I-9 Fines Reduced For a Mom and Pop Family Business

OCAHO reduced fine for a mom and pop family business, from $14,025 to $1,650, stating in the decision that “ICE overreaches when it issues a NIF and files a complaint containing allegations that the government actually knows to be false.” (U.S. v. Crescent City Meat Company, Inc., 4/22/14)

This recently published case appears to demonstrate a distinct trend at the Office of the Chief Administrative Hearing Officer (“OCAHO”)* in drastically reducing ICE’s penalty assessments, particularly when the employer is a small business and acted in good faith.

Typically penalties for substantive violations, which includes failing to produce a Form I-9, range from $110 to $1,100 per violation. In determining penalty amounts, ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations.

This and other resent OCAHO decisions seem to reflect a trend towards reducing fines from those sought against employers by ICE. Moreover, these OCAHO decisions seem to show a “well-entrenched” preference, in the absence of egregious violations, for a “middle-of-the-road” approach when it comes to imposing fines. The OCAHO has clearly stated in several of these decisions that fines must reflect an “amount closer to the mid-range of possibilities.”

Other similar cases demonstrating the trend of fines reduction include:

1) On May 3, 2013, OCAHO reduced penalties from $82,280 to 15,800 imposed by ICE on a rather small employer (owner of 2 subway restaurants) for 72 I-9 violations, finding that the fact that ICE chose to disbelieve the employer’s explanation for completing forms late did not constitute evidence of bad faith.  As previously stated by the OCAHO, proportionality is critical to setting penalties and the amount should be sufficiently meaningful to accomplish the purpose of deterring future violations without being “unduly punitive” in light of the respondent’s resources.  An additional strong factor in favor of leniency to this small employer was the legislative policy preference expressed in the Small Business Regulatory Enforcement Fairness Act of 1996, which calls generally for reducing civil penalty assessments on small entities.  See USA v. Siwan & Sons, Inc., OCAHO Case No. 11A00021.

2)  On August 7, 2013 OCAHO lowered penalties, stating that ICE’s assessed fine of 30% of the company’s annual profit is an extremely high fine for any employer, especially a small restaurant that acted in good faith and had high employee turnover.  See United States v. New Sun Transit, Inc. D/B/A LA Tolteca Mexican Restaurant, OCAHO Case No. 12A00072.

3)  On August 15, 2013 OCAHO reduces penalties from $26,881 to $10,000 stating that while the company is liable for producing newly-created and backdated I-9s at the time of inspection, it is inappropriate to enhance penalties across the board based on the presence of some unauthorized workers.  See United States v. Natural Environmental, Inc. OCAHO Case No. 11A00126

*The Office of the Chief Administrative Hearing Officer (OCAHO ) has jurisdiction over three types of cases arising under the Immigration and Nationality Act as amended (INA), including those involving allegations of: (1) knowingly hiring, recruiting or referring for a fee or the continued employment of unauthorized aliens and failure to comply with employment verification requirements in violation of section 274A of the INA (employer sanctions); (2) immigration-related unfair employment practices in violation of section 274B  of the INA; and (3) immigration-related document fraud in violation of section 274C  of the INA.