Special Problems and Advanced Strategies Part 1
The final 3 articles in this series will address several especially challenging situations for H-1B petitioners.
A. Transfer Between Multiple Work Locations
One of the more technical aspects of the LCA and H-1B petition process which can cause problems for employers is its work location-specific nature. The LCA must state a geographic "intended area of employment," which has particular relevance, for example, in establishing the prevailing wage that the employer must pay. In turn, the H-1B petition must state the location, or locations, of employment, which must come within the locations stated on the LCA. The H-1B petition is then approved for work only on the terms described in the petition.
If the H-1B nonimmigrant works in a location that was not included on the LCA and H-1B petition, the INS may claim that he or she has failed to maintain status. The employer may then be considered to be employing the person in the location without authorization because it has not filed an LCA for the location and has not included a certified LCA for the location in its H-1B petition filing. The employer may even be accused of having made misrepresentations on the LCA or H-1B petition forms to the effect that it knew at the time of petition filing that the foreign national's work location would likely be different from that specified on the forms or that it failed to disclose that the position involved "roving" employment by its nature.
The location-specific system presents no problems where H-1B workers will be employed in only one location. It creates confusion, a bureaucratic burden, and legal risk, however, for employers who must transfer the foreign national between work locations during the worker's petition approval period. Many large companies have offices in various locations throughout the country, and may need to rotate personnel between offices. The problem is more acute for technical staffing and consulting companies, which regularly transfer personnel between client sites to fill project needs of varying duration. This employment is "roving" in nature because the ultimate work locations cannot reasonably be anticipated when the H-1B petition is filed. If the LCA and H-1B petition in these situations only specified one work location, the employer might be required to undergo a new LCA process and file an amended H-1B petition to report the change in location. With advance planning and use of the "multiple location" LCA strategy, however, the employer may draft H-1B petitions to allow for potential transfers and "roving" employment.
A petition that uses this strategy must specify the initial location where the person will work, or, if such locations are unknown, the permanent "home base" of employment, which is often the company headquarters, and then should state on the petition form or in the supporting letter that the position is subject to potential transfer to other sites based on business need. If the employer can identify the other sites in advance, it should list them. If it cannot do this, it should state that the other sites have not yet been selected, but are included within the locations identified on the LCA or LCAs submitted with the petition.
The petitioner should then submit a certified LCA wherein the first area of employment listed matches the initial location or "home base" stated on the H-1B petition. That LCA may then list a second area of employment as potential transfer location. The employer may submit additional LCAs, each of which lists two areas of employment.
Employers that file a high volume of H-1B petitions for "roving" positions use both the "multiple location" and "multiple position" LCA strategies. They typically look at the volume and potential initial work locations for H-1B petitions that they anticipate filing in the course of a year, and engage in strategic planning to obtain LCAs covering all potential areas of employment where H-1B nonimmigrants might be assigned and covering sufficient numbers of workers to meet their needs.
Due to a change in the LCA format, however, pursuing an advance "multiple location" LCA strategy is now more difficult. Formerly, any number of areas of employment could be listed on a supplemental addendum to one LCA, whereas now only two locations may be listed on a single LCA filing. This requires burdensome multiple LCA filings if an employer wishes to provide for its regional or nationwide placement needs in advance. The alternative strategy is to carefully monitor assignments of H-1B workers as they occur, and if there is no pre-existing LCA for the area, use "short-term placement" and/or a new LCA filing on a case-by-case basis.
The problem with this strategy is that when an H-1B worker is placed under a new LCA that the employer obtains after the H-1B petition was approved, INS has said that this constitutes a material change in the terms of employment requiring an amended I-129 petition to be filed. Most employers of "roving" personnel consider it impractical and burdensome to file an amended petition every time an H-1B worker changes location, in addition to filing the new LCA. The DOL has stated that it "recognizes that employers need clarity" on this point, and will consult with the INS and then provide coordinated interpretive guidance. If implemented, the proposal for a "national LCA" would also resolve this problem.
For additional discussion of "short term placement," "multiple location" strategies for roving employees and the "national LCA" proposal, please see the November 18, 2002 and November 25, 2002 articles in this series.
B. Where to File H-1B Petitions
The INS service center where the employer submits the H-1B petition is determined by the initial location of employment stated on the I-129 petition form and the LCA. For large employers with multiple, nationwide offices or technical staffing and for consulting companies with client locations throughout the country, petitions may be filed at any of the four service centers, depending on where the petitioner intends to employ the H-1B worker.
In 1998, the INS began briefly allowing large employers to submit a written request to a particular service center that it exercise "sole jurisdiction" over all that company's employment-based petition filings nationally, including H-1B petitions. The INS announced in late 2000, however, that it would no longer accept new companies into the program. INS will continue to honor the arrangement for companies previously accepted. For them it can provide strategic benefits, in providing for all H-1B petitions to be processed at one Service Center regardless of the location of employment.
C. Bench Time
Many technical staffing or consulting companies employ a business model whereby regular employees are only paid when they actually perform assigned work at a client site, and the employer can bill for their time. During periods when an employee is between client assignments or is otherwise not performing billable work, the company does not pay him or her. The company still considers itself to be the person's employer, and actively markets the person's skills to attempt to place him or her at another client site. When work for a new client begins, payment of salary resumes. These periods of unpaid status are referred to as "bench time," and typically do not last more than a few weeks. Client assignments vary in length from a few months to long-term placements lasting years. To compensate for the employee receiving no income during "bench time," the wage subsequently paid on client assignment is typically a higher hourly rate than the worker would earn as a regular salaried employee.
Historically, consulting and staffing companies have been high-volume users of the H-1B program. However, under the ACWIA statutory provisions for "nonproductive" status they are prohibited from nonpayment of wages during "bench time," and must then adopt another model for employment of H-1B personnel to comply with the INS program rules. The ACWIA provisions on nonproductive status were added in 1998 partly in response to the perceived widespread practice of consulting and staffing companies to bring foreign nationals to the U.S. and then not pay them for extended periods in "bench" status.
The most common, least risky employer action is to make such consulting positions regular salaried positions, with a guaranteed annual level of pay disbursed in regular weekly, biweekly, or monthly intervals. The LCA and H-1B petition would describe the position as a regular, full-time, salaried job, expressing the pay in annualized salary terms. Then the foreign national will receive a paycheck whether or not there is actual work at a client site.
Another strategy represents a cross between the hourly, no-pay-for-bench-time, and regular full-time salaried models for the position. In this third alternative, the employer styles the position as a flexible, part-time/full-time position subject to a range of hours to be worked during the week. The person is paid for full-time work or for any number of hours worked while he or she is on client assignment with the flexibility to have the work hours vary within the range specified. When the foreign national is in bench status, he or she is paid hourly at a level of part-time hours commensurate with "at least the average number of hours worked by the H-1B nonimmigrant." The LCA in this approach must designate "part-time" employment with the pay expressed in hourly terms. The H-1B petition similarly should describe the pay in hourly terms, and include the guaranteed minimum and upward range of hours. The ACWIA nonproductive status provisions expressly acknowledge the employer's option to designate a position as part-time on the LCA and H-1B petition and, in those instances, hold the employer's required wage obligation to pay wages at the level of "at last the average number of hours normally worked" and in no event below the minimum level of hours stated on the petition.
The next question, of course, is what level of hours is acceptable to list as the minimum in the part-time range. The statute and regulations do not specify a minimum number of hours that INS will accept on an H-1B petition. It will certainly not be acceptable to state zero hours as the minimum (using a range of "0 to 40" hours), however, because then there is no guaranteed minimum-level of pay and the employer is all but stating openly that the job opportunity consists of prohibited "speculative" employment. The level should be a minimum that represents sufficient pay to support the H-1B worker and any family members in the U.S. should the need for actual work hours and/or any subsequent bench pay based on the reduced average work hours fall below full time for a prolonged period. This minimum will be scrutinized by the U.S. consulate when the foreign national and his or her family apply for H-1B and H-4 visas, and the consular official will deny the visas if he or she feels the family could become "public charges" because the guaranteed minimum level of pay might cause them to fall below the poverty line. On balance, a reasonable minimum the author has used is 20 hours, for a range stated on the H-1B petition of "20 to 40 hours."
The employer must take care not to create an imbalance between what U.S. and H-1B workers may earn for equivalent work. If the employer creates a regular annual salary plan, for example, it should assign a value to the salary equivalent to what the normal employed consultant would earn in a year, taking into account an expected amount of bench time, with realistic discounts for any additional benefits or for the employer's risk in providing an income that is guaranteed. The employer should then offer the salary option to its U.S. workers as well.
Next week: More Special Problems and Advanced Strategies, Including "Recapture" of Time to Extend the Six-Year Maximum and Dealing with Lapse of Status.
About The Author
George N. Lester IV is of the Immigration Practice Group (the "Group") of the law firm of Foley, Hoag & Eliot LLP. Foley, Hoag & Eliot LLP is a full-service law firm of 200 lawyers in Boston and Washington, D.C. It was the first large law firm in Boston to develop an expertise in business immigration law, and for over thirty years its Group has represented employers in a full range of procedures to obtain temporary or permanent authorization to employ foreign professionals. Mr. Lester has practiced immigration law for ten years, and regularly speaks to business, academic, and professional groups on immigration topics. As part of his regular AILA activities, Mr. Lester meets with officials of the INS Vermont Service Center to discuss H-1B and other liaison topics. He also serves as Treasurer and a Board Member of the Political Asylum/Immigration Representation Project (PAIR) in Boston, and received that organization's Pro Bono Attorney Award for Dedication and Commitment to Human Rights in May 1996. Mr. Lester is a 1989 graduate of Northeastern University School of Law.
This article is the twenty-fourth in a weekly series by George N. Lester IV of the Foley Hoag LLP Immigration Practice Group based on a chapter he authored titled "Specialty Occupation Professionals," in the treatise Business Immigration Law: Strategies for Employing Foreign Nationals, edited by Rodney A. Malpert and Amanda Petersen, and appears here with the permission of the publisher. Published by Law Journal Press. Copyrighted by NLP IP Company. All rights reserved. Copies of the complete work may be ordered from Law Journal Press, Book Fulfillment Department, 105 Madison Avenue, New York, New York 10016 or at www.lawcatalog.com or by calling 800-537-2128, ext. 9300.
For the latest updates from the Foley Hoag Immigration Practice Group, including weekly Process Time Updates from the Vermont Service Center, click here.
The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.
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