OSHA ALERT:

OSHA Regional Emphasis Program

Targets Southeastern Poultry Processing Facilities

 

On October 26 and 27, 2015, OSHA's Atlanta and Dallas offices announced new regional emphasis programs focused on chicken processing facilities.  This program will affect employers in Regions 4 and 6, which cover an area stretching from the Arizona state line in the west to the eastern seaboard, as far south as Key West, and as far north as Kentucky. 

OSHA's press release states that poultry processing workers are twice as likely to suffer serious injuries and six times more likely to get sick on the job than other private sector workers, and suffer a high incidence of musculoskeletal disorders and ergonomic stressors.  The two regions targeted include the nation's largest chicken producers, and account for 29 of the 51 billion pounds of chicken produced each year in the U.S.

The program will begin with a three-month period of education and prevention outreach activities to share safety and health information with employers, associations (unions), and workers. Employers are encouraged to use this period to bring their facilities into compliance with OSHA standards, if they are not already.  The agency then will begin its targeted enforcement phase.  This will include on-site inspections and a review of poultry processing production operations, working conditions, recordkeeping, chemical handling, and safety and health programs to ensure compliance, and is scheduled to last for one year.

So, what does this mean for employers?  In the words of Wimberly & Lawson senior principal and OSHA specialist Larry Stine, "a pile of trouble."  Poultry processors can expect wall-to-wall inspections and in-depth record reviews.  Employers will be selected for inspection based on random criteria, or an unprogrammed inspection conducted for a limited purpose may be expanded to comprehensive.  Inspectors will scour plants looking for violations in ergonomics, process safety management, sanitation, lockout/tagout, recordkeeping, and machine guarding. This may remind many employers of the wage and hour crusade against poultry processors in 1999-2000, which found violations at the vast majority of plants inspected, and resulted in decades of donning-and-doffing litigation.

Although there is supposed to be an "education" period before inspections commence in earnest, we have heard of at least two compliance officers who already have tried to expand inspections commenced for other reasons into wall-to-walls.  They don't necessarily have the authority to do that.  In most jurisdictions, courts have held that OSHA may not expand an inspection triggered by a discrete complaint into a wall-to-wall inspection, even if there is an emphasis program in place:  there is a Constitutional dimension to selection, and the criteria must be neutral.  So an employer should not assume that every visit from OSHA has the potential to expand to cover the entire operation, and should be prepared to push back – politely – if a compliance officer states that intention.

As a practical matter, OSHA cannot subject all poultry processors to the same rigorous treatment:  they don't have the resources.  However, the unlucky employers selected can expect to have OSHA inspectors as their guests for weeks, even months.  A prudent poultry processor will take this opportunity to conduct an audit and get their plant (and paperwork) in good order, and should be prepared to call counsel early in the event of any inspection to ensure that the inspection is conducted correctly and does not overstep its limits.

OSHA is holding a meeting at Georgia Tech on December 3, 2015 with industry representatives and will bring Regional personnel from the Atlanta and Dallas regions along with officials from the National Office.  We will supplement this Alert after the meeting.

Questions?  Need more information?  Contact Larry Stine at (404) 365-0900 or at jls@wimlaw.com.

DOL PROPOSES TO INCREASE SALARY THRESHOLD FOR OVERTIME EXEMPTION:  WILL IT RAISE WAGES OR CUT HOURS?

 

On June 30, 2015, the U.S. Department of Labor announced a notice of proposed rulemaking (NPRM) which proposes to more than double the current salary threshold for the executive, administrative, and professional (EAP) exemptions to overtime.  The proposal aims to plug a gap that some claim has caused many lower-level managers to be unfairly deprived of overtime when they work more than 40 hours.  Skeptics say the new rule likely will decrease the number of hours many employees are allowed to work, replacing full-time workers with part-timers, raise costs, and make it more difficult for hourly workers to climb the ladder to management positions.  The public has 60 days to submit comments on this proposal.  (Read the full text at http://www.dol.gov/whd/overtime/NPRM2015/OT-NPRM.pdf.)

Background.

Since 1940, regulations implementing the white collar exemption to the normal rule that workers are entitled to be paid time-and-a-half overtime when they work more than 40 hours generally have required three tests to be met for the exemption to apply:  (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the "salary basis test"); (2) the amount of salary paid must meet a minimum specified amount (the "salary level test"); and (3) the employee's job duties must primarily involve executive, administrative, or professional (EAP) duties as defined by the regulations (the "duties test"). The proposed new regulations would change the salary requirements.  Salary level requirements have changed seven times since 1938, most recently in 2004 when the Department of Labor’s Wage and Hour Division (WHD) undertook a wholesale revision of Part 541 of the regulations.

Under the current regulations, to qualify for the exemption an executive, administrative, or professional employee must be paid at least $455 per week ($23,660 per year for a full-year worker).  (To qualify for a different exemption for highly compensated employees (HCE), an employee must earn at least $100,000 in total annual compensation.) WHD has long recognized the salary level test as "the best single test" of exempt status. But inflation can erode the level:  if left at the same amount over time, the effectiveness of the salary level test as a means of determining exempt status diminishes as the wages of employees entitled to overtime increase and the real value of the salary threshold falls.

Proposed Changes:  A Big Rise, and Indexing.

In order to maintain the effectiveness of the salary level test, WHD proposes to set the initial, standard salary level for the EAP exemption at a point equal to the 40th percentile of earnings for full-time salaried workers: $921 per week, or $47,892 annually for a full-year worker, in 2013. WHD also is proposing to set the highly compensated  level at the 90th percentile, or $122,148 (up from $100,000 in the 2004 regulations)  Then, in order to prevent the salary levels from becoming outdated, WHD proposes to include in the regulations a mechanism to automatically update the salary and compensation thresholds on an annual basis using either a fixed percentile of wages or the consumer price index for urban consumers (CPI-U).  The Department is proposing these changes to ensure that the FLSA's intended overtime protections are fully implemented and to simplify the identification of overtime-protected and exempt employees, thus making the exemptions easier for employers and workers (and HR departments) to understand. The current Administration considers that the $455/week salary level set in the 2004 amendments was too low to restrict the exemption to bona fide managerial employees when paired with the standard duties test.

The latest data currently available are for the first quarter of 2015 sets the 40th percentile of weekly earnings at $951, which translates into $49,452 for a full-year worker. Assuming two percent growth between the first quarter of 2015 and the first quarter of 2016, the Department projects that the 40th percentile weekly wage in the final rule would likely be $970, or $50,440 for a full-year worker.

Raising the minimum salary will substantially reduce the number of workers for whom employers must apply the duties test to determine exempt status.  Similarly, setting the HCE total annual compensation level at the annualized value of the 90th percentile of weekly wages of all full-time salaried employees ($122,148 per year, based on 2015 statistics) will ensure that the HCE exemption cover only the top 10% of earners, employees who almost invariably meet all the other requirements for exemption. Finally, automatic annual updates to the standard salary and compensation are designed to ensure that they maintain their effectiveness.

Methodology.

DOL arrived at their estimate for the threshold earnings level by including broad categories of employees, many with high earnings, who are fully exempt from the overtime rules.  The proposed rule uses data including employees previously excluded by the Department in 2004. For example, teachers, physicians, lawyers, outside sales employees, and federal employees were excluded from the 2004 sample because they are not subject to the part 541 salary level test.   The proposed revision included them, and netted many very high earners.  According to BLS, in 2012 physicians and surgeons averaged more than $187,000 in annual earnings; the Office of Personnel Management stated that the average earnings for Federal employees in 2012 was over $78,000.  This makes comparing the 2004 study with the current proposal more difficult.  In a rare fit of transparency, DOL admits that its basis for these calculations is not totally . . . transparent:  "The Department notes that the public will not be able to exactly replicate the weekly earnings and percentiles used in this NPRM from the public-use data files made available by BLS.  As with all BLS data, to ensure the confidentiality of survey respondents, data in the public-use files use adjusted weights and therefore minor discrepancies between internal BLS files and public use files exist. BLS publishes quarterly the earnings deciles of full-time salaried workers on which the Department relies to set the proposed salary level at http://www.bls.gov/cps/research_series _earnings_nonhourly_workers.htm."

Inclusion of Nondiscretionary Bonuses in the Salary Level Requirement.

Until now, WHD looked only at actual salary or fee payments made to employees and, with the exception of the highly compensated test, did not include bonus payments of any kind in this calculation. However, several business representatives asked then to include nondiscretionary bonuses and incentive payments as a component of any revised salary level requirement.  Such payments are an important component of employee compensation in many industries, and might be curtailed if the standard salary level was increased and employers had to shift compensation from bonuses to salary to satisfy the new standard salary level.  The proposed rules provide that in order for an employer to be permitted to credit such compensation toward the weekly salary requirement, the employee will have to receive the bonus payments monthly or more frequently.  (WHD was not willing to consider allowing employers to make a yearly catch-up payment as they may under the HCE exemption.)

Annual Adjustments (Indexing).

In a bid to avoid inflation-driven "bracket creep," WHD proposes to establish a mechanism for automatic updates for the standard salary test, as well as the total annual compensation requirement for highly compensated employees.  (This is an idea that has been considered for the minimum wage, although never formally proposed.)  The Department is considering two alternate methodologies for annually updating the salary and compensation thresholds.  One method would be based on a fixed percentile of earnings for full-time salaried workers.  The other would be based on changes in the CPI-U. Both methods are described in detail in the NPRM.  

Duties Test.

WHD's proposal to set the salary threshold at the 40th percentile of weekly earnings of full-time salaried employees is intended to severely limit the need for a duties test by restricting it only to employees who earn more than the increased salary threshold.  They believe that the proposed salary level increase, coupled with automatic updates, will address most of the concerns relating to the application of the EAP exemption.  A regularly updated salary level will screen out employees who spend significant amounts of time on nonexempt duties and for whom exempt work is not their primary duty.  However, WHD invites comment on whether adjustments to the duties tests are necessary or desirable.  Duties remain a critical metric of exempt status, but it will be relevant to a much smaller number of employees.

Impact on Employers and Employees.

In 2013, there were an estimated 144.2 million wage and salary workers in the United States, of whom DOL estimates that 43.0 million were salaried employees who may be affected by a change to the Department’s part 541 regulations.  Of these workers, DOL estimates that 21.4 million are currently exempt EAP workers under existing rules.  DOL projects that their proposed changes, if adopted, would affect an estimated 4.6 million currently exempt workers who earn at least $455/week but less than the 40th earnings percentile ($921).  Absent some intervening action by their employers, these employees would become entitled to overtime if the proposed rules take effect.   Similarly, an estimated 36,000 currently exempt workers who earn at least $100,000 but less than the 90th earnings percentile ($122,148) per year and who meet the HCE duties test also may become eligible for minimum wage and overtime protection.  As the rates are adjusted, more employees will be affected.     

In addition to the 21.4 million potentially affected current EAP exempt workers, WHD estimates that an additional 6.3 million salaried white collar workers who do not satisfy the duties test and who currently earn at least $455 per week but less than the proposed salary level will become entitled to overtime because the salary test alone will determine their status, without the need to examine their duties.  At the current standard salary threshold, there are 11.6 million salaried workers who fail the standard duties test and are therefore overtime eligible, but earn at least the $455 threshold, while there are only 845,500 salaried workers who pass the standard duties test but earn less than the $455 level.  The number of workers who pass the current salary threshold test but not the duties test is nearly 14 times the number of workers who pass the duties test but are paid below the salary threshold.  This underscores the large number of overtime-eligible workers for whom employers must perform a duties analysis, and who may be at risk of misclassification as EAP exempt.  If the salary threshold is raised to the 40th percentile, WHD estimates that the number of overtime-eligible salaried workers who would earn at least the threshold but do not pass the duties test would be reduced to 5.6 million.

Alternatives

Employers will not be required simply to raise the pay of all formerly EAP workers to the 40th percentile ($921/week) to comply with these rules.  It is likely that many employers will shift salaried workers paid less than the new minimum to hourly status, with hourly rates that approximate their former salaries, and control costs by restricting overtime.   Salaried, nonexempt pay will remain a viable option to employers interested in controlling overtime expense in states where the practice is permitted (not in California).  This allows an employer to pay a nonexempt employee a guaranteed salary for all hours worked, plus an overtime premium of an additional one-half the regular rate for each overtime hour.   This method is desirable where an employer wants to contain costs by discouraging employees from shifting work from regular hours to overtime, since the employee's effective rate of earnings per hour actually declines the more overtime hours are worked.  If either of these methods is adopted, the employer will, of course, be required to make and preserve records of hours worked for these employees.

Unintended Consequences.

Aside from causing many salaried, managerial employees to take perceived "demotions" to hourly status, the proposed changes will move up that first rung on the ladder of success for many workers – a lot.  The old exemption threshold ($455/week) works out to about $9/hour over 50 hours, not an unusual rate for a starting-level assistant manager at a discount retail chain, for example.  It's certainly an improvement over a starting minimum hourly wage of $7.25.   Learning to be a manager can take time, as the employee learns procedures and develops supervisory skills.  If the starting point for a salaried managerial position is moved up to $921/week, an effective rate of $18.42 over 50 hours, the employer is making more than twice the investment in the employee.  Most employers are not going to be willing to give inexperienced first-timers an opportunity to move up from hourly work at annual rates in excess of $50,000. 

The proposed salary level increase will raise management issues as well.  It will be necessary to maintain records of hours worked for more employees, and some with managerial responsibilities may chafe at being required to clock in and out.  This may create an incentive to work more overtime.   An employee earning $22.50 per hour will earn $33.75 per hour overtime:  a 60-hour week will cost the employer $1575.  And overtime can be hard to control.  For example, a nonexempt employee who checks his or her work e-mail outside of normal working hours may be due overtime for that activity.  It is nearly impossible to prevent an employee possessing a smart phone from checking work e-mail without locking them out of the system after hours.  Remember, an employer may adopt a rule prohibiting employees from working overtime, but it must pay if they work.  When more high-earning employees are nonexempt, the stakes will rise for back pay awards (and attorneys’ fees).  The change also may affect employee benefits such as health insurance, since many employers provide more or better benefits to salaried, exempt workers than they do to nonexempt, hourly employees.

Conclusion.

 

            The proposed steep increase in the minimum amount of salary an employee must be paid to qualify for the "white collar" exemption from overtime, is unlikely to substantially raise the income of more first-level managers right away.  It is more likely that this change will reinforce a perceived social chasm between hourly workers and salaried managers, and delay the promotion of hourly workers into managerial positions where they can grow professionally. 

 

Questions?  Need more information?  Contact Larry Stine or Betsy Dorminey

at (404) 365-0900 or jls@wimlaw.com or ekd@wimlaw.com

NLRB EXPLAINS WHAT EMPLOYER RULES

ARE UNLAWFUL AND HOW TO MAKE THEM LAWFUL

 

On March 18, 2015, the NLRB General Counsel (GC), Richard Griffin, issued a report attempting to reduce some of the mass confusion over the NLRB's policies concerning employer handbooks and other company policies.  The GC acknowledges most employers do not draft their policies with the object of restricting conduct protected by the labor law, but states that the law does not allow even well-intentioned rules that would inhibit employees from engaging in protected activities.  The main principle is that the maintenance of a work rule may violate the law if a rule has a chilling effect on employees' protected activity.  The most obvious way a rule would violate the Act is by explicitly restricting protected concerted activity.  However, even if a rule does not explicitly prohibit protected activities, it will still be found unlawful if:  (1) employees would reasonably construe the rule's language to prohibit protected activity; (2) the rule was promulgated in response to union or other protected activities; or (3) the rule was actually applied to restrict the exercise of protected rights.  The GC states the vast majority of violations are found under the first prong, and the NLRB has issued a number of decisions interpreting whether "employees would reasonably construe" employer rules to prohibit protected activity. 

The GC report is divided into two parts.  The report compares common employer rules the NLRB has found unlawful with rules it found lawful and explains the reasoning.  It covers confidentiality rules, professionalism rules, anti-harassment rules, trademark rules, photography/recording rules, and media contact rules.  The second part discusses handbook rules from a recently settled unfair labor practice charge against Wendy's.  This part of the report sets forth Wendy's rules that the NLRB initially found unlawful with an explanation, along with Wendy's modified rules.

In discussing unlawful confidentiality rules, the GC memorandum finds a rule "prohibiting employees from disclosing details about the employer" to be unlawful, but a rule stating "no unauthorized disclosure of business secrets or other confidential information" will be lawful.  Addressing rules regarding employee conduct with the company and supervisors, the GC memorandum finds a rule "be respectful of others and the company" to be unlawful, while a rule stating "each employee is expected to work in a cooperative manner with management/supervision, co-workers, customers and vendors" to be lawful.  In discussing rules regarding conduct towards fellow employees, the GC finds a rule "do not send unwanted, offensive, or inappropriate emails" to be unlawful, but a rule prohibiting "threatening, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors" to be lawful.  Addressing rules regarding employee interaction with third parties, the GC finds a rule stating "employees are not authorized to speak to any representative of the media about company matters unless designated to do so by HR" to be unlawful, but goes on to give several examples of lawful rules regarding employee communications with the media.  Addressing rules restricting use of company logos, copyrights and trademarks, the GC finds a rule "do not use any company logos, trademarks, graphics, or advertising materials in social media" to be unlawful, but again gives examples of lawful rules  protecting employer logos, copyrights, and trademarks. 

The GC then addresses rules restricting photography and recording devices.  The GC states that a rule prohibiting "use or possession of personal electronic equipment on employer property" is unlawful, apparently because employees should have the right to use personal equipment to engage in a protected activity while on breaks or other non-work time.  A single example is given of a lawful rule regulating pictures and recording equipment with the rationale that in context the employees would read the rule to ban news cameras, not their own cameras.

Regarding employer rules restricting employees from leaving work, the GC finds a rule "walking off the job is prohibited" to be unlawful, because it reasonably could be read to include protected strikes and walkouts.  On the other hand, the GC finds a rule to be lawful "entering or leaving company property without permission may result in discharge."  Regarding employer conflict of interest rules, the GC finds a rule that ”employees may not engage in any action that is not in the best interest of the employer" to be unlawful, but finds other stated rules to be lawful because they include context and examples that indicated that the rules were not meant to encompass protected concerted activity.

In the second part of the report, involving the Wendy's handbook, a number of common employer rules or policies are found to be unlawful.  Extremely helpful, however, are a number of lawful handbook rules negotiated pursuant to the Wendy's settlement agreement, governing handbook disclosure, social media, conflict of interests, confidential information, employee conduct, no distribution/no solicitation, and telephone/cell phones/camera phones/recording devices.

Wimberly & Lawson Comments

The NLRB's position on employer handbooks and other personnel policies is very frustrating, and they are going to be very difficult for the average human resource executive, or even the average labor lawyer, to interpret and apply.  Further, it is likely that a more employer-friendly NLRB in the future will rescind some of these technical and demanding NLRB case precedents.  In the meantime, employers are left in a dilemma of whether to commit significant resources to try to bring their rules in compliance with the revolving NLRB doctrine, or whether to run some risks in this regard.  Reasonable people can reach different conclusions as to the best strategy.  However, should a union organizing campaign commence with a potential for an NLRB election, it is recommended that employers immediately seek competent labor law counsel to determine whether any of their policies are unlawful and objectionable, in order to minimize liability to the company resulting from illegal policies being in effect during the critical period before an NLRB election.

For a copy of this NLRB memorandum, you can request one from Wimberly & Lawson or you can go to http://apps.nlrb.gov/link/document.aspx/09031d4581b37135.

For questions or additional information call James W. Wimberly, Jr., Martin H. Steckel, or any other attorney at (404) 365-0900 or at jww@wimlaw.com or mhs@wimlaw.com.

GOVERNMENT POSITION:  WORKER PRESENTS

NEW SOCIAL SECURITY NUMBER AND STATES

PREVIOUS DOCUMENTS WERE NOT REAL

 

One of the most common (and difficult) immigration issues faced by employers occurs when an employer has accepted an employee's work authorization documents that appear genuine, but the employee later comes in and presents new identity and work authorization documents and states that the previous documents were not real.  Employers are concerned whether this situation opens the employer up to any discrimination issues in any way if it chooses to keep or terminate the employee.  The U.S. Department of Justice's Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) issued a technical assistance letter on January 8, 2015, explaining an employer's responsibilities in this situation.  Because of the importance of the issue, significant portions of the "correct steps" and opinion are stated below:

In a situation where an employer has properly completed these steps, and an employee later provides the employer with new work authorization documentation and explains that the previously-presented documentation was not genuine, U.S. Citizenship and Immigration Services ("USCIS") – the agency that publishes the Form I-9 – provides additional guidance.  According to the USCIS Handbook for Employers, Guidance for Completing Form I-9 (Form M-274 Rev. 04/30/13), available at http://www.uscis.gov/sites/default/files/files/form/m-274.pdf:

"You may encounter situations other than a legal change of name where an employee informs you or you have reason to believe that his or her identity is different from that previously used to complete the Form I-9.  For example, an employee may have been working under a false identity, has subsequently obtained a work authorized immigration status in his or her true identity, and wishes to regularize his or her employment records.  In that circumstance you should complete a new Form I-9.  Write the original hire date in Section 2, and attach the new Form I-9 to the previously completed Form I-9 and include a written explanation.

In cases where an employee has worked for you using a false identity but is currently work authorized, the I-9 rules do not require termination of employment . . . ."

USCIS Handbook for Employers at 24.

This Office cannot identify any violation of 8 U.S.C. § 1324b when an employer consistently accepts documents that employees choose to present that reasonably appear to be genuine and relate to the individual, regardless of whether an employee admits that the documents previously presented for employment eligibility verification were "not real."  Nor can this Office identify any 1324b violation when an employer allows an employee to continue employment under the circumstances you present.  However, to the extent an employer rejects valid work-authorization documentation or terminates employees because of their citizenship status or national origin, the employer could violate the anti-discrimination provision.

A further portion of the technical assistance opinion is quite important although it will not be quoted.  It goes on to state that an employee who is terminated under the circumstances described above may allege citizenship status discrimination and may also allege national origin discrimination.  The OSC indicates that an employer with a consistently-followed policy of terminating individuals for providing false information during the hiring process may have a legitimate non-discriminatory reason for the termination, and that whether or not OSC concludes that such a termination violates the anti-discrimination provision depends on the facts presented.  The entire OSC technical assistance letter can be viewed at http://op.bna.com/dlrcases.nsf/ r?Open=lfrs-9t7sbn.

Wimberly & Lawson Comments

The OSC’s technical assistance opinion cautions employers that terminating all employees who present different names, Social Security Numbers, or other document information, for falsifying documentation to the company, may result in discrimination claims.  The first concern is whether such an employer has consistently followed a policy of terminating all employees who are determined to have provided false information, particularly since it appears common for employees to present documents that are falsified in some manner.  For example, some studies indicate that 75% of job applicants falsify their employment application in some way.

A second concern relates to the natural reaction of an employer to simply request additional documentation from the employee to determine whether or not the employee is currently work authorized.  The same technical assistance letter cautions that an unfair documentary practice occurs when an employer rejects valid Form I-9 documentation, demands more or different Form I-9 documentation, or requests specific I-9 documentation based on an employment-authorized individual's citizenship status or national origin.  This advice is given in respect to what the OSC believes are "the correct steps going forward." 

These issues are also going to come to the forefront as the implementation of President Obama's deferred prosecution policy goes into effect, probably around the middle of the year.  Because of this deferred prosecution policy, employers should expect that some employees will be coming forward with new identity and work authorization information, and employers will be required to act in accordance with not only the position of ICE (Immigration and Customs Enforcement), but also with the position of the OSC as indicated in the technical assistance letter discussed herein. 

For those employers who accept the new documents and continue the employment of the workers, it is important to maintain records of the change in identity and work authorization documents.  Such employers should prepare new Form I-9s based on the new documents and attach the new Form I-9s to the old Form I-9s for the workers.  Other employment records should cross reference the name and Social Security number changes so that all relevant documents can be retrieved when necessary.

For those employers who continue the practice of terminating employees who confess to providing false identification and work authorization documents in the past, it is important to maintain records to show a consistent practice of terminating all employees who provide false information during the hiring process.

For questions or additional information call James W. Wimberly, Jr., Jim Hughes, or Ray Perez, or any other attorney at (404) 365-0900 or at jww@wimlaw.com, jlh@wimlaw.com or rp@wimlaw.com.

PROS, CONS AND ISSUES WHEN DEALING WITH

ELECTRONIC I-9 SOFTWARE PROVIDERS

 

Should an employer adopt an electronic I-9 system?  If so, how should an employer go about selecting an electronic I-9 software provider?

On the pro side, the perception is that an employer can reduce administrative burdens and costs, such as filing and retrieval time and storage costs.  Moreover, in theory, the HR clerk could enter the information one time for payroll, HR and E-Verify purposes.  In addition, many electronic I-9 software programs are marketed as fool-proof so that an employer can feel comfortable that the I-9 is fully completed.  On the con side, the government likes electronic systems because the government can review I-9s more quickly and there are a lot of rules to follow.  Also, the electronic I-9 systems are not fool proof.  Some employers have made the mistake of relying on the software provider as the expert, and have learned the hard way that legal advice and guidance would have saved them a lot of time and money. 

For example, Abercrombie & Fitch learned that its electronic I-9 system must comply with federal regulations when it had to pay more than $1 million to settle ICE fines because its electronic I-9 system did not satisfy federal employment eligibility verification and recordkeeping requirements. 

In addition, the federal government filed a complaint against Rose Acre Farms in 2012 alleging discrimination because the electronic I-9 system did not allow non-U.S. citizens to present List B and C documents, but did allow U.S. citizens to present List B and C documents.  The litigation of that case continues.

Wimberly & Lawson is active in the American Immigration Lawyers Association (AILA).  AILA has published a 15-page article entitled:  "Advising Clients on the Selection of an Electronic I-9 Software Provider," which we can provide to employers who have, or who are considering, electronic I-9 systems.  Attorneys at Wimberly & Lawson are available to guide employers through the process, including providing information on “due diligence” items in selecting, and monitoring the performance of, electronic I-9 software providers. 

For questions or additional information call Jim Hughes, James W. Wimberly, Jr. or Ray Perez, or any other attorney at (404) 365-0900 or at jlh@wimlaw.com, jww@wimlaw.com  or rp@wimlaw.com.

Wimberly, Lawson, Steckel, Schneider & Stine

 3400 Peachtree Road, Ste 400 / Lenox Towers / Atlanta, GA 30326 / 404.365.0900

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