I-9 Fines, Penalties and Enforcement

What penalties does an employer face for I-9 violations?

Employers face stiff penalties for IRCA and I-9 violations including substantial fines and debarment from government contracts. Penalties can be imposed for hiring unauthorized workers as well as simply for committing paperwork violations even if all workers are authorized to work. Fines for hiring unauthorized workers will amount to anywhere from $250 to $5,500 per worker depending on the prior history of violation. Employers can also be barred from competing for government contracts for a year if they knowingly hire or continue to employ unauthorized aliens. Paperwork violations can also result in significant fines. Each mistake or missing item on a form can result in a $100 penalty up to $1000 for each form. A missing I-9 Form would automatically be assessed at $1000. An employer, for example, that had 100 employees and did not complete I-9 Forms might face a $100,000 fine. IRCA investigators have considerable discretion in assessing fines and will look at factors like the size of the company, the seriousness of the violations, whether the employer was trying to comply in good faith and the pattern of past violations.

Employers should also be cautioned that knowingly accepting fraudulent documents from employees, or accepting them with "constructive knowledge," is a different kind of violation that can be criminally prosecuted, including individual criminal liability for officers, executives, managers and supervisors, under other immigration laws.

Aside from federal violations, many states have passed or are considering passing laws that would penalize employers violating IRCA including barring such employers from state contracts and revoking their business licenses.

What is Constructive Knowledge?

Employer liability extends to circumstantial evidence and constructive knowledge. It is unlawful to "knowingly hire" or "continue to employ" unauthorized workers. "Knowingly hire" includes "constructive knowledge". The requisite employer's knowledge may be constructive knowledge when it may be fairly inferred through notice of certain facts which through exercise of reasonable care would lead a person to know about; or the employer deliberately fails to investigate such facts.

Using of temporary or short-term contracts cannot be used to circumvent the employment authorization verification requirements. Employer constructive knowledge extends to its subcontractors' and independent contractors' I-9 compliance.

Constructive knowledge may include, but is not limited to, situations where an employer:

1. Fails to complete or improperly completes the Form I-9, for example, the employer fails to sign the I-9 form, or does not assure that the employee has properly completed Section 1 of the form, such as by failing to enter an expiration date for employment authorization when the employee indicates that s/he is an alien with employment authorization.
2. Fails to have the employee complete an I-9, if the employee turns out to be unauthorized to work;
3. Has information available to it that would indicate that the alien is not authorized to work;
4. Continues to employ the alien without reverifying his/her employment eligibility after the expiration date for employment eligibility listed by the alien in Section 1 of the I-9 form; or
5. Acts with reckless and wanton disregard for the legal consequences of permitting another individual to introduce an unauthorized alien into its work force or to act on its behalf.

The error must suggest that the employer has information available to it than an individual is not authorized to work. For example, failing to list an expiration date for a identity document presented by an employee for employment verification purposes does not establish that the employer "knew" an employee was unauthorized to work.

"Constructive knowledge" represents a potentially dangerous briar patch for employers. Many recent ICE enforcement actions, and employer settlements and convictions, are based on an expanding application of constructive knowledge.

The crimes of "harboring" and "conspiracy to "harbor" and "aiding and abetting harboring" an illegal alien frequently are based on "constructive knowledge." The government's harboring, conspiracy to harbor, and aiding and abetting harboring cases are often premised on the argument that the employer would not have taken an action or actions unless the employer had some concern the worker did not have legal status or employment authorization.