Safe-Harbor Procedures for Employers Who Receive a No-Match Letter: Rescission, 41801-41805 [E9-19826]

Agencies

• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 74, Number 159 (Wednesday, August 19, 2009)]
[Proposed Rules]
[Pages 41801-41805]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-19826]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 74, No. 159 / Wednesday, August 19, 2009 / 
Proposed Rules

[[Page 41801]]



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: Proposed rule.

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SUMMARY: The Department of Homeland Security (DHS) proposes to amend 
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. 
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: Comments must be submitted not later than September 18, 2009.

ADDRESSES: Comments may be submitted, identified by DHS Docket No. ICEB 
2006-0004, by one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail/Courier: National Program Manager Charles McClain, 
U.S. Immigration and Customs Enforcement, Office of Investigations--MS 
5112, 500 12th Street, SW., Washington, DC 20536-5112.024 To ensure 
proper handling, please reference DHS Docket No. ICEB-2006-0004 on your 
correspondence. This mailing address may also be used for paper, disk, 
or CD-ROM submissions.
     Hand Delivery: National Program Manager Charles McClain, 
U.S. Immigration and Customs Enforcement, 500 12th Street, SW., 
Washington, DC 20536-20024.

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. Public Participation

    Interested persons are invited to comment on this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
rule. Comments that will most assist DHS will reference a specific 
portion of the rule and explain the reason for any recommended change. 
Comments should include data, information, and the authority that 
supports the recommended change. Comments previously submitted to this 
docket do not need to be submitted again.
    Instructions for filing comments: All submissions received must 
include the agency name and DHS docket number ICEB-2006-0004. All 
comments received (including any personal information provided) will be 
posted without change to https://www.regulations.gov. See ADDRESSES, 
above, for methods to submit comments. Mailed submissions may be paper, 
disk, or CD-ROM.
    Reviewing comments: Public comments may be viewed online at https://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 you must call telephone number 202-307-0071.

II. 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. 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 DHS 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.'' There can be many causes for a no-match, 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 a 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.

[[Page 41802]]

    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 authorized to work in 
the United States. On August 15, 2007, DHS issued a 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. The rule also established ``safe-harbor'' procedures 
for employers receiving no-match letters.
    On August 29, 2007, the American Federation of Labor and Congress 
of Industrial Organizations, and others, filed suit seeking declaratory 
and injunctive relief in the United States District Court for the 
Northern District of California. AFL-CIO, et al. v. Chertoff, et al., 
No. 07-4472-CRB, D.E. 1 (N.D. Cal. Aug. 29, 2007). The district court 
granted plaintiffs' initial motion for a temporary restraining order 
against implementation of the August 2007 Final Rule. AFL-CIO v. 
Chertoff, D.E. 21 (N.D. Cal. Aug. 31, 2007) (order granting motion for 
temporary restraining order and setting schedule for briefing and 
hearing on preliminary injunction). On October 10, 2007, the district 
court granted the plaintiffs' motion for preliminary injunction. AFL-
CIO v. Chertoff, 552 F.Supp.2d 999 (N.D. Cal. 2007) (order granting 
motion for preliminary injunction).
    The court raised three issues regarding DHS's rulemaking action 
implementing the No-Match final rule: Whether DHS had (1) supplied a 
reasoned analysis to justify what the court viewed as a change in the 
Department's position--that a no-match letter may be sufficient, by 
itself, to put an employer on notice, and thus impart constructive 
knowledge, that employees referenced in the letter may not be work-
authorized; (2) exceeded its authority (and encroached on the authority 
of the Department of Justice (DOJ)) by interpreting the anti-
discrimination provisions of the Immigration Reform and Control Act of 
1986 (IRCA), Public Law 99-603, 100 Stat. 3359 (1986), INA section 
274B, 8 U.S.C. 1324b; and (3) violated the Regulatory Flexibility Act, 
5 U.S.C 601 et seq., by not conducting a regulatory flexibility 
analysis. DHS subsequently published a supplemental notice of proposed 
rulemaking (SNPRM) and supplemental final rule to clarify certain 
aspects of the 2007 No-Match final rule and to respond to the three 
findings underlying the court's injunction.. See e.g. 73 FR 15944 (Mar. 
26, 2008), 73 FR 63843 (Oct. 28, 2008). Neither the SNPRM nor final 
rule, however, changed the safe-harbor procedures or applicable 
regulatory text. The implementation of the rule remains enjoined.

III. Basis for Policy Change

    On January 20, 2009, President Barack Obama was sworn into office. 
Shortly thereafter, on January 21, 2009, Janet Napolitano was sworn in 
as the Secretary of Homeland Security. Following the transition, the 
Secretary conducted a review of existing programs and regulations to 
determine areas for reform or improved efficiency. Pursuant to this 
review, DHS has determined that improvements in U.S. Citizenship and 
Immigration Services' (USCIS) electronic employment verification system 
(E-Verify), along with other DHS programs, provide better tools for 
employers to reduce incidences of unauthorized employment and to better 
detect and deter the use of fraudulent identity documents by employees. 
As discussed below, DHS therefore has concluded that rescinding the 
August 2007 No-Match Rule and 2008 Supplemental Final Rule will better 
achieve DHS's regulatory and enforcement goals.
    DHS has determined 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 USCIS's E-Verify employment eligibility 
verification system, the U.S. Immigration and Customs Enforcement's ICE 
Mutual Agreement Between Government and Employers (IMAGE), and other 
programs. This decision is part of a Government-wide reexamination of 
regulatory processes.
    Further development of the USCIS E-Verify employment eligibility 
verification system warrants refocusing DHS's priorities on the 
implementation of that compliance protocol. DHS believes E-Verify is an 
essential tool for employers committed to maintaining a legal 
workforce. E-Verify compares employee information from the Form I-9 
against more than 455,000,000 records in the SSA database and more than 
80,000,000 records in DHS immigration databases.
    E-Verify has expanded exponentially in the past several years to 
include over 138,000 employers representing over 500,000 locations; on 
average, 1,000 employers enroll in E-Verify each week. Participation 
has more than doubled each fiscal year since 2007. As of August 1, 
2009, more than six million queries have been run through the system in 
FY 2009. Accuracy of the E-Verify program also has improved. An 
independent evaluation completed in December 2008 found that 
approximately 96.9 percent of all cases queried through E-Verify are 
instantly found to be work-authorized. Of the 3.1 percent of queries 
that resulted in a mismatch of the information in SSA or DHS databases, 
0.3 percent of queries were successfully contested. The remaining 2.8 
percent either did not contest the determination or were unsuccessful 
in contesting, or were found unauthorized to work at the secondary 
verification stage.
    In September 2007, E-Verify began to automatically flag 
inconsistent data and allow employers to double-check the data they 
entered into E-Verify before issuing a tentative non-confirmation, 
thereby reducing data entry errors and initial mismatches by 
approximately 30 percent. Cross-checking queries against USCIS 
naturalization data reduced citizenship mismatches by approximately 39 
percent. As of May, 2008, E-Verify also added the Integrated Border 
Inspection System (IBIS) real time arrival and departure information 
for non-citizens to its databases. This step reduced hundreds of E-
Verify mismatches that had resulted from data entry delays, thus 
allowing newly arriving workers to enter the country legally and start 
working immediately. In February 2009, USCIS began incorporating 
Department of State passport data into E-Verify in order to check 
citizenship status information in the event of a mismatch with SSA, 
reducing the number of mismatches for citizens who did not personally 
complete the naturalization process, but derived citizenship from their 
parents, eliminating several hundred more mismatches.
    Finally, to reduce the premium on identity theft to commit 
immigration fraud, the E-Verify program introduced a photograph 
screening capability into

[[Page 41803]]

the verification process in September 2007, allowing an employer to 
check the photos on Employment Authorization Documents or Permanent 
Resident Cards (green card) against images stored in USCIS databases. 
Through use of the photo tool, hundreds of cases of document and 
identity fraud have been identified, and unauthorized workers have been 
prevented from illegally obtaining employment.
    In FY 2010, USCIS plans to improve the E-Verify system's ability to 
automatically verify international students and exchange visitors 
through the incorporation of ICE's Student and Exchange Visitors 
Information System (SEVIS) data into E-Verify. By incorporating SEVIS 
nonimmigrant student visa data into the automatic initial E-Verify 
check, the number of students and exchange visitors who receive initial 
mismatches should be reduced. In 2010, ICE will be launching a new 
version of SEVIS, SEVIS II, which will include employment eligibility 
information that E-Verify will be able to access electronically. 
Currently, the SEVIS database is checked manually by immigration status 
verifiers after an initial mismatch is issued. See, Adjusting Program 
Fees and Establishing Procedures for Out-of-Cycle Review and 
Recertification of Schools Certified by the Student and Exchange 
Visitor Program To Enroll F or M Nonimmigrant Students, 73 FR 21260 
(Apr. 21, 2008) (proposed rule); 73 FR 55683 (Sept. 26, 2008) (final 
rule) (establishing fees and cost base for SEVIS II).
    DHS is dedicated to providing this service to employers and 
continuing to make improvements to the system to address issues such as 
usability, fraud, discrimination, and further improve the system's 
automatic verification rate. E-Verify will continue to be a key element 
of DHS's ability to deter employment of unauthorized aliens and illegal 
immigration.
    Additionally, the ICE Mutual Agreement between Government and 
Employers (IMAGE) program assists employers to develop a more secure 
and stable workforce and to enhance fraudulent document awareness 
through education and training to combat unlawful employment and reduce 
vulnerabilities. Employers can reduce unauthorized employment and the 
use of fraudulent identity documents by voluntarily participating in 
the IMAGE program. As part of IMAGE, ICE and USCIS provide education 
and training on proper hiring procedures, fraudulent document 
detection, and the use of the E-Verify employment eligibility 
verification program. Since 2006, ICE has partnered with industry to 
provide ``best practices,'' training, and recommended tools that 
industry can use to comply with worksite laws and requirements. In FY 
2008, ICE outreach coordinators in 26 field offices made 517 IMAGE 
presentations to more than 8,300 businesses. DHS believes that a 
comprehensive strategy to address worksite enforcement creates a 
culture of industry compliance. To that end, IMAGE outreach efforts 
have increased significantly since the inception of the program.
    Opportunities for employment remain a primary motivation for aliens 
seeking illegal entry into the United States. ICE's worksite 
enforcement program targets unscrupulous employers who prey upon these 
aliens by subjecting them to poor or unsafe working conditions or 
paying them sub-standard wages. ICE's multi-faceted worksite 
enforcement strategy targets two types of employers: employers whose 
business model relies upon an unauthorized workforce, and employers who 
place the national security of the United States at risk by employing 
unauthorized workers in sensitive critical infrastructure industries.
    Employers hire undocumented workers to obtain a financial advantage 
over their competitors by paying lower wages, offering few if any 
benefits, failing to comply with tax laws, and avoiding health and 
safety related complaints. ICE focuses on the most egregious violators, 
namely employers who engage in human smuggling, identity theft, and 
social security number fraud. ICE also focuses on employers who use 
undocumented workers at our Nation's critical infrastructure sites, 
including airports.
    DHS's worksite enforcement strategy includes a restructured process 
for worksite administrative fines to build a more vigorous program. ICE 
has established and distributed to all field offices guidance about the 
issuance of administrative fines and standardized criteria for the 
imposition of such fines. DHS expects that the increased use of the 
administrative fines process will result in meaningful penalties for 
those who engage in the employment of unauthorized workers.
    ICE has also implemented a debarment policy that prevents employers 
from receiving Federal contracts when they are in violation of worksite 
laws. After completion of administrative proceedings and on the basis 
of a determination that an employer has violated the worksite laws, an 
offending employer may be excluded from doing business with the Federal 
Government or from receiving loans under the Recovery Act. Since this 
relatively new program began, thirty-one companies and forty 
individuals have been debarred.
    ICE also created the Document and Benefit Fraud Task Forces (DBFTF) 
to combat the vulnerabilities exploited by identity and document fraud 
organizations and to maintain the integrity of the United States 
immigration system. The DBFTF cooperative effort leverages multiple law 
enforcement tools and authorities to identify, disrupt, and dismantle 
criminal organizations involved in immigration benefit fraud and the 
manufacturing and distribution of fraudulent identity documents, 
including United States passports, birth certificates, state-issued 
identification cards, social security cards, and alien registration 
documents. In these taskforces, ICE and USCIS work with the law 
enforcement functions and the Inspectors General of the Departments of 
Labor and State, the Social Security Administration, U.S. Postal 
Service, and various state and local law enforcement agencies.
    The aggregate of these changes in enforcement priorities must be 
balanced with other efforts of the U.S. government. In addition, as 
noted in the 2008 Supplemental Final Rule, SSA has continued to refine 
the wage reporting process in ways that help to reduce potential errors 
resulting in a no-match letter. As noted previously, electronic filing 
of Forms W-2 rose from 53% of all employee reports in FY2003 to over 
80% in FY2007--a 51% increase.\1\ SSA has more recently reported a 
further increase in electronic filing of Forms W-2 to 86.3%.\2\ 
Employers who use SSA's system are able to eliminate most no-matches in 
their reports and thereby significantly reduce their likelihood of 
receiving a no-match letter. SSA improvements in related areas have led 
the SSA Inspector General to question the efficacy of the continuing 
use of no-match letters.\3\
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    \1\ Social Security Administration, Performance and 
Accountability Report, Fiscal Year 2007 at 67-8.
    \2\ Social Security Administration, Performance and 
Accountability Report, Fiscal Year 2008 at 175.
    \3\ Office of the Inspector General, Social Security 
Administration, Quick Response Evaluation: Effectiveness of 
Educational Correspondence to Employers, Audit Rept. No. A-030-07-
17105 (Dec. 2008) (``[O]ur review showed EDCOR letters were not as 
successful as other SSA processes in removing suspended wage items 
from the ESF'').
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    Finally, as noted in the Supplemental Final Rule, SSA no-match 
letters have also formed a basis for multiple criminal investigations 
by ICE and prosecutions on charges of harboring or knowingly

[[Page 41804]]

hiring unauthorized aliens.\4\ DHS has determined that focusing on the 
management practices of employers would be more efficacious than 
focusing on a single element of evidence within the totality of the 
circumstances.
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    \4\ 73 FR at 63848 & n.2. Further developments in the criminal 
cases previously noted in this rulemaking illustrate the utility of 
focusing attention on employer and employer management conduct. 
United States v. Gonzales, 2008 WL 160636 (N.D. Miss. No. 4:07-CR-
140, Jan. 18, 2008) (final order of forfeiture of $310,511.75, as to 
Gonzalez and Tarrasco Steel Company, Inc.); United States v. 
Insolia, No. 1:07-CR-10251 (D. Mass), (Insolia plead guilty to 
harboring and submitting false social security numbers; to serve 13 
to 18 months, fined $30,000; MBI plead guilty to 18 counts of 
knowingly hiring unauthorized workers between early 2004 and late 
2006; harboring and shielding from 2004-2007; social security and 
mail fraud from 2005-2007; fine approximately $1,500,000, including 
$476,000 in restitution to employees; managers also plead guilty); 
United States v. Rice, No. 1:07-CR-109 (N.D.N.Y) (IFCO Systems 
reached corporate settlement of $2,600,000 in back pay for overtime 
violations and $18,100,000 in civil forfeitures. Nine IFCO managers 
previously plead guilty (including Rice) (indictment of seven 
managers for illegal immigration and employment-related practices 
filed).
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    Accordingly, DHS proposes to rescind the 2007 Final Rule and 2008 
Supplemental Final Rule, and reinstate the language of 8 CFR 274.1(l) 
as it existed prior to the effective date of the 2007 Final Rule.

IV. Statutory and Regulatory Reviews

A. Administrative Procedure Act

    DHS is publishing this proposed rule in the Federal Register as a 
discretionary request for public comment. DHS has previously stated 
that the regulation that is being rescinded was an interpretive, not 
legislative, rule. 73 FR 15951 (March 26, 2008) (supplemental proposed 
rule); 73 FR 63861 (Oct. 28, 2008) (supplemental final rule). DHS 
believes that rescission of the regulation is an interpretive rule for 
the same reasons that the underlying regulation being rescinded was an 
interpretive rule.

B. 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 proposed 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 would 
reinstate 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 to 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 notice of proposed rulemaking will not have a 
significant economic impact on a substantial number of small entities. 
DHS invites comments from small entities regarding any direct costs 
commenters believe this rulemaking would impose.

C. 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.

D. Small Business Regulatory Enforcement Fairness Act of 1996

    This proposed 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 proposed 
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.

E. Executive Order 12866 (Regulatory Planning and Review)

    This proposed 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. Because this rule rescinds two previously 
published rules that received considerable public attention and 
involves multiple agencies of the United States, this rule raises novel 
policy issues and, thereby, is subject to OMB review.

F. 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 43,255 (Aug. 4, 1999), this rule does 
not have sufficient federalism implications to warrant the preparation 
of a federalism summary impact statement.

G. 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 Fed. Reg. 4729 (Feb. 5, 
1996).

H. 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.

    Accordingly, for the reasons set forth in the preamble, DHS 
proposes to

[[Page 41805]]

amend part 274A of title 8 of the Code of Federal Regulations as 
follows:

8 CFR CHAPTER 1--DEPARTMENT OF HOMELAND SECURITY

PART 274a--CONTROL OF EMPLOYMENT OF ALIENS

    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.
    2. Section 274a.1 is proposed to be 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. E9-19826 Filed 8-18-09; 8:45 am]
BILLING CODE 9111-28-P