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New York Restaurant Hit with I-9 Penalties

Some of our more regular readers may recall our article on one of the largest I-9 compliance busts ever late last year. It looks like I-9 compliance issues have made its way into the news again, but this time to a small restaurant in New York.

In Rochester, New York, the Black and Blue Restaurant was assessed with an $88,700 fine by the Department of Justice's Office of the Chief Administrative Hearing Officer (OCAHO). This was a reduction from the $264,605 fine the Immigrations and Customs Enforcement (ICE) was seeking initially. Last year, however, its Buffalo, New York location was assessed with a $32,850 fine.

The restaurant lost on a number of their arguments. One argument they made was that one person was not an employee but a "partner" instead. A partner is not required to file an I-9 form, but an employee is. However, despite their argument they had no evidence to support it and thus a fine was assessed for that individual.

A perhaps more troubling point is how the restaurant lost in its next argument. The restaurant argued that the ICE auditor provided them with a memo with instructions only to produce I-9 forms for those employees employed between January 1, 2008 and April 7, 2010. However, the Immigration Reform and Control Act of 1986 (IRCA), which is the controlling law in this case, states that the employer must retain former employees' I-9 forms for three years from the date of hire, or one year after the employee's termination, whichever is later. The starting date for the restaurant's inspection was January 1, 2008. Thus, the restaurant had to produce the I-9 forms of former employees hired after January 1, 2005 or terminated after January 1, 2007, or else be punished by fine. Despite what the ICE auditor said or wrote in the memo, IRCA trumped the auditor's misinterpretations even though there was no fault by the restaurant.

Despite the number of violations and OCAHO ultimately finding against the restaurant, OCAHO found that the $264,605 that ICE was initially seeking was excessive, and amounted to about half of the restaurant's 2011 income. Instead, OCAHO assessed a fine of $500 per violation, rather than $935, for the failure to prepare Form I-9s for 19 employees. Also, it assessed a fine of $300 each, instead of $935 each, for the restaurant's failure to properly complete both pages of the Form I-9 for 264 employees.

Form I-9 violations can have serious consequences for businesses both large and small. If you have questions about I-9 compliance or any other immigration issues, contact our office today.

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