In U.S. v. Teelah Inc., OCAHO Case No. 09A00026 (Dec. 22, 2010), ICE filed a two-count complaint alleging that a Subway franchisee had I-9 substantive section verification paperwork violations for 31 persons as well as failure to prepare or present I-9 forms paperwork violations for another 85 individuals. Judge Ellen K. Thomas found no genuine of material fact with regard to liability, and her ruling as regard to the civil money penalty assessment is of significance.
The Immigration Reform and Control Act (“IRCA”) and the implementing regulation at8 C.F.R. § 274a.10 (b)(2) set the framework for determining civil money penalties for paperworkviolations. Due to the civil monetary penalties inflation adjustment the current minimum penalty for paperwork violations are a minimum of $110 and the maximum penalty at $1110. 8 C.F.R. § 274a.10a9(b)(2). The statute provides five factors that must be given due consideration in making a determination regarding the amount of the penalty, as follows: 1) The size of the business of the employer being charged; 2) The good faith of the employer; 3) The seriousness of the violation; 4) Whether or not the individual was an authorized alien; 5) the history of previous violations.
The ICE Forensic Auditor established the agency’s base fine by first ascertaining that the percentage of employees for whom there were violations was 100% so that the base penalty for each violation was $935.00. He then considered the five statutory factors and concluded that two of those factors warranted aggravating the penalties by 5% each, or a 10% enhancement. He treated the other three factors as neutral so the government's final figure for each violation was $1,028.50. While the judge mentioned the ICE penalty methodology, she did not adopt it.
Judge Thomas did not give equal weight to each statutory factor, or limit her assessment to the use of only the five specified factors in assessing the civil monetary penalties. New China Buffet Restaurant, 10 OCAHO 1133 (2010), Hernandez, 8 OCAHO 1043 (2000).
While the judge found that the violations were serious and that the employer lacked good faith, nevertheless she found that Teelah is a small employer, had no unauthorized workers and no previous violations. She found that three of the statutory factors pointed to mitigation and two to aggravation. Judge Thomas further found that the amount ICE sought, $119,306.00, was disproportionate to the company's size and resources, that there was a depressed economy and that the penalties should be reduced to fall in the lower end of the permissible range.
For count I, Judge Thomas penalized Teelah $250 for 24 verification paperwork violations and $300 for 7 backdated verification paperwork violations, for a total of $6900. The penalty for the violations in Count II was assessed at $250 for each of the 85 named individuals, or $21,250. For both counts, the total was $28,150.00, or more than a 75% reduction from the ICE complaint amount.