Earlier this month, an Administrative Law Judge (ALJ) for OCAHO ordered Hartmann Studios, Inc., an event design and production company based in Richmond, California to pay civil money penalties totaling $605,250 based on 808 I-9 paperwork violations.  The vast majority of violations involved the company’s failure to sign section 2 of the I-9 forms.  The Conclusion noted, “OCAHO case law has emphasized that penalties should have a deterrent effect on an employer’s behavior and not merely be the cost of doing business.”

The 808 violations were broken down into five counts which included:

  • Count 1: failure to prepare and/or present I-9 forms
  • Count 2: failure to timely prepare and/or present I-9 forms
  • Count 3: failure to ensure employees signed section 1 of the I-9 form
  • Count 4: failure to properly complete section 2 of the I-9 form
  • Count 5: failure to properly complete section 3 of the I-9 form

Out of 718 employees, approximately 400 were hired through the Collective Bargaining Agreement (CBA), Local 16, which Hartmann Studios identified as “on-call workers”.  As part of the on-call process, Local 16 developed a three-in-one form which was comprised of a W-4 form, part of sections 1 and 2 of the I-9 form, and a check-off authorization that allowed a portion of the individual’s wages to be deducted for union dues. Although this modified I-9 was not an acceptable substitute for the actual I-9 form, the government did not charge these as violations as failure to prepare Form I-9 and instead pursued the lesser charges in the completion of these documents. Initially the government set a baseline fine of $935 per violation noting the employer’s error rate exceeded 50%; however, this rate was later dropped to a range of $550-700 with an additional $200 for each unauthorized alien.

This case is a critical reminder that employers should ensure their I-9 records are prepared and maintained properly. In addition, the employer should understand how to maintain I-9 records for those individuals who may be employed on a project, intermittent basis.  Finally, employers should ensure that regular self-audits of their I-9 records are conducted and those company representatives who are responsible for the I-9 process receive I-9 training on an ongoing basis.

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Photo of Ian Macdonald Ian Macdonald

Ian R. Macdonald Co-Chairs the firm’s Labor & Employment Practice’s International Employment, Immigration & Workforce Strategies group. He focuses his practice on developing, assessing and managing global mobility programs for multinational companies on a range of challenges affecting the movement of people capital

Ian R. Macdonald Co-Chairs the firm’s Labor & Employment Practice’s International Employment, Immigration & Workforce Strategies group. He focuses his practice on developing, assessing and managing global mobility programs for multinational companies on a range of challenges affecting the movement of people capital domestically and internationally, including secondment agreements, benefits transferability, local host country employment concerns and immigration.

Ian and his team work closely with companies to manage and modify, where needed, corporate immigration programs to maximize efficiency, service and regulatory compliance levels. He is experienced with the full range of business immigration sponsorship categories (visas and permanent residence), anti-discrimination rules to reduce or eliminate risk of employment litigation, employer sanction cases, and I-9 and E-Verify compliance. Ian assists clients with establishing risk-based performance standards (RBPS) and Department of Homeland Security protocol, providing risk assessment assistance to corporations subject to Chemical Facility Anti-Terrorism Standards (CFATS) and assisting clients with ITAR/Export Control compliance within the immigration context.

Ian has developed strategic relationships abroad that he utilizes when working with clients to ensure compliance with foreign registration requirements. He is experienced with analyzing complex global mobility opportunities on country-specific matters to facilitate the transfer of personnel. Ian is also experienced in counseling employers on immigration strategy as well as immigration consequences of mergers and acquisitions, reduction in workforces, and furloughs.

Prior to joining the firm, Ian worked for the United Nations, various non-governmental think tanks and corporate law firms in London, Washington, D.C., New York and Atlanta.