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I-9 E-Verify Immigration Compliance

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  1. Employer Successful in Greatly Reducing Penalties at OCAHO

    By Bruce Buchanan, Sebelist Buchanan Law

    Click image for larger version. 

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    As previously stated, OCAHO has recently issued several decisions including U.S. v. St. Croix Personnel Services, Inc., 12 OCAHO no. 1289 (October 2016). In SCPS, OCAHO found in favor of the employer on eight of the 17 alleged violations, thereby reducing the penalty sought from $16,690 to $5,450.

    SCPS, based in Minnesota, was served with a Notice of Inspection and subpoena in September 2013 and thereafter provided 16 Form I-9s to Immigration and Customs Enforcement (ICE). ICE issued a Notice of Intent to Fine and then a Complaint alleging the 16 form I-9s were in violation of the Immigration Reform and Control Act for failure to timely complete sections 1 or 2 of the I-9 form plus failure to provide an I-9 form for one employee. In its Answer, SCPS admitted to nine violations – the one failure to prepare an I-9 form and eight of the 16 other violations. However, it denied the other eight violations, arguing they were timeliness violations and were beyond the five-year statute of limitations. Furthermore, SCPS asserted two of the eight individuals were owners, not employees; thus, no I-9 forms were required. Finally, it asserted the penalty amount was excessive and sought the minimum of $110 per violation.

    ICE sought a baseline penalty of $935 per violation based upon an error of over 50%. Moreover, it aggravated the penalty by 5% ($46.75) but never disclosed what the aggravation was based upon. Therefore, OCAHO declined to aggravate the penalty.

    The major issue before OCAHO was whether eight I-9 forms were barred by the five-year statute of limitations. The evidence established SCPS failed to ensure the employees completed section 1 on their first day of employment and failed to complete section 2 within three business days of their hire dates.

    OCAHO carefully analyzed this issue and reviewed the eight employees’ dates of hire and the dates I-9 forms were competed. The complaint was filed on July 30, 2015; thus, any timeliness claims which occurred before July 30, 2010 were time-barred. OCAHO found the eight employees in question were hired between April 2, 1999 and October 1, 2007 and section 2 should have been completed within three days thereafter; thus, all eight allegations occurred before July 30, 2010. Based upon this analysis, OCAHO dismissed the eight allegations as time-barred. In so doing, it did not address whether the two owners had to have I-9 forms.

    Concerning the five statutory factors in assessing a penalty, small business, seriousness of violation, good faith/bad faith, employment of unauthorized workers, and history of violations, OCAHO found the violations were serious and a 5% aggravation was appropriate. However, it found SCPS was a small business, which should receive a 5% mitigation based upon this factor. The other three factors – lack of good faith, no unauthorized workers, and no history of violations, were treated as neutral.

    In conclusion, OCAHO found SCPS deserved leniency due to consideration of the public policy of leniency to small businesses. As such, OCAHO assessed a $650 penalty for the failure to prepare one Form I-9 and $600 per violation for the other eight violations for a total of $5,450.

    SCPS’counsel, DeAnne Hilgers, said “SCPS Personnel was willing to acknowledge liability where it was liable, but felt strongly about defending itself where it was not liable rather than capitulate. The court agreed with my client.”

    Thus, through litigation, SCPS was able to reduce the penalty by about two-thirds, which should be considered a major victory for the employer.
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