Diversity & Inclusion

Employers risk damages, civil money penalties for improper I-9 and E-Verify procedures

by Mary Pivec

Employers face a high cost if they are accused of engaging in discriminatory employment verification procedures. The Office of Special Counsel for Immigration-Related Discrimination (OSC) in the Civil Rights Division of the U.S. Department of Justice (DOJ) has made it a priority to pursue employers that allegedly misuse or abuse their access to the E-Verify program and unlawfully discriminate against applicants and employees in hiring and termination on the basis of their citizenship status or engage in document abuse.  Employment Verification Information

Employers suspected of a pattern or practice of discriminatory employment verification procedures could face months of costly investigation and be forced to pay civil money penalties, back wages, and punitive damages. What’s more, they could be barred from participating in the E-Verify program, lose the right to do business in some areas, and face debarment from federal contracting rights.

Background information

Under the Immigration Reform and Control Act of 1986 (IRCA) and the implementing regulations of the U.S. Citizenship and Immigration Services (USCIS), all U.S. employers are required to verify the identity and employment eligibility of newly hired or rehired employees by properly completing U.S. Department of Homeland Security (DHS) Form I-9 within three business days of the first day of employment and prior to the expiration of time-limited DHS work authorization documents.

Certain federal contractors and employers in some states must do more than just complete a paper I-9 form. They must also submit employees’ I-9 data for verification through the DHS-operated E-Verify database.

Rules governing E-Verify participation and use

As a condition of E-Verify enrollment, employers must sign a memorandum of understanding (MOU) with the DHS and the Social Security Administration (SSA) committing to limit their use of the E-Verify system to the terms of the agreement and applicable regulations. For example, participating employers are prohibited from permitting untrained and unauthorized agents and employees from accessing the E- Verify database and I-9 records. They must also establish adequate security practices and procedures to ensure data privacy and notify DHS of any security breach (defined as any instance of unauthorized access to E-Verify personal data). Moreover, certain federal contractors are prohibited from using the system to investigate the immigration status of current workers except as authorized under the Federal Acquisition Regulations (FAR).

Participating employers must agree to abide by the rules for tentative nonconfirmation of Social Security numbers and DHS work authorization status, including:

  • Providing timely personal notice to affected employees of their right to contest the mismatch and refraining from taking adverse action against workers who elect to contest tentative SSA and DHS nonconfirmation results;
  • Closing out E-Verify cases in a timely manner;
  • Notifying DHS that employees with final nonconfirmation notices have been terminated; and
  • Maintaining required E-Verify information and paperwork with related I-9 files.

OSC’s broad investigatory authority

Reports of alleged employment discrimination growing out of inappropriate I-9 and E-Verify procedures can reach the OSC through multiple channels. An individual who feels he was subjected to discriminatory treatment in the verification process based on his national origin or citizenship status can file a charge of discrimination with the OSC, the Equal Employment Opportunity Commission (EEOC), or a state or local fair employment practices agency, which could trigger a broad investigation of the employer’s I-9 and E-Verify practices.

The OSC could also open an investigation based on an anonymous tip reported on its hotline. For the past several years, the OSC has also pursued enforcement leads received from the USCIS Verification Division’s Office of Monitoring and Compliance and from the DHS Office of Homeland Security Investigation (HSI), a division of Immigration and Customs Enforcement (ICE) responsible for enforcement of the I-9 verification and paperwork rules.

Section 274B of the IRCA grants the OSC broad investigatory authority to identify and deter intentional discrimination in hiring and termination based on national origin by employers with more than three and fewer than 15 employees and based on citizenship status by all employers with more than three employees. Backed by the subpoena power vested in the DOJ Executive Office for Immigration Review’s Office of the Chief Administrative Hearing Officer (OCAHO), the OSC has successfully required employers to produce all I-9 and E-Verify records, application forms, and verification policies and training materials covering extended time periods.

The agency is looking for direct and indirect anecdotal and statistical evidence that the employer subjected foreign workers to disparate treatmentfor example, by insisting that they produce a DHS work authorization document for I-9 and E-Verify purposes or by terminating foreign workers upon their receipt of a tentative nonconfirmation notice without first giving them timely notice and an opportunity to resolve the original no-match situation.

What happens if OSC finds ‘reasonable cause’?

Should the OSC conclude an investigation with a finding of “reasonable cause” of discrimination, the agency would file an administrative complaint against the employer with the OCAHO seeking civil money penalties, back pay, compensatory and punitive damages, reinstatement, and other affirmative relief on behalf of the aggrieved individuals or one or more classes of aggrieved individuals of unknown identity. Months of pleadings, motions, discovery (exchange of relevant evidence), hearings, and briefing would follow.

At the end of those proceedings, if an administrative law judge (ALJ) finds the employer guilty of violating Section 274B, the judge could issue an order directing the employer to pay civil money penalties ranging from $250 to $1,100 per violation (in a first offense case) and any other damages the OSC has proved at trial. In addition, the court could order the employer to hire or reinstate individuals who were denied employment or lost their jobs as a result of its unlawful conduct. Conviction could also lead to termination of the employer’s right to participate in the E-Verify programa result that could lead to debarment as a federal contractor and the imposition of state fines and penalties for failure to meet state E-Verify mandates.

To avoid costly and protracted litigation with the OSC and the complications resulting from a liability finding, many employers agree to resolve discrimination charges and complaints through conciliation agreements. Although such agreements typically provide that the employer denies liability for the alleged violations, it nevertheless must agree to pay civil money penalties to the federal government and full back wages to injured workers, submit to random OSC inspections over the term of the agreement, provide antidiscrimination training to all managers and officials with responsibility for making I-9 and E- Verify employment eligibility determination decisions, and consent to enforcement of the settlement agreement by the U.S. district court with jurisdiction over the company.

Bottom line: how to protect your business

The government encourages employers that use E-Verify to conduct internal assessments to ensure compliance with the privacy, antidiscrimination, usage, and paperwork retention requirements of the E-Verify MOU. To guide employers in measuring their rate of compliance, DHS has developed a detailed 77-point E-Verify compliance checklist and encourages employers to track the effectiveness of their corrective action measures over time. The checklist can be found at www.uscis.gov using the search terms “self assessment guide for e-verify.”

Any documents related to self-assessment audits would be subject to discovery in the event of litigation with the OSC or other parties unless it’s protected under the attorney-client or work product privileges. As a result, it’s highly recommended that employers refrain from engaging in E-Verify self-assessments without the direction of legal counsel. Moreover, you should always take appropriate precautions to ensure the confidentiality of all working papers and advice memoranda.


Mary Pivec is a management-side immigration and employment lawyer with FordHarrison LLP. She may be contacted at mpivec@fordharrison.com.

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