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DOL Proposal To Eliminate Substitutions On Labor Certifications Throws Baby Out With Bath Water

by Cyrus D. Mehta and Cristina Velez

On February 13, 2006, the Department of Labor (DOL) published a proposed rule that would eliminate the ability for an employer to substitute an alien beneficiary on a labor certification application as well as reduce incentives to reduce the opportunity for fraud and abuse. The proposed rule applies to applications filed under the new Program Electronic Review Management (PERM) that took effect on March 28, 2005 as well as applications filed before that date.

While the DOL does have a legitimate interest to maintain the integrity of the program, some of its proposals will hurt legitimate employers and foreign national beneficiaries of labor certifications.

No Substitution of Foreign National Beneficiary

This proposed rule has been promulgated in light of what the DOL views as a “black market” in approved labor certifications. The DOL believes that labor certifications have been approved for the purposes of selling them to the highest bidder. According to the preamble to the DOL proposed rule, labor certifications have been obtained for fictitious jobs or have been filed by unscrupulous persons on behalf of non-existent employers or without the knowledge of the employer. There has also been a spate of recent convictions of attorneys. The DOL refers to Mr. Kooritzky who filed approximately 2,700 fraudulent applications with the DOL that he later sold to aliens for at $20,000 a piece so they could be substituted for the existing named beneficiary on the approved labor certification. See U.S. v. Kooritzky, No. 02-502-A (E.D. Va.).

Interestingly, the very same Mr. Kooritzky had earlier successfully blocked a similar rule of the DOL prohibiting substitutions in a federal appeals court on the ground that the DOL had not followed the requirements of the Administrative Procedures Act. See Kooritzky v. Reich, 17 F.3d 1509 (DC Cir. 1994).

It appears that the proposed rule will only have the effect of prohibiting substitutions of aliens with the DOL. Presently, based on an understanding between the DOL and Department of Homeland Security (DHS), the substitution occurs at the time of filing the employment-based immigrant visa petition (I-140) with the DHS after the approval of the labor certification.1 The DOL rule, in order to be effective, will have to be accompanied by a similar rule from the DHS, which has not been announced to date.

While the DOL is understandably concerned about the fraudulent filing of labor certifications to be sold as a commodity, there is no need to throw out the baby with the bath water. Bona fide employers legitimately wish to substitute the beneficiary if he or she has left the employment and not used the labor certification to obtain permanent residency. It takes a great deal of effort and several years (at least for pre-PERM applications) for an employer to obtain a labor certification on behalf of a foreign national beneficiary. The substituted beneficiary must still be able to establish that he or she meets all the requirements of the job opportunity. Furthermore, the employer has already unsuccessfully attempted to recruit US workers with these skills. Hence, it would be most unfortunate if legitimate employers are deprived of substituting beneficiaries under these genuine circumstances especially when a labor certification is approved after such an onerous and lengthy process.

Labor Certification Must Be Filed With USCIS Within 45 Days Of Approval

The proposed rule also requires the permanent labor certification to be filed with the DHS within 45 calendar days from the date that it is certified by the DOL. Here too, the DOL is concerned that the approved labor certification, which is presently valid indefinitely, could be sold to the highest bidder over a matter of time. But if the DOL eliminates substitutions, there is no question of the labor certification being sold.

The DOL is also concerned that the labor market test conducted and the prevailing wage determination used to obtain labor certification would become stale after a period of time.

Again, it is unreasonable for the DOL to narrow the window to only 45-days before the employer files approved the labor certification with the DHS. The employer’s ability to pay is crucial for winning an I-140 petition. Many employers legitimately require more time to file the I-140 petition especially if the financial documents such as tax returns and annual reports have not been finalized. Moreover, the foreign national beneficiary needs time to obtain verification of his or her foreign degrees as well as foreign employment experience. In addition, the DOL often approves a labor certification and mistakenly fails to transmit the approval to the employer for several weeks.

Therefore, the imposition of a 45-day deadline would cause undue hardship to legitimate employers who again have spent considerable efforts in unsuccessfully recruiting US workers and waited for several years for the approved labor certification.

No Sale, Barter Or Purchase Of Labor Certification Application

The proposed rule will further prohibit any kind of sale, barter or purchase of applications for permanent labor certifications and specifically states that approved labor certifications are not articles of commerce.

No one can disagree with this proposal of the DOL. But here too, the DOL imposes draconian rules to enforce its goals. In addition to prohibiting the sale of labor certifications, the DOL seeks to prohibit payment or reimbursement by the beneficiary foreign national of the attorney fees and other costs related to preparing and filing of a labor certification application. Thus, if the proposal is implemented, it will no longer be possible for a foreign national beneficiary to pay an attorney for legal services in connection with the labor certification application.

This proposal strikes at the heart of the attorney-client relationship. It is well accepted that the attorney represents both the employer and the foreign national beneficiary on the labor certification. Both parties become clients of the attorney as he or she is expected to provide legal advice to both. By expecting only the employer to pay the legal fee, the DOL assumes that the foreign national employee is not the client of the attorney.

The U.S. Supreme Court has previously recognized that restrictions on the speech of attorneys must not infringe upon otherwise lawful activity. In Bates v. State Bar of Arizona, the Court held that despite the government’s interest in preventing fraud, “[t]he appropriate response . . . is a sanction addressed to that problem alone, not a sanction that unduly burdens a legitimate activity.” 433 U.S. 350 (1977) [emphasis added]. Given the many mechanisms available to the DOL to prevent fraud, the government’s ability to prosecute offenders, and the legal profession’s own rules against unethical behavior, the prohibition on payment of legal fees and costs by the foreign national beneficiary is but another example of overreaching in the proposed regulations.

Conceivably, the attorney could offer legal advice to the beneficiary without accepting payment. The proposed rule, however, seeks to prohibit the establishment of an attorney-client relationship between the beneficiary and the attorney. As speech in the form that is sold for profit, concerns lawful activity, and is not misleading, legal advice related to the labor certification process is at the very least subject to the same protections as commercial speech under the First Amendment. See Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980); Bates, 433 U.S. at 370. However laudable the government’s interest in preventing fraud, the prohibition on payment of legal fees by foreign national beneficiaries is far more extensive than necessary and unconstitutionally chills protected speech.

Debarment From Labor Certification Program

The proposed rule also gives the DOL the ability to refer cases for investigation based on possible fraud or willful misrepresentation in connection with the labor certification program. The DOL can refer employers, attorneys and agents. In the event that an employer or attorney is under criminal indictment, the DOL can suspend the processing of the labor certification application. This proposal turns the presumption of innocence on its head. It is hornbook law that a person under criminal indictment is presumed innocent until convicted.

Finally, the DOL also proposes to debar an employer, attorney, or agent from the permanent labor certification program for a period of no more than three years based upon any prohibited conduct under the rules such as the sale, barter or purchase of a labor certification or providing false or inaccurate information on the form. Debarment will also be imposed on failure to comply with the terms of the labor certification program or if a court, DHS or Department of State determines fraud or willful misrepresentation involving a permanent labor certification application.

The public is invited to submit written comments on or before April 14, 2006.

This article originally appeared on on February 17, 2006.

About The Author

Cyrus Mehta, a graduate of Cambridge University and Columbia Law School, practices immigration law in New York City and is the managing member of Cyrus D. Mehta & Associates, P.L.L.C. He is the Chair of the Board of Trustees of the American Immigration Law Foundation and recipient of the 1997 Joseph Minsky Young Lawyers Award. He is also Secretary of the Association of the Bar of the City of New York and former Chair of the Committee on Immigration and Nationality Law of the same Association. The views expressed in this article do not necessarily represent the views of ABCNY or AILF. He frequently lectures on various immigration subjects at legal seminars, workshops and universities and may be contacted in New York at 212-425-0555.

Cristina Velez is an Associate at Cyrus D. Mehta and Associates, P.L.L.C, where she practices in the area of immigration law. She is a graduate of Cornell Law School, where she was an editor of the Cornell Journal of Law and Public Policy. She is admitted to the bar of the State of New York.

1See Memo, Crocetti, Assoc. Comm. Adjudications, HQ 204.25-P (Mar. 7, 1996), reprinted in 73 Interpreter Releases, 436, 444-46 (Apr. 8, 1996); Memo, Farmer, Admin. Regional Management, DOL (Mar. 22, 1996), reprinted in 73 Interpreter Releases 436,447-48 (Apr. 8, 1996).

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.