Here is the latest issue of “This & That” Tuesday. I hope you find it to be informative and useful.

 

Announcements

You can always check out my website for upcoming speaking engagements that are guaranteed to be of value to business owners or for a list of topics that I can speak on at Chambers, Clubs, Business Associations, etc. More details about the events, topics and Human Resources 4U, in general, can be found on my website.

Upcoming Talks

May 29, Irwindale "The Impact of the New Minimum Wage on All Employers" Click here for more information.

 

July 9, City of Industry “HR4U 101 Full-day Workshop" Click here for more information.

 

July 17, West Covina "Critical Human Resources Issues for Business Owners" Click here for more information.

 

OCAHO Decision Reminds Employers to Complete Accurate and Timely I-9 Forms

It is critical that employers are prepared for strict worksite enforcement of I-9 requirements to prevent costly auditing and penalties for paperwork violations or the knowing employment of undocumented workers. A recent decision from the Justice Department’s Office of the Chief Administrative Hearing Officer (OCAHO) is a stark reminder to businesses to ensure that their I-9 forms are in order. While OCAHO ultimately levied a civil money penalty of $15,600, it reduced that amount, as a matter of discretion, from the original fine of more than $25,500 initially sought by U.S. Immigration and Customs Enforcement (ICE).

 

In U.S. v Anodizing Industries, Inc., OCAHO confirmed that employers are required to timely and properly complete and maintain Form I-9. Each failure to properly (1) prepare, (2) retain, or (3) produce the forms upon request in accordance with I-9 rules constitutes a separate violation. The decision further confirmed that failing to prepare an I-9 form when hiring a new employee is substantive in nature, rather than a mere technical failure that might afford the employer a “good faith defense.” Moreover, the failure to timely prepare Form I-9—within three business days of the employee’s commencement of employment—is not only a substantive violation but also a serious one.

 

Other violations characterized as substantive rather than technical in nature include:

• the lack of an employee signature in the section 1 attestation;
• the lack of a signature by the employer’s representative in the section 2 attestation; and
• the omission of proper documents to establish identity or employment eligibility, or the listing of improper documents.

In Anodizing, the company’s untimely completion of Forms I-9 on behalf of 25 of its employees and failure to sign and date the section 2 attestation on behalf of one of its employees, both substantive violations, meant that the company could not avail itself of the good faith relief from liability for minor, unintentional I-9 violations.The focus on audits and other worksite enforcement actions will likely continue. Employers thus are reminded to review their immigration compliance policies and practices.

 

When reviewing or evaluating compliance programs, it is essential that companies examine their hiring policies and practices, take steps to ensure their workforce is legal by making good faith efforts to verify employment eligibility, and proactively discuss compliance with experienced Human Resources or legal counsel. Reviewing I-9 policies, training persons responsible for I-9 completion, and conducting a self-audit of I-9 records (whether with knowledgeable internal staff or outside assistance) are just a few of the steps a prudent employer should contemplate.

 

Owner Held Personally Liable Under FLSA

A decision by the Second Circuit U.S. Court of Appeals is a reminder that individual business owners and management members can face claims of personal liability for federal Fair Labor Standards Act violations.  In Irizarry v. Catsimatidis, the court found that a supermarket company's owner, chairman, and CEO was an "employer" within the FLSA's meaning and was therefore personally liable for millions in FLSA collective-action liability.  The court so concluded even while acknowledging that there was no evidence that the owner himself either was responsible for the FLSA violations or ever directly managed or interacted with the plaintiffs.

 

The FLSA does not definitively say who qualifies as an "employer".  Where allegations of personal liability are concerned, the courts decide the matter case-by-case, taking into account all of the relevant circumstances. They do so against the backdrop of the FLSA's broad remedial purposes and its "expansive interpretation."

 

The court felt that more than just "any amount of corporate control" is necessary so as to prevent individual exposure from being extended too far.  Neither did the court see either ownership or an ownership interest, standing alone, as being enough to justify individual liability.  Instead, the court's analysis revolved principally around whether the "totality of the circumstances" showed that the owner's operational control of the business included a decision making role that, even if it fell short of day-to-day supervisory involvement or actual complicity in FLSA violations, nonetheless directly affected the nature or conditions of the employees' employment.

 

The Second Circuit observed among other things that the owner exercised broad overall authority; exercised influence in specific stores' operations on multiple occasions; and hired, oversaw, and fired individuals who were themselves managerial and were in charge of subordinate employees.  It also noted that he had the power to hire and fire any employee (even though he rarely exercised this power); addressed problems that arose in particular stores; interacted with promotion candidates; had overall financial control over the company; electronically signed paychecks; and tracked accounting reports and information, including payroll expense.

 

Taking together these and other details, the court determined that the owner possessed and exercised functional control over the business, and consequently over the plaintiffs' employment.  Therefore the court concluded that the owner's involvement in daily operations as being more than "symbolic or ceremonial" or simply a "legal fiction".

 

This case illustrates a continuing risk that individual liability will be asserted in an FLSA lawsuit.  And although this particular case involved a business owner, the prospects are by no means limited to such people.  Non-owner officers, managers, supervisors, and even human-resources personnel are sometimes individually-named targets.  This is just one more reason among many to ensure that your organization is FLSA-compliant.

 

Factoids

• Promotional increases typically range from 6.5% to 7.5% 
• Learning: Average # of hours in 2011 was 31, up from 26 in 2001 
• Learning: Average amount spent per employee in 2011 was $1182

 

What do you want most from your career?

• A promotion       24%
• Switch fields      12%
• Find a new job   31%
• Get a raise         33%

 

Quotes

“I went on a diet, swore off drinking and heavy eating, and in fourteen days I had lost exactly two weeks.”

~Joe E. Lewis~