Ignorance Is Not an Excuse for Form I-9 Noncompliance

Author: Melissa A. Silver, Brightmine Legal Editor

An employer's ignorance of the Form I-9 verification process is not a valid excuse for noncompliance. However, certain factors can help mitigate the penalties. In the matter of United States of America v. La Hacienda Mexican Cafe, OCAHO Case No. 12A000, an Administrative Law Judge (ALJ) ruled that an employer violated the Immigration and Nationality Act and directed it to pay penalties even though it was unaware of the Form I-9, did not have a history of Form I-9 violations and did not hire any unauthorized workers.

The US Department of Homeland Security, Immigration and Customs Enforcement (ICE) served La Hacienda Mexican Cafe (La Hacienda) with a Notice of Inspection (NOI) directing it to provide ICE with copies of its I-9 forms. All employers must use the Form I-9 to verify that a newly hired employee is legally authorized and eligible to work in the United States.

When ICE returned to collect the forms, La Hacienda informed the agency that it did not have any Form I-9s on file. Nonetheless, La Hacienda provided lists of current and former employees (a total of 24), which included hire and termination dates.

ICE served La Hacienda with a Notice of Intent to Fine seeking $22,440 in penalties - $935 for each violation. According to ICE, it aggravated the penalties due to a lack of good faith and due to the seriousness of the violations. ICE claimed that it mitigated the penalties based on La Hacienda's small size and its lack of a history of Form I-9 violations.

La Hacienda sought to reduce the penalties because:

The owner was unaware of the Form I-9 until she received the NOI;
The owner did ask new employees for resident alien cards, government issued IDs and driver's licenses, and all employees had proper documentation;
No unauthorized aliens were hired; and
The penalty would be an economic hardship in light of the fact that La Hacienda had to close its second location due to the economy, and the number of employees had been reduced from 24 to seven.

Although the ALJ agreed with ICE that La Hacienda's Form I-9 violations were serious, she did not find that La Hacienda lacked good faith. As such, the ALJ reduced the penalty from $935 to $400 per violation, making the total $9,600. Weighing in the employer's favor was the fact that it did not have any previous violations and all of its workers were authorized. Further, the ALJ reduced the penalty because the penalty requested was near the maximum allowed and was therefore disproportionate to the size of the employer.

The ALJ's decision will become final unless modified, vacated or remanded by the Chief Administrative Hearing Officer of the Executive Office for Immigration Review or the Attorney General.

Advice for Employers

Although the ALJ reduced the penalties, this case serves as a reminder to all employers that, regardless of industry, size or location, they are "fair game" for worksite investigations by the government to ensure they are hiring authorized workers. Also, this case demonstrates ICE's aggressive stance on seeking maximum penalties for Form I-9 violations even if the employer does not have a history of I-9 violations and has an authorized workforce. Therefore, employers must ensure they verify the identity of all new employees and that they are authorized to work in the US through the Form I-9 process. Otherwise, as seen in this case, noncompliance with the Form I-9 process can expose an employer to penalties, even if the violation was not deliberate.