The hotel industry famously grapples with labor challenges, which makes it imperative that hoteliers self-audit for employment eligibility or risk a visit from Immigration and Customs Enforcement agents.
Dawn Lurie, senior counsel in the immigration practice group at law firm Seyfarth Shaw’s Washington, D.C., office, said all hoteliers should conduct an audit of their on-site I-9 forms, which verify employment eligibility in the U.S. for both citizens and noncitizens. An audit is particularly important, Lurie said, if hoteliers switched from paper to electronic filing systems within the past few years, or took on new ownership.
“The older the I-9, the greater your liability you will have,” Lurie said. “After mergers and acquisitions, we have seen a lot of different results. Auditing is a best practice, but at the same time there are also companies that understand they have violations, and they have to move forward to continue operating.”
Immigration is top of mind in modern America. Immigration reform has been floated by the current administration, and with it increased activity from ICE officials. Due to this, Davis Bae, regional managing partner at the Seattle office of law firm Fisher Phillips, said auditing your existing workforce should not be delayed.
“Many hotels, based on their size, are ideal targets for ICE,” Bae said. “These are companies that operate on the franchise model. This is the time to identify your liability. Bite the bullet and do an audit of either a sample lot of your employee base or your entire workforce.”
If you think this sounds like a tall order, Bae agrees. With the transient workforce that permeates the hotel industry, Bae said it isn’t uncommon for hotel operators to prioritize training, workplace efficiency, Occupational Safety and Health Administration compliance and wage matters over I-9 compliance, but the penalties for lack of compliance can be disastrous.
“If you fail to act on this, it could shut down your business or result in personal liability,” Bae said. “ICE is not sympathetic right now.”
Invasion of Privacy
In September 2017, several Motel 6 hotels in Arizona were revealed to have provided personal guest information to ICE agents, ostensibly to locate undocumented immigrants. These actions resulted in at least seven arrests, but because this was a breach of privacy on behalf of the hotel, it also resulted in a $7.6 million settlement to those who were arrested.
According to Bae, this incident helped spread the word about ICE’s rising activity in the hotel and travel sector, and emphasizes the importance of compliance going forward.
“When you are seeing three to four times the level of audits occurring in the industry, the word gets around,” Bae said. “However, we still sometimes see a lack of urgency from ownership to make this a top priority, so it’s important to sell the compliance element to your owners.”
In terms of how to audit, Lurie said that in some cases it will require larger organizations or hotel properties to assess how they hire, how they complete I-9 forms and how they train in order to get a handle on the situation. This requires additional training, but it’s training that could save an organization from millions of dollars in damages, as well as incalculable losses to brand reputation.
“In general, employers want to do the right thing in this area, but it can be hard to do without training,” Lurie said. “Good I-9 hygiene is very important. For many people in the hotel industry there is no human resources manager on site, so we have GMs filling out I-9s and this is not top of mind for them. That could increase exposure to liability by missing deadlines. These are things that can be avoided with only limited training.”
It’s no secret that hotels often have been supported by the work of undocumented immigrants, particularly in entry-level positions. Bae said the current perception from hoteliers is that this uptick in enforcement is complicating an already competitive labor market, but the alternative could lead a company’s closure.
“Compliance is hard because what I hear from clients sometimes is, ‘If I do a better job with my I-9s then I worry I won’t have employees, and the people working for me will go to my competition,’” Bae said. “Insurance doesn’t cover this issue, though. This issue cost a company in Philadelphia who knowingly employed people without status over $90 million. The employees in question had work authorization cards that were valid at the time, but not renewed, and that is fraud. A single employee could be worth a $4,000 fine.”
“This used to be something that was considered just [part of] the cost of doing business,” Lurie said. “Under this administration, this is being rethought. The focus right now is on inspection and on the criminal prosecution of employers. This is not the rhetoric we heard three to four years ago.”