Tenth Circuit Enforces Civil Penalties Against Employer for IRCA Violation

In Split Rail Fence Co. v. United States, the Tenth Circuit affirmed an administrative law judge’s (“ALJ”) summary decision, which imposed civil penalties on Split Rail Fence Company, Inc. for violating the Immigration Reform and Control Act (“IRCA”).

The IRCA was enacted in 1986 by Congress and established an extensive “employment verification system, designed to deny employment to aliens who (a) are not lawfully present in the United States or (b) are not lawfully authorized to work in the United States.” This verification system is known as the I-9 system. It specifically requires the following of employers:

  • To verify the identity of their employees and ensure they are eligible to work in the United States by examining certain documents; and
  • To complete and retain an Employment Eligibility Verification Form (“I-9 Form”) for each employee.

There is a list of acceptable documents found on the I-9 Form which employers must examine for each employee, then record the title, number and expiration (if any) of those documents on the I-9 Form. By requiring employers to review these documents, the IRCA is imputing knowledge on employers to know who they are hiring and if those individuals are lawfully able to seek employment in the United States.

The IRCA makes it unlawful for an employer to:

  1. Hire an alien knowing the alien is an unauthorized alien (“knowing hire violation”);
  2. Hire an individual without complying with the I-9 system (“paperwork violation”); or
  3. Continue to employ an alien, knowing the alien is (or has become) an unauthorized alien (“knowing continue to employ violation”).

Split Rail Fence Company, Inc. (“Split Rail”), is a Colorado business that sells and installs fencing materials. In June 2009 Immigration and Customs Enforcement (“ICE”), an agency within the Department of Homeland Security, inspected Split Rail to determine its compliance with the IRCA. In September 2009, ICE issued Split Rail a Notice of Suspect Documents, which identified 32 current employees and 51 terminated employees with suspicious documentation. Twenty-three (23) of the 32 current employees were immediately terminated. The nine remaining employees continued to work for Split Rail. In February 2010, ICE served Split Rail with a Notice of Intent to Fine and in June 2010, ICE and Split Rail reached a settlement agreement.

One year later, in June 2011, ICE again mailed Split Rail a Notice of Inspection and in August 2011 mailed Split Rail a Notice of Suspect Documents, identifying nine current employees and one terminated employee who had incomplete I-9 Forms. All but one of the individuals identified in 2011 were the same individuals identified in 2009 by ICE. In September 2011 ICE served Split Rail with a Notice of Intent to Fine. Split Rail took no steps regarding the questioned employees’ I-9 Forms.

After a complaint was filed in April 2012 by ICE against Split Rail an Administrative Law Judge found that Split Rail had failed to require its employees to present I-9 documentation and failed to offer such documentation to challenge ICE’s evidence of unauthorized statues of those employees. Furthermore the ALJ concluded Split Rail had constructive knowledge of the employee’s unauthorized status because after both Notices of Suspect Documents, Split Rail’s efforts to verify the authorization of the employees was inadequate, instead relying on documents not identified on the I-9 Forms.

Fines for violations of IRCA range from $178 per violation (for First Offense) to $21,563 per violation (Third or subsequent offense). For a complete table of penalties, visit, https://www.uscis.gov/i-9-central/penalties. For questions or concerns regarding the IRCA or I-9 Forms, we here at Joseph, Hollander & Craft are willing and able to help.

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