An Administrative Law Judge with the Office of the Chief Administrative Hearing Officer (OCAHO) recently entered an order against a Minnesota-based professional employer organization (PEO) for failing to comply with the Form I-9 attestation requirement.  The order assessed nearly $230,000 in civil penalties against the PEO. 

The penalties stemmed from a U.S. Immigration and Customs Enforcement (ICE) audit in El Paso, Texas.  During the course of the audit, ICE discovered that the PEO placed its own employees with another entity without fully complying with the Form I-9 requirements.  Specifically, through an outsourcing arrangement, the PEO contracted with another party that oversaw the employees’ completion of Section 1 of the I-9, reviewed original identity and work authorization documents presented by the employees, and certified to the PEO that the documents appeared genuine and related to those who presented them.  The PEO, upon receiving this certification and photocopies of the documents, completed the attestation in Section 2 of the I-9, affirming under penalty of perjury that it examined the documents, the documents appeared genuine and related to the employees, and the employees were, to the best of its knowledge, authorized to work in the United States.

Administrative Law Judge Ellen Thomas agreed with ICE, stating, “While the company’s general appeal to agency law is creative, it is nevertheless unpersuasive.”  Judge Thomas noted: “[T]he company [does not] cite any case holding that an employer substantially complies with the statute by having a long-distance agent examine the original documents and not sign the section 2 certification.”  She emphasized that “[a]n employer does not substantially comply with the employment eligibility verification system by completing a false certification . . . .”  Rather, an employer must either review the original documents and sign the Section 2 certification itself, or utilize a third party, in which case that third party must review the documents and sign the certification.  The blended approach followed by the PEO was insufficient.  Notably, Judge Thomas rejected the PEO’s assertion of substantial compliance simply because it completed E-Verify on these individuals, ruling “the E-Verify program [does not] excuse a failure to properly complete section 2 of the I-9 forms.” 

Judge Thomas’s order is a telling reminder to employers.  Although many rely on third parties to assist with completing the I-9 form, it is critical that employers ensure those third parties both review the original identity and work authorization documents and complete the Section 2 certification.  Likewise, if an employer retains that responsibility, it should be sure the person executing the Section 2 certification also reviews originals, not photocopies, of the supporting documentation.