1. HR PROFESSIONALS: H-1B Visa and Audits / DOL Audits
9/21/2018
HR PROFESSIONALS: H-1B Visa and Audits / DOL Audits
Presented by:
Ludka Zimovcak, Esq. and
Snehal Batra, Esq.
Nachman, Phulwani, Zimovcak Law Group, P.C.
NPZ Law Group, P. C.
NPZ Law Group, P.C.Copyright 2012 NPZ Law Group, P.C. 1

2. 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

3. What is Labor Condition Application (LCA)?

4. Labor Condition Application (LCA)
The employer must accurately specify:
Employer information
Rate of pay
Period of intended employment
Occupation information
Work locations
Prevailing wage

5. 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

6. 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

7. 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

8. 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, These additional requirements include recruitment provisions and prohibitions on displacement of U.S. workers

9. 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
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

10. 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
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)

11. 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

12. 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

13. 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

14. 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.

15. 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

16. 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

17. TERMINATION OF
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

18. 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

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

20. 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

21. 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

22. 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

23. 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

24. 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

25. What is PAF?

26. Public Access File
Only keep required documentation in this file – it is not part of an employment file (and should be stored separately from the employment file)
Must be available for public examination within 1 working day after submitting LCA
Must be maintained for 1 year beyond last date employee employed under LCA (even unused LCAs must be maintained for 1 year after expiry/withdrawal)
Must contain:
Original signed and certified LCA
Memo stating wage rate of employee and system for setting the “actual wage” for all similarly situated employees
Prevailing wage source documentation
Evidence of satisfying notice requirements (notice of posting or union notification)
Summary of benefits for all similarly situated employees equal to the H-1B employee’s
Change in corporate structure declaration for new employer to take on obligations of the LCA, list of affected LCAs, new “actual wage” descriptions and FEIN, if applicable
H-1B dependency requirements

27. Updating the Public Access File
An employer’s obligation does not end after preparing the Public Access File (PAF).
Some of the major areas of concern that require updating the PAF include the following:
Changes in corporate structure
Changes in actual wage/wage levels for extensions
Displacement issues for willful and dependent employers
Bona fide terminations

28. Non-Public Documents
These records should be kept in a separate, non-public file in case of site-visit/investigation:
Copy of H-1B petition filed with USCIS with all supporting documentation
Payroll records for the H-1B and other similarly situated employees (maintain for three years)
Memo confirming the employer provided a signed and certified LCA to the employee by start date
Memo of documentation of fringe benefits (including what was offered, selected, declined and actually provided)
This file should also be separate from the employment file

29. Consequences of Non-Compliance
Civil money penalties with maximums ranging from $1,000 to
$35,000 per violation, depending on the type and severity of the violation
Back wages
Disbarment from future access to the H-1B program for 3 years depending on the nature of the violation
I-9 violations
Criminal sanctions?
Audits leading to sanctions can emanate from disgruntled employees’ complaints or randomly

30. YOU HAVE COMPLIED WITH THE LCA
BUT YOU GET AUDITED
SO NOW WHAT?

31. USCIS Fraud Detection and National Security Directorate (FDNS) Workplace Site-Visits
Site visits randomly on H-1B and L-1 petitions (after adjudication) and R-1 petitions (before adjudication) – triggers?
FDNS officers make unannounced visits to collect information as part of a compliance review to verify the truthfulness of petitions and continuing eligibility
Process includes researching information in government systems, reviewing public records and evidence accompanying the petition, and interviewing the petitioner and beneficiary
Participating in a site visit is voluntary, but failure to cooperate may have negative effects on the compliance review – right to counsel?

32. FDNS Workplace Site-Visits
At any point, if the petitioner/beneficiary is unwilling to participate, inspector will terminate the visit, and complete the report using the data available
The compliance review will usually include a follow-up with the petitioner and beneficiary by phone, fax or – do not respond without consulting counsel!
Inspectors record their observations on a Compliance Review Report, which are submitted to USCIS for appropriate action, including revocation and further investigations
Site inspectors are not adjudicators and do not make decisions on applications

33. FDNS Workplace Site-Visits
Inspector perform the following tasks:
Verify the information, including supporting documents, submitted with the petition
Verify petitioning organization exists
Review public records and information on petitioner
Conduct unannounced site visits to the worksite
Take photographs
Interview personnel to confirm the beneficiary’s work location, physical workspace, hours, salary and duties
Interview the beneficiary
Request additional documentation (e.g. payroll records)

34. Strategies for Site-Visits
Be prepared and have a strategy!!
Designate in advance which employer representative will handle site visit
Inform other staff members they are not authorized and should refer any investigators to responsible person
Employer representative should be familiar with the contents of petitions or have easy access to them (if number of petitions are voluminous)
Provide the beneficiary with a copy of the petition and have them review typical questions
Check officer’s credentials and document them
Always accompany the officer while onsite, if wants to take a tour or photograph
Take detailed notes of visit, specifically any questions answered and any documentation submitted
Outsourced petitions?

35. Questions
Don’t answer questions unless you are sure of the answers. Rather, inform the officer that you would need to check on the information first
Standard list of questions:
About the petitioner: type of business, revenues, number of employees, locations
About the petition: position title/duties, salary, work location, job requirements, hours per week, payment of petition’s fees
o If L-1, will ask about the management functions or specialized knowledge
About the beneficiary: confirmation of continued employment, qualifications, hire date

37. 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
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.

38. Wage and Hour Division Investigations
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

39. 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

40. 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.

41. Or visit us on the web at:
9/21/2018
Any Questions?
Feel free to contact David H. Nachman, Esq., Ludka Zimovcak, Esq. and Snehal Batra, Esq. for more information at:
(x107)
Or visit us on the web at:
NPZ Law Group, P.C.Copyright 2012 NPZ Law Group, P.C.
NPZ Law Group, P. C.