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Judge Fines Company $173,250 after ICE Auditby Bruce BuchananKetchikan Drywall Services (KDS), a drywall and framing company in the Puget Sound area of Washington, was found to have committed 225 separate I-9 violations and fined $173,250. Immigration and Customs Enforcement (ICE) subpoenaed employees' I-9s and supporting documentation dating back 3+ years. Initially, KDS provided approximately 454 Form I-9s with some supporting documentation. Over a year later, KSB provided another 81 Form I-9s for a total of 535 Form I-9s. ICE issued a Notice of Intent to fine alleging 271 Form I-9 violations and seeking a fine of $286,000. KDS disputed the proposed fine. Thus, the case went before the Office of the Chief Administrative Law Hearing Officer (OCAHO). With over 250 alleged violations, there were a number of issues, including whether employees were recalled from layoff or rehired; whether information in supporting documentation is sufficient when the I-9 has none of that information; whether late production of a lawful permanent resident (LPR) card alleviates a substantive violation for no status box checked; and whether certain recorded information in Section 1 can alleviate a substantive violation for failure to check a status box or more than one status box. The recall versus rehire issue was pertinent because there was a lot of seasonal employment and if KDS established it was recalling employees from layoff, there would not be a need for a new I-9 on those recalled employees. On the other hand, as a rehire, KDS would be required to fill out Section 3 of the old I-9 (if rehired within three years) or a new I-9. KDS successfully established that 19 of the employees were recalled and thus it did not commit a violation by not obtaining a new or re-verified I-9. KDS was not as successful in its defense that possession of the supporting documents alleviates the need to fill out Section 2 - List A, B, or C. The Administrative Law Judge (ALJ) stated the supporting documentation could only be reviewed if there was human error in transcribing information on to the I-9. There were a number of issues related to the employees' failure to check a status box for citizen, permanent resident, or authorized to work. For the employees who failed to check a box or write any information, the fact that KDS was able to later produce a LPR card was of no value - this is still a substantive violation. However, if an employee provided their A# but failed to check that box, it is not a substantive violation. Furthermore, if an employee checked both permanent resident and authorized to work boxes, it is not a substantive violation; if the citizen box was checked with permanent resident or authorized to work, it is a substantive violation because the checked boxes are contrary to each other. The I-9s reflected a number of other violations which were really not in dispute - failure to sign the I-9s, failure to list any or all the necessary information in List A, B, or C, and acceptance of improper documentation. ICE asserted KDS should be fined $286,000 based on these calculations: (1) there were 271 Form I-9s with substantive violations out of 535 Form I-9s presented which equals approximately 50% of the I-9s; (2) on the sliding scale of $110 to $935 per violation, the 50% rate means the highest fine - $935; (3) there were three aggravating factors, size of business, seriousness of violations and number of unauthorized aliens, which increased the $935 base fine by 15%; and (4) 271 violations x $935 = $253,385 + 15% = $286,000. The ALJ found ICE proved 225 substantive violations in the 535 Form I-9s for a 42% violation rate, which equates to a base fine of $770. As for the aggravating or mitigating factors, the ALJ found the size of business was a neutral factor and ICE failed to prove the number of unauthorized aliens. Although the ALJ agreed a 5% increase for the seriousness of the violations could be included, she exercised her discretion and declined to do so. Thus, 225 violations x $770 = $173,250.00. This was the fine set by the ALJ.
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