On March 3, 2020, the Supreme Court of the United States (SCOTUS), in a 5-4 ruling, agreed with the State of Kansas that it could use the state’s identity theft statutes to prosecute three separate criminal cases where the defendants used stolen Social Security numbers to get jobs or lease apartments. All three defendants were undocumented immigrants. 

Background

In 1986, Congress enacted the Immigration Reform and Control Act (IRCA). IRCA created an employment verification system where employers are required to have all new hires (U.S. citizens or not) complete Form I-9. IRCA made it illegal to employ individuals who are unauthorized to work and created various civil and criminal penalties against employers that violate the law. In addition, IRCA expressly, and for the most part, “bars States from imposing penalties on employers of unauthorized aliens, Arizona v. United States, 567 U.S. 387, 406 (2012), but IRCA “is silent about whether additional penalties may be imposed against the employees themselves.”

The Case

Between 2011 and 2012, each of the three defendants used other people’s Social Security numbers to complete new hire documents, including a Form I-9, a federal W-4 tax form, a state K-4 tax form, and other information. The Kansas identity theft statutes criminalize the “using” of any personal identifying information, such as a Social Security number belonging to another person, with the intent to defraud that person, or anyone else, in order to receive any benefit. In these cases, the benefits received were employment and housing. Kansas prosecuted each defendant for identity theft and making false writings. The basis was their use of stolen Social Security numbers on the state and federal tax withholding forms. All three were convicted by the trial court, and the state appellate court affirmed.

The Kansas Supreme Court reversed, however. It held that defendants could not be prosecuted under the state’s identity theft laws because the Social Security numbers were contained in defendants’ Form I-9s, since IRCA states that Form I-9 and any information contained in or appended to such form may not be used for purposes other than enforcement of federal immigration laws. SCOTUS then agreed to take the case and heard oral arguments in October of 2019.

The two issues before the justices were:

1. Whether IRCA expressly preempts the states from using any information entered on or appended to a federal Form I-9, including common information such as name, date of birth, and Social Security number, in a prosecution of any person (citizen or alien) when that same, commonly used information also appears in non-IRCA documents, such as state tax forms, leases, and credit applications.

2. Whether IRCA impliedly preempts Kansas’s prosecution of the three defendants.

SCOTUS answered both in the negative. In its decision, the majority’s opinion found that while a Social Security number is information that is “contained” in Form I-9, it is also information that is captured and “‘contained in’ many different places” (such as the W-4 and K-4). As a result, reliance on non-Form-I-9 documentary evidence of the misuse of a Social Security number in a state criminal prosecution does not mean that “information contained in or appended to Form I-9” is being used in violation of the explicit prohibition found in the IRCA.

What Does this Holding Mean for Employers? 

Employers should be ever more vigilant when completing Form I-9 and more diligent in conducting self-audits on a regular basis. In case of an I-9 audit, Form I-9, its supporting documents, and other employment records likely will be subpoenaed by Immigration and Customs Enforcement—which can include the federal Form W-4 and equivalent state tax forms as seen in this case. In addition, employers may find that the added threat of state prosecutions may constrict the pool of interested workers, particularly in industries that rely heavily on immigrants.

Employers should also be responsive to Social Security no-match letters and pay particular attention to information received from reliable sources, such as payroll or a benefits provider/carrier, should they alert management to any discrepancy with an employee’s Social Security number. To the extent possible, employers should be careful to avoid being connected to individual’s criminal prosecution, potentially through allegations of constructive knowledge.