Presented by: Steven Moore and Angelica Ochoa Denver, Colorado May 16, 2012

1. Strategies Every Company Needs to Know: How to Keep EEOC and ICE Investigations in Check Presented by: Steven Moore and Angelica Ochoa Denver, Colorado May 16, 2012 05.16.12 Denver, Colorado 1 of 47

2. The EEOC’s Renewed Systemic Initiative 2 of 47

3. EEOC’s Systemic Initiative • Increased Funding • EEOC attorneys being trained for systemic litigation • EEOC’s goal is to proactively identify class cases 3 of 47

4. Pattern or Practice Cases • Rule 23’s requirements of numerosity, commonality, typicality, and adequacy of representation do not apply • No class certification is required • Proverbial “class action monster” • Litigated in two phases 4 of 47

5. EEOC’s Systemic Initiatives • Systemic Discrimination • Pattern and Practice theory • E-RACE • Combating race and color discrimination • Intersects with systemic discrimination 5 of 47

6. ADA Enforcement Actions • Maximum Medical Leave Policies • Example: a workers’ compensation policy prohibiting leave for more than one year 6 of 47

7. Avoid Being a Target • Watch for early indicators of exposure • Closely scrutinize individual charges and resolve early when possible • Be proactive with policies, procedures and training • This means more than just lip service • Look at your own stats • Be careful when providing information/ documents 7 of 47

8. Defending Against A Systemic Charge • Has the EEOC followed its own administrative requirements? • Has the EEOC investigated on a class basis? • Did the charge specify the company’s territories or regions at issue? • Did the EEOC identify class members in conciliation? • Did the EEOC conciliate in good faith? 8 of 47

9. Courts Are Striking Back • EEOC criticized for failing to provide information during conciliation • “Sue First, Ask Questions Later” 9 of 47

10. If You Find Yourself A Target In Litigation • Hire the best statistical expert possible • Continue to be proactive with policies, procedures and training • Be prepared for massive electronic discovery requests • Alert Public Relations • Explore early settlement 10 of 47

11. Settlement Strategies • Pre-Complaint • Conciliation and/or EEOC Mediation Program • Confidential • Post-Complaint • Consent Decree and EEOC press release • Extensive equitable relief 11 of 47

12. Keeping ICE Investigations in Check 12 of 47

13. Why are we here? • ICE audits increasing and affecting all sizes of companies and all industries • Record number of fines against employers, even when no unlawful workers were found • Random, tip-based and government information sharing 13 of 47

14. Why are we here? 14 of 47

15. Strategy #1: Know the Basics 15 of 47

16. I-9 Basics Complete for every employee hired after November 6, 1986 Provide instructions and list of acceptable documents to employee Employee must complete Section 1 no later than the end of his first day of work Employer must complete Section 2 within three (3) business days of employee’s first day of work 16 of 47

17. Current Interpretation of Timeframe for Completing Section 2 Employer must fully complete Section 2 within three (3) business days of the first day of work Long standing interpretation – “Wednesday Rule” – employee begins work on Monday, employer must complete Section 2 by Wednesday New interpretation – “Thursday Rule” – employee begins work on Monday, employer must complete section 2 by Thursday - M-274 appears to indicate employer has four (4) full business days to complete Section 2 17 of 47

18. Form I-9 Versions currently valid for use: Rev. 8/7/09Y and Rev. 2/2/09N 18 of 47

19. Completing Sections 1 & 2 • Section 1: • ONLY employee may complete Section 1 BUT employer is responsible for reviewing and ensuring that it is fully and properly completed • ALL fields must be completed EXCEPT Social Security Number • Exception: E-Verify employers • Section 2: • Employer must permit employee to select the original documents he/she will provide to show authorization to work in the US • One document from List A or one document from List B and one from List C • Only unexpired documents permitted 19 of 47

20. Strategy #2: Avoid Common Errors 20 of 47

21. Common Errors Procedural/Technical vs. Substantive Common Procedural/Technical Errors Completion errors but at least employee’s identity and employment authorization was vetted Common Substantive Errors No Form I-9 - not completed or not retained Failure to complete I-9 within 3 days of hire No signature or employee attestation in Section 1 No employer signature or recordation of proper documents in Section 2 Failure to re-verify in Section 3 21 of 47

22. Complex Issues - Documents Are Receipts for a List A, List B or List C document acceptable? If receipt is for a replacement of a lost, stolen or damaged document, but only for 90 days Receipt for an initial Employment Authorization Document (EAD) or an extension of an expiring EAD is NOT acceptable Lawful Permanent Resident Card LPRs NOT required to present I-551 Permanent Resident Card (green card) for Section 2 I-551 cards with or without expiration are List A documents that should not be re-verified Social Security Card If contains restrictive language, it is NOT a valid List C document 22 of 47

23. Complex Issues – Re-verification Re-verification of employment authorization Must be completed no later than the date employment authorization expires Use Section 3, unless: Not available because already used or Version of I-9 is no longer valid If using a new I-9 to complete re-verification: Ensure new form is current version Write employee’s name in Section 1 Retain new I-9 with original 23 of 47

24. Strategy #3: Copy I-9 Documents 24 of 47

25. To Copy or Not to Copy? • Required under Colorado law • For I-9 - transition in guidance – • Attaching copies of I-9 documents can turn substantive violations into technical/procedural violations • Recommendations • Copy front and back and retain with I-9 and attestation • Not expected to be document experts BUT need to practice due diligence in examining to ensure that documents do not appear fraudulent on their face 25 of 47

26. Strategy #4: Properly Retain & Purge Often 26 of 47

27. Retention Rule • Must retain employee’s Form I-9 for as long as the individual works for the employer • Employer must retain I-9 for either • Three (3) years from date of hire, or • One (1) year after the date of termination, whichever is later 27 of 47

28. Purging Practice • Once employment is terminated, move I-9 into separate binder for terminated employees and calculate the length of time for which the I-9 must be retained • I-9 Retention Calculation Worksheet (M-274, p. 23) • Once retention date lapses, purge old I-9 forms • If want a blanket retention policy, it should be at least 3 years from the date of termination, or longer, to ensure that required period has lapsed • Caution: ICE could penalize for old I-9s if they contain errors 28 of 47

29. Strategy #5: Avoid Discrimination in the I-9 Process 29 of 47

30. Common Issues • Over-documentation – requiring more documents than necessary • Re-verification of documents where none is required • Requiring employee to present a specific document, either initially or at re-verification • Handling I-9 process inconsistently • Refusal to accept a document, or hire an individual, because a document has a future expiration date • Limiting of jobs to U.S. citizens 30 of 47

31. Strategy #6: Know the Audit Process 31 of 47

32. Step One – NOI Issued ICE issues a Notice of Inspection (NOI) ICE required to provide employer with at least three (3) days written notice prior to a Form I-9 inspection Contents of a NOI: Name of business to be inspected, date/time of proposed inspection/audit, waiver of 3-day notice, and time period covered by inspection 32 of 47

33. I-9 Inspection: Step One • Employer will be requested to provide the following: • I-9s for all current and terminated employees • List of all current and terminated employees with hire and termination dates • Copies of quarterly wage and hour reports and/or payroll data for all employees (current and terminated) covering the inspection period • Quarterly tax statements (IRS Form 941) • FEIN, TIN or SSN of employer, address, telephone numbers, copies of Articles of Incorporation (if applicable), copies of business licenses, etc. • Copies of any and all correspondence with Social Security Administration regarding mismatched or no matched Social Security Numbers • Whether the company is a current or previous participant in the E-Verify or Social Security Number Verification System 33 of 47

34. Step Two – Inspection of Forms • ICE not required to conduct inspection at location of business; employer may be required to produced the forms at the field office • I-9s must be made available in original paper, electronic form, paper copy of the electronic form, or microfilm/microfiche • ICE will document receipt of I-9s from employer on Customs and Border Protection Form 6051 • Interview of Human Resources Manager/Responsible Hiring Officer 34 of 47

35. Step Three – Review of I-9s • ICE will review I-9s for violations • Report of Investigation (ROI) must document the process and results of the I-9 Inspection: # of forms inspected, # and types of violations present, and percentage of I-9s found in violation • ICE may issue a Notice of Technical or Procedural Failures, aka, “Ten-day Notice” – employer has 10 days to make appropriate changes to errors on I-9s or to provide explanations of the errors 35 of 47

36. Step Four – Letters/Notices Issued • Letters/notices issued by ICE: • Notice of Inspection Results (Compliance Letter) – advises employer is in compliance; no further investigation necessary • Notice of Suspect Documents Letter – advises employer that that an employee is unauthorized to work; advises employer of possible civil and criminal penalties • Notice of Discrepancies Letter – advises employer ICE has been unable to determine an employee’s work eligibility • Notice of Intent to Fine (NIF) – Contains basis of the charges against employer, the statutory provisions alleged to have been violated, and the penalty that will be imposed 36 of 47

37. Issuance of NIF • ICE will issue a Final Order within 45 days of the service of the NIF if a written request for a hearing is not received – NO appeal • Employer may enter into negotiations with ICE to reach a settlement • Employer may request a hearing if no settlement is reached • Final Order issued at conclusion of case 37 of 47

38. Penalties of Non-Compliance:What’s the Cost? • Types of I-9 Violations • Technical/procedural and/or substantive errors – “paperwork” violations • $110 to $1,100 per violation • “Knowing” violations – constructive and actual knowledge, knowing hire, and/or continuing to employ • $375 to $16,000 per violation • Discrimination violations • $375 to $16,000 per violation 38 of 47

39. Additional Penalties • Fines may be increased/decreased by up to 25% depending on mitigating/aggravating factors • Criminal prosecution possible • Attorneys fees for discrimination violations • Subsequent penalties enhanced • Barred from government contracts 39 of 47

40. Strategy #7: Expect an Audit – Be Prepared 40 of 47

41. Be Proactive • Conduct I-9 self-audit to correct any procedural/technical and substantive errors, if possible • Maintain separate I-9 binders for current and termed employees – do NOT keep in personnel files • Have an audit plan in place 41 of 47

42. Best Practices 42 of 47

43. I-9 Best Practices Establish a system to complete forms on time and term employees who cannot produce required documents Provide training for all employees involved in the process and ONLY allow trained employees to complete form Set up a system of checks and balances Pre-populate company name and address fields on I-9 in Section 2 Set up a tickler system for expiring documents that must be re-verified 43 of 47

44. I-9 Best Practices Copy documents and attach to I-9 form Keep the I-9 process separate from other processes which may require documents Review forms for purging eligibility Consider electronic I-9 systems and/or E-Verify Consider use of SSNVS, and having SSN No Match and honesty policies Ask questions 44 of 47

45. ICE Audit Do’s • Develop a transparent process for interacting with employees • Provide all workers with a reasonable amount of time to correct discrepancies in their records identified by ICE and treat all workers in the same manner • Inform employees from whom you seek specific information that you are seeking this information in response to an ICE audit • Communicate in writing with employees from whom you seek information, and describe the specific basis for the discrepancy and/or what information you need from them 45 of 47

46. ICE Audit Don’ts • DON’T selectively verify employment eligibility of certain employees • DON’T terminate or suspend employees without providing notice and a reasonable opportunity to present valid I-9 documents • DON’T over document or limit the range of documents allowed for purposes of the I-9 • DON’T treat employees differently at any point during the audit because they look or sound foreign, or based on assumptions about whether they are authorized to work in the US 46 of 47

47. Questions? Need Articles/Updates? If you have specific questions about the information presented today, please contact us at: Steven W. Moore (303) 764-6801 steven.moore@ogletreedeakins.com Angelica M. Ochoa (303) 764-6810 angelica.ochoa@ogletreedeakins.com 47 of 47