Immigration and Customs Enforcement (ICE) assessed penalties totaling $264,605 for 283 Form I-9 violations on a restaurant in New York.  That’s a lot of money for a small business for paperwork violations!  Following a government investigation of the company’s I-9 compliance, ICE alleged that the restaurant failed to properly complete I-9s for 264 employees and failed to prepare or produce I-9s for 19 employees.  ICE proposed a penalty of $264,605, with a baseline penalty of $935/violation, alleging that the increased baseline was due to the seriousness of the violations and the bad faith of the employer.  It then mitigated the baseline amount due to the employer’s small size and absence of unauthorized workers.   Ultimately this matter ended up in court, before the Office of the Chief  Administrative Hearing Officer (OCHAO), where Administrative Law Judge Thomas reduced the total penalties to $88,700.  Still a lot of money for a small business.  Judge Thomas found that the government’s proposed total penalty was excessive, in part due to its small size and also its location in an economically depressed area.  She also found no bad faith on the part of the employer. The case is United States v. Two for Seven, LLC, 10 OCAHO no. 1208, 2014 OCAHO LEXIS 1 (Jan. 15, 2014).

Takeaways from this case:

  • Fines for I-9 compliance lapses quickly add up and ICE aims high when assessing penalties.  Paperwork violations start at $110/violation and can go as high as $16,000/violation if you are a repeat offender. Generally speaking, in government investigations I handle, I often see ICE use $935 as the baseline fine amount.  One bad I-9 can equal $935.00.
  • Not completing a Form I-9 is a big deal if you are the subject of an ICE investigation, as it is a substantive violation and can serve as the basis for a fine.  Make sure you have a Form I-9 for all current employees and if you don’t, contact legal counsel experienced in I-9 compliance issues to address.
  • Not properly completing the Form I-9 is as serious as not presenting a Form I-9, depending on how poorly it has been completed.  There are two types of violations — substantive I-9 violations and technical violations which can be corrected.  Depending on what wasn’t completed on the I-9, an employer can be charged accordingly.  For instance, an employee not completing the attestation section in Section 1 is a substantive violation, which can lead to a fine.
  • If you are the subject of a government investigation for your I-9 compliance (i.e., you’ve recieved a Notice of Inspection and/or received an administrative subpoena from ICE) work with legal counsel experienced in I-9 compliance investigations.  Don’t go it alone.