Thursday, August 6, 2015

The Six Hundred Thousand Dollar Letter

The company behind major San Francisco events like the 2013 America’s Cup, the opening of the Bay Bridge, as well as two World Series parades, is no stranger to attending to every detail. 

But just recently on July 8th, the specific details Hartmann Studios Inc., actually had been missing took the Department of Justice seventy-seven pages to publish. With the concluding signatures, the order ends with a record-breaking fine of over $600,000; the largest amount ever issued for an administrative violation.

While the news was just recently broken, the story begins much further back to 2011. The company had revenues to compete with Tiger Woods and made Bay Area news for the millions in contracts won. Hartmann Studios Inc. had hundreds of employees and seemed prepared for anything- except for the special agent from Immigration and Customs who showed up with a letter for a routine inspection. Unlike many other employers in the same situation, Hartmann Studios Inc. had reason to panic.

Even with management’s record keeping practices, experience with a 1994 audit, and collection of documents forwarded by the employees unions, the employment verification requirements weren’t legally met. The regulations are nearly thirty years old but even the company’s own executives said they were unaware employers had to sign the forms. 

Employers may have managers who aren’t familiar with legal requirements and managers may have employers who are in the dark, but the law just isn’t flexible. Its important to ensure all aspects are correctly followed without applying creative alternatives. The judge made it clear that there is no substitute for noncompliance and severe penalties will be established. In this case, the fine was actually reduced and then issued as “motivation to conform”.

Enforcement has gone up considerably and the amount of fines, settlements, investigations making the news is an indicator of more to come. Employers have nothing to worry about if they are well-versed in their obligations and have controls in place to monitor for and remedy any violations.

Hartmann Studios Inc. has learned the hard way that any employer should except a guest from the government, but its the amount of preparation that will determine if the visit is brief or will last four years. 

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posted by Form I-9 Compliance News @ 9:28 AM