Mere Paperwork Violations in I-9 Process Lead to $600,000 Fine

Even without any unauthorized workers in their workforce, employers can suffer significant penalties for not completing the Form I-9 correctly. In July, the Office of the Chief Administrative Hearing Officer (OCAHO), the court with jurisdiction to review I-9 penalties imposed by ICE, ordered Hartmann Studios, Inc., an event design and production company in California with roughly 700 employees, to pay $605,250 in civil money penalties for Form I-9 paperwork violations. What are paperwork violations? Errors caused by the failure to accurately complete the paperwork (the Form I-9). Although there was no evidence that Hartmann was intentionally employing unauthorized workers, its laid back approach to I-9 compliance cost it greatly. The paperwork violations included:

Even though employers have been required to complete an I-9 for each new hire since 1986, many employers have been lax with their I-9 compliance, often entrusting the I-9 process to the most junior human resource and administrative staff. However, in recent years, as immigration has moved into the national spotlight, enforcement against employers has increased. Some of Hartmann's errors were caused by its use of a "three-in-one" form created by a local union that combined a portion of a W-4 form, parts of Sections 1 and 2 of the Form I-9 and a withholding authorization for union dues. The "three-in-one" form did not require Hartmann to sign Section 2 of the I-9. In an effort to maximize efficiency in the onboarding process, many companies have attempted to shorten or streamline the I-9 process. Unfortunately, cutting corners can carry significant consequences. Don't wait for an inspection to test your compliance. Although Hartmann argued that it revamped its compliance procedures thereby showing good faith, OCAHO disagreed, noting that Hartmann's effort to fix its problems with its I-9 process were only taken after it received a Notice of Inspection. Further, OCAHO found that Hartmann's procedures evidenced a general disregard for ensuring its workers were authorized to work. For example, failing to sign Section 2, even if the employer had examined the worker's identity and employment authorization documents, was considered by OCAHO to be "sufficiently defective to foreclose a claim of either good faith or substantial compliance." Hartmann also argued that historically, penalties at this level have been reserved for the most egregious violations ‒ intentional misconduct, falsifying I-9s or having a workforce that was mostly unauthorized ‒ and that such factors did not apply to it. However, the judge found minimal evidence that Hartmann made reasonable efforts to comply with the law before the NOI. Further, the judge found that the company did "appear to need additional motivation to conform its employment verification processes to what the law requires." This case demonstrates the importance of ensuring I-9s are correctly prepared and maintained. Employers should ensure that regular internal I-9 audits are conducted by experienced immigration counsel and those responsible for the I-9 process receive training on a regular basis prior to an inspection. Form I-9 paperwork violations are no laughing matter.

Spotts Fain publications are provided as an educational service and are not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.


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