The Good Faith Criterion: Lessons Learned From US vs. M&D Masonry and Form I-9

In 2010, ICE alleged in two counts that M&D Masonry committed 364 violations against the Immigration and Nationality Act (INA). The first count charged that 277 of M&D’s employees didn’t correctly complete section 1 and 2 of Form I-9; the second count charged that M&D didn’t have proper paperwork for 87 additional employees. The company refuted ICE’s allegations, and protested to 40 of the 277 violations named in Count I, and six of the 87 violations named in Count II.

For Count I, the government contests that M&D failed to ensure that:

  • 34 employees signed the attestation in section 1 of Form I-9;
  • 60 employees checked a box in section 1;
  • three employees attested to only one status in section 1; and
  • 10 employees who attested to status as lawful permanent residents entered their respected alien numbers on the adjacent line.

For Count II, M&D failed to:

  • complete section 2 of Form I-9 properly;
  • sign section 2;
  • record the issuing authority for a List B document;
  • provide the document number for List A, List B, and List C documents; and
  • review both List B and C documents.

Additionally, M&D instead accepted unacceptable documents, and didn’t examine or authenticate many I-9 forms within three business days of the individual’s hire date.

Among the defenses, the company alleges that the proposed monetary fines are exorbitant and do not consider the M&D’s financial abilities; and that ICE’s enforcement practices are unreasonable and impulsive. On January 6, 2014, ICE revised its complaint and retracted 25 of the named persons in Count I. According to the US government, M&D supplied satisfactory evidence that demonstrated that those employees had been dismissed before ICE’s inquiry, and wasn’t within the purview of the audit.

Lesson 1

A newspaper article is actually what led ICE to inspect and fine M&D Masonry. On April 30, 2010 an article titled “Illegal hiring for airport construction?” was printed in the Atlanta Journal Constitution. The article cited a hiring foreman for M&D who said that the company was hiring people without sufficient work authorization. ICE conducted a worksite enforcement inquiry on May 7, 2010; subsequently, ICE served M&D with a Notice of Inspection (NOI) for current and past employee I-9 forms from May 7, 2007 to May 7, 2010, and for employment records, payroll data, and wage and hour reports. ICE then issued M&D with slew of other notices throughout 2010 and 2012, including a Notice of Technical and Procedural Failures (NTPF), a Notice of Suspect Documents (NSD), and a Notice of Intent to Fine (NIF).

Lesson 2 & 3

M&D was timely in their response to ICE, and filed a Request for Hearing a month after ICE issued the NIF.

After acquiring and studying M&D’s Wage Inquiry by Employer Number records—obtained from the Georgia Department of Labor—Count II of ICE’s allegations concluded that M&D failed to prepare I-9 forms for 87 employees. M&D’s violations in Count II are far more egregious than Count I because failure to properly prepare and/or present I-9 forms destroys the purpose of the INA.

Penalties

M&D believed that ICE should fine the company based on its financial means; however, the governing statute asserts that such consideration is only applicable in five certain circumstances; M&D did not fall within the scope of those circumstances. While some OCAHO cases have previously taken financial means into consideration when determining penalties in a case, such leeway is not required of the government.

ICE fined M&D $332,813.25 for 339 violations, where each violation cost $981.75. Each violation incurred a baseline penalty of $935, also taking into account the employer’s 84% error rate. ICE heightened the penalties by 5 percent for the significance of the violations—over 100 I-9 forms were purportedly verified by signature stamp, although section I of the forms reflected various dates—and 5 percent for the size of the company: M&D had been in business for over 20 years, employed over 400 workers in a three year period, had a payroll of $4.3 million, and a large amount of contracted work. ICE handled the inclusion of unauthorized workers and absence of previous violations as neutral; ICE also lessened the penalties by 5 percent due to the good faith criterion.

ICE was charitable by applying the good faith criterion in M&D’s case. The good faith criterion is gauged by a study of whether the employer tried to comply with the INA obligations before the delivery of the NOI. Since M&D’s case isn’t the most extreme example of the INA violations, the penalties were lessened to a grand total of $228,300.

Takeaway

Incorrectly preparing and/or presenting a Form I-9 is one of the grievous paperwork violations an employer can make. Good faith is only taken into account when an employer actually attempts to determine its legal duties and yield to them. When judging suitable violations of the INA, the following must be favored:

  1. size of the employer;
  2. employer’s good faith;
  3. gravity of violations;
  4. whether an individual is an unauthorized alien; and
  5. employer’s history of previous violations.
See you in my next blog.
Nalini S Mahadevan, JD, MBA
Immigration Attorney St. Louis, Missouri
nsm@mlolaw.us

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The information is not meant to create a client-attorney relationship. This blog is for informational purposes only, and is not a substitute for legal advice. Situations may differ based on the facts.Copyright 2014. All rights reserved.

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