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In United States v. T-Ray Construction Co, Inc., 13 OCAHO no. 1346 (Feb. 19, 2020), the employer’s failure to raise the affirmative defense of Statute of Limitations on timeliness violations cost them opportunity to reduce its penalties by $13,300. However, the litigation was successful in that OCAHO reduced T-Ray’s penalties almost 50% - from $81,743 to $42,654.
Immigration and Customs Enforcement (ICE) served a Notice of Inspection (NOI) on the company on September 21, 2018. T-Ray timely submitted 41 Forms I-9. ICE issued a Notice of Intent to Fine (NIF) and a Complaint alleging 43 violations of 8 U.S.C. § 1324a (I-9 violations) and sought $81,743 in penalties.
The first set of violations alleged by ICE were failure to complete/prepare I-9 forms for two employees. However, it wasn’t really a failure to complete/prepare an I-9 form; rather, the employer completed Section 3 upon the employees’ rehiring. In order to complete Section 3, one must be rehired within three years of the original date of hire. Unfortunately for T-Ray, it rehired the two employees over three years from the date of original hire. Therefore, OCAHO found T-Ray liable for these two violations.
Thirty-nine allegations concerned the failure to timely complete I-9 forms written three business days of the first date of employment. Of the thirty-nine, four had other substantive violations. Meaning there were thirty-five violations only alleging timeliness. I-9 violations concerning timeliness are treated differently than other I-9 violations. Since there is not a way to “cure” a timeliness violation, there is a five-year statute of limitations on timeliness violations - meaning the statute begins to run four days after the employee’s first day of employment and ends five years later.
In this case, there were approximately 20 timeliness violations over five years old. Unfortunately, a statute of limitations defense is an affirmative defense - meaning T-Ray must assert it for OCAHO to make a finding that the 20 timeliness violations were outside the statute of limitations. However, T-Ray did not assert the defense; thus, OCAHO could not utilize it.
Concerning the statutory factors, ICE aggravated by 5% for seriousness of the violations and mitigated by 5% due to the small size of the business and lack of undocumented workers. The other statutory factors, good faith/bad faith and no history of I-9 violations were treated as neutral. OCAHO agreed ICE’s analysis on the five statutory factors.
In determining the penalties to be assessed, OCAHO noted ICE’s requested penalties of $1901 per violation were 85% of the maximum, which should only be for the most egregious violations. OCAHO stated these violations were not the most egregious and ICE’s proposed penalty was “disproportionate to the Form I-9 violations and mitigating factors.” Thus, OCAHO lowered the penalties and determined how much to lower them based on the type of violation. Incredibly, OCAHO viewed completing Section 3 instead of completing a new I-9 form as very, very serious and assessed a penalty of $1,453 for each of the two violations. For the timeliness violations, OCAHO assessed between $630 and $635 for ones occurring before November 2, 2015 and $1290 for ones occurring from November 2, 2015 forward. Overall, OCAHO assessed penalties of $42,654.
This decision demonstrates the importance of asserting the affirmative defense of the statute of limitations. If an employer fails to hire an attorney experienced in worksite enforcement, the employer may fail to raise such an affirmative defense.
If you want to know more information on I-9 compliance and related issues, I recommend you read The I-9 and E-Verify Handbook, a book I co-authored with Greg Siskind, and available at http://www.amazon.com/dp/0997083379.
