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I-9 E-Verify Immigration Compliance

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  1. 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.
  2. 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.
  3. 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.
  4. OCAHO Substantially Reduces Employer’s Penalties

    By: Bruce Buchanan, Sebelist Buchanan Law

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    In new ALJ James McHenry’s first decision, U.S. v. International Packaging, Inc., 12 OCAHO no. 1275a (Nov. 2016), the Office of Chief Administrative Hearing Officer (OCAHO) reduced the penalties proposed by Immigration & Customs Enforcement (ICE) from $88,825 to $38,050 for the 94 Form I-9 violations committed by International Packaging, Inc. (IPI).

    Notice of Inspection and NIF

    IPI was served with a Notice of Inspection and subpoena on February 17, 2011. On February 23, 2011, IPI produced some but not all its I-9 forms, inadvertently failing to produce 21 Form I-9s. ICE states it did not even learn of the existence of more employees until it examined IPI’s payroll records. After ICE requested nine of the 21 Form I-9s – all current employees – IPI complied.

    On August 16, 2011, ICE issued a Notice of Intent to Fine (NIF). ICE alleged in Count I that IPI failed to produce 21 Form I-9s, and in Count II alleged that on 73 occasions, the company failed to enter certain data, such as document title, identification number or expiration date, in Lists A, B or C of Section 2. IPI failed to present any documentation attached to the I-9 forms. Thus, ICE asserts these are substantive errors, not technical ones, citing the Virtue Memorandum. IPI asserts that the supporting documentation was requested in a cover letter, not a subpoena; thus, ICE had “insufficient process” to allege these violations where the documentation, if presented, would have established these errors were technical.

    For the 94 Form I-9 violations, ICE asserted a baseline penalty of $935 with a 5% mitigating factor due to IPI’s small size and a 5% aggravating factor for the seriousness of the offenses; the remaining three statutory factors were treated by ICE as neutral.

    Earlier OCAHO Decision

    In an earlier decision, U.S. v. International Packaging, Inc., 12 OCAHO no. 1275 (Apr. 2016), OCAHO sided with ICE and found nothing in the Virtue Memorandum requires an employer to copy and provide documents; rather, it is simply an affirmative defense. OCAHO found there was no conflict between 8 C.F.R. § 1324a.(b)(3) and the Virtue Memorandum. In this case, the employer did not provide the supporting documentation with the I-9 forms to ICE; therefore, the errors in Lists A, B and C were substantive. Furthermore, OCAHO found ICE is not required to ask for any supporting documentation; it is up to the employer to provide such and raise as an affirmative defense.

    IPI’s Defenses

    IPI asserted it demonstrated good faith before, during and after ICE’s audit. It specifically referenced IPI’s consultation with an immigration attorney several years before the audit on how to ensure compliance with the law. OCAHO found this reliance may have inadvertently caused subsequent confusion in ICE’s investigation – by failure to supply the backup supporting documentation for the I-9 Forms, which contributed to some of the violations. However, such reliance did demonstrate good-faith, which warrants some mitigation of the penalty.

    OCAHO’s Decision

    Furthermore, IPI asserted through affidavits and financial documents that it could not afford to pay the proposed penalties and remain in business. Despite unclear financial records regarding the company’s financial condition and conclusory testimony, ALJ McHenry took the company’s finances into account because calculation of penalties is to be sufficiently meaningful for future compliance, not to force an employer out of business. Finally, ALJ McHenry cited IPI’s small size and the public policy of leniency toward small businesses.

    Based upon these factors, OCAHO determined the penalty for failure to prepare and/or present I-9 Forms should be set at $500 per violation, rather than $935. As for the 73 substantive paperwork violations, OCAHO assessed those violations at $350 each.

    Takeaway

    IPI’s willingness to litigate the matter was advantageous from a financial perspective as it reduced the penalties by $50,000 or over 50%. This was despite losing on the initial legal issue of not being required to produce supporting documentation because it was not subpoenaed.
  5. OSC Settles Two Immigration-Related Discrimination Claims

    By: Bruce Buchanan, Sebelist Buchanan Law

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    The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), an agency within the Department of Justice, reached settlements resolving claims that the Denver Sheriff Department and the Aldine, Texas Independent School District discriminated against work-authorized immigrants in violation of the Immigration and Nationality Act (INA).

    The investigation found that from approximately January 1, 2015 until March 23, 2016, the Denver Sheriff Department discriminated based on citizenship status by requiring applicants for deputy sheriff positions to be U.S. citizens and publishing job postings with U.S. citizenship requirements, in violation of the INA. The INA’s anti-discrimination provision prohibits employers from limiting jobs to U.S. citizens except where the employer is required to do so by law, regulation, executive order or government contract. The Denver Sheriff Department was not subject to one of the INA’s exceptions.

    Under the settlement agreement, the Denver Sheriff Department will pay $10,000 in civil penalties; identify applicants who may have been disqualified from consideration for deputy sheriff positions due to the citizenship requirement and consider these applicants’ qualifications without regards to their citizenship; train its human resources staff on the anti-discrimination provision of the INA by attending an OSC webinar; provide the OSC every 6 months for the next three years the completed I-9 forms of all new hires and all recruiting advertisements; and review and revise its policies and procedures to comply with the requirements of the INA’s anti-discrimination provision.

    The other investigation found that Aldine School District required non-U.S. citizens, but not similarly-situated U.S. citizens, to present specific documents when reverifying their employment eligibility once their original documents expired. The INA’s anti-discrimination provision prohibits employers from making specific documentary demands based on citizenship or national origin when verifying or reverifying an employee’s authorization to work.

    As part of the settlement agreement, Aldine School District will pay a $140,000 civil penalty, revise its policies and procedures, and train its human resources staff on the anti-discrimination provision of the INA by attending an OSC webinar.
    In a unique remedy, Aldine School District will implement a three-year program to train students and students’ parents on the requirements of the INA’s anti-discrimination provision. Specifically, the training program will be focused on educating adult participants in Aldine’s parent literacy/English as a Second Language (ESL) classes, 12th grade students enrolled in certain classes and the school district’s employees.
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