CAHO Upholds Fine of $329,895 for 300 I-9 Forms

If you have already undergone one I-9 audit by ICE, you may think your business is now safe and off of the government’s radar. You would be wrong. As reaffirmed in a recent decision by the Office of the Chief Administrative Hearing Officer (OCAHO), a private company that was audited in the past was re-audited and hit with tougher charges. OCAHO has jurisdiction to review penalties imposed by the U.S. Immigration and Customs Enforcement (ICE) for I-9 compliance violations. On October 23, 2014, in U.S. v. Durable, the Chief Administrative Hearings Officer (CAHO) affirmed a decision by the Administrative Law Judge (ALJ), finding no error in the analysis and that the penalty of $329,895 for 300 I-9 Forms was just and reasonable.

In its request to review the ALJ’s decision, the employer unsuccessfully made several arguments. First, it argued that for 115 of the Forms I-9, upon which ICE based an alleged violation, the employer complied with the requirements in substance, but merely recorded the document information (minus the issuing authority) and signed in Section 3 instead of in Section 2. Second, it argued that these violations were not serious and, therefore, did not warrant aggravating the penalty because the forms reflect that the employer reviewed appropriate documents, recorded the document information (except for the issuing authority), and attested to this review and recordation under penalty of perjury. The employer further argued that the government improperly allowed the fines to be increased “three­fold” based on a history of previous violations, despite a temporal gap of more than twenty years between the previous violations and the current violations. The employer also claimed that it had conducted an internal audit and training warranting a mitigation of the fine. Finally, it argued that the violations at issue here were far from the “most egregious,” and yet the government determined that fines near the maximum amount were appropriate.

In response to the above arguments, CAHO agreed with the ALJ that an employer may not elect to sign Section 3 as a substitute for properly completing section 2 of an employee’s I-9. CAHO reasoned that “[i]nformation required in Section 2 is missing from Section 3, including—crucially—the date of hire. Omitting the date of hire from the Form I-9 renders it impossible to determine whether the employee timely completed the attestation as to their citizenship or immigration status upon the date of hire and whether the employer timely completed the required document review and employer attestation within three business days of the date of hire.” This reasoning is flawed because omitting the date of hire is only a technical violation for forms created on or after September 30, 1996. Thus, the employer may be allowed ten days to provide the date of hire for such forms before it may be fined. It is unclear if the employer was provided with ten days in this case.

As to the seriousness of the violations, CAHO noted that the high amount of the fine was warranted because the employer allegedly failed to properly verify and certify its employees’ employment eligibility and ninety percent of its workforce was found to be comprised of unauthorized workers. Furthermore, it had failed to put meaningful compliance procedures into place after its previous violations and settlement agreement. CAHO observed that the alleged audits the company underwent apparently resulted in the creation of false or deficient I-9s. Additionally, the employer had failed to offer any admissible evidence to show that the alleged training did indeed take place.

As the above case demonstrates, it is imperative that employers commit to implementing proper I-9 practices. Further, the case demonstrates the importance of undergoing an in-house audit by competent counsel to avoid aggravating any errors through improper edits or backdating. Employers must ensure that acceptable proof of such audits and training is kept so that it may be admissible in OCAHO/CAHO proceedings. Finally, the above case shows that having been subject of an enforcement I-9 audit does not provide any sort of blanket protection from a re-audit. On the contrary, the base fine for second violations is higher and a history of prior violations may result in a significant fine enhancement.

With such large fines becoming the rule rather than the exception, companies cannot afford to forego ongoing I-9 evaluations by competent immigration counsel.

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