Transcript Public Access File

LCA Compliance Issues for
Employees of H-1B Workers
Panelists:
Kamlesh Tewary, Esq.
Akshat Tewary, Esq.
This presentation is being made available for informational purposes
only, and its presentation herein neither creates an attorney-client
privilege nor constitutes legal advice.
Recent News on H-1B Enforcement
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Increased documentary requirements by various agencies (USCIS,
DOS, DOL) for routine filings.
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October 2008 – Survey of H-1B employers by the Office of Fraud
Detection and National Security (FDNS), a division of the USCIS.
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February 2009 – Passage of Economic Stimulus Plan
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February 2009 – Nationwide prosecutions and raids under “Operation
Pacific Vision”
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More information: http://www.tewary.com/h1b021309.htm
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LCA Compliance Issues for
Employers of H-1B Workers
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Labor Condition Applications (LCAs)
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When an employer files a petition for an H-1B
worker, it files an LCA.
In the LCA the employer specifies certain details,
such as the wage offered, prevailing wage, work
location, and prevailing wage source.
In filing the LCA, the employer takes on certain
obligations.
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Basic LCA Requirements
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Basic Attestations
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Basic LCA Attestations
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Payment of the “required wage”
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Required wage - higher of the “actual wage” and the
“prevailing wage” covering the H-1B employee’s
occupation and work location.
DOL’s OES wage data is the most reliable source of
prevailing wage information in most cases.
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www.flcdatacenter.com
The actual wage is the wage rate paid by the
employer to all other individuals with similar
experience and qualifications for the specific
employment in question. Public access file’s Actual
Wage Memorandum must define “actual wage”
properly to avoid penalties.
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Basic LCA Attestations
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Working Conditions
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Should not discriminate against U.S. workers in
working conditions or benefits
No Strike or Lockout at worksite
Notice of LCA Filing
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Must be posted at worksite (or given to
bargaining representative for unionized
worksites).
A copy of the LCA must be given to the H-1B worker.
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Notice of LCA Filing – (No Bargaining Rep.)
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Must state the basic information listed on the LCA
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Must include the following language (for all companies):
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“Complaints alleging misrepresentation of material facts in the labor condition
application and/or failure to comply with the terms of the labor condition
application may be filed with any office of the Wage and Hour Division of the
United States Department of Labor.”
Must also include the following language for H-1B dependent employers:
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“that H-1B nonimmigrants are sought; the number of such nonimmigrants the
employer is seeking; the occupational classification; the wages offered; the period
of employment; the location(s) at which the H-1B nonimmigrants will be
employed; and that the LCA is available for public inspection at the H-1B
employer's principal place of business in the U.S. or at the worksite.”
“Complaints alleging failure to offer employment to an equally or better qualified
U.S. applicant or an employer's misrepresentation regarding such offers of
employment may be filed with the Department of Justice. . .”
More information:
http://edocket.access.gpo.gov/cfr_2008/aprqtr/pdf/20cfr655.734.pdf
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Notice of LCA Filing – (No Bargaining Rep.)
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Hard Copy or Electronic Copy
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Hard copy: posted in two conspicuous locations at each place of
employment (even if that means the client site for contractors)
Electronic copy: Via email, bulletin board, Internet site, etc. In
contractor situations, the affected employees at the client-site need to
be provided notice.
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Notice must be posted on or within 30 days before the date the LCA
is filed, and kept for 10 days.
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New posting is required for each new work location, even if that
location is within the same commuting area and no new LCA is filed.
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More information:
http://edocket.access.gpo.gov/cfr_2008/aprqtr/pdf/20cfr655.734.pdf
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H-1B Dependent Employers
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Employers that are deemed “H-1B dependent” under the following definition
undertake certain additional obligations (with some exceptions).
An H-1B employer is “H-1B dependent” if, as per its current payroll, it has:
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25 or fewer full-time equivalent employees and at least eight H-1B nonimmigrant
workers; or
26 - 50 full-time equivalent employees and at least 13 H-1B nonimmigrant
workers; or
51 or more full-time equivalent employees of whom 15 percent or more are H-1B
nonimmigrant workers.
A part-time employee counts as ½ an employee for “full-time equivalent”
purposes, but as a full employee for “H-1B nonimmigrant worker” purposes.
More information:
http://www.dol.gov/esa/whd/regs/compliance/FactSheet62/whdfs62C.pdf
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H-1B Dependent Employers
When an H-1B dependent employer files an LCA for an H-1B worker, it
takes on certain additional obligations with respect to that hiring:
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UNLESS, that H-1B worker will earn $60,000 per year or has a
relevant Master’s degree.
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In that case, the employer is still H-1B dependent, but is “exempt” from
the additional attestations listed above for that particular H-1B worker.
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H-1B Dependent Employers
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Displacement
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The H-1B dependent employer attests that there is no “lay off ” a U.S.
worker (GC/USC) performing the same job as the new H-1B worker 90
days before or after the filing of the H-1B petition.
Secondary Displacement
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If the H-1B worker will work at a client site, the H-1B dependent
employer makes the same attestation regarding the client’s workforce
(no layoffs of U.S. workers 90 days before or after H-1B petition filing).
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Employment Relationship Exemption
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Recruitment and Hiring
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How does an employer document compliance?
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More information:
http://edocket.access.gpo.gov/cfr_2008/aprqtr/pdf/20cfr655.738.pdf
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Public Access File
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All H-1B employers must maintain a public access file.
Retention:
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Payroll records of H-1B employees and other employees in similar
positions must be kept posted for 3 years from the date of creation of
that record.
LCAs in the public access file must be kept for 1 year after the end of
the H-1B employee’s employment or 1 year after the LCA expires or is
withdrawn.
This public access file should be kept separate from normal
employee records, and must be made available to anyone from the
public who asks to see it.
The public access file can be a file folder with 10 sub-folders
covering of the 10 requirements of the public access file regulation
(20 CFR 655.760).
More information:
http://edocket.access.gpo.gov/cfr_2008/aprqtr/20cfr655.760.htm
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Public Access File
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First section:
20 CFR 655.760 (1): A copy of the
certified labor condition application
(Form ETA 9035 or Form ETA 9035E) and
cover pages (Form ETA 9035CP). If the Form
ETA 9035 is submitted by facsimile
transmission, the application containing
the original signature shall be maintained
by the employer in its files. If the Form
ETA 9035E is submitted electronically, a
printout of the certified application
shall be signed by the employer and
maintained in its files.
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Public Access File
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Second section:
20 CFR 655.760(2):
Documentation which provides
the wage rate to be paid the H1B nonimmigrant.
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Public Access File
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Third section:
20 CFR 655.760(3) A full, clear
explanation of the system that the
employer used to set the ``actual wage''
the employer has paid or will pay workers
in the occupation for which the H-1B
nonimmigrant is sought, including any
periodic increases which the system may
provide--e.g., memorandum summarizing the
system or a copy of the employer's pay
system or scale (payroll records are not
required, although they shall be made
available to the Department in an
enforcement action).
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Public Access File
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Fourth section:
20 CFR 655.760(4) A copy of the
documentation the employer used to
establish the ``prevailing wage'' for the
occupation for which the H-1B nonimmigrant
is sought (a general description of the
source and methodology is all that is
required to be made available for public
examination; the underlying individual
wage data relied upon to determine the
prevailing wage is not a public record,
although it shall be made available to the
Department in an enforcement action);
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Public Access File
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Fifth section:
20 CFR 655.760(5) A copy of the
document(s) with which the employer
has satisfied the union/employee
notification requirements of Sec.
655.734 of this part.
This refers to all the LCA posting notices for LCAs
that are kept in Section 1.
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Public Access File
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Sixth section:
20 CFR 655.760(6) A summary of the benefits offered
to U.S. workers in the same occupational
classifications as H-1B nonimmigrants, a statement
as to how any differentiation in benefits is made
where not all employees are offered or receive the
same benefits (such summary need not include
proprietary information such as the costs of the
benefits to the employer, or the details of stock
options or incentive distributions), and/or, where
applicable, a statement that some/all H-1B
nonimmigrants are receiving ``home country''
benefits (see Sec. 655.731(c)(3));
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Public Access File
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Seventh section:
20 CFR 655.760(7) Where the employer
undergoes a change in corporate structure,
a sworn statement by a responsible
official of the new employing entity that
it accepts all obligations, liabilities
and undertakings under the LCAs filed by
the predecessor employing entity, together
with a list of each affected LCA and its
date of certification, and a description
of the actual wage system and EIN of the
new employing entity (see Sec.
655.730(e)(1)).
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Public Access File
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Eighth section:
20 CFR 655.760(8) Where the
employer utilizes the
definition of ``single
employer''in the IRC, a list of
any entities included as part
of the single employer in
making the determination as to
its H-1B-dependency status (see
Sec. 655.736(d)(7));
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Public Access File
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Ninth section:
20 CFR 655.760(9) Where the employer is H-1B-dependent and/or a willful violator,
and indicates on the LCA(s) that only ``exempt'' H-1B nonimmigrants will be
employed, a list of such ``exempt'' H-1B nonimmigrants (see Sec. 655.737(e)(1))
If the employer is H-1B dependent:
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The employer can go through all the LCAs listed in section 1. If
Option c is checked as shown above (Page 3, Section F-1 of the
LCA), that means that the H-1B employee is “Exempt.” Create a
list of all “exempt” individuals and keep it here.
If the employer is not H-1B dependent, this is N/A
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Public Access File
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Tenth section:
20 CFR 655.760(10) Where the employer is
H-1B-dependent or a willful violator, a
summary of the recruitment methods used
and the time frames of recruitment of U.S.
workers (or copies of pertinent documents
showing this information) (see Sec.
655.739(i)(4).
If the employer is H-1B dependent:
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The employer must describe its efforts to recruit U.S.
workers.
If the employer is not H-1B dependent, this is N/A
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Payment Obligations
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At least the required wage must be
guaranteed to H-1B employees every
paycheck.
Timing of paychecks
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Deductions
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Deductions from the H-1B employee’s paycheck are permissible if:
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Required by law
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Reasonable and customary
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Insurance premiums, retirement plans (not recouping business expenses)
Certain voluntary deductions.
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(e.g. payroll, income taxes)
Consult with an attorney before making any deductions other than those
required by law.
Generally, voluntary deductions are permissible only if they are
specifically requested by H-1B worker in writing and for the H-1B
worker’s benefit, and not used to recoup employer’s business
expense
Also deductions must not violate the Consumer Credit Protection Act
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garnishment(s) may not exceed 25 percent of an employee's disposable
earnings for a workweek.
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Leave Letters
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Nonpayment by the employer is acceptable due to:“conditions
unrelated to employment which take the nonimmigrant away from
his/her duties at his/her voluntary request and convenience (e.g.,
touring the U.S., caring for ill relative) or render the nonimmigrant
unable to work (e.g., maternity leave, automobile accident which
temporarily incapacitates the nonimmigrant).” 20 C.F.R. §
655.731(c)(7)(ii)
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Written request
by employee
for own benefit
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USCIS makes its own determination for H-1B status purposes: Has
the employment relationship been maintained
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Leave letters cannot be used to substitute for bench periods.
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DOL looks at this closely
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Payment Obligations
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Employee Payment of Fees
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$750/$1500 H-1B filing fee (user fee) explicitly must not be paid
by employee
PERM related fees explicitly must not be paid by the employee
Any remaining H-1B related fees paid by employee could be
considered recoupment of business expenses
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Best practice: Employer pays all H-1B related fees.
How can an employer protect itself from H-1B workers
who hop from employer to employer?
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Travel or relocation expenses for a new work location
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Avoid using “per diems” as a substitute for wages.
Initial transportation to US can be paid by employee.
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Payment Obligations
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When does the payment
obligation begin for H-1B
employees?
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Consular cases: Earlier of (30 days)
and (when the employee makes
himself/herself available for
employment)
Extension cases: Earlier of (60 days)
and (when the employee makes
himself/herself available for
employment)
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Changes in Terms of Employment
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Changes in work location:
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Require a new LCA if new location is outside the
commuting area of the prior LCA’s work location
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A new area in the same MSA means it is commutable
A new LCA notice posting is still required at the new
site even if no new LCA is required
Complicated exceptions apply for Casual or
Short-term placements
Details: See Short-term placement and
peripatetic worker regulations.
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Changes in Terms of Employment
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“Material” changes in terms of employment
require amended I-129 petition with USCIS
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Material:
LCA filed after change in work location
 Significant change in salary or job duties
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Not Material:
LCA filed before change in work location
 Change in company name due to merger or simple
name change
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Key Issues in Recent Audits
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Payment of Required Wage
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Justification of Actual Wage
Justification of Wage Levels
No Benching!
Proper Revocation (3 steps)
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1. Inform USCIS
2. Inform Beneficiary
3. Offer return airfare unless the Beneficiary
resigned
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Key Issues in Recent Audits
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Generally avoiding legal wage
requirements:
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Filing LCAs in remote areas
Abuse of per diems and other non-taxed
compensation
Fabricating paystubs / experience letters
Performing functions not listed on petition
Filing payroll taxes in improper state
Displacement of US workers
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Key Issues in Recent Audits
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Government Agencies are “Ganging up” on Violators
Vision Systems case involved investigation or assistance from:
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U.S. Attorney’s Office, Southern District of Iowa;
U.S. Immigration and Customs Enforcement;
U.S. Citizenship and Immigration Services – Fraud Detection and
National Security Division;
U.S. Department of Labor - Office of Inspector General;
U.S. Postal Inspection Service;
U.S. Department of State, Kentucky Consular Center
U.S. Marshals Service;
Social Security Administration - Office of Inspector General;
Internal Revenue Service - Criminal Investigations;
Des Moines Police Department;
West Des Moines Police Department;
Iowa Department of Transportation - Motor Vehicle Enforcement Office.
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