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I-9 E-Verify Immigration Compliance


  1. How does ICE Calculate Fines in an I-9 Inspection

    By: Bruce Buchanan, Sebelist Buchanan Law

    As Immigration and Customs Enforcement (ICE) conducts more and more I-9 inspections (the ICE director stated they would be increasing by 400 to 500%), employers need to know how ICE calculates any fines assessed against employers. AILA’s I-9 Verification Committee, through Rick Gump and Eileen Momblanco, recently drafted a fine Practice Pointer, which I encourage AILA members to read. For non-AILA members, this article will discuss the same concepts.

    It begins for an employer when ICE serves a Notice of Inspection (NOI)/subpoena to review the employer’s I-9 forms as well as many other HR-related records. The NOI gives the employer three business days to provide the subpoenaed documents. The ability to receive an extension of time to provide the I-9 forms and other documents seems to vary with what ICE office you are dealing. I have been successful in receiving extensions in almost all NOIs, but I never ask for more than one week and usually only five days. After the ICE auditor reviews the I-9 forms, the employer will receive a series of notices – Notice of Suspect Documents and Notice of Technical and Procedural Failures are the most common notices.

    If substantive paperwork, hiring, or continuing to employ (H/CTE) violations are found, ICE normally issues a Notice of Intent to Fine (NIF), although if the errors are less than 10%, ICE usually only issues a Warning Notice without a penalty. The fine/penalty amount in the NIF is determined by ICE attorneys and special agents in charge. Fines can be challenged by requesting review by an Administrative Law Judge (ALJ) of the Office of Chief Administrative Hearing Officer (OCAHO) within 30 days of receipt of the NIF. If litigated, the ALJ can adjust the fine amount.

    In November 2008, ICE issued a Memorandum, “Revised Administrative Fine Policy Procedures”, which contained a set of matrixes and required ICE to follow specific procedures for calculating paperwork and H/CTE fines. The Policy Procedures state the following to determine the level of fine within each matrix:

    • Use the number of violations of each type (paperwork or H/CTE) as the numerator and the number of total employees as the denominator; and
    • The percentage calculated above would be used to determine the percentage box in the fine matrix to start, and then fines could be adjusted up or down five percent for each of the five factors - business size, good faith, seriousness, employment of unauthorized aliens, and prior history with ICE/INS.

    However, ALJs can consider any factors it deems necessary to calculate an appropriate fine based on the case at hand. Cases with both paperwork and H/CTE violations sometimes produce higher fines for a greater number of paperwork violations compared to fines for a fewer number of H/CTE violations.

    To increase the level of penalties, ICE has begun to create a higher level of fine on each matrix by adding the number of paperwork violations to the number of H/CTE violations as the numerator, which in some cases dramatically increases the level of the fine in each matrix. Here are two examples:

    • If you have 100 employees with 10 substantive paperwork violations and 20 H/CTE violations, you add 10 + 20 = 30 to calculate 30% violations for each matrix. This would lead to a fine of $60,270 using the 2017 matrixes.
    • If you have 100 employees with 10 substantive paperwork violations and 20 H/CTE violations, you add 10/100 = 10% for paperwork and 20/100 = 20% for H/CTE violations for each matrix. This would lead to a fine of $40,560 without any aggravating or mitigating factors applied.

    In other words, instead of taking the number of paperwork violations and dividing them by the
    number of employees, and then calculating the H/CTE violations the same way, ICE adds the
    number of paperwork violations to the number of H/CTE violations when calculating the
    violation percentage from each matrix. This is resulting in a higher fine based on the matrix
    percentage of violations for each of the paperwork and H/CTE violations.

    ICE has defended this calculation method by pointing to language in the 2008 fine policy procedures, “The recommended base fine amount is determined by dividing the number of ‘knowing hire,’ ‘continuing to employ,’ and substantive verification violations by the total number of Forms I-9 presented for inspection to determine a violation percentage.”

    However, as the Practice Pointer states:
    On the next two pages, ICE instructs agents to “divide the number of ‘knowing hire’ and ‘continuing to employ’ violations by the number of employees for whom a Form I-9 should have been prepared to obtain a violation percentage” and to “divide the number of substantive violations by the number of employees for whom a Form I-9 should have been prepared to obtain a violation percentage.” Each instruction is paired with a separate fine matrix and no other ICE issued documentation instructs agents or attorneys to add the violations together. ICE’s I-9 inspection webpage also makes no mention of the double-dipping method of fine calculation.

    In evaluating NIFs, attorneys for employers should ask these questions:
    1. Are the fines calculated within the confines of the statute as updated by DOJ?
    2. What baseline and method did ICE use to calculate the fine in the instant case?
    3. What factors were used to aggravate or reduce the level of the fine?
    4. Were the factors appropriately used?
    5. Did ICE apply the 5% enhancement for employment of unauthorized aliens to only those violations as opposed to across the board?
    6. Did the NIF miscalculate the fines by double-counting violations? And
    7. Did ICE make other errors in its calculations?

    After evaluating these issues and trying to negotiate a settlement, one must assess the propriety of settling with ICE versus challenging the fine with an OCAHO ALJ.

    If you want to know more information on I-9 penalties/fines, I recommend you read The I-9 and E-Verify Handbook, a book I co-authored with Greg Siskind, and available at
  2. Attorney and Spouse Sentenced to 2 Years Probation for Visa Fraud

    By Bruce Buchanan, Sebelist Buchanan Law

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    After pleading guilty to fraud in relation to H-1B visas, New York immigration lawyer Loreto Kudera, and his wife, Hazel Kudera, the owner of several medical staffing agencies, were sentenced to two years probation and fined $25,000 each. Previously, they had forfeited $1 million.

    Hazel Kudera owned multiple staffing agencies in New York that specialized in providing nurses to hospitals, outpatient and skilled nursing facilities. According to the government, Hazel and Loreto Kudera submitted at least 100 fraudulent applications to authorities, and profited from filing fees collected from the nurses and from the health care facilities that paid Hazel Kudera’s staffing agencies.

    Hazel and Loreto Kudera falsely stated that the foreign nurses would be working in specialty occupations at prevailing wage rates when in actuality they were going to work as licensed practical nurses (LPNs) or registered nurses (RNs) at much lower rates of pay.

    As part of the alleged scam, Hazel Kudera falsified a staffing agreement between NYC Healthcare Staffing and Dewitt Rehabilitation listing job positions that did not exist, such as clinical coordinator and health care quality assurance manager, in order to cover up the false job titles she provided to USICS.
  3. Company and Owner Sentenced for Knowingly Hiring Unauthorized Workers

    By: Bruce Buchanan, Sebelist Buchanan Law PLLC

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    A Washington company, DJ Drywall, Inc., and its owner, David L. Jones, were sentenced in U.S. District Court in Seattle, Washington for repeated violations of the Immigration Reform and Control Act (IRCA) of 1986. Previously, in February 2016, DJ Drywall and David Jones pleaded guilty to knowingly encouraging and inducing a Mexican national to reside in the United States in violation of law. The guilty plea followed two civil penalties imposed by Immigration and Customs Enforcement (ICE) regarding the company’s practice of illegally hiring undocumented workers.

    In both 2008 and 2011, DJ Drywall was audited by ICE and paid fines of $32,316 and $27,405, respectively, for violating immigration law, including the hiring of 21 known undocumented workers. Additionally, in 2013, ICE found a pattern of DJ Drywall hiring unauthorized workers and paying them ‘off the books,’ or encouraging them to submit false I-9 documents.

    Under the terms of the plea agreement, David Jones forfeited $25,000 to the United States and received two years of probation. The company will be on probation for five years and will pay a $75,000 fine. While on probation, DJ Drywall will be required to verify the work authorization of all newly hired employees through the E-Verify system.
  4. Company is Pulling Out its Hair after OCHAO Decision

    By Bruce Buchanan, Sebelist Buchanan Law
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    The Office of Chief Administrative Hearing Officer (OCAHO) issued another decision arising case out of Buffalo, New York wherein it upheld most of Immigration and Customs Enforcement’s (ICE) proposed fine of $5329.50. See U.S. v. Hair U Wear, LLC, 11 OCAHO no. 1268 (2016). The case is similar to the earlier Buffalo case, Golden Farm Market.


    Hair U Wear, a very small business, received a Notice of Inspection (NOI) from ICE in January 2014. After not timely preparing four I-9 forms and failing to prepare two forms, a Notice of Intent to Fine was issued. Hair U Wear denied all allegations and did not raise any affirmative defenses.
    Of the four allegations related to not timely preparing I-9 forms, each reflected there was no date in either Section 1 or Section 2 after the signatures. Furthermore, all of the I-9 Forms used the March 8, 2013 edition even though the first day of employment for each employee was listed as October 1, 2003, October 1, 2006, April 1, 2008, and April 12, 2012. This is obvious evidence that the I-9 forms were prepared well after the employees were hired.

    Appropriate Penalties

    ICE asserted the appropriate penalty was $5329.50 based on a 100% error rate – which equals a fine of $935 per violation. ICE mitigated the fine by 10% based on the mitigating factors of a small business and no employment of undocumented workers. It aggravated the penalty by 5% due to the seriousness of the violations. These mitigating and aggravating factors led to a fine assessment of $888.25 per violation.
    ICE provided reports reflecting that Hair U Wear reported employing six employees in 2013. Hair U Wear did not dispute this fact. Hair U Wear did not provide I-9 forms for two individuals listed in the reports and conceded it prepared the other four I-9 forms after the NOI.
    Concerning the five aggravating / mitigating factors, OCAHO agreed with ICE’s use of three of the five factors, but added a third mitigating factor, lack of prior violations. Concerning the aggravating factor of seriousness, OCAHO cited prior caselaw which states the failure to prepare or timely prepare I-9 forms is a potentially serious violation because the employer has not ensured the individuals are authorized to work without completing the I-9 form. Through the use of these factors, the baseline penalty of $935 was reduced by 10% to $841.50 per violation. Thus, OCAHO found the total penalties should be $4776.50.


    As is usually the case, if Hair U Wear had conducted an internal I-9 audit before the NOI, it would have realized it did not have I-9 forms for its employees and sought to resolve the issue. As you can see by this case, even very small employers can face penalties assessed by ICE.
  5. OCAHO finds 2 of an Employer’s Owners are Employees

    By Bruce Buchanan, Siskind Susser, PC

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    In a recent decision, U.S. v. Homestead Metal Recycling Corp., 11 OCAHO no. 1251 (2015), an Administrative Law Judge (ALJ) of the Office of Chief Administrative Hearing Officer (OCAHO) found two owners were legally considered employees; thus, the company should have completed I-9 forms for them. However, the ALJ reduced Homestead’s penalties to $2,450 because almost all of the statutory factors weighed heavily in the employer’s favor, especially the general public policy of leniency toward small entities.

    After Immigration and Customs Enforcement (ICE) served a Notice of Inspection (NOI) on Homestead, the company failed to present I-9 forms for seven employees. Thereafter, ICE issued a Notice of Intent to Fine (NIF), alleging Homestead failed to timely prepare and/or present I-9 forms for seven employees, including Alejandro Morua and Teresa Rabassa.
    Homestead argued Morua and Rabassa were two of its present owners; thus, it did not need to have I-9 forms for them.

    The evidence reflected Homestead had only one owner,
    Otto San Roman, at the time of the NOI. ICE said Homestead’s interrogatory answers showed Rabassa became a 10% owner while Morua became a 20% owner after the NOI. Additionally, ICE argued the two individuals had only de minimus corporate voting rights, and were unable to direct or influence corporate affairs. Furthermore, Homestead identified Morua on documents presented to ICE as a “manager” or “foreman,” not company officer, partner, or owner. ICE said that his employment was subject to the control and direction of San Roman.

    Legal Standards for Finding an Employee

    Under the law, an individual is not an employee of the business if he or she, through an ownership interest, controls all or part of the business. The U.S. Supreme Court foundcommon law agency principles are applied in this analysis with the principal factor being that of control of the business. Clackamas Gastroenterology Assocs. v. Wells, 538 U.S. 440, 448 (2003).

    The only evidence that Homestead presented to support its defense were incorporation documents listing Morua and Rabassa as officers of the company, but these documents were not filed until after issuance of the NOI. Furthermore, the ALJ found San Roman was the only individual “having the power of the purse” - he was the only one authorized to conduct transactions from Homestead’s bank account. Morua and Rabassa appeared on both Homestead’s employee roster and on its payroll registry. The fact that Homestead asserted Morua is in charge of the company’s day-to-day operations and Rabassa runs the administrative functions are not sufficient indicia of control to establish that they were not employees at the time of the NOI.

    Small Business Owner Status Helps Homestead Reduce the Penalties

    The ALJ found all the statutory factors, except the seriousness of the violations, weighed heavily in Homestead’s favor, especially the general public policy of leniency toward small entities under the Small Business Regulatory Enforcement Fairness Act of 1996. Furthermore, ICE’s proposed penalty was more than 50% of Homestead’s bank balance. Therefore, the ALJ reduced the penalties from $5,890.50 to $2,450, a reduction of over 58%.

    Take Away – Owners must have Meaningful Control of the Business

    In determining whether a company must have an I-9 form for an owner, one must determine whether the owner has meaningful control of the company. In two recent decisions, U.S. v. Santiago’s Restaurant and U.S. v. Jalisco’s Bar and Grill, Inc., OCAHO found an owner with meaningful control of a company did not have to complete an I-9 form for that individual. However, in the present case, the two individuals’ ownership status did not provide for any control of Homestead. The underlying principle in this analysis is one cannot be an employer and an employee. Thus, if it can be established an individual’s ownership status causes him to be in control of the company, he is an employer, not an employee.
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