Know the Rules Around 'Constructive Knowledge' of Unlawful Employment



​Having "constructive knowledge" of an employee's unauthorized work status is a serious violation, but defining constructive knowledge can be tricky for HR professionals.

The U.S. Department of Homeland Security (DHS) holds employers liable not only when they have actual knowledge that an employee is unauthorized to work, but also when knowledge may be inferred through notice of certain facts that would "lead a person, through the exercise of reasonable care, to know about a certain condition," according to the agency.

Immigration attorney Bruce Buchanan discussed with SHRM Online various scenarios related to constructive knowledge of unlawful employment in the context of Form I-9 verification. 

It is one of the topics covered in The I-9 and E-Verify Handbook (Alan House Publishing, 2017) co-written by Buchanan with attorney Greg Siskind.

[How well do you understand I-9 compliance? Take this quiz to find out.]

SHRM Online: When is an employer considered to have constructive knowledge of unlawful employment?

Buchanan: DHS lists several examples of constructive knowledge in its rules, including when: 

• The employer fails to complete or improperly completes the Form I-9.
  
• The employer has information that would indicate the person is not authorized to work, such as a labor certification when he or she is claiming to be a U.S. citizen or permanent resident. 
  

In addition, failing to reverify a Form I-9 requiring reverification usually will be considered constructive knowledge. 
A clearer situation is found when an employer receives a Notice of Suspect Documents [NSD] from Immigration and Customs Enforcement [ICE] that an employee has submitted fraudulent documentation. The courts generally have held that such a notification would provide an employer with constructive knowledge of a problem and that the employer would need to reverify. 

SHRM Online: What if an employer knows an employee is not authorized to be employed even though the Form I-9 was properly completed?

Buchanan: An employer that knows the employee is not authorized to work, even though everything on the Form I-9 appears valid, is violating the Immigration Reform and Control Act [IRCA] because the employer is considered to have actual knowledge that an employee is not employment eligible. An employer that simply suspects an employee is ineligible to work should be extremely careful before terminating that person or even asking for additional documentation, unless the employer has a solid foundation for the belief. Taking an action after merely hearing [a rumor] that a particular person is unauthorized to be in the United States is a recipe for a discrimination lawsuit, because IRCA does not require employers to make inquiries under these circumstances. On the other hand, if an employee actually provides information to the employer regarding his or her immigration status, HR would be considered to have knowledge. If the employer continues to employ this individual, it is a serious violation. 

SHRM Online: What if a worker tells HR that another worker is unauthorized?

Buchanan: The employer should not consider a mere tip from another employee to constitute knowledge that an employee is out of status. An employer acting on such a tip alone could be found to have violated anti-discrimination laws. 
According to ICE, "tips and leads should not always be presumed to be credible. An employer is cautioned against responding to tips that have no indicia of reliability, such as unsubstantiated, retaliatory, or anonymous tips."
An April 1999 opinion letter from the Immigration and Naturalization Service general counsel noted that if an employer receives a tip from an employee indicating that another employee is not authorized to be employed, and the employer later receives a Social Security no-match letter, the employer would likely have constructive knowledge based on a "totality of the circumstances."

SHRM Online: What if an employee later presents a Social Security number [SSN] that is different from the number given when the Form I-9 was completed?

Buchanan: Because a person is assigned only one SSN in his or her lifetime, an employee who comes to an employer with a number different from the one [provided] at the time of hire should be viewed with suspicion. The odds are that the employee used a false number to begin work and has somehow been able to obtain a valid SSN later, such as through a green-card application filed independently of the employer. 
The same principle normally applies with an "A" or "alien number." An employee should have only one alien number. The number does not change upon renewal of a permanent resident card or moving from an employment authorization card to a permanent resident card.
Employers will, of course, want to speak to employment counsel involving a violation of an employer's policies regarding making false statements during the hiring process.
With respect to IRCA, the employer should inquire into the circumstances surrounding obtaining the new number. However, the employer is not required to terminate the employee even if the employee admits making a false statement, and the employer would be able to continue employing the person if it had no knowledge of his or her previous lack of work authorization. In this case, a new Form I-9 should be completed with the old Form I-9 attached with an explanation. The employer should correct the number with the IRS so taxes are properly withheld. 

SHRM Online: Is an employer liable if it uses a contractor and knows the contractor's employees are not authorized to work?

Buchanan: Yes. DHS regulations state that any person who uses a contract, subcontract or exchange to obtain the labor or services of a foreign employee in the United States, knowing that the employee is unauthorized to work, should be considered to have hired the employee for purposes of determining if a person has violated IRCA.

SHRM Online: Can failing to complete a Form I-9 or completing it improperly be considered having constructive knowledge of unlawful employment?

Buchanan: Yes. In various cases, employers have been held to have had constructive knowledge that an employee was unauthorized to work, even if the employer had no direct knowledge of the employee's employment status. Courts have held that employers are not excused simply because there is a Form I-9 if the form itself was not properly completed. A court would look to the circumstances surrounding the particular form and use a standard of what is reasonable to determine if an employer should have known that an employee was likely not authorized.

SHRM Online: Can failing to reverify workers be considered having constructive knowledge of unlawful employment?

Buchanan: Yes. Courts have found that an employer that fails to reverify a Form I-9 when reverification is required will usually have constructive knowledge that an employee is unauthorized to work. The more complicated question is what to do when the employee presents documentation that does not relate to the expired document presented at the time of hire. ICE and the courts have held that an employer has an obligation to make an inquiry regarding the continuing employment authorization, although this would seem to violate the anti-discrimination rules in IRCA that bar employers from specifying which documents an employee may submit.