Immigration and Customs Enforcement’s efforts to obtain enhanced civil penalties against employers for Form I-9 violations has met with resistance from the Justice Department’s Office of the Chief Administrative Hearing Officer (OCAHO) in two rulings issued on March 18, 2013.

In the first, United States of America v. Siam Thai Sushi Restaurant, d/b/a Four Siamese Company, Inc., OCAHO Case No. 12A00058, ICE sought aggravated civil penalties by arguing that the employer lacked good faith because the Form I-9s for 18 employees were not completed and produced until four days after a Notice of Inspection had been served on the employer, rather than the three days allowed.. The employer conceded liability for its failure to timely verify the employment eligibility of its employees, although it argued it was unaware of the employment verification requirements and that the proposed enhanced fine would cripple its small business. 

While agreeing with ICE that the employer’s failure to timely complete the I-9s were serious violations, the OCAHO Administrative Law Judge (ALJ) disagreed with ICE’s view that the respondent lacked good faith, even though the belatedly produced I-9s contained substantive errors and were incomplete. “[N]either the fact that an employer’s I-9s are missing nor that they are defective is sufficient to show a lack of good faith…,” the ALJ  concluded. A failure of compliance based on ignorance of the law is accordingly insufficient to establish bad faith… Absent evidence of culpable conduct that goes beyond the mere failure to comply with the verification requirements there has been no showing that Siam Thai lacked good faith.” ICE’s attempt to impose enhance civil penalties on the basis of lack of good faith was denied.

In United States of America v. Seven Elephants Distributing Corp., OCAHO Case No. 12A00031, ICE sought aggravated civil penalties for 33 flawed I-9s in each of which Section 2 was completed improperly and for the employer’s failure to complete an I-9 for another employee (only 7 of the affected 34 employees were found to be unauthorized workers). The ALJ stated that while it was entirely appropriate to enhance a civil penalty based on the undocumented status of an employee, this is true only with respect to the I-9 form for the specific employee who is found to be unauthorized. However, the ALJ said, “It is… inappropriate to aggravate penalties for all the violations across the board based on the presence of some unauthorized individuals in the workforce.” Therefore, enhanced civil penalties were assessed only for the defective I-9s for the seven unauthorized workers, as expressly permitted under 8 U.S.C. 1324a(e)(5).