How much is your company willing to pay Immigration and Customs Enforcement (ICE)? The Office of the Chief Administrative Hearing Officer (OCAHO) issued a decision, United States v. Anodizing Industries, Inc., wherein the fines sought by ICE were over $25,000 and ultimately reduced to $15,600.

Anodizing Industries is a small business, 26 employees, which operates a metal-finishing factory in Los Angeles, California. After ICE issued a Notice of Inspection (NOI) on July 30, 2010, Anodizing Industries provided their employees' I-9 forms. Unfortunately for Anodizing Industries, many of the I-9 forms presentedwere dated August 12, 2010 in Section 2 -a full 13 days after the NOI was served, and months or years after some of the employees were hired. Furthermore, at least 11 of the I-9 forms were undated by the employee.  Anodizing Industries argued these were technical, not substantive, errors for which the "good faith" defense should apply so that it should be given 10 days to correct the deficiencies.

OCAHO disagreed with Anodizing Industries' argument. The case law is clear that "failure to prepare an I-9 in a timely fashion... is not only a substantive violation but also a serious one, because an employee could potentially be unauthorized for employment during the entire time his or her eligibility remains unverified," citing previous OCAHO decisions. Furthermore, OCAHO stated "the longer an employer delays in preparing an I-9 form, the more serious is the violation." OCAHO pointed to former employees' I-9 forms, which were not completed for between two and five years. At least one I-9 form was not completed until 22 years after the fact.

OCAHO sought a baseline penalty of $935 and aggravated the penalties by 5%, apparently based upon the seriousness of the violations and the presence of unauthorized workers, but mitigated by 5% for the small size of the employer. Despite the seriousness of the violations, OCAHO in its discretion found the penalties should be adjusted to the "upper mid-range" and assessed at $600 per violation for a total of $15,600.

The lesson learned here is prepare an I-9 form immediately at the time of hire and if you realized you forgot to do so, then do so as soon as possible. The longer you wait the worse.