OCAHO Slides Back on Employer Sanctions for I-9 Violations

By: Yuwei Ji

The Immigration Reform and Control Act of 1986 (“IRCA”) requires employers to verify that every new employee has proper authorization to work in the United States.[1]  The IRCA and its implementing regulations subject employers to responsibility not only for knowingly hiring an unauthorized worker, but even for failing to properly complete an employment eligibility verification form, also known as Form I-9.[2]

The Obama administration has opted to pursue a new immigration enforcement strategy by increasing employer audits and sanctions in order to create an economic disincentive for employers to escape from their Form I-9 obligations under the IRCA.[3]  Fortunately for many employers, however, an employer may request a review before the Office of the Chief Administrative Hearing Officer (“OCAHO”) if they believe a finding of the Immigration and Customs Enforcement (“ICE”) is in error.[4]  OCAHO has recently decided on many cased directing the ICE to reduce penalties deemed unfair or excessive.[5]

Immigration and Nationality Act (“INA”) states that, when determining the penalties for I-9 paperwork violations, “due consideration shall be given to,” among other factors, “the size of the business of the employer” and “the good faith of the employer.”[6]  In U.S. v. Taste of China,[7] the OCAHO reduced penalty by more than 60 percent for a restaurant with 10-14 employees, where it found no bad faith since all of the employees were authorized to work in the U.S. although the I-9 forms were problematic.

The OCAHO interprets “bad faith” narrowly when faced with struggling, small businesses.  In U.S. v. La Hacienda Mexican Café,[8] even when the Form I-9 violation was so serious that the employer failed to complete any I-9 forms for the employees, with a concern of its reluctance to cripple small businesses, the OCAHO found no bad faith because the employer was not aware of the I-9 requirement, and substantially reduce the fine.

As a take-away, employers should pay more attention about their Form I-9 obligations as the ICE is taking I-9 compliance very seriously.  Also, employers of small businesses need not be too intense about this issue since they can expect OCAHO to go sympathetic and lenient on them if they handle their responsibilities carefully and professionally.

[1] See Immigration Reform and Control Act, 8 U.S.C.A. § 1324a (a) (1).

[2] See 8 U.S.C.A. § 1324a (b) (1) (A); Immigration and Nationality Act, 8 C.F.R. § 274a.2 (a) (2).

[3] See Allen Smith, I-9 Audits on the Rise in Obama Administration, SHRM (Jan. 11, 2011), http://www.shrm.org/legalissues/federalresources/pages/i9auditsobamaadministration.aspx. (“the Obama ICE has increased administrative fines and paper audits”; also quoting an attorney’s words that the Obama administration has imposed higher fines for form I-9 violations and that “[e]mployers and their managers also can face criminal prosecution if they deliberately neglect their legal responsibilities in this area.”).

[4] Fact Sheet: Form I-9 Inspection Overview, ICE (June 26, 2013), http://www.ice.gov/news/library/factsheets/i9-inspection.htm.

[5] See Trends in Fines Assessment for I-9 Paperwork Violation OCAHO Update, FOLEY (Aug. 19, 2013), http://www.foley.com/trends-in-fines-assessment-for-i-9-paperwork-violations–ocaho-update-08-19-2013 (introducing a trend of the OCAHO administrative law judge finding ICE’s fines assessment to be unduly harsh).

[6] See 8 C.F.R. § 274a (e) (5).

[7] 10 OCAHO no. 1164 (2013).

[8] 10 OCAHO no. 1167 (2013).

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