By Erica Rocush/Shareholder
On July 8, 2015, the Office of the Chief Administrative Hearing Officer (OCAHO), the administrative court with jurisdiction to review penalties for I-9 violations, issued a decision in the matter of United States v. Hartmann Studios, Inc., 11 OCAHO no. 1255 (2015). In its decision, OCAHO ordered Hartmann Studios, Inc. to pay civil penalties totaling $605,250.00.
The case and penalties resulted from an I-9 enforcement audit conduct by the U.S. Department of Homeland Security, Immigration and Customs Enforcement (ICE) in May 2013. Following the audit, ICE had issued a Notice of Intent to Fine alleging five counts. Specifically, the counts alleged that Hartmann (1) failed to prepare and/or present I-9s for four employees, (2) failed to timely prepare and/or present I-9s for eight employees, (3) failed to properly complete Section 1 of the I-9 for six employees, (4) failed to properly complete Section 2 of the I-9 for 797 employees, and (5) failed to properly complete Section 3 of the I-9 for 4 employees. The potential range for the alleged violations was $88,800 to $888,880, and ICE sought penalties in excess of $810,000.00.
In deciding to issue a fine of over $605,000.00, OCAHO noted that the employer did not act in good faith prior to the commencement of the audit. Additionally, although most of the violations were errors related to the failure to properly complete paperwork, which are normally considered minor violations, OCAHO found that, in part due to the number of such errors, the company’s violations were serious and foreclosed any defense of good faith or substantial compliance. OCAHO also justified the stiffness of the penalty by noting that Hartmann appeared to need “additional motivation to conform its employment verification processes to what the law requires.”
This case, which is no longer an outlier, but rather reflects a trend in the issuance of substantial penalties for clerical errors in I-9 completion, should serve as a reminder to all employers of the importance of ensuring that they strictly follow I-9 procedures. In order to ensure that proper procedures are being followed, all managers and personnel involved in completing I-9’s should be trained frequently, and companies should conduct internal I-9 audits on a regular basis. Indeed, evidence of such training and internal audits could be very useful in showing good faith in order to decrease the amount of any penalty should violations be found in an official audit.