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Iowa Immigration Law Blog: The Benefits of Being Small Revisited - May 30, 2013

Another recent I-9 case shows how the preference for small employers works in the OCAHO (Office of Chief Administrative Hearing Officer) context*.

Siwan & Sons, Inc. is a Subway franchisee.  Upon audit, it was found to have failed to make sure its employees completed Section 1 or failed to correctly complete Section 2 of more than 70 of its I-9s.  Additionally eight I-9s were found to be missing.  ICE claimed that the I-9s were also “backdated”, showing bad faith.

The penalty was aggravated from $110 to $935 per violation.  ICE considered the size of the business to be a neutral factor.  Although the business had few employees at any one time, because it was part of a large franchise, ICE claimed that it should have had access to HR assistance from the franchisor on I-9 compliance.

Siwan & Sons argued that it did not have any training on I-9s from Subway.  As to the backdating of I-9s, it explained that when the new I-9 form came out the owners believed that all the I-9s had to be re-done.  They copied the information from the old forms to the new forms and dated them as of the hire dates.  They then discarded the old forms.  This misunderstanding was caused in part because of their limited English proficiency.

OCAHO confirmed earlier cases that refused to find that a small employer did not become larger for purposes of the I-9 penalty calculation by being part of a franchise.  

It also held that ICE’s disbelieve of the employer’s explanation for “backdating” the forms does not mean the employer lacked good faith.  

OCAHO found the penalty of $935 per violation to be excessive in light of these circumstances and reduced the total penalty to $15,800 from $82,280.

*U.S. v. Siwan & Sons, Inc. d/b/a Subway #35029 and Subway #23095
, OCAHO Case No. 11A00021.