Florida Pizza Company Delivers $140,000 to Department of Justice for Alleged I-9 Violations

When HR and hiring managers think about I-9 compliance, they tend to focus on the threat of a Form I-9 audit from Immigration and Customs Enforcement (ICE) – the investigative arm of the Department of Homeland Security that is responsible for policing the Form I-9 requirement. This is perfectly normal of course, especially in light of the Trump administration’s promises to crack down on illegal hiring and make all employers use E-Verify nationwide.

Some might even argue that employers should take any and all steps possible to batten down the hatches during this uncertain time by adopting stricter standards or even “extreme I-9 vetting” – a phrase that hasn’t been uttered in public yet, but is certainly not beyond imagination.

But employers take note, ICE is not the only agency examining your I-9s for potential violations. The Department of Justice, through its Immigrant and Employee Rights (IER) section, has been quietly pursuing employers who violate the anti-discrimination provisions of the law by adopting different I-9 document rules and requirements for employees based on their protected class. And as many employers have learned over the years, the difference between a robust I-9 practice and unlawful discrimination can be a fine line indeed.

I-9 discrimination can cost you some dough

The latest example of an I-9 practice gone apparently wrong involves a Papa John’s pizza franchisee with 31 locations in Florida. According to a March 21, 2017 press release, the Justice Department’s investigation revealed that the pizzeria routinely requested lawful permanent residents to hand-over a permanent resident card (aka “green card”) in order to demonstrate their work authorization for I-9 purposes. Meanwhile, the company did not have a practice of requesting specific documents from US citizens (thus forming the basis for the discrimination claim).

As many employers are aware, lawful permanent residents (like US citizens) are eligible to receive unrestricted social security cards, and many will choose to present the SS card along with a driver’s license in order to satisfy the I-9 verification check. Requiring these individuals to present a specific document (even if done innocently or by accident) is considered an unfair documentary practice, which can subject an employer to penalties and fines.

And that’s exactly what happened here – according to the settlement agreement, the pizza company has agreed to pay the DOJ a civil penalty of $140,000 and accept a laundry-list of ongoing I-9 obligations, including training of HR personnel, revising of employment handbooks, and notifying IER of any new or changed policies or practices that relate to nondiscrimination on the basis of citizenship, immigration status, or national origin.

What about using electronic I-9 and E-Verify providers?

Although not specifically mentioned in the DOJ press release, it appears that the pizza company may have been using an electronic I-9 provider and E-Verify agent in order to prepare and complete the I-9s that were under investigation. Specifically, the DOJ settlement agreement notes that the company must agree to “review all procedures its E-Verify designated agent uses to initiate E-Verify cases” as well as all written documentation that is provided to employees as part of the verification process (e.g., TNC notices, Referral Date Confirmation letters, etc.).

The settlement agreement also requires the pizza company to provide IER with “access to the company’s completed Forms I-9, either through ongoing electronic access to its on-line software system or through producing, every three (3) months for the duration of the Agreement, electronic copies of the Forms I-9 completed in the prior three (3) month period or the same Forms I-9 information produced on an electronic Excel spreadsheet.”

As we’ve described in the past, electronic I-9 systems offer numerous benefits to employers of all shapes and sizes including paperless filing, error-checking, reporting, and E-Verify integration (to name just a few). But employers must also be very careful in choosing their system – particularly those that are developed by HR software companies whose primary focus is unrelated to I-9s and immigration compliance. During the past few years, several companies have been implicated in I-9 discrimination investigations relating specifically to the use and practice of their electronic I-9 software.

The biggest concern (as expressed by IER) is that the software may over-automate or change the I-9 process to such a degree so as to limit an employee’s choice in presenting documents or impose additional burdens that adversely impact a certain class of employees. Employers must also make sure that their system of choice follows the specific (and sometimes esoteric) rules relating to foreign national employees, including those for lawful permanent residents.

But all is not lost – employers can still benefit from smart technology and stay in compliance with the law by conducting due diligence into the software vendor’s programs and practices. In particular, HR and compliance managers should focus on the following 5 factors (from an IER and discrimination standpoint):

  1. How does the employee complete section 1 – is he/she provided every opportunity to enter information required by the I-9?
  2. Does the system enable the employee to present any document from the list of acceptable documents, while at the same time alerting HR of potential inconsistencies?
  3. How does the system know when to require reverification?
  4. Does the system enable proper Form I-9 completion for refugees, asylees, and other work-authorized foreign nationals?
  5. What safeguards are in place to prevent improper submission to E-Verify and otherwise ensure that the employee is fully aware and notified of E-Verify results?

Do you have questions or comments relating to Form I-9 anti-discrimination or the use of electronic I-9 software? Please feel free to contact us here or send me an email to the address provided in my bio link below.

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John Fay is an immigration attorney and technologist with a deep applied knowledge of I-9 compliance and E-Verify rules and procedures. During his career, John has advised human resource managers and executives on a wide variety of corporate immigration compliance issues, including the implementation of electronic I-9 systems. In his current role, John serves as Vice President and General Counsel at the LawLogix division of Hyland Software, Inc., where he is responsible for overseeing product design and functionality while ensuring compliance with ever-changing government rules.