Staffing Company Fined $276,000 for I-9 Violations

In a decision published June 7, 2017, an administrative law judge (ALJ) in the Office of the Chief Administrative Hearing Officer (OCAHO) fined a staffing company $276,000 for various substantive violations related to its employees’ I-9 forms. The violations included failure to prepare I-9s, failure to timely present the forms after a request from U.S. Immigration and Customs Enforcement (ICE), and failure to ensure the forms were completed correctly. Although the ALJ reduced the fine from the $367,000 originally imposed by ICE, this case reflects the potentially enormous liability employers face for improperly completing and maintaining employee I-9 records, as well as the importance of a robust compliance program.

Current Form I-9 Requirements

As detailed in the MurthyDotCom NewsBrief, Form I-9 Compliance for H1B Employers (11.May.2017), the purpose of the I-9 form is to verify the identity and work authorization of a company’s employees. The I-9 consists of two sections. In section 1, the employee attests to his or her citizenship or immigration status under penalty of perjury no later than the first day of employment. The employer then completes section 2, which indicates that that the employer reviewed the employee-provided identity and employment authorization documents within three days of hiring. An employer typically must retain its I-9 records for either three years from the date the worker is hired, or for one year beyond the date the employment ends, whichever is later. An employer must also present its I-9 records to the government within three days of a request.

Substantive I-9 Violations

An employer can be fined for “substantive” and/or “technical” violations related to a form I-9. Substantive violations are more serious and include failure to prepare an I-9, failure to present an I-9 to ICE when requested, failure to ensure an employee has attested to his/her immigration status and signed section 1, and failure to complete section 2. Fines are assessed within a statutory range of $216 – $2,156 per deficient I-9, and depend on a number of factors, including the size of the business, good faith, the seriousness of the violations, whether an individual was unauthorized to work, and the employer’s history of previous violations.

In this case, the employer was found liable for substantive violations related to (1) failing to prepare or present I-9s for 344 employees, and (2) improper completion of section 1 or 2 for another 130 employees. It was fined $770 for each failure to prepare and $500 – $600 for each I-9 presented to ICE after the deadline, depending on the lateness. Each improperly completed I-9 received a $700 fine. The total fine was $276,000.

Conclusion: Proactive Compliance is Safest

This case illustrates the need for businesses to implement a robust I-9 compliance program, including training for human resources (HR) professionals and occasional audits of I-9 records to ensure consistent compliance. Furthermore, a company’s efforts to remediate I-9 problems before ICE begins an investigation is one factor that can sway favorable treatment from ICE or reduce the fine ultimately imposed. Employers interested in discussing matters related to I-9 compliance are encouraged to eMail law@murthy.com to schedule a time to speak with a Murthy Law Firm attorney.

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