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Discrimination Actions by Office of Special Counsel Increase as ICE Pursues Aggressive I-9 Audit Program

 

There has been a dramatic increase in I-9 and E-Verify discrimination claims following implementation of a new worksite enforcement strategy by U.S. Immigration and Customs Enforcement (ICE).

ICE’s strategy includes an aggressive I-9 audit program, resulting in the issuance of millions of dollars in fines. As enforcement by ICE has increased, the Department of Justice Office of Special Counsel for Unfair Immigration-Related Employment Practices (“OSC”) has stepped in to protect workers from discrimination in the I-9 and E-Verify process. Accordingly, employers must develop effective I-9 and E-Verify compliance programs that not only protect against liability from ICE’s I-9 audits but also ensure that the I-9 process is completed in a non-discriminatory manner.

Background – ICE’s Worksite Enforcement Actions

About two years ago, ICE first announced a new worksite enforcement strategy. Rather than large scale raids, the focus is on employers. As part of this strategy, ICE identified I-9 audits as an important administrative tool in building cases, issuing civil penalties and bringing employers into compliance with the law. Not only will ICE use traditional criminal enforcement methods, but the guidance to the field emphasizes that the I-9 audit will be used “to advance criminal cases, and in the absence of criminal charges, to support the imposition of civil fines and other available penalties.”

Following the implementation of this strategy, ICE’s worksite enforcement numbers have climbed to historic levels with record breaking numbers of I-9 audits, fines and increased criminal prosecutions of employers. In fiscal year 2011 alone, ICE conducted 2,496 I-9 audits and initiated 3,291 worksite enforcement cases—more than during the entire Bush administration. I-9 audit numbers have continued to increase this year. So far in fiscal year 2012 (October 2011 to June 2012), ICE has issued 2,600 notices of inspection (which is more than all of fiscal year 2011).

ICE has been able to sustain these increases due to additional personnel and funding dedicated to worksite enforcement. In February 2012, for example, the Department of Homeland Security (parent organization to ICE) released its annual budget proposal for fiscal year 2013 which includes $1.7 billion allotted towards interagency law enforcement task forces and operations I-9 audits and enforcement investigations and managing ICE’s national security work. Additional personnel have supported the rounds of I-9 audit notices, often in increments of 500 to 1,000 notices at a time. In January 2011, ICE announced that a new Employment Compliance Inspection Center was being established in Crystal City, Virginia to assist ICE offices throughout the U.S. with I-9 audits. By mid-February 2011, ICE issued 1,000 I-9 audit notices throughout the U.S. In announcing that round of audits, ICE acknowledged in a statement that “the inspections will touch on employers of all sizes and in every state of in the nation—no one industry is being targeted nor is any one industry immune from scrutiny.” ICE’s aggressive enforcement and audit waves of 500 notices or more have continued. Most recently, 2,000 notices of inspection were issued in May 2012 and it was reported that another 1,000 notices would be issued in June 2012.

The I-9 audits have also resulted in record breaking penalties. In fiscal year 2011, ICE issued over $10.5 million in fines compared to only $675,000 in fines in 2008. In 2011, ICE also criminally arrested 221 employers accused of violations related to employment and debarred 115 individuals. So far in fiscal year 2012, ICE has issued 275 final orders totally $6 million in fines and collected $9 million in judicial fines, and forfeitures.

OSC Enforcement

Over the last two years, there has been a dramatic increase in enforcement by the OSC. The OSC is responsible for enforcing the anti-discrimination provision of the Immigration & Nationality Act (“INA”), which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work authorized individuals from discrimination in the employment eligibility verification process and from retaliation.

Two record-breaking settlements have recently been announced. In October 2010, the OSC announced that it reached a settlement with Catholic Healthcare West (“CHW”) to resolve allegations that it discriminated against non-U.S. citizens by requiring them to provide more documentation of work authorization than is required for the purposes of the Form I-9. This type of violation is often referred to as document abuse, a violation of the INA that prohibits employers from imposing different or greater employment-eligibility verification (I-9) standards on the basis of a worker’s citizenship status.

Under the terms of the settlement, CHW agreed to pay $257,000 in civil penalties as well as $1,000 in back pay to the charging party. As part of the agreement, CHW has also agreed to complete a review (conducted by employees who are independent of the routine I-9 process) of I-9s for all non-U.S. citizens and naturalized citizens hired at all CHW hospitals and medical centers to identify each instance of over-documentation and to determine whether employees suffered lost wages due to the document abuse. CHW agreed to issue progress reports on the review every 60 days and to provide back pay to any employees who suffered lost wages as a result of document abuse. CHW also agreed to implement a detailed, system-wide written policy describing nondiscriminatory employment eligibility verification procedures and to conduct I-9 training with annual updates.

The newest record breaking settlement was announced in August 2011. According to OSC’s press release, Farmland Foods has agreed to pay $290,400 in civil penalties to resolve allegations that the company engaged in a pattern and practice of discrimination in the I-9 context. It is the highest civil penalty since the enactment of the anti-discrimination provision in 1986. Like CHW, Farmland has also agreed to provide I-9 training and periodic reports to the OSC for monitoring purposes. The complaint was initiated after a naturalized U.S. citizen received a tentative non-confirmation (TNC) through E-Verify. Rather than following the required TNC process which would include a referral to SSA and/or Department of Homeland Security (DHS) to resolve the issue, Farmland improperly asked the employee to bring in her naturalization certificate and/or specific documents to prove citizenship. An OSC investigation further revealed that Farmland engaged in a pattern of discriminatory practices by requesting specific documentation and requiring employees to provide more documentation than is required for Form I-9. For example, Farmland would require employees who identified themselves in Section 1 of the I-9 Form as permanent residents to produce an I-551 permanent resident card even though those individuals provided other acceptable documentation of identity and work authorization such as a List B and C combination of a driver’s license and social security card.

These are just two examples of the many recent enforcement actions by the OSC which have continued to the present. As ICE has stepped up I-9 audits, OSC has increased enforcement of anti-discrimination rules as they relate to the I-9 process. No type of employer is immune. Even universities have been subject to discrimination actions. A lawsuit by the OSC against John Jay College (“John Jay”), for example, was recently settled for over $30,000 in civil penalties and back pay to a former employee. The lawsuit alleged that John Jay College engaged in a pattern or practice of citizenship status discrimination by requesting documents issued by the Department of Homeland Security (DHS) from non-U.S. citizens, but not from U.S. citizens, during the employment eligibility verification Form I-9 process.

The OSC has also brought enforcement actions against E-Verify employers who terminated employees following a “Final Non-Confirmation” (FNC) from the system indicating that the employee was unauthorized to work—despite E-Verify guidelines that require E-Verify employers to terminate following receipt of a FNC. In January 2010, for example, the OSC announced a settlement of a charge of citizenship status discrimination filed by a U.S. citizen against Dillard’s. The employee called OSC’s E-Verify Hotline and the matter was originally handled by OSC as a hotline intervention. Dillard’s ran an E-Verify query on the citizen which eventually resulted in a FNC and, as a result, the worker was fired. During the OSC’s intervention, it was determined that the charging party’s name was misspelled by Dillard’s resulting in the FNC. Following the intervention, the query was run again using the correct name and the citizen was rehired. However, because she missed work, the matter was settled awarding back-pay. In another example, Triumph Foods entered into a settlement dismissing a suit filed by a naturalized U.S. citizen. The worker had changed his name when he naturalized but he never updated his Social Security Administration (SSA) record to reflect the name change. Even though the worker contested the original tentative non-confirmation from E-Verify, the SSA failed to follow proper procedures and as a result E-Verify issued an erroneous FNC and the worker was terminated. The worker filed a charge seeking compensation for the work he missed. Even though the FNC resulted from SSA’s error, as part of the resolution of the charge, the employee received $3,000 in back pay from Triumph Foods and the company agreed to provide training to its staff on proper I-9 completion and E-Verify procedures.

OSC Information Sharing Agreement

Not only is OSC actively enforcing employees’ rights in the I-9 context through lawsuits and charges, but the United States Citizenship and Immigration Services (USCIS) has entered into a Memorandum of Agreement (“MOA”) to share E-Verify information with the OSC. Under the MOA, which went into effect on March 17, 2010, USCIS will share with OSC data obtained from queries run through E-Verify which will allow OSC to identify potential violations of the anti-discrimination provisions of the INA. Under the MOA, USCIS will also refer to OSC allegations involving potential discrimination resulting from employer misuse or abuse of E-Verify. OSC will analyze the information to identify potential patterns or practices of discrimination through the misuse of E-Verify, or by investigating individual claims of discrimination.

Detailed I-9 and E-Verify Policies & Practices Essential to Limit Liability

In order to avoid potential liability, employers are well advised to develop and implement detailed I-9 policies and practices to protect against both ICE and OSC enforcement. ICE recommends that employers, at a minimum, establish an internal I-9 training program, with annual updates, on how to manage completion of Form I-9 and how to detect fraudulent use of documents in the I-9 process. Regular, detailed E-Verify training is also essential for E-Verify employers. Any I-9 or E-Verify process should only be conducted by individuals who have received training, and should include a review of the completed I-9 and documents by a second person as part of each employee’s verification to minimize the potential for a single individual to subvert the process. Regular audits–conducted before ICE comes knocking on the door–are also key to obtain compliance and limit liability.

In light of the recent OSC enforcement actions, and the information sharing agreement, it is clear that any policy and training must also address discrimination. Employers should discuss I-9 and E-Verify compliance with experienced legal counsel and take all steps to ensure that employees responsible for I-9 and E-Verify completion are aware of the anti-discrimination provisions of the INA. These steps include not only training employees on the “nuts and bolts” of these processes, but also training related to potential discrimination claims in both the I-9 and E-Verify context.

  • Worksite Compliance

    Klasko Immigration Law Partners assists employers with comprehensive worksite compliance solutions including I-9 compliance, audits, discrimination claims, H-1B LCA compliance, and more.

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