Immigration Reform and Control Act of 1986 (IRCA)

What Is the Immigration Reform and Control Act of 1986?

The Immigration Reform and Control Act of 1986 (also known as the Simpson-Mazzoli Act or the Reagan Amnesty) is a law that makes it illegal for employers in the United States to knowingly recruit, hire, or refer noncitizens who are not authorized to work in the country.

The law also includes fines and penalties for employers who commit the prohibited actions.

The IRCA requires all employees to provide proof of work eligibility by completing Form I-9. Noncitizens must provide documentation about their residency and employment history, as well as completing a form attesting that they are authorized to work in the United States.

The law's original goal was to preserve jobs within the country for United States citizens and those coming from abroad who are legally authorized to be in the country. However, the IRCA also offered pathways to lawful permanent residence and naturalization for those who entered the country prior to 1982 and farm employees with at least 90 days of employment experience. Approximately 3 million workers gained legal status as a result.

How the Immigration Reform and Control Act of 1986 Impacts Employers

The Immigration Reform and Control Act of 1986 requires employers to complete a number of verification tasks before they hire someone who is not a US citizen, as well as keep up with the eligibility status of that individual throughout their tenure of employment.

Identity Verification

The US Department of Homeland Security expects employers to verify that new hires indeed possess this authorization before they start working.

Employers do this in two ways. First, an employer must have the employee fill out a Form I-9 and collect proper documentation to confirm a candidate or employee’s identity and certify that they are eligible to work in the US.

Second , an employer must run this information through E-Verify, an electronic system maintained by DHS and the Social Security Administration that confirms the information on the I-9.

E-Verify is designed to be quick and simple to use. Employers create a case, get initial results, and then close the case once documentation is verified.

If there are discrepancies, a candidate or employee may have to call the proper agency to correct them, and if those corrections are not made within a certain time frame, employers may receive a final non-confirmation, which they must report to DHS.

Recordkeeping

Federal law requires employers to retain a Form I-9 for each employee for three years after the date of hire or one year after their employment ends. These records may be maintained on paper, microfilm, or in an electronic storage system.

No matter how they are stored, employers must be able to produce them if inspection is requested by a federal agent.

Recertification

Many employment authorizations given to noncitizens have an expiration date, which must be documented on an I-9. Before that date, an employee must present documentation of current authorization.

Employers must complete and submit Supplement B (Reverification and Rehires). If the employee is no longer authorized to work in the US, the employer may terminate employment.

Non-Discrimination

Though employers are allowed to terminate employment based on a person’s legal ineligibility to work in the United States, employers cannot discriminate against a candidate or employee on the basis of their national origin or citizenship status. Discrimination can take any number of forms:

• Specifying what eligibility documents someone may present beyond the IRCA’s list of acceptable documents
• Demanding to see additional documents even after the candidate or employee has provided the necessary documentation
• Refusing to accept documents without a reason to believe they are not genuine
• Refusing to interview or hire someone based on their citizen status, country of origin, or cultural background

Employers should also note that it is illegal to retaliate against an employee for complaining about discrimination or filing a charge with the Equal Employment Opportunity Commission.

Penalties for Violating IRCA Regulations

Several agencies are responsible for enforcing the Immigration Reform and Control Act of 1986. These include the Department of Homeland Security and the Equal Employment Opportunity Commission, which investigates issues of discrimination on the basis of national origin or citizenship status.

These departments are authorized to conduct investigations into employer activity related to recruiting, hiring, and employing individuals who are not legally authorized to work in the United States. When employers are found to be in violation of the IRCA, these agencies can levy both civil and criminal penalties.

Often, the severity of the fine or penalty will depend on whether the employer has tried to act in good faith, the size of the business, the seriousness of the violation, and whether an employer has had previous violations.

DHS publishes guidelines for what employers should expect in terms of dollar amounts based on the type of violation. Note that these penalty amounts are subject to change based on current inflation rates.

Unlawful Employment

Employers can be cited for unlawful employment when they knowingly recruit and hire employees who are not authorized to work in the United States. This violation also applies if employees later become ineligible to work in the US, or if the company discovers an employee's ineligibility after hiring them.

As of February 12, 2024, the minimum penalty for this violation is $698 per unauthorized employee, and the maximum is $5,579. Penalties are higher for repeated violations, and employers may be fined up to $27,894.

Failure to Notify

Per IRCA rules, employers are obligated to close an employee’s case and terminate employment if they receive a final non-confirmation of employment authorization from the E-verify system. Then, employers must notify DHS of their decision. Failure to do so can result in a non-compliance fine with a minimum of $973 and a maximum of $1,942.

Paperwork Violations

IRCA compliance requires employers to complete and maintain personnel records, including I-9 forms and copies of a candidate or employee’s identification and work authorization documents.

If employers fail to properly complete or retain these forms, falsify any of the information they contain, or otherwise use them in a fraudulent manner, they can face civil and criminal penalties.

As of 2024, employers can expect a minimum fine of $545 per document and a maximum of $4,610. For subsequent violations, the fine may be as high as $9,718 per document.

Discriminatory Practices

Though it is important to stay on top of IRCA requirements, employers that cross the line into discriminatory practices may be fined a minimum of $575 and a maximum of $4,610 for the first violation. Subsequent violations may incur fines of up to $2,304 per individual discriminated against.

It’s also important to note that employers found guilty of violating anti-discrimination laws can face other penalties. For example, they may have to rehire the individual who was discriminated against or compensate them with back pay.

Requiring Indemnification Bonds

In some cases, employers ask undocumented employees to post a bond or pay them a specified amount to cover any potential financial liabilities they may face as a result of hiring them. This is illegal under IRCA and can result in civil penalties against the employer. Typically, this violation carries a charge of $2,789 per violation.

Criminal Penalties for IRCA Violations

Financial penalties are not all that awaits those violating the federal Immigration Reform and Control Act of 1986. Employers can be subject to imprisonment for up to six months if DHS or another investigative agency finds evidence of repeated violations (referred to as “pattern or practice)” in hiring or continuing to employ unauthorized noncitizens.

Employers can be imprisoned for up to five years for using fraudulent documents, using documents issued to someone else, or making false statements to help employees pass employment eligibility verification requirements. Even if an employer is not imprisoned, they may be barred from receiving any government contracts.