Court reduces I-9 fine for employer who retained supporting documents

Human resources and hiring managers have so many decisions to make when it comes to I-9 and E-Verify compliance. Should the new hire complete section 1 before the first day of work? Who in the company will be in charge of reviewing I-9s for accuracy? Who do I call if ICE suddenly knocks at our door and asks to see all of our I-9s (and how loudly should Icopying docs scream)?
One of the most frequently asked policy decisions though is actually quite mundane on its surface – should we retain a copy of the “supporting documents” presented by the employee (e.g., driver’s license and social security card)? And if so, will this save us from fines and penalties in the event of an I-9 audit?

As with so many things in I-9 compliance, it depends. And that brings us to today’s tantalizing tale of I-9 misfortune and redemption in the case of U.S. v. Foothill Packing, Inc. Read-on to learn how this California-headquartered employer managed to reduce its I-9 fines by over 80% based on its diligent practice of copying supporting I-9 documents (and some fine lawyering work too).

The Audit

Somerton
Somerton is a small city in the southwest part of Arizona – about 12 miles south of Yuma and 180 miles east of San Diego. It’s an agricultural town through and through, with many residents working in citrus and vegetable growing/processing jobs. And it is here that we find a small sub-office of Foothill Packing, Inc., a farming and fruit and vegetable packing company based in Salinas, California.

It’s May 2012, and the area manager Tony receives an unexpected surprise: a visit from the nearest ICE office. According to Tony, the ICE agent Scott presented him with a Notice of Inspection (NOI) and administrative subpoena demanding that Foothill produce all I-9 forms for employees hired at the Somerton location for the period of 2009 through 2011. Tony began the arduous process of assembling all of the I-9s (about 6,000 in total), and had them packed in twelve boxes for ICE’s review.
Now, here’s where it gets interesting. According to Tony, the ICE agent Scott took one look at thboxes-of-paper-filesose 12 boxes (and perhaps seeing a very long evening ahead), instructed Tony that he in fact only needed to present the I-9 forms for the 526 employees currently working at the location, along with their E-Verify confirmation sheets. But wait…what about all of these supporting documents? Shall we send those too? According to Tony, the ICE agent replied – nope, just the I-9s and E-Verify sheets. Tony complied with this request and waited anxiously for the results.

ICE’s Response

In July 2012, ICE sent a letter to Foothill, notifying them of certain technical or procedural I-9 failures which may (as a matter of law) be corrected prior to the issuance of a fine. According to the record, the company corrected those issues and waited for further news from ICE. Then, in July 2013, the fine arrived. And it was a big one – in excess of $160,000 for 382 I-9 failures and 1 count of knowingly hiring an unauthorized employee.  Were the I-9s really all that bad? How did the penalty grow so large?

The company contacted ICE to inquire about the fine, but this time, they were directed to a different ICE agent named Ryan. He explained that forty-four of the I-9s had “substantive verification violations” such as the employee failing to check a box for immigration status, checking multiple boxes, or failing to sign. There’s nothing you can do about those  – sorry better luck next time. But, as it turns out, the vast majority of errors (337 in total) were actually due to missing document information in section 2. It’s too bad Foothill didn’t present ICE with copies of the I-9 supporting documents, because then these would have been treated as technical or procedural, and Foothill could have corrected them.

The Dispute
When it comes righth2-visa down to it, Foothill argues that it was hoodwinked by ICE. Unlike many other agricultural employers, Foothill contends that it has a pretty rigorous process for verifying I-9 documents, due in large part to the fact that they employ a substantial number of foreign agricultural
workers from Mexico under the H-2A visa program. As part of their process, Foothill routinely made copies of the worker’s foreign passports, including the biographical page, the visa stamp, and the I-94 that was attached at the port of entry in San Luis.

The company argues that ICE refused to accept these document copies (which were plentiful), and thereby robbed Foothill of the opportunity to correct the missing document information in section 2. They also pointed out that all of these errors occurred on pre-2013 versions of the I-9, a form which had long confused employers who need to record information about foreign-born workers.

The Court Decision

In a somewhat odd (and anticlimactic) turn of events, ICE offered no affidavits or other evidence to prove that they had in fact asked Foothill to present all I-9 documentation, including the supporting documents during the initial ICE audit. In fact, they didn’t even respond to the company’s argument at all! As a result, the Judge threw out the 337 violations relating to section 2 documents, noting that employers should always be afforded the opportunity to correct section 2 document information if the document copies have been retained with the I-9. Score one for Foothill!

Next, the judge discussed the one claim of a knowing hire of an unauthorized employee. According to the record, Foothill had hired an employee on June 12, 2010, and accepted and entered an EAD card that had expired almost seven years earlier on his I-9 form. Foothill, however, claimed that just because it had accepted an expired document doesn’t mean they knew he was actually unauthorized to work.

The Judge rejected this argument, and pointed out that case law has long held that when an employer is put on notice of circumstances that would cause a reasonable person to make a timely and specific inquiry (e.g., “hey, why is your document expired?”), the employer is on the hook if it turns out the employee is unauthorized to work. As a result, Foothill was assessed a penalty of $2,200 for that I-9 violation alone.

In the end though, the case was a definite victory for Foothill. In total, their I-9 fines were reduced from $168,455 to $21,560, due in large part to their diligence in copying supporting documents and fighting ICE on the fine.

Does this mean we should always copy I-9 supporting documents?

Once again, it depends. While there are numerous advantages to copying and retaining I-9 supporting documents, there are also a few pitfalls for the unwary. In some cases, an employer may inadvertently prove that they knowingly accepted false documents – particularly when the document copy reveals a pretty glaring error in judgment. Moreover, employers must be mindful of potential discrimination issues (if they fail to copy documents consistently) as well as issues relating to employee’s privacy and data security.

As the Foothill case illustrates though, copying I-9 supporting documents can definitely be a lifesaver in the face of an I-9 audit. More importantly though, copying documents can also greatly simplify and streamline your I-9 remediation process by eliminating the need to go back to your employees to ask for missing document information.

Want to learn more about the pros and cons of copying I-9 supporting documents? Request our free white paper for a detailed analysis which can help your organization define its own policy.

Do you currently have paper or electronic I-9s which require correction? Contact us today to learn how the Guardian Electronic I-9 and E-Verify system can identify past I-9 mistakes, electronically fix I-9s following DHS rules, and securely store all I-9 related records (including supporting documents) in one central location.