Georgia Construction Company Hit with $228,000 I-9 Penalty
The Department of Justice, Office of the Chief Administrative Hearing Officer (OCAHO) recently assessed an I-9 related penalty of over $228,000 to M&D Masonry, a Georgia construction contractor, based on an audit conducted in May 2010. While the fine is one of the higher amounts we’ve seen from OCAHO during the past few years, it actually represents a considerable improvement over the assessment by Immigration & Customs Enforcement (ICE) of over $332,000.
Newspaper Article followed by NOI
The beginning of the case is quite interesting. The Atlanta Journal Constitution published an article, “Illegal Hiring for Airport Construction,” wherein a M&D foreman was quoted as saying M&D was employing undocumented workers. After ICE read the article, it served a Notice of Inspection (NOI) on M&D seeking the I-9 forms of current employees and employees terminated in the last three years. The contractor provided 342 Forms I-9.
Notice of Intent to Fine – 339 Allegations
Thereafter, ICE issued a Notice of Intent to Fine alleging 339 violations – 87 for failure to prepare and/or present an I-9 form for those individuals and 252 violations for failure to ensure proper completion of Section 1 of the I-9 form and/or failure to properly complete Section 2 of the I-9 form. OCAHO’s decision detailed the errors found on the 252 Form I-9s. Specifically, they were:
- Failure to sign Section 1 – 34
- Failure to check status – 60
- Checking more than one status – 3
- Failure to provide A# – 10
- Failure to sign Section 2 – 81
- Failure to record an issuing authority – 21
- Failure to provide a document number – 25
- Failure to provide both List B and List C documents – 29
- Recording unacceptable documents – 7
Based upon an 84% error rate on the I-9 forms, ICE assessed a baseline penalty of $935 for each violation. It enhanced the penalty by 5% each for seriousness of the violations and large size of the company but mitigated by 5% for good faith. Overall, it assessed the 339 allegations at $981.75 for a total of $332,813.25.
M&D asserted a number of defenses, a few of which will be discussed in this article. One defense was that ICE failed to fully identify 52 employees in Count II, some of which were only identified by three capital letters. ICE got the three capital letters from the Georgia Department of Labor, who responded to ICE’s inquiry on employees employed by M&D Masonry in 2009 and 2010 with Social Security numbers and an abbreviated three letter surname.
M&D argues that a previous 2013 OCAHO decision, United States v. Siwan & Sons, held a violation may not be found for failure to present an I-9 form for an individual whose whole name was not provided by ICE. OCAHO disagreed with M&D on the meaning of Siwan and cited a 2014 decision, United States v. Synmetric Solutions, where violations were found on 64 individuals with no last name listed. Moreover, OCAHO found M&D knew the identities of virtually all of the individuals involved.
M&D also asserted the failure to provide the issuing authority in Lists A, B, or C should be a technical violation, not a substantive violation. In so arguing, it sought to reverse OCAHO’s decision in United States v. Ketchikan Drywall Services. OCAHO declined to reverse Ketchikan and found violations in the instances where M&D failed to list the issuing authority.
Interestingly, OCAHO found ICE was “unduly generous” in treating good faith as a mitigating circumstance. OCAHO cited M&D’s certifying signature, through a rubber stamp, that was done in advance of hiring employees. Thus, OCAHO found this conduct to constitute a “false attestation.”
Concerning the penalties, M&D argued ICE was required to consider M&D’s ability to pay. OCAHO found it was not required to consider the company’s ability to pay, but did so in many cases as a matter of discretion.
OCAHO concluded “the principle of proportionality” should apply and lowered the penalties to $650 each for Count I violations and $750 each for Count II violations – failure to prepare I-9 forms. Overall, M&D was assessed $228,300 in penalties.
This is the second consecutive OCAHO decision arising out of Georgia and each employer was assessed significant penalties. Furthermore, this case sheds light on the manner in which some investigations are commenced – from a newspaper article – and the cooperation that the Georgia Department of Labor provided in the investigation.