E-Verify & I-9 News

[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

In a continuing trend of higher fines and forfeitures, the U.S. Attorney’s Office and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) announced ABC Professional Tree Services Inc. (ABC) had agreed to pay $2 million as forfeited funds to the Department of Homeland Security and adhere to revised immigration compliance procedures in return for the government agreeing not to criminally prosecute the company.

ABC is a Houston-based company that provides right of way vegetation management for electric utilities in more than a dozen states. ICE-HSI agents, in Birmingham, Alabama, began investigating ABC in early 2008 following complaints that a significant portion of the company’s employees were undocumented aliens. In March 2008, agents conducted traffic stops on ABC crews and detained employees, who were determined to be unlawfully present in the United States.

In June 2008, ICE-HSI agents reviewed the I-9 forms and supporting documentation for about 2,500 employees at ABC. The inspection revealed a significant number of employees had presented invalid personal identification documents, such as permanent resident cards, work authorization cards, and driver licenses, at the time of hire. As of the second quarter of 2009, about 30 % of the workforce was determined by ICE to be undocumented workers.

On March 4, 2010, ICE-HSI agents executed a search warrant at ABC’s Houston headquarters seizing employment and personnel records. Additionally, agents detained undocumented workers, who were on site at the headquarters. More undocumented ABC employees were detained during a traffic stop in Birmingham on that same day.

The government’s investigation revealed ABC had ignored federal law for years, by falsely attesting on I-9s that work authorization documents presented by new hires appeared genuine. In addition, for several years, ABC had received “no-match letters” from the Social Security Administration (SSA) and similar information from the company’s payroll processor, both of which indicated employee names and Social Security numbers did not match SSA records. However, the company failed to take corrective measures, resulting in the continued employment of the undocumented aliens.

ABC derived at least $2 million in revenue from the provision of services to electrical utilities with its undocumented workforce from 2006 through 2011. This figure represents the amount of money that ABC agreed to forfeit to the government.

Since September 2008, ABC has used E-Verify to verify the employment eligibility of new hires. Beginning in the fall of 2008, the company also revised its immigration compliance procedures to include new policies concerning the proper completion, retention and auditing of I-9s and for responding to SSA no-match letters. Furthermore, ABC has terminated hundreds of undocumented workers.

Just in 2012, ICE-HSI has fined or agreed to forfeitures at the following companies or business executives in these amounts (only listing those of $100,000 or more): Atrium Companies – $2 million; Advanced Containment Systems Inc. (ACSI) – $2 million; HerbCo – $1 million; Sun Drywall and Stucco, Inc. – $225,000; two executives of LTCI Ltd. – $223,000; and J & J Industrial Supply – $150,000.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post is brought to you by guest blogger Katie Nokes Minervino, Associate Attorney in the Immigration Group at Pierce Atwood LLP. Katie assists employers and employees in employment authorization needs and provides clients with support and guidance on employment verification requirements, best practices, and audit response.]

E-Verify is the federal government’s current foray into electronic verification of employment authorization of US workers that functions as a complement to— not a replacement for — the traditional paper-based Form I-9 employment verification system. Over the past few years, many employers have found themselves in a “sink or swim” situation as they have been forced into this otherwise optional program by laws mandating their use. Others have voluntarily enrolled in the program. The remaining majority are now finding themselves teetering at the edge wondering whether or not to take the plunge.

E-Verify: Who Should Jump Right In

Businesses required by law should enroll in E-Verify and structure their participation to comply with applicable laws and the terms of the program. Currently many employers are required by state or local law to enroll in E-Verify, and all signs indicate that this trend will continue. Certain federal contractors are also required to use E-Verify. Further, multi-state corporations may consider enrolling nationally to avoid facing the moving target of state-by-state compliance and the associated burden as new state laws are passed. Employers who have previously been the subject of an I-9 audit and related fines should also strongly consider enrolling in the program.

E-Verify: Who Should Stay on Shore

E-Verify use has its drawbacks. These include employer-borne costs of training personnel and allocating resources to correctly administer the program, the addition of an extra step in the hiring process, and the risk of a “false positive” for a new hire that may raise an unnecessary red flag that requires corrective action. For companies with limited HR resources or who would face significant burdens in regularly accessing the online program not required or otherwise inclined to enroll, the costs will not likely justify the benefits. Some employers simply do not want to participate in the “voluntary” program, and can elect this approach unless otherwise required to enroll.

E-Verify: Who Should Test the Waters

As the program is currently structured, employers have options in how they use E-Verify, including limiting use for new hires at only one (or a handful) of hiring sites. Enrolling in the program for use at a single hiring location, for example, does not trigger a nation-wide E-Verify use requirement for all hiring sites of a given company. While E-Verify is imperfect, the federal government has put significant resources into the program and more and more states are imposing E-Verify requirements. Odds are good that most employers will need to at least consider participation at some point in the future.

Enrolling in E-Verify on a limited basis is a good option for employers with the necessary resources to properly administer the program who may otherwise be on the fence. Choosing to participate at one hiring site provides an opportunity to gain familiarity with the program and complete the necessary training and registration on the employer’s own timeline. E-Verify experience may also provide a competitive edge when competing for business. Companies are increasingly adding employment verification compliance provisions to service contracts, which may include current (or perhaps future) E-Verify use. Putting “a toe in the water” provides companies negotiating such contracts an advantage over companies that are not familiar with or currently contemplating at least limited use of the program.

No matter their current E-Verify enrollment status, all US employers should continue to monitor E-Verify related developments to acquire a general understanding of program requirements and any pertinent compliance deadlines.

Disclaimer: The content of this website is for information purposes only and should not be construed as legal advice or a legal opinion on any specific facts or circumstances, nor does it create attorney-client privilege. This blog should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

In a case where immigration law and labor law intersected, Pacific Steel Casting Company (Pacific Steel) reached a settlement with the National Labor Relations Board (NLRB) concerning its obligations to bargain with the union about its implementation of E-Verify.

On February 23, 2011, Pacific Steel enrolled in E-Verify by signing a Memorandum of Understanding (MOU) with the Department of Homeland Security (DHS). However, in so doing, it did not notify the Glass, Molders, Pottery, Plastics & Allied Workers International Union, Local No. 164B (Local 164B), which represented its 600 employees at its Berkley, California facility.

At approximately the same time, Immigration & Customs Enforcement (ICE) served a Notice of Inspection on Pacific Steel. As a result of the I-9 audit, ICE concluded about 200 employees did not have valid work authorizations; thus, Pacific Steel terminated these 200 employees in December 2011.

In May 2011, Local 164B made an information request to Pacific Steel asking whether it had enrolled in E-Verify . As the bargaining representative, it is entitled to request certain information which could impact the employees’ terms and conditions of employment. Pacific Steel confirmed its participation in E-Verify but initially claimed it was required to do so because Pacific Steel was a federal contractor. Later, Pacific Steel conceded it was not a federal contractor but planned to continue using E-Verify.

Thereafter, Local 164B filed a charge with the NLRB alleging Pacific Steel violated Section 8(a)(5) of the National Labor Relations Act by unilaterally implementing E-Verify without bargaining Local 164B. In the March 2012 settlement, Pacific Steel agreed to provide written notice to the DHS terminating their enrollment in E-Verify. Furthermore, it agreed to reinstate employees, with backpay, who were terminated as a result of implementation of E-Verify. However, this does not appear to cover the 200 employees terminated in 2011 as those were as a result of the ICE audit of current employees while implementation of E-Verify covered new employees hired after February 23, 2012. Also, if it is determined these employees did not possess proper work authorization, the employees could not reinstated under NLRB law or awarded backpay. See Mezonos Maven Bakery, 357 NLRB No. 147 (Aug. 9, 2011) citing the Supreme Court decision, Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) – “awarding backpay to undocumented workers lies beyond the scope of [the Board’s] remedial authority”.

As one of the few immigration compliance attorneys who formerly worked as an attorney with the NLRB, I can tell you if Pacific Steel had in fact been a federal contractor and required to enroll in FAR E-Verify, this matter probably would have had a different result. Also, if Pacific Steel had offered to bargain with the union before implementation of E-Verify and reached an agreement to sign a MOU, it could have lawfully implemented E-Verify.

This is a reminder of how employers face obligations under multiple statutes in matters involving immigration compliance.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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On April 20th, 2012, ICE Director John Morton warned that ICE will conduct 3,000 I-9 inspections this year, and that this number will remain the same or climb higher in the years to come.

This planned number for ICE was confirmed by Bill Riley, former Special Agent with both the INS and ICE for 20 years and Unit Chief for Worksite Enforcement, where he implemented the ICE Mutual Agreement between Government and Employers (IMAGE) and where he created the current ICE I-9 audit program.

In a worksite enforcement webinar on Thursday, May 3rd, Riley clarified that the 3000 Notices of Inspection (NOIs) would be issued in waves at the rate of 500 every two months.

As of March 29, the agency had notified 500 businesses “of all sizes and types” to turn over I-9 employment-eligibility forms and other documents for audits.  If you have received an NOI, don’t delay and reach out to informed legal counsel, including some of our esteemed guest bloggers, for guidance on how best to respond. You can read more about the I-9 audit and NOI’s, check out one of our previous posts from an attorney expert.

So how can you best prepare for a potential ICE audit?

First, companies should consider conducting a preemptive audit to get your I-9 house in order.  Then analyze your results, initiate targeted training, and standardize your I-9 practices and procedures. As you will probably find out, the paper Form I-9 process is error-prone and hard to centralize. Therefore, after conducting the audit you will want to implement a trustworthy I-9 software system to keep track of all the I-9 documents, deadlines, and work visa reverification requirements. These steps are especially important for companies that have a large number of employees, high turnover rates, and/or multiple worksites.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post was written by our guest blogger Melinda McAfee, Esq., Vice President – Legal, Abercrombie & Fitch, Tracker I-9 client since 2010.]

Nothing tests your company’s best practices like an ICE audit. Any company that has been through a large scale ICE audit will come out of the experience with lessons learned. Converting these lessons learned into best practices can and will help you survive future ICE audits relatively unscathed. Below are a few of the “best practices” lessons learned that any large retailer or similar employer can benefit from.

Best Practice #1: Develop and Implement a Regular Audit Process
The most important lesson that any employer can learn from going through an ICE audit is the importance of a regular audit process for I-9 compliance. This is especially true with respect to electronic I-9s, which are susceptible to the vagaries of technology. The risk when errors occur is much higher with electronic I-9s where technological problems can affect hundreds or thousands of I-9s at once, and could subject a Company who has acted in good faith to disproportionate fines. Developing an audit program that regularly reviews both the behind the scenes working of your electronic I-9 system (i.e., database storage, stability and security) and the front end product (i.e., correct completion of the I-9) is essential.

Best Practice #2: Make it Fail Safe
There are numerous error types that are possible on an I-9 form, any one of which can result in a fine from an ICE audit. At a minimum, any electronic I-9 system must provide automatic error-checking. Ideally, the system should prevent I-9s from being submitted with invalid input or incomplete information. For example, your electronic I-9 software should prohibit the form from being submitted without all the required fields completed. Other error protections include prohibiting the entry of expired documents, date and number formatting checks to prevent typographical errors, and protections to prevent accidental over-documentation and subsequent accusations of discriminatory I-9 practices.

Best Practice #3: Keep it Simple
I-9 and E-Verify processing can be high risk, but is usually a low priority for retail managers, whose focus is, and should be, on running the business. Along with the fail safe protections discussed above, the electronic I-9 system and interface should be as simple to use as possible. Managers need to be able to do the following without becoming confused or distracted by too many extraneous features in your electronic I-9 system:

1. Create an I-9 record
2. See a list of every record in process, and
3. See the employees who need to be E-Verified.

Avoid putting extensive reporting and searching tools on your local interface. Make sure that the instructions and screens that local managers see are clear and concise, walking them step by step through the process. Save the bells and whistles for your Corporate Office HR professionals and auditors.

Best Practice #4: An Integrated Solution
If your Company uses an applicant tracking system (ATS), it is possible to integrate the electronic I-9 software with your ATS. This can provide another fail safe to ensure that I-9s are completed at or prior to the hire process, requiring the I-9 to be completed before the individual can hit the sales floor. For retailers with a large part-time workforce that may not work every day, this can ensure compliance with the mandatory I-9 completion time frame. Integrating the electronic I-9 system with the ATS also helps “Keep It Simple” because Section 1 of the I-9 can be pre-populated with information provided by the employee during the application process, requiring only the employee’s review, correction and signature.

Likewise, using Single Sign On simplifies the electronic I-9 system and makes security easier to control. Managers can sign on to the Point of Sale system and be authenticated at sign on, which will provide them access to the electronic I-9 system, ATS and the electronic hiring system. This prevents the manager from having to reauthenticate multiple times in order to process a new hire, complete an I-9 and initiate E-Verify.

Best Practice #5: Portable Authentication for Substitute Managers
Large retailers in cities with multiple stores often need to borrow or exchange managers from one worksite to another to cover vacations, sick days and turnover. This requires an I-9 system that is not only easy to use, but also enables portability of system access. Creating temporary access roles for a new user every time a manager goes to a new store creates a burden on IT staff, creates login and security complexities, and risks managers being unable to log into and use the system. By integrating your I-9 software with your other systems, the I-9 software can automatically permit access for managers to the specific stores at which they are scheduled to work, and then disable that access when they transfer to a different location.

Best Practice #6: Support Seasonal and Under-Age-18 Hiring
Retailers, food service and hospitality industries thrive on hiring seasonal, temporary and under-age-18 employees. The electronic I-9 system used by such employers must simplify the I-9 and E-Verify complexities inherent for these types of employees. For example, if an employee is working for three days or less, the three-day grace period to sign Section 2 does not apply and you cannot accept a receipt in lieu of an original Section 2 document. Your electronic I-9 system should automatically enforce compliance with these special rules.

By keeping these six best practices in mind, multi-worksite organizations in the retail or similar industries can help ensure the best compliance with I-9 and E-Verify and increase their chances of surviving an ICE audit with minimal impact to the business.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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ICE Director, John Morton

Tracker participated in the Second Annual Worksite Immigration Compliance Symposium which took place at Stanford Law School’s Rock Center for Corporate Governance on April 20^th, 2012. This Symposium featured many of the top authorities and influencers in Form I-9 worksite compliance, for an insightful day of panel discussions on best practices in compliance and auditing, enforcement and penalties, IMAGE participation, and more.

Today’s post is an introduction to as series of future articles that will share details from some of the key discussions in this Symposium. Here is a quick overview of the discussion points that we will cover in greater detail in the coming weeks:

Executive Ethical Compliance Training

Featuring Charles H. Kuck (Partner, Kuck Immigration Partners LLC) and Carl Hampe (Partner, Baker & McKenzie) and moderated by Charles M. Miller, (Principal, Miller Law Offices, and Co-author of Immigration Compliance Auditing for Lawyers), this panel addressed the keys to managing a successful and ethical compliance program, developing I-9 policies, manuals, and training, and private external auditing. Their discussion covered the things all I-9 administrators must know, using a complete compliance audit as a best practice to avoid liability exposure, the steps to follow for proper remediation, and the essentials of how to do a private audit.

Updates on the IMAGE Program

Sharon Mehlman (Partner, Larrabee, Mehlman, Albi and Coker, LLP) and Adam Wilson, Unit Chief, IMAGE, DHS, ICE) provided an update on the IMAGE program, the Penalty Assessment Policy, the Memorandum of Understanding, and details on the private audit and IMAGE membership. Moderated by S. Christopher Stowe, Jr. (Law Office of S. Christopher Stowe, Jr., Executive Director of Homeland Security Compliance Council and Co-author Immigration Compliance Auditing for Lawyers), this session clarified what an IMAGE audit looks like, leniency towards companies undergoing an IMAGE audit, and recommendations for conducting internal audits.

ICE Worksite Enforcement Policies & Programs

Rachel Ross (Section Chief of the Employer Compliance Inspection Center, Worksite Enforcement Unit Office of Investigations (ECIC), DHS, ICE) and Paul Virtue (Partner, Baker & McKenzie and former INS General Counsel) discussed the current basis for ICE policies. This session provided information on the INS Virtue Memorandum on Technical errors versus Substantive violations, planned changes to the ECIC, recommendations about Self Auditing procedures, and a discussion on the government’s position on electronic I-9 systems.

Immigration Compliance Requirements

Rachel Ross (ECIC) and Jennifer Sultan (Acting Special Policy Counsel, Office of Special Counsel for Immigration-Related Unfair Employment Practices,  Department of Justice) discussed best practices for large corporations, including their biggest tips on how to avoid fines and discrimination charges, OSC guidance for acting on No Match letters, documentation best practices, and preventing issues that would appear to constitute “constructive knowledge” or a pattern of practice.

Keynote Speaker, ICE Director John Morton

John Morton (Director, United States Immigration and Customs Enforcement, Department of Homeland Security) was on-hand as the luncheon’s keynote speaker. Director Morton gave a history and background of ICE. He expressed the importance of employers adhering to proper hiring practices (warning that ICE will conduct 3,000 I-9 inspections this year. He also explained the benefits of participating in the IMAGE program (ICE Mutual Agreement between Government and Employers).

Look forward to more details

There was such a substantial windfall of information from this symposium, we look forward to sharing the insights from these discussions in our upcoming posts.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

Atrium Companies, the owner of Champion Windows and Advanced Containment Systems, agreed to settle a case with Immigration & Customs Enforcement (ICE) for $2 million as a result of a pattern and practice of hiring illegal aliens.

An I-9 audit, conducted by ICE – Homeland Security Investigations (HSI) in February 2011, revealed 269 of Champion’s 451-person workforce consisted of undocumented aliens. Many employees’ I-9 documentation had numerous “egregiously suspect” errors, such as misspellings of agency names and/or containing the words “novelty item.” In November 2009, Thereafter, at the request of the government, all of the undocumented aliens were terminated from Champion by the end of April 2011.

The ICE HSI investigation also revealed that, since acquiring Champion, management at Atrium had become aware of the possibility of large numbers of undocumented aliens being employed at Champion’s Houston factory. A follow-up audit conducted by ICE HSI of Atrium Companies’ remaining 12 subsidiaries in May 2011 revealed that about 8.3 percent of the parent company’s 3,382 employees (excluding Champion employees) were undocumented aliens. All of these workers were terminated within a matter of weeks.

Atrium received multiple notices from the Social Security Administration (SSA) known as “no-match letters,” which indicated employee names and Social Security numbers did not match SSA records. The companies failed to take any corrective measures, resulting in the continued employment of the undocumented aliens.

The ICE announcement reported that since December 2010, Atrium Companies has revised its immigration compliance procedures to include new policies concerning the proper completion, retention and auditing of I-9 forms and for responding to SSA no match letters. Under the terms of the agreement, Atrium Companies must also hire a full-time chief compliance officer and continue to consult with immigration counsel in order to ensure the legality of its workforce.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

March was a busy month for the Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices, a division of the Department of Justice. It settled cases against Onward Healthcare, Indrescom Security Technology, and Ross Department Stores, who were each accused of immigration discrimination.

Onward Healthcare, a healthcare staffing company based in Connecticut, resolved allegations that the company posted discriminatory job advertisements on its home page and third party websites that limited its jobs to U.S. citizens. Over a one year period, thousands of Onward Healthcare’s job postings impermissibly limited applications to U.S. citizens, even though work-authorized immigrants, such as lawful permanent residents, asylees and refugees, should have been allowed to apply.

The Immigration and Nationality Act (INA) generally prohibits employers from discriminating on the basis of citizenship status unless required by law, regulation or government contract. It was determined Onward Healthcare had no legal basis for its stated citizenship preference. Under the settlement agreement, Onward Healthcare agreed to pay $100,000 in civil penalties, to change its internal policies and manuals to reflect the INA’s protections, and to be subject to reporting and compliance monitory requirements for a period of three years.

The Indrescom Security Technology and Ross Stores settlements involved situations where the employers demanded more documentary requirements for permanent residents than U.S. citizens. Specifically, Ross Stores refused to honor a work authorization document and demanded a permanent resident card while Indrescom refused to accept a valid driver’s license and Social Security card and demanded a permanent resident card.

Per the settlement agreement, Ross Stores agreed to reinstate the charging party and pay $6,384 in back pay plus interest to the charging party and $10,825 in civil penalties to the United States. Ross Stores also agrees to comply with the law, to train its human resources personnel about employers’ responsibilities to avoid discrimination in the employment eligibility verification process and to be subject to reporting and compliance monitory requirements for 18 months. Similarly, Indrescom agreed to pay $7,000 in back pay to the charging party, train its human resources personnel and be subject to reporting and compliance monitoring requirements for three years.

The lessons to be learned through these settlements are do not limit you applicant pool to only U.S. citizens unless you have a government contract or similar situation which requires only U.S. citizens and do not demand the employee’s permanent resident card if they have already provided you with sufficient documentation to establish work authorization.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

“ICE fine, right ahead!”

Recent decisions of the Office of the Chief Administrative Hearing Officer (OCAHO) continue to demonstrate Immigration and Customs Enforcement (ICE) and OCAHO strongly disagree on the appropriate level of penalties for small employers committing I-9 violations. Three recent OCAHO decisions demonstrate that ICE continues to seek large penalties against small employers committing numerous I-9 violations while OCAHO continues to use its discretion to reduce the penalties by 50% or more.

In the most recent OCAHO decision, United States v. Pegasus Restaurant, 10 OCAHO No. 1143 (2012), OCAHO reduced ICE’s proposed penalty of $131,554.50 to $49,427, a reduction of about 62%. In this matter, the restaurant failed to fill out any I-9′s for 134 hired employees over a three year period. Of the 134 employees, four were not authorized to work. ICE sought a penalty of $981.75 per violation. ICE did not seek to aggravate or mitigate the proposed penalty based upon the five designated factors – size of business, good faith, history of violations, seriousness of the violations, and presence of unauthorized employees.

OCAHO accepted the restaurant’s argument that the proposed penalties were disproportionate in light of the size and resources of the business. OCAHO cited precedent which states a penalty should be sufficiently meaningful to accomplish the purpose of deterring future violations without being “unduly punitive” in light of the respondent’s resources; thus, proportionality is the key. See United States v. Jonel, 8 OCAHO No. 1008 (1998), and United States v. Minaco Fashions, Inc., 3 OCAHO No. 587 (1993).

Therefore, OCAHO reduced 130 violations from $981.75 per violation to $350 each while refusing to reduce the penalty involving the four unauthorized employees. OCAHO found a penalty of $47,427 to be “sufficiently substantial” to have a significant deterrent effect going forward.

Similarly, in United States v. Ice Castles Daycare Too, Inc., 10 OCAHO No. 1142 (2011), OCAHO substantially reduced the employer’s penalty from $55,352 to $18,500. In Ice Castles Daycare, the evidence established over a three-year period of time the daycare center failed to prepare I-9s for 74 employees although it did examine appropriate documents to verify employment eligibility.

ICE sought a penalty of $748 for each of the 74 violations. This amount was a reduction of the baseline penalty of $935 per violation based on 5% mitigation for each of these factors – small size of business (it averaged 30 employees), good faith of employer, no unauthorized employees and no history of violations.

The daycare asserted a fine of $55,000 could put them out of business since its ordinary business income from 2006 to 2009 was $21,000, ($4,000), $5,500, and $38,000, respectively. Based upon Ice Castles Daycare’s ability to pay, its small size, and its efforts to verify employment authorization, OCAHO reduced the 74 violations to $250 for a total of $18,500. Thus, the penalties were reduced by about 66%.

Previously, in United States v. Snack Attack Deli, Inc., 10 OCAHO No. 1137 (2010) (Subway case), OCAHO reduced the restaurant’s penalty from $111,000 to $27,150, a reduction of about 75%. In doing so, OCAHO cited the company’s inability to pay and relatively small size.

Two recent decisions where the penalties were not reduced by over 50% are United States v. Alyn Industries, 10 OCAHO No. 1141 (2011), and United States v. Ketchihan Drywall Services, 10 OCAHO No. 1139 (2011). However, in both of these cases, the employers were not small employers and had the ability to pay substantial fines.

My advice to small employers, who are facing substantial ICE penalties and cannot afford to pay them, is to hire an immigration attorney with experience in ICE audits and litigation (hopefully you have already done so) and litigate your case before OCHAHO. If successful, the reduction in the penalty should be greater than the cost of legal fees for the litigation, especially since the litigation involves a motion for summary judgment based upon the record evidence, not a hearing with witnesses.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post was written by Delisa J. Futch, a Partner in Foster Quan LLP Austin office and past Vice President for Conference Planning and Publications for the State Bar of Texas Immigration and Nationality Law Section. This article was originally published in Foster Quan Immigration in the News.]

On March 27, 2012, U.S. Citizenship & Immigration Services published a notice of proposed revision to the Form I-9 in the Federal Register. Most notably, the proposed form is two pages rather than one page, and the instructions comprise six pages instead of three. The form appears to be ready for “form-fill” and seems to facilitate electronic completion and retention, though both the form and the rules continue to permit manual completion and retention of the Form I-9. The proposed form is open for comment until May 29, 2012.

Detailed Instructions, Greater Clarity
Overall the modifications provide more detailed instructions for completion of the form, and greater clarity concerning the specific information required in each field. For instance, fields requesting specific numbers clearly illustrate the number of digits the required number should have. Additionally, the new form clarifies that employers must enter “the employee’s first day of work for pay (mm/dd/yyyy)” in Section 2. The current version of the Form I-9 requires completion of “the employee began employment on (month/day/year) ______”.

New Fields
Completely new fields include the request for additional employee contact information – e-mail address and telephone number – though completion of these fields is optional. The new form also contains an additional block of fields for entry of document numbers and expiration dates under List A. Additionally, at the top of the second page, the employee’s name must be re-entered.

Separate, Enumerated Employer Attestations
Other proposed changes relate to the employer attestation. The proposed form separately enumerates the following with respect to the attestation the employer representative must make when signing the Form I-9: “I attest, under penalty of perjury, that (1) I have examined the document(s) presented by the above-named employee, (2) the above-listed document(s) appear to be genuine and to relate to the employee named, and (3) to the best of my knowledge the employee is authorized to work in the United States.”

List of Acceptable Documents
Proposed changes to the List of Acceptable Documents are minimal. The proposed form clarifies as follows with respect to the presentation of a Social Security Account Number card:

“A card that includes one of the following restrictions, for example, is not acceptable: (1) NOT VALID FOR EMPLOYMENT; (2) VALID FOR WORK ONLY WITH INS AUTHORIZATION; (3) VALID FOR WORK ONLY WITH DHS AUTHORIZATION.” The form also refers employers to the Employer Review and Verification section of the form’s instructions for additional information regarding acceptable receipts.

The new, proposed Form I-9 is not yet effective, and employers should continue to use the current Form I-9, with a revision date of 08/07/09, expiring on 08/31/2012.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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