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How One Employee’S Complaint Can Lead to a Full Blown Investigation of an H-1B Employer’S LCA Records

A recent U.S. Court of Appeals decision in Greater Missouri Medical Pro-Care Providers, Inc.ARB Case No. 12-015, ALJ Case No. 2008-LCA-26 (2014), is worth noting as it addressed the issue of how much latitude the DOL has to investigate an H-1B employer’s H-1B documents and records.

As background, an employer seeking to employ a temporary foreign worker in H-1B (also H-1B1 or E-3) nonimmigrant status must, as the first step in the petition process, file a Labor Condition Application (LCA) with the Department of Labor (DOL) and receive certification. The LCA is completed on electronic Form 9035 and submitted through the DOL’s iCERT system. The LCA collects information about the occupation including the occupational title, the number of immigrants sought, the gross wage rate to be paid, the starting and ending dates of employment, the place of employment, and the prevailing wage for the occupation in the area of intended employment. The LCA contains special attestation requirements for employers who previously committed willful violations of the law or for employers who are deemed to be H-1B dependent. The employer must also state that its employment of nonimmigrants will not adversely affect the working conditions of workers similarly employed in the area of intended employment. An employer is permitted to file the LCA no more than six months before the initial date of intended employment. See 8 U.S.C. § 1182(n)(1)ID); 20 C.F.R. §§ 655.730-733.

Once the LCA is filed, the DOL must approve it within 7 days unless the application is incomplete or obviously inaccurate. 20 C.F.R. §§ 655.740(a)(1)-(2). Within one day of the LCA filing, the employer must maintain a public access file accessible to interested and aggrieved parties. The file must be available at either the principal employer’s place of business or at the employee worksite. 20 C.F.R. § 655.760(a). An aggrieved employee has 12 months after the latest date on which an alleged violation was committed to file a complaint with the DOL Wage and Hour Division (WHD). 20 C.F.R. § 655.806(a)(5).

In Greater Missouri, the employer hired numerous physical and occupational therapists from the Philippines on H-1B status. As required, the employer filed LCA applications for the desired workers. One H-1B employee, a physical therapist from the Philippines, filed a complaint alleging that she had personally paid all the fees, including attorney’s fees, to file and to extend her H-1B status and that the employer failed to pay her during a nonproductive period of over one year when she was reviewing for her licensing exam. The employee also questioned whether the H-1B employer was legally permitted to charge her a fee for “breach of contract” due to her early termination of her employment.

Upon review of the employee’s complaint (forwarded to the DOL by the Missouri state regulators), the DOL treated it as an “aggrieved party” complaint and the DOL investigator concluded that there was “reasonable cause” to investigate the charge that the H-1B employer had attempted to require the employee to pay a penalty for ceasing her employment early. Based only on the determination that this one charge was worth investigating, the DOL investigator launched a full scale investigation and sent a letter to the H-1B employer requesting all of its H-1B documents and records. The DOL investigator also interviewed the aggrieved employee and the employer’s other H-1B workers.

Based on its investigations, the DOL found that the employer improperly failed to pay wages to employees who it had placed in nonproductive status (benched); made improper deductions from employee wages for H-1B petition fees; and required or attempted to require improper penalty payments from some employees for early termination. The employer was ordered to pay over $380,000 in back wages to 45 employees.

The employer fought back by requesting a hearing before an Administrative Law Judge (ALJ).  The employer argued that the applicable statute and regulations limited the DOL’s investigation to the specific issues of the complaint that was filed and only to that aggrieved party’s LCA. The employer also argued that the statute and regulations impose a 12 month time limit for investigating violations. However, the ALJ held that the 12 month time limit only refers to when a complaint can be filed and does not refer to the scope of remedies that can be meted out. The ALJ issued a decision ordering the employer to pay back wages, fees for illegal fee deductions and amounts to employees for illegally withholding paychecks.  When the ALJ failed to hold in the employer’s favor, the employer petitioned for review before the Administrative Review Board (ARB).

The ARB held that the DOL indeed had the authority to investigate alleged violations involving H-1B workers who did not file complaints but also held that violations that occurred outside of the 12 month period prior to the filing of a complaint are not actionable.  However, the ARB affirmed the order for employer to pay awards. The employer took the case up to the District Court which affirmed the ARB’s decision and payment of awards. The employer then appealed to the US Court of Appeals. The DOL did not appeal the District Court’s ruling that violations that occurred outside the 12 month period are not actionable.

In the end, the Court of Appeals held that the DOL’s initial investigatory authority is limited to the complaint that was filed and to those specific allegations and the DOL was not authorized to launch a comprehensive investigation of the employer based only on a single allegation by one employee. The Court of Appeals recognized that additional violations could come to light in the course of the DOL’s investigation of a single complaint and that the DOL may need to modify or expand its investigation based on reasonable cause. However, the Court of Appeals found that this was not how the investigation proceeded in the instant case. The Court of Appeals held that the awards cannot stand because the ARB’s finding of violations and the resulting awards were based entirely on the DOL’s unauthorized investigation of matters other than the allegation in the aggrieved party’s complaint. The US Court of Appeals reversed the judgment of the District Court.

While this was ultimately a victory for the H-1B employer and it is good to note that the DOL does not have sweeping authority to investigate allegations of violations that fall outside of the 12-month statute of limitations, this case is nevertheless a cautionary tale for all H-1B employers. Even a single complaint from one disgruntled employee could lead to a comprehensive investigation of the employer’s H-1B practices. Even though the Court of Appeals in Greater Missouri found that the DOL had overstepped in its initial investigation, the court also pointed out that the DOL may modify its investigation of a single complaint if other violations come to light.   Greater Missouri also highlights the fact that once allegations are made, the employer bears the burden of proof to prove that it has complied with the LCA attestations. Therefore, the importance of excellent record keeping cannot be overstated.

Going into 2016, it would be a good idea for any H-1B employer that is not 100% confident in its LCA records, and its ability to withstand a DOL audit of those records, to conduct a self-audit on behalf of the employer and bring to light any issues that the employer can immediately correct and ensure that it is in compliance. Such a self-audit will give the employer the confidence that it needs should the DOL ever launch an investigation and will help the employer to avoid the potential financial and reputation damage that could come from such an investigation. When it comes to DOL investigations, the proactive approach is always best.

WHEN AN AMENDED H-1B PETITION IS NOT REQUIRED EVEN AFTER MATTER OF SIMEIO SOLUTIONS

By  Cyrus D. Mehta

The AAO decision in Matter of Simeio Solutions, LLC,  26 I&N Dec. 542 (AAO 2015) has already caused headaches as it will make it more costly and burdensome for employers who hire H-1B workers. An overview of the AAO decision can be found at AAO Firmly Tethers H-1B Workers To The LCA Like A Dog Is To A Leash. In Matter of Simeio, the AAO concluded that changes in the beneficiary’s places of employment, resulting in the obtaining of a new Labor Condition Application (LCA) constituted a material change to the terms and conditions of employment as specified in the original petition,  thus necessitating the filing of an amended petition. 
Every time an H-1B worker moves to a location not covered in the LCA, the employer will have to file an amended petition. The filing of an amended H-1B petition will incur additional costs for an employer. At an April 30, 2015 DHS Ombudsman call on the AAO decision,  it was estimated that if an employer moves 50 workers three times a year, that would be 150 amended petitions resulting in half a million dollars in legal fees and costs.   It will also give a right to the USCIS to adjudicate the H-1B petition as no deference is given to a prior approval when there is a material change in the employment. It is also a fact that the USCIS Vermont Service Center and California Service Center do not always apply consistent standards when adjudicating H-1B petitions. If the Vermont Service Center approved an H-1B petition, and the worker will be assigned to a work location within the jurisdiction of the California Service Center,  there is a likelihood that the amended H-1B petition will be adjudicated under a stricter standard, resulting in a Request for Evidence and even a denial. 
Prior to Simeio Solutions, employers relied on informal USCIS guidance indicating that so long as a new LCA was obtained prior to placing an H-1B worker at a new worksite, an amended H-1B petition was not required. See Letter from Efren Hernandez III, Dir., Bus. And Trade Branch, USCIS, to Lynn Shotwell, Am. Council on int’l Pers., Inc. (October 23, 2003). The AAO has now explicitly stated in Simeio Solutions, footnote 7, that the Hernandez guidance has been superseded. Employers who relied on the prior guidance who file amended H-1B petitions to comply with Simeio Solutions should not be penalized for not previously filing an amended H-1B petition by deeming that the H-1B worker fell out of status. 
When is an amended petition not legally required even after Simeio Solutions
Arguably, if an H-1B worker is being moved to a new job location within the same area of intended employment, a new LCA is not required and nor will an H-1B amendment be required. The original LCA should still be posted in the new work location within the same area of intended employment. So a move to a new job location within New York City would not trigger a new LCA, although the previously obtained LCA would need to be posted at the new work location. This could happen if an entire office moved from one location to another within NYC, or even if the H-1B worker moved from one client site to another within NYC.
There is also nothing in the law and regulations that require an employer to first obtain an approval of the amended petition prior to placing a worker there. Footnote 11 in the Simeio decision suggests that the new LCA, along with the amended H-1B petition, must be submitted, before the beneficiary would be permitted to begin working in the new place of employment. It does not suggest that the amended H-1B petition has to be approved before the worker would be permitted to work. Still, there is an exception in the DOL regulations to immediately filing a new LCA, and by corollary an amended H-1B petition, even when an H-1B worker is moved to a new location. Employers may take advantage of the short term placement exception at 20 CFR 655.735. Under the short term placement exception, an employer may under certain circumstances place an H-1B worker at a new job location for up to 30 days, and in some cases 60 days (where the worker is still based at the original location), without obtaining a new LCA. Thus, when an employer needs to urgently transfer an H-1B worker to a new location, it can do so under the short term placement exception without needing to also immediately file an amended H-1B petition. This exception is limited, though, since if the H-1B worker is placed at the new location for more than the 30 or 60 days, the employer needs to obtain a new LCA and also file an amended H-1B petition. An employer also cannot use the short term placement exception if there is already an existing LCA at that location. 

While readers should review the short term placement rule in its entirety, an employer who wishes to take advantage of this rule must:

(i) Continue to pay such worker(s) the required wage (based on the prevailing wage at such worker’s(s’) permanent worksite, or the employer’s actual wage, whichever is higher); 

(ii) Pay such worker(s) the actual cost of lodging (for both workdays and non-workdays); and 

(iii) Pay such worker(s) the actual cost of travel, meals and incidental or miscellaneous expenses (for both workdays and non-workdays). 

Finally, if an H-1B worker is placed at a location that is considered a non-worksite under 20 CFR 655.715, which does not trigger an LCA,  the AAO decision is also inapplicable. Non-worksites include locations where employee developmental activity is conducted such as management conferences, staff seminars, etc. Non-worksites may also include locations where little time is spent by the employee at anyone location, and where the worker’s job is “peripatetic in nature.” They may also include situations where the H-1B worker’s job is spent at one location but where the worker occasionally travels for short periods to other locations  “on a casual, short-term basis, which can be recurring but not excessive (i.e., not exceeding five consecutive workdays for any one visit by a peripatetic worker, or 10 consecutive workdays for any one visit by a worker who spends most work time at one location and travels occasionally to other locations).” 20 CFR 655.715 provides the following examples of non-worksites, although readers are well advised to read the rule in its entirety:

A computer engineer sent out to customer locations to “troubleshoot” complaints regarding software malfunctions; a sales representative making calls on prospective customers or established customers within a “home office” sales territory; a manager monitoring the performance of out-stationed employees; an auditor providing advice or conducting reviews at customer facilities; a physical therapist providing services to patients in their homes within an area of employment; an individual making a court appearance; an individual lunching with a customer representative at a restaurant; or an individual conducting research at a library.

The regulation also provides the following examples of “worksites” that would trigger a new LCA, and now under Simeio, an amended H-1B petition: 

A computer engineer who works on projects or accounts at different locations for weeks or months at a time; a sales representative assigned on a continuing basis in an area away from his/her “home office;” an auditor who works for extended periods at the customer’s offices; a physical therapist who “fills in” for full-time employees of health care facilities for extended periods; or a physical therapist who works for a contractor whose business is to provide staffing on an “as needed” basis at hospitals, nursing homes, or clinics. 

Employers will soon feel the brunt of the AAO decision as they start moving H-1B workers, which in some industries like IT, accounting and management consulting is the norm. The exceptions to filing an amended H-1B petition while useful are still limited. As employers feel overly burdened by the AAO decision, they may consider resorting to litigation as the AAO has created a new rule without going through the appropriate notice and comment procedure under the Administrative Procedure Act.  According to the AAO, “[i]f an employer does not submit the LCA to USCIS in support of a new or amended H-1B petition, the process is incomplete and the LCA is not certified to the Secretary of Homeland Security.” The AAO cites INA 101(a)(15)(H)(i)(b), 8 CFR 214.2(h)(4)(i)B)(1) and 20 CFR 655.700(b) to support its position, but none of these provisions seem to suggest that an LCA obtained after an H-1B petition has already been submitted is not valid if it is “not certified to the Secretary of Homeland Security.”   The DOL certifies the LCA. There is no separate process where the DOL also has to certify the LCA to the Secretary of Homeland Security. The AAO’s invention of a new rule relating to the validity of the LCA is also ripe for litigation. Finally,  an H-1B worker should not found to be in violation of status for failure to file an amended H-1B petition prior to Simeio. If the USCIS begins to retroactively apply Simeio so as to penalize employers and H-1B workers, this too would be ripe for federal court litigation.

 

The H-1B Process Gets Even Harder: DOL Proposes Dramatic Changes to the LCA Form

I still think longingly of the days when certification of a Labor Condition Application (“LCA”) could be obtained within seconds. Three years ago, the Department of Labor (DOL) mandated that all LCA filings must be filed through its iCERT portal (http://icert.doleta.gov/) and that each application form, also changed to request additional, new information, would be manually reviewed prior to certification. This change increased the official LCA processing time from a few seconds to 7 business days. Human error and other systemic problems at the onset of the change resulted in filings taking three weeks or longer to process which led to late filings on H-1B petitions, a public outcry and US Citizenship and Immigration Services (USCIS) temporarily allowing employers to file H-1B petitions without certified LCAs! The new iCERT system forced H-1B employers to change their approach to filing H-1B petitions. The LCA process is about to change again.

As a background, an employer seeking to employ a temporary foreign worker in H-1B, H-1B1 or E-3 nonimmigrant status must, as the first step in the petition process, file an LCA with the DOL and receive certification. The LCA is completed on electronic Form 9035 through the DOL’s iCERT system. The LCA collects information about the occupation and there are special attestation requirements for employers who previously committed willful violations of the law or for employers who are deemed to be H-1B dependent. An employer is permitted to file the LCA no more than six months before the initial date of intended employment.

The DOL now seeks to once again revise the scope of the information collected on the LCA citing, in its LCA supporting statement, a desire to improve its integrity review and ensure the accuracy and completeness of the information. On July 9, 2012, the DOL published a Notice in the Federal Register announcing a 60-day comment period (to end on September 7, 2012) on its proposed changes to the form ETA-9035. In a process that is likely to take several months, the changes must be approved by the federal Office of Management and Budget before they can be implemented.

Changes include requiring more detailed information about the prevailing wage; requiring more detailed information regarding how the employer determined whether it is H-1B dependent and whether the nonimmigrant worker is an exempt employee or if not exempt, specifying the employer’s recruitment efforts to recruit US workers; and requiring the employer to list the address where the employee’s public access file is kept.

Some of the changes are even more significant.

Identification of Intended Beneficiaries

The current LCA does not require any information identifying the intended beneficiaries. The new form will collect information on the nonimmigrant(s) including name, date of birth, country of birth, country of citizenship and current visa status. If a PERM labor certification application was filed on behalf of the intended beneficiary, the PERM application number must be listed.

In its LCA supporting statement, the DOL states that this new information will allow its Wage Hour Division (WHD), which was created with the enactment of the Fair Labor Standards Act (FLSA) and is responsible for the administration and enforcement of a wide range of laws which collectively cover virtually all private, State and local government employment, to more efficiently gather information during its enforcement activities and to find beneficiaries who may be entitled to back wages after an investigation. The DOL claims that this change will cause little extra burden because employers “generally know who the beneficiaries are before filing the LCA except possibly for the 2.6 percent of employers who file LCA’s for more than 10 employees.” Because iCERT saves much of the information on an LCA which can later be used to fill out other LCAs, the DOL states that it will not be overly burdensome for an employer to complete more than one LCA. The DOL also refers to its “relatively quick turnaround on LCA approval” as another reason why employers do not need to complete one LCA for large numbers of beneficiaries.

The DOL makes some valid points.  The majority of employers do not need to complete an LCA for more than 10 workers at a time. iCERT indeed saves most of the information and it may not be overly burdensome to complete multiple LCAs.  However, since employers are required to make LCAs available for public inspection, privacy and identity theft concerns are easily justifiable. The DOL ought to address this.

In addition, what the DOL has not addressed is the flexibility that will be lost because employers will no longer be able to use an existing, certified LCA to file a nonimmigrant petition for a new hire. The new identification requirement may be hard on large employers who file numerous H-1B petitions. The current annual cap on the H-1B category is 65,000. Each year, on April 1, USCIS begins accepting cap-subject H-1B petitions for employment to commence in the new fiscal year, on October 1. Employers typically scramble to prepare and file cap-subject H-1B petitions before the cap closes. For large employers, especially those with branches abroad, it is may be difficult to come up with a list, in March or April, as to who will be transferred to the US to work in October. These hiring decisions are ongoing and employers rely on the flexibility of the LCA which allows them to quickly file an H-1B petition using an existing, certified LCA provided it lists the correct information such as visa category, job classification, etc. This way, employers are not always forced to spend 7 business days waiting for the LCA to be certified and watching existing H-1B visa numbers dwindle.

What about that H-1B worker who just received notice from his current employer and has luckily found a new employer willing to file an H-1B on their behalf? How significant would it be if the new employer is able to use an existing, certified LCA and file an H-1B transfer petition before that worker falls out of status? What the DOL describes as a “relatively quick turnaround on LCA approval” can seem interminable in the case of an emergency. The DOL must bear in mind that no matter the emergency, it provides no expedite procedures for the LCA. Flexibility is therefore very important.

Interestingly, the new LCA would require listing the beneficiaries’ PERM application numbers. At this time, the possible acceptable responses to this question are not clear. But, since the PERM application is filed by the employer, a new employer of an H-1B transfer might not have this information. But this requirement suggests that the DOL may begin to cross reference the job opportunities in the nonimmigrant and immigrant cases as well as match the wages in both the cases.

Limiting the LCA to only 10 workers

Currently, a single LCA may be filed for up to hundreds of workers. An employer may use a single LCA to request multiple positions where they are in the same visa category and job classification and are either all part-time or all full-time positions.

The DOL now seeks to limit the number of workers to 10 per LCA explaining that it has found enforcement of LCA obligations difficult when an LCA is for 50 or 100 job opportunities and it would be a significant expenditure to build an electronic form to accept more than 10 names.

The issue, as discussed above, may not be with the limit of 10 names, but with naming requirement itself and the limitations that come from that.

Worksite Identification

The current LCA form requires the employer to identify the place(s) of intended employment. This entails listing the complete address and county where the beneficiary will work. The proposed new LCA will require significant additional detail.

The employer will have to indicate whether the intended worksite is the employer’s business premises; the employer’s private household; the worker’s private residence; or other business premises which type must then be inserted on the form. The employer must state whether the employee placement is at an end client location. If yes, the form then requires the name of the end client.

In its LCA supporting statement, the DOL stated simply that the additional information is needed for “clarification on actual worksite to enable employer to demonstrate regulatory compliance regarding changes in worksite.” This requirement could cause serious problems.

Again, the employer’s flexibility may be taken away. Currently, the employer has the flexibility to send employees to new worksite locations without filing a new LCA provided the new location is in the same area of intended employment listed on the certified LCA. See 20 C.F.R. §655.731(a)(2) which states that the wage on an LCA is valid for the area of intended employment. If each LCA has to list the end client information, will the employer be required to complete a new LCA each time it moves an employee even if it is within the intended area of employment?

Also, in cases where the employer is filing a change of status petition on behalf of the beneficiary or the beneficiary is abroad and will obtain an H-1B visa to enter the US, until the beneficiary is lawfully present in the United States in valid H-1B status and is thereby authorized to accept employment in the United States, the employer cannot hold him out as an employee.  See 8 C.F.R § 274a.1(c) and (f). Therefore, the employer may not be able to obtain that end client agreement prior to preparing the LCA.

Business immigration practitioners may already know that cases involving telecommuting and roving employees are currently being given increased scrutiny by the DOL. In light of that, the proposed changes to the LCA form are not surprising and seem to stem from some concern on the part of the DOL, with regard to LCA compliance and the bona fides of the offer of employment. Following the request for end client information on the proposed form is the irrelevant and possibly offending question, “Is this a bona fide job opportunity?” The DOL’s makes no effort to hide its blatant mistrust of the employer who places its employee at an end client site.

In recent times, the US government has taken small steps to attract foreign workers and to show that they are an asset rather than a liability. The changes to the LCA will again add more burdens on the employer by eliminating flexibility. On March 12, 2012, the USCIS issued revised guidance indicating that the failure to obtain an end client letter would not be fatal to an H-1B petition. The DOL is now insisting on exactly that by requiring that the precise worksite be listed on the LCA. We need less regulation rather than more in order for US companies to attract global talent.  In addition to the proposed changes to the LCA, there is proposed legislation in the form of HR 3012 (following the compromise between Senators Grassley and Schumer) that will grant the DOL draconian powers in denying LCAs based on undefined indicators of suspected fraud and thus hold up the processing of H-1B petitions.    Are the proposed changes to the LCA form taking two steps back?

HR 3012: A Good Bill Saddled With a Bad Amendment

By Myriam Jaidi

As Cyrus Mehta noted in his December 7, 2011 blogpost regarding H.R. 3012, “How Fair is the Fairness for High-Skilled Immigrants Act?”, although not a perfect bill, H.R. 3012 passed the House in November 2011 by a landslide. The bill, as passed by the House, would eliminate the employment-based per country cap entirely by 2015 and raise the family-sponsored per-country cap from 7% to 15%. The passage of this bill by a margin of 389-15 signaled the strong bipartisan concern with the significant inequities in the immigrant visa system with regard to individuals from certain countries, especially individuals from India and China sponsored for employment-based immigrant visas. Although the country limits addressed by H.R. 3012 were originally enacted for all countries, these limits have resulted in mind-boggling wait times for people from India and China. For example, for Indians in the employment-based third preference (EB-3) category, some have estimated the wait times could be up to 70 years!

The landslide, bi-partisan passage of H.R. 3012 in the House was also proof positive that Congress, despite the gridlock and often seething partisanship, is in fact deeply concerned with repairing our country’s dysfunctional and unfair immigration system, especially in at a time when economic and global realities require the United States to reform the system to facilitate our ability to compete more effectively in the global economy. Both our “home-grown” and imported talent will mutually benefit from more reasonable access to visas for highly-skilled immigrant (and nonimmigrant) workers, as many U.S. business leaders such as Bill Gates have attested (see pages 12 to 14 of his testimony). Further proof of that fact is the strong support of entrepreneurs, both foreign and domestic, by the Obama Administration, as demonstrated by the Start-Up America and Entrepreneurs in Residence initiatives.

Then along came Senator Grassley’s hold on the bill in December 2011. After extensive negotiations, on July 11, 2012, Senator Grassley lifted his hold. To remove the hold, senators in favor of the original bill reached what may well be a sort of “Faustian bargain” with Senator Grassley. In order to agree to lift the hold on the bill, Senator Grassley demanded provisions that could severely hamper the already difficult H-1B nonimmigrant visa process and, in tandem with that, hamper U.S. businesses and their ability to compete in the global economy.

So, what’s the big deal? This is what Senator Grassley had to say about the amendment he proposed:

[T]here is agreement to include in H.R. 3012 provisions that give greater authority to program overseers to investigate visa fraud and abuse. Specifically, there will be language authorizing the Department of Labor to better review labor condition applications and investigate fraud and misrepresentation by employers. There is also agreement to include a provision allowing the Federal Government to do annual compliance audits of employers who bring in foreign workers through the H–1B visa program.

I appreciate the willingness of other members to work with me to include measures that will help us combat visa fraud, and ultimately protect more American workers.

Sounds fine, right? Protect American workers, combat fraud, what’s wrong with that? There is of course nothing wrong with protecting American workers and preventing fraud. Supporters of the amendment seem to frame their support in the same way that people who criticize the Constitutional protections against unreasonable searches and seizures and self-incrimination frame those criticisms: if companies are not doing anything wrong, they have nothing to fear, right, from a search, seizure or questioning?

Senator Grassley’s description of his proposed amendment is something of a gross oversimplification. First of all, the amendment covers issues already addressed by existing law so query whether the amendment will serve any constructive purpose. The Immigration and Nationality Act (“INA”) and implementing regulations, as well as the related rules promulgated by the Department of Labor (“DOL”) addressing the process of obtaining approval of a labor condition application (“LCA”), the necessary first step of the H-1B sponsorship process, already include extensive protections for American workers and provisions to search out and punish fraud, if it does occur. Just to name a few examples, the existing rules require notice to “U.S. workers” (which, pursuant to the DOL regulations at 20 C.F.R. § 655.715, include citizens or nationals of the United States as well as green card holders, refugees, asylees, or “an immigrant otherwise authorized (by the INA or by DHS) to be employed in the United States” – it is unclear who Senator Grassley’s term “American workers” includes), provide minimums for offered salaries to ensure that such salaries do not undercut the salaries of U.S. workers, and where employers are “H-1B dependent”, the rules require, if such employers offer a salary of less than $60,000 per year, that they attest, and when called upon to do so, demonstrate, that they have made good faith efforts to recruit U.S. workers for the offered position (see 20 C.F.R. § 655.738-655.739)). Penalties for violations of the rules are already included in the statute and governing regulations (see INA § 212(n)(2)(C)).

So what does Senator Grassley’s amendment do? The amendment changes, but does not clarify, the trigger for DOL review of an application from “only for completeness and obvious inaccuracies” to “for completeness, clear indicators of fraud or misrepresentation of material fact.” The amendment does not define what might constitute “clear indicators of fraud or misrepresentation of material fact,” although these may be similar to the ones some authors have observed that USCIS followed (and may still) as indicators of fraud in H-1B cases: companies grossing under $10 million per year, companies with less than 25 employees, companies established less than 10 years ago, etc. Grassley’s amendment to the bill also changes the investigation process by removing the need for “reasonable cause” to conduct an investigation based upon a complaint, which continues to be the basis on which an investigation may be commenced. Thus, any complaint, reasonable or not, received by the DOL about an employer could serve as the basis for an investigation.

What does this mean for the process? It could bring the process of getting an LCA approved to a standstill and therefore limit or even prove fatal to an employer’s ability to hire a highly skilled foreign worker on an H-1B nonimmigrant visa. First, let us consider cap-subject cases. Each fiscal year, only 65,000 H-1B visas are available and time is usually of the essence because the H-1B cap “opens” on April 1, for an October 1 start date for cases subject to the cap, and in many years, the cap was often reached on or soon after that April 1 date, so there is great competition for these visas and having them ready to file on time is crucial. Currently, the process of getting an LCA approved takes about 7 business days. During this period, the DOL checks for obvious inaccuracies, checks the existence of the employer, salary details, and whether the employer has made the appropriate attestations, among other details. This 7-day period is a built-in delay of the process. Under the current laws, an investigation may be conducted for a period of up to 60 days (see INA § 212(n)(2)(G)(viii)). Under the proposed amendment, there appears to be no time limitation on the length of time an investigation may continue.

Without any sense of how long an investigation may take, and given the uncertainty of the trigger, an employer who is certain it wants to hire an individual for an October 1 start date, cannot build in more than 6 months of precautionary time for what could amount to a random investigation, because the current process does not allow an LCA to be prepared and submitted to the DOL for processing more than 6 months prior to the intended start date of the H-1B visa. For cases that are not cap subject, such as a company hiring an individual who already holds H-1B status, the risk is losing a highly-skilled prospective employee who may be desperately needed because of uncertain delay in the very first step of the process. The portability process created by the American Competitiveness in the 21st Century Act (“AC21”), which allows a change to a new employer immediately after that employer files an H-1B petition, cannot do anything for an employer looking to transfer someone’s H-1B to their company if they cannot get the H-1B petition filed because the LCA process is held up by investigation. Viewed in this light, this amendment to a well-meaning bill would obstruct the flexibility promoted by AC21, the intent of which was to promote the United States’ ability to compete in the 21st Century!

Senator Grassley’s amendment also allows the DOL to conduct “surveys of the degree to which employers comply” with Grassley’s new LCA regime. Exactly how such surveys would be conducted, who would be involved, and how long they might take is unstated. Under Senator Grassley’s amendment, the DOL may also conduct annual compliance audits of any H-1B employer. Of course, compliance audits are already a part of the existing rules. However, the new twist is that the DOL must conduct such annual compliance audits of “each employer with more than 100 full-time equivalent employees who are employed in the United States if more than 15 percent of the number of such full-time employees are H-1B nonimmigrants . . . .” Although there is a four-year period between allowed compliance audits for employers who pass muster, the amendment also provides for publication of the DOL’s findings. Given the current anti-immigrant climate and the tendency of many people to blame foreign workers for the lack of available jobs, publishing results even of companies who are completely in compliance could lead to backlash against the companies, or could lead companies to avoid hiring foreign workers in the United States, and perhaps moving operations overseas or to Blueseed to avoid exposure.

Removing per-country limits on employment-based immigrant visas and increasing the limits on family-based immigrant visas are obviously laudable goals, but query what risks Senator Grassley’s amendment poses. The reality appears to be that the amendment will not serve its stated ends but rather will serve to obstruct access to highly-skilled foreign workers and undermine U.S. businesses and their ability to compete in the global economy. Perhaps it would be best if H.R. 3012 were passed – without Senator Grassley’s amendment.

The LCA in the Age of Telecommuting

By Cyrus D. Mehta and Myriam Jaidi

An H-1B employee has a job with a company based in New Jersey. Her job can, however, be performed remotely from virtually anywhere in the United States or the world. So long as she has good internet access, she can sign in to her employer’s server and perform her work as if she were in the office. She usually works at her office, but has decided to work from home in Pennsylvania for two months. When her boyfriend’s mother, who lives in California, becomes ill, she and her boyfriend go out to care for her, staying for six weeks. She then goes on a cruise in US waters, still telecommuting to work. She has no work-related duties in Pennsylvania or California (or out in US waters during the cruise), such as working with clients there, and will be effectively telecommuting to the New Jersey office. What would her employer need to do in order to comply with the Department of Labor’s regulations for H-1B workers, specifically with regard to the Labor Condition Application (LCA) rules?

As a background, the LCA is to an H-1B worker like a leash is to a dog. The LCA ensures that notice is provided to US workers about the fact that an H-1B worker is being sought, the occupational classification, the wages offered, the period of employment, locations at which the H-1B worker will be employed, and that the LCA and accompanying documents are available for public inspection. See 20 CFR § 655.734.

Telecommuting (or “telework” as labeled by the US government) has become more and more prevalent. (See studies here, http://tinyurl.com/6jcc7ww.) Telecommuting employees raise important questions and issues in the immigration context, especially with regard to the Labor Condition Application required for H-1B nonimmigrant workers.

The first issue raised under the facts above is whether a new LCA is required for each location, and if so, whether the posting should be done in the employee’s home and in her boyfriend’s mother’s home.

These situations raise interesting concerns about how (and where) work is “actually” performed (as stated in the regulations) in a global economy increasingly characterized by telecommuting. Can it be argued that because the employee is logging into the employer’s system in New Jersey, the work is actually being performed in New Jersey? Not likely given the structure of the regulatory scheme, but it is something that should be considered in the global economy.

The laws governing the LCA and H-1B processes are out-dated. They do not recognize, and in fact guidance issued by USCIS in 2010, available at http://tiny.cc/z3ZU8, makes clear that some government agencies view with skepticism, the global economy and the increasing frequency of telecommuting.

The LCA and the attestations an employer makes when submitting one were developed as a means to protect wages and working conditions, and to ensure that US workers are made aware of the hiring of H-1B professionals (which makes the concept of posting an LCA in someone’s home or vacation hotel room somewhat absurd). The regulatory scheme is largely location-oriented. Violation of the regulatory framework may result in fines, debarment from participation in the LCA (and thus H-1B) process, and further investigations. Thus, even where a company pays the required wage for any location and has no intent of violating the procedures, a failure to comply with the specific technical requirements, even where compliance seems absurd, may result in penalties.

USCIS has become more location-oriented in its analysis of H-1B petitions. USCIS now examines worksite issues more closely and, with the recently issued Form I-129, has begun to request greater detail on worksites and itineraries for all H-1B petitions. The agency’s interest stems in part from its concern with the existence of a proper employer-employee relationship to support an H-1B petition. (For more information, see From Problem to Springboard: Tips on Using the Neufeld Memorandum in Support of H-1B Petitions, available at http://tinyurl.com/33t7fkz.) Such a relationship is defined in part by where an employee is working and whether the employer has control over the employee’s work at that location. The companies currently subjected to the highest scrutiny are those that place workers at end client sites (i.e., work locations not controlled by the petitioning employer) to perform services/work. But the concerns raised in that category may spread to other circumstances, such as the employee telecommuting from home.

The definitions addressing where an H-1B employee works were developed originally with a focus on the worker’s actual physical location, assuming that the job duties would need to be performed in a particular location. Gathering statistics and issuing prevailing wage determinations require pinpointing a particular city or geographic area. The entire prevailing wage framework is place-based. 20 CFR 655.715 provides the following definitions:

Area of intended employment means the area within normal commuting distance of the place (address) of employment where the H–1B nonimmigrant is or will be employed. …

Place of employment means the worksite or physical location where the work actually is performed by the H–1B, H–1B1, or E–3 nonimmigrant.

These definitions are vague and do seem to leave room to argue that an H-1B worker who can be anywhere but works through the employer’s location via the internet (thus the work arguably “actually is performed” at the employer’s location), is always within “normal commuting distance” so long as the employee has proper internet access. If all that the worker needs is a computer and an internet connection to perform the work, then it would be most logical to post the LCA where the employer’s server is located! To go back to our hypothetical and show how absurd it can be, imagine our H-1B telecommuter embarking on a voyage on a cruise ship for more than 30 days from San Francisco, CA to Anchorage, Alaska. Each time the ship enters a location, which is not within commuting distance from the original location posted on the LCA, a new LCA will need to be posted on the cruise ship. So, her employer, who is a stickler about compliance, posts an LCA with a San Francisco, CA location, which is where the ship starts its voyage. By the time, the cruise ship sails up the waters adjoining Oregon and Washington, new LCAs will need to be obtained and posted on the cruise ship. Once the cruise ship is in Canada, we can assume that the DOL’s LCA regulations do not apply in foreign territories, but with the DOL you can never tell as it passionately attempts to expansively interpret its rules. Once the ship reaches Alaska, more rounds of LCA’s will need to be posted (as Alaska is a huge territory) until its final destination in Anchorage, Alaska.

Nevertheless, using the employer’s address even where the employee telecommutes because the work is being done virtually at the employer’s location has not been tested. This problem does not arise in the PERM labor certification process with roving employees, because an employer can obviate the problem by using headquarters as the base from which to conduct recruitment. See Cora-Ann Pestaina’s article PERM and the Roving Employee, available at http://tinyurl.com/64dhcv5. A DOL auditor who reviews a company’s LCA public access files may not accept this 21st century application of the policies and definitions. Therefore, however absurd it may sound, it might still be advisable to file an LCA for the worker who telecommutes, and have the worker post the LCA in two conspicuous locations in his or her home or the location from which he or she is telecommuting. In the alternative, the LCA notice provision may be satisfied by an electronic posting directed to employees in the relevant occupation classification. Pursuant to 20 CFR 655.734(a)(ii)(B), such electronic posting may be accomplished:

by any means [the employer] ordinarily uses to communicate with its workers about job vacancies or promotion opportunities, including through its “home page” or “electronic bulletin board” to employees who have, as a practical matter, direct access to these resources; or through e-mail or an actively circulated electronic message such as the employer’s newsletter. Where affected employees at the place of employment are not on the “intranet” which provides direct access to the home page or other electronic site but do have computer access readily available, the employer may provide notice to such workers by direct electronic communication such as e-mail ( i.e., a single, personal e-mail message to each such employee) or by arranging to have the notice appear for 10 days on an intranet which includes the affected employees (e.g., contractor arranges to have notice on customer’s intranet accessible to affected employees).

The benefit of electronic posting is that it may protect an employer in situations where the employee is working remotely from various locations (not office sites, but locations such as a relative’s home or vacation spot) for more than 30 days per year, based on the argument that the electronic posting covers all potential locations. There are some general problems with electronic notification – it does not obviate the need to obtain a new LCA when the H-1B telecommutes, nor does it obviate the need to pick an address to indicate on the LCA. Electronic posting only obviates the absurd situation of having an employee post the LCA in his or her home. Furthermore, the rules governing electronic posting are quite vague and thus fraught with risk. The rules do not make clear who has to be notified – all employees everywhere and anywhere who fall within the same “occupational classification” (and the rules do not indicate how narrowly or broadly that should be interpreted) or only those in the “area of intended employment.” Where is that in an economy increasingly characterized by telecommuting?

The DOL’s framework is location-focused, and gives no clear guidance on whether the work a telecommuting employee does is “actually is performed” at the employer’s address as listed on the LCA, and not where the telecommuting employee is located. What is clear is that one who works remotely for less than 30 days (or in some limited circumstances, up to 60 days, see 20 CFR 655.735((c)) in a one year period need not have a new LCA to cover that employee’s new location.

Even if the DOL has not taken a position on the issue, it is hoped that the DOL auditor who wishes to rigidly apply this 20th century rule on work locations in the 21st century may exercise discretion in not imposing a penalty if the employer has complied in every other aspect. The DOL auditor may decide that given the lack of clarity in this area, the employer took a good faith position. However, to ensure against such risks, employers may wish to prepare a new LCA indicating the address from which the individual will be telecommuting, and have the individual post the LCA in two locations at that address. Until the regulations catch up with reality in the 21st century, this would be the appropriate course of action.