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A Less Discriminating Approach to Form I-9 Compliance

By: Robert Groban and Susan Gross Sholinsky

Recent settlements with Forever 21 and Macy’s announced by the U.S. Justice Department’s Office of Special Counsel (“OSC”) underscore the importance to retail employers of training staff regarding the anti-discrimination provisions of the Form I-9 requirements.

Most employers are familiar with the Form I-9 requirements that direct employers to obtain original documentation establishing the identity and work authorization of all new employees hired since November 7, 1986.  In their eagerness to satisfy their Form I-9 obligations, however, many employers, including a growing number in the retail industry, fail to comply with the anti-discrimination provisions of the law.

The Form I-9 requirements are contained in the Immigration Reform and Control Act of 1986 (“IRCA”).  When Congress passed IRCA, however, it recognized that this was the first time employers had been required to inquire whether new employees were authorized to work, and it was concerned that many employers might misuse the law to discriminate against “foreign looking” employees.  To guard against this possibility, Congress included several anti-discrimination provisions in IRCA that define unfair immigration-related employment practices.  These include asking for more or different documents than IRCA requires, asking for specific documents, applying the Form I-9 requirements differently to various applicants, limiting applicants to just U.S. citizens absent legal justification.  Congress also created the OSC to enforce these anti-discrimination provisions.

In Forever, 21, the OSC alleged that the company violated IRCA when it required a prospective employee to produce a permanent residence or “green card”, and refused to accept a valid employment authorization document (“EAD”).  A valid EAD is a document that satisfies the Form I-9 requirements under IRCA.  By refusing to accept the candidate’s EAD and insisting on a green card, the employer allegedly violated IRCA’s anti-discrimination requirements.  Under the terms of the settlement, Forever 21 agreed to pay a civil fine and back pay.

The OSC brought similar claims against Macy’s Retail Holdings, Inc., Macy’s Florida Stores, LLC, Macy’s Puerto Rico, Inc. and Macy’s West Stores, Inc. (collectively, “Macy’s”). The OSC alleged that Macy’s refused to accept documents presented by new hires that appeared on their face to be genuine and instead asked these employees for more or different documents than IRCA allows.  Macy’s agreed to pay $175,000 in civil penalties and to establish a $100,000 fund to compensate employees damaged as a result of its practices.

These settlements by the OSC underscore the dangers that employers in the retail industry face if they focus too intently on compliance with the Form I-9 employment eligibility verification process.  With the emphasis placed on Form I-9 compliance, many of these employers forget these provisions and the substantial penalties and other obligations that they carry.  These settlements are but the latest reminders to retail and other employers of the importance of training staff on these other aspects of the Form I-9 process.