Duff on Hospitality Law

If you had asked me one month ago to predict the winner of the presidential election, I would have been wrong. Therefore, rather than make my own [ill-fated] predictions of the changes that await employers when PEOTUS takes office, I consulted my trusty Magic 8 Ball. Here’s what it predicted:

Will the overtime rule ever become law?     

MY SOURCES SAY NO.

We all have heard by now that the Department of Labor (DOL) rules extending eligibility for time-and-a-half overtime pay to some 4.2 million additional workers (including many employees in the hospitality industry) are on hold thanks to an injunction by a federal court judge in Texas. So what now?  The DOL under the Obama administration was expected to appeal the ruling to the US Court of Appeals for the 5^th Circuit, but the Trump administration has different priorities and may decide not to pursue an appeal after all.

Some employers don’t take the Form I-9 seriously, but they should. The government has significantly increased its audits of all kinds of employers – not just the bad guys - and are assessing hefty fines for mere technical violations. This is particularly true in the hospitality industry, which can be a target for audits and which, because of employee turnover, has seen disproportionately high fines.

Every employer knows that the government’s one-page form, the “Form I-9, Employment Eligibility Verification,” must be completed for every new employee. And most make sure that they get theirs completed in a timely manner. But failure to be vigilant regarding the timelines or whether the forms are completed fully or correctly can cost even the best employer thousands of dollars in fines.

Most employers consider themselves good guys. They don’t purposely seek out or hire employees who are not authorized to be employed in the U.S. But those employers are mistaken if they think that Immigration and Customs Enforcement (ICE), the enforcement arm of the Department of Homeland Security, only audits unscrupulous employers. ICE does focus on certain industries in which there is a history of unauthorized employment, but the reality is that ICE has become very good at conducting audits, and has a team of forensic auditors on staff that it wants to keep busy. ICE does that by initiating seemingly random individual audits or nationwide actions in which up to 1,000 audits are served in a single day, providing as little as three days’ notice before documents have to be surrendered. The writing is on the wall – employers should plan for and expect a government audit of its Form I-9 documentation.