On June 27, 2013, the Department of Justice’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (DOJ OSC) announced that it had entered into a settlement agreement with retailer Macy’s in which Macy’s agreed to pay a civil penalty of $175,000 and back pay of $100,000 to compensate individuals who suffered economic damages as a result of its employment eligibility reverification practices (yes, reverification – it comes after verification for certain employees).  In addition to paying $275,000, Macy’s will be subject to extensive monitoring by the DOJ OSC and reporting requirements for two years.  Although Macy’s denied wrongdoing, the DOJ OSC noted it initiated its investigation as a result of several calls to the DOJ OSC worker hotline. 

So just what did Macy’s do wrong?  The DOJ OSC’s press release and the Settlement Agreement indicate that Macy’s reverification procedures are the source of its pain.  Reverification procedures must strike a delicate balance: while on the one hand, employers must ensure that their employees are authorized to work in the United States, on the other, they must also be careful not to go too far so as to run afoul of the anti-discrimination provisions of immigration law.  Unfortunately, this is easier said than done. 

Many employers have been snared by their reverification process and for good reason.   The reverification process contains numerous traps for even the most conscientious employer.  The reverification rules are tricky and counterintuitive.  It may help to think of the anti-discrimination provisions as controlling the “how” of the Form I-9 process; whereas ensuring the employee is authorized to work is the “what” of the process.  It is important for all employers to remember that the “how” of the process is just as important as what is placed on the Form I-9.  Employers must walk a fine line between ensuring employee work authorization while avoiding discrimination against any employee based on his or her immigration status or national origin.  Crossing that line is fairly easy to do, even for the well-intentioned human resources associate. 

For example, often employers mistakenly believe Lawful Permanent Residents must be reverified because their work authorization document (typically a green card) includes an expiration date.  Despite the expiration date, however, for most Lawful Permanent Residents, reverification is not permitted.  Similarly, although employees with temporary protected status (TPS) may have initially presented an employment authorization card with an expiration date, often times, TPS status is extended automatically via publication in the Federal Register even though the employee does not receive an updated employment authorization card. 

In addition to reverifying employees for whom the employer is not permitted to reverify, Macy’s may also have violated the anti-discrimination provisions by the manner in which it performed the reverification itself.  For example, an overzealous employer may require that all employees with temporary work authorization present an Employment Authorization Card as their form of identification and work authorization for Form I-9 purposes.  To the untrained human resources associate, this process may seem innocuous.  Not so fast.  Requiring certain employees to present certain documents during the Form I-9 process may violate the INA’s anti-discrimination provisions. 

Unfortunately, many electronic I-9 systems don’t understand the “how” of the Form I-9 process.  A number of sophisticated employers have patted themselves on the back for implementing the “best” electronic I-9 systems only to find that their electronic system is woefully inadequate in meeting the complex requirements of the Form I-9 process.  The Macy’s Settlement Agreement indicates that its electronic system may fall into this category (Paragraph 13 requires modification of its electronic Form I-9 system so that it “complies with all employment eligibility verification laws and regulations”).  There is no substitute for a well-designed process, comprehensive training and an internal audit system designed to catch and appropriately remediate errors before they become the subject of a government investigation.