Tag Archive for: Department of Labor

Cyrus Mehta

Killing the H-1B Visa Also Kills the US Economy

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By Cyrus D. Mehta & Kaitlyn Box

Last week the Department of Labor (DOL) and the Department of Homeland Security (DHS) each issued new rules aimed at further attacking the H-1B visa program. The DOL rule, which was issued without affording the public an opportunity for notice and comment, significantly raises the minimum required wage that employers must pay to H-1B employees. The new rule could increase prevailing wages for some positions by as much as 40% or more.  The rule goes into effect immediately. The rule’s stated purpose is to ensure that U.S. workers are not forced out of their jobs by cheap foreign labor, but it advances no support for the outdated notion that H-1B workers are systematically underpaid. It was promulgated without any notice and comment as required under the Administrative Procedures Act. The DOL’s spurious justification for this unfair surprise was to prevent employers from rushing to filing Labor Condition Applications under the old wage rates that would have been valid for three years.

The rule, which was likely aimed at making H-1B employees too costly for U.S. employers to hire, poses several legal quandaries.  As pointed out by Stuart Anderson in a Forbes article, U.S. employers, for example, could be forced to pay H-1B employees significantly higher wages than their American counterparts, causing them to run afoul of equal pay laws that require employees who are in a protected class, including nationality, to be paid wages that are equivalent to those earned by employees who are not members of the protected class. Take, for example, New York’s New York State’s Pay Equity Law, which prohibits employers from paying an employee who is a member of one of the protected classes less than a worker without protected status for equal or substantially similar work. N.Y. Labor Law art. 6, § 194 (1) (2019). “Protected Class” is defined to include gender, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or domestic violence victim.

By promulgating this latest rule, the DOL could also be forcing employers to violate its own rules regarding the payment of wages to H-1B workers. Under 20 CFR § 656.731(a), employers must pay H-1B workers the higher of the prevailing or the actual wage. The actual wage is the wage paid to all other individuals with similar experience and qualifications for the specific employment in question. An employer could be forced to pay new hires significantly higher wages than those paid to existing H-1B workers holding the same position, resulting in the existing employees being paid less than the actual wage in violation of 20 CFR § 656.731(a). Employers could raise wages across the board to avoid this situation, but increasing wages substantially and with little warning is unlikely to be feasible for most, and could ultimately result in layoffs and damage to the U.S. economy.

The DHS rule, which goes into effect on December 7, 2020, makes it more difficult yet for U.S. employers to win H-1B approvals by imposing language requiring a direct relationship between the specialized degree and the occupation. Under the new rule, a position does not qualify as a “specialty occupation” unless:

“(1) A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is the minimum requirement for entry into the particular occupation in which the beneficiary will be employed;

(2) A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is the minimum requirement for entry into parallel positions at similar organizations in the employer’s United States industry;

(3) The employer has an established practice of requiring a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, for the position. The petitioner must also establish that the proffered position requires such a directly related specialty degree, or its equivalent, to perform its duties; or

(4) The specific duties of the proffered position are so specialized, complex, or unique that they can only be performed by an individual with a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent.”

(emphasis added)

Among the DHS rule’s most significant changes is the reduction of the H-1B visa validity period from the current three years to just one year when the H-1B worker will work at a third-party worksite. Additionally, the rule inserts the requirement that only positions requiring education or experience in a “directly related specific specialty” will qualify as specialty occupations, greatly limiting the number of individuals who can successfully qualify for an H-1B visa. Employees in IT-related fields, who often hold general degrees in engineering or computer science, are likely to have particular difficulty meeting this new requirement.

The rule also imposes burdens on employers who send H-1B workers to third-party worksites, apparently reviving some of the onerous requirements struck down in IT Serve Alliance v. Cissna. In assessing whether an employer-employee relationship exists, the new rule encourages closer scrutiny as to whether the requisite level of employee supervision exists when the employee is stationed at a third-party worksite. Additionally, employers who employ H-1B workers at third-party worksites must submit additional evidence such as “contracts, work orders, or other similar corroborating evidence showing that the beneficiary will perform services in a specialty occupation at the third-party worksite(s), and that the petitioner will have an employer-employee relationship with the beneficiary”.

These new rules pose the potential for serious harm to both H-1B workers and the U.S. companies who employ them. Employers must file an extension for an H-1B worker whose status is expiring, but if they are not able to pay the employee the new, artificially inflated wages imposed by the DOL rule, the request for an extension may not be filed. Limitations in OES data have resulted in wages for some positions being entirely unavailable. For example, no wage data has been listed for a Software Developer, Systems in San Francisco since the new rule was promulgated on October 8, 2020. The default wage for Software Developer, Systems is $208,000. Similarly, little wage data is listed for physicians so they too must be paid the $208,000 default wage. Employers are forced to either pay the default wage, an exorbitant salary for many positions, or wait until wage data is available, potentially risking an untimely filing of the employee’s H-1B extension. If an extension is not filed, the H-1B employee would then be forced to rapidly depart the United States in the midst of a pandemic. Employers, particularly those in IT-related fields who employ numerous H-1B workers, who are unable to pay the new, substantially higher wages could be forced to lay off workers, or move their operations overseas. Foreign students graduating from US schools will not be hired by US employers if the entry level wage is ridiculously high. This will result in foreign students paying tuition fees to universities in other countries if their career prospects in the US will be diminished by these rules.  Nonprofits and startups will also find it impossible to pay these artificially inflated wages, which have no bearing whatsoever on the prevailing market wage.

Although litigation may soon challenge the new rules, putting U.S. employers in this difficult position for the time being does not bode well for the American economy’s chances of recovering from the effects of COVID-19. Forcing U.S. companies to reduce their workforce or move overseas to keep costs down also threatens the employment prospects of American workers who look to these same companies for jobs – ironic, as this is the very group whose interests the new rules are aimed at protecting.  Aspiring immigrants desire to come to America to succeed, and this in turn also benefits the US economy as they innovate and start or lead great companies. This is America’s secret sauce.  Nobody is denying that some aspects of the H-1B visa program should not be reformed, such as providing more job mobility to H-1B workers and providing them with a faster path to the green card, but these two new rules poison the secret sauce that keeps America so successful.

 

Kaitlyn Box graduated with a JD from Penn State Law in 2020, and works as a Law Clerk at Cyrus D. Mehta & Partners PLLC.

 

 

Cora-Ann Pestaina

LISTING THE FOREIGN NATIONAL’S QUALIFICATIONS ON THE PERM FORM

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One of the most surprising lessons to learn for practitioners who regularly file PERM labor certifications is that past certifications do not always mean future certifications. In other words, just because 10 PERM labor certifications prepared in the same way have all been certified without issue does not mean that the 11th one will also be certified. That is the nature of PERM. The Department of Labor (DOL) is notorious for suddenly coming up with new and previously unheard of reasons for denial.

Most recently, there have been reports of a slew of PERM denials, primarily for physician and teaching occupations, on the basis that Section H.14 of the ETA Form 9089 indicates that a medical or other license is required, but Section K does not list that the PERM beneficiary holds a license. What makes these denials even more baffling is that in many of these cases, the foreign national’s work experience practicing medicine or teaching in the US was listed in Section K thereby providing proof that the foreign national was indeed licensed.  Moreover, the ETA Form 9089 does not provide any specific section in which to list licenses. Most disturbing is the fact that the DOL did not previously deny any PERM applications for failing to list a license on the form. But that did not stop the denials from coming.  The American Immigration Lawyers Association (AILA) recommends that denials of a PERM labor certification solely because of not listing a license should be reported to the AILA-DOL liaison committee. A motion for reconsideration should be filed at the same time.

The DOL has promised to issue an FAQ (Frequently Asked Questions) on this issue. But since the ETA Form 9089 will remain unchanged, it is anticipated that the FAQ will advise practitioners to list the foreign national’s qualifications in Section K.9. AILA raised the issue of the denials in a DOL Stakeholders Meeting on December 12, 2013 (AILA Doc. No. 14011449). In sum, the DOL responded with:

In general, if an employer states that a specific position requires a license, the employer should indicate that the beneficiary has the license. The appropriate place to list the license is under K.9 so that the analyst can compare the requirements and the beneficiary’s qualifications. OFLC will issue an FAQ to spell this out more clearly. When stakeholders asked OFLC to consider in the future, issuing an FAQ in advance of the change in practice, OFLC agreed to take this into consideration if there is a decision to make a policy change. OFLC is continuing to examine how to address cases already denied on the basis that Section K did not list the license or certification. Employers with denials on this basis may wish to file a Request for Reconsideration of the denied case to at a minimum preserve the issue until OFLC develops further guidance.

At the recent AILA National Immigration Conference in Boston on June 18-21, 2014, representatives of the DOL indicated that the instructions in Section K.9 of the ETA Form 9089 already instruct practitioners to list “job duties performed, use of tools, machines, equipment, skills, qualifications, certifications, licenses, etc.” Accordingly, the DOL expects practitioners to list all the experience and qualifications gained with a particular job under the particular job experience listed on the ETA Form 9089. At the AILA national conference, it was also suggested that Section K of the ETA Form 9089 can be completed to only indicate the foreign national’s license or other special qualification earned during a specific time period when he was not also earning work experience and the ETA Form 9089 will not be denied for failure to list an employer’s name and other details. Other qualifications that need to be included in Section K.9 of the ETA Form 9089 include (See AILA InfoNet Doc. No. 14041655. (Posted 04/16/14):

 

  • Licensure, or eligibility for license, e.g., Medical License, Teacher Certification, Professional Engineer (PE).
  • Knowledge or coursework acquired in a course of study.
  • Professional certificates or diplomas, e.g., Microsoft certification, Health and Safety Certificate, CPR Certificate, Engineer-in-Training Certificate.
  • Board Certification, or Certification Eligible, e.g., Board Certification in Internal Medicine, Board Certification in Immigration Law.
  • Second degree, if required by employer, e.g., Bachelor’s in Civil Engineering, in addition to a Ph.D.
  • Degree or other credential required at H.4, “education: minimum level required,” does not match the foreign national’s credential at J.11, “highest level achieved relevant to the requested occupation” [e.g., H.4 requires a BS in Chemical Engineering; J.11 indicates foreign national has a (relevant) Ph.D. in Process Engineering, but foreign national also has a BS in Chemical Engineering that cannot be entered anywhere in Section J or K].

The issue of making every attempt to set forth the foreign national’s qualifications on the ETA Form 9089 in a manner that ensures the Certifying Officer’s (CO) comprehension was also highlighted in the Board of Alien Labor Certifications (BALCA) case, Matter of The Clariden School, 2011-PER-02857 (January 30, 2014). In that case, the primary job requirements for the position of “AMI Montessori Elementary Teacher” as listed on the ETA Form 9089 included a Bachelor’s degree in any discipline and AMI (Montessori) Certification. The Employer indicated in Section H.7 of the ETA Form 9089 that an alternative field of study was acceptable; specifically a Bachelor’s in Education plus AMI Certification. In Section H-8 the Employer also indicated that it would accept the alternative combination of a Master’s degree, and one year of experience. In Section H-14, the Employer noted that AMI Certification is required.

In Section J.11 of the ETA Form 9089 which requires the Employer to list the highest level of education achieved relevant to the occupation, the Employer checked “Other” from a list of options that included “None,” “High School,” “Associate’s,” “Bachelor’s,” “Master’s,” “Doctorate,” and “Other.” The Employer specified in Section J.11-A that the “Other” classification was AMI Certification. The Employer reported that the Alien obtained the AMI Certification in 2006 at the Montessori Institute of Milwaukee. The CO denied certification under 20 C.F.R. § 656.17(i)(1) on the ground that the application did not indicate that the foreign national met either the primary or the alternative educational requirements of a Bachelor’s degree in any discipline or a Master’s degree in any discipline.

In its request for reconsideration/review, the Employer argued that it answered Section J.11 accurately because AMI Certification was the highest education level achieved by the foreign national and that such a certification is a level of education higher than Bachelor’s but lower than a Master’s or a Doctorate. The Employer pointed out that the motion for reconsideration was its first opportunity to explain and clarify its answer on the ETA Form 9089, Section J, and that it was supplying supporting documentation which included a document from the Montessori Training Center of Minnesota stating that one of the admission requirements for its AMI Montessori Diploma program is that the applicant holds a Bachelor’s degree.

The CO refused to bend and affirmed the denial arguing that the employer’s representation on the ETA Form 9089 that Other – AMI Certification is the highest education level achieved by the foreign national did not enable the DOL to verify from the face of the application that the foreign worker earned a Bachelor’s degree which is the minimum education level required. The CO then went on to present the novel argument that “there is sufficient free form space on the ETA Form 9089” for the employer to disclose, for example, that the foreign national possessed a Bachelor’s degree (or its equivalent) in addition to AMI Certification.

BALCA thankfully saw reason and held that while the initial denial could be understood since it is hardly intuitive that AMI Certification is a higher level of education than a Bachelor’s degree, the CO’s insistence that the Employer disclose the foreign national’s holding of a Bachelor’s or Master’s degree be disclosed on the ETA Form 9089, even in the face of documentation on a motion for reconsideration showing that a Bachelor’s degree is a prerequisite for the foreign national’s admission to the Minnesota Montessori Training Facility for its AMI certification program, was unreasonable and unsupported by the regulations. BALCA was not persuaded by the CO’s claim that the ETA Form 9089 had adequate free form text fields finding, as any reasonable person would, that the form actually does not have any obvious free form space for clarifying why a person would necessarily have at least a Bachelor’s degree to have obtained an AMI certification.

Matter of Clariden and the recent PERM denials highlight the fact that practitioners need to find some way to list all of the foreign national’s credentials somewhere on the ETA Form 9089. While we await the DOL’s forthcoming FAQ, it is important to make every attempt to alert the CO that the foreign national possesses the qualification required for the offered position. If the offered position requires experience in specific technologies then these technologies need to be listed somewhere in the job descriptions of the foreign national’s past experience. If the offered position requires any license, certification, knowledge or anything other than work experience, it needs to be listed in Section K. This information can be listed in Section K.9 between asterisks or in capital letters or in any manner at the bottom of any job description for the foreign national’s past experience or it can be listed on its own in Section K.9.

The moral of the story is basically that anything which could remotely be unclear to the CO should be explained somewhere on the ETA Form 9089, notwithstanding the space limitations. But with regard to the recent Section K denials, the hope is that once the FAQ has been published the DOL will apply its requirement prospectively rather than to already pending cases. In such matters, the DOL really ought to hold itself accountable for setting a precedent for how the ETA Form 9089 should be completed merely by its certification of all prior cases.

Cyrus Mehta

DOL POLICY ON LAID-OFF U.S. WORKERS FOR PERM LABOR CERTIFICATION APPLICATIONS

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The filing of a labor certification application is normally the first step when an employer sponsors a foreign national employee for permanent residence. Under the labor certification process, the employer is required to demonstrate that it unsuccessfully conducted a good faith recruitment of the US labor market at the prevailing wage before it can proceed to sponsor the foreign national employee.

The Department of Labor, under the slim authority given to it in INA 212(a)(5) has promulgated complex rules in 20 Code of Federal Regulations (CFR) Part 656 that govern how an employer must establish a good faith test of the US labor market. These rules, which have created a huge “labor certification bureaucracy”, also reflect a concern for US workers who were laid off within 6 months of filing the labor certification application. Specifically, 20 CFR 656.17(k) provides:

1) If there has been a layoff by the employer applicant in the area of intended employment within 6 months of filing an application involving the occupation for which certification is sought or in a related occupation, the employer must document it has notified and considered all potentially qualified laid off (employer applicant) U.S. workers of the job opportunity involved in the application and the results of the notification and consideration. A layoff shall be considered any involuntary separation of one or more employees without cause or prejudice.

(2) For the purposes of paragraph (k)(1) of this section, a related occupation is any occupation that requires workers to perform a majority of the essential duties involved in the occupation for which certification is sought.

The requirement for an employer to have notified and considered all potentially qualified laid-off workers has always been a touchy issue for employers. It is easier for an employer to broadcast advertisements and undertake other prescribed recruitment steps for prospective US workers than for an employer to contact its own prior workers regarding a job opportunity that is the subject of the labor certification application. The notification requirement of all laid off workers in the specific occupation or related occupation has also been open to varying interpretations. Would it suffice if the laid off worker was told to check job opportunities in the future on the employer’s website or must the worker be actually notified when labor certification is being sought in the same job opportunity?

The Department of Labor’s Employment and Training Administration has added a new question and answer (Q&A) to its frequently asked questions (FAQ). The new Q&A concerns notification and consideration of laid-off U.S. workers for PERM labor certification applications.

The new Q&A asks, “How does an employer demonstrate that it notified and considered laid-off U.S. workers for the job opportunity listed on the ETA Form 9089?” The answer notes that some employers have misconstrued the regulations to require only that they inform workers when laid off that the employer may have future positions and invite the worker to monitor the employer’s job postings and apply, rather than their actively notifying and considering the laid-off workers. In fact, the Q&A notes, misapplication of the regulatory requirements will result in denial of a PERM application. The employer must make a reasonable, good-faith effort to notify each potentially qualified worker who has been laid off during the six months preceding the application whenever a relevant job opening exists and invite the worker to apply.

The Q&A notes that an employer who files multiple labor certifications can satisfy its responsibilities under the relevant regulation by notifying each laid-off worker (in the manner chosen by the worker) at least once a month that a list of current relevant job openings is maintained electronically on a website operated by the employer. “Simply informing a laid-off worker to monitor the employer’s website for future openings and inviting the worker, if interested, to apply for those openings, will not satisfy the employer’s regulatory obligation to notify all of its potentially qualified laid-off U.S. workers of the job opportunity,” the Q&A states.

The Q&A adds that an employer must maintain documentation showing that it has met its notice and consideration requirements, including copies of all relevant letters, e-mails, faxes, Web pages (including those listing details of the relevant job openings and applications by laid-off workers for those openings), and other contemporaneous documents that show when and how notice and consideration was given. In addition, an employer must obtain and maintain written documentation that a laid-off worker has declined to receive notices, requested discontinuation of the notices, or refused to give or update contact information.

While the DOL has clarified the notification requirement for laid-off workers, must an employer contact all laid off workers in the specific or related occupation for which labor certification is sought even if the employer knows that the laid-off worker’s qualifications do not objectively meet the requirements of the position? For example, the job opportunity for which labor certification is being sought, let’s say a Software Engineer, requires five years of experience in certain computer programming languages like C++, Java and Python. The employer knows that a former worker, also a Software Engineer, who was laid off 3 months ago only had 1 year of experience in C++, but not Java and Python. Is the employer required to notify this worker under 20 CFR 656.17(k) when the employer knows that the laid off worker is not qualified for the position?

The employer must also check off a box on ETA 9089, Section 1.e.26,  which broadly asks whether the employer had a layoff in the area of intended employment in the occupation of the job opportunity or a related occupation within 6 months of filing the application. The checking off the “yes” box is likely to trigger an audit and further scrutiny. The next box Section 1.e.26A, asks “were the laid off U.S. workers notified and considered for the job opportunity for which certification is sought?” If the employer checks off the “no” box or the “NA” box, would that be permissible if the laid off worker is clearly not qualified for the position?   In other words, when an employer knows that a laid-off worker is not potentially qualified, may it only consider the worker’s qualification or does it also need to notify that prior worker? If the labor certification is audited, the DOL will request documentation to establish the number of US workers in the occupation or in a related occupation that were laid off by the employer; a listing of all occupations relevant to the layoffs; an explanation as to why notification or consideration of the employer’s potentially qualified laid-off US workers was not applicable; and proof that any laid off US workers not notified and considered by the employer were not potentially qualified for the job opportunity.

The Board of Alien Labor Certifications in Matter of Federal Home Loan Mortgage Corp, 2011-PER-02902 (BALCA February 10, 2014)  held that an employer was justified in rejecting a laid-off worker who was not qualified for the position. While it is not clear from this decision whether the employer had notified the laid off worker, it is clear from the resume that the laid off worker was not qualified for the position, according to BALCA. The position in the instant case required a very deep knowledge of SAS, including SAS on Unix and SAS for Windows. The laid-off worker did not have experience with these program tools. Although the Certifying Officer in denying the labor certification assumed that the laid off worker would have obtained the same skills and knowledge for the position for which labor certification was sought, having worked with the employer for three years, BALCA found that the CO’s assumption was unfounded and unsupported by the record. Cisco Systems, Inc, 2011-PER-02900 (BALCA April 26, 2013), however, provides more clarity regarding whether an employer needs to notify a laid-off worker who is not qualified for the position. There BALCA held that the employer who had not notified a laid-off worker was justified in its rejection of that worker who clearly lacked the qualifications for the position.

It may thus be defensible for an employer to not notify all laid off workers in the occupation for which labor certification is sought, or a related occupation, unless the laid off worker is potentially qualified for the position. Of course, when in doubt, the employer must contact the laid-off worker per the new DOL FAQ. Unfortunately, in the world of labor certification, the DOL imposes unrealistic requirements and burdens upon employers, and one can never know how the DOL will react when an employer justifies that its reason for not notifying laid-off workers was because they were unqualified for the position. The DOL has publically indicated that BALCA does not speak for it, and it may not consider itself to be bound by Matter of Federal Home Loan Mortgage Corp or Cisco Systems. Therefore, employers are advised to tread very cautiously when workers have been laid off within six months prior to filing a labor certification on behalf of a foreign national employee.

Cyrus Mehta

Hey Boss, I Need Premium Processing: Can An H-1B Employee Pay The Premium Processing Fee?

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By Cyrus D. Mehta and Myriam Jaidi

An employer is in the process of preparing an H-1B extension for an employee.  The employer is preparing the petition several months before the expiration of the employee’s current H-1B status, and therefore has determined to file without premium processing. Moreover, pursuant to 8 CFR § 274a.12(b)(20), the employee can continue working for the same employer for a period not to exceed 240 days after the expiration of the H-1B status provided a timely request was filed.   The employee, however, has approached the employer, expressing a need for premium processing because of upcoming travel plans or other personal reasons.  If the employer does not need premium processing for its own business reasons, and premium processing would be only for the employee’s benefit, may the employee pay the premium processing fee, which is currently $1225? (Please note that this blog post addresses the premium processing fee in the H-1B context only; payment of the premium processing fee by a beneficiary of an I-140 immigrant petition is allowed without question.)

This is a gray area, like so many things in immigration law, because there is no clear rule on the issue and, believe it or not, different government agencies have taken different stances on the issue over time, and of course, no one approach is clearly definitive. Anecdotal data provides some guidance, as so much in our practice comes from cumulative experience on issues like the one here, i.e., whether a beneficiary may pay the premium processing fee.  Although no agency has opined on the issue since 2009, allowing the H-1B beneficiary to pay the premium processing fee may be defensible where the benefit inures solely to the employee, the employer has no need for the premium processing, and the payment of the premium processing fee does not drop the H-1B beneficiary’s wage below the required wage.  

In 2001, legacy INS (the agency that was dissolved in 2003 and reconstituted as three agencies within the Department of Homeland Security, specifically US Citizenship and Immigration Services (USCIS), US Immigration and Customs Enforcement (USICE), an US Customs and Border Protection (USCBP)) confirmed with AILA (American Immigration Lawyers Association) liaison that “there is no bar to employees providing the Premium Processing fee checks.”  See ISD Liaison Report for 8/9/01 (AILA InfoNet Doc. No. 01082431 (posted 8/24/01)).  On August 12, 2009, the Vermont Service Center (one of the Service Centers of USCIS) issued a practice pointer prepared by their Adjudications Branch that made the following statement on page 12: “The petitioner, attorney, or beneficiary can pay $1000 Premium Processing fee.” See Adjudications Branch, Vermont Service Center, VSC Helpful Filing Tips (August 12, 2009; AILA InfoNet Doc. No. 09112363 (posted 11/23/09)).  No restrictions on the beneficiary paying the premium processing fee were noted by legacy INS or USCIS.  

Interestingly, also in August 2009 the Department of Labor, Wage and Hour Division issued a Fact Sheet that conflicts somewhat with the USCIS position on the premium processing issue, but does not prohibit the employee from paying it.  That Fact Sheet states that an H-1B employee, “whether through payroll deduction or otherwise, can never be required to pay the following. . . .  Any deduction for the employer’s business expenses that would reduce an H-1B worker’s pay below the required wage rate (20 CFR § 655.731(c)(9)), including . . . any expense, including attorney’s’ fees and the premium processing fee (INA § 286(u)) directly related to the filing of the Petition for Nonimmigrant Worker (Form I-129/I-129W) (20 CFR §655.731(c)(9)(ii) and (iii)(C).” Other things included in that list were tools and equipment, travel expenses while on employer’s business, and any expenses, including attorney’s fees, directly related to the filing of the Labor Condition Application (LCA).  

The only other statement from the DOL was a decision by an Administrative Law Judge (ALJ) in 2008 where the ALJ cited the regulation provision referring to the then $1000 training fee to find that the regulation requires that the employer pay the premium processing fee.  See Toia v. Gardner Family Care Corp., 2007-LCA-00006 (ALJ Apr. 25, 2008) at page 20.  This was clearly an erroneous decision because the ALJ was confusing the premium processing fee, which the regulations do not  specifically prohibit payment by the H-1B beneficiary, and the training fee, which the regulations specifically state must not be paid by the H-1B beneficiary, because both happened to be $1000 at the time of the decision.  The DOL Fact Sheet is in fact more amenable to the idea that a premium processing fee could be paid by a Beneficiary because unlike the ALJ decision purporting to ban that practice, the DOL Fact Sheet leaves room to allow a beneficiary to pay a premium processing fee if doing so does not drop the wage below the required wage. 

The immigration law treatise, Buffenstein & Cooper, Business Immigration Law & Practice, Volume 1, Nonimmigrant Concepts (AILA 2011), confirms this is a gray area, and provides no conclusive answer.  The discussion in the treatise supports the argument that where premium processing is pursued at the insistence of the beneficiary, it could be considered the individual’s expense.  

The crux of the matter is whether the premium processing fee would be viewed as a “business expense” of the employer under the DOL regulations governing the H-1B LCA, in which case the DOL could view it as a wage & hour issue and analyze whether the deduction of the premium processing fee worked an impermissible dropping of the H-1B employee’s wage below the required wage (the higher of the actual or prevailing wage). This is something of a distinction without a difference because in any cases where you have more than one similarly situated employee in a position (i.e., where the position is not unique) the deduction of the premium processing fee would always drop the wage below the actual wage.  In positions that are unique, whatever is paid to the unique employee is the actual wage so the premium processing fee would not necessarily drop the wage below the prevailing wage.  

There is anecdotal evidence, based on surveying attorneys on a private list serve, that the DOL in at least two LCA investigations did not consider the premium processing fee to be an employer’s expense where the employee has requested premium processing for the employee’s benefit.  Many attorneys on the AILA list serve seemed to agree that premium processing should not be considered an employer expense, but this thread has not been updated since 2007. 

One interesting question is whether the premium processing fee could be deducted from a benefit such as a performance bonus.  Cash bonuses are considered a “benefit” under the DOL regulations.  The regulation states as follows: 

Benefits and eligibility for benefits provided as compensation for services (e.g., cash bonuses; stock options; paid vacations and holidays; health, life, disability and other insurance plans; retirement and savings plans) shall be offered to the H-1B nonimmigrant(s) on the same basis, and in accordance with the same criteria, as the employer offers to U.S. workers.

Thus, a company is required to *offer* H-1B employees the same benefits as US workers. However, another section of the regulation makes clear that the H-1B employee may choose to turn down benefits: 

The benefits received by the H-1B nonimmigrant(s) need not be identical to the benefits received by similarly employed U.S. workers(s), provided that the H-1B nonimmigrant is offered the same benefits package as those workers but voluntarily chooses to receive different benefits (e.g., elects to receive cash payment rather than stock option, elects not to receive health insurance because of required employee contributions, or elects to receive different benefits among an array of benefits)

The upshot is that there is a strong argument to be made for the conclusion that where an employee demands premium processing of an H-1B petition solely for the employee’s benefit, that premium processing fee should not be deemed an “employer business expense” such as to trigger a wage/hour analysis of the offered wage that could result in a finding against the employer.  In addition, the fee could be deducted from the performance bonus so long as the employee has been offered benefits on the same basis and using the same criteria as offered to US workers, but opts for a different benefit.  If an employer takes this approach it would likely be best to get the employee’s agreement in writing that they are opting out of the full bonus because of their own need for premium processing on an H-1B petition to accommodate their personal circumstances, and that the premium processing is not done for the employer’s benefit. 

Obviously, given the conflicting positions taken by USCIS and the DOL regarding premium processing fees, this remains a gray area and the most risk adverse and cautious approach would be to avoid any question of the employer paying the appropriate wage by having the employer pay the premium processing fee.  However, as noted above, it is defensible to have the employee pay the premium processing fee where it inures solely to the employee’s benefit.

What are the risks?  The regulations provide for various penalties relating to LCA violations.  A DOL action would only likely come to pass in the event of an employee filing a wage and hour complaint with the DOL, and based on a single complaint on any LCA issue, the DOL could audit all of the LCA files of an employer.  

If an employee complains and the DOL determines that the premium processing fee worked a reduction in the required wage, the employer would be required at the very least to reimburse the employee for the premium processing fee.  Assuming in the worst case that the DOL misconstrues the premium fee to be like the training fee, which is what the ALJ did in the 2008 decision noted above, the DOL may also impose a $1,000 fine per violation.  As a practical matter, an employee may first make a demand for reimbursement or back wages before complaining to the DOL, and under those circumstances, it would be advisable for the employer to reimburse the employee for the premium processing fee.  The regulations provide for enhanced penalties for “willful” failure to pay the required wage such as fines up to $5,000 and debarment from filing new H-1Bs.  However, this is truly a worst case scenario speculation, based on collective experience with DOL investigations where DOL auditors have taken the position that the fee was not an employer’s business expense and have not required the employer to reimburse the employee for payment of the premium processing fee.  The expectation would be that an employer would be able to present a strong argument that this is a gray area and there was no willful failure here.  

We hope that the DOL and USCIS will coordinate their positions on premium processing in H-1B cases and recognize that it is often employees, not employers, who truly need premium processing on their H-1B cases, and thus should be able to make the payment in those cases to facilitate their own personal plans.  Moreover, premium processing is not directly related to the filing of an H-1B petition.  It only expedites the petition, which has in any event been filed, and the employee often then desires that the H-1B petition be expedited for personal reasons.  In such cases the premium processing fee should not be viewed as an employer’s business expense, thus allowing both the employer and employee the best outcome.