Employment Law Bulletin | March 2020
Handling Changes in Employee Identification Information That May Implicate the Employee’s Work Authorization
California employers have unique challenges arising from the many laws enacted to protect employees, especially when those laws seem to conflict with federal law. Now more than ever, California employers are grappling with the conflicts between state and federal laws regarding the immigration status of prospective and current employees. This is compounded by the lack of guidance from any government agency on the best approach for resolving these conflicting obligations.
The Immigration Reform and Control Act (IRCA) contains some protection against discrimination for employees, but is better known for its employer compliance requirements and restriction against knowingly hiring or continuing to employ any worker who is unable to show proof of eligibility to work in the U.S. In order to prove compliance under IRCA, a prospective employee is required to show proof of eligibility to work via I-9 Form documentation and may begin and continue their employment only so long as the employer maintains a “good faith belief” that the employee is legally authorized to work in the U.S. Actual knowledge of an employee’s unauthorized status can destroy this good faith belief and expose an employer to significant civil and criminal penalties.
Meanwhile, the California Fair Employment & Housing Act (FEHA) and the Labor Code protect applicants and employees by prohibiting discrimination and retaliation on a far broader spectrum than IRCA and other federal laws. In addition to the national origin and citizenship status protections under IRCA, California law protects employees against discrimination based on immigration status, ethnicity, and any actions by an employee to provide updated identity information. Violation of California law can result in high stakes lawsuits for discrimination, retaliation and wrongful termination. Employers presented with information that calls into question an employee’s I-9 documentation or identification information face a stressful conundrum: if we update the employee’s information as permitted by California law, have we violated IRCA by continuing their employment?
This can arise in a number of ways. An employer may receive information from the Social Security Administration (SSA), the Employment Development Department (EDD), the Franchise Tax Board (FTB), the District Attorney’s office, or even an anonymous report that raises concerns about the validity of an employee’s social security number, name, or employment authorization. For example, SSA no-match notices, which weren’t issued for 7 years during the Obama Administration, returned last year in aggressive fashion with hundreds of thousands of notices sent to what appeared to be targeted industries. The EDD and FTB, in their active pursuit to collect revenue and prevent, investigate and prosecute fraud, now frequently send notices asking employers to verify employee identity and information. Employees may also present updated documentation showing identity and eligibility information different from what they presented when hired.
Many questions arise for employers in these circumstances. For example: Does the new information destroy our good faith belief of eligibility for employment under federal law? If so, do we violate California law if we respond by terminating the employee? What happens if we are presented with information from multiple sources or receive multiple changes to one employee’s information or documentation?
Under these various and sometimes nerve-wracking circumstances, employers tend to:
(1) do nothing, or (2) take actions that are detrimental to the employee and result in significant legal exposure to the employer. While the first reaction may trigger an audit or fines by a government agency, the second may violate California law and result in a lawsuit. Ignoring government requests, such as the SSA’s no-match notice, could destroy an employer’s good faith belief in the employee’s legal work status and potentially place the employer on the agency’s audit radar. If proven to have knowingly employed an individual who was not authorized to work in the U.S., the employer can be fined anywhere from $500 to several thousand dollars per employee and face imprisonment. Meanwhile, an employer who wrongfully terminates an employee because of the employee’s protected status or conduct could be exposed to a lawsuit. Caught in the middle, an employer’s primary concern is keeping their workforce intact without violating the law, but how that can be accomplished?
It is no wonder that California employers struggle when faced with these challenging circumstances. In working through these scenarios with our clients, we have developed strategies to ensure compliance with both state and federal law while minimizing the impact on our clients and their employees. Given the various possibilities, each scenario should be handled on a case-by-case basis. The following tips are a helpful starting point for an employer confronted with new or different information or documentation from an employee, or a notice from a government agency.
What to Do:
- Read and fully understand the information before you act
- Develop a protocol for handling these situations, and train staff appropriately
- Keep all communication about the information you receive confidential
- Document your efforts to prove compliance
- Designate a point person to become familiar with handling notices, updates, changes of identification information and employment authorizations
- Treat each notice on a case-by-case basis
Depending on the circumstances, you may need to:
- Check your records for accuracy
- Notify the employee of the notice or corrective action that needs to be taken
- Ask the employee to take action to correct the problem and bring proof
- Submit a W-2C
- Create a new I-9
- Note corrections on the original I-9
- Terminate employment (but call counsel before doing so)
What Not to Do:
- Ignore the information/Do nothing
- Assume that your employee isn’t authorized to work in the U.S. or committed identity theft
- Discriminate, retaliate or otherwise take an adverse action against an employee based on the receipt of information that implicates the employee’s protected class
- Terminate without following proper steps to ensure lawfulness
- Re-verify non-expired I-9 documents
If you have questions about a particular notice or situation impacting your workplace, please contact an SMT employment law attorney. These issues are complex and have legal, operational and human-impact risks. We are here to help you work through it successfully.
Kari J. Brown
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Do you employ 50 or more employees who work in the State of Nevada? If so, a new Nevada mandatory paid leave law may apply to you. Effective January 1, 2020, some Nevada employees must accrue 0.01923 hours of paid leave for each hour of work performed and can request to use this paid time off after completing 90 days of employment without providing any reason to the employer. This Nevada law goes beyond the California paid sick leave law in that it permits employees to use accrued paid leave for any purpose. The law also has posting requirements. Contact an SMT employment law attorney to find out if this new law applies to your Nevada employees.
Lisa Ann Hilario
No Se Habla Español?
SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.
Spaulding McCullough & Tansil LLP
Employment Law Group