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OSC Instructs Employers Regarding Software Features

Nowadays, it seems like the government is keen on keeping tabs on evolving workplace technology, particularly software that relates to the I-9 process. Software that automatically enables or requests data may inadvertently allow employers to more easily violate anti-discrimination provisions of the Immigration and Nationality Act (INA) 8 USC § 1324b. This section of the INA prohibits discrimination based on the citizenship status or national origin in the hiring, firing unfair document practices (“document abuse”) during employment eligibility verification process, and retaliation.

The U.S. Department of Justice, Civil Rights Division Office of the Special Counsel (OSC) enforces Section 1324b. Increasingly, we are beginning to see OSC release more and more guidance to employers on the potential risks for built-in software features, which may be intuitive and beneficial for other business processes (such as payroll), but are not particularly encouraged by OSC (as we’ll discuss below). Last month, OSC released two very helpful advisories instructing employers on the potential pitfalls certain software features may encounter in complying with anti-discrimination provisions of Section 1324b.


In an Inter-Agency Letter dated August 21, 2012, OSC responded to an inquiry about “an electronic payroll system” that includes an employment eligibility verification component (i.e.: I-9 Process) in its payroll software, but also requires a social security number. OSC explains and reminds employers that the social security number is not required data for the sole purpose of completing Form I-9, unless the employer is enrolled in E-Verify. In those circumstances, the employer must enter the social security number, or wait until an employee has been issued a number by the Social Security Administration, before initiating a case in the E-Verify system. The primary concern OSC has regarding software that automatically requests data from employees that is not necessarily required (and we’ve discussed this issue in the past numerous times), is the danger for actual, or an appearance of, document abuse. I-9 software that fully integrates payroll functionality directly into the employment eligibility verification process, lacking any ability to segregate the automation of certain functions, can place an employer in a precariously non-compliant scenario ripe for review by OSC. The fact that this advisory letter was issued in response to another government agency’s inquiry reveals how closely the government is indeed reconciling how to interpret payroll systems that has built-in functionality that is now deemed to be discouraged by OSC.


OSC also issued a second, Separate Advisory Letter on August 21, 2012, along the same logic as the prior letter. This letter was issued to a private software vendor that markets job-searching software to educational career centers. In the letter, the software vendor inquired as to whether it could develop software that requested from its job applicants their “visa status” for the purpose of indicating whether that job applicant was work-authorized in the U.S. Again, the OSC reminded software developers (and employers), “A process that asks applicants to identify their citizenship status may be facially discriminatory in that it creates an unnecessary barrier to noncitizen applicants.” More importantly, OSC notes that an applicant’s immigration status may change over time such that the software may not reflect accurate information upon which potential employers can rely. The danger of requesting immigration status from job seekers and making it available to potential employers is that employers may make their hiring decisions based on the citizenship status of such applicants. This practice is prohibited by INA Section 1324b.


The warnings are clear and quite generous: Employers should carefully vet their software systems for all aspects related to employment eligibility verification to ensure well-meaning software vendors do not inadvertently place additional risks onto employers. The danger with well-meaning functionality in software is that software developers are not necessarily trained to review the software functionality for compliance with U.S. immigration laws. Because employers are essentially “on the hook” for the non-compliance of the software they select and utilize, it’s imperative for employers to truly conduct a thorough evaluation of their I-9 software or any software that integrates an I-9 component. Before the new I-9 Form becomes finalized, now is actually a good time for employers to consult with experienced legal counsel in evaluating existing or future I-9 software solutions, especially if payroll or other HR systems are incorporated into the I-9 software in light of the recent OSC advisories. Download our due diligence questions on how to review an I-9 software vendor’s compliance credentials.

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Human Resources Today