Here’s another sad story from the restaurant industry. Snack Attack Deli, d/b/a  a Subway Restaurant franchise in Fayetteville North Carolina, has been neglecting filling out I-9 Employment Eligibility forms for several years to the tune of 108 I-9 violations producing a serious fine of some $111,078, as reported by the Department of Justice, Office of the Chief Administrative Hearing Officer (OCAHO) on February 11, 2011.  The Judge considered the small size of the company, the number of employees and their payroll and reduced the penalty down to $27,000 which was still difficult for the small franchise to handle.

Here’s the back story: Snack Attack produced 11 incomplete I-9 forms for 108 employees, current and mostly past employees, following the receipt of an NOI requesting I-9 forms for current and past employees for years 2006 through 2009 from ICE in early 2009.  The ICE auditor provided the owner with a copy of a sample I-9 form along with a copy of the I-9 Employer Handbook and told one of Snack Attack’s employees that if new forms were prepared, they should not be back dated.  Section 2 of the 11 I-9 forms that were produced were not filled out at all, and 7 of the 11 forms had been back dated  – including one for the restaurant owner.  Amazing- go figure!

ICE then issued a Notice of Intent to Fine in July 2009 stating that Snack Attack committed 108 I-9 violations including improper completion of the 11 forms, failing to complete I-9 forms for 97 employees.  Each violation carried a penalty of $1,028.50 for a total of $111,078.

Snack Attack alleged that the back dating was not their fault because it occurred in section 1 and that the owner had sold the business to another person, although there was no evidence to support his claim and so the judge issued civil penalties in the case.

The Judge wrote that failure to prepare an I-9 form is amongst the most serious of paperwork violations, in addition to not filling out the employer attestation in section 2.

It should be stated that there was no evidence of unauthorized workers and the 97 employees for whom no I-9’s were filled out, remains unresolved.  ICE’s position was that Snack Attack’s practices could very easily lead to the hiring of unauthorized workers.

We cannot stress enough that employers must be proactive and generate an I-9 form for all their employees and should catch these serious violations right now, particularly if you are in an industry such as food service, manufacturing/distribution, the garment industry, construction or the hospitality industry that are making headlines every week and creating media nightmares for employers

We also learn with this ruling that although fines are calculated based on regulatory criteria, there is some hope of relief based on a company’s size and business volume.  The question is, could there have had a much happier ending if Snack Attack would have retained the services of a competent attorney with a specialty in employer compliance issues to represent them during the audit?  We say unequivocally, “yes!”

For more information on employer compliance issues, please visit our I-9 Resource Center.