New Proposed Rule Reflects Increase in I-9 Anti-Discrimination Enforcement

On August 15, 2016, the Department of Justice published a proposed rule which promises to make several important changes to the agency’s investigation and prosecution of I-9 related discriminatory activities. As many HR managers are now acutely aware, the Department of Justice (DOJ) has been aggressively pursuing employers for “unfair immigration-related employment practices” which often occur in connection with the Form I-9 and E-Verify processes. As described below, the DOJ’s proposed rule further reinforces the agency’s views about when I-9 discrimination occurs and seeks to eliminate ambiguities in the I-9 regulatory text (a noble intention indeed!)

Will this new rule help (or complicate) the hiring process for HR and hiring managers? And more importantly, are we now in store for additional enforcement activities? Read on to learn more about this emerging topic!

Competing Priorities

If you ask a HR representative to describe the most painful aspect of the I-9 process, he or she is likely to rattle off several possible choices: ensuring the form is completed on-time, figuring out how to correct errors, reviewing a document which looks completely unfamiliar, etc., etc. The motivating factor behind all of this, of course, is the ever-present threat of an audit by Immigration and Customs Enforcement (“ICE”) – the agency that is responsible for enforcing the I-9 requirements and assessing monetary fines and penalties against those employers who fail to follow the law.

discrimBut as it turns out, that’s just half the story. For you see, employers are not only charged with ensuring they have a legal workforce, they’re also prohibited from discriminating against any work-authorized individual based on the person’s citizenship, immigration status, or national origin. We often refer to this as being stuck between a rock and a hard place – employers who zealously take their I-9 responsibilities a bit too far, may soon find themselves at the other end of an I-9 discrimination investigation by the DOJ’s special unit known as the Office of Special Counsel for Immigration-Related Unfair Employment Practices (or OSC for short).

OSC is charged with enforcing the anti-discrimination provisions of the law through broad employer investigations, hotline interventions (for one-off complaints), and outreach activities, which include in-person and online trainings and a wide variety of educational materials.

I-9 Discrimination Basics

In the I-9 context, employers can be penalized for engaging in a prohibited practice known as “document abuse,” a concept which, befitting its name, relates to an abuse of power when requesting I-9 documentation. There are generally 4 types of document abuse which can occur as you’re completing your I-9 form:

  1. Requesting that employees produce more documents than are required by the Form I-9 to establish the employee’s identity and employment authorization;
  2. Requesting that employees present a particular document, such as a “green card,” to establish identity and/or employment authorization;
  3. Rejecting documents that reasonably appear to be genuine and belong to the employee presenting them; and
  4. Treating groups of applicants differently when completing the Form I-9, such as requiring certain groups of employees who look or sound “foreign” to produce particular documents the employer does not require other employees to produce.

In each one of the cases above, the employer must also have an “intent to discriminate” – an important requirement which was added to the law way back in 1996. However, the regulations never clearly defined the discriminatory intent standard for document abuse, and employers were often left wondering whether a case of accidental or mistaken over-documentation could be excused if the HR person didn’t really mean to treat the person differently.

DOJ Clarifies Discriminatory Intent

In their proposed regulation, the DOJ clarifies that discrimination means the act of intentionally treating an individual differently based on national origin or citizenship status, regardless of the explanation for the differential treatment, and regardless of whether it is because of animus or hostility. Practically speaking, this means that an employer could engage in unfair documentary practices based simply upon their misunderstanding of I-9 requirements and procedures.

For example, how many HR managers out there have ever engaged in the following I-9 practices? Don’t worry, I can’t see if you’re raising your hand…

(1) Show me your green card

Your new hire, Maria, completes section 1 of her Form I-9 and indicates that she is a lawful permanent resident. When it comes time to check her documents, you specifically request to see her “green card” in order to demonstrate her status (since you know that all lawful permanent residents get green cards). Maria doesn’t have her green card with her, but is able to produce a driver’s license and an unrestricted social security card. You politely explain to her that you can’t accept those documents since you have a firm policy that lawful permanent residents must have a green card.

(2) Have you renewed your green card?

In the course of examining your I-9 files, you notice that one of your employees (David) presented a green card which will be expiring next month. David is an excellent worker (and key employee), and so you want to make sure that he can continue working for your company without interruption. You approach David and remind him that he’ll need to present a new green card as soon as possible, which you intend to record in section 3 of the Form I-9. As it turns out, David didn’t have time to apply for his new card yet, and so you decide to take him off payroll.

Now, let’s say that in both of the situations above, you did not have a similar policy for US citizens (for example, you didn’t require them to present specific documents or renew their documents). What’s the end result? In both situations, you have engaged in unfair documentary practices because you treated Maria and David differently based on their citizenship or immigration status.

But wait a minute, you say, I didn’t really intend to discriminate against these individuals…I just thought that lawful permanent residents had extra (special) requirements. Doesn’t matter – as now clearly articulated by the DOJ in their regulation, your feelings about the employee (or your I-9 practice in general) are largely irrelevant in the eyes of the law. The only important inquiry (for purposes of finding a violation) is whether you were treating your employees differently based on their protected class.

Diminishing Role of Good Faith

When faced with an I-9 enforcement activity, employers (with the help of counsel) often utter those two magic words that can heal so many I-9 wounds: good faith. Under the law, an employer may be able to eliminate (or at the very least reduce) their liability based upon their conduct prior to the audit. So for example, an employer may be able to reduce fines for substantive or uncorrected technical violations by showing that they cooperated in the investigation or did their very best to complete the I-9 process in the first place (despite the mistakes). Or employers may avail themselves of the statutory “good faith defense” which provides employers 10 days to correct technical or procedural violations discovered during an audit.

Does this notion of good faith also extend to investigations by the OSC for alleged unfair documentary practices? Based on this proposed rule and recent settlement agreements, I think the answer is no. The DOJ further explains their reasoning in the regulatory text by citing a recent case (United States v. Life Generations Healthcare, LLC.), where the court used a “reverse group” test for determining whether discrimination has occurred in a particular I-9 situation.

Under the reverse group test, you should ask yourself whether you would have changed your practice based upon the employee’s status (e.g., if the employee had been US citizen instead of a lawful permanent resident). If the answer is yes, then discrimination exists regardless of whether or not you thought requesting extra documents would help the individual or you were completely unaware of the prohibition. Put more plainly, ignorance of the law is no excuse. This is not to say that the OSC will completely ignore good faith in their interactions with employers – they do, after all, consider the totality of the circumstance. But based on this regulatory change and recent OSC enforcement actions, employers can by no means rely upon their good intentions or mistaken beliefs to get them out of hot water.

I-9 Discrimination Investigations on the Rise

During the past few years, the OSC has been vigorously pursuing complaints of unfair immigration-related employment practices like we’ve never seen before. It seems like every month the OSC publishes a new press release announcing that a settlement agreement has been reached for alleged instances of document abuse – most commonly involving lawful permanent residents and green cards.

These settlements (which call for civil penalties, back-pay, and ongoing training) will typically occur in “pattern or practice” situations which involve multiple violations over a period of time. As a result, large and medium size employers (in particular) are at risk, based purely upon the numbers game. The more individuals you employ, the higher the likelihood that OSC will find a systemic violation – one that deserves their full attention and protection under the law.

Other changes in the works

In addition to clarifying discriminatory intent, the DOJ’s proposed rule also seeks to add-on and simplify some of the statutory terms and replace outdated references (among other things). For example, the proposed revisions would replace the term ‘‘documentation abuses’’ with ‘‘unfair documentary practices’’ to more clearly describe the prohibited conduct. This is a welcome change indeed as I always felt a little funny talking about “document abuse” – which contrary to its name, has nothing to do with bending or mishandling a driver’s license for example.

The proposed rule also introduces a new name for OSC – from here on out, the Official of Special Counsel for Immigration Related Unfair Employment Practices (OSC) will now be known as the “Immigrant and Employee Rights Section.” The new name is not only shorter, but also less likely to cause confusion with the other “Office of Special Counsel” department in the federal government. Regardless though, the office’s mission remains the same – to prevent discrimination during the hiring process based on the employee’s citizenship, national origin, or immigration status.

Lastly, the proposed rule notes that the agency is not bound by the 90-day statutory time limit on filing a complaint that is applicable to individuals filing private actions. In the absence of such a time limit, the DOJ would only be bound by the general five-year statutory time limit in 28 U.S.C. 2462 for bringing actions to impose civil penalties.

What this all means for employers

Now more than ever, HR and hiring managers need to take stock of their I-9 and E-Verify policies and procedures, with a particular focus on avoiding discriminatory practices. Too often, employers spend all of their time trying to be better “I-9 enforcers” without taking into account the other side of the coin – ensuring that employees are not treated differently based on their citizenship status, national origin, or immigration status.

Admittedly, this is not so easy to do. You may have dozens (or even hundreds or thousands) of individuals who may complete an I-9 form for your organization. All it takes is one bad documentary practice or mistaken belief, and you can easily find yourself with the dreaded pattern or practice claim (regardless of whether or not your managers knew what they were doing was wrong). For as we described in today’s blog, the “oops” defense will not get you very far with the DOJ.

Fortunately though, employers can take proactive steps now to lessen the likelihood of an investigation (which can occur based on individual employee complaints or even referrals from E-Verify). Here are three strategies to ensure you’re on the right side of the law:

(1) Perform a top to bottom evaluation of your current I-9 hiring processes and procedures, paying special attention to how you typically inform employees of the documents required for I-9 verification. In doing so, you’ll also want to review your I-9 forms and look for any instances where you may have over-documented in section 2 or employed any special procedures for non-citizen employees.

(2) Work with experienced immigration counsel to develop policies, documentation, and training – the 3 best ways to ensure that your organization is on the same page when it comes to I-9 and E-Verify processing. Counsel can also help you resolve any past I-9 or E-Verify compliance failures and provide advice with respect to any alleged claims of discrimination.

(3) Begin using a smart electronic I-9 and E-Verify software solution, which helps your hiring and HR managers comply with the often confusing (and conflicting) requirements of the law. A well-designed system will alleviate many I-9 and E-Verify concerns by preventing mistakes, standardizing practices, and guiding employers on the proper procedure for requesting I-9 documentation. Be careful though because not all I-9 systems are created equally. You’ll need to make sure the system is fully compliant with the I-9 regulations and treats employees consistently, regardless of their status.

Update: after receiving multiple requests, the DOJ has extended the time period to provide comments on this important new rule until October 14, 2016. If you’d like to submit a comment, please follow the link here: https://www.regulations.gov/comment?D=DOJ-CRT-2016-0020-0001.

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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.