Over a three-month period Troy Jackson was “visited” by six federal agencies and fined over a half a million dollars, not including legal fees, for non-compliance.
Troy has been in business since 1996 and has two very successful companies After Dark Designs a home interior and retail furniture business with 18 employees, and Metropolitan Parking, a paid parking lot management businesses with 37 employees.
“After I terminated, with good reason, an employee who was a supervisor of mine in the parking business, she called the Department of Labor (DOL) and complained to them that I hired her underage son. When she was my supervisor she hired her son who was only 16 and not supposed to work after 5:00 pm, then scheduled him to work from 5 to 9 pm.”
The first agency to come in was the Equal Employment Opportunity Commission (EEOC). The EEOC came to investigate the disgruntled employees claim. Troy did not get fined but was told “other agencies will be visiting”.
The Department of Labor (DOL) was the second agency to come in. “They didn’t send a letter they just showed up”. My secretary came into my office and told me, “There are two agents here to see you and they have Federal IDs.” They demanded to see my Employee Personnel Files to do an audit. There was no notice, no time to get ready. The agents were standing in my office and said, ‘We need to see where ever you store your employee files – we need access NOW.’ At that point they started going through the files to confirm what my former employee told them. They told me it doesn’t matter how many employees you have; even if you only have one employee, and you terminate them, the agencies will audit you because YOU are considered an employee of your company. They reviewed my employee handbook, job descriptions, locked cabinets, posters that I was supposed to have up, etc. They even interviewed my employees without notice or my permission. The Department of Labor fined me heavily for not having the proper requirements and I had to sign an agreement with them that I would pay $3,200 per year for the next three years for them to be able to come in an audit my files, or I would go to jail.”
Troy was also fined $1,500 for not having the appropriate posters on the wall.
Next, “the DOL called Homeland Security to audit my I-9’s.” Luckily Troy had his I-9s but they had NOT been updated and all were expired. In 2009 the Department of Homeland Security updated the new I-9 and all employers were supposed to update these records at that time. “My I-9s were not up to date. I did not realize I-9s expire periodically, and they fined me $1,800 per day, per employee, and the fines were retroactive from the date of hire!”
Homeland Security told Troy to expect other agencies to visit and the next one was OSHA followed by the Environmental Protection Agency (EPA).
The next agency to visit Troy’s company checked his “Right to Know” and all Safety training for employees. The OSHA and EPA agents did not tell Troy they would talk to his employees without his knowledge. By the time Troy knew what was happening OSHA and EPA fined him $100,000 and gave him 14 days to pay. Troy had not updated his OSHA log or conducted training. He was fined and made to sign commitment letters so he would not go to jail.
Next the EPA wanted to know if there was a spill what was our policy for containment? You have to have a policy on file for or oil spills. “They even checked our Windex and Pledge.” In your office and on the jobsite, cleaning supplies have to documented and properly labeled.
Troy’s business is NOT a federal contractor but does work with the city and state. The Office of Federal Contract Compliance (OFFCP) was the next agency to come in and state he needed and Affirmative Action Plan. Troy was fined $25,000 and had to immediately implement an AAP plan because he was doing business with the Tulsa Airport. Furthermore, Troy had to comply with E-verify that validates I-9. If he did not do this it would be a fine of $1,800 a day.
After OFCCP left, the Internal Revenue Service (IRS) and Texas Workforce Commission came and stayed on his property for over 30 days to review his pay practices. The IRS and Texas Workforce Commission looked at his contractors (1099) and employees to ensure that the contractors were not “really employees”. The IRS made Troy’s company have an Independent Contractor Agreement on each 1099 contractor, ensure each had an I-9 and a contractor file. He was fined heavily for payroll violations. The agents said to Troy, “We’ve heard you have been visited by all these other agencies. We just want to do our due diligence to make sure we are getting our fair share.”.
Troy has had to sign over 6 agreements with the federal government and if he violates any of them they will shut down his businesses down. If you don’t have a contract and 1099 on file for each contractor – the fine is $2,500 per contractor. Troy’s fine was $14,400 from the IRS.
To date, Troy has paid these agencies a total of $576,040, not to mention legal costs. Troy told me, “I learned it only takes one employee to complain, no matter how small the company is, and here they [the agencies] come. I’m still receiving 3-4 emails a day from each of these government entities with requests to make sure I am in compliance.
Now Troy has incorporated and merged with another company that has +400 employees and they have a team of employees and an HR team on staff. He was a mentor with and connections. He now values the importance of a certified Human Resources team to protect his company assets.
I am proud of Troy, and thank him for allowing me to share this with other employers. When I ask him how he feels spending over $575,000 in fines not counting legal fees. His answer is simply, “Hey, everyday I appreciate that I am free. Now I know what I should be doing, I should have known, but the government does not understand that! They believe you should know! I educate myself every day to stay in compliance because I do not want to loose my business or my employees. Every document I have signed with the government allows them to shut down my businesses and prospective business down if I do not comply with what every employer should comply with.”
