By Bruce Buchanan, Siskind Susser

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In the last decision of 2014 from the Office of the Chief Administrative Hearing Officer (OCAHO), the administrative law judge held that Dr. Robert Schaus, a dentist, was liable for failing to timely prepare and/or present I-9 forms for 10 employees at his dental office. The ALJ reduced his penalty from $10,030 to $5,400.

Dr. Schaus’s dental practice is located in Clarence, New York, where it operates as a sole proprietorship. After Immigration and Customs Enforcement (ICE) served Schaus with a Notice of Inspection (NOI), he provided a list identifying the hire dates for eight current employees, and the hire and termination dates for three former employees, along with six I-9 forms and other requested documentation. Schaus identified two employees as working on an “as needed” basis and one employee who had been terminated when she joined the Army Reserves several years before.

Schaus argued that he did not need to retain the I-9 forms of current employees, who had worked greater than three years. OCAHO rejected this defense as it is fundamentally “wrong as a matter of law”. An employer must always retain the I-9 forms of current employees, including those employees who are working on an as-needed basis.

OCAHO dismissed one allegation related to the employee who had been terminated on September 20, 2010, when she joined the Army Reserves. Although the employee’s name was listed in quarterly reports for two years, no wages were reported in any of those quarters. Since the employee only was employed for five months, the duty to retain her I-9 form ended three years from her date of hire or April 19, 2013, four days before the NOI was issued.

Schaus also asserted that certain I-9s contained only technical violations -- the omission of a date in Section 2 of the I-9 forms. If so, Schaus would get the opportunity to cure within ten days’ notice from the government. However, the violations concerned the failure to promptly prepare the I-9 forms, which is a substantive violation. Thus, OCAHO rejected this defense. In doing so, it stated a violation is not cured by a belated (after the NOI was served) or partial completion of the I-9 forms.

In assessing the penalties for the paperwork violations, ICE set a baseline penalty of $935 for each of the employees hired before September 29, 1999, and $850 for each of the employees hired after September 29, 1999. ICE mitigated the penalty by five percent for each violation, based on the small size of Schaus’ business, and the absence of unauthorized workers. However, ICE aggravated the penalty by five percent for each violation, based on the business’s alleged bad faith in backdating the I-9s it presented and the seriousness of the violations. OCAHO agreed with the mitigation and aggravation of the penalties, except it determined the evidence did not support a finding of bad faith.

OCAHO reduced the penalty from $10,030 to $5,400 because it should be closer to the “midrange” of permissible penalties and more in line with those imposed on other small family businesses with similar violations. For the six violations involving failure to timely prepare I-9 forms, the penalty was set at $500 per violation. For the four violations involving the failure to present I-9s, the penalty was set at $600 per violation.

A copy of the OCAHO decision is available here.
Cite as U.S. v. Dr. Robert Schaus, D.D.S., 11 OCAHO no. 1239 (2014).