Employers Must Tread Carefully To Manage Foreign Worker Employment & Employment Discrimination Explosures

A $180,000 wrongful termination settlement that Foothill Packing, Inc. just paid to settle Department of Labor charges illustrates the potential Catch-22 tightrope that employers must walk when choosing between citizens and resident aliens with visas for hiring and firing decisions.

The Foothill wrongful termination settlement resolving H-2A visa rule violation charges illustrates an often overlooked side of the potential Catch-22 that U.S. employers can face when making hiring and other employment choices between work-eligible foreign and U.S. citizen employees or candidates.

Usually, we hear about employers nailed for employment discrimination against noncitizens.  This time, firing U.S. citizens and keeping foreign workers was the problem.

Employers Must Juggle Many Duties When Dealing With Foreign Applicants & Workers

The H-2A visa program requirements established by the labor provisions of the of the Immigration and Nationality Act and provisions of the Migrant and Seasonal Agricultural Worker Protection Act (H-2A visa program) allows companies and farm labor contractors to bring in foreign agricultural workers on a temporary basis when an adequate amount of qualified U.S. workers cannot be found to perform the work. As a condition to qualifying to hire foreign workers under the program, the H-2A program explicitly requires all jobs in this country must be offered to U.S. citizens before an employer may receive authorization to hire foreign workers.  To fulfill this requirement, an employer must demonstrate that it made required efforts to hire U.S. workers prior to having their visas approved.  Employers also must not give H-2A workers preferential treatment or wrongfully discharge U.S. workers.

The H-2A visa program requirement that employers offer work to available U.S. workers before seeking to employ foreign workers under a H-2A visa exists concurrent with the national origin and race discrimination prohibitions of Title VII of the Civil Rights Act.  Title VII, among other things, generally prohibits U.S. employers from discriminating in hiring or other terms and conditions of employment based on a worker’s national origin, ancestry or race. The national origin discrimination prohibitions of Title VII of the Civil Rights Act generally extend to any discriminatory employment decision by an is covered by Title VII, including recruitment, hiring, promotion, transfer, wages and benefits, work assignments, leave, training and apprenticeship programs, discipline and layoff and termination.

Beyond the national origin, race and other nondiscrimination requirements of Title VII, employers dealing with workers who are not U.S. citizens also generally are accountable for complying with various other nondiscrimination and other employment laws including but not limited to the following:

  • The Immigration Reform and Control Act of 1986 (IRCA), which prohibits employers with four or more employees from discriminating because of citizenship status against U.S. citizens and certain classes of foreign nationals authorized to work in the United States with respect to hiring, referral, or discharge. IRCA also prohibits national origin discrimination by employers with between four and fourteen employees.
  • The Fair Labor Standards Act (FLSA): The FLSA requires, among other things, that covered workers, including those who are not U.S. citizens, be paid no less than the federally designated minimum wage.
  • Employment of foreign nationals under special visa programs, such as H-1B and H-2A visas, also may be subject to certain requirements related to wages, working conditions, or other aspects of employment.
  • When making employment decisions and taking hiring or other employment actions involving foreign workers on H-2A visas or otherwise, employers must understand and tread carefully to comply with all of these requirements.

DOL Chared Foothill Violated H-2A Visa Program By Retaining Foreign Workers While Terminating U.S. Citizens

According to the June 13, 2016 U.S. Department of Labor Wage and Hour Division (DOL) announcement of the Foothill settlement, DOL investigators determined that Foothill, a packing and labeling company, violated the H-2 visa program by terminating 18 workers, who were U.S. citizens, that Foothill claimed failed to meet production standards when the investigation found that many of the terminated workers consistently exceeded the production of many of the foreign workers Foothill continued to employ to the same jobs.  In reaching this finding, the DOL interpreted the H-2A visa program requirement that H-2A program’s prohibition against providing preferential treatment to foreign worker as extending to layoffs.

To resolve the charges, Foothill Packing paid $180,000 in back wages to the 18 terminated workers and also paid $55,000 in penalties for the violations of H-2A provisions of the Immigration and Nationality Act, and provisions of the Migrant and Seasonal Agricultural Worker Protection Act. The settlement agreement also requires Foothill to:

  • Designate a staff member whose primary job duties consist of monitoring and reporting the firm’s compliance with all H-2A regulatory requirements;
  • Provide annual training to all frontline supervisors involved with the H-2A program;
  • Provide detailed reasons for any future terminations to the U.S. Department of Labor; and
  • Otherwise comply with the labor provisions of the requirements of the H-2A Visa Program.

Reconciliation Of H-2A Visa Rules With Civil Rights Act Nondiscrimination Rules

The key to reconciling the H-2A visa program requirement that employers show preference to U.S. workers over H-2A visa workers in hiring and retaining workers and the race and national origin employment discrimination prohibitions of Title VII is understanding that Title VII’s protections are construed and enforced as extending to all work-eligible workers in the United States, whether born in the United States or abroad and regardless of citizenship status.

While Title VII does not prohibit citizenship discrimination per se, citizenship discrimination does violate Title VII where it has the “purpose or effect” of discriminating on the basis of national origin.  For example, a citizenship requirement would be unlawful if it is a “pretext” for national origin discrimination, or if it is part of a wider scheme of national origin discrimination.

The H-2A visa program’s requirement that an employer show preference for U.S. workers over workers whose eligibility for employment is based on a H-2A visa is based on the eligibility of the employer to work in the United States under United States immigration laws. As such, when the adverse action is taken against a worker using a H-2A visa for eligibility to work, the action is based on eligibility to work required by the I-9 verification rules, and not based on the ancestry, place or origin, race or other elements of national origin.

Whether or not dealing with a H-2A visa worker, however, employers still must tread carefully to conduct and document their employment actions with respect to workers to withstand scrutiny under both requirements in the event of a challenge on either or both fronts.  Both doing the right thing and documenting throughout the process is critical as the “after acquired evidence” rules of evidence applicable to employment discrimination claims under the Civil Rights Act could prevent an employer from presenting documentation or other evidence to support an employer’s defense of a valid, nondiscriminatory business purpose to rebut discrimination claims in the event of litigation or a government investigation or charge.

About The Author

Cynthia Marcotte Stamer is a noted Texas-based management lawyer and consultant, author, lecturer and policy advocate, recognized for her nearly 30-years of cutting edge management work as among the “Top Rated Labor & Employment Lawyers in Texas” by LexisNexis® Martindale-Hubbell® and as among the “Best Lawyers In Dallas” for her work in the field of “Tax: Erisa & Employee Benefits” and “Health Care” by D Magazine.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, past Chair and current committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, a former  ABA Joint Committee on Employee Benefits Council Representative and , Ms. Stamer helps management manage.

Ms. Stamer’s legal and management consulting work throughout her nearly 30-year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, expat and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings. She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer serves on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and as an editorial advisor and contributing author of many other publications. Her leadership involvements with the American Bar Association (ABA) include year’s serving many years as a Joint Committee on Employee Benefits Council representative; ABA RPTE Section current Practice Management Vice Chair and Substantive Groups & Committees Committee Member,  RPTE Employee Benefits & Other Compensation Committee Past Group Chair and Diversity Award Recipient,  current Defined Contribution Plans Committee Co-Chair, and  past Welfare Benefit Plans Committee Chair Co-Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; International Section Life Sciences Committee Policy Vice Chair; and a speaker, contributing author, comment chair and contributor to numerous Labor, Tax, RPTE, Health Law, TIPS, International and other Section publications, programs and task forces.  Other selected service involvements of note include Vice President of the North Texas Healthcare Compliance Professionals Association; past EO Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former Southwest Benefits Association Board of Directors member, Continuing Education Chair and Treasurer; former Texas Association of Business BACPAC Committee Member, Executive Committee member, Regional Chair and Dallas Chapter Chair; former Society of Human Resources Region 4 Chair and Consultants Forum Board Member and Dallas HR Public Policy Committee Chair; former National Board Member and Dallas Chapter President of Web Network of Benefit Professionals; former Dallas Business League President and others. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal control and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at Solutionslawpress.com such as:

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