Staffing Firm Wrongly Fined for Employment Verification

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By Laura D. Francis

Aug. 11 — A staffing firm that verified employees' work eligibility by having a contractor inspect and copy their documents and someone else verify them didn't violate the law, the U.S. Court of Appeals for the Fifth Circuit held ( Emp'r Solutions Staffing Grp. II, LLC v. Office of the Chief Admin. Hearing Officer, 2016 BL 259902, 5th Cir., No. 15-60173, 8/11/16 ).

To ensure that they aren't hiring undocumented immigrants, employers must complete I-9 employment eligibility verification forms. Workers must produce documents proving their identity and work authorization, and employers must attest on the form, under penalty of perjury, that the documents appear genuine and relate to the worker.

The Department of Homeland Security argued that the same individual who inspects an employee's identity and work authorization documents must also sign the attestation on the I-9.

But the Fifth Circuit said the Immigration and Nationality Act, DHS regulations and the Form I-9 all are ambiguous as to whether they allow corporate attestation, which Employer Solutions Staffing Group II LLC followed. Therefore, ESSG shouldn't have been fined $226,270, the court said.

Judge Leslie H. Southwick wrote the decision, joined by Judges W. Eugene Davis and Edward C. Prado.

Could Increase Flexibility for Employers

If the DHS chose to accept the ruling, it would increase flexibility for employers with remote workers, Fragomen, Del Rey, Bernsen & Loewy attorney Dan Brown told Bloomberg BNA Aug. 11.

Although ESSG's practice isn't common, there is a “remote worker problem” of getting I-9s completed within the required time frame when workers aren't based at corporate headquarters, he said.

Section 2 of the I-9 must be completed within three days of the employee's hire date. That can be a challenge for companies with, for example, remote sales forces that are located all over the country, Brown said. Allowing the corporate attestation the Fifth Circuit sanctioned would mean companies could use Skype or other technology to complete the process more easily, he said.

But the Fifth Circuit said it wasn't ruling on whether the DHS has the authority to prohibit corporate attestation, or whether the OCAHO decision could be used as precedent for future enforcement actions.

That gives the agency an avenue to be more clear either on the Form I-9 or in regulations that corporate attestation isn't allowed, Brown said. That means employers should have the same person inspect workers' documents and sign the I-9, he said.

Even though the agency lost this case, it's now very clear that the DHS believes that is the proper practice, Brown said.

DHS, OCAHO Said Attestations False

According to the court, ESSG, based in Edina, Minn., is a temporary staffing agency that contracted with an El Paso, Texas, manufacturing company to supply workers. ESSG in turn contracted with El Paso-based Flexicorps Inc. to hire the workers.

Under that arrangement, Flexicorps ensured that the workers completed Section 1 of the I-9 form and inspected and photocopied their identity and work authorization documents. The photocopies and I-9 forms were then sent to ESSG in Minnesota, and an ESSG employee would complete and sign the employer attestation in Section 2 of the form.

But when the DHS's Immigration and Customs Enforcement audited ESSG's I-9s, the agency determined that they hadn't been completed properly. ESSG took the case to the Justice Department's Office of the Chief Administrative Hearing Officer, which agreed that the company didn't properly complete Section 2 on 242 I-9s.

The OCAHO administrative law judge reasoned that the same person who inspects a worker's original documents must also sign the attestation, the court said. Because that didn't happen here, ESSG's attestations were false, the ALJ said.

Unclear That ESSG Acted Improperly

But the INA doesn't specifically say the same person has to inspect the documents and sign the form, nor do the DHS's regulations, the Fifth Circuit said. Although the I-9 form and the OCAHO's decision could warrant some deference, the court said ESSG didn't have fair notice that its employment verification practices weren't legal.

“At best,” the court said, the I-9 contains conflicting information as to whether a single individual must complete Section 2, or whether a corporate entity can do it.

The OCAHO ALJ's decision was clear, but the court called it a “novel interpretation” of the Immigration and Nationality Act that hasn't been the subject of public comment. It also was based on “commonsense rather than any legal authority,” it said.

Hunton & Williams represented ESSG. The Justice Department represented OCAHO and the DHS.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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