April 10, 2023

---

The Office of the Chief Administrative Hearing Officer (OCAHO) issued eight decisions during the past year for I-9 penalties. In each decision, Immigration and Customs Enforcement (ICE) conducted I-9 audits on the employers who received Notices of Inspection (NOIs). Later, the Office lowered the penalties by an average of 34.16%. As a result, the OCAHO decisions went from a high of $2,535,272 to a low of $19,480.

The most significant case reported a staffing agency accrued over 2,000 Form I-9 violations. As a result, ICE sought to penalize the company for $2,535,272. However, the OCAHO noted that the company qualified as a small business, which the Office considered a mitigating favor. Nevertheless, further investigations revealed the violations severe enough to be an aggravating factor, with other facts proving neutral. In addition, the company claimed it could not pay the $2.5 million in penalties, though it failed to establish this inability with the OCAHO. Regardless, the OCAHO reduced the fines to $1,527,308.

Another case involved a construction company receiving charges of $286,356 in penalties for not preparing Form I-9s for 135 employees. Though the company admitted to this failure, it also claimed an inability to pay the fines. The company claimed it counted as a small business, that ICE could not prove 84 employees as unauthorized, and that paying this fine would cause economic hardship. The OCAHO agreed that the company would suffer increased losses from paying the full penalty. As a result, the Office reduced ICE’s proposed fine of $2,045 per violation to $1,350 per violation.

The third case involved ICE charging a hospitality employer for not preparing Forms I-9 for ten employees. ICE wanted penalties of $19,480, though the OCAHO chose not to aggravate the fines due to lacking proof of this factor. As such, the OCAHO reduced the penalties to $13,500.

The next case involved ICE issuing complaints against two restaurant chain franchisees. ICE charged these franchisees for not preparing Forms I-9 for 71 and 47 employees and knowingly hiring 61 and 40 unauthorized employees, respectively. ICE wanted $431,609 in penalties for the first franchisee and $284,012 for the second. 

The employers first claimed they would go bankrupt if they paid the penalties. However, the OCAHO countered this argument, pointing out how they failed to meet the burden. The employers then argued how the penalties felt excessive compared to the offenses’ magnitude. However, the OCAHO disagreed and rejected the employer’s defenses. Despite this result, the OCAHO reduced ICE’s penalty for substantive paperwork violations from $1,901 per violation to a minimum of $1,612 and a maximum of $1,870. The OCAHO also reduced the fine for knowingly employing unauthorized workers from $3,802 to $3,495.

In another case against a window installation company, ICE wanted penalties of $57,466 for failing to prepare 23 Forms I-9 and not completing eight Forms I-9.

In 2023, the OCAHO issued two decisions: One against a packing supply store and the other against a produce wholesaler. For the first, ICE sought a penalty of $1,008 to $1,054 for substantive violations. However, the OCAHO decided on fines between $1,096 and $1,548 for substantive violations. For knowingly employing one unauthorized employee, the OCAHO and ICE initially agreed to a penalty of $658.95 before the OCAHO increased it to $80,187.

In the second decision, ICE sought $64,072 for failure to prepare and/or present Forms I-9 and knowingly continuing to employ two unauthorized workers. The employer requested a hearing before the OCAHO. However, the employer waived their right to be heard on penalties due to repeatedly declining to appear at proceedings. Therefore, since it had no arguments to the contrary, the OCAHO assessed the $64,072 penalty ICE sought.

These cases show the importance of properly completing Form I-9 and the cost of failure. The best way to ensure the proper completion of Form I-9 is to invest in an electronic I-9 management system. This system guides employers through the process step-by-step and safely and securely stores the forms for easy retrieval.

When it comes to your employees, automation makes eligibility verification quick and simple. Ensure compliance today with I-9 Compliance.

Source