[Federal Register Volume 74, Number 193 (Wednesday, October 7, 2009)]
[Rules and Regulations]
[Pages 51447-51452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24200]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / 
Rules and Regulations

[[Page 51447]]



DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 274a

[ICE 2377-06; DHS Docket No. ICEB-2006-0004]
RIN 1653-AA59


Safe-Harbor Procedures for Employers Who Receive a No-Match 
Letter: Rescission

AGENCY: U.S. Immigration and Customs Enforcement, DHS.

ACTION: Final rule.

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SUMMARY: The Department of Homeland Security (DHS) is amending its 
regulations by rescinding the amendments promulgated on August 15, 
2007, and October 28, 2008, relating to procedures that employers may 
take to acquire a safe harbor from receipt of No-Match letters. DHS is 
amending its regulations as proposed on August 19, 2009, without 
change. Implementation of the 2007 final rule was preliminarily 
enjoined by the United States District Court for the Northern District 
of California on October 10, 2007. After further review, DHS has 
determined to focus its enforcement efforts relating to the employment 
of aliens not authorized to work in the United States on increased 
compliance through improved verification, including participation in E-
Verify, ICE Mutual Agreement Between Government and Employers (IMAGE), 
and other programs.

DATES: This final rule is effective November 6, 2009.

FOR FURTHER INFORMATION CONTACT: National Program Manager Charles 
McClain, U.S. Immigration and Customs Enforcement, Office of 
Investigations--MS 5112, 500 12th Street, SW., Washington DC, 20536. 
Telephone: 202-732-3988 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Docket

    Public comments on this docket may be viewed online at http://www.regulations.gov or in person at U.S Immigration and Customs 
Enforcement, Department of Homeland Security, 500 12th Street, SW., 
Room 1000, Washington, DC 20024, by appointment. To make an appointment 
to review the docket, call 202-307-0071.

II. Final Rule

    After considering the public comments, DHS has determined, for the 
reasons stated in the proposed rule and in this final rule, to 
promulgate the rescission of the 2007 and 2008 final rules (referred to 
collectively as the ``No-Match rules'') without change.

III. Background

    It is unlawful for a person or other entity to hire, or to recruit 
or refer for a fee, an alien for employment in the United States 
knowing the alien is not authorized to work in the United States. 
Immigration and Nationality Act of 1952, as amended (INA), section 
274A(a)(1)(A), 8 U.S.C. 1324a(a)(1)(A). It is also unlawful for a 
person or other entity, after hiring an alien for employment, to 
continue to employ the alien in the United States knowing the alien is 
(or has become) an unauthorized alien with respect to such employment. 
INA section 274A(a)(2), 8 U.S.C. 1324a(a)(2).
    All persons or entities that hire, or recruit or refer persons for 
a fee, for employment must verify the identity and employment 
eligibility of all employees hired to work in the United States. INA 
section 274A(a)(1)(B), (b)(1), (b)(2), 8 U.S.C. 1324a(a)(1)(B), (b)(1), 
(b)(2). Under the INA, this verification is performed by completing an 
Employment Eligibility Verification form (Form I-9) for all employees, 
including United States citizens. INA section 274A(b)(1), (b)(2), 8 
U.S.C. 1324a(b)(1), (b)(2); 8 CFR 274a.2. The INA provides, however, 
that an employer may not conduct this verification in a manner that 
treats employees differently based on their citizenship status or 
national origin. INA section 274B(a), 8 U.S.C. 1324b(a). An employer, 
or a recruiter or referrer for a fee, must retain the completed Form I-
9 for three years after hiring, recruiting or referral, or, where the 
employment extends longer, for the life of the individual's employment 
and for one year following the employee's departure. INA section 
274A(b)(3), 8 U.S.C. 1324a(b)(3). These forms are not routinely filed 
with any Government agency; employers are responsible for maintaining 
these records, and they may be requested and reviewed by U.S. 
Immigration and Customs Enforcement (ICE). INA section 
274A(b)(1)(E)(3); 8 CFR 274a.2(b)(2), (c)(2); see 71 FR 34510 (June 15, 
2006) (Electronic Signature and Storage of Form I-9, Employment 
Eligibility Verification).
    Employers annually send the Social Security Administration (SSA) 
millions of earnings reports (W-2 Forms) in which the combination of 
employee name and social security number (SSN) does not match SSA 
records. In some of these cases, SSA sends a letter, such as an 
``Employer Correction Request,'' that informs the employer of the 
mismatch. The letter is commonly referred to as an employer ``No-Match 
letter.'' No-Match letters may be caused by many things, including 
clerical error and name changes. One potential cause may be the 
submission of information for an alien who is not authorized to work in 
the United States and who may be using a false SSN or an SSN assigned 
to someone else. Such a letter may be one indicator to an employer that 
one of its employees may be an unauthorized alien; the letter itself, 
however, does not make any statement about an employee's immigration 
status. ICE sends a similar letter (currently called a ``Notice of 
Suspect Documents'') after it has inspected an employer's Employment 
Eligibility Verification forms (Forms I-9) during an investigation 
audit and after unsuccessfully attempting to confirm, in agency 
records, that an immigration status document or employment 
authorization document presented or referenced by the employee in 
completing the Form I-9 was assigned to that person. After a Form I-9 
is completed by an employer and employee, it is retained by the 
employer and made available to DHS investigators on request, such as 
during an audit.
    Over the years, employers have inquired of the former Immigration 
and Naturalization Service, and now DHS, whether receipt of a No-Match 
letter constitutes constructive knowledge on the part of the employer 
that he or she may have hired an alien who is not

[[Page 51448]]

authorized to work in the United States. On August 15, 2007, DHS issued 
a final rule describing the legal obligations of an employer following 
receipt of a No-Match letter from SSA or a letter from DHS regarding 
employment verification forms. See 72 FR 45611. That final rule also 
established ``safe-harbor'' procedures for employers receiving No-Match 
letters.
    The rule has never been implemented in light of a preliminary 
injunction issued by the United States District Court for the Northern 
District of California. AFL-CIO v. Chertoff, 552 F. Supp. 2d 999 (N.D. 
Cal. 2007) (order granting motion for preliminary injunction). As a 
result of that litigation, DHS also issued a supplemental proposed and 
final rule providing to address specific issues raised by the court. 
See, e.g., 73 FR 15944 (Mar. 26, 2008) (supplemental proposed rule), 73 
FR 63843 (Oct. 28, 2008) (supplemental final rule). Neither the 
supplemental nor 2008 final rules, however, changed any regulatory 
text.
    DHS proposed to rescind the No-Match rules on August 19, 2009, 
explaining that a more appropriate utilization of DHS resources would 
be to focus enforcement/community outreach efforts on increased 
compliance through improved verification, including increased 
participation in the U.S. Citizenship and Immigration Services (USCIS) 
E-Verify employment eligibility verification system, the ICE Mutual 
Agreement Between Government and Employers (IMAGE), and other programs. 
The proposed rescission rule and this final rule are part of a 
Government-wide reexamination of regulatory processes. 74 FR 41801, 
41802 (Aug. 19, 2009); Docket ICEB-2006-0004-0923. DHS requested public 
comments on the proposed rescission of the No-Match rules and provided 
a 30-day public comment period.

IV. Public Comments

    DHS received 22 comments during the 30-day comment period. DHS 
received comments from individuals, professional associations, unions, 
trade organizations, and advocacy organizations. DHS received comments 
from the litigants in AFL-CIO v. Chertoff, No. 07-cv-4472-CRB (N.D. 
Cal.). Many commenters supported the rescission of the 2007 final rule 
and provided arguments why the 2007 final rule should be rescinded. 
Other commenters argued in favor of retaining and implementing the 2007 
final rule. The substantive comments are addressed below.

A. Viability of the 2007 and 2008 Rules

    One commenter suggested that the guidance provided in the No-Match 
rules clarified and interpreted existing law. The commenter suggested 
that the safe harbor provision provided valuable guidance to employers 
that need guidance in this area. The commenter further argued that 
removal of the No-Match rule will just create uncertainty and more room 
for unscrupulous employers to continue to hire and retain workers they 
know or should know are not authorized to work. Another commenter 
expressed concern that rescinding the No-Match rules will leave 
employers wanting to resolve discrepancies but having no guidance on 
what DHS would consider a good faith attempt to resolve the discrepancy 
to avoid a finding of constructive knowledge, as opposed to violating 
the anti-discrimination laws; and that E-Verify, IMAGE and other DHS 
programs identified in this rule do not provide guidance in dealing 
with No-Match letters or provide a safe harbor to employers.
    DHS does not disagree that additional guidance would be valuable to 
employers. DHS disagrees, however, with the suggestion that if the No-
Match rules are rescinded, employers will have no guidance on 
compliance with the Immigration and Nationality Act's employment 
verification requirements. As discussed in all of the proposed and 
final rules in this rulemaking, DHS and its predecessor agencies have 
provided guidance on the immigration implications and responding to No-
Match letters. Similarly, the Office of Special Counsel for Immigration 
Related Unfair Employment Practices, Civil Rights Division, Department 
of Justice, enforces the anti-discrimination provisions of INA section 
274B, 8 U.S.C. 1324b, and provides guidance to employers about 
responding to SSA no-match letters in a manner consistent with the 
anti-discrimination provision of the INA. The No-Match rules set out 
that advice and provided a safe harbor if employers followed specified 
steps to resolve the discrepancy. The commenter, a professional 
association, has provided similar advice to its members. DHS, in 
considering all of its options, does not believe that the addition of a 
``safe-harbor'' to that guidance is as effective as other tools to 
assist in compliance with the employment restrictions of the 
Immigration and Nationality Act.
    DHS continues to provide employer support through IMAGE. IMAGE is 
specifically designed to help the business community develop and 
implement hiring and employment verification best practices.
    As of September 2009, more than 155,000 employers have signed an 
MOU with DHS to participate in E-Verify, representing more than 500,000 
hiring sites; in fiscal year (FY) 2009, employers queried E-Verify 
nearly 8.6 million times. The Administration and DHS fully support the 
expansion of E-Verify and have taken steps to encourage use of E-
Verify, including ensuring that federal contractors use E-Verify to 
ensure an employment eligible workforce.\1\ USCIS also recently updated 
the Handbook for Employers (M-274) to provide more comprehensive 
guidance and instructions for completing the Employment Eligibility 
Verification Form (Form I-9). http://www.uscis.gov/files/nativedocuments/m-274.pdf.
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    \1\ A modest expansion of E-Verify will occur with the 
requirement that certain government contractors utilize E-Verify. 
See Executive Order 13,465, 73 FR 33285 (June 11, 2008); Designation 
of the Electronic Employment Eligibility Verification System Under 
Executive Order 12,989, 73 FR 33837 (June 13, 2008); Proposed 
Employment Eligibility Verification Rule, 73 FR 33,374 (June 12, 
2008); Final Employment Eligibility Verification Rule, 73 FR 67651 
(Nov. 14, 2008); Chamber of Commerce of the United States v. 
Napolitano, 2009 WL 2632761, D. Md. No. 08-civ-3444 (AW), Memorandum 
Opinion, Dk. No. 51 (Aug. 26, 2009) (denying plaintiff's motion for 
summary judgment and preliminary injunction; granting defendant's 
motion for summary judgment), appeal filed No. 09-2006 (Sept. 4, 
2009. DHS also encourages States and other jurisdictions to utilize 
E-Verify. Cf., Chicanos por la Causa, Inc. v. Napolitano, 558 F.3d 
856, 867 (9th Cir. 2009) (amended on denial of petition for 
rehearing) (holding that ``Congress could have, but did not, 
expressly forbid state laws from requiring E-Verify 
participation.''), pet. for cert. filed sub nom. Chamber of Commerce 
v. Candelaria, U.S. No 09-115 (filed May 28, 2009).
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    These tools focus on more universal compliance with the employment 
eligibility verification requirements of the Immigration and 
Nationality Act than a safe harbor procedure for a limited number of 
employers who receive a No-Match letter. A No-Match letter is reactive, 
either one specifically guided to the employment eligibility issue from 
ICE or one indirectly pointing to a potential employment eligibility 
issue through social security number record mismatches on tax filings 
through SSA.
    Furthermore, DHS has acknowledged that unscrupulous employers would 
continue to find ways to take advantage of the system, regardless of 
whether the No-Match rules were in place. DHS focuses criminal and 
civil enforcement against the most egregious violators: employers who 
use unauthorized workers in order to gain a competitive advantage or 
those who exploit the vulnerable, often engaging in human trafficking 
and smuggling, identity theft,

[[Page 51449]]

and social security number and document fraud; and employers in the 
Nation's critical infrastructure sites, including airports, seaports 
and power plants.

B. Issues Raised in the 2007 and 2008 Rules

    Other commenters repeated arguments previously made in the 2007 and 
2008 rulemaking, and in the subsequent litigation, that the No-Match 
rules created confusion among many small businesses, including farm 
businesses, and that the No-Match rules would have resulted in 
additional costs; and also that the process outlined in the No-Match 
rules would have resulted in additional labor, resource and personnel 
costs, which many small businesses would be unable to absorb.
    The 2007 and 2008 No-Match rules were intended to clarify the 
obligations of an employer following the receipt of a no-match letter 
from SSA or a letter from DHS regarding employment verification forms. 
Further, as explained, DHS does not believe the No-Match rules imposed 
a mandate that forced employers to incur ``compliance'' costs. 73 FR 
63863. Only small entities that choose to avail themselves of the safe 
harbor would incur direct costs as a result of the No-Match rules, and 
all entities are responsible for the wage statement (Form W-2) that 
creates a No-Match letter.
    Commenters asserted that the No-Match rules should be rescinded 
because the correction period allowed in the final rules is inadequate. 
SSA, according to the commenters, would be unable to resolve mismatches 
presented by authorized workers within the correction period. One 
commenter further alleged that the No-Match rules would 
disproportionately impact authorized workers of color, transgender 
workers, and those who appear or sound ``foreign;'' the rules would 
lead to retaliatory firings.
    Although DHS agrees with the commenters' suggestions that the rules 
should be rescinded, DHS disagrees with the suggestion that the No-
Match rules would have generated additional costs or would have 
disproportionately impacted authorized workers or any discrete group. 
As stated above, the No-Match rules were intended to clarify the 
obligations of an employer following the receipt of a No-Match letter 
from SSA or a letter from DHS regarding employment verification forms.
    Another commenter alleged that the No-Match rules were an unlawful 
expansion of the definition of ``constructive knowledge'' because the 
No-Match letters are sent out for reasons unrelated to immigration 
status. Similarly, another commenter supported the rescission of the 
No-Match rules arguing that the rules would have led to the termination 
of large numbers of United States citizens and other authorized workers 
because many of the ``no-matches'' in the SSA's Earning Suspense File 
have nothing to do with immigration status.
    DHS disagrees. DHS has not changed its position as to the merits of 
the 2007 and 2008 rules; DHS has decided to focus on more universal 
means of encouraging employer compliance than the narrowly focused and 
reactive process of granting a safe harbor for following specific steps 
in response to a no-match letter. DHS has determined that focusing on 
the management practices of employers would be more efficacious than 
focusing on a single element of evidence. Receipt of a No-Match letter, 
when considered with other probative evidence, is a factor that may be 
considered in the totality of the circumstances and may in certain 
situations support a finding of ``constructive knowledge.'' A 
reasonable employer would be prudent, upon receipt of a No-Match 
letter, to check their own records for errors, inform the employee of 
the no-match letter, and ask the employee to review the information. 
Employers would be prudent also to allow employees a reasonable period 
of time to resolve the no-match with SSA.
    Another commenter noted that employers are wrongly implementing the 
2007 and 2008 final rules even though implementation of the 2007 rule 
was enjoined and that employees who receive no-match letters are being 
discriminated against and terminated if they are unable to resolve 
their discrepancies with SSA within ten days. DHS acknowledges that an 
employer who terminates an employee without attempting to resolve the 
issues raised in a No-Match letter, or who treats employees differently 
based upon national origin, perceived citizenship status, or other 
prohibited characteristics may be found to have engaged in unlawful 
discrimination under the anti-discrimination provision of the INA 
section 274B, 8 U.S.C. 1324b. That fact does not, however, warrant DHS 
changing its earlier position that receipt of a No-Match letter and an 
employer's response to a No-Match letter, in the totality of the 
circumstances, may be used as evidence of a violation of the employment 
restrictions of the Immigration and Nationality Act. 73 FR at 63848, 
n.2; 74 FR 41804, n.4. Employers should not use No-Match letters, 
without more, as a basis for firing employees without resolution of the 
mis-match, and DHS has never countenanced such a practice. DHS urges 
employers, employees, and other interested parties to contact the 
Office of Special Counsel for Immigration-Related Unfair Employment 
Practices, (800) 255-8155 or http://www.usdoj.gov/crt/osc/, for 
additional information and guidance about the application of the anti-
discrimination provisions.
    Another commenter alleges that the No-Match rules failed to address 
the concerns of the District Court that led to the injunction of the 
rules. This comment appears more attuned to the 2008 supplemental 
proposed rule, rather than the rescission of the 2007 final rule. 
Although DHS disagrees that the supplemental rule failed to address the 
District Court rationale in the order granting a motion for preliminary 
injunction, DHS is nonetheless rescinding the No-Match rule as the 
commenter urged.

C. Scope of No-Match Letters as an Enforcement Tool

    Several commenters suggested that SSA discontinue issuing No-Match 
letters to employers and instead send them to affected employees. The 
commenters further recommend that, if sent to employers, DHS not use 
the no-match letters for immigration compliance purposes or, if the 
letters are obtained through audits or investigations, that DHS inform 
employers that they will have safe harbor from wrongful termination and 
Privacy Act charges. Another commenter further noted that No-Match 
letters are issued for administrative purposes; that they were not 
designed as an immigration enforcement tool and are, in fact, ill-
suited for this purpose.
    Whether the SSA will continue to provide employers and employees 
with written notice indicating that there is a discrepancy between the 
worker's name and social security number is a decision to be made by 
SSA. DHS believes that SSA notification is beneficial to the employer 
and the employee, and that the different letters to employers and 
employees serve different purposes for SSA. Employers and employees are 
made aware of discrepancies in their filings and that the discrepancy 
may affect employees' potential benefits, respectively, and the letters 
encourage corrective action to ensure that the employee's earnings are 
properly credited for retirement, disability, survivor and other 
benefits.
    As discussed above, a finding of constructive knowledge of 
unauthorized employment may be based on the totality of the 
circumstances. Employers

[[Page 51450]]

remain liable where the totality of the circumstances establishes 
constructive knowledge that the employer knowingly hired or continued 
to employ unauthorized workers. An employer's receipt of a No-Match 
letter and the nature of the employer's response to the letter are only 
two factors that may be considered in determining the totality of the 
circumstances.
    Another commenter argued that the use of social security numbers 
for immigration enforcement through delivery of No-Match letters turns 
employers into de facto immigration agents, which goes beyond the scope 
of SSA's mission. DHS strongly disagrees. DHS acknowledges that receipt 
of the No-Match letter, without more, does not mean that the employee 
is not authorized to work or that the employee provided a fraudulent 
name or social security number. The discrepancy may be based upon a 
number of reasons unrelated to immigration status, such as clerical 
errors or employees' name changes that may not have been reported to 
SSA. However, a No-Match letter may also be generated because the 
individual is unauthorized to work in the United States and provided 
fraudulent information to the employer at the time of hire.
    With regard to the comment that DHS provide a safe harbor from 
wrongful termination and Privacy Act charges, such action is outside of 
DHS's authority. DHS, therefore, declines to accept the recommendation.

D. Viability of E-Verify and IMAGE

    Several commenters suggested that E-Verify and IMAGE cannot replace 
the No-Match rules. One commenter argued that improvements in E-Verify 
and other DHS programs do not provide better tools for employers to 
reduce the incidence of unauthorized employment and to better detect 
and deter the use of fraudulent identity documents by employees, 
because IMAGE and E-Verify are voluntary, and unscrupulous employers 
will not sign up for either. The commenter further argued that E-Verify 
is deeply flawed and will confirm work authorization for individuals 
who claim to be a citizen and obtain identity documents using the 
citizen's name and social security number. Some commenters expressed 
reservations about expansion of E-Verify without significant 
modifications because of alleged reliance on databases that are flawed 
or riddled with errors that would result in denial of employment to 
authorized workers, including United States citizens, and in 
discrimination against immigrant workers. Another commenter supported 
the rescission of the 2007 and 2008 No-Match Rules, but opposes 
mandated participation in E-Verify or IMAGE.
    Another commenter suggested that a mandatory or vast expansion of 
the E-Verify electronic employment verification system is not a 
solution to our nation's immigration problems. Further, the commenter 
suggested that the degree of inaccuracy in the E-Verify underlying 
databases means that large numbers of Americans will be denied 
employment and paychecks, at least temporarily, while they attempt to 
resolve the problem with relevant government agencies. Finally, the 
commenter suggests that evidence coming from those who have used E-
Verify indicate that the current program is seriously flawed, 
ineffective, and could potentially cost thousands of United States 
citizens and legal residents their jobs due to database errors.
    Other commenters suggested that E-Verify relies upon databases 
which are flawed or error-prone and have unacceptably high error rates 
that misidentify authorized workers; abuse of the program by employers 
is substantial and results in discrimination, profiling of a vulnerable 
segment of workers, and illegal employment practices by unscrupulous 
employers; the privacy and security concerns of the program have not 
been addressed; and expanded use of the program jeopardizes the labor 
rights and livelihoods of work-authorized immigrant and citizen 
workers.
    Other commenters similarly expressed reservations about expansion 
of E-Verify without significant modifications to the program, its 
timely implementation with added employer safeguards, and fair 
procedures to ensure the system's accuracy and accountability. Another 
commenter supported the rescission of the 2007 and 2008 final rules, 
but opposed mandated participation in E-Verify or IMAGE.
    DHS agrees that E-Verify and IMAGE do not replace the no-match 
rules per se--DHS never intended to suggest that its change in focus 
was a replacement for the No-Match rule. The E-Verify and IMAGE 
programs, and DHS enforcement priorities, are not a part of this rule 
and the proposed rule did not propose any action that would make E-
Verify or IMAGE or any other program a replacement or mandatory. DHS 
stated only that it was changing enforcement priorities and focus. 
These comments address broader policy decisions, not the content of the 
rescission proposed rule. DHS continues to believe that E-Verify 
provides the best available method for employers to verify the 
employment eligibility of employees.
    DHS strongly disagrees, however, with the commenters' suggestion 
that E-Verify contains a degree of inaccuracy that warrants not using 
E-Verify.\2\ Although outside the scope of the proposed rule, DHS notes 
that many of the statistics used by commenters are out of date and some 
do not establish the point suggested by the commenter. As discussed 
above, the Administration and DHS are expanding the use of E-Verify 
because it is an accurate and effective tool for employers to verify 
employment eligibility.
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    \2\ Current statistics are available on the Internet at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=f82d8557a487a110VgnVCM1000004718190aRCRD&vgnextchannel=a16988e60a405110VgnVCM1000004718190aRCRD. See Committee on Oversight 
and Government Reform, Subcommittee on Government Management, 
Organization and Procurement, E-Verify: Challenges and 
Opportunities, 111th Cong., 1st Sess. (July 23, 2009) (prepared 
statements available at http://governmentmanagement.oversight.house.gov/story.asp?ID=2552).
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    In addition, the IMAGE outreach program and other initiatives, such 
as requiring all government contractors to utilize E-Verify, positively 
influence United States employers to exercise proactive immigration 
compliance, thus restricting the competitive field in which 
unscrupulous employers operate.
    Several commenters suggested that relying solely on electronic 
verification of employment eligibility would disadvantage agricultural 
employers who are located in rural areas where modern internet 
capability is not readily available; these commenters further argued 
that the difficulty faced by these employers in using electronic 
verification may subject them to an imprecise interpretation of 
constructive knowledge. DHS has made clear that E-Verify is not a 
requirement and is one of many means to assure compliance. An employer 
who decides to use E-Verify, however, may choose, for example, to use 
an outside company or vendor to run E-Verify queries. Employers could 
also seek out other sources of internet access, such as public sites. 
Accordingly, DHS does not believe that it is impracticable for some 
employers to use electronic employment verification methods such as E-
Verify in areas where internet capability may currently be limited. As 
discussed above, E-Verify is one of many tools available to employers, 
not the exclusive tool available or the exclusive focus of DHS' 
assistance to employers. To the extent that agricultural employers are 
located in rural areas that are not well served with modern

[[Page 51451]]

internet capability, employers may continue to complete the Employment 
Eligibility Verification Form I-9 in the paper format and comply with 
the employer verification requirements of the Immigration and 
Nationality Act by carefully examining the identification and 
employment eligibility documents presented by the employee at the time 
of hire.

E. Other Issues

    A commenter suggested that the Employment Eligibility Verification 
Form I-9 process is flawed and that employers refer to it as the ``ten 
foot rule''--i.e. that if the documents presented look valid from ten 
feet away, then they are acceptable. DHS shares the commenter's concern 
that the Employment Eligibility Verification process can be abused by 
fraudulent document holders. The standard implicated in this comment by 
which employers are held to account regarding document verification is 
fixed by statute. INA section 274A(b)(1)(A), 8 U.S.C. 1324a(b)(1)(A) 
requires employers to verify an alien's work eligibility where a work 
authorization document presented ``reasonably appears on its face to be 
genuine.'' Accordingly the comment treats matters outside the scope of 
this rule. DHS is making improvements in the Employment Eligibility 
Verification Form I-9 to assist employers and improve the integrity of 
employment verification. See, e.g., Documents Acceptable for Employment 
Eligibility Verification, 73 FR 76505 (Dec. 17, 2008) (interim final 
rule with request for comments amending lists of acceptable documents); 
74 FR 5899 (Feb. 3, 2009) (delayed effective date); 74 FR 10455 (Mar. 
11, 2009) (correction).
    A few commenters further suggested that this rescission rule should 
address guest worker programs. These comments are outside the scope of 
this rulemaking action and thus will not be addressed in this final 
rule. DHS may consider these issues separately.

V. Statutory and Regulatory Reviews

A. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have 
considered whether this rule would have a significant economic impact 
on a substantial number of small entities. This rule would amend DHS 
regulations to rescind the amendments promulgated in the 2007 final 
rule and the 2008 supplemental final rule relating to procedures that 
employers may take to acquire a safe harbor from evidentiary use of 
receipt of no-match letters. Implementation of the 2007 final rule was 
preliminarily enjoined by the United States District Court for the 
Northern District of California on October 10, 2007. This rule 
reinstates the language of 8 CFR 274.1(l) as it existed prior to the 
effective date of the 2007 final rule.
    As explained at 73 FR 63863, DHS does not believe the safe-harbor 
offered by the 2007 final rule and the 2008 supplemental final rule 
imposed a mandate that forced employers to incur ``compliance'' costs 
for the purposes of the Regulatory Flexibility Act. Only small entities 
that choose to avail themselves of the safe harbor would incur direct 
costs as a result of the 2007 final rule and the 2008 supplemental 
final rule. As this rulemaking proposes to rescind the offer of a safe 
harbor, this rule does not propose any compliance requirements and 
consequently would not impose any direct costs on small entities if 
promulgated as a final rule. Therefore, DHS certifies under 5 U.S.C. 
605(b) that this rule will not have a significant economic impact on a 
substantial number of small entities.

B. 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 one year, and it would not significantly or uniquely 
affect small governments. Therefore, no actions were deemed necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995, 
Public Law No. 104-4, 109 Stat. 48 (1995), 2 U.S.C. 1501 et seq.

C. 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 Act of 1996, Public Law 104-121, 
804, 110 Stat. 847, 872 (1996), 5 U.S.C. 804(2). This rule has not been 
found to be likely to 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 or foreign markets.

D. Executive Order 12866 (Regulatory Planning and Review)

    This rule constitutes a ``significant regulatory action'' under 
Executive Order 12866, and therefore has been reviewed by the Office of 
Management and Budget. Under Executive Order 12866, a significant 
regulatory action is subject to an Office of Management and Budget 
(OMB) review and to the requirements of the Executive Order. The 
Executive Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights or obligations of recipients 
thereof; or (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.

E. Executive Order 13132 (Federalism)

    This rule does 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 section 6 of 
Executive Order No. 13132, 64 FR 43255 (Aug. 4, 1999), this rule does 
not have sufficient federalism implications to warrant the preparation 
of a federalism summary impact statement.

F. Executive Order 12988 (Civil Justice Reform)

    This rule meets the applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order No. 12988, 61 FR 4729 (Feb. 5, 1996).

G. Paperwork Reduction Act

    This rule calls for no new collection of information under the 
Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.

List of Subjects in 8 CFR Part 274a

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

0
Accordingly, for the reasons set forth in the preamble, DHS amends part 
274a of title 8 of the Code of Federal Regulations as follows:

[[Page 51452]]

8 CFR CHAPTER 1--DEPARTMENT OF HOMELAND SECURITY

PART 274a--CONTROL OF EMPLOYMENT OF ALIENS

0
1. The authority citation for part 274a continues to read as follows:

    Authority:  8 U.S.C. 1101, 1103, 1624a, 8 CFR part 2, Public Law 
101-410, 104 Stat. 890, as amended by Public Law 104-134, 110 Stat. 
1321.

0
2. Section 274a.1 is amended by revising paragraph (l) to read as 
follows:


Sec.  274a.1  Definitions.

* * * * *
    (l)(1) The term knowing includes not only actual knowledge but also 
knowledge which may fairly be inferred through notice of certain facts 
and circumstances which would lead a person, through the exercise of 
reasonable care, to know about a certain condition. Constructive 
knowledge may include, but is not limited to, situations where an 
employer:
    (i) Fails to complete or improperly completes the Employment 
Eligibility Verification Form, I-9;
    (ii) Has information available to it that would indicate that the 
alien is not authorized to work, such as Labor Certification and/or an 
Application for Prospective Employer; or
    (iii) Acts with reckless and wanton disregard for the legal 
consequences of permitting another individual to introduce an 
unauthorized alien into its work force or to act on its behalf.
    (2) Knowledge that an employee is unauthorized may not be inferred 
from an employee's foreign appearance or accent. Nothing in this 
definition should be interpreted as permitting an employer to request 
more or different documents than are required under section 274(b) of 
the Act or to refuse to honor documents tendered that on their face 
reasonably appear to be genuine and to relate to the individual.

Janet Napolitano,
Secretary.
[FR Doc. E9-24200 Filed 10-6-09; 8:45 am]
BILLING CODE 9111-28-P