The restaurant industry is the second largest private sector employer in the United States, according to the National Restaurant Association, with approximately one in 10 people in the country working in a restaurant. Restaurants have a higher proportion of younger workers, hourly workers and immigrant workers than other industries, and the penalties for noncompliance with legal standards are high.

In one of the more public cases of illegal hiring practices, in February 2011 Chipotle Mexican Grill fired hundreds of workers in Minnesota stores after a probe by immigration authorities showed that many employed there were in the country illegally. Immigrations and customs enforcement agencies have targeted the restaurant industry because of this type of practice.

Restaurants can reduce their legal liability by conducting background checks, I-9 verifications, work opportunity tax credits and more. Correctly performing background checks and tracking all of the paperwork can be complicated and time consuming.

The good news is that there are software systems that integrate all such hiring processes, streamlining the hiring process and ensuring regulatory compliance.

Penalties

According to the Immigration Reform and Control Act (IRCA), penalties can be levied for I-9 noncompliance. As stated on their form, "federal law provides for imprisonment and/or fines for false statements or use of false documents in connection with the completion of this form."

An employer who hires an unauthorized worker can be fined between $250 and $5,500 per worker. Also, such an employer can be barred from federal government contracts for one year. An employer who knowingly accepts fraudulent documentation also can be criminally prosecuted under other immigration laws.

Employers who fail to keep proper records and ensure all I-9s are filed properly can be fined $110 per missing item for each form, up to $1,100 per form, even if the employee is legally authorized to work in the United States.

An individual who knowingly commits or participates in document fraud may be fined between $375 and $3,200 per document for the first offense, and between $3,200 and $6,500 per document for subsequent offenses.

Background checks

Background checks for employers through a software system allow employers to check criminal records, employment records and sexual offender databases plus search for address history. By submitting one request with a few strokes of the keyboard, all of the relevant information is gathered by the system, instead of an employer having to individually go through each database.

Background-check software can offer a detailed picture of a potential employee's history, including credit history, former addresses, criminal or civil action against the person and driving records. Uncovering Social Security numbers can validate residency and provide a picture of where the potential employee has lived and worked for the last several years.

Employers do not have unlimited rights to investigate an applicant's background and personal life, however. According to the U.S. Small Business Administration, employees have a right to privacy in certain areas and if this right is violated, they can take legal action against the company. Therefore, it is important to know what is permitted when following up on a potential employee's background and work history — medical records cannot be required by an employer, for example.

I-9 checks

An I-9 form shows the applicant is able to legally work in the United States. Employers are required to verify these applications and must record information on the I-9 from documents provided by the applicant (e.g., passport, school identification card, permanent resident or alien registration receipt card).

Hiring software can check employment verification with tools such as electronic form completion and deadline tracking. Using such tools ensures employers are hiring people who are legally able to work in the United States, avoiding costly penalties and a public relations nightmare.

Work opportunity tax credits

Software can do more than ensure legal compliance. It also can help an employer take advantage of tax credits. Work opportunity tax credits range from as little as $1,000 to as much as $9,000 for hiring certain individuals, depending on the worker's age and background.