What Has Been Happening at OCAHO in 2024-2025?

From May 2024 through June 2025, the U.S. Department of Justice’s Office of the Chief Administrative Hearing Officer (OCAHO)—which is responsible for adjudicating violations of Form I-9, unlawful employment of unauthorized workers, and unfair immigration-related employment practices—has issued only four decisions. Of the four, two decisions concerned the valuation of I-9 penalties, one concerned subpoena disputes, and the final decision addressed calculation of interest on penalties. This year’s summary once again highlights the downward trend in published substantive OCAHO decisions.¹ This continued trend appears to be caused by the introduction of a Settlement Officer Program, which has assisted litigants to reach a resolution of a case without further litigation. 

OCAHO Continues to Decline to Use ICE’s Matrix 

As can be seen in prior Littler articles,² OCAHO has consistently declined to follow the matrix (a tool that determines the amount of the penalty per the percentage of I-9 violations found in the audit) used by Immigration & Customs Enforcement (ICE), which is based upon the percentage of Forms I-9 with substantive errors. 

In United States v. John Ferguson Moving & Storage, 21 OCAHO no. 1651 (Mar. 12, 2025), Respondent failed to prepare any Forms I-9 for its 23 employees; thus, it did not provide any in response to ICE’s Notice of Inspection (NOI). ICE calculated a civil monetary penalty of $45,586 for failure to prepare and/or present 23 Forms I-9. It used $1,982 per I-9 violation, which ICE stated was the highest amount permissible. 

Respondent asserted it provided 16 Forms I-9, but they were completed after service of the NOI; thus, they were not considered in the decision-making. It also raised an affirmative defense of good faith. However, good faith is only reviewed for technical errors, hiring employees, and as a statutory factor; thus, it is misplaced as a defense to a substantive violation. 

Since ICE used the highest assessment of penalties allowed at that time, it did not use the five mitigating/aggravating factors.³ However, OCAHO did consider the factors and found Respondent was a small employer, which provides for a 5% mitigating factor. Concerning seriousness of the violations, OCAHO found this was a 5% aggravating factor. The other three factors, good faith/bad faith, no employment of unauthorized workers and no history of violations, were determined to be neutral.

OCAHO concluded that it was going to exercise its discretion and find a reduction in the proposed penalty amount that was just and reasonable. Here, OCAHO held:

[The government] proposes a penalty of $1,982 per violation, which is approximately 71% of the maximum of the penalty range the court can consider for these violations.⁴ Penalties at or near the maximum permissible fine amount should be reserved for more egregious circumstances. Here, the court weighs most heavily the seriousness of the violations for failure to prepare and/or present Forms I-9 and considers that the violations include all of Respondent’s employees…. After considering the remaining statutory factors, the court finds that the violations do not warrant a penalty toward the high end of the penalty range. Rather, the court exercises its de novo authority and finds that a penalty slightly above the mid-range is warranted.

Thus, the ALJ reduced the penalties from ICE’s proposed $45,586 to $36,179. 

In United States v. Pasquel Hermanos, Inc., 18 OCAHO no. 1506f (May 27, 2025), Respondent was charged with failure to prepare and/or present Forms I-9 for 22 of the 23 employees. In its defense, Respondent asserted all its employees were authorized to be employed; therefore, there were no substantiative violations. OCAHO summarily dismissed that defense. In reviewing the penalties, OCAHO stated, “The civil penalties for violations of Section 1324s are intended to set a meaningful fine to promote the future compliance.” 

OCAHO determined the penalties by reviewing the five statutory aggravating/mitigating factors. In so doing, OCAHO found the employer’s small size was a mitigating factor. Concerning whether there was bad faith, OCAHO stated:

[T]his employer had a poor compliance rate - demonstrating it took virtually no steps to comply with the law before the inspection. However, there is nothing to indicate that during the inspection and in the time preceding the receipt of the Notice of Intent to Fine this employer engaged in any concerning behavior; rather, the record shows the employer was forthcoming about the number of Forms I-9 available for inspection, and seemed otherwise comply expeditiously with the HSI auditors request. Without more, the statutory factor is duly considered, but it does not serve, in this case, to aggravate or mitigate the penalty.

The seriousness factor was met and determined to be an aggravating factor. The final two factors, no employment of unauthorized workers and no history of violations, were found to be neutral. 

OCAHO decided to use a mid-range of penalties, not the matrix, in assessing $1,450 per violation for a total of $31,900, rather than ICE’s proposed penalties of $42,856.

On average, OCAHO reduced the penalties by 23% in these two published decisions. 

Subpoena Disputes

A subpoena dispute arose in In re Investigation of Adobe, Inc., 21 OCAHO no. 1669 (June 25, 2025). During an investigation of a charge by Immigrant and Employee Rights Section (IER) of the Department of Justice, IER issued a subpoena requesting from Abode information concerning applicants for positions that Charging Party applied, including PERM applicants, information about Charging Party, and personnel files for applicants. 

Adobe raised two principal objections. First, IER exceeded its statutory authority in continuing an investigation when there was no reasonable cause for the charge. In response, OCAHO concluded, “A determination on whether IER has conducted a sufficient investigation is beyond this ALJ's authority; nor would this ALJ be aware of whether IER has expanded the scope of the investigation, which has the authority to do.... Further, a resolution of the merits of the case is outside the scope of these proceedings and would be improper in any event without a full evidentiary submission.” 

Second, Abode asserts attorney-client privilege and work-product privilege on presenting many documents. However, Adobe failed to present a privilege log under Rule 25(b)(5). As OCAHO stated:

A properly crafted privilege log has the potential to resolve disputes without Court intervention in that it helps the opposing side evaluate whether it should challenge the asserted privileges. When Court intervention is required, that same privilege log allows the court to understand the propriety of the party’s position on privileges. In this case the Court has no basis upon which to resolve the dispute as there is no privilege law and thus no way for the court to evaluate whether it was properly asserted. 

The Court orders Petitioner (Adobe) to create a privilege log for any responsive documents it intends to withhold based on a privilege…. [T]he Court asks IER to review the privileged log, meet and confer with the Petitioner, and if any asserted privilege cannot be resolved, the parties may then bring the dispute to this Court to resolve with an in camera review of the withheld documents.

Calculation of Interest on Penalties

In United States v. Majestic Petroleum Services, LLC, 21 OCAHO no. 1641b (April 3, 2025), the parties, ICE and Respondent, reached a settlement agreement for an installment payment plan. Thereafter, a dispute arose on the amount of monthly payment based on calculation of monthly interest. The pertinent language is as follows:

It is financially unable to pay the amount due in one lump sum payment, Respondent will pay its $95,000 debt in 108-monthly installments and also agrees to pay interest on the outstanding balance. Each monthly billing set by the FSCB will be for an amount which represents an amount of principal plus the interest….

The interest due will be amortized over the 108-month payment period and will be added to the principal amount due each month.

Respondent asserts that the agreement’s terms, “fixed” and “amortized over the 108-month payment period” with respect to the rate and payment of interest mean that it should have a fixed monthly payment including principal and interest.

OCAHO disagreed with Respondent’s interpretation and stated, “The phrase ‘monthly installments’ is only used in reference to the payment of the principal, separate from the distinct agreement to pay interest on the outstanding balance…. Were this provision to state that both debt and interest on it would be paid in monthly installments, such language would support Respondent’s interpretation that both the principal and interest payment would be one fixed monthly payment; however, such is not the case here.”

Conclusion

There is a continuing trend of OCAHO decreasing the penalties between 23% and 40%. Therefore, it is often beneficial to litigate before OCAHO, rather than accept ICE’s proposed penalties. Alternatively, after a Notice of Intent to Fine (NIF) is filed but before a Complaint is issued, employers should consider using the possibility of litigation before OCAHO to negotiate lower penalties with ICE.

The other two cited OCAHO decisions help employers to understand the subpoena process as well as calculation of interest in settlements. 

Employers seeking more information on trends in I-9 compliance can contact immigration counsel.