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I-9 E-Verify Immigration Compliance

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  1. 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.
  2. Company Agrees to Pay $195,000 to Settle Immigration Discrimination Claim

    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, has reached a settlement with American Cleaning Company (ACC), a maintenance and janitorial company based in Brighton, Massachusetts, resolving claims that the company discriminated against work-authorized non-U.S. citizens in violation of the Immigration and Nationality Act (INA).

    The OSC’s investigation found that from January 15, 2009 until September 30, 2015, ACC routinely required workers, who were not U.S. citizens, to produce specific documents for the I-9 form and E-Verify processes, even though U.S. citizens were permitted to choose whatever valid documentation they wished to prove their work authorization. Under the INA, all workers, including non-U.S. citizens, must be allowed to choose whichever valid documentation they would like to present to prove their work authorization. It is unlawful for an employer to limit employees’ choice of documentation because of their citizenship or immigration status.

    Under the terms of the settlement agreement, ACC will pay $195,000 in civil penalties, train its human resources staff on the anti-discrimination provision of the INA through OSC webinars, and review and revise its employment policies and procedures related to nondiscrimination to conform to INA’s anti-discrimination requirements. Furthermore, ACC agreed to eliminate or revise the section of its website entitled “Immigration Compliance” to be consistent with E-Verify requirements, for a three-year period submit any changes in employment policies concerning nondiscrimination on the basis of citizenship, immigration status, or national origin to the OSC for their review, and submit written reports to the OSC, if requested to do so, over a three-year reporting period.

    Updated 10-19-2016 at 10:28 AM by BBuchanan

  3. 5th Circuit Overrules OCAHO Decision Concerning $226,000 Penalty

    By: Bruce Buchanan, Sebelist Buchanan Law, PLLC

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    The Fifth Circuit Court of Appeals in Employer Solutions Staffing Group II, LLC v. OCAHO (August 11, 2016) reversed an OCAHO decision concerning the issue of personal versus corporate attestation of employee’s documents in Section 2 of the I-9 form; thus, it vacated the $226,000 civil penalty.

    ESSG is a staffing company based in Edina, Minnesota. It contracted with Larsen Manufacturing Co. in El Paso, Texas to provide employees. Then ESSG subcontracted with Flexicorps, Inc. to make all the hiring decisions for temporary employees at the Larsen facility.

    In so doing, ESSG had Flexicorps supervise the completion of Section 1 of the I-9 forms by employees and examine original documents presented by the employees for Section 2. However, instead of Flexicorps completing the employer certification at that time, ESSG had Flexicorps make color copies of the documents and send the I-9 forms and color copies of the documents to ESSG’s corporate headquarters. At that point, an ESSG employee examined the photocopies and completed Section 2, including the signed attestation that the employer examined the documents and they appeared to be genuine.

    In 2011, Immigration and Customs Enforcement (ICE) served a Notice of Inspection on ESSG for the Larsen facility and thereafter determined ESSG’s procedure in signing the certification was contrary to the law. After a hearing before an Administrative Law Judge (ALJ) of OCAHO, OCAHO agreed with ICE, found 242 violations and assessed a penalty of over $226,000.

    The 5th Circuit analyzed the statute, the Immigration and Nationality Act (INA), the accompanying regulations, and any applicable case law. The INA states a “person or entity must attest… on a form” that it has verified the employee’s document(s). See § 1324a (b)(1)(A). Thus, ESSG argued corporate attestation is consistent with the INA.

    The regulations state “an employer, his or her agent, or anyone acting directly or indirectly in the interest thereof, must” complete Section 2 on the I-9 form and sign the attestation. § 274a.2(b)(1)(ii)(B). The Court said it did not read this regulation to require the same person who met the hired employee and examined the original documents to be the one to sign the attestation.

    The Court then reviewed whether ESSG had fair warning of OCAHO’s reading of the statute and regulations. It found it did not, especially given the fact there were no prior OCAHO decisions on the matter and the ALJ only cited “commonsense” for her ruling, not any statute, regulation or case law. Thus, given the language of the INA and its regulations, the Court found ESSG lacked fair notice of OCAHO’s position.

    The Court concluded a “reasonable interpretation” permits corporate attestation due to the language of the INA. Thus, the Court concluded ESSG did not violate the INA. However, before employers celebrate the victory, it must be noted the Court went on to state their holding “does not address whether ICE can lawfully prohibit corporate attestations”; only that ESSG was not given fair notice.

    Since this is a Court of Appeals decision, it does not change ICE’s and OCAHO’s position and they are free to clarify whether corporate attestation is prohibited.

    An interesting question is whether this decision may provide an avenue to resolve the remote hire issue where the employer does not view the original documents. Obviously, it will depend on ICE’s and OCAHO’s position on this issue going forward
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  4. Company Pays $200,000 to Settle with OSC on Immigration-Related Discrimination Claim

    By Bruce Buchanan, Sebelist Buchanan Law

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    The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) reached an agreement with Crookham Company, of Caldwell, Idaho, whereby it agreed to pay $200,000 to resolve allegations that the company discriminated against work-authorized non-U.S. citizens, in violation of the Immigration and Nationality Act (INA).

    The investigation found Crookham discriminated against non-U.S. citizens by requiring them to produce either a permanent resident card (green card) or employment authorization card to prove their work authorization, whereas U.S. citizens were permitted to choose whichever valid documentation they wanted to present to prove their work authorization. Under the INA, all workers, including non-U.S. citizens, can choose whichever valid documentation they would like to present from the lists of acceptable documents to prove their work authorization. It is unlawful for an employer to limit employees’ choice of documentation because of their citizenship or immigration status.

    Under the settlement agreement, Crookham will be subject to monitoring for a three-year period. Prior to the settlement, Crookham proactively underwent department-provided training on the anti-discrimination provision of the INA and
  5. Safe-Air Fails to Find Safety in its I-9 Forms

    By: Bruce Buchanan, Sebelist Buchanan Law

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    OCAHO issued a decision in U.S. v. Safe-Air of Illinois, Inc., 12 OCAHO no. 1270 (2016), finding Safe-Air committed all of the alleged violations but reduced the fine from $34,969 to $18,450.

    Safe-Air is a family-owned business in Chicago where they perform sheet metal work and manufacturing. It employs 42 workers. After a Notice of Inspection, Immigration and Customs Enforcement (ICE) issued a Notice of Intent to Fine alleging 39 violations within three separate counts: Count I - failed to prepare I-9 forms – 2 violations; Count II - failed to properly complete Section 2 of the I-9 forms - 30 violations; and Count III - failed to properly complete Section 2 of the I-9 forms for 7 unauthorized employees. Safe-Air stipulated to liability on all counts.

    The question before the Administrative Law Judge was what the appropriate fine was. ICE stated there was a 95% error rate, which equals $935 per violation. The baseline penalty was mitigated by 5% due to Safe-Air being a small business. Thus, ICE sought a baseline penalty of $888.25 per violation, equaling $34,969.

    Safe-Air argued that it was in substantial compliance of the law even though it had a 95% error rate. ICE found this argument to be incredulous and OCAHO agreed.

    Safe-Air also asserted it was entitled to greater mitigation based upon its good faith and no prior history of immigration violations. It also argued it could not afford to pay the penalty as it already owed $40,000 to the IRS and had unpaid property taxes. ICE responded that the debt to the government showed a “pattern of consistent disdain and disregard for its legal and financial obligations.” Furthermore, ICE questioned the validity of Safe-Air’s financial records because they were neither audited nor certified. Finally, ICE pointed out the proposed fine was less than 1% of Safe-Air’s total sales in 2014.

    OCAHO found that because the company was small and did not demonstrate any bad faith or have any history of violations, leniency was favored. Plus, OCAHO agreed with Safe-Air that the company had financial problems; thus, proposed penalties were “unduly harsh”. Based upon this reasoning, OCAHO found the following: Count I violations - $500 each; Count II violations - $450 each, and Count III violations - $550 each.

    As is so often the case, if Safe-Air had conducted a timely internal I-9 audit, many of these violations could have been located and fixed.
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