The Department of Homeland Security (DHS) takes the position that employers must physically review original documents in the actual presence of a new hire when completing the attestation in Section 2 of the Form I-9 (the attestation is a statement from the employer indicating the employer reviewed the new hire’s documents and the documents belong to the new hire).  In other words, DHS prohibits employers from reviewing copies of documents remotely or via video when completing a Form I-9.  In a decision published on August 11, 2016, the United States Court of Appeals for the Fifth Circuit found that a Minnesota staffing company was not liable for a $226,000 fine it received when it completed Section 2 in Minnesota after reviewing copies of the Form I-9 documents presented by new hires located in El Paso, Texas.¹ 

Background

In this case, the Minnesota staffing company agreed to provide employees to a manufacturer in El Paso.  The Minnesota staffing company then subcontracted with a separate El Paso staffing company to provide employees to the El Paso manufacturer.  The El Paso staffing company made all hiring and firing decisions; it also ensured new hires completed Section 1 of the Form I-9 and reviewed original documents presented by the new hire.  After reviewing the original documents, the El Paso staffing company would make copies of the documents and send the copies with the Form I-9 to the Minnesota staffing company, which completed Section 2, including signature and retained the I-9.

In November 2011, U.S. Immigration and Customs Enforcement (“ICE”) audited the Minnesota staffing company and requested all forms I-9 for the employees it provided to the El Paso manufacturer from February 2008 to February 2011.  At the conclusion of the audit, ICE ordered the Minnesota staffing company to pay $237,162.75 for completing the attestation in Section 2 without having reviewed the original documents in the physical presence of the new hires.  The Minnesota staffing company appealed the fine to the Department of Justice’s Office of the Chief Administrative Hearing Officer (OCAHO).  OCAHO lowered the fine to $226,000, but adopted DHS’s position that the Minnesota staffing company violated the Immigration and Nationality Act’s (“INA”) employment verification provisions by completing Section 2 without having reviewed original documents in the presence of the new hires.² 

The Minnesota staffing company appealed the OCAHO decision to the U.S. Court of Appeals for the Fifth Circuit.  The Fifth Circuit summarized the issue on appeal as whether “the person who signs the Section 2 attestation must also have examined the original documents in the presence of the employee, or whether those tasks may properly be performed by different people.”³ To answer this question, the court noted the deference due to an agency and began an analysis of the INA and the INA’s accompanying regulations.  The court found that neither the INA nor the regulations specify that the Section 2 attestation must be completed by an individual who reviewed original documents in the presence of the new hire.  Further, the court stated that the concept of corporate attestation is permitted. As noted by the court, “corporate attestation would permit the company as a whole to the examination of the original documents.”  Further, the court found that the Form I-9 at issue in this case was also unclear on this point.  Since the Minnesota staffing company lacked fair notice from either the statute, regulations or the Form I-9 that its practice was illegal, DHS’s fine was not lawful.

Conclusion

While the Fifth Circuit’s holding contradicted ICE’s position on Section 2 requirements, the holding focused solely on the notice due to employers when administrative agencies assess penalties for violations of ambiguous laws.  The court even notes at the conclusion of the opinion that DHS has discretion to require employers to follow certain procedures for completing Section 2 within the confines of the INA.   In fact, since 2013, DHS has done so, and noted in its guidance that the Section 2 attestation must be completed by an individual who reviews original documents within the physical presence of an employee. 

Employers with questions regarding Form I-9 practices should consult legal counsel.