A small transportation company was issued substantial fines for Form I-9 violations, and the 2nd U.S. Circuit Court of Appeals upheld most of the penalties.  

Employers are required by the Immigration and Nationality Act to confirm that their workers are legally authorized to be employed in the United States. All employers must fill out Form I-9, the Employment Eligibility Verification Form, within three days of hiring an employee. Although, if an employer makes a procedural or technical mistake on the form, they will likely still be considered to have complied with the requirement. However, the Immigration and Naturalization Service considers it a substantive violation not to fill out the form at all. 

When ICE audited a small travel company, they found six procedural or technical errors as well as the more serious issue of 138 substantive violations. These violations were for not preparing or presenting I-9 forms for their employees or failing to prepare them within three days of hiring the employees. 

Because of these violations, ICE imposed a fine of  $935 for each of the violations the company made. ICE did reduce the fines due to some mitigating factors, such as no history of previous violations, a lack of bad faith, and the absence of illegal workers. However, ICE did still impose an upper-range penalty.

The company appealed the fine to the Office of the Chief Administrative Hearing Officer for the Executive Office for Immigration Review (OCAHO). The penalties proposed by ICE were found to be disproportionate by an administrative law judge (ALJ) because of mitigating factors and due to ICE’s failure to explain why the penalty for failing to prepare and present the I-9 form is the same as for failing to complete the I-9 form in a timely manner even though they are not equally serious offenses.  

The company’s penalties were reduced to the mid-range by the ALJ due to the different levels of seriousness in the offenses and other mitigating factors, such as the absence of bad faith, the size of the company, the absence of unauthorized workers, the lack of a history of non-compliance, and an inability to pay. The judge levied a fine of $600 for each violation involving the I-9’s of past workers and $500 for each violation involving the I-9’s of current workers.

The company appealed the decision to the Second Circuit. But, the court upheld the decision made by the ALJ. The court found that the judge considered the number and seriousness of the violations when making the decision to reduce the fines and that the judge made an allowable judgment.

This case shows just how critical properly performing and maintaining I-9 forms can be for employers. The best way to ensure you remain in compliance is to use an electronic I-9 management service. This can guide you through the process and ensure that your I-9s are completed consistently and maintained for as long as they need to be.