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I-9 and E-Verify Software Due Diligence after Rose Acre Farms

Anyone who has purchased a home knows that conducting due diligence is critical. You have to go through a number of steps. Including property inspection and clearing the title before you close on the property. Failure to perform the necessary investigation before signing on the dotted line will raise many eyebrows and might leave you holding the bag!


In the world of electronic I-9 and E-Verify software, the need to conduct due diligence on the software’s legal compliance and the vendor’s expertise is equally critical (if not more), not only because of the threat of scrutiny from government agencies, but also from resulting negative publicity, civil fines, payments of back-wages, legal fees and other “punitive-like” measures. (Read more examples here.)

Last week, we wrote about the Department of Justice’s lawsuit against Rose Acre Farms Inc., a major egg producer in the United States, which highlighted the government’s increased scrutiny of how electronic systems are shaping employer I-9 practices, in violation of the law. This is another high-profile example involving the use of electronic I-9 systems. (Read about a prior case here.)

In light of these legal developments, how should employers conduct due diligence of electronic I-9 and E-Verify software?

First: Partner with experienced legal counsel (whether in-house or outside counsel).

Employers will benefit from attorney-client privilege and from counsel’s experience managing I-9 and E-Verify issues. For a list of counsel with the most experience handling electronic I-9 providers, please click here.

Second: Conduct a Request for Proposal

(RFP) process of short-listed vendors. E-Verify requirements for software vendors differ drastically from the current software available online to U.S. employers. This is why the Request for Proposal (RFP) process is a critical component for employers to perform due diligence by investigating the software solution meets not only the company’s needs, but also legal requirements set forth by USCIS, and beyond. For organizations that are governed by FAR contract clauses or other federal requirements, the RFP process may actually be required. Failure to conduct an RFP can lead to significant liabilities (and potential debarment from government contracts).

As a provider of electronic I-9 and E-Verify software system, we’ve had the privilege of migrating many Fortune 500 employers from paper I-9 processes and from many other electronic I-9 providers who simply lacked the applied knowledge and experience in the unique field of I-9 and E-verify compliance(after successfully overcoming complex RFP processes). While the basic U.S. Citizen or Legal Permanent Resident may not pose many challenges for I-9 software vendors, it’s the uniqueness of the I-9 and E-verify regulations that challenge most vendors. The RFP process is what allows employers to distinguish the vendors who understand the depth of the law and its implications versus the vendors who simply think of the I-9 as just a one page (maybe soon-to-be two-page) form! In fact, I can name only one vendor that employs multiple attorneys to help develop their I-9 and E-Verify software solution.

Remember, the government has said on numerous occasions the onus is entirely on the employer to select and utilize a compliant software system. (This was certainly the case of Rose Acre Farms.)

Finally: Go beyond the surface by asking tough questions.

Some vendors specialize in other products and I-9/E-Verify is simply not their core competence. Other vendors may simply hope organizations don’t ask the necessary questions but are attracted by their low prices as a result of pre-existing relationships with clients. Some vendors may present high profile client lists as a means to impress, but beware! If those clients were procured outside of the RFP process, you won’t know if those high-profile clients conducted the necessary and reasonable due diligence.

For a list of the best due diligence questions, click here.

Human Resources Today