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By November 1, 2010No Comments

At the end of September 2010 – and with little fanfare – the Department of Homeland Security and Immigration and Customs Enforcement (ICE) announced settlement of an enforcement action against Abercrombie & Fitch, the nationwide clothing retailer. This settlement is remarkable for several reasons.

The settlement amount is $1,047,110, which is an enormous monetary penalty in today’s economy. More shocking is the fact that this penalty is for paperwork violations only. There are no allegations that Abercrombie & Fitch employed illegal workers or otherwise violated immigration law. Instead, this penalty is solely for improper completion of I-9 forms.

The settlement results from a compliance audit initiated in November 2008. It’s common for ICE to take two years or more to conclude an I-9 paperwork audit.

The second surprise about this settlement is that the I-9 inspection involved the clothing retailer’s Michigan stores, and is apparently not the result of a nationwide compliance audit. The ICE press release states that the company “was fully cooperative during the investigation and no instances of the knowing hire of unauthorized aliens were discovered.” If that is the case, the agreed-upon penalty either reflects an enormous number of violations or very severe fines per violation.

Third, the violations uncovered during the inspection involved “numerous technology-related deficiencies in Abercrombie & Fitch’s electronic I-9 verification system.” This suggests that the company’s I-9 software vendor was negligent and failed to confirm that its software system achieved proper I-9 compliance or that the company was poorly trained in implementing and administering the electronic I-9 compliance program. In either case, this settlement serves as a wake-up call to all employers using electronic verification systems: Make certain the system ensures proper I-9 compliance and that you are using it correctly.

Even employers that don’t use electronic I-9 compliance systems should note the heavy fines imposed because of this investigation. The ICE press release confirms that the agency has implemented a new, comprehensive strategy to audit and investigate employers, and that this effort has resulted in a record number of civil and criminal penalties against employers. Now is the time to ensure that your compliance will survive an ICE investigation!

To obtain the free 14-step self-audit checklist, click here.

Article courtesy of Worklaw® Network firm Elarbee Thompson (