IRCA Compliance and HR Roles in Documenting Workers

Introduction

One of the intensely debated issues in America in the mid-2000s was the border between Mexico and the United States. In the years leading up to this debate, many states responded to the impact of illegal immigration on their legal, economic, medical, educational, and social systems by passing aggressive new rules and laws requiring landlords and employers to verify certain applicant information before providing housing or employment, in order to discourage the housing and hiring of undocumented tenants and workers (Green and Ciobanu, 2006, p. 1203). The Department of Homeland Security announced that it would begin enforcing the Immigration Reform and Control Act of 1986 against employers (The Washington Times, April 21, 2006, p. A01). Drawing employers into the web of problems associated with illegal immigration — by way of new reporting requirements and compliance audits — means that human resource personnel in business organizations play a critical role in verifying worker status and fulfilling other legal obligations arising from these laws.

Enforcing the 1986 Act's rules will increase the amount of paperwork that must be completed for each employee, thereby increasing the costs associated with new hires. The legal costs arising from the new reporting burden remain to be determined, but employers can also expect costs related to defending their businesses against challenges to the new laws and reporting requirements — challenges in which human resource offices will necessarily be involved. The new reporting requirements and the burden they place on human resource offices threaten the sustainability of the organization as a whole.

The research presented here examines the requirements being placed on employer human resource officers as a result of current and changing laws intended to curtail the flow of undocumented workers in the United States.

Some estimates place the number of illegal immigrants living and working in the United States as high as 12 million people who crossed the border from Mexico illegally (The Daily Herald, March 10, 2007, p. 1). An estimated one million illegal immigrants cross the Mexico–United States border each year, so the number of reported or estimated undocumented individuals grows substantially with each passing year (The Washington Times, July 19, 2004, p. A01). "Carlos, who came to America in 1996, is one of eight million to 12 million illegal aliens living and working in the United States, who has no fear of ever being detained or deported. And there's good reason: no one is looking for them" (The Washington Times, July 19, 2004, p. A01). The exact number is difficult to determine, since the illegal nature of their status interferes with accurate reporting and data collection. "If they can get by us — and a lot of them do — they know they can go underground, find a job and disappear — particularly in the several cities and towns across the country that have large Hispanic populations," said a veteran Border Patrol supervisor in Arizona (The Washington Times, July 19, 2004, p. A01). The border between Mexico and the United States is also believed to be a point of entry for individuals other than Hispanic immigrants, including terrorists who might attempt to cross undetected in the same manner as Mexican and South American nationals seeking to improve their way of life (The Washington Times, June 30, 2005, p. A01).

The border between Canada and the United States represents another point of entry for undocumented individuals, and — since September 11, 2001 — a concern that both borders are serving as entry points for terrorists as well (Timmerman, 2001, p. 24).

This research demonstrates that the burden placed upon human resource officers and their staff to verify employee information is not limited to specifically undocumented workers applying for employment, but must be applied uniformly to all individuals seeking employment. To assess the implications of the changes in rules and laws governing employee documentation as they relate to human resource office staffs, it is necessary to begin with an understanding of the role of the human resources office and its personnel.

The Role of Human Resources in a Business Organization

The function of a human resources office and its staff within a business organization is to support the overall company business plan and strategy through hiring, overseeing training programs that prepare employees to be productive contributors to specific functions and tasks, and to serve as innovators and leaders of change within the organization (Walker, 2002, p. 59). Human resource offices today are challenged with creating sustainable work environments — that is, meeting the needs of today's workforce without compromising the future needs and environment of the business and its employees (Wirtenberg, Harmon, Russell, and Fairfield, 2007, p. 10).

Experts Wirtenberg, Harmon, Russell, and Fairfield write: "From a business perspective, sustainability has been defined as a 'company's ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental and social opportunities into its business strategies'" (Symposium on Sustainability, 2001, as cited in Wirtenberg et al., 2007, p. 10). Studies have shown that the social and environmental performance of a business is tangential to the organization's overall success in the marketplace (Wirtenberg, Harmon, et al., 2007, p. 10). "Because human resources are widely viewed as a key factor in an organization's ability to build and sustain competitive advantage, HR can play a critical role in business enterprise" (Wirtenberg, Harmon, et al., 2007, p. 10). The role of the HR office is therefore integral to the success of the organization in maintaining a sustainable workplace and workforce environment.

Laws and rules created to discourage the hiring of undocumented workers present new challenges for human resource personnel within businesses and organizations in the United States. At the federal level, the situation of undocumented workers on a work site was, until the House of Representatives passed HR 4437, more a matter of enforcing existing laws that had not previously been applied against employers than of pending new legislation (Olds Som and Momblanco, 2006, p. 286). Since the Immigration Reform and Control Act of 1986 (IRCA), employers have been obligated to verify applicant and employee citizenship status, and face costly fines for noncompliance — yet these rules were largely not enforced, and employers were, for the most part, not fined (Olds Som and Momblanco, 2006, p. 286).

Human Resource Personnel and Undocumented Workers

That has now changed. Because of the threat posed by international terrorism and the burden illegal immigration places on state social structures — including healthcare, education, legal services, and social services — employers are now faced with the prospect of documenting workers and ensuring their legal status in the United States. Additionally, court cases such as one against Travelodge, in which a court determined that a Social Security "no-match letter" (which suggests that the worker is not in the legal U.S. Social Security system) does not constitute grounds for terminating an employee, further complicate the HR office's role in complying with worker status verification requirements (Bacon, 2001, p. 15).

Human resource offices must now address the following questions:

1) What is the current system for documenting workers, and how effectively does it work?
2) What is the cost of documenting workers?
3) What are the costs of failing to document workers?
4) What are the legal ramifications of failing to document workers?
5) What are the legal ramifications of documenting workers?
6) What additional responsibilities must employers assume in documenting workers?

The Immigration Reform and Control Act of 1986 (IRCA) places four requirements on employers (Tunnell, Zimmermann, and Seipel, 1993, p. 36):

1. Not to hire unauthorized aliens.
2. To verify the identity and work authorization for every new employee.
3. Not to discriminate on the basis of citizenship or national origin.
4. To recognize the amnesty rights of certain illegal aliens who are eligible for temporary or permanent resident status in the United States.

As these four requirements illustrate, the Act causes employers to consider not only whether a worker is undocumented, but also the worker's potential legal status. This is a specialized area of knowledge for which HR staff must be trained. Requirement three further complicates the picture: an employer is prohibited from discriminating on the basis of citizenship or national origin, yet the Act imposes fines on any employer who knowingly hires an undocumented worker. This tension — between the obligation to report undocumented workers and the prohibition against using undocumented status as a reason to deny employment — may help explain why the Act was not rigorously enforced in the years following its passage.

An HR professional is responsible for processing a new hire's IRS information, state and federal withholding taxes (FICA), and Federal Unemployment Tax Act (FUTA) obligations, unless the new hire is an independent contractor — in which case the individual would handle his or her own withholdings, though the employer would still issue a 1099 statement of earnings (Tunnell, Zimmermann, and Seipel, 1993, p. 36). If the new hire is a foreign national who is in the country legally, the HR professional must also issue the I-9 form, which documents the employee as a non-citizen and ensures that proper withholdings are made on the employer's behalf. An employer can be fined for failure to issue the proper employment status documentation and withholdings (Tunnell, Zimmermann, and Seipel, 1993, p. 36).

The official U.S. Citizenship and Immigration Services website serves as a resource for human resource personnel seeking compliance guidance on government forms required for documenting and reporting on aliens in the United States, whether legal or undocumented. The site includes additional non-federal forms required by individual states for reporting purposes. While a valuable tool for HR professionals, it encompasses pages of forms and instructions that can be time-consuming to navigate and may even require HR staff to provide one-on-one assistance to employees completing the forms. HR personnel must obtain education and training in order to become proficient in the forms and requirements imposed by state and federal governments, as an employee's status can shift from legal to illegal if proper extensions and paperwork are not filed in a timely manner.

A query of online sources for books, journals, magazine articles, and newspaper articles using keywords including employer documentation, human resource reporting, illegal immigrant laws, illegal immigrant legislation, documenting workers, IRCA, and Immigration Reform and Control Act 1986 returned more than 2,000 results per publication type. To obtain the most recent and pertinent information on employer verification and reporting of worker status, journal articles proved to be the most thorough, manageable, and current source. For historical research — such as the background of the Immigration Reform and Control Act of 1986 — books proved most valuable, while magazine and newspaper articles provided useful supporting material for bridging ideas and topics.