Seyfarth Synopsis: This week, the U.S. Supreme Court in the case of Kansas v. Garcia __ U.S. __, (Slip Op., March 3, 2020), upheld the application of the Kansas state identity theft and benefit fraud statutes against unauthorized workers using fraudulent social security numbers on IRS Form W-4 and on the Form K-4, the Kansas state version of the W-4.
In so doing, the Supreme Court reasoned that general federal preemption of state laws designed to enforce federal immigration law, as well as regulations restricting employer’s use of the Form I-9 do not operate prevent state prosecutions based on information, such as the social security number, that is also entered into a federal Form I-9. The three men whose convictions were upheld had argued that the state could not prosecute their fraud cases based on the personal information found in onboarding forms, because the biographical information (Name, DOB, SSN) was also used to establish work eligibility on the Form I-9.
The Kansas prosecution and the Supreme Court’s green light for similar enforcement activity offer a path for state prosecutors and law enforcement authorities looking to leverage state authority to take similar action against either employees, HR personnel or employing entities where falsified identity information, including but not limited to social security numbers, is entered into documents that are required to either be submitted to or are to kept available for inspection by state or federal government authorities. For the over eight million undocumented workers in the United States, the ruling raises another area of risk, with potentially far-reaching implications in certain states.
Significantly, the Department of Justice filed an amicus brief in the case supporting the Kansas prosecutions, arguing that “protection against fraud is among the oldest powers within the ambit of the police power of the States.” This signals pretty clearly that the feds will not likely stand in the way of similar prosecutions in the immediate future.
HR professionals and employers could face similar prosecution, particularly in states that are eager to leverage state law legal authority and enforcement resources to combat employment of undocumented individuals. For example, an employer who submits a state tax form or state unemployment insurance form bearing either a name or social security number that does not actually belong to the employee could face prosecution if they have reason to know that the information is fraudulent.
In particular, employers who become aware of concrete information suggesting either that identity documents presented during the preparation of Section 2 of Form I-9 are fraudulent or that any other information presented by the employee to the employer for use in preparation of Forms I-9 or any other government forms is false, are well-advised to take steps to investigate, generally with assistance of legal counsel experienced in immigration compliance matters.
The particulars of any situation should be reviewed based on the facts and analyzed individually to avoid missteps. For example, a social security letter notifying an employer of a mismatch of W-2 information does not rise to the same level as the discovery of substantiated fraudulent information does. As a general matter, employers will want to inquire with the employee about any information the employee may have presented which appears to be fraudulent, and in the case of fraudulent I-9 documents, ask the employee to submit alternative documents from the Lists of Acceptable Documents that accompany the Form I-9. In all cases, employers should approach such inquiries consistently regardless of the citizenship status of the employee. If, however, investigation shows that an employee is not authorized to work in the United States or his unable to document their eligibility to work in the United States after being given the opportunity to do so, the employee should be terminated.
The Seyfarth Immigration Compliance practice handles Form I-9 audits, worksite visits, ICE worksite enforcement actions, Immigrant and Employee Right (IER) anti-discrimination reviews/investigations, government contract debarment actions, Labor Department employment-related immigration charges, USCIS Fraud Detection and National Security site visits (FDNS) and E-Verify monitoring and compliance review, as well as criminal investigations.