On September 28, 2010, ICE 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 (as discussed in previous blogs) 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 an NOI):

  • 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 I-9 Form;
  • Fines of up to $6,500 for various prohibited activities related to document fraud;
  • Prison sentences of up to 10 years for criminal violations;
  • Forfeiture of illegally obtained assets; and
  • Debarment

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 it warrants.”

The Abercrombie fine should serve as a warning to employers: NOIs are an enforcement, not an administrative tool.