Employers and Foreign Nationals Can Avoid Employment Gaps with New Automatic Work Permit Extension

This alert was originally published by Phelps on May 10, 2022, and was expanded for additional publication by Law360 under the title Work Permit Extension Rule Increases I-9 Compliance Risks.

Labor shortages have pressured U.S. employers on an increasing basis in recent years.  The domestic labor supply has not kept pace with American labor demand for both highly skilled talent and entry-level workers. 

To remain competitive, American employers have used employment-based immigration programs to onboard talent and satisfy labor needs.  But the reliability of certain employment-based immigration programs was affected by the great resignation and by increasing backlogs in the government's visa-processing systems.  

To make matters worse, many foreign nationals who were eligible for employment outside the employment-based visa context lost their employment eligibility because the government could not process employment authorization renewals quickly enough. 

Until recently, these processing delays limited the supply of foreign individuals who could accept employment or remain employed with U.S. employers by way of employment authorization documents, or EADs.

USCIS Extends Automatic Employment Authorization by Up to 540 Days

In May, the U.S. Department of Homeland Security took action to reduce EAD renewal backlogs. The agency published a temporary final rule amending Title 8 of the Code of Federal Regulations, Section 274a.13(d), temporarily increasing the automatic extension period of employment authorization and documentation for some renewal applicants. 

Under the old provision, the validity of certain foreign nationals' employment documents was automatically extended for 180 days, so long as an eligible Form I-765 request for renewal of the employment authorization was properly filed. The 180-day automatic extension typically allowed foreign nationals to continue working while waiting on their renewed EADs.

But the pandemic amplified operational challenges at U.S. Citizenship and Immigration Services, or USCIS, such that renewal applications were no longer being processed within the 180-day automatic extension period, causing breaks in employment eligibility. To address this problem, USCIS announced the temporary increase in the automatic extension period to 540 days.

The additional extension period prevents breaks in employment eligibility that otherwise would affect tens of thousands of EAD renewal applicants and their U.S. employers. The 540-day extension confers employment eligibility to qualified foreign nationals who worked pursuant to an EAD and were eligible for an automatic 180-day extension, but who did not receive authorization within that time due to processing delays.

Such foreign nationals receive an additional 360 days of work authorization — for a total of up to 540 days — provided they have a timely-filed Form I-765 renewal application pending between May 4 and Oct. 26, 2023.

On Oct. 27, 2023, automatic extensions of employment authorization and EAD-validity periods will revert to the 180-day extension period for eligible applicants who timely file a renewal application.

The 540-day automatic extension period applies to the following classes of foreign nationals:

• • Foreign nationals with expired EADs and currently pending EAD renewal applications, whose 180-day automatic extension has lapsed. The added period of employment eligibility for those individuals began May 4 and will last up to 540 days from the expiration date of their EAD. They may resume employment during this additional period if they are otherwise eligible.
  • Foreign nationals with currently pending renewal applications who are still within the 180-day automatic extension period. These individuals will be granted an automatic extension of up to a 360 days beyond the end of the 180-day period, for a total eligibility period of up to 540 days beyond the expiration of their current EAD.
  • Foreign nationals with a pending renewal application and whose EADs were valid on May 4, or who timely file an EAD renewal application before Oct. 27, 2023, will be granted an automatic extension of up to 540 days if their EAD expires before the renewal application is processed.

The Automatic Extension Period Affects I-9 Employment Eligibility Compliance Obligations

The extended authorization period means certain foreign nationals who had lost employment eligibility are again eligible for work. Other foreign national employees will maintain employment eligibility that otherwise would have lapsed.

Employers who hire these foreign nationals must understand how to comply with Form I-9 employment eligibility verification requirements when re-onboarding such employees, or documenting their continued eligibility for employment.

Form I-9 compliance is key because the government continues to carefully enforce employment eligibility verification obligations, and noncompliance can be costly in light of the applicable penalties.

With respect to substantive, uncorrected technical paperwork violations, the U.S. Department of Homeland Security increased fines for Form I-9 violations on Oct. 18, 2021, increasing the minimum fine per violation from $234 to $237. The maximum fine per violation was increased from $2,332 to $2,360.

Fines for knowingly hiring or continuing to employ an unauthorized worker also increased.

First-offense fines increased from between $583 and $4,667 to between $590 and $4,722. Second offense fines increased from between $4,667 and $11,665 to $4,722 and $11,803. Third or subsequent offense fines increased from between $6,999 and $23,331 to between $7,082 and $23,607.

Human resources professionals who manage this labor compliance function should understand how to establish applicable renewal deadlines and create timelines in light of the recently modified EAD eligibility periods.

Employers may calculate dates and satisfy I-9 employment eligibility requirements as follows.

When hiring new employees who recently regained employment eligibility, employers should have the employee use the extended expiration date to complete Section 1 of the Form I-9, if applicable. Employers filling out the employer review and attestation in Section 2 of the form should list the date that the automatic extension period expires.

When reverifying the employment eligibility of current employees who are waiting for extension approval, the employer should update the employee's previously completed Form I-9 to reflect the extended expiration date, based on the automatic EAD extension effective while the renewal is pending. The employer should reverify the employee's eligibility no later than the date that the automatic extension expires.

When completing the Form I-9 for applicants whose employment authorization lapsed before May 4, the employer can either reverify the employment authorization on the employee's existing Form I-9, or complete a new form.

In such cases, the employer can either reverify the employment authorization on the employee's existing Form I-9, or complete a new form.

Calculating the applicable employment authorization periods and Form I-9 renewal timelines can be complicated. To improve record-keeping compliance, USCIS plans to issue Form I-797C notices of action with an explanation of the new automatic extension periods to eligible applicants who filed on or after May 4. 

However, USCIS does not plan to issue updated notices to eligible applicants who already filed their renewal applications before May 4. So employers must understand the employment eligibility periods that apply to this new pool of employment candidates.

Miscalculating employment eligibility periods or erroneously concluding that employment eligibility is unavailable, may expose employers to the risk of employment eligibility verification noncompliance as well as certain employment discrimination violations.

On May 20, USCIS created the EAD Automatic Extension Calculator to assist American employers that are ready to hire and to prevent separations in employment.[1]

Employers can use this online tool as a guidepost when calculating new EAD expiration dates for employees eligible for automatic extensions.

For more information about employment authorization and Form I-9 compliance related to this new rule, please contact Brandon Davis or any member of Phelps’ Immigration team.