[Federal Register Volume 63, Number 66 (Tuesday, April 7, 1998)]
[Proposed Rules]
[Pages 16909-16913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8969]


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DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Part 274a

[INS No. 1819-96]
RIN 1115-AE70


Limiting Liability for Certain Technical and Procedural 
Violations of Paperwork Requirements

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to amend the regulations of the Immigration 
and Naturalization Service (Service) by limiting liability for certain 
technical and procedural violations of paperwork requirements for those 
employers that have made a good faith attempt to comply with a 
particular employment verification requirement. This rule is necessary 
to implement section 411 of the Illegal Immigration Reform and 
Immigrant Responsibility Act of 1996 (IIRIRA) Public Law 104-208.

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


[[Page 16910]]


ADDRESSES: Please submit written comments, in triplicate, to the 
Director, Policy Directives and Instructions Branch, Immigration and 
Naturalization Service, 425 I Street, NW., Room 5307, Washington, DC 
20536. To ensure proper handling please reference INS No. 1819-96 on 
your correspondence. Comments are available for public inspection at 
the above address by calling (202) 514-3048 to arrange for an 
appointment.

FOR FURTHER INFORMATION CONTACT:
Angelo Sorrento, Senior Special Agent, Immigration and Naturalization 
Service, HQINV, 425 I Street, NW., Washington, DC 20536; telephone 
(202) 514-2998.

SUPPLEMENTARY INFORMATION: 

What is the Purpose of This Rule?

    This rule proposes to amend Service regulations to implement 
section 411 of IIRIRA, which was enacted on September 30, 1996. This 
legislation significantly amended the Immigration and Nationality Act 
(Act) by allowing employers who have made a good faith attempt to 
comply with a particular employment verification requirement to correct 
technical or procedural failures to meet the verification requirement 
before such failures are deemed to be violations of the Act. This 
proposed rule ensures that the good faith compliance provision relieves 
employers from strict liability with respect to minor, unintentional 
violations of the employment verification requirements, but does not 
provide a shield for employers to avoid the requirements of the Act.

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

    This proposed rule applies to technical or procedural verification 
failures with respect to the current Form I-9 (11/21/91 version). On 
February 2, the Service published a proposed rule, INS# 1890-97, 
Reduction in the Number of Acceptable Documents and Other Changes to 
Employment Verification Requirements (63 FR 5287). A draft revision to 
the Form I-9 was published for comment with that proposed rule. That 
revision was intended to simplify and clarify the verification 
requirements, and the Service hopes that improvements to the form will 
help employers avoid inadvertent violations. Any changes to the good 
faith compliance regulations which are required by a future revision of 
the Form I-9 will be published with appropriate notice and comment 
periods.

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

    The good faith compliance provision amends section 274A(b) of the 
Act by adding a new provision, found in sections 274A(b)(6)(A), (B), 
and (C) of the Act. Section 274A(b)(6)(A) of the Act provides that a 
person or entity that has made a good faith attempt to comply with an 
employment verification requirement of section 274A(b) of the Act will 
be considered to have complied with the requirement, notwithstanding a 
technical or procedural failure to meet such requirement. This holds 
true unless one of two exceptions applies. First, section 274A(b)(6)(B) 
of the Act provides that a person or entity will be considered not to 
have complied with the requirement if: (1) the Service or other 
enforcement agency has explained to the person or entity the basis for 
the failure; (2) the person or entity has been provided a period of not 
less than 10 business days, beginning after the date of the 
explanation, within which to correct the failure; and (3) the person or 
entity has not corrected the failure within such period. Second, 
section 274A(b)(6)(C) of the Act provides that a person or entity will 
be considered not to have complied with the requirement if the person 
or entity is engaging in a pattern or practice of knowing hire or 
continuing to employ violations of sections 274A(a)(1)(A) or 274A(a)(2) 
of the Act.

When does the Good Faith Compliance Provision Take effect?

    Section 411 of IIRIRA applies to failures occurring on or after 
September 30, 1996. Except for timeliness failures, failures to meet a 
verification requirement continue from the first day the requirement 
must be met until: (1) the day that the failures are corrected; (2) the 
day that the failures can no longer be corrected, such as when the 
Service or other enforcement agency inspects the employer's Employment 
Verification Forms (Form I-9); or (3) the day that the duty to meet the 
requirement ceases. Continuing failures that persist on or after 
September 30, 1996, therefore, fall within the purview of section 411 
of IIRIRA, even if the failures first occurred on Form I-9 prepared 
before the date of enactment. The Service has determined that section 
411 of IIRIRA will apply to cases arising out of inspections conducted 
on or after September 30, 1996. For failures associated with timely 
completion of the Form I-9, section 411 of IIRIRA will not apply if the 
requirement to complete the Form I-9 should have been met before 
September 30, 1996.

What Does This Proposed Rule do?

    This proposed rule defines the term technical or procedural failure 
to meet such requirement, clairifes when an employer has not made a 
good faith attempt to comply with the requirement, and describe show an 
employer who is notified of technical or procedural failures is 
required to correct such failures to bring himself or herself into 
compliance with the employment verification requirements of the Act.

What are Technical or Procedural Verification Failures?

    Because the good faith compliance provision applies to technical or 
procedural failures to comply with a particular verification 
requirement rather than the verification requirements as a whole, the 
Service must identify the substantive and technical or procedural 
components of each statutory verification requirement in section 274(b) 
of the Act in order to form the basis for the proposed rule.
    This rule proposes to define the term technical or procedural 
failure to meet such requirement as the failure of a person or entity 
to: (1) ensure that an individual provides his or her maiden name, 
address, or birth date in section 1 of the Form I-9; (2) ensure that an 
individual provides his or her Alien number on the line next to the 
phrase in section 1 of the Form I-9, ``A Lawful permanent Resident,'' 
but only if the Alien number is provided in sections 2 or 3 of the Form 
I-9 (or on a legible copy of a document retained with the Form I-9 (or 
on a legible copy of a document retained with the Form I-9 and 
presented at the I-9 inspection); (3) ensure that an individual 
provides his or her Alien number or Admission number on the line 
provided under the phrase in section 1 of the Form I-9, ``An alien 
authorized to work until'' but only if the Alien number or Admission 
number is provided in sections 2 or 3 of the Form I-9 (or on a legible 
copy of a document retained with the Form I-9 and presented at the I-9 
inspection); (4) ensure that an individual dates section 1 of the Form 
I-9; (5) ensure that an individual completes section 1 of the Form I-9 
timely by dating section 1 of the Form I-9 at the time of hire, if the 
time of hire occurred on or after September 30, 1996; (6) ensure that a 
preparer and/or translator provides his or her name, address, 
signature, or date; (7) provide the document title, identification 
number(s) and/or expiration date(s) of a proper List A document or 
proper List B and List C

[[Page 16911]]

documents in section 2 of the Form I-9, but only if a legible copy of 
the document(s) is retained with the Form I-9 and presented at the I-9 
inspection; (8) provide the title, business name and business address 
in section 2 of the Form I-9; (9) provide the date of hire in the 
attestation portion of section 2 of the Form I-9; (10) date section 2 
of the Form I-9; (11) complete section 2 of the Form I-9 timely by 
dating section 2 of the Form I-9 within 3 business days of the date the 
individual is hired or, if the individual is hired for 3 business days 
or less, at the time of hire if the date on which section 2 had to be 
completed occurred on or after September 30, 1996; (12) provide the 
document title, identification number(s), and/or expiration date(s) of 
a proper List A or List C document in section 3 of the Form I-9, but 
only if a legible copy of the document is retained with the Form I-9 
and presented at the I-9 inspection; or (13) provide the date of rehire 
in section 3 of the Form I-9.

What are the Principal Verification Requirements That are not 
covered by This Definition?

    Section 274A(b) of the Act delineates three principal employment 
verification requirements: (1) individual attestation of employment 
authorization on a verification form; (2) employer attestation on a 
verification form after examination of identity and employment 
eligibility documents; and (3) retention of the verification form. The 
list of technical or procedural failures defined in this proposed rule 
reflects those components of the statutory provision and current 
regulations that fall outside the principal components.
    The principal components of the individual attestation are 
identified as the subject matter of the attestation, namely, the 
individual's identification of whether he or she is a citizen or 
national of the United States, Lawful Permanent Resident or alien 
authorized to work until a specified date, and the individual's 
signature. The principal components of the employer attestation are 
identified as the subject matter of the attestation, namely, the 
examination of proper identity and employment authorization documents, 
and the employer's signature. The principal components of the retention 
requirements are identified as completion of the Form I-9 itself and 
maintenance of the Form I-9 for the periods specified in the Act since, 
without either the Form I-9 or its retention, the employment 
verification requirements would be ineffectual.

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

    The term good faith attempt to comply with the requirement is not 
directly defined in this proposed rule. Rather, this proposed rule 
clarifies when an employer has not made a good faith attempt to comply 
with a particular requirement and, thus, does not gain the benefit of 
the notification and correction period requirements of section 
274A(b)(6) of the Act.

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

    An employer has not made a good faith attempt to comply with a 
particular requirement when: (a) the employer committed the technical 
or procedural failure to intentionally avoid the verification 
requirement or knowingly relied on the good faith compliance provision; 
(b) the employer corrected or attempted to correct the failure with 
knowledge, or in reckless disregard of the fact that the correction or 
the attempted correction contains false information or a material 
misrepresentation; (c) the employer prepared the Form I-9 with 
knowledge or in reckless disregard of the fact that the Form I-9 
contains false information or a material misrepresentation; or (d) the 
type of failure was previously the subject of a Warning Notice, Notice 
of Intent to Fine, or notification of technical or procedural failures. 
Intentional avoidance of the requirements can be demonstrated 
circumstantially through such evidence as a large number of 
unauthorized aliens in the employer's work force combined with a 
pattern of failures with respect to those unauthorized aliens, or 
failure of the employer to prepare Forms I-9 for his or her employees 
until after the Service notifies the employer through the Notice of 
Inspection that the Service intends to conduct an I-9 inspection. This 
proposed rule is not intended to provide a shield for employers to 
avoid the requirements of the Act.

How can Employers Correct Technical or Procedural Verification 
Failures?

    This rule proposes a mechanism for employers to correct technical 
or procedural failures for which they have been notified. To be deemed 
to have properly corrected a technical or procedural failure identified 
in section 1 of the Form I-9, the employer must ensure that the 
individual, preparer, and/or translator corrects the failure on the 
Form I-9, initials the correction, and dates the correction. To be 
deemed to have properly corrected a technical or procedural failure 
identified in sections 2 or 3 of the Form I-9, the employer must 
correct the failure on the Form I-9, and then initial and date the 
correction.
    The Service recognizes that the correction of technical or 
procedural failures is sometimes impossible, whether due to the nature 
of the failure, such as a timeliness failure, or to the inability of 
the employer to access the necessary information, such as when the 
information has been independently destroyed or is inaccessible due to 
termination of the individual's employment. This rule proposes that, 
where the employer's explanation of an inability to correct a technical 
or procedural failure is reasonable, the employer will be deemed to 
have complied with the requirement, notwithstanding the inability to 
correct the failure.
    This proposed rule in no way affects the Service's authority to 
enforce verification failures that are not characterized as technical 
or procedural.

What About the Other Employment-Related IIRIRA Provisions?

    This is one of four rules the Service is proposing to implement 
IIRIRA amendments to section 274A of the Act. In addition to this rule, 
we are developing and publishing proposed rules to:
    (a) Implement sections 412(a), 412(d), and 416 of the IIRIRA by: 
(1) eliminating certain documents currently used in the employment 
eligibility verification (Form I-9) process; (2) including any branch 
of the Federal Government in the definition of entity for employer 
sanctions purposes; and (3) clarifying the Service's authority to 
compel by subpoena the appearance of witnesses and production of 
evidence when investigating possible violations of section 274A of the 
Act. This proposed rule and a proposed revision to the Form I-9 were 
published for comment on February 2. This proposed rule includes 
numerous changes intended to simplify the verification procedures;
    (b) Implement changes to the application process for obtaining 
employment authorization from the Service. This proposed rule will 
include a revision to the Form I-765, Application for Employment 
Authorization, and revisions to Subpart B of Part 274a; and
    (c) Implement section 412(b) of IIRIRA, which permits an employer 
which is a member of an association of two or more employers that hires 
an individual who is a member of a collective bargaining unit and is 
employed under a collective bargaining agreement entered into between 
one or

[[Page 16912]]

more employee organizations and the association to use the Form I-9 
completed for that individual within 3 years (or, if less, the period 
of time that the individual is authorized to be employed in the United 
States) by a prior employer which is a member of the same association.

Regulatory Flexibility Act

    The Commissioner, in accordance with the Regulatory Flexibility Act 
(5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, 
certifies that this rule does not have a significant economic impact on 
a substantial number of small entities. This rule eases the burden on 
small businesses by ensuring that employers who make a good faith 
effort to comply with the employment verification provisions are not 
penalized for technical and procedural failures.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any 1 year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100 million or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign-based companies in domestic and export markets.

Executive Order 12866

    This rule is considered by the Department of Justice, Immigration 
and Naturalization Service, to be a ``significant regulatory action'' 
under Executive Order 12866, section 3(f), Regulatory Planning and 
Review. Accordingly, this regulation has been submitted to the Office 
of Management and Budget for review.

Executive Order 12612

    The regulation adopted herein will not have substantial direct 
effects on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, in 
accordance with Executive Order 12612, it is determined that this rule 
does not have sufficient federalism implications to warrant the 
preparation of a Federalism Assessment.

Executive Order 12988 Civil Justice Reform

    This proposed rule meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of E.O. 12988.

Paperwork Reduction Act

    This proposed rule does not impose any new reporting or 
recordkeeping requirements. The information collection requirements 
contained in this rule were previously approved for use by the Office 
of Management and Budget (OMB). The OMB control number for these 
collections is contained in 8 CFR 299.5, Display of control numbers.

List of Subjects in 8 CFR Part 274a

    Administrative practice and procedure, Aliens, Employment, 
Penalties, Reporting and recordkeeping requirements.
    Accordingly, part 274a of chapter I of title 8 of the Code of 
Federal Regulations is proposed to be amended as follows:

PART 274a--CONTROL OF EMPLOYMENT OF ALIENS

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

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

    2. Section 274a.1 is amended by:
    a. Removing the ``.'' at the end of paragraph (1)(2) and replacing 
it with a ``;'' and by
    b. Adding a new paragraph (n) to read as follows:


Sec. 274a.1  Definitions

* * * * *
    (n) The term technical or procedural failure to meet such 
requirement means failure of a person or entity to:
    (1) In section 1 of the Form I-9:
    (i) Ensure that an individual hired or recruited or referred for a 
fee provides his or her maiden name, address, or birth date;
    (ii) Ensure that an individual provides his or her Alien number on 
the line next to the phrase ``A Lawful Permanent Resident'', but only 
if the Alien number is provided in sections 2 or 3 of the Form I-9 (or 
on a legible copy of a document retained with the Form I-9 and 
presented at the I-9 inspection);
    (iii) Ensure that an individual provides his or her Alien number or 
Admission number on the line provided under the phrase ``An alien 
authorized to work until'', but only if the Alien number or Admission 
number is provided in sections 2 or 3 of the Form I (or on a legible 
copy of a document retained with the Form I-9 and presented at the I-9 
inspection);
    (iv) Ensure that an individual dates section 1 of the Form I-9;
    (v) Ensure that an individual completes section 1 of the Form I-9 
timely by dating section 1 of the Form I-9 at the time of hire, if the 
time of hire occurred on or after September 30, 1996; and
    (vi) Ensure that a preparer/translator provides his or her name, 
address, signature, and date.
    (2) In section 2 of the Form I-9:
    (i) Provide the document title, identification number(s) and/or 
expiration date(s) of a proper List A document or proper List B and 
List C documents, but only if a legible copy of the document(s) is 
retained with the Form I-9 and presented at the I-9 inspection;
    (ii) Provide the title, business name, and business address;
    (iii) Provide the date of hire in the attestation portion;
    (iv) Date section 2 of the Form I-9; and
    (v) Complete section 2 of the Form I-9 timely by dating section 2 
of the Form I-9 within 3 business days of the date the individual is 
hired or, if the individual is hired for 3 business days or less, at 
the time of hire, if the date on which section 2 had to be completed 
occurred on or after September 30, 1996.
    (3) In section 3 of the Form I-9:
    (i) Provide the document title, identification number(s), and/or 
expiration date(s) of a proper List A or List C document, but only if a 
legible copy of the document is retained with the Form I-9 and 
presented at the I-9 inspection; and
    (ii) Provide the date of rehire.
    3. Section 274a.2 is amended by adding a new paragraph (e) to read 
as follows:


Sec. 274a.2  Verification of employment eligibility.

* * * * *
    (e) Good faith compliance with the employment verification 
requirements notwithstanding technical or procedural failures. (1) In 
the case of I-9 inspections conducted on or after September 30, 1996, 
an employer or recruiter or referrer for a fee will not be subject to 
civil monetary penalties under Sec. 274a.10(b) for technical or

[[Page 16913]]

procedural failures to meet a requirement of section 274A(b) of the Act 
if the employer or recruiter or referrer for a fee made a good faith 
attempt to meet such requirement. An employer or recruiter or referrer 
for a fee will not be considered to have made a good faith attempt to 
meet such requirement when:
    (i) The technical or procedural failure was committed with the 
intent to avoid a requirement of the Act, as demonstrated by the 
totality of circumstances including but not limited to the substantial 
presence of unauthorized aliens hired by the employer combined with a 
pattern of repeated failures in the completion of the Form I-9 with 
respect to such unauthorized aliens, or failure of the employer to 
prepare the Form I-9 until after the employer is served with a Notice 
of Inspection;
    (ii) The technical or procedural failure was committed in knowing 
reliance on section 274A(b)(6) of the Act;
    (iii) The employer or recruiter or referrer for a fee corrected or 
attempted to correct the technical or procedural failure with knowledge 
or in reckless disregard of the fact that the correction or attempted 
correction contained a false, fictitious, or fraudulent statement or 
material misrepresentation, or has no basis in law or fact;
    (iv) The employer or recruiter or referrer for a fee prepared the 
Form I-9 with knowledge or in reckless disregard of the fact that the 
Form I-9 contained a false, fictitious, or fraudulent statement or 
material misrepresentation, or has no basis in law or fact; or
    (v) The type of failure was previously the subject of a Warning 
Notice described in Sec. 274a.9(c) or Notice of Intent to Fine 
described in Sec. 274a.9(d), or a notice of technical or procedural 
failures.
    (2) An employer or recruiter or referrer for a fee will be subject 
to civil money penalties under Sec. 274a.10(b) notwithstanding 
paragraph (e)(1) of this section if, after receiving notice of the 
technical or procedural failure(s), the employer or recruiter or 
referrer for a fee does not voluntarily correct the failure(s) on the 
Form I-9 by the date specified in the notice. The date specified in the 
notice must be at least 10 days after the date the notice is received 
in the case of personal service and 15 days after the date on the 
notice in the case of service by certified or regular mail. No penalty 
will apply if the failure could not reasonably be corrected, and the 
employer or recruiter or referrer for a fee provides a Service officer 
with an explanation of why the failure(s) cannot reasonably be 
corrected by the date specified in the notice. This explanation may be 
written or oral at the discretion of the Service officer. The employer 
or recruiter or referrer for a fee will be deemed to have properly 
corrected a technical or procedural failure where the employer or 
recruiter or referrer for a fee:
    (i) In the case of a failure in section 1 of the Form I-9, ensures 
that the individual, preparer and/or translator corrects the failure on 
the Form I-9, initials the correction, and dates the correction; or
    (ii) In the case of a failure in sections 2 or 3 of the Form I-9, 
corrects the failure on the Form I-9, initials the correction, and 
dates the correction.

    Dated: March 29, 1998.
Doris Meissner,
Commissioner, Immigration and Naturalization Service.
[FR Doc. 98-8969 Filed 4-6-98; 8:45 am]
BILLING CODE 4410-10-M