October 14, 2010
On September 28, 2010,
announced a settlement with clothing retailer Abercrombie & Fitch requiring
the Company to pay a $1,047,110 fine. The settlement is the result of a Form I-9
Notice of Inspection (NOI) issued in November 2008 to Abercrombie’s retail
stores in Michigan. The inspection revealed “technology-related deficiencies” in
Abercrombie’s employment authorization verification system. Even though ICE
uncovered no knowing hires of unauthorized aliens, Abercrombie cooperated with
ICE, and Abercrombie implemented corrective measures, the Company still must
suffer a $1 million fine.
The Abercrombie fine highlights the fact that what begins as an NOI can end with significant penalties. In addition to
the significant loss of productivity an immigration-related investigation may
bring, employers face the following potential penalties for immigration-related
violations (all of which may be the result of an investigation that begins with
- Fines of up to $1,100 for each I-9 Form violation;
- Fines of up to $16,000 for each unauthorized employee or for each unfair
practice offense, including the refusal to accept documents listed on the
- Fines of up to $6,500 for various prohibited activities related to
- Prison sentences of up to 10 years for criminal violations;
- Forfeiture of illegally obtained assets; and
Given the potential for significant penalties, employers must implement an
effective compliance system. According to Brian M. Moskowitz, special agent in
charge of ICE HSI for Ohio and Michigan, “We are pleased to see Abercrombie
working diligently to complete the implementation of an effective compliance
system; however, we know that there are other companies who are not doing so.
This settlement should serve as a warning to other companies that may not yet
take the employment verification process seriously or provide it the attention
The Abercrombie fine should serve as a warning to employers: NOIs are an
enforcement, not an administrative tool.
This alert originally appeared on
Subject to Inquiry,
a McGuireWoods blog covering white collar, congressional, SEC, energy
enforcement and other government inquiries.