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California Employer Agrees to Pay Largest Civil Penalty for Discrimination During the I-9 Process

Last week, the Department of Justice announced a record anti-discrimination settlement agreement with Luis Esparza Services, Inc. (LES) to resolve allegations that the company engaged in a pattern or practice of discrimination during the I-9 process. As described below, it appears yet another employer made the unfortunate (and costly) mistake of requiring certain classes of employees to present specific documents during the hiring process. Let’s take a closer to see where this particular company went astray.

In July 2013, the Office of Special Counsel for Immigration-Related Unfair Employment Practices (“OSC”) opened an independent investigation against LES based on a discrimination complaint from one of its employees. According to the settlement agreement, the employee claimed that LES had demanded specific DHS documents for section 2 of the I-9 based solely on the individual’s citizenship status. When the worker was unable (or unwilling) to produce the specific document requested, LES refused to let them work (despite the employee having passed an E-Verify check).


The OSC Snowball Effect

Based on the charging party’s complaint, OSC then proceeded to examine the employer’s entire I-9 and E-Verify operation to determine if there was a “pattern or practice” of discrimination against individuals on the basis of citizenship status. As part of this investigation, OSC likely examined the total number of hires, percentage of employees attesting to be non-citizens, and the resulting process workflow implemented by the employer. As we’ve described in the past, these “independent investigations” often take on a life of their own – revealing all kinds of potential issues for which an employer may be fined.

In the case at hand, it appears that LES routinely required individuals attesting to be lawful permanent residents to present a “green card” during the I-9 process (even though other documents such as a driver’s license and unrestricted social security card would also be acceptable). LES apparently did not have any such procedure for U.S. citizens – thus forming the basis for the alleged discrimination.

Under the terms of the settlement, LES has agreed to pay $320,000, the highest civil penalty paid through a settlement since the anti-discrimination provision went into effect in 1986. LES must also remit back pay and accumulated interest to the worker for the eleven days during which he or she was unable to work due to LES’ improper I-9 procedure. Lastly, LES agreed to the usual laundry list of ongoing obligations including training on the anti-discrimination provision of the law; review and revision of its employment policies; and periodic reports to the OSC for three years.


The Insidious Influence of I-9 Document Verification

When employers think about I-9 rules, the primary focus tends to be on making sure that the form is completed properly, original documents are reviewed, and everything is retained for the right amount of time in order to avoid potential issues and fines. However, employers must also recognize that it is illegal to discriminate against work-authorized individuals and employers cannot specify which document(s) they will accept from an employee. This latter offense, known as “document abuse,” can occur in any one of the following prohibited practices:

  • Improperly requesting that employees produce more documents than are required by Form I-9 to establish the employee’s identity and employment authorization;
  • Improperly requesting that employees present a particular document, such as a “green card,” to establish identity and/or employment authorization;
  • Improperly rejecting documents that reasonably appear to be genuine and belong to the employee presenting them; and
  • Improperly treating groups of applicants differently when completing 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.


Despite this warning and the potential consequences, many employers continue to fall prey to discrimination charges and fines as the OSC aggressively pursues these complaints. Below is list of recent notable cases where an employer was forced to pay penalties (and/or backpay) for alleged document abuse.


Lessons Learned

So, how should employers ensure that I-9s are completed properly without engaging in unlawful discrimination? Here are 3 essential steps:

  1. Engage experienced immigration counsel to evaluate your current I-9 hiring processes and procedures and ensure compliance with the antidiscrimination provision of the law.
  2. 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.
  3. Begin using a smart Electronic I-9 and E-Verify program – a well designed system will alleviate many I-9 concerns by preventing mistakes, standardizing practices/procedures, and guiding employers on the proper procedure for requesting I-9 documentation.

About John Fay

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 President at the LawLogix division of Hyland Software, Inc., where he oversees all aspects of the division’s operations and provides strategic leadership and direction in the development and support of Form I-9, E-Verify, and immigration case management software solutions.

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