On Mar 01 2011 by Elise A. Fialkowski

USCIS Issues New I-9 Guidance: What’s All the Fuss About?

On Jan. 12, the U.S. Citizenship and Immigration Services (USCIS) released their latest version of the "Handbook for Employers" (M-274). Federal immigration law requires that all U.S. employers verify the identity and employment authorization for every worker they hire after Nov. 6, 1986, regardless of the employee's immigration status.

The handbook is the service’s official guide to completion of the I-9, Employment Eligibility Verification Form and serves as an important resource to employers in the employment eligibility process. Additionally, the handbook offers guidance on E-Verify requirements, as well as the anti-discrimination provisions of the Immigration and Nationality Act. The new handbook replaces the previous edition, which took effect in April 2009.

The handbook has been revised and updated with new information about applicable regulations, including new regulations about electronic storage and retention of Forms I-9; it clarifies how to process an employee with a complicated immigration status; and responds to frequently asked questions. It is encouraging to see that the USCIS has worked diligently to try to address many of the comments and concerns that they received over the past year from the public. While the handbook does reflect the service’s efforts to clarify many contentious issues, it still leaves many substantive issues unresolved. Additionally, for employers with foreign nationals on their workforce, the I-9 compliance process has become lengthier and more burdensome.

Timetable for Completion of the Form I-9

The handbook confirms that an employer must review the employee’s documents and fully complete the Form I-9 within three business days of the first day of work for pay. This does not include the actual date of hire. Therefore, if an employee begins work on a Monday, the Form I-9 would have to be completed by Thursday. This change in USCIS policy was adopted in the past year and the handbook’s confirmation of it serves as an important reminder for employers that they must continually update their corporate compliance policies and training materials for the use of their hiring personnel.

F-1 Students and Cap Gap

The new handbook provides concrete instructions on how to complete the Form I-9 for F-1 students who are changing status to H-1B and are working under the “cap gap” extension of status and employment authorization. A cap-gap extension automatically extends an eligible F-1 student’s status to bridge the gap between the end of their student status when they are working pursuant to Optional Practical Training (OPT) and the start of their H-1B status. Quota or cap-subject H-1B status can not begin earlier than the first day of the government’s fiscal year, which is Oct. 1. The cap-gap provision allows the student to remain in the United States and continue working during the “gap.” The cap-gap extension is available to students who, as of April 1 of each year, were either on approved OPT or in their 60-day grace period and have a pending or approved change-of-status cap-subject H-1B petition.

USCIS now requires that the employer re-verify the student’s I-9 no later than Oct. 1. Specifically, the employer must ensure that the student’s school endorsed the cap-gap extension on the Form I-20, which governs a student’s status in the United States. The employer is also now required to record the student’s I-20 number in Section 2 of the Form I-9. The handbook confirms that the student will remain work eligible through Sept. 30 of the calendar year in which the H-1B petition was filed, as long as the student’s H-1B status was requested to begin on Oct. 1. Similarly, Form I-9s for J-1, Exchange Visitors will also now require that the person completing the I-9 include their DS-2019 number in Section 2.

H-1B Portability

The new guidance provides simplified procedures for verifying the employment eligibility of H-1B employees who have changed employers (known as H-1B portability) in accordance with the provisions of the American Competitiveness in the Twenty-First Century Act (AC-21). The handbook states that when an H-1B worker “ports” to a new employer a Form I-797, Receipt Notice from USCIS evidencing filing of the H-1B “Change of Employer” petition is not required to begin employment. This means that a foreign national in H-1B status can change employers and begin working immediately upon the filing of the H-1B Change of Employer petition. To complete the Form I-9, the employee may present his or her passport and the Form I-94, Arrival/ Departure Record issued by his or her previous employer as List A documents confirming their work eligibility. Additionally, employers must write AC-21 and the date that the H-1B Change of Employer petition was submitted to USCIS in the margin of the form next to Section 2.

In the 2009 version of the Handbook, USCIS had reversed their long-standing practice of allowing employees to begin working for a new employer upon the filing of the H-1B Change of Employer petition. This policy drew complaints from many in the business community because employers would often wait weeks to obtain a receipt notice from USCIS that would allow the H-1B worker to commence employment with the new employer. Restoring an H-1B workers ability to “port” and complete the I-9, without a Form I-797 Receipt Notice from USCIS first being required is a welcome change.

Although this appears to be a positive development it also raises many questions. The handbook does not provide any guidance on when, or if, employers are required to re-verify the H-1B employee’s work eligibility once the petition is adjudicated. Likewise, no guidance is given for how long the AC-21 notation is valid for. Will Immigration and Customs Enforcement (ICE), the principal investigative arm of the U.S. Department of Homeland Security, penalize employers who fail to later update the I-9 with evidence of the petition’s approval?

Nonimmigrant Work Visa Extensions

The handbook explains that when an extension request is filed on behalf of an H-1B employee prior to the expiration of his or her H-1B status, the employee remains work authorized for up to 240 days while the extension request remains pending. For H-1Bs, the employer is required to write “240 Day Ext.” and record the date that the extension request was submitted to the USCIS in the margin of Form I-9 next to Section 2. The handbook also provides a detailed description on how to properly complete the Form I-9 and the specific documentation that should be attached for individuals in E, L, O, P, Q, R or TN nonimmigrant work status who have timely filed extension requests with the same employer.

Employers must reverify an employee’s employment authorization in Section 3 once they receive a decision on the extension request or by the end of the 240 day period, whichever comes first. To reverify, employers must list the document title, number and expiration date in Section 3. They are also required to provide the employee with Form I-94A, which is evidence of the employee’s work authorized status in the United States.

In the cases of extension requests, the handbook states that the following documentation should now be attached to the Form I-9: a copy of the Form I-129 filed with USCIS, proof of payment of the filing fee for the new petition and evidence that the petition was mailed to the USCIS. After the extension is filed, USCIS will issue a Form I-797 receipt notice, which should also then be added and retained with the Form I-9. The Handbook offers no guidance on whether retention of these documents is a mandatory requirement and how non-compliance would be viewed by ICE, in the case of an I-9 audit.

Recording Name Changes for Current Employees

USCIS has clarified that employers are not required to update the Form I-9 in instances where an employee changes his or her name because of marriage or for other reasons. However, if they wish to do so, this change can be made in Section 3 of the Form I-9. Employers are also advised that they may accept a document with a different name than what was entered in Section 1 in order to complete Section 3, as long as the employer is satisfied that the documents appear to be genuine and relate to the employee.

Of concern is the suggestion by USCIS that the employer may request additional identity documentation from the employee to satisfy this requirement. This suggestion flies in the face of Department of Justice, Office of Special Counsel guidance which warns employers against over-documentation and document abuse during the I-9 process that can be considered a violation of the Immigration and Nationality Act’s anti-discrimination provisions. The handbook also reminds government contractors required to use E-Verify that a name change requires the completion of a new Form I-9 under the Federal Acquisition Regulation regulation.

Implications for Employers Using Electronic I-9 Systems

The handbook now provides detailed instructions for employers who choose to retain their Form I-9s using an electronic I-9 system. The new guidelines require employers to maintain and make available upon request complete descriptions of the electronic generation, storage system and the indexing system that permits the identification and retrieval of documents and records maintained in the systems.

Employers will also need to contact their electronic I-9 providers to ensure that they can quickly alter their electronic versions of the Form I-9 to permit the employer to write in the margins and other areas of the form as is now required by the handbook. The handbook’s changes will certainly impose additional time and expense on electronic I-9 providers who are now required to implement these changes.

So What Does It All Mean?

A lot of this information seems technical and many employers may balk at investing significant time and resources on reviewing a 69-page handbook that seeks to provide supplemental guidance in the completion of a one-page form. However, given the government’s ongoing focus on worksite enforcement, it is critical that employers recognize that the time for immigration compliance has come.

Not only should employers make certain that they do not hire or continue to employ workers they know to be ineligible for employment, but they must ensure that they are in full compliance with all USCIS requirements pertaining to employment eligibility verification. Establishing internal “best practices” to avoid liability is critical. Bringing in experienced counsel to train human resources personnel on all aspects of immigration compliance, provide regular trainings and update compliance policies for personnel to follow can significantly mitigate damages, reduce exposure and minimize costs for the employer in the long term.

Published in The Legal Intelligencer, March 1, 2011