In January 2012, two employers inHoustoneach settled charges ofI-9violations and hiring of unauthorized aliens by ICE (Immigration and Customs Enforcement) for $2 million. While the details are unclear, 269 of 451 workers of one of the companies were found to be “unauthorized,” meaning without work authorization.

ICE follows a complex set ofrules (8 CFR 274.a10) to assess penalties and fines, which can include both criminal [you can go to jail] and civil penalties (you have to pay a lot of money). 

Criminal penalties can be assessed up to $3,000 for each unauthorized alien and imprisonment for six months. 

Civil penalties are divided into two categories:  “Paperwork” violations – roughly means mistakes on the I-9 form and the employer was “trying” to complete theI-9properly and with no intent to hire any unauthorized aliens, and “Hiring” violation – loosely means that the employers knew that the workers were without authorization and still hired them.   

A “paperwork” violation carries a fine of $100 to $1,100 per violation.  It should be noted that the minimum fine increases based on the percentage of incorrectI-9s.  The minimum fine of $110 only applies if less than 9% ofI-9scontain mistakes. If a third of an employer’sI-9sis deficient, the minimum fine is $605 per violation.  Repeated offenders can expect a stiffer fine level. 

A “hiring” violation carries such high fines that a small to medium sized business can be  financially crippled.  The fines range from $275 for each unauthorized alien for a first-time offender with less than 9% of its workforce in violation, to $16,000 for a three-time offender with over 50% of its workforce unauthorized. 

Further, ICE can recommend aggravating and mitigating factors in the assessment of fines pursuant to the following five criteria:  Business size, good faith, seriousness of the offence, number of unauthorized aliens, and history of the business.  Each factor is allowed a 5% adjustment upward or downward.  Therefore, if an employer is found to have aggravating factors in all five criteria, the total fines can be adjusted upward by 25%. 

Confusing?  You bet.

But let’s put it in simpler terms, using the twoHoustonemployers as examples.  The settlement with ICE was for $2 million for each employer.  The number of unauthorized aliens at one employer was 269.  Simple mathematics reveals that each unauthorized alien cost the employer $7,435 in fines.  Fortunately for both employers, ICE did not file criminal charges against either company or their officers. 

What is the take-away?  It can cost big time to ignore mistakes onI-9sand hire unauthorized workers.  Don’t find out the hard way.  Get your I-9s in order by conducting a thorough audit, best by using experts in the field, and instead of by the same employees who were responsible for the I-9 process in the first place.  And, while it might be easy for me to say, it is hard for business owners operating in the real world to stay on top of a gazillion local and federal laws. The only protection against the hire of unauthorized workers is diligence with respect to verification of work authorization, because there are severe consequences for carelessness and inattention to the process, and even more severe consequences for deliberate inattention to the hire process.