Interim Guidelines on the Implementation of Section 411 of the IIRAIRA: The Virtue Memorandum

This article analyzes the March 6, 1997, memorandum drafted by the Immigration and Naturalization Service's ("Service's") Office of Programs to discuss Section 411 of the Illegal Immigration Reform and Control Act of 1996 ("IIRAIRA"), Pub. L. No. 1014-2097, 110 Stat. 3008, October 1, 1996. This memorandum, generally referred to eponymously as the "Virtue Memorandum" alter its author, Paul Virtue, Acting Service Commissioner of Programs, seeks to provide interim guidelines to Service field officers and attorneys assigned to employer sanctions cases on how they should implement Section 411. Until implementing regulations for this section are finalized, Service personnel should look to this memorandum for guidance on how Section 411 should be enforced.

I. IIRAIRA SECTION 411 AND ITS CONTEXT

The IIRAIRA reforms the employment verification process in two ways: first, Section 412 reduces the number of documents that may be used to verify an employee's identity and employment authorization. Second, in the most striking concession granted to employers by this otherwise highly restrictive Act, Section 411 amends Section 274A(b) of the Immigration and Nationality Act ("INA"), governing employment verification requirements, by creating a new subsection (6), entitled "Good Faith Compliance." This section softens the rigidity of these requirements by introducing a new strain of "technical or procedural" failures in the employment verification process. These are failures that may be committed by employers without violating the statute, and thereby becoming subject to sanctions, as long as such employers have attempted in "good faith" to comply with the verification process. Previously, employers who committed any failures in this process, however minor, were subject to sanctions. Section 274A(b)(6) has three limitations. First, it covers only technical/procedural failures "occurring" on or alter September 30, 1996. Second, its dispensation is unavailable to employers who have been granted a period of at least ten business days to correct such technical/procedural failures, and have failed to do so. This effectively places an obligation on employers to correct technical/procedural violations within ten days of receiving notice from the Service. Third, employers who have engaged in a "pattern or practice" of knowingly hiring or continuing to hire unauthorized aliens may not benefit from this section.

Although the legislative history behind the creation of Section 274A(b)(6) is scant, this new section can reasonably be interpreted as serving two associated purposes. First, it is designed to protect well-intentioned employers whose paperwork violations are infrequent and are the result of simple misinformation or inattention, or a failure to grasp the intricacies of the I-9 verification process. This protection takes the form of a second chance. Under the new section, such employers may not be punished until the Service has alerted them to their violations, and has given them a grace period of ten days to correct these violations. This grant of a second chance represents a welcome attempt to come to terms with the practical realities of the I-9 verification system. While not extraordinarily complex, the procedures for completing properly an I-9 employment verification form are intricate, and require close attention. Since employers must complete these forms for all new employees, it is almost inevitable, as most immigration practitioners will confirm, that employers with large work forces will in some cases inadvertently fail to provide every item of information requested in every section of every form, or will commit other innocuous slip-ups. Such missteps generally are the result of simple misinformation or inattention, and are not motivated by intent to evade the provisions of the law barring the employment of unauthorized aliens. Employers who commit these missteps are accordingly not deserving of sanctions.

Second, the new section serves to restrain over-aggressive Service officers who in the past have been at liberty to impose sanctions for the slightest paperwork violations in the I-9 process, as well as to overrule administrative law judges who have imposed strict liability on employers for all paperwork violations committed during the I-9 verification process. Although the Service's official position has been that it never punishes merely technical violations of this process, many employers have in the past received heavy frees for failing to maintain perfect I-9 forms, and have rarely been provided an opportunity to correct minor paperwork violations before being freed. Indeed, the principal impulse behind Section 274A(b)(6)'s introduction was the frustration of its architect, Sonny Bono (R-Calif.), at being subjected to "hassling" from Service officers as a result of maintaining less than perfect I-9 forms at his restaurant.

The need to protect well-meaning employers who commit de minimis paperwork violations has not hitherto been ignored by employer sanctions jurisprudence. Administrative courts dealing with claims of violations of the employment verification process have for some years recognized the affirmative defense to these claims of "substantial compliance" with the paperwork verification requirements. Under this doctrine, an employer who demonstrates that it has complied substantially with these requirements will not be liable under Section 274A(e)(5), notwithstanding the fact that it has committed one or-more paperwork violations. The statute offers further protection: in assessing the size of a penalty to be imposed for a paperwork violation, agency officials are instructed to consider the "good faith" of the employer and the "seriousness" of the violation(s) committed. Although an employer may not raise these two factors as affirmative defenses to liability, they may operate to reduce a monetary penalty significantly.

The defense of substantial compliance and the mitigating factors of good faith and seriousness function as the direct antecedents of Section 274A(b)(6), and the interplay between the three provides a good frame of reference for analyzing this new section. Each should therefore be briefly considered, as should the Service's recently declared policy of issuing "Warning Notices" to employers who commit "minor" verification violations.

A. Substantial Compliance

In analyzing asserted defenses of substantial compliance with I-9 paperwork requirements, most administrative courts continue to employ the approach adopted by the Office of the Chief Administrative Hearing Officer ("OCAHO") in United States v. Northern Michigan Fruit Co., 4 OCAHO 667 (1994). Under this approach, an employer will be considered to have substantially complied with these requirements if the following five conditions are met: (1) a Form I-9 to determine an employee's identity and employment eligibility has been used; (2) the employer's signature under penalty of perjury appears in Section 2 of the form; (3) the employee's signature appears in Section 1; (4) in Section 1, an indication appears that attests under penalty of perjury that the employee is either (a) a citizen or national of the United States; or (b) a lawful permanent resident; or (c) an alien authorized to work until a specified date; (5) there is some type of information concerning, or a reference to, a document either spelled out or attached either in Section 2, List A, or Section 2, Lists B and C. Id. at 17; see also United States v. Corporate Loss Prevention Associates, 1996 OCAHO LEXIS 51, *4 (August 30, 1996). The failure to meet one or more of these conditions makes the defense of substantial compliance unavailable.

More broadly, OCAHO decisions have borrowed from case law outside the employer sanctions context, and have defined substantial compliance as "actual compliance with respect to the substance essential to every reasonable objective" of the statute involved. United States v. Davis Nursery, 1994 OCAHO LEXIS 73, *20 (September 30, 1994), quoting International Longshoremen and Warehousemen v. Board of Supervisors, 116 Cal. App. 3d 170, 175 (1974). Under this interpretation, when there is such actual compliance as to all matters of substance, then mere technical imperfections of form should not be given the stature of noncompliance. Id. Substantial compliance may be found if a court determines that the statute has been followed sufficiently so as to carry out the purpose for which the statute was adopted. Id. Thus, in evaluating whether or not an employer has substantially complied with the verification requirements imposed by Section 274A of the INA, the appropriate inquiry is not whether or not Form I-9's instructions have been followed to the letter, but whether or not the employer's failures frustrate the policy of this section to prevent and punish the employment of unauthorized aliens.

B. Good Faith

Section 274A(e)(f) of the INA requires that, in assessing the size of a penalty to be imposed on an employer who has committed paperwork employment verification failures, "due consideration" must be given to such an employer's "good faith." Neither the statute nor its regulations elucidate the meaning of this term. OCAHO case law has consistently held, however, that the mere fact of paperwork violations in the employment verification process is insufficient to show a lack of good faith for penalty purposes. See, e.g., United States of America v. Mesabi Bituminous, 1995 OCAHO LEXIS 80 *8 (September 29, 1995), citing United States v. Minaco Fashions, 3 OCAHO 587 (1993). To demonstrate a lack of good faith, the prosecuting agency must present some evidence of culpable behavior beyond mere failure of compliance on the employer's part. Id. Thus, partial compliance with Form I-9 requirements will not per se lead to a conclusion that an employer acted in bad faith in failing fully to comply with these verification requirements. United States of America v. Chef Rayko, 1995 OCAHO LEXIS 74 *18 (September 29, 1995). Instances of culpable behavior leading to a finding of a lack of good faith include the commission of paperwork violations (1) after visits by Service and Department of Labor officers during which employment verification obligations were explained. United States v. Giannini Landscaping, 3 OCAHO 573, 8-9 (1993); (2) while failing to cooperate in a Service investigation. United States v. Primera Enters., 4 OCAHO 692, 4 (1994); and (3) after the apprehension of an undocumented alien worker on the employer's premises. United States v. Enrique Reyes, 4 OCAHO 592 (1994).

C. Seriousness of the Violations

Section 274A(e)(5) of the INA also requires that the "seriousness" of an employer's paperwork violation be considered in calculating the size of the penalty to be imposed on that employer. In evaluating this factor, OCAHO decisions routinely state that paperwork violations are "always" potentially serious, since the principal purpose of Form I-9 is to allow an employer to ensure that it is not hiring anyone who is not authorized to work in the United States. See, e.g., United States v. Eagles Group, 2 OCAHO 342, 3 (1992). Such decisions recognize, however, that there exist degrees of seriousness in paperwork violations, and that such degrees are to be measured by the extent to which the employer has deviated from the proper Form I-9 completion format. United States v. Task Force Security, 4 OCAHO 625 (1994). The highest degree of seriousness lies in a complete failure to complete a Form I-9, since this renders ineffective the Congressional prohibition against the employment of unauthorized aliens. United States v. Charles C.W. Wu, 3 OCAHO 434, 2 (1992) (Modification of the Decision and Order of Administrative Law Judge).

D. Warning Notice Policy

Within a few days of the enactment of the IIRAIRA, the Service issued a Proposed Rule designed to articulate its policy towards employers who commit "minor" violations in the employment verification process. This Proposed Rule, found at 61 Fed. Reg. 52,235 (Oct. 7, 1996), seeks to amend 8 C.F.R. ' 274a.9 to allow Service officers to issue a "Warning Notice" (Form 1-846), rather than a Notice of Intent to Fine ("NIF") (Form 1-763), to employers who have committed such "minor" violations, and from whom the Service expects future compliance, as well as correction of the identified violations. As such, the Proposed Rule intends to address precisely the type of situation addressed by Section 274A(b)(6).

II. THE VIRTUE MEMORANDUM

The Virtue Memorandum sets out, in exquisite detail, interim guidelines for the implementation of Section 274A(b)(6) of the INA. As noted above, until implementing regulations for this section are established, Service officers and attorneys must refer to this memorandum to decide how Section 274A(b)(6) should be enforced.

A. Basic Provisions

The basic guidance provided by the Virtue Memorandum to Service officers conducting an I-9 inspection is that any technical/procedural failures on the part of an employer who has attempted in good faith to comply with the statute should not be included in a NIF until the employer has been notified of these failures in a Notification of Technical or Procedural Failures letter, and has been given a grace period of at least ten business days to correct these failures. If these failures are corrected within the ten-day period, the employer will be deemed to have complied with Section 274A(b)(6) of the Act, and no sanctions will be imposed.

Additionally, only employers who have acted in good faith may benefit from this section. Employers who have not shown such good faith will be issued a IF, regardless of the technical/ procedural nature of their violations. The memorandum also introduces the category of "substantive" verification failures, which are not mentioned in the statute. These are failures that are so serious that they cannot be deemed technical/procedural, and are thus not eligible for correction. Employers who have shown such good faith, but have committed violations of a substantive nature, will also not be covered by this section. Employers who have engaged in a "pattern or practice" of knowingly hiring, or continuing to employ, unauthorized aliens will also not be able to claim good faith compliance under this section. Moreover, employers who have been informally notified of technical/procedural failures, and are discovered to have committed such failures again in a later inspection will be found to lack good faith, and will not be allowed to benefit from Section 274A(b)(6).

The memorandum also provides that Service officers have discretion to decide whether to include technical/ procedural failures in a NIF. If an officer decides to include such failures, the issuance of the IF must be postponed until the ten-day correction period has run its course. After reviewing the corrected failures at the end of the ten-day period, the officer may issue a NIF that includes all uncorrected technical/ procedural failures, as well as knowing hire counts and substantive verification failures. If an officer decides to exclude technical/procedural failures from a NIF, this can be issued without regard to Section 274A(b)(6)'s correction mechanism. In this case, Service officers may unofficially notify an employer of technical/procedural failures that have been found. If such failures are again found at a later inspection, the employer will be deemed not to have made a good faith attempt to comply with the verification requirements, and will not be shielded by Section 274A(b)(6).

Echoing its recently issued Proposed Rule, the memorandum notes that it is Service policy to issue Warning Notices rather than NIFs to employers who have committed only paperwork violations, and have no unauthorized aliens at their worksites. This policy may have the effect of rendering Section 274A(b)(6) superfluous. Certainly, it suggests that most of the employers whom Section 274A(b)(6) is intended to cover may, in practice, never be reached by this section. Indeed, if the Service's policy of issuing Warning Notices is followed in every case in which paperwork violations are found, Section 274A(b)(6)'s correction mechanism will be almost entirely preempted. The issuance of a Warning Notice may have one of two results: first, the failures may be corrected; in this case, no further Service action would follow. Second, the failures may not be corrected; in this case, if the failures are discovered during a subsequent Service inspection, the employer will be considered not to have acted in good faith under Section 3(c)(5) of the memorandum, and a NIF will be issued without regard to Section 274A(b)(6)'s protections. Both of these outcomes side-step the new section's provisions. Only in the rare situations where an insubstantial number of authorized aliens in a workplace is accompanied by a set of verification failures will Section 274A(b)(6) apply. Failing this, only in cases where Service officers decide to act contrary to this agency's policy would Section 274A(b)(6) be given effect.

B. Applicability of Section 274A(b)(6)

The Virtue Memorandum limits the applicability of Section 274A(b)(6) to cases "arising" from inspections conducted on or after September 30, 1996. This limitation contrasts with Section 411(b) of the IIRAIRA, which restricts the applicability of Section 274A(b)(6) to "failures occurring on or after" September 30, 1996. This latter language apparently suggests that only I-9 violations committed on or after this date may benefit from the new law's safeguards. By focusing on the date of the inspection rather than the date of the violation, however, the Virtue Memorandum extends the applicability of Section 274A(b)(6) to violations that occur before September 30, 1996, provided that the inspection that uncovers them takes place on or after that date. This inconsistency disappears, however, if the term "occurring," as used in Section 411 (b) of the IIRAIRA, is interpreted to refer not to the commission of I-9 violations, but to their ongoing existence. Thus, a violation "occurs" from the moment it is committed to the moment it is cured. Under this interpretation, all I-9 violations committed before September 30, 1996, and uncorrected as of this date, may benefit from Section 274A(b)(6). The Virtue Memorandum contains support for this interpretation; under its terms, "timeliness" failures (i.e., a failure to date Form I-9 on the date of hiring on the part of an employer, or an employer's failure to date this form w/thin three days of the date of hiring) that occur before September 30, 1996, are not covered by Section 274A(b)(6), despite their technical/procedural nature. As the memorandum explains, such failures "do not continue after they are first committed" [emphasis added].

C. What Is a Technical/Procedural Failure?

Only failures that are "technical" or "procedural" are covered by Section 274A(b)(6), and may be corrected during the ten-day period. The kernel of the Virtue Memorandum is an examination of what constitutes such a technical/procedural violation under the terms of Section 274A(b)(6). It should be noted preliminarily that the memorandum interprets "failures" in the employment verification process purely in terms of omissions, i.e., failures to provide information requested, or blanks, in Form I-9. No mention is made of failures that consist of the provision of inaccurate or incomplete information, and thus no guidance is given to Service officers on how to deal with these. The reason for this is probably that only such omissions or blanks can readily be identified as violations by Service officers in the context of an inspection.

The memorandum's examination operates inductively, rather than deductively. Thus, no attempt is made to interpret the meaning of "technical" or "procedural" (these terms are also left undefined by the statute) in this context, with a view to applying this interpretation to violations as they are encountered by agency personnel. Rather, the memorandum simply lists a series of violations that are substantive and thus non-technical/substantive, and a series of violations that are technical/procedural. These two categories are reproduced in two checklists appended to the memorandum, and intended for use in the field by Service officers. The benefit of this approach by concrete example is that the discretion of Service officers to decide whether a given violation is technical/procedural or substantive is limited; the disadvantage is the resulting uncertainty about precisely what these terms mean in a theoretical sense.

1. Substantive Verification Failures

The memorandum provides that "substantive" verification failures are not procedural/technical in nature, and are therefore excluded from the reach of Section 274A(b)(6). An employer who commits any substantive violation will violate the statute's verification requirements, and will not be eligible for the notification and correction mechanisms of Section 274A(b)(6). Substantive failures include a failure to prepare or present Form I-9, as well as the following omissions:

1. In Section One of Form I-9, a failure to ensure that:

a) the employee provides a printed name;

b) the employee checks a box indicating status as a citizen/ national, permanent resident, or alien authorized to work until a specified date;

c) the employee provides an A number next to the phrase "A Lawful Permanent Resident," but only if this number is not provided in Sections Two or Three of the form, or in a legible copy of a document presented for inspection and retained with the form;

d) the employee provides an A number or Admission number next to the phrase "An alien authorized to work until," but only if this number is not provided in Sections Two or Three of the form, or on a legible copy of a document presented for inspection and retained with the form;

e) the employee signs the attestation in this section;

f) the employee dates this section at the time of hiring, if the hiring occurred before 9/30/96.

2. In Section Two, a failure to:

a) review and verify a proper List A document or proper List B and List C documents;

b) provide the title, identification number, and/or expiration date of a proper List A document or proper List B and List C documents, unless a legible copy of this document or documents is presented for inspection and is retained with the form;

c) sign the attestation in this section;

d) date this section within 3 business days of hiring, or, if the individual is hired for 3 business days or less, at the time of hiring if the date by which this section was to be completed occurred before 9/30/96.

3. In Section Three, a failure to:

a) review and verify a proper List A document or proper List B and List C documents;

b) provide the title, identification number, and/or expiration date of a proper List A document or proper List B and List C documents, unless a legible copy of this document or documents is presented for inspection and is retained with the form;

c) sign this section;

d) date this section, or date this section no later than the date of expiration of the individual's work authorization.

This litany of deadly verification sins expands to seventeen the five cardinal requirements set out in the substantial compliance doctrine. In this respect, the Virtue memorandum enlarges this doctrine's conviction that the commission of any failure that frustrates the purpose of Section 274A of the INA (namely, to prevent the employment of unauthorized aliens) must be penalized. Thus, the failures to use Form I-9, to print an employee's name, to check a box in Section I indicating the employee's status as a citizen/national, permanent resident, or alien authorized to accept employment, and to sign the various attestations provided in Form I-9, cannot be pardoned because they make it impossible to establish that unauthorized employment has not occurred. Despite the seriousness of these substantive verification failures, however, and in keeping with the permissive policy of Section 274A(b)(6), the Virtue Memorandum pragmatically does not insist on rigid and literal compliance with Form I-9's instructions. Accordingly, although a failure to provide in Form I-9 an alien's A number or Admission number, or to provide where indicated on this form the pertinent details of a document establishing employment authorization, are substantive failures under the memorandum, these failures will be excused if the relevant information is provided elsewhere in the form, or in a copy of a document attached to the form. This provision effectively overrides a substantial body of OCAHO case law holding that the attachment of work authorization and documents in lien of completion of Form I-9 does not establish substantial compliance. See, e.g., United States v. Manos and Associates, DBA Bread Basket, 1 OCAHO 130 (1989) (attaching photocopies of employee' s identification and immigration documents to back of facially incomplete Form I-9 is not an affirmative defense); United States v. James O. Carlson, 1 OCAHO 260 (1990) (copying documents and attaching them to an incomplete Form I-9 is not substantial compliance, but a factor to consider as to mitigation).

The Virtue Memorandum gives no indication of the intended exhaustiveness of this list of substantive failures; it is therefore possible that further violations not listed here may also be "substantive" and outside the reach of 274A(b)(6). Curiously, the memorandum does not list the failure to include an employee's Social Security number in Section 1 of Form I-9 as a substantive failure, or, indeed as a technical/procedural failure. It is doubtful that this is an intentional omission, and should be explained as a simple oversight on the Service's part. The memorandum also fails to indicate whether the failure to print the name of an employer or its authorized representative in Section 2, and the failure to provide a new name, if applicable, in Section 3, are technical/procedural, although it is highly unlikely that these failures would be considered substantive.

After such a careful and expansive delineation of which verification failures are substantive, and therefore outside the technical/procedural category, it might be questioned, despite the memorandum's creditable attempt at completeness, whether its subsequent description of technical/procedural failures is necessary. In the interest of simplicity, and ease of both understanding and implementation by agency officials, it would be preferable to define technical/procedural failures as all failures but those described in the "Substantive Verification Failures" section of the memorandum. The Virtue Memorandum, as it presently stands, appears to require a double inquiry. from Service officers to determine if Section 274A(b)(6) applies. First, a Service officer must inquire if a failure is "substantive." If the answer is affirmative, then no further inquiry is needed, and Section 274A(b)(6) will be inapplicable. If the answer is negative, then the officer must consider whether the failure is technical/procedural, by referring to the list of such failures in Section 3(b) of the memorandum. Since Section 3(a) of the memorandum presents such a comprehensive listing of "substantive" verification failures, it is difficult to see how eliminating Section 3(b), and allowing (or, indeed, instructing) Service officers to consider all failures not listed in this section to be technical/procedural, would interfere with the statutory policy preventing the employment of unauthorized aliens.

2. Technical/Procedural Failures

Technical/procedural failures are venial sins for which an employer should be allowed to atone. Under the terms of the memorandum, "it has been determined that" the following failures fall into the technical/procedural category:

In Section One of Form I-9, a failure to ensure that:

a) the employee provides a maiden name, address, or date of birth;

b) the employee provides an A number, as long as this number if provided in Sections Two or Three of the form, or in a legible copy of a document presented for inspection and retained with the form;

c) the employee provides an A number under the phrase "An alien authorized to work until," as long as this number is provided in Sections Two or Three of the form, or in a legible copy of a document presented for inspection and retained with the form;

d) the employee dates this section, or date this section at the time of hiring if this is on or after September 30, 1996;

e) the preparer or translator of the form provides his or her name, address, signature, and dates the form.

In Section Two of Form I-9, a failure to:

a) provide the title, identification number, and expiration date of a proper List A document or proper List B and List C documents, as long as a legible copy of the document is presented for inspection and is retained with the form;

b) provide a title, business name, and business address;

c) provide the date of hire in the attestation portion of the form;

d) date this section, or date it within three business days of the date of hiring, or if the individual is hired for three business days or less, at the time of hiring if the date on which Section 2 had to be completed was on or after September 30, 1996.

In Section Three, a failure to:

a) provide the title, identification number, and/or expiration date of a proper List A document or proper List B and List C documents, as long as a legible copy of the document in question is presented for inspection and is retained with the form;

b) provide the date of the employee's rehiring.

The memorandum does not state whether or not this listing operates by illustration or limitation, and thus leaves open the possibility that further violations not listed here may be embraced by Section 274A(b)(6).

Again, the definition of these violations as technical/procedural can be explained in pragmatic terms; they are pardonable because their commission does not frustrate the statute's policy of preventing and punishing the employment of unauthorized aliens. In other words, whether or not an alien is authorized to accept employment can be inferred from the face of a Form I-9 without taking into account these failures. For example, the fact that an otherwise properly completed Form I-9 fails to include the maiden name of an employee or the name of a translator do not hamper the Service's task of ascertaining whether or not unauthorized employment has taken place.

To summarize, the failures listed in the Virtue memorandum may be variously classified as "red light" failures (failures that will always subject an employer to sanctions), "yellow light" failures (failures that may or may not subject an employer to sanctions), and "green light" failures (failures that will not subject an employer to sanctions, assuming that the good faith and other requirements are met). A listing of these failures, arranged under these categories, is provided in Appendix A to this article.

D. Good Faith Requirement

In order to escape liability for a verification failure under Section 274A(b)(6), it is not enough for an employer to show that this failure was technical/procedural in nature; such an employer must also show that it was attempting in "good faith" to comply with the statute when the failure was committed. This "good faith" requirement is coherent from a public policy perspective. It reflects, firstly, this section's purpose of protecting well-intentioned employers. Secondly, it prevents the abuse of the liberal provisions of this section. In the absence of such a requirement, unscrupulous employers of unauthorized aliens would be free to commit technical/procedural verification failures intentionally, in the knowledge that such failures would not immediately lead to sanctions. Despite this, and given the narrowness of the technical/procedural category of violations eligible for Section 274A(b)(6)'s protection, it is hard to envisage any employers, however unscrupulous, deliberately committing such violations, and, even if these violations were deliberately committed, it is equally difficult to see what advantage would be gained by doing so.

The memorandum attempts to give guidance to Service officers in determining whether or not an employer has shown the necessary subjective "good faith" in attempting to comply with the statutory verification requirements. Consistently with Section 274A(b)(6) and OCAHO case law discussing good faith in the context of paperwork violations, the memorandum embraces the view that the presence of such violations is not enough, by itself, to establish a lack of good faith, and that further circumstantial evidence is needed. Thus, the memorandum indicates that good faith on the part of an employer will be presumed unless any of the following occur:

1. The "totality of the circumstances" demonstrate that the technical/procedural failure was committed with the intent to avoid a statutory requirement. Such circumstances may include a "substantial" presence of unauthorized alien employees and a "pattern" of repeated failures in the proper completion of Form I-9;

2. The technical/procedural failure was committed in "knowing reliance" on Section 274A(b)(6);

3. The employer corrected, or attempted to correct, the technical/procedural failure knowing (or recklessly disregarding) the fact that the correction or attempted correction contains a false, fictitious, or fraudulent statement or material misrepresentation, or has no basis in law or fact;

4. The employer prepared the Form I-9 knowing (or recklessly disregarding) the fact that it contains a false, fictitious, or fraudulent statement or material misrepresentation, or has no basis in law or fact; or

1. The type of failure involved was previously the subject of a Warning Notice, a NIF, or a Notification of Technical or Procedural Failures letter.

E. Correction of Technical/Procedural Failures

The memorandum states that employers who have been given ten days to correct technical/procedural failures under Section 274A(b)(6) will be considered to be in compliance with the statute's verification requirements if they do so in a timely fashion, and initial and date these corrections. The memorandum further recognizes that, in certain situations, employers will not reasonably be able to correct these failures within the ten-day period. Such circumstances include the following;

1. In the case of Section 1 failures, the employee is no longer employed by the employer, or is on a medical leave, leave of absence, or vacation during the ten-day period;

2. the preparer and/or translator of the Form I-9 cannot reasonably be located;

3. the failure in question relates to timeliness.

An employer asserting a reasonable inability to correct its failures during the ten-day period is required to provide an explanation (orally or in writing, as the Service may decide) of this reasonable inability. If the Service decides that the explanation is reasonable, no violation will be deemed to have taken place, and no sanctions will follow.

F. Interim Procedures

Following its discussion of Section 274A(b)(6), the memorandum sets out "interim" procedures to be followed by agency officials to ensure that investigations are conducted in conformity with Section 274A(b)(6). Under these procedures, Service officers conducting I-9 inspections or reinspections after September 30, 1996, may continue to issue NIFs "as usual" when the violations discovered consist of failures that are "not" technical/ procedural failures (presumably, this means "substantive" failures), under the terms outlined above. Similarly, if a "pattern and practice" of violations is found to exist, a NIF may be issued without regard to Section 274A(b)(6), and may address technical/procedural failures.

The memorandum also notes that, as discussed above, if no unauthorized aliens are discovered during the I-9 inspection process, a Warning Notice, rather than a N[F, may be issued. Such a Warning Notice may address technical/procedural failures without regard to Section 274A(b)(6)'s notification and correction period provisions.

Service officers who encounter technical/procedural failures during an I-9 inspection may include these failures in a NIF issued to the employer. A IF that includes such failures may only be issued after the Service has taken the following steps:

1. It has notified the employer of these technical/procedural failures through a notification packet that is served personally on the employer, or is sent by certified mail. This packet must include a Notification of Technical or Procedural Failures letter, copies of the offending Forms I-9, and copies of any documents originally attached to these forms. The technical/procedural failures must be circled in ink on the copies of these forms, and must be dated and initialed. The letter should indicate the date by which the corrections to these forms must be completed and ready for review. This date must be at least ten business days after service of this letter on the employer, or, if the notification packet is served on the employer by certified mail, at least fifteen days after service.

2. On the date specified in the Notification of Technical or Procedural Failures letter, the Service will retrieve the notification packet sent to the employer. A Service officer will then review the Forms I-9 included in the retrieved packet to determine whether or not the appropriate corrections have been made. This review must be limited to the technical/ procedural failures identified in the notification packet sent to the employer. Any further failures discovered at this stage may only be dealt with through a new inspection.

3. The employer will be considered to be in compliance with Section 274A(b) of the INA with regard to all technical/procedural failures that it has properly corrected. With regard to those technical/procedural failures that the employer could reasonably have corrected, but has not, the employer will be considered to have violated this statutory section. These failures may then be charged in the NIF.

4. After review of the retrieved Forms I-9, Service officers may issue a NIF to the employer. This NIF may charge all violations encountered during the initial I-9 inspection, including paperwork and non-paperwork violations. If the NIF is to charge a failure to correct technical/procedural failures under the procedures outlined above, the count charging this failure must follow a prescribed format that outlines the sequence of events leading to the conclusion that a violation of the statutory verification requirements has taken place.

III. CONCLUSION

What lessons should employers draw from the Virtue Memorandum? The wrong lesson to draw, certainly, is that they can afford to relax their vigilance during their completion of I-9 forms. The balance between "substantive" verification failures and technical/ procedural ones is weighed heavily in favor of the former, and only a small residue of violations eligible for Section 274A(b)(6)'s protection remains. Additionally, if the Service considers that an employer has relied on this section to relax its verification procedures, this may cause the employer to be deprived of these protections, despite the fact that it has committed only technical/procedural violations. Section 274A(b)(6) is a narrow exception to the INA's employer sanctions provisions, and should not lull employers into a false sense of security. The most significant step employers can appropriately take to respond to the memorandum's provisions is to ensure that they make copies of all documents presented by employers at the I-9 completion stage, and retain these copies with the relevant I-9 forms. The memorandum attaches considerable importance to the presence of such copies during I-9 inspections, and whether or not a failure is considered substantive or technical/procedural may often turn (as will the employer's liability) on whether or not such copies have been made.

The Virtue Memorandum represents a diligent and generally even-handed attempt to strike a balance between circumscribing the Service's discretion to impose sanctions for inconsequential paperwork violations, as Section 274A(b)(6) clearly requires, and ensuring that the statute's purpose of preventing and punishing the employment of unauthorized aliens is served. Its principal fault, in the opinion of the author, has nothing to do with its content, and everything to do with its circumstance: given the Service's stated policy of issuing Warning Notices instead of NIFs in situations identical to those which Section 274A(b)(6) purports to address, the memorandum, for all its painstaking thoroughness, may be attempting to guide the Service's actions in an area that has been preempted by another directive. Turning to the content of the memorandum, another plausible criticism that may be leveled against it concerns its arguably overbroad interpretation of "substantive" verification failures, as well as its under-inclusive reading of "technical or procedural" failures. To be sure, Section 274A(b)(6) is not intended to reach all paperwork violations. If it were, the statute could plainly say so. Nevertheless, the Virtue Memorandum creates so broad a class of "substantive" violations outside the scope of Section 274A(b)(6) that the exception effectively swallows the rule.

FOOTNOTES

Memorandum from Office of Programs, INS Headquarters, March 6, 1997 (HQ IRT 50/5.12) (reprinted at 2 Bender's Immigration Bulletin 430 (June 1, 1997)).

Neither the statute nor the Virtue Memorandum define these terms, nor do they indicate whether or not any difference exists between them. This article will therefore treat the two terms as synonymous with each other in this context.

Section 274A of the INA provides two classes of punishable violations: (1) the knowing hiring, reassignment, or referral of unauthorized aliens, and (2) the hiring of individuals without completing the paperwork prescribed by subsection (b) of this section. INA ' 274A(a)(1). The first class of violations is clearly more serious than the second; their respective gravity is reflected in the penalties triggered by each class of violations. Knowingly hiring, assisting, or referring unauthorized aliens may result in civil penalties ranging between $250 and $10,000 per unauthorized alien, as well as criminal penalties and injunctions under certain circumstances. INA ' 274A(e)(4),(f). A paperwork violation, by contrast, may be punished only by a civil penalty ranging between $100 and $1,000 per individual employee. INA ' 274A(c)(5). Section 274A(b)(6) is concerned exclusively with the second class of violations

The other factors to be considered are the size of the employer's business, whether or not the individual employee involved is an unauthorized alien, and the employer's history of previous violations. INA 274A(e)(5). These factors may not be raised to mitigate a penalty for a violation of 274A(a)(1)(A).

It is no coincidence that the title of the new section -- "Good Faith Compliance" --itself seems to be an amalgam of the terms "good faith" and "substantial compliance."

No OCAHO opinion dealing with the application of Section 274A(a)(b)(6) has yet been published.

Section 3(c)(1) of the memorandum states that a "substantial" presence of unauthorized aliens in a workplace will result in a finding that an employer has not acted in good faith for purposes of Section 274A(b)(6).

This letter must include its date of issuance, the name and address of the employer, the relevant file number, the date on which the inspection took place, the number of Forms I-9 included in the notification packet, the name and telephone number of the Service "contact person," and the signature, name, and title of the Service officer who issued the letter

Technical/procedural failures that could not reasonably have been corrected will not be considered punishable violations if the employer provides, as outlined above, a "reasonable" explanation for its failure to correct. Such an explanation may be orally delivered. If the Service officer to whom the explanation is delivered concludes that this explanation is not reasonable, he/she must request a written explanation that is signed and dated by the employer.