DHS Outlines Fines for I-9 Violations

DHS released an overview of the I-9 inspection process, which includes recommended penalties for noncompliance as well as guidance on how investigators should enhance or mitigate the assessed fine. The recommended penalties are presented in two schedules – one for employers who have knowingly hired or continue to employ unauthorized workers, and another for substantive and uncorrected technical violations on the I-9 form. In both schedules, the range of penalties is determined by dividing the number of violations by the number of employees (violation percentage) and then considering whether it is a first offense, second offense, or a third or more offense.

Violations

Employers determined to have knowingly hire or continuing to employ violations shall be required to cease the unlawful activity and may be fined. The agent or auditor will divide the number of knowing hire and continuing to employ violations by the number of employees for whom a Form 1-9 should have been prepared to obtain a violation percentage. This percentage provides a base fine amount depending on whether this is a First Tier (1^st time violator), Second Tier (2^nd time violator), or Third Tier (3^rd or subsequent time violator) case. The standard fine amount listed in the table relates to each knowing hire and continuing to employ violation. The range of the three tiers of penalty amounts are as follows:

Knowing Hire/Continuing to Employ Fine Schedule

(For violations occurring on or after 3/27/08)

Penalties for Substantive and Uncorrected Technical Violations

The agent or auditor will divide the number of violations by the number of employees for whom a Form 1-9 should have been prepared to obtain a violation percentage. This percentage provides a base fine amount depending on whether this is a first offense, second offense, or a third or more offense. The standard fine amount listed in the table relates to each Form 1-9 with violations. The range of penalty amounts are as follows:

Substantive/Uncorrected Technical Violation Fine Schedule

	Standard Fine Amount for each offense
Substantive Verification Violations	1st Offense $110 – $1,100	2nd Offense $110 – $1,100	3rd Offense + $110 – $1,100
0% – 9%	$110	$550	$1,100
10% – 19%	$275	$650	$1,100
20% – 29%	$440	$750	$1,100
30% – 39%	$605	$850	$1,100
40% – 49%	$770	$950	$1,100
50% or more	$935	$1,100	$1,100

Enhancement Matrix

After the “base” fine is determined, investigators can also “enhance” or “mitigate” the recommended fine by 5% for each of five separate factors, which include business size, good faith, seriousness, unauthorized workers, and history. The end results means that fines could be as great as 25% above or below the base recommended penalty.

The following matrix will be used to enhance or mitigate the recommended fine contained on the Notice of Intent to Fine:

Factor	Aggravating	Mitigating	Neutral
Business Size	+5%	- 5%	+/- 0%
Good Faith	+5%	- 5%	+/- 0%
Seriousness	+5%	- 5%	+/- 0%
Unauthorized Workers	+5%	- 5%	+/- 0%
History	+5%	- 5%	+/- 0%
Cumulative Adjustment	+25%	- 25%	+/- 0%

DHS/ICE Form I-9 and employer sanctions laws enforcement now targets employers through on-site investigations and administrative or "desktop" audits. 

Employer failure to verify employment eligibility and properly complete and retain Form I-9 subjects the company to stiff criminal and civil liabilities, including imprisonment, asset forfeiture, and treble damages in RICO (Racketeer Influenced and Corrupt Organization) lawsuits by competitors. Executives, officers, managers, supervisors and key employees, as well as accountants, are personally liable for civil and criminal penalties for I-9 related errors and unlawful employment eligibility verification (EEV) practices.

I-9 compliance (and E-verify for registered employers, now including FAR federal contractors) requires that employers verify all workers’ employment eligibility, or work authorization. Persons not authorized for employment, whether documented foreign nationals (or "illegal immigrants") generally do not have work authorization. The I-9 laws and the employment eligibility verification process restrict employment of illegal or undocumented immigrants and employment of persons who are not "employment authorized".

Employer liability extends to circumstantial evidence and “constructive knowledge”.
  It is unlawful to knowingly hire or continue to employ unauthorized workers. This I-9 process mandates accurate and timely completion of the Form I-9 by all U.S. employers and their employees.

"Knowingly hire" includes "constructive knowledge". The requisite employer's knowledge may be constructive knowledge when it may be fairly inferred through notice of certain facts which through exercise of reasonable care would lead a person to know about; or the employer deliberately fails to investigate such facts. Employer constructive knowledge extends to its subcontractors' and independent contractors' I-9 compliance.

Goulder Immigration Law Firm assists employers with Form I-9 consulting, including I-9 and employer sanctions compliance training, developing a company I-9 and employer sanctions compliance manual, and employment eligibility compliance auditing services.  Written I-9 compliance policies and a Form I-9 and employer sanctions law internal audit will help protect employers from government fines and criminal penalties and help ensure that all I-9 Forms comply with I-9 and employer sanctions laws. 

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DHS Outlines I-9 Employment Eligibility Verification Inspection Process

DHS released an overview of the I-9 inspection process, which includes recommended penalties for noncompliance as well as guidance on how investigators should enhance or mitigate the assessed fine. The recommended penalties are presented in two schedules – one for employers who have knowingly hired or continue to employ unauthorized workers, and another for substantive and uncorrected technical violations on the I-9 form. In both schedules, the range of penalties is determined by dividing the number of violations by the number of employees (violation percentage) and then considering whether it is a first offense, second offense, or a third or more offense.

Employers are required by law to maintain for inspection original Forms 1-9 for all current employees. In the case of former employees, retention of Forms 1-9 are required for a period of at least three years from the date of hire or for one year after the employee is no longer an employee, whichever is longer.

The administrative inspection process is initiated by the service of a Notice of Inspection (NOI) upon an employer compelling the production of Forms 1-9. U.S. Immigration and Customs Enforcement (ICE) typically will allow 3 business days to present the Forms I-9.

Often, ICE will request the employer provide supporting documentation, which may include a copy of the payroll, list of current employees, Articles of Incorporation, and business licenses. ICE agents or auditors then conduct an inspection of the Forms 1-9 for compliance.

When technical or procedural violations are found, pursuant to INA §274A(b)(6)(B)(8) U.S.C. § 1324a(b)(6)(B)), an employer is given ten business days to make corrections.

An employer may receive a monetary fine for all substantive and uncorrected technical violations. Employers determined to have knowingly hired or continued to employ unauthorized workers under INA § 274A(a)(l)(a) or (a)(2) (8 U.S.C. § 1324a(a)(l)(a) or (a)(2)) will be required to cease the unlawful activity, may be fined, and in certain situations may be criminally prosecuted. Additionally, an employer found to have knowingly hired or continued to employ unauthorized workers may be subject to debarment by ICE, meaning that the employer will be prevented from participating in future federal contracts and from receiving other government benefits.

Monetary penalties for knowingly hire and continuing to employ violations range from $375 to $16,000 per violation; repeat offenders receiving penalties at the higher end. Penalties for substantive violations, which includes failing to produce a Form 1-9, range from $110 to $1,100 per violation. In determining penalty amounts, ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations.

ICE will notify the audited party, in writing, of the results of the inspection upon completion. The following are the most common ICE I-9 inspection notices:

• Notice of Inspection Results - also known as a "compliance letter," used to notify a business that they were found to be in compliance.
• Notice of Suspect Documents - advises the employer that based on a review of the Forms 1-9 and documentation submitted by the employee, ICE has determined that the employee is unauthorized to work and advises the employer of the possible criminal and civil penalties for continuing to employ this individual. ICE provides the employer and employee an opportunity to present additional documentation to demonstrate work authorization if they believe the finding is in error.
• Notice of Discrepancies - advises the employer that based on a review of the Forms 1-9 and documentation submitted by the employee, ICE has been unable to determine their work eligibility. The employer should provide the employee with a copy of the notice, and give the employee an opportunity to present ICE with additional documentation to establish their employment eligibility.
• Notice of Technical or Procedural Failures - identifies technical violations identified during the audit and gives the employer 10 business days to correct the forms. After 10 business days, uncorrected technical and procedural failures will become substantive violations.
• Warning Notice - issued in circumstances where substantive verification violations were identified but circumstances do not warrant a monetary penalty and there is the expectation of future compliance by the employer.
• Notice of Intent to Fine (NIF) - may be issued for substantive, uncorrected technical, knowingly hire and continuing to employ violations

In instances where a NIF is served, charging documents will be provided specifying the violations committed by the employer. The employer has the opportunity to either negotiate a settlement with ICE or request a hearing before the Office of the Chief Administrative Hearing Officer (OCAHO) within 30 days of receipt of the NIF. If the employer takes no action after receiving a NIF, ICE will issue a Final Order. If a hearing is requested, OCAHO assigns the case to an Administrative Law Judge (ALJ), and sends all parties a copy of a Notice of Hearing and government's complaint, thus setting the adjudicative process in motion.

The Notice of Hearing spells out the procedural requirements for answering the complaint and the potential consequences of failure to file a timely response. Many OCAHO cases never reach the evidentiary hearing stage because the parties either reach a settlement, subject to the approval of the ALJ, or the ALJ reaches a decision on the merits through dispositive prehearing rulings.

DHS/ICE Form I-9 and employer sanctions laws enforcement now targets employers through on-site investigations and administrative or "desktop" audits. 

Employer failure to verify employment eligibility and properly complete and retain Form I-9 subjects the company to stiff criminal and civil liabilities, including imprisonment, asset forfeiture, and treble damages in RICO (Racketeer Influenced and Corrupt Organization) lawsuits by competitors. Executives, officers, managers, supervisors and key employees, as well as accountants, arepersonally liable for civil and criminal penalties for I-9 related errors and unlawful employment eligibility verification (EEV) practices.

I-9 compliance (and E-verify for registered employers, now including FAR federal contractors) requires that employers verify all workers’ employment eligibility, or work authorization. Persons not authorized for employment, whether documented foreign nationals (or "illegal immigrants") generally do not have work authorization. The I-9 laws and the employment eligibility verification process restrict employment of illegal or undocumented immigrants and employment of persons who are not "employment authorized".

Employer liability extends to circumstantial evidence and “constructive knowledge”.
  It is unlawful to knowingly hire or continue to employ unauthorized workers. This I-9 process mandates accurate and timely completion of the Form I-9 by all U.S. employers and their employees.

"Knowingly hire" includes "constructive knowledge". The requisite employer's knowledge may be constructive knowledge when it may be fairly inferred through notice of certain facts which through exercise of reasonable care would lead a person to know about; or the employer deliberately fails to investigate such facts. Employer constructive knowledge extends to its subcontractors' and independent contractors' I-9 compliance.

Goulder Immigration Law Firm assists employers with Form I-9 consulting, including I-9 and employer sanctions compliance training, developing a company I-9 and employer sanctions compliance manual, and employment eligibility compliance auditing services.  Written I-9 compliance policies and a Form I-9 and employer sanctions law internal audit will help protect employers from government fines and criminal penalties and help ensure that all I-9 Forms comply with I-9 and employer sanctions laws. 

ICE announces 1,000 new workplace audits to hold employers accountable for their hiring practices

U.S. Immigration and Customs Enforcement (ICE) Assistant Secretary John Morton today announced the issuance of Notices of Inspection (NOIs) to 1,000 employers across the country associated with critical infrastructure-alerting business owners that ICE will audit their hiring records to determine compliance with employment eligibility verification laws.

"ICE is focused on finding and penalizing employers who believe they can unfairly get ahead by cultivating illegal workplaces," said Assistant Secretary Morton. "We are increasing criminal and civil enforcement of immigration-related employment laws and imposing smart, tough employer sanctions to even the playing field for employers who play by the rules."

The 1,000 businesses served with audit notices this week were selected for inspection as a result of investigative leads and intelligence and because of the business' connection to public safety and national security-for example, privately owned critical infrastructure and key resources. The names and locations of the businesses will not be released at this time due to the ongoing, law enforcement sensitive nature of these audits.

Audits involve a comprehensive review of Form I-9s, which employers are required to complete and retain for each individual hired in the United States. I-9 forms require employers to review and record each individual's identity and work eligibility document(s) and determine whether the document(s) reasonably appear to be genuine and related to that specific individual.

Protecting employment opportunities for the nation's lawful workforce and targeting employers who knowingly employ an illegal workforce are major ICE priorities, for which ICE employs all available civil and administrative tools, including audits. Audits may result in civil penalties and lay the groundwork for criminal prosecution of employers who knowingly violate the law.

In April, DHS issued updated worksite enforcement guidance emphasizing ICE's major enforcement priorities-specifically focusing on dangerous criminal aliens and employers who cultivate illegal workplaces by breaking the country's laws and knowingly hiring illegal workers. In this strategy, ICE identified form I-9 audits as the most important administrative tool in building criminal cases and bringing employers into compliance with the law.

Statistics since implementation of new ICE worksite enforcement strategy on April 30:

• 45 businesses and 47 individuals debarred—0 businesses and 1 individual were debarred during same period in FY 2008;
• 142 Notices of Intent to Fine (NIF) totaling $15,865,181—ICE issued 32 NIFs totaling $2,355,330 in all of FY 2008;
•  45 Final Orders totaling $798,179—ICE issued eight Final Orders totaling $196,523 during the same period in FY 2008;
• 1,897 cases initiated —ICE initiated 605 cases during the same period in FY 2008;
• 1,069 Form I-9 Inspections—ICE initiated 503 Form I-9 Inspections in all of FY 2008.

In July, ICE issued 654 NOIs to businesses nationwide in the largest operation of its kind before November 19, 2009, as part of ICE's effort to audit businesses suspected of using illegal labor.

Statistics resulting from the 654 audits announced in July:

• ICE agents reviewed more than 85,000 Form I-9s and identified more than 14,000 suspect documents—approximately 16 percent of the total number reviewed;
• To date, 61 NIFs have been issued, resulting in $2,310,255 in fines. In addition, 267 cases are currently being considered for Notices of Intent to Fine (NIFs).
•  ICE closed 326 cases after businesses were found to be in compliance with employment laws or after businesses were served with a Warning Notice in expectation of future compliance.

DHS/ICE enforcement of I-9 and employer sanctions laws now targets employers through on-site investigations and administrative or "desktop" audits. 

Employer failure to verify employment eligibility and properly complete and retain I-9 Forms subjects the company to stiff criminal and civil liabilities, including imprisonment, asset forfeiture, and treble damages in RICO (Racketeer Influenced and Corrupt Organization) lawsuits by competitors. Executives, officers, managers, supervisors and key employees, as well as accountants are personally liable for civil and criminal penalties for I-9 related errors and unlawful employment eligibility verification (EEV) practices.

I-9 compliance (and E-verify for registered employers, now including FAR federal contractors) require that employers verify all workers’ employment eligibility, or work authorization. Persons not authorized for employment, whether documented foreign nationals (or "illegal immigrants") generally do not have work authorization. The I-9 laws and the employment eligibility verification process restrict employment of illegal or undocumented immigrants and employment of persons who are not "employment authorized".

Employer liability extends to circumstantial evidence and “constructive knowledge”.
  It is unlawful to knowingly hire or continue to employ unauthorized workers. This I-9 process mandates accurate and timely completion of the Form I-9 by all U.S. employers and their employees.

"Knowingly hire" includes "constructive knowledge". The requisite employer's knowledge may be constructive knowledge when it may be fairly inferred through notice of certain facts which through exercise of reasonable care would lead a person to know about; or the employer deliberately fails to investigate such facts.

Employer constructive knowledge extends to its subcontractors' and independent contractors' I-9 compliance.

Goulder Immigration Law Firm assists employers with Form I-9 consulting, including I-9 and employer sanctions compliance training, developing a company I-9 and employer sanctions compliance manual, and employment eligibility compliance auditing services.  Written I-9 compliance policies and a Form I-9 and employer sanctions law internal audit will help protect employers from government fines and criminal penalties and help ensure that all I-9 Forms comply with I-9 and employer sanctions laws. 

1200 Illegal Workers Fired in Minnesota

In the largest immigration enforcement action under the Obama Administration, 1,200 illegal aliens working as janitors in Minnesota were fired last month having presented the employer with suspect I-9 employment documents.  The company, San Francisco-based ABM, that contracts to clean office buildings, carried out an internal audit prompted by Immigration and Customs Enforcement (ICE).

The 1,200 workers fired is almost as many employees as the number arrested in the six 2006 Swift raids and about three times as many as were arrested in Postville in 2008. The main difference is these janitors were fired, not arrested and deported. Workers who continue working at the company said about 80 percent of the workforce was fired.

The process began this summer with ABM letters to workers saying ICE had found problems with their paperwork. The employees were provided a reasonable timey to fix the problems, but time ran out in October when the firings started.

Federal law prescribes specific procedures by which employers conduct employment verification activities.

ABM's letter to employees said, "ICE has informed ABM that the documentation you previously provided to confirm your employment authorization in the United States does not satisfy the I-9 Form employment eligibility verification requirements of the Immigration and Nationality Act." 

The letter directed employees to bring in additional documents evidencing employment eligibility or work authorization. The company extended the deadline several times to give workers more time to provide the proper paperwork.

The unemployment rate in Minnesota in September was 7.3%. Of the 1,200 job openings created by the firings, apparently all the jobs have been filled.

ICE “desktop audits” are part of the Obama worksite enforcement strategy targeting employers. Shifting from the Bush worksite enforcement policy of conducting large worksite enforcement actions, the Obama Administration conducts company audits of I-9 documents. Unlike the Bush-era enforcement actions, no action was taken against the fired workers.

ABM will likely be prosecuted.

DHS/ICE enforcement of I-9 and employer sanctions laws now targets employers through on-site investigations and administrative or "desktop" audits. 

Employer failure to verify employment eligibility and properly complete and retain I-9 Forms subjects the company to stiff criminal and civil liabilities, including imprisonment, asset forfeiture, and treble damages in RICO (Racketeer Influenced and Corrupt Organization) lawsuits by competitors. Executives, officers, managers, supervisors and key employees, as well as accountants are personally liable for civil and criminal penalties for I-9 related errors and unlawful employment eligibility verification (EEV) practices.

I-9 compliance (and E-verify for registered employers, now including FAR federal contractors) require that employers verify all workers’ employment eligibility, or work authorization. Persons not authorized for employment, whether documented foreign nationals (or "illegal immigrants") generally do not have work authorization. The I-9 laws and the employment eligibility verification process restrict employment of illegal or undocumented immigrants and employment of persons who are not "employment authorized".

Employer liability extends to circumstantial evidence and “constructive knowledge”.
  It is unlawful to knowingly hire or continue to employ unauthorized workers. This I-9 process mandates accurate and timely completion of the Form I-9 by all U.S. employers and their employees.

"Knowingly hire" includes "constructive knowledge". The requisite employer's knowledge may be constructive knowledge when it may be fairly inferred through notice of certain facts which through exercise of reasonable care would lead a person to know about; or the employer deliberately fails to investigate such facts.

Employer constructive knowledge extends to its subcontractors' and independent contractors' I-9 compliance.

Goulder Immigration Law Firm assists employers with Form I-9 consulting, including I-9 and employer sanctions compliance training, developing a company I-9 and employer sanctions compliance manual, and employment eligibility compliance auditing services.  Written I-9 compliance policies and a Form I-9 and employer sanctions law internal audit will help protect employers from government fines and criminal penalties and help ensure that all I-9 Forms comply with I-9 and employer sanctions laws.