Mr. Mike’s Pizza, Inc. (“Mr. Mike’s”), a small, Lake Placid, New York pizza restaurant went from serving pizza slices to being served a Notice of Inspection ("NOI") by Immigration and Customs Enforcement (“ICE”) in February of 2011. Mr. Mike’s submitted 16 I-9s along with a current payroll list and, 1.5 years later, a Notice of Intent to Fine ("NIF") was served on Mr. Mike’s seeking a penalty amount of $14,960 for allegedly "failing to prepare the Forms I-9 for sixteen named employees within three business days of their corresponding dates of hire," none of which were unauthorized workers.
ICE determined the base fine was $935 per violation or a total of $14,960 based on Mr. Mike’s 100% error rate. The government mitigated the penalty by 5% based on Mr. Mike’s being a small business but aggravated the penalty 5% based on the seriousness of the violations (Mr. Mike’s prepared all the Form I-9s after they received the NOI). Additionally, ICE treated the other remaining factors, good faith, history of previous violations, and presence of unauthorized workers, as neutral. OCAHO ultimately reduced the total penalty to $6400 total (or $400 per violation), an amount closer to the midrange of permissible penalties, in line with the general public policy of leniency toward small entities. We have seen OCAHO reduce similar penalties for small companies in the past, see Forsch Polymer, Corp., Stanford Sign and Awning, Inc., and Four Seasons Earthworks, Inc.
While it is quite nice that the employer has the option to take their case to OCAHO and request a reduction in penalty cost, wouldn’t it be even nicer if the employer could avoid the high costs and time-consuming effort all together? Good news! An employer can avoid the high costs and difficulty of an ICE audit by regularly conducting internal I-9 audits and training to ensure employee I-9s are in compliance with IRCA and that their company is well prepared for a visit from ICE.
The OCAHO decision can be found here.
Corporate Immigration Attorney
THE MDIVANI LAW FIRM, LLC
7007 College Blvd., Suite 460
Overland Park, KS 66211