LEGAL: Expensive lessons learned in Form I-9 and discrimination violations

When an employer violates I-9 paperwork or discrimination requirements, either USCIS (for paperwork violations) or the Office of Special Counsel for Immigration-Related Unfair Employment Practices (for discrimination violations) will initiate an action for penalties against the employer. The employer has the opportunity to settle or to fight. If the employer chooses to fight, the case will be tried before an administrative law judge in the Office of Chief Administrative Hearing Officer (OCAHO).

OCAHO decisions in 2015 illustrate that making mistakes in Form I-9 compliance can be expensive. In “Employer Solutions Staffing Group,” the employer’s representative who reviewed the original employee documents for purposes of completing Form I-9, Section 2 did not sign Section 2. Instead, another employer’s representative signed Section 2 based on review of document photocopies. OCAHO imposed a penalty of $227,252 for these violations. In “Niche Inc.,” OCAHO fined the employer $63,850 because it continued to employ workers after their Employment Authorization Documents (EADs) had expired and the employer failed to re-verify these workers who, in fact, had timely acquired new EADs. In “Hartmann Studios,” the employer’s failure to sign I-9 Section 2 certification on almost 800 occasions substantially contributed to an OCAHO penalty of $605,250.

Other common mistakes that resulted in penalties included: (1) failing to ensure the completion of Section 1 by the employee, (2) failing to complete Section 2 properly, (3) backdating Form I-9, (4) failing to prepare or present Form I-9 in a timely manner, (5) failing to provide a document number or issuing authority in Section 2, and (6) failing to list documents from Lists A or B and C.

Another OCAHO decision demonstrates that an employer should have a verifiable, consistent and non-discriminatory business reason for each hiring or termination decision. In “U.S. v. Estopy Farms,” OCAHO ruled the employer discriminated against a qualified U.S. citizen in favor of hiring qualified foreign workers because the employer provided a series of “shifting, inconsistent, and mutually contradictory explanations” to justify its decision not to hire the U.S. citizen.

An employer can reduce the risk of penalties from paperwork violations by conducting periodic (at least annual) audits of its Form I-9s. An employer can reduce the risk of immigration-related discrimination claims by training its personnel who are involved in hiring and termination. An employer also should rely on legal counsel who is experienced in these matters to make sure that all hiring and termination procedures comply with applicable law.

A few employers choose to litigate immigration penalty cases not only on the merits, but also on the excessiveness of the penalties. A review of recent cases suggests that OCAHO decisions do lower imposed penalties by an average of almost 50 percent, the most common reason being that the penalty should be adjusted to the mid-range of penalties and not be disproportionate to the employer’s resources. There is also a “Small Business Regulatory Enforcement Fairness Act” that OCAHO has cited in a number of cases.


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