An employer who failed to complete an I-9 Employment Eligibility Verification Form within three days of an employee’s start date commits a substantive violation for which the good faith defense is not available to mitigate the assessed fine, according to a recent ruling from the Office of the Chief Administrative Hearing Officer (OCAHO) of the Department of Justice’s Executive Office for Immigration Review, in United States of America v. Anodizing Industries Inc., OCAHO Case No. 12A00030, May 24, 2013.

The Department of Homeland Security, Immigration and Customs Enforcement (ICE) filed a complaint alleging that Anodizing Industries, Inc. of Los Angeles, California had hired 26 named employees for whom it failed to timely prepare I-9 forms within three days of their start dates. The length of time between the start dates of the employees and date of completion of their respective I-9 form ranged from a matter of weeks to 22 years. The company argued that it had complied in good faith with the employment verification requirements in hiring the 26 employees, and that the proposed fines were excessive and should be mitigated under the statutory penalty factors. ICE sought a total of $25,525.50 in civil money penalties.

The Administrative Law Judge ruled that the good faith defense was available only as to certain technical or procedural violations where the employer made a good faith attempt to comply with the recordkeeping requirements. See 8 U.S.C. 1324a(b)(6).  With respect to such violations, the employer must be provided with notice of the violations and given not less than 10 days to correct the failure voluntarily. Fines cannot be assessed or sought until notice and opportunity to cure such violations have been provided.

However, here the ALJ held that a failure to prepare an I-9 form when hiring a new employee is not a technical or procedural failure, but rather is substantive in nature. Moreover, the failure to prepare an I-9 in a timely fashion not only is a substantive violation, but also a serious one because, the ALJ explained, an employee working on the job could be unauthorized for employment during the entire time his or her eligibility remains unverified. Furthermore, the longer an employer delays in preparing an I-9 form, the more serious is the violation. Accordingly, the good faith defense was not applicable here and the company was not entitled to notice and opportunity to cure the violations. The ALJ relied on legacy USINS Interim Guidelines relating to Section 274A(b)(6) of the Immigration and Nationality Act, added by Section 411 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, as a basis for decision.

The good faith defense thus is limited to technical or procedural failures to comply with a partial verification requirement, rather than to failures to comply with the verification requirement as a whole. The defense did not alter or affect the necessity of completing the I-9 form within three business days of the start date or of retaining the forms for the required period of time.  Omissions and delays can prove costly.  Each failure to properly and timely prepare, retain, or produce the forms in accordance with the requirements of the employment verification system is a separate violation of the Act.

Despite certain mitigating factors (none of the employees were unauthorized workers, there was no prior history of I-9 violations, and Anodizing was  a small business), the ALJ still affirmed an adjusted penalty of $15,600, as a matter of discretion, reduced from the $25,525.50 originally sought by ICE.