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I-9 E-Verify Immigration Compliance

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  1. Missing Deadline for Providing I-9s to ICE is Costly

    By Bruce Buchanan, Sebelist Buchanan Law PLLC

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    OCAHO’s recent decision in U.S. v. Alpine Staffing, Inc., 12 OCAHO no. 1303 (May 2017), demonstrates how untimely presentation of I-9 forms can be costly to an employer.

    Alpine Staffing is a small staffing company in Minnesota. It received a Notice of Inspection (NOI) on August 23, 2013 informing the company that it needed to present all of its I-9 forms for current employees and former employees for the past 2 years by August 29, 2013. On that date, Alpine Staffing delivered many I-9 forms to ICE. The following day Alpine Staffing discovered 271 additional I-9 forms. It immediately delivered the additional I-9 forms to ICE. On October 1, 2013, the company discovered another 39 Forms I-9 and thereafter delivered those to ICE.

    After a review of the I-9 forms, ICE issued a Notice of Intent to Fine (NIF) and then a Complaint which alleged in Court I – failure to timely present or prepare 345 Forms I-9 and Court II – company failed to ensure 132 employees properly completed Section 1 of the I-9 form and/or the company failed to properly complete sections 2 or 3 of the I-9 forms. ICE sought $367,000 in penalties.

    Alpine Staffing’s principal defense was it was unaware of a specific deadline for presentation of I-9 forms to ICE. However, this defense was belied by the fact that they presented numerous I-9 forms on August 29, 2013, the date that ICE stated the I-9 forms were due. Thus, OCAHO found all I-9 forms delivered after August 29, 2013 were untimely presented.

    OCAHO affirmed ICE’s assessment of $770 per I-9 form for the 34 instances of failure to prepare an I-9 form for those employees. However, OCAHO gave Alpine Staffing a break on the untimely presented I-9 forms. For those presented a day late, OCAHO set a penalty of $500 each, rather than $770. For those I-9 forms delivered at a later date, OCAHO set a penalty of $600 each, rather than $770. Overall, the penalty assessed for the failure to prepare or untimely present I-9 forms was set at $185,000. ICE had sought $256,000. Concerning the 130 Court II violations, OCHAO reduced the penalty from $770 to $700 per I-9 violation. Overall, OCAHO assessed penalties of $276,000. Thus, Alpine Staffing received a reduction of about 25% in penalties.

    This decision shows the importance of locating and providing all I-9 forms covered by the NOI by the deadline. The company’s error appears to be caused by the fact that their I-9 forms were not kept in one location. It is certainly best to keep all a company’s I-9 forms in one location at the company’s facility.

  2. Year in Review: 2016 OCAHO Decisions

    By: Bruce Buchanan, Sebelist Buchanan Law PLLC

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    No employer wants to receive the dreaded “Notice of Intent to Fine” (NIF) in connection with an audit of their I-9 forms. Dealing with an I-9 inspection alone is a costly affair, but the NIF can be downright crippling – particularly for small businesses. Fortunately, employers can appeal an adverse I-9 decision by requesting a hearing with the Office of Chief Administrative Hearing Officer (OCAHO), an administrative court that reviews employer sanctions cases under §274A of the Immigration and Nationality Act.

    Although OCAHO decisions adjudicating I-9 penalties have leveled off in the past few years, it is anticipated there will be many more decisions in future years as the number of Form I-9 inspections is on the rise in the Trump administration and, as shown below, employers continue to obtain significant decreases of I-9 penalties at OCAHO.

    In calendar year 2016, OCAHO issued 16 substantive decisions against employers in I-9 penalty cases. For a few employers, there were two or more decisions concerning substantive issues before the court reached a decision on the amount of the I-9 penalties. The number of cases is a slight increase from 2015, when there were 13 decisions but still much lower than the 30 decisions issued in 2013.
    For remainder of article go to LawLogix website where full article is published - https://www.lawlogix.com/the-year-in...sions-in-2016/.
  3. Employer’s Argument for Electronic Signature Fails

    By: Bruce Buchanan, Sebelist Buchanan Law

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    In U.S. v. Agri-Systems (ASI), 12 OCAHO no. 1301 (Apr. 2017), the Office of Chief Administrative Hearing Officer (OCAHO) found ASI’s argument, that typing in the company name in Section 2 of an I-9 form equaled an electronic signature, was “spirited but contrary to both law and evidence.” However, OCAHO agreed with ASI that a question of whether 23 Form I-9s were timely presented to Immigration and Customs Enforcement (ICE) is a factual dispute, which cannot be decided without a hearing where witnesses will testify concerning the delivery or non-delivery of those I-9 forms.

    This case started almost six years ago with the service of a Notice of Inspection (NOI) by ICE. Thereafter, ASI delivered 159 Form I-9s to ICE. Two years later, ICE served a Notice of Suspect Documents (NSD), Notice of Discrepancies, and Notice of Technical Errors on ASI. As a result, ASI terminated the 46 employees on the NSD and 22 of the 28 employees on the Notice of Discrepancies plus it provided new I-9 forms on the other six employees listed in the Notice of Discrepancies.

    Two and one-half years later, ICE issued a Notice of Intent to Fine (NIF) alleging in Count I – ASI failed to present 23 Form I-9s and failed to prepare five Form I-9s – and Count II – 82 instances of ASI’s failure to ensure Section I was properly completed or failed to properly complete Sections 2 or 3. As a result, ICE sought a penalty of $103,645 for the 110 alleged violations.

    Many of the Section 2 allegations concerned whether an “electronic” signature was utilized by ASI to sign the certification in Section 2. ASI asserted its “signature” was through the use of “word processing” that “efficiently demonstrates the attestation was read as it comes immediately below the attestation itself.” However, what ASI referred to as a signature was in actuality the typed company name and address on some of the I-9 forms.

    OCAHO found ASI’s action did not equal a signature on a paper I-9 form or an electronic I-9 form. ASI conceded it did not use electronic I-9 forms but argued the typing of its name equaled an electronic signature. OCAHO found this assertion was contrary to both law and evidence. As OCAHO stated: “The relevant statute requires a signature in the attestation in Section 2, and merely pre-printing or typing the company’s name is not the equivalent of a signature.” And without a signature, OCAHO stated “the mandated attestation is patently not complete.”

    ASI also argued it did not violate the law concerning many of the allegations because it timely presented 23 Form I-9s, which ICE denied receipt of. Each party presented affidavits, which were in conflict. ASI officials said they mailed the I-9 forms in dispute and the ICE agent denied receipt. Based on a clear dispute on the factual allegations, OCAHO stated it would set the matter for a hearing, where each party could present their witnesses. (This will be a very rare occasion for live testimony in an OCAHO case.)

    OCAHO determined ASI committed 87 of the 110 allegations. However, because 23 allegations were still in dispute, it declined to find the appropriate penalty until after a decision is rendered on the 23 allegations.
  4. ICE’s Failure to Establish Hire and Termination Dates Leads to Dismissal of Some Claims

    By Bruce Buchanan, Sebelist Buchanan Law

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    Although the Office of Chief Administrative Hearing Officer (OCAHO) found Metropolitan Enterprises committed 189 violations and were fined $151,200, it could have been worse as OCAHO dismissed 20 allegations for the failure of ICE to establish employment during the audited period. U.S. v. Metropolitan Enterprises, Inc., 12 OCAHO no. 1297 (March 2017).

    The case started in the usual way with Immigration and Customs Enforcement (ICE) serving a Notice of Inspection (NOI), seeking I-9 forms for current and terminated employees for a two-year period. Nine months later, ICE issued a Notice of Intent to Fine with Count I alleging 156 violations for various errors in completion of the I-9 forms – no employee signature, no employer signature, blank section 2, and no status box checked, and Count II – failure to prepare/present 53 Form I-9s.

    ICE sought a penalty of $195,649 based upon a baseline penalty of $935 (over 50% of the I-9 forms were in error). It aggravated the penalty by 5% for the seriousness of the violation and mitigated the penalty by 5% for good faith. ICE also alleged five employees were undocumented and aggravated by 5% for those 5 Form I-9s.

    Although ICE proffered a company payroll register for the two-year period of the NOI, this document did not provide hiring and termination dates. Without such, it is impossible to determine whether Metropolitan was required to retain the I-9 forms of the terminated employees, (Remember if the employee has worked there for over three years, an employer is only required to retain the I-9 form for a year from termination). The ALJ stated “mind reading is not an accepted tool of judicial inquiry.” Despite this shortcoming, OCAHO could discern the applicable dates for 189 employees out of the 209 employees.

    However, OCAHO could not discern the hiring and termination dates of 20 employees; therefore, it could not determine whether Metropolitan was required under the law to retain their I-9 forms. Based on this, OCAHO dismissed 20 of the allegations.

    Concerning the mitigation of the penalties, OCAHO did not find good faith based upon “wide spread, fundamental errors, which as a whole, have undermined the purpose of the employment verification system.” Furthermore, OCAHO declined to find five employees were undocumented because the ICE auditor did not identify the databases that he searched nor provided any details regarding how he conducted the searches.

    OCAHO concluded the penalties proposed by ICE “while arguably defensible, are slightly disproportionate to the overall extent of the violations.” Thus, OCAHO set the penalties at $800 per violation rather than $935 per violation.

    This decision was interesting because it detailed ICE’s failure to provide the appropriate facts to established some of the allegations and OCAHO’s astonishment that ICE considered Metropolitan’s conduct would warrant good faith mitigation.
  5. OCAHO Reduces Restaurant’s Penalty

    By: Bruce Buchanan, Sebelist Buchanan Law

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    In one of its last decisions of 2016, the Office of Chief Administrative Hearing Officer (OCAHO) reduced the penalty of a restaurant from $96,398 to $58,850 for 107 violations. See U.S. v. Pegasus Family Restaurant, Inc.,12 OCAHO no. 1293 (Dec. 2016).

    This case stated almost three years ago – in December 2013 – when Immigration and Customs Enforcement (ICE) served a Notice of Inspection (NOI) on Pegasus, a small restaurant in Hamburg, New York. Pegasus provided approximately 81 Form I-9s. Thereafter, ICE filed a Notice of Intent to Fine (NIF) alleging Pegasus failed to prepare and/or present 31 Form I-9s and failed to properly complete 76 Form I-9s - it failed to record any documents in section 2, only recorded a List B document, a driver’s license or state ID card, or failed to ensure the completion of Section 1 with a signature or attesting to the employee’s status, U.S. citizen, permanent resident, etc. Pegasus admitted liability on all the I-9 violations. Thus, the only issue before OCAHO was the amount of the penalty.

    In seeking a penalty of $96,398, ICE used a baseline penalty of $935 per violation due to Pegasus having a violation rate of over 90%. ICE found Pegasus’s small size and the individuals in Count I as eligible for employment to be mitigating factors while the seriousness of the violations to be an aggravating factor. The remaining statutory factors of history of violations and good faith were considered neutral.

    Pegasus asserts its lack of history of violations and no conclusive evidence that any of the employees were unauthorized to work were mitigating factors. Furthermore, it asserts the following non-statutory factors warrant mitigation – general public policy of leniency toward small businesses, company’s high turnover rate, its cooperation with ICE during the investigation, including enrollment in E-Verify, and its inability to pay the proposed penalty.

    OCAHO agreed with Pegasus that the government failed to prove any of the employees were unauthorized to work. In an unusual finding, OCAHO stated this was a mitigation factor, rather than a neutral factor, although it recognized that it could have been accepted as a neutral factor. However, OCAHO declined to find the lack of a history of I-9 violations as a mitigating factor.

    Concerning its inability to pay, OCAHO found it failed to show it could not pay the penalty, but found the proposed penalty was “unduly punitive.” Thus, OCAHO considered the company’s financial situation.

    Although OCAHO found an employer’s post – inspection remedial measures may support mitigation, it declined to final such in this case. Furthermore, it declined to view a high turnover rate as a mitigating factor.

    In conclusion, OCAHO found the penalty should be reduced from between $888 and $935 per violation to $550 per violation. Thus, this total penalty was $58,850. As the facts demonstrate, if Pegasus would have performed an internal I-9 audit before ICE arrived with the NOI, many of the I-9 violations could have been corrected and not subject to a penalty.
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