United States: Can Federal Immigration Law And AB 60 Be Reconciled?

On Jan. 1, 2015, the California Department of Motor Vehicles began accepting applications for the new A.B. 60 driver's license, named after the California legislative enactment that amended the state Vehicle Code to permit undocumented aliens to qualify for licensure by amending the standard eligibility requirements.1 Previously, licensure was limited to individuals age 16 and older who could establish, through documentation, that they were legally present in the U.S. under federal law and in possession of a valid social security account number. A.B. 60 waived those requirements for an undocumented alien who executes an affidavit attesting that he or she is not lawfully present in the U.S. under federal law and is not presently eligible for issuance of a social security account number. The affidavit requirement was deleted by subsequent legislation amending Section 12809 of the California Vehicle Code, such that DMV is directed to issue an original driver's license to a person who is unable to submit satisfactory proof that the applicant's presence in the U.S. is authorized under federal law if he or she meets all other qualifications for licensure and provides satisfactory proof to the department of his or her identity and California residency.2 Emergency regulations promulgated by DMV establish the documents acceptable to prove identity and residency by A.B. 60 applicants.3

According to statistics released by the California Department of Motor Vehicles, the agency issued 59,000 A.B. 60 licenses in January 2015, but received many more applications (236,000 in total) that are backlogged for adjudication.4 Over the life of the program it is projected that more than 4 million undocumented California residents could qualify for licensure. Given the volume of A.B. 60 licenses issued in the first month of the program, and the thousands more expected to be issued in the following months, there is little doubt that employers will encounter these identity documents during the onboarding process, if they haven't encountered them already.

A.B. 60 license cards are identifiable by the letters "DP" instead of the letters "DL" on the front of the card5, and because they bear the following notice: "This card is not acceptable for official federal purposes. This license is issued only as a license to drive a motor vehicle. It does not establish eligibility for employment, voter registration or public benefits."6 The notice has raised questions to whether an A.B. 60 license is an acceptable List B identity document for I-9 purposes, and further whether A.B. 60 license holders are eligible to work in the U.S. Indeed, a reasonable employer might conclude that it should refuse to hire or continue to employ anyone who possesses or presents an A.B. 60 driver's license, based on the card's notice and public notice that the California legislature passed A.B. 60 to enable undocumented workers to become registered drivers — not to provide them with an I-9 verification document.

Despite the logical basis for such a conclusion, if an employer adopts that policy in order to avoid liability for federal immigration violations, it is susceptible to being investigated by the California Fair Employment and Housing Department for discrimination on the basis of national origin, based on the A.B. 60 amendments to the California Fair Employment and Housing Act (FEHA) that define national origin discrimination to include discrimination on the basis of possessing a driver's license granted under Section 12801.9 of the Vehicle Code.7 The FEHA provides for an award of damages and attorney's fees for violations of the Act, as well as other make whole and remedial relief, including an order of reinstatement.8

Employers should take little comfort from the proviso contained in Section 12801.9(h)(2)(B) of the Vehicle Code, which exempts an employer from liability based on A.B. 60 national origin discrimination in order to satisfy the document verification requirements set forth under Section 1324a of Title 8 of the United States Code inasmuch as current federal regulations designate a state-issued driver's license containing a photograph as an acceptable List B identity document for I-9 verification purposes.9. Because A.B. 60 licenses fall within this authorized category, and because there is currently no federal law or regulation expressly prohibiting the employment of A.B. 60 license holders, California employers would be unable to avail themselves of the proviso defense.

In point of fact, the A.B. 60 proviso is not broad enough to avoid a conflict with federal immigration law because it ignores the prohibition on knowing hire otherwise contained in Section 1324a of Title 8. As such, reasonable minds could conclude that enforcement of the A.B. 60 anti-discrimination provision is preempted by federal law to the extent the presentation of an A.B. 60 license to an employer is deemed to create "constructive knowledge" that the holder is an undocumented alien.

The Statutory and Regulatory Basis for Constructive Knowledge Violations

Section 274A of the Immigration Reform and Control Act of 1986 (IRCA), codified under Section 1324a (a) of Title 8 of the United States Code, makes the employment of unauthorized aliens unlawful. The term "knowing," as defined by implementing regulations, includes actual as well as constructive knowledge, which, in turn, is defined as knowledge that "may fairly be inferred through notice of certain facts and circumstances" that would lead a person, through the exercise of reasonable care, to know that an individual was unauthorized to work.10.

Under the federal employer sanctions scheme, in a first offense case, an employer is subject to base civil penalties ranging up to $3,200 per knowing hire violation; the base penalty can rise to $16,000 per violation in a third offense case.11 Base penalties can be aggravated or mitigated by U.S. Immigration and Customs Enforcement based on the respondent's violation history, its relative size, good faith efforts to comply, the seriousness of the violations, and the presence of unauthorized workers, as well as by an administrative law judge in hearing proceedings initiated by an employer request challenging ICE's penalty assessments based on an I-9 inspection and investigation.12.

ICE enforcement personnel have a great deal of authority in investigating potential knowing hire violations, including the right to inspect an employer's I-9 documents upon three days written notice, the authority to issue administrative subpoenas to produce any documents relevant to the investigation, and the right to compel witness testimony under oath. At present, ICE field investigators are at liberty to pursue knowing hire cases against California employers based on the acceptance of A.B. 60 driver's licenses in the absence of limiting instructions from senior officials. Thus far, ICE headquarters' officials have made no public pronouncement that they have or will issue instructions prohibiting or limiting ICE field personnel from pursuing constructive knowledge cases based on the employment of individuals known to hold an A.B. 60 license. To the contrary, the official position of senior regulatory and enforcement officials in Washington, D.C., in response to a question posed by the American Immigration Lawyers Association (AILA) is that employers are on their own in determining whether acceptance of A.B. 60 licenses in the I-9 verification process could lead to prosecution for constructive knowledge violations. The minutes of the liaison meeting of Nov. 6, 2014 between AILA representatives and DHS officials, which are posted on the USCIS website, include the following response to AILA's request for agency guidance:

The employer must decide whether the card presented by an employee meets the description of acceptable identity documents in the regulations at 8 CFR 274a.2 (b) (1) (v) (B). The Handbook for Employers (M-274) and I-9 Central, and the Form I-9 List of Acceptable Documents currently indicate that a driver's license or identification (ID) card issued by a state or outlying possession of the United States is acceptable as a List B document provided it contains a photograph or information such as name, date of birth, gender, height, eye color and address. They also indicate that an identification card issued by federal, state or local government agencies or entities may be acceptable as a List B document provided it contains a photograph or information such as name, date of birth, gender, height, eye color and address. The INA and DHS regulations prohibit an employer from hiring or continuing to employ an individual if the employer has actual or constructive knowledge that the employee is unauthorized to work.13.

Constructive Knowledge Case Law Provides Little Guidance for Employers Regarding Potential Liability for Permitting AB 60 License Holders to Work

The case law relating to constructive knowledge is not particularly helpful in predicting whether or not ICE will be successful in prosecuting employers for accepting A.B. 60 driver's licenses in the I-9 verification process because the fact patterns underlying those cases are different and distinguishable. Administrative law judges with the Office of the Chief Administrative Hearing Officer14 have found employers liable for civil money penalties under the constructive knowledge doctrine under the following circumstances:

  • Acceptance of expired or non-approved identity or work authorization documents in the I-9 employment verification process15;
  • Permitting an employee to continue working after the expiration date of a temporary DHS employment authorization document (EAD) without re-verifying his continuing eligibility to work16;
  • Continuing to employ an individual for more than three days after federal immigration enforcement officials notify the employer that the employee's documents are suspect17; and
  • Permitting an employee to continue working after filing a labor certification or immigrant visa petition for that employee containing information establishing that the employee is undocumented or otherwise ineligible to work for that employer.18

While it is speculative to assume that an administrative law judge would find an employer liable for a constructive knowledge violation for permitting an A.B. 60 license holder to work, it is not beyond reason to assume that an ALJ would impute to the employer knowledge of the legislative scheme to make driver's licenses available to undocumented aliens who could not otherwise satisfy the normal California requirements for documentary proof of legal presence in the U.S. under federal law and a valid social security account number. In such a case, if the employer had accepted a List A or List C work authorization document from the A.B. 60 license holder issued prior to the date on which the A.B. 60 license was issued, such additional circumstances could well tip the balance of a constructive knowledge finding.

IRCA provides for a right of appeal to the United States Court of Appeals with jurisdiction over the place of employment. If a California employer is charged with constructive knowledge violations involving an A.B. 60 fact pattern, the Ninth Circuit would have jurisdiction over the appeal process. Thus far, the Ninth Circuit has decided only four cases involving the IRCA constructive knowledge doctrine. The only fact patterns found to support IRCA constructive knowledge violations by the Ninth Circuit involved a failure by the employer to heed an express warning from federal immigration officials that named individuals had presented false documents in the I-9 process and should not continue to work unless they could produce acceptable documentation that officials could confirm to be valid — conduct the court characterized as tantamount to deliberate indifference or reckless disregard for the law.19 By contrast, the Ninth Circuit reversed an OCAHO decision holding an employer liable for a constructive knowledge violation based on the employer's failure to observe irregularities on the reverse side of a social security account card because the employer failed to consult the valid document facsimile published the I-9 Employer Handbook.20 The Ninth Circuit held that the law required no more than that the employer examine the face of the social security account card to determine if it appeared to be genuine, and was never intended to require employers to become document experts.21

The Ninth Circuit's most recent constructive knowledge decision did not involve an appeal from an OCAHO decision. Rather, it involved an appeal from a district court judgment vacating an arbitration award interpreting the just cause provision of a collective bargaining agreement. The Ninth Circuit ruled that the district court had erred in applying the public policy exception contained in the Federal Arbitration Act to declare the arbitrator's decision in favor of the union to be unenforceable because it compelled the employer to reinstate workers who had failed to produce evidence that they had provided the employer with a valid social security account number after the Social Security Administration reported their account numbers in a "no match" letter sent to the employer. The court relied upon its restrictive application of the constructive knowledge doctrine in Collins Foods to justify its decision to reject Aramark's argument that its failure to terminate the workers based on their failure to promptly resolve an SSA no-match notice could have exposed the company to IRCA fines and penalties.

Conclusion

Employers face a Hobson's choice when it comes to structuring a policy position on whether to accept California A.B. 60 driver's licenses as valid List B identity documents in the I-9 employment verification process, and what additional steps should be taken to verify the validity of List A and C work authorization documents produced by A.B. 60 license holders. If employers elect to accept the A.B. 60 licenses without question or inquiry in order to avoid potential national origin claims, they incur the risk of potential employer sanctions fines under the constructive knowledge doctrine for the reasons discussed above. On the other hand, if they elect to investigate the validity of work authorization documents presented by A.B. 60 holders as a precaution against constructive knowledge charges, they run the risk of liability for national origin discrimination claims. Either way, they can't win.

Footnotes

1. CA VEH § 12801.9 (Persons unable to submit satisfactory proof of authorized presence in the United States under federal law; issuance of driver's license 'emergency regulations' documents acceptable to prove identity and residency) (Effective contingent, January 1, 2015) (Added by Stats.2013, c. 524 (A.B.60, § 15, operative contingent. Amended by Stat.2014, c.71 (S.B.1304), § 172, eff. Jan. 1, 2015; Stats.2014, c. 452 (A.B.1660), § 4, eff. Jan. 1, 2015).

2. Stats.2014, c. 452 (A.B.1660), § 4, eff. Jan. 1, 2015.

3. 13 CCR T 13, Div. I, Ch. 1, Art. 200 (Driver Licenses and Identification Cards). The DMV AB 60 document regulation provides for two subclasses of primary identification documents. The first class includes valid foreign documents that DMV is able to verify electronically with the country of origin.  The second class of foreign primary identification documents must be accompanied by a certified copy of a foreign birth certification issued by a national civil registry within six (6) months of the AB 60 application date that contains an embedded photo of the applicant or a foreign birth certificate that is accompanied by an Apostille authentication and English translation.   If an applicant is unable to meet the primary identification document requirements, he or she must produce as many non-primary identification documents as possible for investigation under the secondary review process.   The designated non-primary identification documents include sealed school records that include a photograph of the applicant; documents issued by or filed with a government within the United States or the U.S. government, including U.S. Department of Homeland Security (DHS) Form I-589 (Application for Asylum and for Withholding of Removal), U.S. DHS Form I-20 (Certificate of Eligibility for Nonimmigrant (F-1) Student Status or (M-1) Student Status, U.S. DHS Form DS-2019 (Certificate of Eligibility for Exchange Visitor (J-1) Status, court documents where the applicant is named as a party to the court proceeding, income tax returns, and a driver's license); documents pertaining to civil marital status or civil unity; divorce decrees; a foreign passport, consular identification card, foreign national identification, or a foreign driver's license; identification cards that contain a photograph of the applicant issued by a government within the U.S. or the U.S. government; birth documents including a birth certificate or adoption records; and documents that list the applicant's spouse, domestic partner, child, parent or legal guardian in combination with the applicant's birth certificate, adoption records, marriage license, or domestic partner registration.

4. CA DMV Press Release (Feb. 18, 2015).

5. CA VEH § 12801.9(d)(1).

6. CA VEH § 12801.9(d)(2).

7. CA GOV § 12926(v).

8. CA GOV § 12965(b).

9. 8 CFR 274a.2(b)(1)(v)(B).

10. 8 C.F.R. §274a.1(l)(1) (2015).

11. 8 C.F.R. §274a.10(b)(1).

12. I-9 Inspection Overview, U.S. Customs and Immigration Enforcement (Rev. June 26, 2013), http://www.ice.gov/doclib/foia/dro_policy_memos/formi9inspectionoverview.pdf.

13. See Item 2 of the Minutes of the November 6, 2014 Joint Meeting between AILA, USCIS, and ICE posted at http://www.uscis.gov/sites/default/files/USCIS/Outreach/Notes from Previous Engagements/PED_FINAL_AILA_Agenda_VerDiv_November_2014.pdf.

14. OCAHO is a subdivision of the Executive Office for Immigration Review within the U.S. Department of Justice and has jurisdiction over administrative complaints arising under IRCA.  8 U.S.C. 1324a(e)(6); 8 U.S.C. §1324a(e)(6).

15. United States. v. Occupational Resource Management Staffing, Inc., 10 OCAHO 1166 (2013).

16. United States v. Great Bend Packing Co., 6 OCAHO 129 (1996); United States v. Buckingham Ltd, 1 OCAHO 151 (1990).

17. See Mester Mfg. Co. v. INS, 879 F.2d 561, 566 (9th Cir. 1989), aff'g U.S. v. Mester Manufacturing Co., 1 OCAHO 18 (1988); New El Ray Sausage v. U.S., 925 F.2d 1153 (9th Cir.1991), aff'g El Rey Sausage., 1 OCAHO 78 (1989)

18. United States v. Walden Station, Inc. 8 OCAHO 1053 (2000).

19. See, supra, Mester Mfg. Co. v. INS, 879 F.2d at 561; New El Ray Sausage v. U.S., 925 F.2d at 1158.

20. Collins Foods Int'I, Inc. v. INS, 948 F.2d 549, 555 (9th Cir. 1991), rev'g  U.S. v. Collins Foods International, Inc. I OCAHO 129 (1990).

21. Aramark Facility Serv. V. Service Employees International Union, Local 1877, 530 F.3d 817 (2008).

The article below originally appeared in Law360.

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