On August 15, 2014, a California-based staffing company reached a settlement with the U.S. Department of Justice (DOJ), Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), resolving allegations that several branches of the company had violated the anti-discrimination provision of the Immigration and Nationality Act (INA) during the employment eligibility verification process. The OSC’s investigation of the company was initiated based on a referral from U.S. Citizenship and Immigration Services (USCIS).

The anti-discrimination provision of the INA (8 U.S.C. § 1324b) prohibits discrimination on the basis of national origin or citizenship status with respect to the hiring, firing, or recruitment or referral for a fee of an individual for employment, with limited exceptions. In particular, employers are prohibited from requesting more or different documents than required by law during the employment verification process if made for the purpose or with the intent of discriminating against an individual on the basis of their national origin or citizenship status. Further, employers are prohibited from refusing to honor documents tendered that on their face reasonably appear to be genuine if the refusal is made for the purpose or with the intent of discriminating against the individual on the basis of national origin or citizenship status. Under the law, employers in violation of the anti-discrimination provision of the INA may be ordered to pay a civil penalty for each individual discriminated against, ranging from $250 up to $10,000 per individual, depending on the violation.

Note that the DOJ has a Memorandum of Agreement with USCIS, pursuant to which USCIS may refer matters to the DOJ for investigation. Note also that USCIS is responsible for administering the E-Verify system, which is an electronic program through which employers verify the employment eligibility of new hires. USCIS monitors and mines the data entered into E-Verify by employers, and if patterns are detected that suggest a potential violation of the above referenced anti-discrimination provisions, a referral to the DOJ for investigation may be triggered. For example, if the data suggests that an employer is requiring certain employees, such as permanent residents (aka “green cardholders”) to present specific documents in connection with the employment eligibility verification process, a referral to the DOJ may result.

In this case, following a referral by USCIS, OSC initiated an investigation of the company’s employment eligibility verification process and alleged that several branches of the California-based staffing company had required non-U.S. citizens, but not similarly-situated U.S. citizens, to present specific documents during the employment verification process to establish their work authorization, in violation of the anti-discrimination provision of the INA. As part of the settlement, the staffing agency must pay $230,000 in civil penalties to the federal government; provide back pay to affected individuals who may have suffered economic damages as a result of the company’s alleged discriminatory employment verification practices; undergo anti-discrimination training; and be subject to monitoring by OSC of its employment eligibility verification practices for three years.

This settlement underscores for employers the importance of understanding and complying with the anti-discrimination provision of the INA during the employment eligibility verification and reverification process. It also highlights the challenges that employers can encounter between verifying an individual’s employment authorization, on the one hand, and complying with federal (and/or state) anti-discrimination laws on the other hand. To avoid violations of the anti-discrimination provision of the INA during the employment eligibility verification and re-verification process, employers should not request more or different documents than are required by law and should permit all employees to present any document or combination of documents acceptable by law. Employers should also be mindful that data entered into the E-Verify system could result in an investigation by the DOJ.

The DOJ, through its OSC, vigorously investigates and prosecutes claims of discrimination, and employers found to be engaging in discriminatory activity may be required to pay civil penalties (as this case illustrates) and back pay to injured parties. When reviewing or assessing compliance programs, it is critical that companies examine their hiring policies and practices to avoid discrimination and proactively discuss compliance with experienced legal counsel. As part of our comprehensive immigration compliance services, Ogletree Deakins can assist employers in implementing proper procedures to avoid liability.