Alabama Staffing Company Settles Immigration-Related Discrimination Claim Involving Electronic I-9 System
Earlier this month, the Department of Justice, through its Immigrant and Employee Rights (IER) section, announced yet another settlement agreement to resolve allegations of discrimination in the Form I-9 process – this time with an Alabama-based staffing company with locations in over a dozen states. As part of the settlement, the company will pay $70,695 in civil penalties and adhere to a variety of I-9 training and compliance obligations.
This case, like many before it, will strike a familiar chord with human resources and I-9 compliance managers. As part of its mission, IER investigates employers for “unfair documentary practices” which often occurs when an organization requests additional documents or information from employees during the Form I-9 process based on a worker’s citizenship status.
The most common example affects lawful permanent residents. “Green card obsession” may sound like a perfume, but it’s actually a real problem which typically involves an HR manager demanding to see a green card from a lawful permanent resident, even though other documents (such as a driver’s license and unrestricted social security card) are equally acceptable.
But this most recent case highlights an even bigger problem faced by many employers in today’s heightened enforcement climate – the risk of automating non-compliance. For as it turns out, this case involves an employer’s use of an electronic I-9 system which may have been partially at fault for the alleged discrimination.
How can an electronic I-9 system lead an employer to discriminate? Read-on for my take on the matter.
But before you begin, a disclaimer (yes, I’m a lawyer). It’s important to note that case-related information presented in this blog is based upon the published settlement agreement between the staffing company and IER. As is typical, the settlement agreement is light on details, so a few inferences have been made. The respondent staffing company may also have additional information or explanations not presented here, and so I wouldn’t necessarily draw any conclusions about the company or the alleged violations.
The Form I-9 Conundrum
To begin, we first need to think about the Form I-9 itself. One of the biggest misconceptions surrounding the I-9 is that it’s a relatively simple process. Granted, the form is only 2 pages in length and has a fairly narrow application in the grand scheme of employee onboarding. But if you look beyond the surface (as all HR and compliance managers must eventually do), you’ll find a labyrinth of rules, multiple governing agencies, and a sanctions-based system for making sure that employers follow the law.
But what often drives the “confusion” and “frustration” of I-9 processing is simply a matter of volume; the more I-9s you process, the more error-prone the process can be. This is especially true for staffing companies who onboard high numbers of temporary workers into an assignment pool for eventual placement. Staffing companies typically ask candidates to complete onboarding paperwork (including I-9s) very early in the process, and generally look for ways to streamline the intensive push of paperwork.
However, Form I-9 efficiency, while highly attainable, is not as easy or straightforward as it might seem. Employers are confined by a 30+ year old statute and infrequently updated regulations which largely dictate what can (and what cannot) be done to ease the pain of I-9 processing. Moreover, there is an inevitable tension between efficiency and compliance in one area in particular: the anti-discrimination provisions of the Immigration and Nationality Act, which are enforced by IER.
Efficiency vs. Compliance
On the one hand, the Form I-9 has special rules and considerations for non-citizen employees, especially those with temporary work authorization. We often joke that the I-9 handbook (familiarly known as the “M-274”) is a 90+ page manual for a 2-page form. And if you look at the M-274 closely, you’ll find there are 20 to 30 pages devoted to explaining the documents that certain categories of non-citizen employees can present and the rules for recording them on the Form I-9. Understanding (or even explaining) these procedures can be challenging for sure, so it’s only natural that employers would have a strong desire to automate these processes whenever possible and create special rules for non-citizen employees.
But on the other hand, the law requires employers to follow Form I-9 and E-Verify rules consistently, regardless of an employee’s citizenship, immigration status, or national origin. And therein lies the challenge and the slippery slope for many employers – in their efforts to comply with the Form I-9 and its varying rules, they may inadvertently or even deliberately treat non-citizen employees differently in ways which are not allowed. Sometimes this occurs because of a lack of understanding of the law (see the green card example above); in other cases, the problem may originate by those very same procedures (including software) which were designed to streamline the process.
The Alabama Staffing Company Settlement
In the case at hand, IER alleges a violation of the anti-discrimination provisions of the law, specifically in connection with the company’s McAllen, Texas location. Pursuant to an independent investigation, IER observed a pattern or practice of requesting more, different, or specific employment eligibility documents from non-U.S. citizens employees, based on the employee’s citizenship or immigration status for a little over a year.
As mentioned earlier, the settlement agreement and accompanying press release do not provide a lot of detail in terms of the types of employees affected, the specific practices observed, or even the defenses (if any) proffered by the company. Instead, the settlement agreement is largely devoted to specifying the training obligations to be assumed by the company (which are numerous).
But one section of the settlement agreement, in particular, sheds some light on what may have been an integral part of the discrimination claim – the company’s use of an electronic I-9 system. Specifically, paragraphs 10 and 11 note the following:
(10) Within 120 days of the Effective Date and to the extent Respondent continues to use electronic Form I-9 software, Respondent will modify, or take all steps necessary to ensure its agent modifies, its electronic Form I-9 system to comply with Form I-9 requirements, including: 1) permitting all individuals who select the Alien Authorized to Work (AAW) citizenship attestation to write or select “N/A” in the expiration date field; 2) stating “Some aliens may write ‘N/A’ in the expiration date field. (See instructions)” adjacent or below the AAW expiration date field.
(11) Within five days of the Effective Date and to the extent Respondent continues to use electronic Form I-9 software Respondent will modify, or take all steps necessary to ensure its agent modifies, its electronic Form I-9 system to comply with Form I-9 requirements, including: 1) not soliciting more information for Sections 1 or 2 than what is required on the Form I-9; and 2) ensuring that Section 3 information (if any) is reflected in all permutations of Respondent’s Form I-9 data production.
Let’s take a closer look at both of these, because they are important for any organization that uses electronic I-9s.
Electronic I-9 Deficiencies
Based on the settlement agreement language above, it would seem the staffing company’s electronic I-9 system (or vendor) made at least four mistakes:
(1) Improperly preventing employees who attested to being an “alien authorized to work” from selecting or indicating N/A in Section 1 for their work authorization expiration
(2) Improper removal of required (and needed) instructions in Section 1 relating to when “N/A” might be an appropriate response for work authorization expiration
(3) Asking for more information than required/needed in Sections 1 and 2
(4) Failing to include Section 3 data (if any) when producing I-9s
The first two mistakes are surprisingly common in the electronic I-9 marketplace, and reflective of the fact that many vendors do not fully understand all of the intricacies of the Form I-9 requirements. At first glance, it would seem quite natural to strictly enforce a date in the Section 1 work authorization field – the form itself does indicate “mm/dd/yyyy” next to the field.
But right beneath it contain the words, “Some aliens may write “N/A” in the expiration date field” – an instruction which was apparently missing in this electronic I-9 system. Moreover, the Form I-9 instructions elaborate further on when “N/A’ is allowed by noting that refugees, asylees and certain citizens of the freely associated states have indefinite employment authorization (and hence the reason that a date would not be applicable).
The third mistake (asking for more information) is even more problematic as it typically results from a vendor’s over-automation of the I-9 process. While automation and overall efficiency directives in the I-9 space are important, they are also fraught with peril if done improperly.
While the settlement agreement did not provide specific details on how this staffing company’s system may have gone awry, I have seen a variety of bad electronic I-9 practices which could lead an employer to commit an unfair documentary practice. Below are just a few examples:
— Documents listed in Section 2 are automatically limited by attestation, which can lead employers to request specific documents
— Adding additional fields and information directly to the Form I-9 for certain employees in ways which increase their documentation requirements
— System logic requires or encourages reverification when not required under the law
— Requiring a new Form I-9 (in lieu of a correction), which means the employee will need to bring-in documents all over again
The last mistake relates specifically to Section 3, but again, the settlement agreement did not reveal the specifics other than noting that Section 3 information (if any) must be reflected in all permutations of an employer’s Form I-9 data production.
This infraction may highlight the fact that some vendors treat Section 3 information as an afterthought, and do not automatically include the Section 3 data when producing I-9s for government inspection. Failure to include Section 3 data can make it difficult (if not impossible) for the government to fully evaluate an I-9 for compliance, particularly when the section is used to document evidence of work authorization.
As noted earlier, creating efficiencies in your Form I-9 process is a worthy (and attainable) goal, but it must be approached from a compliance standpoint. 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?
These questions, while important, are really just the beginning. Employers looking to automate and streamline their Form I-9 and E-Verify processes should evaluate the entire system (and the vendor too) to ensure they are fully compliant with all of the various I-9 and E-Verify rules and procedures. If you’re not familiar with the requirements (or just need help), consider asking an immigration attorney who specializes in worksite compliance. They will be familiar with the regulatory requirements and can help make sure you ask the right questions.
Speaking of questions, LawLogix is here to help too. Please feel free to contact us here if you have any questions on this article or would like to hear more about our electronic I-9 and E-Verify system which was designed first and foremost with compliance in mind.