Delaware Employment Law Blog

The E-Verify program took center stage when federal contractors were mandated to use the system in June. The mandatory E-Verify took many federal contractors by surprise and put other employers on high alert.  The federal government issued a proposed rule on June 12, 2008, and solicited public comments. About 1,600 comments were submitted.

On Friday, November 14, 2008, the final rule for the E-Verify program was published in the Federal Register, together with summaries of the public’s comments and the government’s responses to the comments. To see the rule without the comments, go to the end of the document, but the comments and responses are helpful to the big picture.

Here’s the bottom line. 

Starting on January 15, 2009, once you are awarded a federal contract worth more than $100,000 that has a performance term of 120 days or more, or if you have a subcontract worth more than $3,000, you will have 30 days to enroll in the federal contractor E-Verify program.  Enrolling involves signing a non-negotiable Memorandum of Understanding with the Department of Homeland Security and registering the individuals who will be using the system. I suggest that you take a look at page 5 of the E-Verify User Manual to get an idea of your options and what it will be like to use the system. The people you select to be “users” of the system will have to register and take the on-line tutorial before you can actually begin using the system.

You might want to register now and begin using the standard E-Verify system for new hires to give get a head start before the deadline. If you are already enrolled in the E-Verify program as of January 15, 2009, and you have a qualifying contract or subcontract, you will have to modify your enrollment to switch to the federal contractor version.  Within 90 days of enrollment as a federal contractor, you will have to begin using E-Verify for all new hires in the U.S. (including people who are not working directly on a federal contract), within three days after the employee begins working for pay.

There is one major difference between the federal contractor E-Verify process and the standard E-Verify process. Federal contractors will also have to run E-Verify on each current employee who was hired after November 6, 1986 and who is directly involved in work under the contract. The standard E-Verify process may be used only for new hires.

As you receive new contracts, or make new assignments of current employees to work on a contract, you will have 30 days to run those newly assigned current employees through E-Verify. You don’t have to run your current general administrative support and overhead employees through E-Verify if you don’t want to, but you will have the option of running all of your current employees through E-Verify. You might want to do this to avoid trying to figure out whether an employee is “directly” working on a contract. It’s also a good way to avoid accusations that you assigned an employee to work on a federal contract for discriminatory reasons. You have to give DHS notice if you decide you are going to use E-Verify for your entire post-11/6/86 workforce.

You will probably want to modify your employee information system now to include a way to track whether you have run each employee through E-Verify, and also (if you aren’t going to run all employees through E-Verify) to track whether the employee is working on a federal contract. You only have to E-Verify an employee one time, regardless of how many contracts the employee works on.

You will need to become familiar with some rules for avoiding discrimination while using the E-Verify. They are listed in the E-Verify User Manual. The most important ones are:

• Employers may not verify newly hired employees selectively, and must follow E-Verify procedures for all new hires while their company is participating.
• Employers may not request that the employee use certain documentation for Form I-9 or E-Verify purposes. (This would be considered to be “document abuse.”)
• Employers may not use E-Verify to discriminate against any job applicant or new hire on the basis of his or her national origin, citizenship, or immigration status.
• Employers may not use the system to pre-screen applicants for employment.
• Employers must provide their employees with an opportunity to contest a Tentative Nonconfirmation (TNC). (This is what happens if the system finds a “mismatch” between database information and the information you submit about the employee.)
• Employers cannot take any adverse action against an employee based upon E-Verify unless the program issues a Final Nonconfirmation.
• Employee must continue to work during the verification process.

A good jumping off point for perusing the generous amount of information available on government websites about E-Verify is the USCIS web page.

Other related posts include:

DOJ: How to Prevent Discrimination Arising from the Use of E-Verify

E-Verify Employer Dos & Don'ts

GAO Says Universal Mandatory E-Verify Will Be A Challenge

Charges of employment discrimination in Delaware are handled by the Delaware Department of Labor (DDOL). Until now, the charge process has not been regulated by state law. How the DDOL handles a charge of discrimination and how charging parties and responding employers may be involved in the process have been available only as proposed regulations until last month when the DDOL published its first set of final regulations applicable to the charge process.

In a prior post, the new regulations were summarized and explained. In this follow-up post, I offer some of my thoughts on these important recent changes.

Most of the procedures set forth in the new regulations will be familiar to anyone who has been involved with a charge of discrimination filed with the DDOL during the past few years. One of the most useful recent developments, even prior to the issuance of the new regulations, has been an increased emphasis on mediation. In my view, unless the employer is sure that the Administrator will be dismissing the charge, the employer should always attempt mediation because it often results in a quick and (relatively) inexpensive resolution of the dispute. Mediation is simply a meeting between the mediator, the charging party, the employer, and their attorneys, if any. Both sides are given an opportunity to talk about the case in an effort to resolve it without further litigation.

Settlement means the case will end without an admission of liability by the employer and it is the only way to control the outcome of the dispute. Even if mediation is unsuccessful, participating in the process is still helpful because the employer will gain insight into the charging party’s view of the claim. The employer also will be able to determine the facts upon which the charging party intends to rely.

At the very least, the time it takes to schedule and participate in mediation will allow the employer and its attorney to conduct a more thorough investigation of the facts and law and prepare a better answer to the charge than they would be able to do in the 20 days contemplated by the regulations.

Employers may be a bit disconcerted by the regulations’ failure to require the DDOL to give notice to a respondent employer when it issues a subpoena. When the DDOL published its proposed regulations and opened them to comments, employer representatives, including Young Conaway Stargatt & Taylor, requested that the regulations provide for such notice.

We also requested that the employer be permitted to participate in depositions to enable it to have a more complete understanding of the facts that the DDOL gathers. The DDOL rejected this request, presumably because the law that authorizes the DDOL to issue subpoenas and take depositions (Section 108 of Title 19 of the Delaware Code), does not require the DDOL to give notice or any opportunity to participate to employers. Employers who are unhappy about the possibility that the DDOL may engage in unilateral investigatory activities may consider lobbying their legislators to amend the law.

The Delaware Department of Labor (DDOL), is the agency responsible for processing charges of discrimination filed under Delaware’s various discrimination statutes. Because the DDOL has a work-sharing agreement with the U.S. Equal Employment Opportunity Commission (EEOC), the Department has authority to process charges filed under state and federal discrimination laws.

Until now, the charge process, including applicable deadlines and controlling procedures, has not been regulated by state law. How a charge is handled by the DDOL, and the rules governing charging parties and responding employers have been available only in the form of proposed regulations for the past several years. But, last month, the DDOL published its first set of final regulations applicable to the charge process.

In this post, the new regulations are summarized and explained. A second, follow-up post will offer some commentary about these important changes.

The Charge of Discrimination

The regulations set forth what must be included in a charge of discrimination. A charge must identify:

• the basis for the DDOL to assert jurisdiction over the charge;
• the type(s) of discrimination alleged;
• the type(s) of adverse action alleged;
• the facts that support the claim;
• the laws that have allegedly been violated; and
• the reasons that the charging party believes support a finding of discrimination.

For the charge to be valid, the charging party must swear under oath that the allegations are true and correct and must sign the charge before a notary public.

Initial Processing of a Charge

Once a verified charge is filed, the DDOL must send a copy to the employer, by certified mail, within 14 days. The DDOL may also include a request for information with the charge, and, in its discretion, may invite the employer to participate in mediation. Even if the DDOL has not invited the employer to participate in mediation, the regulations permit the employer to request mediation in lieu of filing an answer.

The employer has 20 days to submit an answer, though the Administrator has the discretion to grant an extension of time to respond. The answer must respond “fully and completely” to the allegations asserted in the charge.

Preliminary Findings

The next step is the issuance of a preliminary finding. The Administrator must issue her preliminary finding within 60 days from the date the charge was served to the employer. The DDOL Administrator has three options. She can refer the case to mediation, refer the case for investigation, or recommend dismissal of the case.

The Administrator may dismiss a case in the following circumstances:

• the DDOL does not have jurisdiction over the case (because, for example, the employer has too few employees to be covered by the law or the employment was not located in Delaware);
• the charging party is not cooperating;
• the employer has filed for bankruptcy or relief is otherwise precluded;
• the charge was filed after the statutory deadline, or
• the charge does not allege facts that would, even if true, constitute a violation of the law.

Administrative dismissal is rare. And, even if dismissal is recommended, the charging party will be given the opportunity to provide additional evidence demonstrating that an investigation is warranted.

Mediation

The regulations also address the DDOL mediation process. The Administrator is authorized to refer a case to mediation at any time, after 20 days from service of the charge. The regulations make clear that mediation communications and records are confidential and may not be used against either party. The regulations preclude the mediation director and staff from participating in the investigation of any case that is unsuccessfully mediated. And, if the case is settled, the settlement agreement will be kept confidential unless there is an allegation that one of the parties has breached the agreement.

Investigation

If the parties do not mediate the charge or if the mediation fails, the charge will be referred for investigation. The employer has 20 days from the date it receives notice that the case has been referred for investigation to file its answer, if it has not done so already. If the employer did file an answer, the employer will have 20 days from the date of notice of investigative referral provide a supplemental response or to respond to any pending request for information.

The regulations include a lengthy description of the DDOL’s tools for investigating claims. The DDOL’s powers include obtaining information from the employer through written requests for information and documents, on-site visits and interviews. The DDOL can obtain information from third parties with subpoenas and depositions. The DDOL also has the authority to obtain information at a fact-finding conference.

A DDOL representative advises the parties in advance of the conference to bring specified witnesses and documents. During the fact-finding conference, the DDOL representative will question the witnesses and parties. The regulations state that “the parties shall not be entitled to cross-examine witnesses,” but the representative has the discretion to allow attendees to question the witnesses.

Determination and Findings

When the DDOL concludes its investigation, the Administrator will issue a determination. The determination can state that the Administrator either did or did not find reasonable cause to believe that the employer violated the law by discriminating against the charging party. A “no-cause” finding results in a dismissal of the charge. A finding of “cause,” on the other hand, means that the Administrator has determined that there is reasonable cause to believe that the employer unlawfully discriminated against the charging party.

In the event of a “cause finding,” the employer has 10 days to file a written request for reconsideration of the finding. The Administrator will determine whether the employer will be granted permission to submit additional information in support of its request. The Administrator’s decision will be issued within 10 days of the date the request for reconsideration is made.

Conciliation

If the reasonable-cause finding is not reversed by the Administrator, it is considered final. A final cause finding triggers the conciliation process. Similar to the mediation process, conciliation provides an additional pre-litigation opportunity for the parties to resolve the dispute.

If conciliation fails and the parties do not reach agreement, the DDOL will issue a Right-to-Sue Notice to the employee, which authorizes the employee to file a complaint in state court. At that point, the DDOL’s involvement in the case concludes. The DDOL will retain its file for two years. If litigation ensues, the parties will have the right to obtain copies of the witness statements and factual written data, reports and documents in the DDOL’s file by making a written request and serving a copy of the request on the other party or the other party’s attorney.

Sexual harassment in the workplace is considered inappropriate and unlawful.  Well, at least in this country it is.  But, according to a Russian judge, it is absolutely okay, and even an act of chivalry, to sexually harass your female workers. He reasoned that without harassment, the human race would come to an end. 

Russia has no laws against sexual harassment, and only two Russian women have ever won a sexual harassment case.  And that’s not because it doesn’t happen there.  A recent survey found that “100% of female professionals said they had been subjected to sexual harassment by their bosses, 32% said they had had intercourse with them at least once and another 7% claimed to have been raped.”

How this serves to preserve the human race I'm not sure.  But it does give me another reason to appreciate the American workplace.

Affirmative Action is back in employment-law news.  In November, voters in three states (Arizona, Colorado and Nebraska), will decide whether to end consideration of race in admissions to public universities, and in hiring and contract awards by state and local governments. California, Washington and Michigan have already passed similar initiatives.

Opponents of affirmative action argue that it is no longer needed and causes reverse discrimination against whites and Asians. Proponents argue that affirmative action is still necessary to provide assistance to historically oppressed minority groups.

All three proposed measures are under attack in court based on claims that the signatures needed to put the issue on the ballot were obtained through misleading signers about what the purpose of the measure was.

State measures ending affirmative action programs have no effect on the obligation of federal contractors and subcontractors to create and implement written affirmative action plans, because federal affirmative action requirements are imposed through executive orders signed by the President and regulations created and implemented by the federal Office of Federal Contract Compliance Programs.

Do the immigration laws governing H-2B category visas need to be reformed? The U.S. Chamber of Commerce says, "yes."  According to the Chamber, H-2B workers are employed mostly in landscaping, seasonal hospitality, and seasonal construction businesses, as well as in manufacturing, food packaging and processing, fisheries, and retail.

The United States Citizenship and Immigration Service (USCIS) announced today that yesterday was the “final receipt date” for applications for new H-2B worker petitions for work start dates before April 1, 2009. H-2B visas are for non-agricultural temporary and seasonal workers. Such workers need not possess any special skills.

Congress imposed a cap of 33,000 workers on the number of petitions that may be granted for the first half of 2009. The USCIS will make a random selection from among the petitions that are subject to the cap that were received before July 29, 2008, and will reject all new applications for workers with requested start dates before April 1, 2009. Petitions that are not among those randomly selected will be returned and the associated fees will be refunded.

The cap has been met for the last two years in a row, which the Chamber says is an indication that the current immigration law needs reform. The cap has not been increased since the law creating the H-2B visa category was enacted in 1990.

E-Verify is now mandatory for all federal contractors.  Pursuant to the executive order issued yesterday, federal contractors must use the E-Verify program to confirm the work eligibility of all employees currently working on a government contract, as well as all newly hired employees whether they are working on a government contract project or not.  The Executive Branch says that the E-Verify system will be able to handle this increasing demand.

But the new executive order isn’t the only new wrinkle in this quickly changing landscape. Several states (including Arizona, Mississippi, Idaho, Rhode Island, Minnesota and Oklahoma), have passed laws mandating use of the E-Verify system by some or all employer.  And there is legislation now pending in Congress that would require all U.S. employers to use the system to verify the employment eligibility of their employees.

The Government Accountability Office (GAO), which is the audit, evaluation and investigation arm of Congress, has just published a report, "Employment Verification:  Challenges Exist in Implementing a Mandatory Electronic Employment Verification System" on the issues presented by mandatory universal use of E-Verify. The report includes a very good overview of how E-Verify works and a helpful flow chart showing each step of the process.

The GAO says that a universal mandatory e-verification will present fiscal and practical challenges. The GAO points out that although 61,000 employers have registered to use E-Verify, only about half are actively using the system, and that there are approximately 7.4 million employers in the U.S. now. The U.S. Citizenship and Immigration Service (USCIS) estimates that mandatory E-Verify would result in about 63 million queries per year about newly hired employees. Both the Social Security Administration and the U.S. Citizenship and Immigration Service would have to buy more servers and hire more employees if E-Verify were mandated for all newly hired employees.

Mandatory E-Verify in its current form will not be a complete solution to the unauthorized immigration problem. It can help employers detect the use of fraudulent documents such as fake Social Security number cards, but it does not prevent use of genuine, but stolen, documents. My clients have reported an increase in incidents of apparent identity theft, which I think is probably an unintended consequence of the increased use of E-Verify.

Related Post:

Attention Government Contractors!! You Are Being Ordered to Use E-Verify!

Federal contractors are now required to use E-Verify, an Internet-based system operated by the Department of Homeland Security (DHS) & the Social Security Administration (SSA) that allows employers to electronically verify the employment eligibility of their newly hired employees.  E-Verify is a free and, until last week, voluntary way to determine the employment eligibility of new hires and the validity of their Social Security Numbers.

On Friday, June 6, 2008, President Bush signed an executive order amending Executive Order 12989, which is entitled “Economy And Efficiency In Government Procurement Through Compliance With Certain Immigration And Naturalization Act Provisions.”  Sounds important, right? This is in fact very big news for government contractors, who must now revamp another part of their hiring process to ensure that they don’t lose their contracts.

The original Executive Order 12989, "Economy & Efficiency in Government Procurement Through Compliance with Certain Immigration & Naturalization Act Provisions", was signed by President Clinton on February 13, 1996.  It stated that if a government contractor violated the Immigration and Naturalization Act’s prohibition on hiring illegal or undocumented aliens, the contractor could be “debarred.”  Debarment means that the contractor loses its current government contract and is shut out from future contracts for the duration of the debarment period.

The amended E.O. 12989 goes a step further, requiring all government contractors to use the DHS electronic verification system (currently known as “E-Verify”)  to ensure that “all persons hired during the contract term by the contractor to perform employment duties within the United States” are authorized to work in the United States. This requirement apparently extends to all newly hired employees, not just employees hired to work on the government contract. In addition, the Executive Order requires the contractor to use an electronic verification system to verify the employment eligibility of “all persons assigned by the contractor to perform work in the United States.”

The Order instructs the Secretary of Homeland Security to “modify as necessary and appropriate the electronic employment eligibility verification system....” On June 9, 2008, DHS announced that E-Verify is the system designated for use by federal contractors for compliance with E.O. 12989.  According to DHS, “Agencies responsible for federal acquisition regulations (FAR) will send a Notice of Proposed Rulemaking (NPRM) to the Federal Register today soliciting public comment on proposed changes to these regulations. Comments will be accepted for 60 days.”

DHS also assured employers that using E-Verify will not be too painful: “More than 69,000 employers currently rely on E-Verify to determine that their new hires are authorized to work in the United States. Employers have run more than 4 million employment verification queries so far in fiscal year 2008. Of those queries, 99.5 percent of qualified employees are cleared automatically by E-Verify.” E-Verify is a free service that, according to DHS, usually verifies an employee’s work authorization in seconds.

As the DHS E-Verify System is currently designed, it may be used only for newly hired employees but legislation introduced by Senator Chuck Grassley on June 5, 2008, would expand the program to cover current employees also.  You can read more about the E-Verify System on the DHS website as well as in prior posts on this blog.

Contractors must still take care to avoid discriminating against applicants and employees who are simply suspected of being undocumented workers. As Procurement Executive Janice Sposato pointed out in April 1997 after the promulgation of the original E.O. 12989, there are various laws that prohibit discrimination based on citizenship status and national origin discrimination. Accordingly, contractors may not “single out or otherwise treat individuals differently because they are foreign born, ‘foreign-looking,’ have ‘foreign sounding names,’ or have accents. All individuals must be treated in the same way during the part of the hiring process in which work authorization documentation must be provided and inspected.

Related E-Verify & Immigration Law Posts:

Getting the Jump on No-Match Letters and Suspicious Document Notices

Safe-Harbor Rule for No-Match Letters: Part 1

Safe-Harbor Rule for No-Match Letters: Part 2

Safe-Harbor Rule for No-Match Letters: Part 3

Restaurants and hospitality organizations, beware--news of another seven-figure EEOC settlement with casual-dining franchise, Razoo's Cajun Cafe restaurants.

The EEOC announced on May 7, 2008 that it had settled a class-wide discrimination case filed against Razzoo’s, a chain of Cajun restaurants, with 11 locations in the Dallas/Ft. Worth and Houston areas.

According to the EEOC, Razzoo’s had a policy favoring women for bartender positions. The EEOC alleged that the restaurant sent managers a plan calling for an 80-20 ratio of women versus men bartenders. The Commission also cited an informal policy that did not allow male bartenders were to work “girls-only” events.

Razzoo’s agreed to split $775,000 among a class of affected male servers, bartenders and applicants, and to spend the other $225,000 either to hire a human resources consultant or to set up an in-house human resources department.

Good idea.