Avoiding Steep Form I-9 Penalties

By: Earth Shah

Recent immigration court cases reveal the importance of employers having a robust and compliant employment eligibility verification program. Every employer must have the new employee complete Form I-9 which is used to verify identity and eligibility for employment.  Failing to do so can invite steep penalties.  DLS Precision Fab Lab LLC vs. US Immigration & Customs Enforcement (Case Number 14-71980) in the Federal Ninth Circuit (“DLS Case”) confirms that employers cannot pass on the blame for violation of Form I-9 to other people, such as an HR director who was hired to carry out the program. The Court ruled that the HR director was the company’s agent and the company was responsible for supervising their acts and ensuring compliance with the law.

In the DLS Case, improper I-9 forms were submitted more than five years ago but the Court rejected the argument that the claim was barred by statute of limitations. The Court reasoned that the any violation with respect to I-9 forms remains a continuous violation, subject to few exceptions.

The current maximum penalties for an error on I-9 paperwork or knowingly hiring unauthorized aliens can range from $2,156 to $21,563 per individual.  Moreover, as the Court clarified in DLS Case, the law does not take into account the inability of a company to pay the violation.  “Ability to pay is not, under the statute, one of the factors that must be considered in setting the amount of the penalty,” the majority opinion said.  While some employer might have other good faith defenses under Section 247A(b)(6), inability to pay is not one of them.

Additionally, employers should note that that based on President Trump’s Executive Order 13788 (“Buy American, Hire American”), which stressed the importance of employment verification compliances, USCIS has updated the Form I-9 which all employer must use beginning September 18, 2017.

Thus, it is increasingly important to have a robust and complaint procedure in place so that systematic violations can be averted.  Please consult with your immigration attorney for more information.