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How to Fight an ICE I-9 Fine, Why Employers Litigate

We recently highlighted another OCAHO decision that ultimately benefitted the Employer (a decision decided on procedural grounds).  However, little is written about employers after they’ve received a Notice of Intent to Fine (NIF) from ICE and how and why they decide to litigate a case.  We’ll take a closer look at what happens and how employers navigate this process.

What Is OCAHO and How Do Employers End Up Before OCAHO?

The Office of the Chief Administrative Hearing Officer (OCAHO), resides within the Executive Office of Immigration Review (EOIR) of the U.S. Department of Justice.  OCAHO hears cases arising out of I-9 issues (amongst other topics). After an employer has had their I-9 records audited by ICE, ICE may issue a NIF with an explanation of how the employer has violated various legal provisions.   An employer can request a hearing with OCAHO within 30 days or try and negotiate a lower fine. If the employer takes no action after the 30 days expire, the NIF will become a Final Order for the employer to pay the fine.

Why Employers Litigate (or Not Litigate)

There are many factors that influence why employers decide to litigate (or not litigate) the NIF.  Ms. Josie Gonzalez, Attorney and Managing Partner of Gonzalez & Harris, a Professional Corporation, with seasoned experience in the field of worksite enforcement issues, offers many reasons why employers choose to litigate. Employers display “anger over being fined by ICE for honest mistakes made in the completion of the forms [and] anger over the fact that the workforce is 100% lawfully employed.”  Most of the time, the NIFs pose a significant economic hardship, particularly on small companies. Moreover, government contractor employers who risk debarment also risk losing a significant source of revenue from potential future government contracts. “This fear,” explains Ms. Gonzalez, “is only justified if there are knowing hire violations.”  Fortunately, “most of the fines currently being assessed are for paperwork violations.” On the other hand, the biggest factor that prevent employers from pursuing litigation is the cost.  “The cost of litigation might be larger than the fine amount and often times the fine reduction after OCAHO proceedings is just 25-40% lower than the original fine assessed,” says Ms. Gonzalez.

What Options Do Employers Have?

In essence, employers finding themselves before OCAHO are in the midst of litigation.  For anyone who has been remotely near the litigation process, it’s overwhelming, time-consuming, stressful, and costly! Mr. Gregory Wald, Senior Attorney at Squires Sanders in the Labor & Employment, Immigration practice group, previously served as an Assistant District Counsel for the U.S. Immigration and Naturalization Service (the predecessor to ICE) in the late 1990s on the Employer Sanctions Team.  Mr. Wald draws from both his government and private practice experience to shed some light on the I-9 litigation process for employers.  Mr. Wald says,

Most litigation decisions are decided from a cost perspective.  For example, an employer who is facing a $250,000 fine may decide, that litigating the case makes business sense if there is a good chance OCAHO will significantly reduce the fine amount.  In that case, even after factoring in counsel’s fees, it may be “worth it” to challenge the NIF. On the other hand, a small employer facing a fine amount of say $2,500, that on principle may be unfair or legally insufficient, may decide not to challenge before OCAHO, because the cost of litigation may moot the savings.

When it comes to mitigating litigation costs and exposure for an employer, “probably the biggest consideration,” Mr. Wald tells us, “is the timing at which employers ask counsel to assist.”

a)     Preventative Period:  The ideal stage to involve counsel is when ICE is nowhere near your I-9 records and preferably during a risk-analysis period of prevention.  Mr. Wald describes, “This is where I have the greatest ability to assist my clients in mitigating their potential exposure.”

During a prevention period, the benefit of having an attorney who has experience working on I-9 audits is that they can provide a cost-projection of how much the errors resulting from the self-audit could have cost the company (if ICE were to have conducted the audit themselves and later issued fines).  Moreover, an experienced attorney can provide employers with expertise on mitigating risks moving forward and advice on compliance tools like I-9 and E-Verify software.

The reason this is the ideal period is if/when ICE does perform an I-9 audit, the records have already gone through one round of review (by the attorney) and if errors do exist, will likely result in reduced or no fines from ICE.

b)     ICE Auditing Period:  The actual auditing period by ICE may take months (maybe even years) depending on the number of records that must be reviewed.  ICE may issue several different notices to employers, including Notice of Inspection, administrative subpoenas, Notice of Suspect Documents, Notice of Technical or Procedural Failures, a Warning Notice and more.  Experienced counsel can help employers know when and how to respond to ICE, as well as how to correct the actions requested by ICE, since there are legal pitfalls to avoid aggravating already tenuous situations.

c)      ICE Fine Period: Once ICE issues a fine, what’s the likelihood of having the fine reduced based on an employer’s good faith, mitigating and aggravating factors?  If Counsel is called in at this very last stage, it may be to attempt to lower the fine amount or overcome other charges, but certainly the options at this point become much more limited.

So far, it looks like DHS’ policy of enforcing compliance through sanctions is working but at significant costs (over $87.9 million in sanctions since January 2009) to employers.   Litigation is timely and costly for both sides.  Employers who seek the most options should take proactive steps to start mitigating risks early as a preventative measure.

Human Resources Today