Tuesday, August 25, 2015

Small Hiring Detail at Nebraska Beef Ltd. Results in Justice Department Investigation & Settlement

Three years ago, the Justice Department contacted a meatpacking plant based in Omaha, Nebraska; informing of an investigation initiated into the company’s labor practices.

On August 24, 2015 the Office of Special Counsel at the U.S. Department of Justice for Immigration-Related Unfair Employment Practices, announced that a settlement had been reached with Nebraska Beef Ltd., a private company with hundreds of employees at its single plant in Omaha.

While it was successful in its operations and and had the right pieces in place, Nebraska Beef Ltd. had a single distinction between the hiring process for US citizens and non-citizens; a distinction that was illegal and would prove to cost substantially. Specifically, Nebraska Beef Ltd., had been asking non-citizen employees to produce certain documentation to verify employment-eligibility.

But this “mistake” wasn’t extended to citizens, who indeed were allowed to choose what documentation they wanted to present from a list of acceptable documentation. This practice is unlawful discrimination and in violation of the Immigration and Nationality Act (INA).

The settlement on the surface may appear to be a conclusion to the problems Nebraska Beef Ltd. is facing, but when reading the terms of the settlement the company agreed to, it is clear this will be a half decade long ordeal. Three years of investigation, dialogue, remediation efforts and another two years at least of legal requirements imposed on Nebraska Beef before they can fully return to normal.

The civil fine of $200,000.00 is due in just a few days, but there are more stipulations required by the federal judge handling the case. In example, for the next two years the company will have to make regular reports of its operations, who it hires, what training has been provided, the list of attendees at the required training, an audit of potential or past employees must also be produced. Nebraska Beef has to contact anyone who has applied for a job and provide them with an offer of relief from the uncapped fund they are responsible for establishing. 

Two years of monitoring by the government and reporting regularly to them will now become part of regular operations at Nebraska Beef Ltd. Because the full extent of possible victims of their discriminatory violations is not yet known, the un-capped fund is a yet undetermined cost the company will have to bear. In addition, they must pay the costs of locating and contacting the victims, as well as the additional training imposed during regular hours for Nebraska Beef's employees.

The entire problem rose from a single practice that could have been stopped had regular training on current and updated laws occurred. All of this would never have happened if Nebraska Beef’s paid attention to the regulations that govern their labor practices, they could have at least re-mediated the issue before it got out of hand. 

It is a hardly hidden stipulation in the rule books that says employers may not discriminate and yet, something as clear as day was entirely missed by a large company with hundreds of millions in sales. Now its too late to avoid the consequences, but for other employers this is a perfect example of what can happen to anyone. Form I-9 compliance has never been more important and employers have never seen enforcement at this level. Ever. 

Nebraska Beef is just one of many and even now, there is no doubt that there are other ongoing investigations that will soon make the news like this did.

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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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