Practice Pointer: Calculation of Fines in an ICE I-9 Audit

Practice Pointer: Calculation of Fines in an ICE I-9 Audit

Practice Pointer: Calculation of Fines in an ICE I-9 Audit

Section 274A of the Immigration and Nationality Act provides ICE the authority to fine employers for various action relating to the unlawful employment of aliens. The process begins with service of a Notice of Inspection (NOI) to review the employer’s Forms I-9, Employment Eligibility Verification. If paperwork, hiring, or continuing to employ (H/CTE) violations are found, ICE may issue a Notice of Intent to Fine (NIF). The date of the violation is the date of the NOI and the date of the NIF determines the applicable fine schedule. For paperwork violations, the five statutory factors of business size, good faith, seriousness, unauthorized aliens, and history must be considered to aggravate or reduce the fine. Although limited by the statutory framework, the Department of Justice (DOJ) periodically increases civil monetary penalties associated with its enforcement activities, with the latest update published on January 29, 2018.

ICE attorneys and special agents in charge determine the fine amount as set out in the NIF for each case. Fines can be challenged by requesting review by an Administrative Law Judge (ALJ) housed under the Office of Chief Administrative Hearing Officer (OCAHO), and if deemed warranted, the ALJ can adjust the fine amount. Historically, ICE attorneys and ALJs struggled with the method of calculating fines. Some would start from the top of the fine schedule and work down, some would start in the middle and work up or down, and others would start at the bottom and work up. Most often the five factors were used in the calculations for both paperwork and H/CTE violations.

In November 2008, ICE issued a Memorandum, “Revised Administrative Fine Policy Procedures.” The 2008 memo contained a set of matrixes and required agents to follow specific procedures for calculating paperwork and H/CTE fines:

To determine the level of fine within each matrix, use the number of violations of each type (paperwork or H/CTE) as the numerator and the number of total employees as the denominator. • The percentage calculated above would be used to determine the percentage box in the fine matrix to start, and then fines could be adjusted up or down five percent for each of the five factors.

ALJs have determined that ICE must follow the 2008 memo and matrixes when calculating fines and must explain how the five factors were applied. However, ALJs could consider any factors it deems necessary to calculate an appropriate fine based on the case at hand. Cases with both paperwork and H/CTE violations sometimes produced higher fines for a greater number of paperwork violations compared to fines for a fewer number of H/CTE violations. Perhaps based on complaints by some government officials that the fines were too low, ICE began to create a higher level of fine on each matrix by adding the number of paperwork violations to the number of H/CTE violations as the numerator, which in some cases dramatically increased the level of the fine in each matrix. Note the following example:

If you have 100 employees with 10 paperwork violations and 20 H/CTE violations, you add 10 + 20 = 30 to calculate 30% violations for each matrix. This would lead to a fine of $60,270 using the 2017 matrixes. This calculation is vastly different from 10/100 = 10% for paperwork and 20/100 = 20% for hiring/continuing to employ violations. This would lead to a fine of $40,560 without any aggravating or mitigating factors applied.

In other words, instead of taking the number of paperwork violations and dividing them by the number of employees, and then calculating the H/CTE violations the same way, ICE adds the number of paperwork violations to the number of H/CTE violations when calculating the violation percentage from each matrix. This is resulting in a very high fine based on the matrix percentage of violations for each of the paperwork and H/CTE violations. ICE has defended this calculation method by pointing to language in the 2008 fine policy procedures:

The recommended base fine amount is determined by dividing the number of ‘knowing hire,’ ‘continuing to employ,’ and substantive verification violations by the total number of Forms I-9 presented for inspection to determine a violation percentage.

However, on the next two pages, ICE instructs agents to “divide the number of ‘knowing hire’ and ‘continuing to employ’ violations by the number of employees for whom a Form I-9 should have been prepared to obtain a violation percentage” and to “divide the number of substantive violations by the number of employees for whom a Form I-9 should have been prepared to obtain a violation percentage.” Each instruction is paired with a separate fine matrix and no other ICEissued documentation instructs agents or attorneys to add the violations together. ICE’s I-9 inspection webpage also makes no mention of the double-dipping method of fine calculation.

Rumors of a new method of fine calculation that would scrap the matrixes in favor of a single fine range for each type of violation are circulating. As noted, ICE can calculate fines as it sees fit if they remain within the statutory limitations, and demonstrate how the amounts were calculated, including use of the five statutory factors. If ICE withdraws the 2008 memo can they still apply the five factors? By statute, the factors apply only to paperwork violations. In evaluating NIFs practitioners should ask:

1. Are the fines calculated within the confines of the statute as updated by DOJ? 2. What baseline and method did ICE use to calculate the fine in the instant case? 3. What factors were used to aggravate or reduce the level of the fine?

Practitioners must assess the propriety of settling a fine with ICE versus challenging the fine with an OCAHO ALJ and one cannot do so without understanding how fines are and should be calculated.


Source: AILA Doc. No. 18040447.