individual 
presenting it, the employer cannot ask for more or different documents 
and must accept the receipt. Otherwise, the employer may be engaging in 
an unfair immigration-related employment practice in violation of 
section 274B of the Act. The receipt presented, however, is only 
acceptable if it is one that is listed in the regulations.
    Like the interim rule, the proposed rule also extends the receipt 
rule to reverification and identifies circumstances where a receipt is 
not acceptable.
In What Circumstances are Receipts Acceptable?
    The proposed rule permits the use of receipts in three instances:
    (1) a receipt for an application for a replacement document,
    (2) A temporary I-551 stamp on a Form I-94, and
    (3) A refugee admission stamp on a Form I-94.
Receipt for Application for a Replacement Document
    The first instance in which a receipt is acceptable is when the 
individual presents a receipt for the application for a replacement 
document. An application for an initial or extension List A or C 
document, however, is not acceptable, except for nonimmigrants as 
provided under 8 CFR 274a.12(b)(20). The latter provision permits 
continued employment for a temporary period of certain nonimmigrants 
authorized to work for a specific employer incident to status, in 
situations where a timely application has been filed with the Service 
and has not been timely adjudicated.
Temporary Evidence of Permanent Resident Status on Form I-94
    The second instance is the use of Form I-94 as temporary evidence 
of permanent resident status. If an alien is not in possession of his 
or her passport, and requires evidence of lawful permanent resident 
status, the Service may issue the alien the arrival portion of a Form 
I-94 with a temporary I-551 stamp and the alien's picture affixed. 
Although this document provides temporary evidence of permanent 
resident status, it does not contain security features and, therefore, 
does not meet the statutory requirements for inclusion on List A. The 
Services, therefore, proposes to designate Form I-94 with a temporary 
I-551 stamp as a receipt for Form I-551 for 180 days.
Special Rule for Refugees
    The third instance is when the departure portion of Form I-94 
contains a refugee admission stamp. The Service recognizes the 
importance of newly admitted refugees being able to seek employment 
promptly upon arrival in the United States. The Service has been 
working with SSA to ensure prompt issuance to refugees of social 
security cards which carry no employment restrictions. In most 
instances, the Service believes that refugees will receive social 
security cards timely and will be able to present them to employers. 
The Service also intends to give refugees the option of obtaining an I-
766 EAD, but recognizes that in most instances refugees will be able to 
obtain a social security card faster. Refugees may wish to obtain an I-
766 EAD so that they will have a Service-issued document with a 
photograph. In order to ensure that refugees are still able to work if 
they encounter delays in obtaining cards from either SSA or the 
Service, the Service proposes a special receipt rule. Under this rule, 
a Form I-94 with a refugee admission stamp will be a receipt evidencing 
eligibility to work valid for 90 days from the date of hire. It will 
not be a receipt for a specific document. The refugees will be 
permitted to present either an unrestricted social security card or an 
I-766 EAD at the end of the 90-day receipt period. If the refugee 
presents a social security card, the refugee will also need to present 
a List B document. If the refugee presents an I-766 EAD, he or she does 
not need to present another document.
Are There Circumstances Where a Receipt is not Acceptable?
    The proposed rule notes two exceptions in which the special rules 
for receipts do not apply. These are if:
    (1) The individual indicates or the employer, or recruiter or 
referrer for a fee, has actual or constructive

[[Page 5297]]

knowledge that the individual is not authorized to work; or
    (2) The employment is for a duration of less than 3 business days.
    The Services considered changing the term ``receipt'' in light of 
the expanded definition contained in this proposed rule. The Service's 
impression, however, is that employers are familiar with this term as 
it is used in the verification context. The Service seeks comment on 
whether other terminology would be clearer or the current term is 
preferred.

Section 274a.4  How long are Employers and Recruiters or Referrers 
Required to Retain the Form I-9 and What Must be Retained With it?

    The proposed rule breaks what was formerly Sec. 274a.2 into two 
sections, pertaining to retention (Sec. 274a.4) and inspection 
(Sec. 274a.6). The retention section addresses general requirements for 
employers and recruiters or referrers for a fee, reverification, 
copying of documentation, and limitations on the use of the Form I-9. 
Most of these provisions remain unchanged in content with the current 
rule. One change is to specify that a form used for reverification must 
be attached to the initial Form I-9 relating to the individual.
    Another change relates to photocopies of documents. Employers and 
recruiters or referrers for a fee may, but are not required to, copy a 
document presented by an individual solely for the purpose of complying 
with the verification requirements. Current regulations state both that 
employers and recruiters or referrers for a fee should retain the 
copies with the Form I-9 and that the retention requirements do not 
apply to copies. The proposed rule removes this apparent inconsistency 
by providing that employers and recruiters or referrers for a fee who 
elect to photocopy documentation must attach the photocopies to the I-9 
and I-9A form and present them with the forms upon inspection. This 
change is necessary to clarify the retention requirements for 
photocopies of documentation in response to investigation issues that 
have confronted the Service and the Office of Special Counsel for 
Immigration-Related Unfair Employment Practices (OSC).

Section 274a.5  Under What Circumstances may Employers and Recruiters 
or Referrers Rely on a Form I-9 That an Individual Previously 
Completed?

    This section addresses requirements in the cases of continuing 
employment (formerly Sec. 274a.2(b)(1)(viii)), hiring an individual who 
was previously employed (formerly Sec. 274a.2(c)), and recruiting or 
referring for a fee an individual who was previously recruited or 
referred (formerly Sec. 274a.2(d)). The only substantive change the 
Service proposes is to eliminate language that could be construed as 
requiring recruiters and referrers to reverify all referred individuals 
whose work authorization expires. The proposed rule requires 
reverification only in the instance of an individual who was previously 
recruited or referred.

Section 274a.6  What Happens When the Government Asks to Inspect Forms 
I-9?

    This section addresses the 3-day notice of inspection, the 
obligation to make records available, standards for microfilm and 
microfiche, and the consequences of failure to comply with an 
inspection. Most of these paragraphs were previously contained in 
Sec. 274a.2(b)(2).
What Changes are Made in the Proposed Rule?
    Section 416 of IIRIRA clarifies the Service's subpoena authority by 
stating that, ``immigration officers designated by the Commissioner may 
compel by subpoena the attendance of witnesses and the production of 
evidence at any designated place prior to the filing of a complaint * * 
*.'' The current regulations at Sec. 274a.2(b)(2)(ii) include a 
reference to the Service's subpoena authority, but they refer to the 
production of documents rather than the production of evidence and do 
not include a reference to the attendance of witnesses. This rule 
proposes to amend the current regulations to include a reference to the 
attendance of witnesses, replace the phrase, ``production of 
documents,'' with the phrase, ``production of evidence,'' and include a 
reference to the exercise of the subpoena authority prior to the filing 
of a complaint with the Office of the Chief Administrative Hearing 
Officer based upon a request for a hearing made by the employer, or 
recruiter or referrer for a fee, following service of the Notice of 
Intent to Fine. The proposed rule also simplifies the statement in the 
regulations regarding the Service's subpoena authority so that it is 
clear that the Service has the authority to compel by subpoena: Forms 
I-9 that a person or entity refuses to produce upon inspection; Forms 
I-9 that are the subject of an inspection whether or not the person or 
entity refuses to produce them; the production of any evidence; and the 
attendance of witnesses.
Will the Service Allow Electronic Storage of the Form I-9?
    In the last several years, the Service has been in dialogue with 
the public over changes in information technology and their possible 
applicability to the Form I-9. One result of these discussions was the 
interim rule, published October 7, 1996, permitting electronic 
generation of a blank Form I-9. Following publication of this rule, the 
Service began to make the Form I-9 available for downloading from its 
world wide web site on the Internet (www.ins.usdoj.gov).
    Employers have also expressed interest in electronic storage of the 
Form I-9. The Service is currently preparing to conduct a demonstration 
project to assess electronic storage of Forms I-9. In reviewing this 
technology, the Service is aware that many employers now scan and/or 
electronically store many of their personnel records.
    The Form I-9, however, raises special issues because it requires 
two signatures. Fraudulent preparation of the form is a common issue in 
the Service's investigations. For example, during an investigation an 
unauthorized alien may claim that the employer did not complete a Form 
I-9 at the time of hire, while the employer presents a Form I-9 for the 
employee and claims that the employee lied about his unauthorized 
status. The determination of whose account is true is central to the 
question of liability for penalties. Investigations of such cases may 
require forensic analysis to determine the authenticity of the 
signatures. Scanned signatures provide adequate detail for such 
analysis only at a rate of resolution higher than those used for most 
records scanning systems. The Service is continuing to monitor 
developments in scanning and other technology. At present, however, the 
Service is considering scanned records for purposes of I-9 retention 
only in the context of the demonstration project.

Sec. 274a.7  What is the Prohibition on Hiring or Contracting With 
Unauthorized Aliens and What Defense can be Claimed?

    This section contains the following three provisions pertaining to 
hiring or contracting and unauthorized aliens:
    (1) Prohibition on the hiring and continuing employment of 
unauthorized aliens, currently at 8 CFR 274a.3;
    (2) Use of labor through contract, currently at 8 CFR 274a.5; and
    (3) Good faith defense to charge of knowingly hiring an 
unauthorized alien, currently at 8 CFR 274a.4.
    The proposed rule amends the paragraph currently at 8 CFR 274a.3 by

[[Page 5298]]

adding a reference to the prohibition on the hiring of unauthorized 
aliens provided by section 274A(a) (1) (A) of the Act. It also 
clarifies that an employer's ``knowledge'' that an employee is 
unauthorized can be either actual or constructive for the provision 
prohibiting the hiring or continued employment of an unauthorized alien 
to be violated. Cross-references to the verification sections are 
amended to reflect the changes proposed by the rule. No other 
substantive changes were made.

Section 274a.8  What are the Requirements of State Employment Agencies 
that Choose to Verify the Identity and Employment Eligibility of 
Individuals Referred for Employment by the Agency?

    This section contains the state agency certification requirements 
currently contained at 8 CFR 274.6. The Service proposes no changes to 
the contents of this section, in part because the Service is not aware 
of any state agencies currently issuing certifications under this 
provision. Under the Act, an employer may rely upon a state agency 
certification instead of completing Form I-9. The requirements in this 
section were developed during the first years that the verification 
requirements were in effect. In light of recent welfare reform efforts, 
the Service is prepared to revisit the requirements if there is new 
interest among state agencies in performing verifications for 
employers. The Service invites comment from state agencies concerning 
changes to the regulations that would facilitate their ability to 
provide this service.

Section 274a.9  Can a Person or Entity Require an Individual to Provide 
a Financial Guarantee or Indemnity Against Potential Liability Related 
to the Hiring, Recruiting, or Referring of the Individual?

    This section contains the prohibition against indemnity bonds 
currently found at 8 CFR 274.8. No substantive changes have been made 
to this section.

Section 274a.10  How are Investigations Initiated and Employers 
Notified of Violations?

    This section contains the paragraphs discussing the filing of 
complaints, investigations, notification of violations, and the 
procedures for requesting a hearing, which are currently found at 8 CFR 
274a.9. No substantive changes have been made to this section.

Section 274a.11  What Penalties may be Imposed for Violations?

    This section contains the penalty provisions currently found at 8 
CFR 274a.10. It also contains the pre-enactment provision, which 
exempts employers from penalties for individuals hired prior to 
November 7, 1987, currently found at 8 CFR 274a.7. Minor language 
changes have been made to the latter for purposes of clarity. The 
substance in this section remains unchanged.

How can the Service Best Inform the Public of Changes to the 
Requirements?

    Over the years, the Service has attempted to inform the public of 
new forms and requirements by mailing information. Mailings were 
conducted in 1987 to introduce the Form I-9; in 1989 to introduce the 
Form I-688B Employment Authorization Document (EAD); in 1991 to 
introduce the revised Form I-9; and in 1997 to introduce the new Form 
I-766 EAD.
    Employers and trade associations have, from time to time, 
questioned the effectiveness of such mailings. Three of the mailings 
were conducted with the assistance of the Internal Revenue Service 
(IRS). Some of the feedback the Service received following those 
mailings suggested that many employers have IRS mail directed to 
attorneys or accountants, which meant that the Form I-9 information did 
not reach its intended audience. For the 1997 mailing, the Service used 
a commercial data base and indicated on the front that the material 
should go to the human resources department. In talking to employers 
who have called INS for information related to the Form I-9, the 
Service has identified few instances where the people responsible for 
Forms I-9 received the mailing.
    The Service recognizes the impact that the Form I-9 has on the 
business community and wants to ensure that the public has ready access 
to the information it needs. The Service is developing a fax-back 
capability for employer information and is making increased use of its 
internet site. All materials related to changes in the requirements 
will be made available through these channels as they become available. 
The Service will also work through trade and professional associations 
and similar organizations to inform the public.
    The Service seeks suggestions from the public concerning the most 
cost-effective means to reach and inform those affected by this rule. 
Similarly, suggestions concerning the preferred format for 
instructional materials, such as the M-274 Handbook for Employers or 
suggested alternatives, would be welcome.

Cross-reference table

    The following cross-reference table is provided to assist the 
public in understanding how the Service proposes to restructure 8 CFR 
274a, Subpart A.

    Cross-Reference--Proposed Restructuring of 8 CFR 274A--Subpart A    
------------------------------------------------------------------------
                Proposed                             Current            
------------------------------------------------------------------------
274a.1  Definitions. Definition of       274a.1 and 274a.2(a)           
 recruiters and referrers moved to this                                 
 section.                                                               
274a.2  Why is employment verification                                  
 required and what does it involve?                                     
    (a) Why employment verification is   274a.2(a)                      
     required.                                                          
    (1) Designation of Form I-9 and      274a.2(a)                      
     Form I-9A.                                                         
    (2) Obtaining and duplicating Form   274a.2(a)                      
     I-9 and Form I-9A.                                                 
    (3) Limitation on use of Form I-9    274a.2(b)(4)                   
     and attachments.                                                   
    (4) Beginning date for verification  274a.2(a)                      
     requirements.                                                      
    (b) How to complete the Form I-9...  274a.2(b)                      
    (1) Employee information and         274a.2(a)(b)(1)(i)(A)--responsi
     documentation.                       bility to complete section 1  
                                          of Form I-9                   
    (2) Document review and              274a.2(b)(1)(i)(B)--responsibil
     verification.                        ity to present documentation  
                                         274a.2(b)(1)(ii)(A)--responsibi
                                          lity to review documentation  
                                         274a.2(b)(1)(ii)(B)--responsibi
                                          lity to complete section 2 of 
                                          Form I-9                      
    (3) Recruiters or referrers........  274a.2(b)(1)(iv)--recruiter/   
                                          referrer responsibility to    
                                          complete Form I-9             

[[Page 5299]]

                                                                        
    (c) Time for completing Form I-9     274a.2(b)                      
     (new heading).                                                     
    (1) Section 1 of the Form I-9......  274a.2(b)(1)(i)(A)--timing to  
                                          complete section 1            
    (2) Section 2 of the Form I-9......  ...............................
    (i) Hires for a duration of 3 or     274a.2(b)(1)(ii)--timing to    
     more business days.                  complete section 2            
                                         274a.2(b)(1)(iv)--timing for   
                                          recruiters/referrers          
    (ii) Hires for a duration of less    274a.2(b)(1)(iii)--timing if   
     than 3 business days.                hire is for less than 3       
                                          business days                 
    (3) Receipts (new).................  ...............................
    (d) Reverification of employment     274a.2(b)(1)(vii)              
     eligibility when employment                                        
     authorization expires.                                             
    (1) Procedures.....................  ...............................
    (2) Continuing obligation (new)....  ...............................
    (3) Exception to reverification      ...............................
     requirement (new).                                                 
274a.3  What documents are acceptable                                   
 for employment verification?                                           
    (a) Documents that establish both    274a.2(b)(1)(v)(A)             
     identity and employment                                            
     authorization (List A).                                            
    (b) Documents that establish         274a.2(b)(1)(v)(B)             
     identity only (List B).                                            
    (1) Acceptable List B documents....  274a.2(b)(1)(v)(B)             
    (2) Special rule for minors........  274a.2(b)(1)(v)(B)(3)          
    (3) Special rule for individuals     274a.2(b)(1)(v)(B)(4)          
     with disabilities.                                                 
    (c) Documents that establish         274a.2(b)(1)(v)(C)             
     employment authorization only                                      
     (List C).                                                          
    (d) Receipts.......................  274a.2(b)(1)(vi)               
    (1) Acceptable receipts and their    274a.2(b)(1)(vi)               
     validity periods (includes new                                     
     content).                                                          
    (2) Exceptions (includes new         274a.2(b)(1)(iii)--prohibition 
     content).                            on receipts if hire is for    
                                          less than 3 business days     
274a.4  How long are employers and       274a.2(b)(2)--retention of Form
 recruiters or referrers required to      I-9                           
 retain the Form I-9 and what must be                                   
 retained with it?.                                                     
    (a) Retention of Form I-9..........  ...............................
    (1) Employers......................  274a.2(b)(2)(i)(A)             
    (2) Recruiters or referrers........  274a.2(b)(2)(i)(B)             
    (b) Retention of attachments (new).  ...............................
    (i) Reverification forms (new).....  ...............................
    (ii) Copies of documentation.......  274a.2(b)(3)                   
274a.5  Under what circumstances may     ...............................
 employers and recruiters or referrers                                  
 rely on a Form I-9 that an individual                                  
 previously completed?                                                  
    (a) Continuing employment..........  274a.2(b)(1)(viii)             
    (b) Employment verification          274a.2(c)                      
     requirements in the case of an                                     
     individual who was previously                                      
     employed.                                                          
    (c) Employment verification          274a.2(d)                      
     requirements in the case of                                        
     recruiting or referring for a fee                                  
     an individual who was previously                                   
     recruited or referred.                                             
274a.6  What happens when the            274a.2(b)(2)--Inspection       
 Government asks to inspect Forms I-9?.                                 
    (a) Notice of inspection...........  274a.2(b)(2)(ii)               
    (b) Obligation to make records       274a.2(b)(2)(ii)               
     available.                                                         
    (1) In general.....................  ...............................
    (2) Standards for submitting         274a.2(b)(2)(iii)              
     microfilm or microfiche.                                           
    (3) Recruiters or referrers........  274a.2(b)(2)(ii)               
    (c) Compliance with inspection.....  274a.2(b)(2)(ii)               
    (d) Use of subpoena authority......  274a.2(b)(2)(ii)               
274a.7  What is the prohibition on                                      
 hiring or contracting with                                             
 unauthorized aliens and what defense                                   
 can be claimed?                                                        
    (a) Prohibition on the hiring and    274a.3                         
     continuing employment of                                           
     unauthorized aliens.                                               
    (b) Use of labor through contract..  274a.5                         
    (c) Good faith defense to charge of  274a.4                         
     knowingly hiring an unauthorized                                   
     alien.                                                             
274a.8  What are the requirements of     274a.6                         
 state employment agencies that choose                                  
 to verify the identity and employment                                  
 eligibility of individuals referred                                    
 for employment by the agency?.                                         
274a.9  Can a person or entity provide   274a.8                         
 a financial guarantee or indemnity                                     
 against potential liability related to                                 
 the hiring, recruiting, or referring                                   
 of the individual?.                                                    
274a.10  How are investigations          274a.9                         
 initiated and employers notified of                                    
 violations?.                                                           
274a.11  What penalties may be imposed                                  
 for violations?                                                        
    (a) Criminal penalties.............  b274a.10(a)                    
    (b) Civil penalties................  274a.10(b)                     
    (c) Enjoining pattern or practice    274a.10(c)                     
     violations.                                                        

[[Page 5300]]

                                                                        
    (d) Pre-enactment provisions for     274a.7                         
     employees hired prior to November                                  
     7, 1986.                                                           
------------------------------------------------------------------------

Regulatory Flexibility Act

    The Service has examined the impact of this proposed rule in light 
of Executive Order 12866 and the Regulatory Flexibility Act (RFA) (5 
U.S.C. 603, et seq.) and has drafted the rule to minimize its economic 
impact on small businesses while meeting its intended objectives. The 
obligations of employment verification have been imposed by Congress 
since 1987 and for the most part remain unchanged after amendment by 
IIRIRA. This rule is intended to reduce the burden on small entities by 
simplifying the procedures for verifying employees' eligibility to work 
in the United States.

What Are the Reasons for This Regulatory Action?

    This rule is necessary to implement certain provisions of IIRIRA, 
specifically provisions which: (1) Eliminate certain documents 
currently used in the employment eligibility verification process; (2) 
include any branch of the Federal Government in the definition of 
``entity'' for employer sanctions purposes; and (3) clarify 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. In conjunction with revising the regulations 
to implement IIRIRA, the Service initiated a comprehensive review of 
the rule to minimize its impact on small businesses. Through that 
review, required by the RFA, the Service identified additional changes 
which are intended to simplify and clarify the requirements.

What Are the Objectives and Legal Basis for the Rule?

    The legal basis for the rule is section 274A of the Act. The major 
objectives of the rule, with respect to its impact on small businesses, 
include:
    (1) Clarifying the timing permitted for completion of the Form I-9. 
These changes respond to frequent questions from employers concerning 
their authority to perform verification before an employee actually 
starts to work, and whether employees must be given 3 days to present 
documentation in all circumstances;
    (2) Specify reverification requirements. These changes respond to 
concerns expressed by employers and to their expressed preference that 
both the employee and the employer should be required to complete an 
attestation as part of reverification;
    (3) Clarify and expand the receipt rule, under which work-eligible 
individuals who are unable to present a required document may present a 
receipt under certain circumstances. These changes respond to frequent 
questions from employers. In addition to revising the receipt rule 
itself, the Service has moved the discussion of receipts to the section 
that identifies acceptable documents. The changes are intended to 
retain the flexibility of the receipt rule, which helps to ensure that 
work-eligible employees are not prevented from working because their 
documents have been lost or stolen, while making the rule easier for 
employers to understand;
    (4) Shorten the list of documents acceptable for verification. This 
is one of the most significant changes for small businesses. A shorter 
list will mean that employers have to be familiar with fewer documents. 
The Service has made a particular effort to limit the circumstances in 
which employers will need to examine a Service-issued ``paper'' 
document (e.g., a Form I-94 with a stamped endorsement), because those 
documents have been the subject of employer confusion; and
    (5) Require the attachment to and retention with the Form I-9 of 
copied documentation, if employers elect to photocopy the documents 
presented. This is an area that is unclear in the current regulations.
    In addition, the proposed rule proposes to restructure the 
regulation to make it easier to use and cite. This should reduce the 
need for small entities to rely on outside assistance to understand the 
basic requirements of the law.

How Many and What Kind of Small Entities Will Be Affected by the 
Proposed Rule?

    The essential requirements in the proposed rule, which have been in 
place for 10 years, apply to all entities which hire individuals to 
perform services or labor in return for remuneration. The requirements 
also apply to recruiters or referrers for a fee which are an 
agricultural association, agricultural employer, or farm labor 
contractor (as defined in section 3 of the Migrant and Seasonal 
Agricultural Worker Protection Act, 29 U.S.C. 1802). Data obtained from 
the Bureau of Labor Statistics show the following number of employers 
in 1994, rounded to the nearest hundred (See Employment and Wages, 
1994, Bureau of Labor Statistics):

              Estimated Number of Businesses by Size, 1994              
------------------------------------------------------------------------
                                                              Number of 
          Size of business  (number of employees)             employers 
------------------------------------------------------------------------
< 5........................................................    3,614,800
5 to 9.....................................................    1,200,800
10 to 49...................................................    1,248,100
50 to 499..................................................      293,700
500 or more................................................       14,700
                                                            ------------
      Total................................................    6,372,100
------------------------------------------------------------------------

    Although other data sources may provide different estimates of the 
actual number of small businesses, the distribution shown above 
indicates that the majority of businesses affected by these 
requirements are small businesses.

What Are the Projected Reporting, Recordkeeping, and Other Compliance 
Requirements of the Proposed Rule?

    The proposed rule continues the existing requirement, imposed by 
Congress since 1987, for employers to complete the Form I-9 for all new 
hires and to retain the form for 3 years or 1 year after the employment 
terminates, whichever is longer. Under the proposed rule, if the 
employer elects to make photocopies of documentation presented, the 
employer must attach the photocopies to and retain them with the Form 
I-9. The requirement to attach and retain the photocopies is new, 
clarifying an area that is ambiguous under the existing regulation. If 
the employee's work authorization expires, the employer must reverify 
the employee's eligibility to work on Form I-9 or Form I-9A and attach 
the reverification form to and retain it with the Form I-9. 
Reverification is not a new requirement, but the proposed rule seeks to 
clarify what is required.
    Because employers are already completing and retaining Forms I-9 
and conducting reverifications when employees' authorization expires, 
the rule is not expected to impose significant new costs on small 
entities.

[[Page 5301]]

There will be some cost, however, associated with becoming familiar 
with the new requirements, obtaining new forms, and retraining 
employees who are familiar with the existing requirements.
    Once the transition to the new forms and requirements is complete, 
the Service anticipates that the costs of compliance for most 
businesses will be lower than under the existing rule and Form I-9. 
Based on informal discussions with a limited number of employers, the 
Service believes that the smaller number of documents, simplified 
design of the Form I-9, and more comprehensive instruction sheet 
provided with the form, all make the verification process faster and 
easier than it is now.
    Additional information on the estimated paperwork burden for the 
Form I-9 is provided under the discussion of the Paperwork Reduction 
Act.

Are There Any Federal Rules That May Duplicate, Overlap, or Conflict 
With the Rule?

    The Service is not aware of overlap, duplication, or conflict with 
other Federal rules. The requirement for employers to verify the 
identity and eligibility to work is unique to section 274A of the Act 
and its implementing regulations.
    The Service has heard complaints on occasion from employers to the 
effect that section 274A of the Act and its implementing regulations at 
subpart A conflict with section 274B of the Act and its implementing 
regulations at 28 CFR part 44, by on the one hand requiring employers 
to verify their employees' identity and work eligibility by examining 
documents, while on the other hand subjecting them to penalties for 
inquiring into the validity of those documents, particularly in light 
of the proliferation of false documentation. The Service firmly 
supports section 274B of the Act and its enforcement, and does not view 
it as conflicting with section 274A. The Service's proposed rule 
includes changes intended to clarify how employers may comply with 274A 
while avoiding practices prohibited by 274B. The Service invites the 
public to suggest other ways that the regulations could minimize any 
perceived inconsistency between these two provisions of law.

Are There Any Significant Alternatives That Would Accomplish the 
Objectives of the Rule and Minimize its Economic Impact?

    In enacting the Immigration Reform and Control Act of 1986, 
Congress considered exempting employers with three or fewer employees 
from the requirements of the law. Congress did not do so, however, 
because of evidence that a significant number of unauthorized aliens 
are employed by small businesses. The Service believes that having a 
uniform set of requirements for all businesses, regardless of size, is 
consistent with congressional intent. What the Service has attempted to 
do is to take into account the needs of a wide variety of businesses in 
formulating the proposed rule.

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, it has been reviewed by the Office of Management 
and Budget.

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.

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

    The impact of this rule on small businesses is discussed under the 
Regulatory Flexibility Act. This preliminary analysis is the basis for 
the Service's finding that this is not a major rule as defined by 
section 804 of the Small Business Regulatory Enforcement 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.

Paperwork Reduction Act of 1995

    This proposed rule contains a revision to an information collection 
(Form I-9, Employment Eligibility Verification/Form I-9A, Employment 
Eligibility Reverification) which is subject to review by OMB under the 
Paperwork Reductions Act of 1995 (Pub. L. 104-13). Therefore, the 
agency solicits public comments on the revised information collection 
requirements for 30 days in order to: (1) Evaluate whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (2) evaluate the accuracy of the agency's 
estimate of the burden of the proposed collection of information, 
including the validity of the methodology and assumptions used; (3) 
enhance the quality, utility, and clarity of the information to be 
collected; and (4) minimize the burden of the collection of information 
on those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    The Service estimates a total annual reporting burden of 13,153,500 
hours. This figure is based on the number of I-9 and I-9A respondents 
(78,890,000)  x  9 minutes per response (.15) for the reporting 
requirements; of the 78,890,000 respondents, 20,000,000 are involved in 
record-keeping activities associated with the I-9 and I-9A process. The 
computation of the annual burden estimate for record-keeping activities 
is based on 20,000,000  x  4 minutes per response (0.66) equating to 
1,320,000.
    As required by section 3507(d) of the Paperwork Reduction Act of 
1995, the Service has submitted a copy of this proposed rule to OMB for 
its review of the revised information collection requirements. Other 
organizations and individuals interested in submitting comments 
regarding this burden estimate or any aspect of these information 
collection requirements, including suggestions for reducing the burden, 
should direct them to: Office of Information and Regulatory Affairs

[[Page 5302]]

(OMB), 725 17th Street, NW, Washington, DC 20503, Attn: DOJ/INS Desk 
Officer, Room 10235. The comments or suggestions should be submitted 
within 30 days of publication of this rulemaking.

List of Subjects

8 CFR Part 274a

    Administrative practice and procedure, Aliens, Employment, 
Penalties, Reporting and recordkeeping requirements.

8 CFR Part 299

    Immigration, Reporting and recordkeeping requirements.

    Accordingly, 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 revising paragraphs (b) and (e), 
and by adding a new paragraph (m), to read as follows:


Sec. 274a.1  Definitions.

* * * * *
    (b) The term entity means any legal entity including, but not 
limited to, a corporation, partnership, joint venture, governmental 
body, agency, proprietorship, or association. For purposes of this 
part, the term entity includes an entity in any branch of the Federal 
Government;
* * * * *
    (e) The term recruit for a fee means the act of soliciting a 
person, directly or indirectly, with the intent of obtaining employment 
for that person, for remuneration whether on a retainer or contingency 
basis; however, this term does not include union hiring halls that 
recruit union members, or non-union individuals who pay membership 
dues;
* * * * *
    (m) The term recruiter or referrer for a fee means a person or 
entity who is either an agricultural association, agricultural 
employer, or farm labor contractor (as defined in section 3 of the 
Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. 
1802).
    3. Section 274a.2 is revised to read as follows:


Sec. 274a.2  Why is employment verification required and what does it 
involve?

    (a) Why employment verification is required. It is unlawful for a 
person or entity to hire or to recruit or refer for a fee an individual 
for employment in the United States without complying with section 274A 
of the Act and Secs. 274a.2 through 274a.5. The Act requires the person 
or entity to verify on a designated form that the individual is not an 
unauthorized alien.
    (1) Designation of Form I-9 and Form I-9A. The Employment 
Eligibility Verification form, Form I-9, has been designated by the 
Service as the form to be used in complying with the employment 
verification requirements. The Employment Eligibility Reverification 
form, Form I-9A, is an optional supplement to the Form I-9 which may be 
used instead of Form I-9 when a person or entity must reverify an 
individual's eligibility to work under paragraph (d) of this section.
    (2) Obtaining and duplicating Form I-9 and Form I-9A. Forms I-9 and 
I-9A may be obtained in limited quantities from the Service forms 
centers or district offices, downloaded from the Service World Wide Web 
site, or ordered from the Superintendent of Documents, Washington, DC 
20402. Employers, or recruiters or referrers for a fee, may 
electronically generate blank Forms I-9 or I-9A, provided that: the 
resulting form is legible; there is no change to the name, content, or 
sequence of the data elements and instructions; no additional data 
elements or language are inserted; and the paper used meets the 
standards for retention and production for inspection specified under 
Secs. 274a.4 through 274a.6. When copying or printing Form I-9, Form I-
9A, or the instruction sheet, the text may be reproduced by making 
either double-sided or single-sided copies.
    (3) Limitation on use of Form I-9 and attachments. Any information 
contained in the Form I-9, and on any attachments, described in 
Sec. 274a.4(b), may be used only for enforcement of the Act and 18 
U.S.C. 1001, 1028, 1546, or 1621.
    (4) Beginning date for verification requirements. Employers need to 
complete a Form I-9 only for individuals hired after November 6, 1986, 
who continue to be employed after May 31, 1987. Recruiters or referrers 
for a fee need to complete a Form I-9 only for individuals recruited or 
referred and hired after May 31, 1987.
    (b) How to complete the Form I-9--(1) Employee information and 
documentation. A person or entity that hires, or recruits or refers for 
a fee, an individual for employment must ensure that the individual 
properly:
    (i) Completes section 1 on the Form I-9. If an individual is unable 
to complete the Form I-9 or needs it translated, someone may assist him 
or her. The preparer or translator must provide the assistance 
necessary for the individual to understand the Form I-9 and complete 
section 1 and have the individual initial and sign or mark the Form in 
the appropriate places. The preparer or translator must them complete 
the ``Preparer/Translator'' portion of the Form I-9; and
    (ii) Presents to the employer, or recruiter or referrer for a fee, 
documentation, described in this paragraph, that establishes the 
individual's identity and eligibility to work. An individual has the 
choice of which document(s) to present. Acceptable documentation is:
    (A) An original unexpired document that establishes both identity 
and employment authorization (List A document described in 
Sec. 274a.3(a)); or
    (B) An original unexpired document that establishes identity (List 
B document described in Sec. 274a.3(b)) and a separate original 
unexpired document which establishes employment authorization (List c 
document described in Sec. 274a.3(C)); or
    (C) If an individual is unable to present a document listed in 
Secs. 274a.3(a), (b), or (c) and is hired for a duration of 3 or more 
business days, an acceptable receipt (listed in Sec. 274a.3(d)) instead 
of the required document. A receipt is valid for a temporary period, 
specified under Sec. 274a.3(d). The individual must present the 
required document at the end of such period.
    (2) Document review and verification. An employer, or recruiter or 
referrer for a fee, must:
    (i) Physically examine the documentation presented by the 
individual establishing identity and employment eligibility as set 
forth in Sec. 274a.3 and ensure that the document(s) presented appear 
to be genuine and to relate to the individual. Employers and recruiters 
or referrers for a fee may not specify which document or documents an 
individual is to present. To do so may violate section 274B of the Act; 
and
    (ii) Complete section 2 of the Form I-9.
    (3) Recruiters or referrers. Recruiters or referrers for a fee may 
designate agents to complete the employment verification procedures on 
their behalf, including but not limited to notaries, national 
associations, or employers. If a recruiter or referrer designates an 
employer to complete the employment verification procedures, the 
employer need only provide the recruiter or

[[Page 5303]]

referrer with a photocopy of the Form I-9 and any attachments.
    (c) Time for completing Form I-9 --(1) Section 1 of the Form I-9. 
An employer, or recruiter or referrer for a fee, must ensure that the 
individual properly completes section 1 of the Form I-9 at the time of 
hire.
    (2) Section 2 of the Form I-9 --(i) Hires for a duration of 3 or 
more business days. An employer, or recruiter or referrer for a fee, 
must examine the documentation presented by the individual and complete 
section 2 of the Form I-9 within 3 business day of the hire. An 
employer, or recruiter or referrer for a fee, may require an individual 
to present documentation listed Sec. 274a.3 at the time of hire or 
before the time of hire, so long as the commitment to hire the 
individual has been made and provided that this requirement is applied 
uniformly to all individuals.
    (ii) Hires for a duration of less than 3 business days.  An 
employer, or recruiter or referrer for a fee, must examine the 
documentation presented by the individual and complete section 2 of the 
Form I-9 at the time of the hire.
    (3) Receipts. If an individual presents a receipt, as provided in 
Sec. 274.3(d), for purposes for verification or reverification, the 
employer must update the Form I-9 (or Form I-9A, if applicable) within 
the time limits specified in that section.
    (d) Reverification of employment eligibility when employment 
authorization expires--(1) Procedures. Except as provided in paragraph 
(d)(3) of this section, if section 1 or 2 of the Form I-9 indicates 
that the individual's employment authorization expires, the employer 
must reverify the individual's employment authorization. The employer 
must, not later than the date that work authorization expires, ensure 
proper completion of sections 1 and 2 of new Form I-9 or a Form I-9A 
by:
    (i) Ensuring that the individual properly completes section 1 and 
attests that he or she is authorized to work indefinitely or until a 
specified date and signs and dates the attestation;
    (ii) Examining and unexpired, original document presented by the 
individual establishing employment eligibility as set forth in 
Sec. 274a.3(a), (c), or (d), and ensuring that it appears to be genuine 
and to relate to the individual. An employer should not reverify List B 
documents;
    (iii) Completing section 2; and
    (iv) Attaching the new Form I-9 or Form I-9A to the previously-
completed Form I-9.
    (2) Continuing obligation. Except as provided in paragraph (d)(3) 
of this section, for as long as the Form I-9 or Form I-9A used for 
reverification indicates that the individual is not a United States 
citizen or national, or a lawful permanent resident, and that the 
individual's employment authorization expires, the employer must 
reverify the individual's employment authorization as provided in 
paragraph (d)(1) of this section, no later than the date that 
employment authorization expires.
    (3) Exception to reverification requirement. An employer shall not 
reverify the employment authorization of an individual who attests in 
section 1 of the Form I-9 or Form I-9A that he or she is a citizen or 
national of the United States. An employer shall not reverify the 
employment authorization of an individual who attests in section 1 of 
the Form I-9 or Form I-9A that he or she is a lawful permanent 
resident, unless the individual presents a foreign passport that 
contains a temporary I-551 stamp, provided in Sec. 274a.3(a)(3).
    4. Section 274a.3 is revised to read as follows:


Sec. 274a.3  What documents are acceptable for employment verification?

    (a) Documents that establish both identity and employment 
authorization (List A).
    (1) A United States passport;
    (2) An Alien Registration Receipt Card or Permanent Resident Card, 
Form I-551'
    (3) A foreign passport that contains a temporary I-551 stamp;
    (4) An employment authorization document issued by the Service 
which contains a photograph, Form I-766, Form I-688 (Temporary Resident 
Card), Form I-688A, or Form I-688B; or
    (5) In the case of a nonimmigrant alien authorized to work only for 
a specific employer, a foreign passport with an Arrival-Departure 
Record, Form I-94, bearing the same name as the passport and containing 
an endorsement of the alien's nonimmigrant status and the name of the 
approved employer with whom employment is authorized, so long as the 
period of endorsement has not yet expired and the proposed employment 
is not in conflict with any restrictions or limitations identified on 
the Form I-94.
    (b) Documents that establish identify only (List B).
    (1) Acceptable List B documents.
    (i) A driver's license or identification card issued by a state (as 
defined in section 101(a)(36) of the Act) or an outlying possession of 
the United States (as defined by section 101(a)(29) of the Act), 
provided that the document contains a photograph or the following 
identifying information: name, date of birth, sex, height, color of 
eyes, and address;
    (ii) A Native American tribal document; or
    (iii) In the case of a Canadian nonimmigrant alien or alien with 
common nationality with Canada who is authorized to work only for a 
specific employer, a driver's license issued by a Canadian Government 
authority or a Canadian federal or provincial identification card.
    (2)  Special rule for minors. Minors under the age of 18 who are 
unable to produce one of the identity documents listed in paragraph 
(b)(1) of this section are exempt from producing one of the specified 
identity documents if:
    (i) The minor's parent or legal guardian completes section 1 of the 
Form I-9 and in the space for the minor's signature, the parent or 
legal guardian writes the words, ``minor under age 18'';
    (ii) The minor's parent or legal guardian completes on the Form I-9 
the ``Preparer/Translator certification''; and
    (iii) The employer or the recruiter or referrer for a fee writes in 
section 2 under List B in the space after the words ``Document 
Identification #'' the words, ``minor under age 18''.
    (3) Special rule for individuals with diasbilities--(i) Procedures. 
Individuals with disabilities, who are unable to produce one of the 
identity documents listed in paragraph (b)(1) of this section, and who 
are being placed into employment by a nonprofit organization or 
association, or as part of a rehabilitation program, are exempt from 
producing one of the specified identify documents if:
    (A) The individual's parent or legal guardian, or a representative 
from the nonprofit organization, association, or rehabilitation program 
placing the individual into a position of employment completes section 
1 of the Form I-9 and in the space for the individual's signature, 
writes the words, ``special placement'';
    (B) The individual's parent or legal guardian, or the program 
representative, completes on the Form I-9 the ``Preparer/Translator 
certification''; and
    (C) The employer or the recruiter or referrer for a fee writes in 
section 2 under List B in the space after the words ``Document 
Identification #'' the words, ``special placement''.
    (ii) Applicability. For purposes of this section the term 
disability means, with respect to an individual:
    (A) A physical or mental impairment that substantially limits one 
or more of the major life activities of such individual;
    (B) A record of such impairment; or

[[Page 5304]]

    (C) Being regarded as having such an impairment.
    (c) Documents that establish employment authorization only (List 
C).
    (1) A social security account number card (other than such a card 
which specifies on the face that the issuance of the card does not 
authorize employment in the United States);
    (2) A Native American tribal document; or
    (3) In the case of a nonimmigrant alien authorized to work only for 
a specific employer, an Arrival-Departure Record, Form I-94, containing 
an endorsement of the alien's nonimmigrant status and the name of the 
approved employer with whom employment is authorized, so long as the 
period of endorsement has not yet expired and the proposed employment 
is not in conflict with any restrictions or limitations identified on 
the Form I-94.
    (d) Receipts--(1) Acceptable receipts and their validity periods. 
(i) A receipt for an application to replace a document described in 
paragraph (a), (b), or (c) of this section because the document was 
lost, stolen, or damaged. Documentation acknowledging receipt of an 
application for an initial grant or extension of a document described 
in paragraph (a) or (c) of this section is not a receipt for this 
purpose, except for a receipt for the application of a timely filed 
application for an extension of nonimmigrant stay as provided in 
Sec. 274a.12(b)(2). The individual must present the replacement 
document within 90 days of the hire or, in the case of reverification 
under Sec. 274a.2(d) or Sec. 274a.5(b), within 90 days of the date 
employment authorization expires or the date of rehire.
    (ii) The arrival portion of Form I-94 marked with an unexpired 
Temporary I-551 stamp and affixed with a photograph of the individual. 
The individual must present the Form I-551 within 180 days of the hire 
or, in the case of reverification under Sec. 274a.2(d) or 
Sec. 274a.5(b), within 180 days of the date employment authorization 
expires or the date of rehire.
    (iii) The departure portion of Form I-94 marked with an unexpired 
refugee admission stamp. The individual must present either an 
unexpired Employment Authorization Document (Form I-766 or Form I-688B) 
or a social security account number card that does not contain 
employment restrictions and an identity document described in paragraph 
(b) of this section within 90 days of the hire or, in the case of 
reverification under Sec. 274a.2(d) or Sec. 274a.5(b), within 90 days 
of the date employment authorization expires or the date of rehire.
    (2) Exceptions. A receipt described in paragraph (d)(1) of this 
section is not an acceptable document if:
    (i) The individual indicates or the employer, or recruiter or 
referrer for a fee, has actual or constructive knowledge that the 
individual is not authorized to work; or
    (ii) The employment is for a duration of less than 3 business days.
    5. Section 274a.4 is revised to read as follows:


Sec. 274a.4  How long are employers and recruiters or referrers 
required to retain the Form I-9 and what must be retained with it?

    (a) Retention of Form I-9--(1) Employers. An employer must retain 
the Form I-9 for 3 years after the date of hire or 1 year after the 
date the individual's employment is terminated, whichever is later.
    (2) Recruiters or referrers. A recruiter or referrer for a fee must 
retain the Form I-9 for 3 years after the date of hire.
    (b) Retention of attachments--(1) Reverfication forms. The 
employer, or recruiter or referrer for a fee, must attach Forms I-9 or 
I-9A used for reverification, as described in Sec. 274a.2(d), to the 
initial Form I-9 relating to the individual and retain them with the 
initial Form I-9.
    (2) Copies of documentation--(i) Option to photocopy. An employer, 
or recruiter or referrer for a fee, may, but is not required to, copy a 
document presented by an individual solely for the purpose of complying 
with the verification requirements described in Sec. 274a.2. If such a 
copy is made, it must be attached to and retained with the Form I-9 (or 
Form I-9A if applicable).
    (ii) Obligation to complete Form I-9. The copying and retention of 
any such document does not relieve the employer, or recruiter or 
referrer for a fee, from the requirement to fully complete section 2 of 
the Form I-9 or Form I-9A.
    (iii) Discrimination prohibited. An employer, or recruiter or 
referrer for a fee, should not copy the documents only of individuals 
or certain classes of individuals based on national origin or 
citizenship status. To do so may violate section 274B of the Act.
    6. Section 274a.5 is revised to read as follows:


Sec. 274a.5  Under what circumstances may employers and recruiters or 
referrers rely on a Form I-9 that an individual previously completed?

    (a) Continuing employment. An employer will not be deemed to have 
hired for employment an individual who is continuing in his or her 
employment and has a reasonable expectation of employment at all times. 
Therefore, no verification is necessary for such individuals.
    (1) An individual is continuing in his or her employment in one of 
the following situations:
    (i) An individual takes approved paid or unpaid leave on account of 
study, illness or disability of a family member, illness or pregnancy, 
maternity or paternity leave, vacation, union business, or other 
temporary leave approved by the employer;
    (ii) An individual is promoted, demoted, or gets a pay raise;
    (iii) An individual is temporarily laid off for lack of work;
    (iv) An individual is on strike or in a labor dispute;
    (v) An individual is reinstated after disciplinary suspension for 
wrongful termination, found unjustified by any court, arbitrator, or 
administrative body, or otherwise resolved through reinstatement or 
settlement;
    (vi) An individual transfers from one distinct unit of an employer 
to another distinct unit of the same employer; the employer may 
transfer the individual's Form I-9 (and attachments if applicable) to 
the receiving unit;
    (viii) An individual continues his or her employment with a 
related, successor, or reorganized employer, provided that the employer 
obtains and maintains from the previous employer records and Forms I-9, 
and attachments, where applicable. For this purpose, a related, 
successor, or reorganized employer includes:
    (A) The same employer at another location;
    (B) An employer who continues to employ some or all of a previous 
employer's workforce in cases involving a corporate reorganization, 
merger, or sale of stock or assets;
    (C) An employer who continues to employ any employee of another 
employer's workforce where both employers belong to the same multi-
employer association and the employee continues to work in the same 
bargaining unit under the same collective bargaining agreement. For 
purposes of this section, any agent designated to complete and maintain 
the Form I-9 and attachments must record the employee's date of hire 
and/or termination each time the employee is hired and/or terminated by 
an employer of the multi-employer association; or
    (D) An individual is engaged in seasonal employment.
    (2) The employer who is claiming that an individual is continuing 
in his or her employment must also establish that the individual is 
expected to resume employment at all times and that the

[[Page 5305]]

individual's expectation is reasonable. Whether an individual's 
expectation is reasonable will be determined on a case-by-case basis 
taking into consideration several factors. Factors which would indicate 
that an individual has a reasonable expectation of employment include, 
but are not limited to, the following:
    (i) The individual in question was employed by the employer on a 
regular and substantial basis. A determination of a regular and 
substantial basis is established by a comparison of other workers who 
are similarly employed by the employer;
    (ii) The individual in question complied with the employer's 
established and published policy regarding his or her absence;
    (iii) The employer's past history of recalling absent employees for 
employment indicates a likelihood that the individual in question will 
resume employment with the employer within a reasonable time in the 
future;
    (iv) The former position held by the individual in question has not 
been taken permanently by another worker;
    (v) The individual in question has not sought or obtained benefits 
during his or her absence from employment with the employer that are 
inconsistent with an expectation of resuming employment with the 
employer within a reasonable time in the future. Such benefits include, 
but are not limited to, severance and retirement benefits;
    (vi) The financial condition of the employer indicates the ability 
of the employer to permit the individual in question to resume 
employment within a reasonable time in the future; or
    (vii) The oral and/or written communication between the employer, 
the employer's supervisory employees and the individual in question 
indicates that it is reasonably likely that the individual in question 
will resume employment with the employer within a reasonable time in 
the future.
    (b) Employment verification requirements in the case of an 
individual who was previously employed--(1) Hired within 3 years from 
the date of the previously completed Form I-9. An employer that hires 
an individual previously employed by the employer within 3 years of the 
date of the initial execution of a previously completed Form I-9 
relating to the individual which meets the requirements set forth in 
Secs.  274a.2 through 274a.4 may (instead of completing a new Form I-9) 
inspect the previously completed Form I-9 and all attachments 
(described in Sec. 274a.4(b)).
    (i) If the Form I-9 and attachments relate to the individual, and 
the individual continues to be authorized for employment, the 
previously completed Form I-9 is sufficient for purposes of section 
274A(b) of the Act.
    (ii) If the previously completed Form I-9 indicates that the 
individual is no longer authorized for employment, the employer must 
reverify in accordance with Sec. 274a.2(d); otherwise, the individual 
may no longer be employed.
    (iii) The employer must retain the previously completed Form I-9 
and attachments for a period of 3 years commencing from the date of the 
initial execution of the Form I-9 or 1 year after the individual's 
employment is terminated, whichever is later.
    (2) Hired more than 3 years after the date of the previously 
executed Form I-9. An employer that hires an individual previously 
employed by the employer more than 3 years after the date of the 
initial execution of a previously completed Form I-9 relating to the 
individual must complete a new Form I-9 in compliance with the 
requirements of Secs. 274a.2 through 274a.4.
    (c) Employment verification requirements in the case of recruiting 
or referring for a fee an individual who was previously recruited or 
referred--(1) Recruited or referred within 3 years from the date of the 
previously completed Form I-9. A recruiter or referrer for a fee that 
recruits or refers an individual previously recruited or referred by 
the recruiter or referrer for a fee within 3 years of the date of the 
initial execution of the Form I-9 relating to the individual which 
meets the requirements set forth in Secs. 274a.2 through 274a.4 may 
(instead of completing a new Form I-9 inspect the previously completed 
Form I-9 and all attachments (described in Sec. 274a.4(b)).
    (i) If the Form I-9 and attachments relate to the individual, and 
the individual continues to be authorized for employment, the 
previously completed Form I-9 is sufficient for purposes of section 
274a(b) of the Act.
    (ii) If the previously completed Form I-9 indicates that the 
individual's employment authorization has expired, the recruiter or 
referrer for a fee must reverify in accordance with Sec. 274a.2(d); 
otherwise the individual may no longer be recruited or referred.
    (iii) The recruiter or referrer for a fee must retain the 
previously completed Form I-9 and attachments for a period of 3 years 
from the date of the rehire.
    (iv) The reverification requirements in Sec. 274a.2(d) do not apply 
to recruiters or referrers for a fee except as provided in paragraph 
(c)(1)(ii) of this section.
    (2) Recruited or referred more than 3 years after the date of the 
previously executed Form I-9. A recruiter or referrer for a fee that 
recruits or refers an individual previously recruited or referred by 
the recruiter or referrer for a fee more than 3 years after the date of 
the initial execution of a previously completed Form I-9 relating to 
the individual must complete a new Form I-9 in compliance with the 
requirements of Secs. 274a.2 through 274a.4.
    7. Section 274a.6 is revised to read as follows:


Sec. 274a.6  What happens when the Government asks to inspect Forms I-
9?

    (a) Notice of inspection. Officers of the Service, the Office of 
Special Counsel for Immigration-Related Unfair Employment Practices, or 
the Department of Labor may inspect the Forms I-9, and all attachments 
described in Sec. 274a.4(b), after providing at least 3 days' notice to 
any person or entity required to retain Forms I-9.
    (b) Obligation to make records available--(1) In general. At the 
time of inspection, the Forms I-9 and all attachments must be made 
available in their original form or on microfilm or microfiche at the 
location where the request for production was made. If the Forms I-9 
and attachments are kept at another location, the person or entity must 
inform the officer of the Service, the Special Counsel for Immigration-
Related Unfair Employment Practices, or the Department of Labor of the 
location where the forms are kept and make arrangements for the 
inspection. Inspections may be performed at a Service office.
    (2) Standards for submitting microfilm or microfiche. The following 
standards shall apply to Forms I-9 and attachments presented on 
microfilm or microfiche submitted to an officer of the Service, the 
Special Counsel for Immigration-Related Unfair Employment Practices, or 
the Department of Labor: Microfilm when displayed on a microfilm reader 
(viewer) or reproduced on paper must exhibit a high degree of 
legibility and readability. For this purpose, legibility is defined as 
the quality of a letter or numeral which enables the observer to 
positively and quickly identify it to the exclusion of all other 
letters or numerals. Readability is defined as the quality of a group 
of letters or numerals being recognizable as words or whole numbers. A 
detailed index of all microfilmed data shall be maintained and arranged 
in such a manner as to permit the immediate location of any particular 
record. It is the responsibility of the employer, or recruiter or 
referrer for a fee:

[[Page 5306]]

    (i) To provide for the processing, storage, and maintenance of all 
microfilm, and
    (ii) To be able to make the contents thereof available as required 
by law. The person or entity presenting the microfilm will make 
available a reader-printer at the examination site for the ready 
reading, location, and reproduction of any record or records being 
maintained on microfilm. Reader-printers made available to an officer 
of the Service, the Special Counsel for Immigration-Related Unfair 
Employment Practices, or the Department of Labor shall provide safety 
features and be in clean condition, properly maintained, and in good 
working order. The reader-printers must have the capacity to display 
and print a complete page of information. A person or entity who is 
determined to have failed to comply with the criteria established by 
this regulation for the presentation of microfilm or microfiche to the 
Service, the Special Counsel for Immigration-Related Unfair Employment 
Practices, or the Department of Labor, and, at the time of the 
inspection, does not present a properly completed Form I-9 with 
attachments for the employee, is in violation of section 274A(a)(1)(B) 
of the Act and Secs. 274a.2 through 274a.6.
    (3) Recruiters or referrers. A recruiter or referrer for a fee who 
has designated an employer to complete the employment verification 
procedures may present a photocopy of the Form I-9 and attachments 
instead of presenting the Form I-9 and attachments in its original form 
or on microfiche, as set forth in Sec. 274a.2(b)(3).
    (c) Compliance with inspection. Any refusal or delay in 
presentation of the Form I-9 and attachments for inspection is a 
violation of the retention requirements as set forth in section 
274A(b)(3) of the Act.
    (d) Use of subpoena authority. No subpoena or warrant shall be 
required for an inspection under this section, but the use of such 
enforcement tools is not precluded. Any Service officer listed in 
Sec. 287.4 of this chapter may compel production of the Forms I-9 and 
attachments by issuing a subpoena if the person or entity has not 
complied with a request to present the Forms I-9 and attachments. Prior 
to the filing of a complaint under 28 CFR part 68, any Service officer 
listed in Sec. 287.4 of this chapter may compel by subpoena the 
attendance of witnesses and production of any evidence, including but 
not limited to Forms I-9 and attachments. Nothing in this section is 
intended to limit the Service's subpoena power under sections 235(d)(4) 
or 274A(e) (2)(C) of the Act.
    8. Section 274a.7 is revised to read as follows:


Sec. 274a.7  What is the prohibition on hiring or contracting with 
unauthorized aliens and what defense can be claimed?

    (a) Prohibition on the hiring and continuing employment of 
unauthorized aliens. A person or entity who hires, or recruits or 
refers for a fee, an individual after November 6, 1986, and who has 
actual or constructive knowledge that the individual is unauthorized to 
work, is in violation of section 274A(a) (1)(A) of the Act. A person or 
entity who continues to employ an individual hired after November 6, 
1986, and who has actual or constructive knowledge that the individual 
is or has become unauthorized, is in violation of section 274A(a)(2) of 
the Act.
    (b) Use of labor through contract. Any person or entity who uses a 
contract, subcontract, or exchange entered into, renegotiated, or 
extended after November 6, 1986, to obtain the labor or services of an 
alien in the United States who has actual or constructive knowledge 
that the alien is an unauthorized alien with respect to performing such 
labor or services, shall be considered to have hired the alien for 
employment in the United States in violation of section 274A(a)(1)(A) 
of the Act.
    (c) Good faith defense to charge of knowingly hiring an 
unauthorized alien. A person or entity who shows good faith compliance 
with the employment verification requirements of Sec. Sec. 274a.2 
through 274a.6 shall have established a rebuttable affirmative defense 
that the person or entity has not violated section 274A(a)(1)(A) of the 
Act with respect to such hiring, recruiting, or referral.
    9. Section 274a.8 is revised to read as follows:


Sec. 274a.8  What are the requirements of state employment agencies 
that choose to verify the identify and employment eligibility of 
individuals referred for employment by the agency?

    (a) General. Under sections 274A(a)(5) and 274A(b) of the Act, a 
state employment agency as defined in Sec. 274a.1 may, but is not 
required to, verify identity and employment eligibility of individual 
referred for employment by the agency. However, should a state 
employment agency choose to do so, it must:
    (1) Complete the verification process in accordance with the 
requirements of Secs. 274a.2 through 274a.6 provided that the 
individual may not present receipts, as set forth in Sec. 274a.3(d), in 
lieu of documents in order to complete the verification process; and
    (2) Complete the verification process prior to referral for all 
individuals for whom a certification is required to be issued under 
paragraph (c) of this section.
    (b) Compliance with the provisions of section 274A of the Act. A 
state employment agency which chooses to verify employment eligibility 
of individuals according to Secs. 274a.2 through 274a.6 shall comply 
with all provisions of section 274A of the Act and the regulations 
issued thereunder.
    (c) State employment agency certification.--(1) A state employment 
agency which chooses to verify employment eligibility according to 
paragraph (a) of this section shall issue to an employer who hires an 
individual referred for employment by the agency, a certification as 
set forth in paragraph (d) of this section. The certification shall be 
transmitted by the state employment agency directly to the employer, 
personally by an agency official, or by mail, so that it will be 
received by the employer within 21 business days of the date that the 
referred individual is hired. In no case shall the certification be 
transmitted to the employer from the state employment agency by the 
individual referred. During this period:
    (i) The job order or other appropriate referral form issued by the 
state employment agency to the employer, on behalf of the individual 
who is referred and hired, shall serve as evidence, with respect to 
that individual, of the employer's compliance with the provisions of 
section 274A(a)(1)(B) of the Act and the regulations issued thereunder.
    (ii) In the case of a telephonically authorized job referral by the 
state employment agency to the employer, an appropriate annotation by 
the employer shall be made and shall serve as evidence of the job 
order. The employer should retain the document containing the 
annotation where the employer retains Forms I-9.
    (2) Job orders or other referrals, including telephonic 
authorizations, which are used as evidence of compliance under 
paragraph (c)(1)(i) of this section shall contain:
    (i) The name of the referred individual;
    (ii) The date of the referral;
    (iii) The job order number or other applicable identifying number 
relating to the referral;
    (iv) The name and title of the referring state employment agency 
official; and
    (v) The telephone number and address of the state employment 
agency.

[[Page 5307]]

    (3) A state employment agency shall not be required to verify 
employment eligibility or to issue a certification to an employer to 
whom the agency referred an individual if the individual is hired for a 
period of employment not to exceed 3 days in duration. Should a state 
agency choose to verify employment eligibility and to issue a 
certification to an employer relating to an individual who is hired for 
a period of employment not to exceed 3 days in duration, it must verify 
employment eligibility and issue certifications relating to all such 
individuals. Should a state employment agency choose not to verify 
employment eligibility or issue certifications to employers who hire, 
for a period not to exceed 3 days in duration, agency-referred 
individuals, the agency shall notify employers that, as a matter of 
policy, it does not perform verifications for individuals hired for 
that length of time, and that the employers must complete the identify 
and employment eligibility requirements under Secs. 274a.2 through 
274a.6. Such notification may be incorporated into the job order or 
other referral form utilized by the state employment agency as 
appropriate.
    (4) An employer to whom a state employment agency issues a 
certification relating to an individual referred by the agency and 
hired by the employer, shall be deemed to have complied with the 
verification requirements of Secs. 274a.2 through 274a.6 provided that 
the employer:
    (i) Reviews the identifying information contained in the 
certification to ensure that it pertains to the individual hired;
    (ii) Observes the signing of the certification by the individual at 
the time of its receipt by the employer as provided for in paragraph 
(d)(13) of this section;
    (iii) Complies with the provisions of Sec. 274a.2(d) by either:
    (A) Updating the state employment agency certification in lieu of 
Form I-9, upon expiration of the employment authorization date, if any, 
which was noted on the certification issued by the state employment 
agency under paragraph (d)(11) of this section; or
    (B) By no longer employing an individual upon expiration of his or 
her employment authorization date noted on the certification;
    (iv) Retains the certification in the same manner prescribed for 
Form I-9 and attachments in Sec. 274a.4, to wit, 3 years after the date 
of the hire or 1 year after the date the individual's employment is 
terminated, whichever is later; and
    (v) Makes it available for inspection to officers of the Service or 
the Department of Labor, according to the provisions of section 
274A(b)(3) of the Act, and Sec. 274a.6.
    (5) Failure by an employer to comply with the provisions of 
paragraph (c)(4)(iii) of this section shall constitute a violation of 
section 274(a)(2) of the Act and shall subject the employer to the 
penalties contained in section 274A(e)(4) of the Act, and Sec. 274a.11.
    (d) Standards for state employment agency certifications. All 
certifications issued by a state employment agency under paragraph (c) 
of this section shall conform to the following standards. They must:
    (1) Be issued on official agency letterhead;
    (2) Be signed by an appropriately designated official of the 
agency;
    (3) Bear a date of issuance;
    (4) Contain the employer's name and address;
    (5) State the name and date of birth of the individual referred;
    (6) Identify the position or type of employment for which the 
individual is referred;
    (7) Bear a job order number relating to the position or type of 
employment for which the individual is referred;
    (8) Identify the document or documents presented by the individual 
to the state employment agency for the purposes of identity and 
employment eligibility verification;
    (9) State the identifying number of numbers of the document or 
documents described in paragraph (d)(8) of this section;
    (10) Certify that the agency has complied with the requirements of 
section 274A(b) of the Act concerning verification of the identify and 
employment eligibility of the individual referred, and has determined 
that, to the best of the agency's knowledge, the individual is 
authorized to work in the United States;
    (11) Clearly state any restrictions, conditions, expiration dates, 
or other limitations which relate to the individual's employment 
eligibility in the United States, or contain an affirmative statement 
that the employment authorization of the referred individual is not 
restricted;
    (12) State that the employer is not required to verify the 
individual's identity or employment eligibility, but must retain the 
certification in lieu of Form I-9;
    (13) Contain a space or a line for the signature of the referred 
individual, requiring the individual under penalty of perjury to sign 
his or her name before the employer at the time of receipt of the 
certification by the employer; and
    (14) State that counterfeiting, falsification, unauthorized 
issuance, or alteration of the certification constitutes a violation of 
Federal law under 18 U.S.C. 1546.
    (e) Retention of Form I-9 by state employment agencies. A Form I-9 
utilized by a state employment agency in verifying the identity and 
employment eligibility of an individual under Secs. 274a.2 through 
274a.6 must be retained by a state employment agency for a period of 3 
years from the date that the individual was last referred by the agency 
and hired by an employer. A state employment agency may retain a Form 
I-9 either in its original form, or on microfilm or microfiche.
    (f) Retention of state employment agency certifications. A 
certification issued by a state employment agency under this section 
shall be retained:
    (1) By a state employment agency, for a period of 3 years from the 
date that the individual was last referred by the agency and hired by 
an employer, and in a manner to be determined by the agency which will 
enable the prompt retrieval of the information contained on the 
original certification for comparison with the relating Form I-9;
    (2) By the employer, in the original form, and in the same manner 
and location as the employer has designated for retention of Forms I-9, 
and for the period of time provided in paragraph (c)(4)(iv) of this 
section.
    (g) State employment agency verification requirements in the case 
of an individual who was previously referred and certified. When a 
state employment agency refers an individual for whom the verification 
requirements have been previously complied with and a Form I-9 
completed, the agency shall inspect the previously completed Form I-9:
    (1) If, upon inspection of the Form, the agency determines that the 
Form I-9 pertains to the individual and that the individual remains 
authorized to be employed in the United States, no additional 
verification need be conducted and no new Form I-9 need be completed 
prior to issuance of a new certification provided that the individual 
is referred by the agency within 3 years of the execution of the 
initial Form I-9.
    (2) If, upon inspection of the Form, the agency determines that the 
Form I-9 pertains to the individual but that the individual does not 
appear to be authorized to be employed in the United States based on 
restrictions, expiration dates, or other conditions annotated on the 
Form I-9, the agency shall not issue

[[Page 5308]]

a certification unless the agency follows the updating procedures under 
Sec. 274a.2(d) of this part; otherwise the individual may no longer be 
referred for employment by the state employment agency.
    (3) For the purposes of retention of the Form I-9 by a state 
employment agency under paragraph (e) of this section, for an 
individual previously referred and certified, the state employment 
agency shall retain the Form for a period of 3 years from the date that 
the individual is last referred and hired.
    (h) Employer verification requirements in the case of an individual 
who was previously referred and certified. When an employer rehires an 
individual for whom the verification and certification requirements 
have been previously complied with by a state employment agency, the 
employer shall inspect the previously issued certification.
    (1) If, upon inspection of the certification, the employer 
determines that the certification pertains to the individual and that 
the individual remains authorized to be employed in the United States, 
no additional verification need be conducted and no new Form I-9 or 
certification need be completed provided that the individual is rehired 
by the employer within 3 years of the issuance of the initial 
certification, and that the employer follows the same procedures for 
the certification which pertain to Form I-9, as specified in 
Sec. 274a.5(b)(1)(i).
    (2) If, upon inspection of the certification, the employer 
determines that the certification pertains to the individual but that 
the certification reflects restrictions, expiration dates, or other 
conditions which indicate that the individual no longer appears 
authorized to be employed in the United States, the employer shall 
verify that the individual remains authorized to be employed and shall 
follow the updating procedures for the certification which pertain to 
Form I-9, as specified in Sec. 274a.5(b)(1)(ii).
    (3) For the purposes of retention of the certification by an 
employer under this paragraph for an individual previously referred and 
certified by a state employment agency and rehired by the employer, the 
employer shall retain the certification for a period of 3 years after 
the date that the individual is last hired, or 1 year after the date 
the individual's employment is terminated, whichever is later.
    10. Section 274a.9 is revised to read as follows:


Sec. 274a.9  Can a person or entity require an individual to provide a 
financial guarantee or indemnity against potential liability related to 
the hiring, recruiting, or referring of the individual?

    (a) General. It is unlawful for a person or other entity, in hiring 
or recruiting or referring for a fee for employment of an individual, 
to require the individual to post a bond or security, to pay or agree 
to pay an amount, or otherwise to provide a financial guarantee or 
indemnity, against any potential liability arising under this part 
relating to such hiring, recruiting, or referring of the individual. 
However, this prohibition does not apply to performance clauses which 
are stipulated by agreement between contracting parties.
    (b) Penalty. Any person or other entity who requires any individual 
to post a bond or security as stated in this section shall, after 
notice and opportunity for an administrative hearing in accordance with 
section 274A(e)(3)(B) of the Act, be subject to a civil fine of $1,000 
for each violation and to an administrative order requiring the return 
to the individual of any amounts received in violation of this section 
or, if the individual cannot be located, to the general fund of the 
Treasury.
    11. Section 274a.10 is revised to read as follows:


Sec. 274a.10  How are investigations initiated and employers notified 
of violations?

    (a) Procedures for the filing of complaints. Any person or entity 
having knowledge of a violation or potential violation of section 274A 
of the Act may submit a signed, written complaint in person or by mail 
to the Service office having jurisdiction over the business or 
residence of the potential violator. The signed, written complaint must 
contain sufficient information to identify both the complainant and the 
potential violator, including their names and addresses. The complaint 
should also contain detailed factual allegations relating to the 
potential violation including the date, time, and place of the alleged 
violation and the specific act or conduct alleged to constitute a 
violation of the Act. Written complaints may be delivered either by 
mail to the appropriate Service office or by personally appearing 
before any immigration officer at a Service office.
    (b) Investigation. The Service may conduct investigations for 
violations on its own initiative and without having received a written 
complaint. When the Service receives a complaint from a third party, it 
shall investigate only those complaints that have a reasonable 
probability of validity. If it is determined after investigation that 
the person or entity has violated section 274A of the Act, the Service 
may issue and serve a Notice of Intent to Fine or a Warning Notice upon 
the alleged violator. Service officers shall have reasonable access to 
examine any relevant evidence of any person or entity being 
investigated.
    (c) Warning notice. The Service and/or the Department of Labor may 
in their discretion issue a Warning Notice to a person or entity 
alleged to have violated section 274A of the Act. This Warning Notice 
will contain a statement of the basis for the violations and the 
statutory provisions alleged to have been violated.
    (d) Notice of Intent to Fine. The proceeding to assess 
administrative penalties under section 274A of the Act is commenced 
when the Service issues a Notice of Intent to Fine on Form I-763. 
Service of this Notice shall be accomplished according to 8 CFR Part 
103. The person or entity identified in the Notice of Intent to Fine 
shall be known as the respondent. The Notice of Intent to Fine may be 
issued by an officer defined in Sec. 239.1(a) of this chapter with 
concurrence of a Service attorney.
    (1) Contents of the Notice of Intent to Fine. (i) The Notice of 
Intent to Fine will contain the basis for the charge(s) against the 
respondent, the statutory provisions alleged to have been violated, and 
the penalty that will be imposed.
    (ii) The Notice of Intent to Fine will provide the following 
advisals to the respondent:
    (A) That the person or entity has the right to representation by 
counsel of his or her own choice at no expense to the Government;
    (B) That any statement given may be used against the person or 
entity;
    (C) That the person or entity has the right to request a hearing 
before an administrative law judge under 5 U.S.C. 554-557, and that 
such request must be made within 30 days from the service of the Notice 
of Intent to Fine;
    (D) That the Service will issue a final order in 45 days if a 
written request for a hearing is not timely received and that there 
will be no appeal of the final order.
    (e) Request for hearing before an administrative law judge. If a 
respondent contests the issuance of a Notice of Intent to Fine, the 
respondent must file with the Service, within 30 days of the service of 
the Notice of Intent to Fine, a written request for a hearing before an 
administrative law judge. Any written request for a hearing submitted 
in a foreign language must be

[[Page 5309]]

accompanied by an English language translation. A request for a hearing 
is not deemed to be filed until received by the Service office 
designated in the Notice of Intent to Fine. In computing the 30-day 
period prescribed by this section, the day of service of the Notice of 
Intent to Fine shall not be included. If the Notice of Intent to Fine 
was served by ordinary mail, 5 days shall be added to the prescribed 
30-day period. In the request for a hearing, the respondent may, but is 
not required to, respond to each allegation listed in the Notice of 
Intent to Fine.
    (f) Failure to file a request for hearing. If the respondent does 
not file a request for a hearing in writing within 30 days of the day 
of service of the Notice of Intent to Fine (35 days if served by 
ordinary mail), the Service shall issue a final order from which there 
is no appeal.
    12. Section 274a.11 is added to read:


Sec. 274a.11  What penalties may be imposed for violations?

    (a) Criminal penalties. Any person or entity which engages in a 
pattern or practice of violations of section 274A(a)(1)(A) or (a)(2) of 
the Act shall be fined not more than $3,000 for each unauthorized 
alien, imprisoned for not more than 6 months for the entire pattern or 
practice, or both, notwithstanding the provisions of any other Federal 
law relating to fine levels.
    (b) Civil penalties. A person or entity may face civil penalties 
for a violation of section 274A of the Act. Civil penalties may be 
imposed by the Service or an administrative law judge for violations 
under section 274A of the Act. In determining the level of the 
penalties that will be imposed, a finding of more than one violation in 
the course of a single proceeding or determination will be counted as a 
single offense. However, a single offense will include penalties for 
each unauthorized alien who is determined to have been knowingly hired 
or recruited or referred for a fee.
    (1) A respondent found by the Service or an administrative law 
judge to have knowingly hired, or to have knowingly recruited or 
referred for a fee, an unauthorized alien for employment in the United 
States or to have knowingly continued to employ an unauthorized alien 
in the United States, shall be subject to the following order:
    (i) To cease and desist from such behavior;
    (ii) To pay a civil fine according to the following schedule:
    (A) First offense--not less than $250 and not more than $2,000 for 
each unauthorized alien, or
    (B) Second offense--not less than $2,000 and not more than $5,000 
for each unauthorized alien; or
    (C) More than two offenses--not less than $3,000 and not more than 
$10,000 for each unauthorized alien; and
    (iii) To comply with the requirements of Sec. 274a.2(b), and to 
take such other remedial action as appropriate.
    (2) A respondent determined by the Service (if a respondent fails 
to request a hearing) or by an administrative law judge to have failed 
to comply with the employment verification requirements as set forth in 
Secs. 274a.2 through 274a.6, shall be subject to a civil penalty in an 
amount of not less than $100 and not more than $1,000 for each 
individual with respect to whom such violation occurred. In determining 
the amount of the penalty, consideration shall be given to:
    (i) The size of the business of the employer being charged;
    (ii) The good faith of the employer;
    (iii) The seriousness of the violation;
    (iv) Whether or not the individual was an unauthorized alien; and
    (v) The history of previous violations of the employer.
    (3) Where an order is issued with respect to a respondent composed 
of distinct, physically separate subdivisions which do their own 
hiring, or their own recruiting or referring for a fee for employment 
(without reference to the practices of, and under the control of, or 
common control with another subdivision) the subdivision shall be 
considered a separate person or entity.
    (c) Enjoining pattern or practice violations. If the Attorney 
General has reasonable cause to believe that a person or entity is 
engaged in a pattern or practice of employment, recruitment, or 
referral in violation of section 274A(a)(1) (A) or (B) of the Act, the 
Attorney General may bring civil action in the appropriate United 
States District Court requesting relief, including a permanent or 
temporary injunction, restraining order, or other order against the 
person or entity, as the Attorney General deems necessary.
    (d) Pre-enactment provisions for employees hired prior to November 
7, 1986. The penalty provisions set forth in section 274A (e) and (f) 
of the Act for violations of sections 274A(a)(1)(B) and 274A(a)(2) of 
the Act shall not apply to employees who were hired prior to November 
7, 1986, and who are continuing in their employment and have a 
reasonable expectation of employment and have a reasonable expectation 
of employment at all times (as set forth in Sec. 274a.5(a)), except 
those individuals described in Secs.  274a.5(a)(vii) and (a)(1)(vii) 
and (a)(1)(viii)). For purposes of this section, an employee who are 
hired prior to November 7, 1986, shall lose his or hers pre-enactment 
status if the employee:
    (1) Quits;.
    (2) Is terminated by the employer; the term termination shall 
include, but is not limited to, situations in which an employee is 
subject to seasonal employment.
    (3) Is excluded or deported from the United States or departs the 
United States under a grant of voluntary departure; or
    (4) Is no longer continuing his or her employment (or does not have 
a reasonable expectation of employment at all times) as set forth in 
Sec. 274a.5(a).

PART 299--IMMIGRATION FORMS

    13. Section 299.1 is amended by adding to the listing of forms, in 
proper numerical sequence, the entry for Form ``I-9A'' to read as 
follows:


Sec. 299.1  Prescribed forms.

* * * * *

------------------------------------------------------------------------
           Form No.                Edition date            Title        
------------------------------------------------------------------------
                                                                        
*                  *                  *                  *              
                                     *                                  
I-9A..........................  xxxxx............  Employment           
                                                    Eligibility         
                                                    Reverification.     
                                                                        
*                  *                  *                  *              
                                     *                                  
------------------------------------------------------------------------

    14. Section 299.5 is amended by adding to the listing of forms, in 
proper numerical sequence, the entry for form ``I-9A'' to read as 
follows:


Sec. 299.5  Display of control numbers.

* * * * *

[[Page 5310]]



------------------------------------------------------------------------
                                                            Currently   
         INS form No.               INS form title        assigned OMB  
                                                           control No.  
------------------------------------------------------------------------
                                                                        
*                  *                  *                  *              
                                     *                                  
I-9A..........................  Employment Eligibility  1115-           
                                 Reverification.                        
                                                                        
*                  *                  *                  *              
                                     *                                  
------------------------------------------------------------------------

    Dated: January 22, 1998.
Doris Meissner,
Commissioner, Immigration and Naturalization Service.

    Note: The Form I-9 and Form I-9A will not appear in the Code of 
Federal Regulations.

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[FR Doc. 98-2124 Filed 1-30-98; 8:45 am]
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