On August 6, 2013, the U.S. Court of Appeals for the Ninth Circuit upheld $173,250 in penalties against an employer for failing to maintain correctly completed I-9 forms for newly hired employees.
The employer, a drywall company, was notified by Immigrations and Customs Enforcement (“ICE”) officials that it was conducting an audit of the employer’s I-9 compliance. When the audit and subsequent follow-up with the company revealed hundreds of missing or incomplete I-9 forms, ICE assessed a penalty of $286,624 against the employer. After the employer filed an appeal with an Administrative Law Judge (“ALJ”), the ALJ ruled in favor of ICE but reduced the penalties to $173,250 (based on a finding that the actual number of violations was fewer than alleged by ICE).
The employer then appealed the ALJ’s decision to the U.S. Court of Appeals, which reviews ICE and other agency decisions under the narrow “arbitrary or capricious standard” set forth in the federal Administrative Procedures Act.
The employer admitted to the Court that it had not completely filled out each and every I-9 form; however, the employer claimed that such work was unnecessary and duplicative because for each hired employee the employer had photocopied the required documents and attached them to the employee’s I-9 form. The employer argued to the Court that “it is senseless to require employer and employees to waste the time necessary to transcribe information onto I-9 Forms when that information is already available on an attached copy of the relevant document.”
The Court disagreed. The Court stated that “requiring that the parties take the time to copy information onto the I-9 Form helps to ensure that they actually review the verification documents closely enough to ascertain that they are facially valid and authorize the individual to work in the United States . . . It is neither arbitrary nor capricious to require that employers actually complete their I-9 Forms.” Thus, the Court refused to set aside the $173,250 in penalties that had been assessed against the employer by the ALJ.
The case is Ketchikan Drywall Services v. Immigration and Customs Enforcement, No. 11-73105, (9th Cir. 2013). The published decision can be found here.