# Presentation: 652729

## The Employment of Non-Immigrants on H-1B Visas

- Presented by the
- U.S. Department of Labor
- Wage and Hour Division

## Immigration and Nationality Act(INA) of 1952

**Amended by**:
- H-1B Reform Act of 2004
- American Competitiveness and Workforce
- 	Improvement Act of 1998 (ACWIA)
**Regulations**
- Title 20 CFR Part 655, Subparts H & I

## H-1B Program

- Establishes an annual ceiling on the number of workers issued H-1B visas
- Defines the scope of eligible occupations
- Specifies the qualifications for H-1B status

## H-1B Program

- Requires an employer to file a Labor Condition Application (LCA) which establishes conditions of employment
- Establishes an enforcement system to determine compliance with LCA requirements

## Agencies

- The Employment and Training Administration (ETA) of the USDOL approves the LCA
- The U.S. Citizenship and Immigration Services (USCIS) approves H-1B visa classification (status)
- The Department of State issues the visa
- The Wage and Hour Division (WHD) of USDOL enforces the employer’s LCA obligations

## Petition Fees

- A training and processing fee ($1,000) charged to employers that was discontinued on October 1, 2003, is reinstated and restructured as of December 8, 2004:
- 25 or fewer employees - $750
- more than 25 employees - $1,500
- Anti-Fraud Fee – all employers pay an additional $500

## Labor Condition Application (LCA)

## Labor Condition Application (LCA)

**The employer must accurately specify:**
- Employer information (firm name, employer identification number (EIN), address, phone)
- Rate of pay (amount, salary/hourly, full/part-time)
- Period of intended employment (beginning and ending dates)

## Labor Condition Application (LCA)

**The employer must also accurately specify:**
- Occupation information (number of H-1Bs sought, occupation code, and job titles)
- Work locations (initial and additional or subsequent work locations)
- Prevailing wage (amount, source) for all work locations listed

## Labor Condition Application (LCA)

**The employer must agree to abide by (or “comply**
**with”) the following Labor Condition Statements:**
- Wages: The employer will pay the higher of the actual or prevailing wage rate, pay for nonproductive time, *and *offer benefits on the same basis as offered to U.S. workers
- Working Conditions: The employer will provide working conditions (including hours, shifts, vacations, seniority based benefits) which will not adversely affect similarly employed U.S. workers

## Labor Condition Application (LCA)

**The employer must agree to abide by (or “comply **
**with”) the following Labor Condition Statements:**
- Strike, Lockout or Work Stoppage:  There is no strike or lockout in the same occupational classification on the LCA
- ETA will be notified if a strike/lockout occurs
- No H-1B will be placed at a site with a strike/lockout

## Labor Condition Application (LCA)

**The employer must agree to abide by (or “comply **
**with”) the following Labor Condition Statements:**
- Notification:  The employer will notify the union or workers of the LCA filing
- A copy will be posted for 10 days at two conspicuous locations, or
- A copy will be posted electronically, and
- A copy will be provided to the H-1B worker

## Labor Condition Application (LCA)

**Additional Labor Condition Statements for **
**H-1B Dependent and/or Willful Violator**
**Employers**
- The “ACWIA” amendments to the INA of 1998 established additional requirements for “H-1B Dependent” and/or “Willful Violator” employers on or after January 19, 2001.  These additional requirements include recruitment provisions and prohibitions on displacement of U.S. workers

## Labor Condition Application (LCA)

**These provisions sunset on September 30,**
**2003, and were not included on LCAs filed**
**after that period until...**
- The H-1B Reform Act of 2004 reinstated these provisions;
- Effective March 8, 2005, the additional provisions are part of all LCAs filed on or after that date

## Labor Condition Application (LCA)

**H-1B Dependent Employer defined**:
- 25 or fewer full-time equivalent (FTE) employees, including 8 or more H-1Bs
- 26-50 FTE employees, including 13 or more H-1Bs
- 51 or more FTE employees, including at least 15% H-1Bs

## Labor Condition Application (LCA)

**Willful Violator Employer defined**:
- An employer who (in a final agency action) was determined to have committed a willful failure or a willful misrepresentation after October 21, 1998, and within five years of the filing of the LCA

## Labor Condition Application (LCA)

**Additional Labor Condition Statements for **
**H-1B Dependent and/or Willful Violator **
**Employers:**
- Non-Displacement: Employer will not displace a similarly employed U.S. worker within 90 days before or after an H-1B visa petition is filed
- Secondary Inquiry: Employer must inquire of a secondary employer whether an H-1B will displace a similarly employed U.S. worker

## Labor Condition Application (LCA)

**Additional Labor Condition Statements for **
**H-1B Dependent and/or Willful Violator**
**Employers ****(cont’d):**
- Recruitment: Employer will make good faith efforts to recruit U.S. workers
- Employer will offer the job to an equally or better qualified U.S. applicant (enforced by Department of Justice)

## Labor Condition Application (LCA)

**Public Disclosure Information:**
- The employer must also maintain a public disclosure
- file that will be kept at the:
- Employer’s principal place of business
- 	     or
- The place of employment

## Compliance

## Compliance

**A Material Fact is a significant item of**
**information:**
- The H-1B worker’s occupation
- Number of H-1B workers sought
- Rate of pay
- Period of employment
- Work location, prevailing wage rate, and source
- H-1B dependent and/or willful violator employer status

## Compliance

**Misrepresentation of a Material Fact:**
- Failure to exercise reasonable care and diligence
- False statement at the time of filing
- More than inadvertent error
- If the employer knowingly or recklessly provides
- incorrect information on the LCA, the employer has
- committed a _willful_ misrepresentation

## Compliance

**Wages:**
- 	Employer must pay no less than the Required Wage Rate
- Required Wage Rate is the higher of the actual wage paid or the prevailing wage for the occupation in which the H-1B worker is employed in the geographic area of intended employment

## Compliance

**Prevailing Wage:**
- Weighted average (mathematical mean) of wages
- paid:
- To all individuals in the same occupational class
- Within the area of intended employment *and...*
- Represents the most recent and accurate information available
- The prevailing wage rate must be no less than the
- 	minimum wage required by Federal, State, or local
- 	law

## Compliance

**Prevailing Wage Sources:**
- Collective Bargaining Agreement (CBA)
- State Workforce Agency (SWA) (formerly State Employment Security Agency (SESA))
- Occupational Employment Statistics (OES)
- Independent authoritative source or other legitimate source
- Service Contract Act (SCA) wage determination

## Compliance

**Prevailing Wage – Occupational Employment**
**Statistics (OES):**
- The USDOL provides prevailing wage rates on its website: www.flcdatacenter.com
- Starting March 8, 2005, a four level wage structure replaced the previous two levels

## Compliance

**Actual Wage:**
- Employer’s own scale or system
- Must be documented
- May include variable rates
- EMPLOYER MUST PAY THE HIGHER OF THE ACTUAL
- WAGE OR PREVAILING WAGE RATE

## Compliance

**Obligation to Pay - The employer’s obligation**
**commences on the date which:**
- The H-1B worker first makes self available for work or otherwise comes under control of the employer
- 	_And_
- If the H-1B worker does not reside in the U.S., not later than 30 days after that worker is admitted to the U.S.; OR
- If the H-1B worker already resides in the U.S., not later than 60 days after that worker becomes eligible to work

## Compliance

**Obligation to Pay – Nonproductive Time:**
- The employer _*must pay*_* *the required wage rate for
- all nonproductive time caused by:
- conditions related to employment
- lack of work
- lack of permit
- studying for licensing exam
- employer required training
- Failure to pay will result in the employee’s being
- “benched.” Benched time must be compensated.

## Compliance

**Obligation to Pay – Nonproductive Time ****(cont’d):**
- Payment is not required if reasons unrelated to
- employment exist, such as:
- Voluntary absence for pleasure
- Voluntary absence due to illness
- Absence must be truly voluntary

## Compliance

**Obligation to Pay – Nonproductive Time ****(cont’d):**
- Full-time workers must be paid the full amount of the required wage rate
- Part-time workers must be paid for the number of hours indicated on the I-129 and referenced on the LCA

## Compliance

**Obligation to Pay: **
- The employer’s obligation ceases only after a bona fide termination
- of employment, as indicated by:
- Notification to the H-1B worker that employment relationship has been terminated
- Notification to USCIS that the employment relationship is canceled
- Payment and/or offer to pay transportation home if required by USCIS regulation
- An H-1B worker may not be terminated and then rehired
- under the same petition

## Compliance

**The required wage rate must be paid, cash in**
**hand, free and clear, when due.**
- 	Wages are:
- Payments reported on the employer’s payroll as earnings
- Reported as earnings to the IRS
- Reported as earnings to all other appropriate Federal, State, and local governments under appropriate law

## Compliance

**Authorized Deductions from Wages:**
- Deductions required by law (taxes)
- Reasonable/customary deductions (insurance, savings, retirement)
- Authorized by a collective bargaining agreement

## Compliance

**Permissible Deductions:**
- Voluntarily authorized in writing by the employee, but not as a condition of employment
- Principally for the benefit of the employee
- Do not exceed the fair market value or actual cost of a provided benefit (lodging, transportation, goods, for example)
- Do not exceed the garnishment limits

## Compliance

**Deductions **_**may not**_** be taken:**
- To recoup an employer’s business expense
- As a penalty for early cessation of employment
- To recover the $750/$1,000/$1,500 USCIS filing fee
- To cover the costs incurred in the petition process
- To recover the $500 Anti-Fraud Fee

## Compliance

**Short-Term Placement:**
- 	Employers may temporarily place an H-1B worker at a worksite without an LCA if they:
- Pay the required wage rate of the home-based LCA
- Pay the actual cost of lodging
- Pay the actual cost of travel, meals, and incidental or miscellaneous expenses

## Compliance

**Short-Term Placement Limitations:**
- There can be no strike/lockout at placement site
- There can be no LCA for that geographic area of employment
- The H-1B worker does not exceed 30 workdays within a one-year period
- _Plus_ an additional 30 workdays if certain criteria are met

## Compliance

**A penalty assessed an H-1B worker who**
**ceases employment before the contract **
**ends is prohibited:**
- Bona fide liquidated damages are permitted
- Liquidated damages may include business expenses, but* *_**NOT**_ USCIS filing fee
- State law determines whether an assessment is a penalty or liquidated damages

## Compliance

**Last paycheck may not be withheld **
**by the employer to recover liquidated **
**damages **

## Compliance

**Labor Condition Statements – Notification:**
- On or within 30 days prior to the filing of the LCA
- A copy is to be provided to a collective bargaining representative, *or*
- A copy is to be posted at all worksites for 10 days at two conspicuous locations, *or*
- A copy is to be posted electronically

## Compliance

**Displacement of U.S. Workers:**
*	**Super Penalty Violation*
- A three year debarment and Civil Money Penalty (CMP) not to exceed $35,000 per violation may be assessed where an employer (in a final determination) was found to have a willful violation, in the course of which a U.S. worker in an essentially equivalent job was laid off within 90 days before or after the filing of the H-1B petition

## Compliance

**Displacement of U.S. Workers ****(cont’d):**
*	**Super Penalty Violation*
- Applies to all H-1B employers, not just H-1B dependent  and/or willful violator employers
- Applies only where the displaced U.S. worker is employed by the violating H-1B employer
- This displacement ban _**did not**_ sunset

## Compliance

**Additional Labor Condition Statements for H-1B**
**Dependent and/or Willful Violator Employers – **
**Displacement:**
- 	*Direct Displacement*
- Bans layoff of a U.S. worker in an equivalent position 90 days before and after the filing of the   H-1B petition
- Applies only where the displaced U.S. worker is employed by the violating H-1B employer

## Compliance

**Displacement ****(cont’d):**
- 	*Secondary Displacement*
- Requires an H-1B dependent and/or willful violator employer placing an H-1B worker with a secondary employer to ask whether the secondary employer has laid off, or intends to lay off, a U.S. worker from an essentially equivalent job, 90 days before or after the placement of the H-1B worker

## Compliance

**H-1B Dependent and/or Willful Violator Employer**
**- Recruitment:**
- Must take good faith steps to recruit
- 	U.S. workers before the LCA or petition is filed
- Must recruit using “industry wide” standards
- 	(normal, common, prevailing in the industry)

## Compliance

**Recruitment:**
- External or Internal Solicitation, and
- Active (direct communication with potential employees), and
- Passive (indirect communication through advertising, internet, etc.)

## Compliance

**H-1B Dependent and/or Willful Violator Employer**
**- Qualified U.S. Worker:**
- The employer must offer the LCA job to a better or equally qualified U.S. worker - this is enforced by the Department of Justice, not by the Wage and Hour Division

## Compliance

**H-1B Dependent and/or Willful Violator Employer**
**- “ Exempt” H-1B Workers:**
- Additional Labor Condition Statements do _not_ apply to
- LCAs listing only “exempt” H-1B workers
- An “exempt” H-1B worker is one who:
- Earns at least $60,000 a year; _**or**_
- Has the equivalent of a master’s degree or higher

## Compliance

**Whistleblower Protection:**
- The employer may not retaliate against any current, former, or prospective employee for asserting H-1B rights or cooperating in H-1B enforcement

## Records

## Records

**Public Access File:**
- The employer must make the LCA and supporting documentation available to the public within one working day of the filing

## Records

**Public Access File includes:**
- LCA and cover pages
- Wage rate documentation
- Actual wage system
- Prevailing wage documentation
- Summary of benefits

## Records

**Public Access File includes ****(cont’d):**
- Notification documentation
- Change in corporate structure statement
- “Single Employer” entities
- List of “exempt” H-1Bs
- Summary and time frame of recruitment efforts

## Records

**The employer must also maintain the following **
**records:**
- Complete petition package
- Payroll and basic records
- Name, address, social security number, occupation of workers
- Benefit plans
- Record of dependency determination

## Enforcement

## Enforcement

**The Wage and Hour Division investigations**
**are based upon:**
- The existence of a valid LCA
- A complaint from an aggrieved party
- a person or entity whose operations or interests are adversely affected by the employer’s alleged non-compliance with the LCA
- An alleged violation of the H-1B program which occurred within 12 months of the complaint

## Enforcement

**Wage and Hour may conduct random **
**investigations of “Willful Violators”**
- Any employer that has been determined in a final agency action to have committed a willful failure or a willful misrepresentation after October 21, 1998, is a “willful violator”
- The authority to conduct the investigation expires five years after the final agency action

## Enforcement

**The H-1B Reform Act of 2004:**
- Authorizes Wage and Hour to conduct an
- 	investigation when the Secretary of Labor
- 	personally certifies that there is reasonable
- 	cause to do so; such authority is
- 	retroactive to October 1, 2003

## Enforcement

**The H-1B Reform Act of 2004 ****(cont’d):**
- Authorizes Wage and Hour to conduct an
- 	investigation if it receives information from
- 	a known “credible source” likely to have
- 	Knowledge of an employer’s practices or
- 	labor conditions within 12 months of the
- 	alleged violations

## Determinationof Findings

## Determination of Findings

- 	When the investigation is complete,
-    Wage and Hour issues a determination
-    letter offering the employer and interested
-    parties an opportunity to appeal the
-    findings.

## Determination of Findings

**Violation Categories:**
- Wages
- Benefits
- Misrepresentation of a material fact
- Working conditions
- Strike/Lockout
- Notification
- Specificity
- Displacement – Direct and Secondary

## Determination of Findings

**Violation Categories ****(cont’d)****:**
- Recruitment
- Petition fees
- Early cessation penalty
- Discrimination for protected conduct
- Failure to make available public access documents
- Failure to maintain documentation
- Failure to cooperate in Wage Hour investigation
- Failure to comply with the regulations

## Determination of Findings

**Levels of Violation:**
- Nonwillful Failure
- Substantial Failure
- Willful Failure
- Willful and Substantial Failure

## Determination of Findings

**Good Faith Defense:**
- Under the H-1B Reform Act of 2004,  no violation
- 	will be cited for a “technical” or “procedural” failure,
- 	if there was a good faith attempt to comply; _**and**_
- The employer corrects the failure within 10 business
- 	days after USDOL or another enforcement agency
- 	has explained the failure; _**and**_
- There is no pattern or practice of willful violations

## Determination of Findings

- The H-1B Reform Act of 2004 also provides that
- in employer found to have violated the prevailing wage
- requirements during the course of an investigation will
- not be assessed fines or penalties _if_ the employer can
- establish that the manner in which the wage was
- calculated was consistent with industry standards and
- practices.

## Determination of Findings

**Remedies:**
- Back Wages
- Fringe Benefit Reimbursements
- Civil Money Penalties (CMPs)
- Prohibition from obtaining any new non-immigrant or permanent program foreign workers for one to three years (Debarment)
- Compliance

## For More Information

- Other resources concerning H-1B** **are available at** www.wagehour.dol.gov**
- Regulations
- H-1B complaint form (Form WH-4)
- Wage and Hour office locations
- The Foreign Labor Certification Data Center is available at www.flcdatacenter.com
- LCA filing information
- Prevailing wage rates
- Hotline: 1-866-4US-WAGE (1-866-487-9243)