An Arlington hotel was notified by the Immigration and Naturalization Service yesterday that it will be fined $16,500 for employing 11 illegal aliens, the INS said. The hotel could become the first business in the country to pay penalties under the immigration law passed last year.

The Quality Inn, at Arlington Boulevard and North Court House Road, is being fined for "continuing to employ the aliens even after they learned they lacked an employment authorization," said Duke Austin, a spokesman for the INS. The hotel also failed to complete paperwork required by the new law, he said.

Under the provisions of the law, the hotel has 30 days to pay the fine or seek a hearing. If it pays, it will become the first employer to be fined under the provisions of the law, which was signed by President Reagan last November, said Austin. No decision has been made on whether to seek the hearing, said Raymond G. Murphy, vice president for administration for Manor Care Inc., parent company of the Quality Inn chain.

Murphy said the hotel has complied with INS procedures. "We have cooperated to the fullest extent with the INS," he said.

The Immigration and Reform Control Act of 1986 provides a process by which long-term illegal immigrants can apply for legal status and requires employers to check the immigration status of workers hired after Nov. 6, 1986. Those employers who do not check or knowingly hire undocumented workers after Nov. 6 risk fines.

The INS said the fines were based a rate of $1,000 for each illegal alien employed -- $11,000 in this case -- plus $500 per instance in 11 instances of failing to maintain proper records.

Yesterday's action is partly based on a raid of the hotel last Monday in which 16 workers from Mexico, Guatemala, El Salvador and Bolivia were arrested,according to the INS.

Thirteen of the workers were hired before Nov. 6, and the hotel could not be cited for violations in those cases, said Austin. Three of the workers arrested last Monday and another eight were cited separately from the basis of the complaint against the hotel, the INS said.

Austin said the agency had received complaints this summer "from U.S. citizens and legal residents of the United States about the number of undocumented aliens working at that facility." He declined to say whether the complaints had come from other employes of the hotel.

Agents visited the hotel Sept. 4 and after an inspection of hotel personnel records warned managers that they were in violation of the law, the INS said.

Hotel spokesman Murphy said the INS audited the hotel in August and at that time the hotel turned over a list of employes hired after the law's effective date. On Sept. 4 the INS told hotel officials that 10 workers were illegal, said Murphy. Eight were discharged, he said, and the two others had proper papers.