A company operating a New York-based 7-Eleven saw the fine levied against it for Form I-9 violations reduced substantially because of its size and the fact that its failure to properly complete the forms was not in bad faith.
The company, Holtsville 811 Inc. operates a Long Island 7-Eleven that, according to Immigration and Customs Enforcement, violated the Immigration Reform and Control Act of 1986, according to an Office of the Chief Administrative Hearing Officer settlement agreement. On June 12, 2014, ICE filed a complaint alleging that Holtsville failed to prepare or present Form I-9s for 27 individuals. Additionally, it claimed that the company did not properly complete the form for eight of those employees. Though the employer was found guilty of those violations, it was determined that the company had not purposefully broken the law.
The charges against Holtsville 811 Inc.
Count I of ICE's complaint, regarding the failure to prepare or present the Form I-9s, carried a fine of $26,554 and Count II, concerning improper completion of the documents, led the agency to assess a $7,854 penalty. The total charge assessed for the Form I-9 violations was $34,408.
"The fines were enhanced to $981 due to a 'lack of good faith.'"
The agency noted that two forms were not provided by Holtsville at all. Additionally, ICE claimed that on a number of the Form I-9s employees indicated that they had filled the documents out in 2011 and 2012, though they were printed by the agency in 2013 as noted on the bottom portion. The agency also claimed that one of those employees, Manishkumar Patel, was not authorized to work in the U.S. and provided a social security card corresponding with another individual. Eight of the Form I-9s that Holtsville did provide were "missing signatures, missing dates, missing names and missing document numbers," according to the settlement agreement.
ICE noted that because 100 percent of the Form I-9s submitted by the company contained mistakes a $935 base fine for each violation was justified. Each of these fines was enhanced to $981 due to a "lack of good faith" because the agency determined a number of the Form I-9s were backdated. This was proof that the employer knew what is was doing when improperly filling out the forms. The penalty associated with Manishkumar Patel's Form I-9 was raised to $1,028.58 as a result of the allegation that he was not authorized to work in the U.S.
President Deven Patel's response to the charges
However, Deven Patel, president of the company, in response, explained that the maximum fines were unwarranted, and that his company was doing what it could "without the benefit of professional help," the settlement agreement explained. He noted that he did not intend to subvert hiring regulations and that if charged with the full $34,408 it would impact the "very existence" of the company. Additionally, he noted that Manishkumar Patel presented a valid Social Security card at the time of his hiring, in explaining that he did not intentionally hire someone not authorized to work in the U.S.
Proving Manishkumar Patel presented a valid social security card was a big step toward having the penalty reduced.
Determining a final penalty for Form I-9 violations
It was determined that, though Deven Patel claimed all the Form I-9 violations were minor and technical in nature, paperwork violations are, in fact, almost always serious. However, the government's other charge that the company hired an individual not authorized to work in the U.S. turned out to be false, according to the settlement agreement. ICE was unable to attain a copy of the Social Security card submitted by Manishkumar Patel, while Deven Patel did, in fact, provide a copy of the document, proving that it was legitimate. The government also failed to come up with enough evidence to show that the Form I-9s were backdated in acts of bad faith.
"The government could not prove Holtsville acted in bad faith."
Because the government was not able to prove Holtsville acted in bad faith or that it employed an unauthorized employee, as well as the fact that the company has no history of violations and is a small business, it was able to get its fine reduced. However, the company was found liable for 35 "serious and substantive" Form I-9 violations. Due to the factors weighing in Holtsville's favor the fine it eventually did receive for those violations was substantially reduced to $15,450.
Oftentimes businesses are able to successfully argue against at least a portion of the charges levied against them, but $15,450 is still a substantial amount, and companies can take measures to avoid ending up in the same situation as Holtsville. For example, an electronic Form I-9 generation and storage system can help employers ensure that they complete their hiring documents mistake-free. This sort of precaution can go a long way toward making sure your company is compliant with hiring regulations.