In recent weeks, the Office of the Chief Administrative Hearing Officer (OCAHO) has issued numerous decisions promoting a trend of reducing penalty amounts.   The decisions including the following employers: March Construction, Inc., Forsch Polymer Corp., BKR Restaurants (d/b/a Burger King), and Barnett Taylor (d/b/a Burger King). 

Under the Immigration and Nationality Act, the Office of the Chief Administrative Hearing Officer (OCAHO)  has jurisdiction over three types of cases, including those involving allegations of: (1) knowingly hiring, recruiting or referring for a fee or the continued employment of unauthorized aliens and failure to comply with employment verification requirements; (2) immigration-related unfair employment practices; and, (3) immigration-related document fraud. 

When ICE issues a Notice of Intent to Fine an employer for I-9 violations, the employer has 30 days to request a hearing on ICE’s findings or to pay the fine as assessed. Based upon the cases discussed below, it will be  in many employers’ best interest to request a hearing to seek a reduction in fines, as in most cases the cost of the legal fees will be minimal in comparison with the reductions in fines that are possible. When determining I-9 fines, ICE looks at five factors:

  1. The size of the business of the employer;
  2. The good faith of the employer;
  3. The seriousness of the violation (s);
  4. Whether or not the individuals involved were unauthorized aliens; and,
  5. History of previous violations.

In the case of March Construction, Inc. (March),  OCAHO reduced fines in connection with 103 I-9 violations based on the preponderance of evidence.  March is a  concrete for water treatment plants business, based out of San Antonio, Texas.  After being served with a Notice of Inspection and administrative subpoena in September of 2008, March turned over the requested I-9 forms and employment records for current and past employees and revised them as per ICE’s request.  Shortly thereafter, a Notice of Intent to Fine was served to March alleging 103 I-9 violations. In ICE’s motion for summary decision, they sought penalties in the amount of $86,933.00, reflecting a baseline fine of $770.00 then aggravated to reflect a lack of good faith, seriousness of the violations, and for the involvement of unauthorized aliens, bumping the fine to $885.50 per violation, which March disputed. Upon analysis, OCAHO stated that “A poor rate of I-9 compliance is insufficient to show bad faith absent some culpable conduct going beyond the mere failure to comply” and although they agreed with ICE on the seriousness of the violations, they found that ICE failed to prove that March employed undocumented workers.  In addition, March’s financial situation was assessed with regard to their ability to pay the penalties.  Ultimately, the total penalty was reduced to $17,020.

 Forsch Polymer, a small urelane consulting firm based in Englewood, Colorado exemplifies that no case is too small for ICE.  A Notice of Inspection was served in June 2010 and resulted in 12 Form I-9s being produced.  Forsch Polymer was subsequently charged with 11 violations, including failure to complete a Form I-9 and failure to properly complete all sections of Form I-9.  As a result, ICE pursued a fine of $11,827.75.  OCAHO found that three of the ten employees involved the failure to complete Form I-9 within three days of hire, which ICE should have provided notice and an opportunity for Forsch Polymer to correct.  Since ICE failed to do so, all allegations were dismissed in that regard.  ICE prevailed on other allegations including charges that the employer back-dated several I-9s.  As a result, it was determined that the base penalty was $935 per violation, aggravated 5-15% each due to the seriousness of the violations, lack of good faith, and employment of four unauthorized aliens; however, OCAHO reduced the total fine to $4,600.

Lastly, BKR Restaurants and Barnett Taylor, both operating as Burger Kings in Phoenix, Arizona were charged with not preparing Form I-9 for employees as well as failing to properly complete Form I-9.  With 87 violations, ICE proposed a fine of $54,945 for BKR Restaurants and Barnett Taylor was charged with a total of 83 violations.  In defense, the restaurants claimed that omissions in Section 1 of Form I-9, such as immigration status, could be cured by entries in Section 2; however, the claim is not supported by case law and was rejected by the court.  In addition, Barnett Taylor asserted that the violations were a result of a clerical error by a “rogue” employee.  OCAHO found that regardless of the excuse provided, none establish a defense of impossibility.  In both cases, no final penalties were assessed; rather, the parties were granted 30 days to make additional filings related to the penalties.

So what does this mean for employers who are doing everything they can to comply with very complicated I-9 rules?  It means that in almost all cases, employers should request OCAHO review of I-9 fines:  While requiring employers to present compelling evidence to support their claims,  OCAHO will look fairly at arguments and evidence presented by employers and will hold ICE accountable for procedural errors and unsubstantiated I-9 fines. Most importantly, OCAHO will significantly reduce unfair and unsupportable I-9 fines.