Chinese restaurant found liable for I-9 substantive violations, but ICE must provide clear reason for aggravating fines

The Office of the Chief Administrative Hearing Officer (OCAHO) has published a precedent decision regarding an employer’s liability for I-9 Section 2 omissions as well as the proper procedure for determining government fines. In the case at hand, ICE issued a Notice of Intent to Fine (NOIF) for $6,872.25 against New China Buffet for failure to complete the I-9 section 2 attestation (employer signature and date) as well as the documents proving identity and work authorization for all 7 of its employees.  According to the record, New China attempted to correct these errors (at least partially) by signing and dating each form (with the current date) in the hopes that these would be considered “technical or procedural” errors which can be corrected without penalty. In ruling on the government’s motion for summary judgment, OCAHO called New China’s assertion “simply wrong,” noting that the DHS has provided a memo and checklist (known in the field as the Virtue Memo) which clearly identifies omissions which are substantive and those which are technical or procedural. In China Garden’s case, all of its errors fall into the substantive category: failure to complete employer attestation within 3 days of hire, no documents indicated, and no attestation signature. See the attached chart from the Virtue memo for reference. On the issue of penalties, however, OCAHO found that ICE failed to meet its burden in proving that there was a reasonable basis for increasing the assessed fine amount by 5%. ICE had used its recently released penalty schedule for substantive/technical violations to arrive at a base fine of $935 per violation (first time offense/more than 50% errors). After the base was determined, ICE then enhanced the fine by 5% (to $981.75) based on the seriousness of the violation.  In reviewing this assessment, OCAHO noted that the “seriousness” aggravating factor may not be appropriate for instances where ICE is already using the highest base amount (which implies seriousness by its very nature). Since ICE did not provide any explanation as to how the aggravating factor was determined, OCAHO determined that it could not rule on that issue until both parties are given an opportunity to present evidence. Bottom line: determining whether I-9 errors are substantive versus technical is an important first step in assessing an employer’s I-9 liabilities. Although this case seems fairly straightforward, the process can be complex, requiring analysis of various policy memoranda and case law. If your organization is facing an I-9 investigation, it’s always best to consult experienced legal counsel who can advise your potential I-9 liability and the best course of action.