by Mary Pivec and Manesh Rath
The Department of Justice, Office of the Chief
Administrative Hearing Officer, a division of the Executive Office for
Immigration Review, has just released the December 22, 2010 final decision and
order issued by administrative law judge (ALJ) Ellen Thomas in United
States of America v. Snack Attack Deli, Inc. d/b/a
Subway Restaurant #3718. The decision spells good news for all employers
because the ALJ rejected the penalty formulas published in internal agency
guidance as controlling in determining the appropriate fine amounts to be
levied even for serious I-9 violations.
In Snack Attack Deli, the employer conceded that
it had failed to prepare or present Form I-9s for 97 employees and that it had
submitted 11 Form I-9s with serious Section 1 and Section 2 errors. Utilizing
the Immigration and Customs Enforcement (ICE) Guide to Administrative Form
I-9 Inspections and Civil Money Penalties, the ICE auditor assessed a base fine
of $935 and tacked on an additional 10% per violation based on the employer's
size and alleged bad faith. ICE offered no evidence that the any of the missing
I-9s related to unauthorized workers.
Relying primarily on the relatively small size of the
business, high turnover rate, and the disproportionate size of the proposed
penalties, the ALJ reduced the total fine from $111,078 to $27,150, apportioned
among the 106 serious I-9 violations cited in the Notice of Intent to Fine.
Implications of the Snack Attack Deli
To regularize fine setting among I-9 auditors nationwide,
in 2009, Department of Homeland Security (DHS) Secretary Janet Napolitano
held an employer summit in Washington, D.C. at which the Department announced
that it would apply the following guidelines in assessing civil money penalties
against employers charged with I-9 errors:
% of I-9 Forms with
$110- $1,100 @ Violation
50% or more
As the foregoing fine chart illustrates, the higher
the I-9 error rate percentage is found to be the higher the base fine
level will be - regardless of the relative seriousness of the violations
present or any other relevant fine setting factor.
After the base fine rate is set for all I-9 errors
detected in the employer's production, ICE auditors then apply the following
formulas to aggravate or mitigate the base fine amount:
Judge Thomas implicitly rejected this rigid formulation
in the Snack Attack Deli case and that overall the agency must
defend its fine determinations as fair and proportionate to the size of the
business and the seriousness of the violations charged.
As a result of the Snack Attack Deli decision,
employers can approach negotiations on fine reductions with greater confidence
in their ability to obtain sizable reductions in proposed civil money
penalties. Currently, Judge Thomas is the only ALJ assigned to hear employer
appeals in I-9 cases.
Employers Encouraged to Correct I-9
Deficiencies Before An Audit Notice
In her decision, Judge Thomas makes clear that employers
will derive no fine reductions if compliance efforts are ignored until after a
Notice of I-9 Inspection is served. Implicitly, employers are encouraged to
undertake self-audits and correct I-9 errors for the purpose of demonstrating
good faith, a factor to be considered in mitigation of any penalties ultimately
levied by ICE.
On January 20, 2011, DHS Undersecretary John Morton
announced that ICE had established a special I-9 audit unit in Crystal City,
Virginia, with the computer and forensic resources necessary to conduct large
scale, multi-state employer audits. As a result, the nation's largest
employers, which to this point have largely avoided being selected for I-9
audits will likely be targeted.
If you have questions or concerns about your company's
I-9 compliance status, please contact Mary Pivec, Esq., 202-412-4212 (email@example.com) or Manesh Rath, Esq.,