New Oregon Law Imposes Form I-9 Audit Notification Requirement on Employers
As Form I-9 inspections continue to heat up across the US, employers in Oregon now have a new obligation to add to their audit response task list: notifying employees that Uncle Sam is looking at their paperwork (specifically, I-9s). This new requirement comes courtesy of Oregon Senate Bill 370, which was signed into law by the governor on June 6, 2019.
To some employers (and HR) in other states, this law may sound very familiar, and with good reason. Two years ago, the state of California passed the Immigrant Worker Protection Act (AB 450), a controversial and embattled law which required (among other things) for employers to provide notice to employees of Form I-9 inspections. We covered AB 450 in some detail in our blog here.
While Oregon’s law copies California’s “pre-inspection” notice requirement (almost word for word), there are important differences in how this new law is framed, and ultimately, implemented and policed for Oregonians.
Read-on to learn all about Oregon’s new I-9 requirements and the steps HR can take to prepare.
Administrative Form I-9 Inspections
But first, let’s take a quick (and admittedly superficial) look at the Form I-9 inspection process. For those not familiar with a Form I-9 inspection (lucky you!), the whole process generally begins when Immigration and Customs Enforcement (ICE) delivers a Notice of Inspection (often simply referred to as an NOI) to an employer. The purpose of the NOI is to evaluate whether the employer has been satisfying its requirements under the law – namely, to verify the identity and employment eligibility of all employees hired in the US after November 6, 1986.
The NOI will demand that an employer turn over their I-9s to ICE within three business days (as required by regulation) and produce a laundry list of other supporting documentation such as payroll records, tax statements, lists of subcontractors/temp agencies, etc. Employers using electronic I-9 systems will also need to provide system-specific information along with audit trails and electronic signature documentation.
Upon receipt of the documents, an ICE forensic auditor will review the I-9s for compliance with Form I-9 requirements (and electronic I-9 regulatory standards, if applicable). Once the paperwork has been reviewed, an employer may receive a variety of potential correspondences (and results) from ICE, depending upon the nature of the audit and the condition of the I-9s.
For example, an employer may receive a Notice of Technical or Procedural Failures for any minor errors on the I-9s along with an opportunity to correct within 10 business days (as required by law). An employer can also receive a Notice of Intent to Fine for any substantive, uncorrected technical, knowingly hire and continuing to employ violations. Other notices are possible as well – ICE provides a brief description here.
Oregon SB 370 Requirements
Now that we’re sufficiently refreshed on the Form I-9 inspection process, let’s take a look at how the Oregon law impacts employers. In a nutshell, SB 370 requires Oregon employers to provide notice to employees of an upcoming Form I-9 inspection by a federal agency within three business days of the employer’s receipt of the NOI. The law also prescribes rules around how this notification must occur. Specifically, an employer must notify employees of the inspection by:
- Posting a notice in a conspicuous and accessible location, in English and in the language the employer typically uses to communicate with the employees; and
- Making reasonable attempts to individually distribute notifications to employees in the employee’s preferred language.
In terms of the content, the law requires that the notice include:
- A copy of the federal agency’s notice of inspection received by the employer;
- The date of the inspection;
- To the extent the employer knows, the scope of the federal agency’s inspection;
- The employer’s obligations with respect to providing information within the scope of the federal agency’s notice of inspection; and
- A telephone number, prescribed by the Bureau of Labor and Industries, for a hotline operated by an organization that provides information and advocacy related to immigrant and refugee workers’ rights.
On or before January 1, 2020, the Oregon Bureau of Labor and Industries (BOLI) is required to draft (and make available on its website) a template notification that employers may use to comply with the requirements discussed above. The template must be made available in English and in each of the five most widely used non-English languages in the state. The languages must be updated every five years (if applicable).
Frequently Asked Questions
Now that we have a basic understanding of SB 370 (and its notice requirements), we’ll examine a few questions which are likely to arise as employers update their I-9 audit response practices and procedures.
(1) Why did the Oregon legislature implement this requirement?
During two public hearings (held in February and May of this year), witnesses from various unions (including the ACLU) argued that employees have the right to know when any government entity seeks to inspect their private information – primarily so that they can better navigate any potential consequences of the inspection. Witnesses spoke of creating “uniformity” of notifications amongst employers and “transparency” so that workers understand what is going on during an audit and can seek assistance in remedying their status (if applicable).
For those familiar with the California AB 450 deliberations (and ultimate requirements), the contrast in the tone and stated purpose of the Oregon bill is striking. In drafting and supporting AB 450, Assemblymember David Chiu (D-San Francisco) publicly decried the “disruptive workplace raids” and the fears of mass deportations amongst immigrant communities. Meanwhile, during the Oregon hearings, supporters sought to distinguish their bill from California’s and emphasized (on several occasions) that it would not conflict with federal law.
A closer look at the Oregon bill’s legislative history reveals that an earlier draft included a hot button provision which enabled employers to refuse consent to the entry of a federal agency into any nonpublic areas of the employer’s place of business unless the federal agency presents a judicial search warrant. This mirrors a provision in California’s AB 450 law which is currently blocked pursuant to a preliminary injunction in a lawsuit brought by the Trump administration against California. The Oregon supporters were quick to point out that they had removed this provision from their bill, and that California’s 3-day notice requirement (adopted by Oregon) still stands despite legal challenges.
(2) Does this law apply to all organizations with employees in Oregon?
Most likely, yes. Oregon law defines an “employer” as any person employing one or more “employees,” including the State of Oregon or any political subdivision thereof or any county, city, district, authority, public corporation or entity and any of their instrumentalities organized and existing under law or charter. Elsewhere, an employee is defined as any individual who renders personal services wholly or partly in this state to an employer who pays or agrees to pay such individual at a fixed rate.
Note, there are exceptions to the above, so it’s always a good idea to check with your counsel if questions arise.
(3) Are there any penalties if an employer fails to notify their employees?
There are no penalties for non-compliance with the Oregon law (the absence of which presents another stark contrast with California’s law, where employers are faced with penalties of $2,000 to 5,000 for a first violation and $5,000 to 10,000 for each subsequent violation).
(4) When does the law go into effect?
The law became operative upon signing – meaning, it’s currently in effect as of June 6, 2019. But note, the requirement for BOLI to present a template notification does not go into effect until January 1, 2020.
(5) What should I (as an employer in Oregon) do now?
In light of SB 370’s new requirements, and the ever-increasing likelihood of Form I-9 audits in general, Oregon employers are well advised to create (or update) their processes and procedures for responding to Form I-9 audits to include a notification step. While Oregon has yet to publish their recommended template, employers can still plan ahead by reading the law’s requirements and working with counsel on a recommended form (and mode) of communication.
At the same time, employers should think about where their I-9s are currently located, and more importantly, the condition they are likely to find them in. Many (if not most) employers are sorely prepared for an inspection, which can lead to significant fines and penalties. Fortunately though, the law enables employers to significantly reduce (and even eliminate) their potential liability through a self-audit and remediation process.
To learn more about a self I-9 audit, check out our presentation here: Webinar: I-9 Self-Auditing 101 – Detecting and Fixing Past I-9 Mistakes. And if you’re interested in learning about I-9 remediation (through software), visit us here.