Recent Round of Fines Issued By Department of Labor

By October 15, 2013Articles

The Department of Labor recently announced it had reached a settlement with a software development firm in which the company agreed to pay $741,288 in back wages to H-1B workers. The settlement agreement followed a Department of Labor Wage and Hour Division (WHD) investigation into the company’s H-1B compliance practices.

During its investigation, WHD found that the company failed to pay 54 H-1B workers for time spent in unproductive status when the company failed to assign work to the employees. Under the H-1B visa program, the employer agrees to comply with various requirements, including not laying off U.S. workers to hire an H-1B worker and paying the H-1B worker at least the “prevailing wage” at all times the H-1B worker is available for work. This obligation to pay prevailing wage continues even if the employer has not assigned the worker any work.

The recent investigation by WHD and the resulting assessment of more than $740,000 in fines is one more sign that the Department of Labor has become increasingly vigilant about enforcing an employer’s obligations under various visa programs, including the H-1B program. To find out more about those obligations, and to find out whether your company is in compliance, or whether it is at risk of an assessment of fines by the Department of Labor, contact one of the immigration attorneys at Paule, Camazine & Blumenthal, P.C.

In a separate investigation by Immigration and Customs Enforcement (ICE), a family-owned construction company was assessed fines in the amount of $9,500 for paperwork violations in completing its I-9 forms. The I-9 form is a deceivingly complicated form that an employer of any size must complete for its employee, upon hire, to confirm and record each employee’s eligibility to work. This obligation to complete and maintain the I-9 form applies even if the employee, or all of the company’s employees, are U.S. citizens.

In this case, the employer had completed and maintained I-9 forms for all employees. Further, all employees were, in fact, authorized to work in the U.S. However, the employer failed to properly complete the information on the form and ICE assessed penalties for that failure.

In considering the amount of penalties to be assessed per I-9 form, the hearing officer considered the seriousness of the particular offense. The officer determined that the seriousness of this offense, failing to complete information regarding the employment eligibility document, is a serious offense, but not as serious as other common violations, such as failing to complete the I-form, or failing to sign it. The hearing officer then assessed a $500 fine per I-9 completed improperly. Therefore, a total penalty of $9,500 was assessed to this small, family-owned company employing just 22 workers.

This assessment of fines against a small employer that employed only individuals who were authorized to work is another sign that ICE intends to enforce the I-9 requirements, and an employee’s obligation to verify the eligibility of its workforce, against all employers. An employer does not need to employ non-U.S. citizens in order to be at risk of an investigation. The best way to prevent the issuance of fines is to ensure human resources staff members are familiar with I-9 processes and requirements, and to stay up to date on training. In addition, that companies must either perform periodic self-audits of its I-9 forms or hire outside counsel to perform the audit. If you have any questions about a company’s I-9 requirements, or would like to discuss auditing your forms, contact an immigration attorney at Paule, Camazine & Blumenthal, P.C.

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