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Roving H-1B Employees: An Employer's Guide To Labor Condition Applications

by D.Ray Mantle

INTRODUCTION

Each spring, the news media brings us reports of how the high-tech and other industries in the United States are struggling to find enough qualified professionals to fill job positions, and how the demand for highly skilled workers has far surpassed both the number of qualified U.S. applicants and the number of foreign professionals who can be employed under the H-1B visa category. With a cap of only 65,000 visa numbers available for new foreign workers each year, employers are racing to prepare for April 1, the first day applications can be filed for the new fiscal year.[1] Trends over the past several years suggest that applications received after April 2 will not even be considered, unless the individual holds a U.S. Master's degree. For those employers lucky enough to win one or more of the coveted H-1B cap workers, or who have existing H-1B workers transfer into their workforce, helping the individual maintain their legal status can be just as tricky.

Any H-1B petition filed with U.S. Citizenship and Immigration Services (USCIS) must be supported by a certification from the U.S. Department of Labor (DOL) covering the employer's ongoing obligations with respect to the H-1B worker.[2] This article provides a brief overview of the employer's obligations under the Labor Condition Application (LCA) and a practical guide to understanding when a new LCA is required for roving employees.

THE LABOR CONDITION APPLICATION

The Labor Condition Application consists of a series of attestations made by the employer regarding the employment conditions of the H-1B worker in respect to other workers. Completing and filing the application is remarkably simple - a few yes/no questions and basic information on wages and work location are provided through an online application system, and the LCA is usually certified within moments.[3] In contrast to the ease and simplicity of the application process, the attestations made by the employer require extensive analysis and preparation before submitting the application. Each H-1B employer filing an LCA must make at least four attestations, each of which carries significant legal obligations.[4] The attached checklist (Appendix A) outlines the basic points associated with these attestations.

WAGE REQUIREMENTS

By signing the LCA, the employer agrees to pay the H-1B worker the required wage for the entire period of authorized employment. The required wage is based on the geographic area of employment and is either the "actual wage" the employer pays similarly employed individuals in the same occupation for that area, or the "prevailing wage" for the occupation in that area, whichever is higher.[5] The methodology used to determine the "actual wage" for the position must be documented, and can include such factors as experience, qualifications, education, job responsibility and function, specialized knowledge, and other legitimate business factors, subject to recognized principles or accepted standards. If there are other employees with substantially similar qualifications and duties, the "actual wage" is the amount paid to these other workers.[6] The "prevailing wage" is most often the weighted average of wages paid to workers similarly employed in the area of intended employment, unless a collective bargaining agreement provides a different wage rate for the position.[7] In most cases, the Department of Labor's Online Wage Library provides adequate prevailing wage rates, and the employer does not need to incur the expense of subscribing to other published wage surveys.

The employer also agrees to pay the required rate to the employee "cash in hand, free and clear, when due."[8] Authorized deductions may be made, such as payroll taxes and union dues, as well as deductions for health care and other benefits in the same manner as other workers.[9] In fact, employers are required to offer benefits to H-1B workers on the same basis as benefits offered to U.S. workers.[10] Other deductions that may reduce the wage below the required level are carefully regulated by the Department of Labor, and certain other deductions are flatly prohibited.[11]

Employers should also note that they are obligated to pay the H-1B worker the full wage rate, even during nonproductive periods. An employer cannot avoid the wage obligation by benching the H-1B worker.[12] Violations of this, or any of the wage obligations, may result in enforcement action and an assessment of back wages and additional fines.[13]

WORKING CONDITIONS

An employer certifies in the LCA that the working conditions of similarly employed U.S. workers in the same area will not be adversely affected by employing the H-1B worker.[14] This obligation is met by offering the H-1B worker the same working conditions on the same basis and in accordance with the same criteria as those offered to similarly employed U.S. workers.

STRIKES AND LOCKOUTS

An employer cannot file the LCA if a strike or lockout is underway in the occupational classification at the place of employment, nor can an employer transfer a H-1B worker to a location where there is an ongoing strike or lockout involving the same occupation.[15] If a strike or lockout arises after the LCA has been filed, the employer is obligated to notify the Employment and Training Administration of the Department of Labor in writing, who may consult with the union and USCIS.

NOTICE

Within 30 days prior to filing the LCA, an H-1B employer is required to provide notice to employees in the same occupational classification at the worksite.[16] If a collective bargaining agreement is in place, notice must be provided to the collective bargaining representative. In all other cases, notice must be provided either as a physical posting at the worksite or through electronic notification.

If notice is provided through a physical posting, it must be placed in two or more conspicuous places for a total of 10 days. DOL recommends that the notice be posted near other required notices, such as OSHA or wage and hour posters.[17] Another option is to provide electronic notification to workers in the same occupational classification at the worksite (including both employees of the H-1B employer and employees of any other employer at the worksite). If notification is made through an intranet accessible to all workers in the same occupation at the worksite, then it must remain available for 10 days. The employer may also meet the notice requirement by sending an email to each such worker. Regardless of how notice is provided to workers in the same occupation at the worksite, the employer is also required to provide the H-1B worker a copy of the signed LCA on or before the first day of work.[18]

The required contents for the notice are all contained on the LCA, and many employers elect to simply post a copy of the LCA in the appropriate locations for 10 days. If another format is used, the notice must contain the information detailed in the attached checklist (Appendix A), including instructions on how complaints may be filed.[19]

ADDITIONAL REQUIREMENTS

All H-1B employers must also certify on the LCA whether they are H-1B dependent, or if they had previously been found to be a willful violator. A simple test for H-1B dependent employer status is outlined in the attached checklist, and any employer falling under this category will be required to make additional attestations regarding specific recruitment of U.S. workers.[20]

RECORD RETENTION

The attestations made in the LCA must be supported by documentation retained in a file at the employer's principal place of business in the U.S., or at the place of employment, which is available for public examination.[21] The public access file must be available within one working day of filing the LCA, and remain accessible until one year after any of the H-1B workers it covers are no longer employed. The required contents of the file are outlined in the attached checklist (Appendix A). In addition to the public access file, the employer must also retain payroll records for the H-1B workers and other employees in the same occupational classification for at least three years after the record was created.[22]

FILING THE INITIAL LCA

Determining when to file the initial LCA is a straightforward process. The LCA may be filed with DOL as soon as the employer has provided the required notice to workers at the worksite. Employers preparing H-1B petitions for an April 1 filing date should also be aware that the online LCA system limits the end date of the LCA to no more than three years after the date the LCA is submitted. The cap-subject H-1B petition will have a start date of no earlier than October 1, 2008, and an end date up to three years later. Under these circumstances, the employer must track both the H-1B status expiration date and the LCA expiration date, and later submit a new LCA to cover the gap. USCIS also encourages employers to file multiple location LCAs or multiple LCAs with the original H-1B petition if employee transfers are anticipated.

WORKSITES AND TRANSFERS

The LCA program is designed to protect U.S. workers within the same occupation and geographic area as the H-1B worker, as well as to provide adequate protections to the H-1B worker. Although the notice requirements apply to the specific worksite(s) where the H-1B worker will be stationed, only the city and state of the worksite(s) are listed on the LCA. An employer who transfers H-1B workers to different worksites within the cities or geographic areas listed on the LCA may not have to file a new LCA, but the employer is still under the same obligations for the attestations made on the initial LCA with respect to the new work location. For example, if a worker is transferred to a worksite at the other end of town, a new LCA is not required, but the employer must provide notice at the new worksite as outlined above.

A new LCA is required, however, whenever an employee transfers to a new "worksite" in a different geographic area. A computer engineer, for instance, who works on projects or accounts in different geographic areas for weeks or months at a time, must have a new LCA in place for each assigned location. The presumption is that any transfer is a transfer to a new worksite. The attached LCA Transfer Checklist (Appendix B) outlines instances where the regulations do not require the employer to file a new LCA and, in some cases, do not require notice at the temporary location.

TEMPORARY TRANSFERS TO NON-WORKSITES

Determining whether a new LCA is required for a location depends on whether it meets the definition of "worksite" under the DOL regulations.[23] A temporary transfer to an off-site location may qualify as a "non-worksite," and not require a new LCA or notice, if it falls under any of the following three categories:

  • Peripatetic Occupations. DOL recognizes that some occupations necessarily involve frequent travel to client sites or other locations, and that requiring a new LCA or even posting notice at these sites would place an undue burden on U.S. employers. A new LCA will not be required if the nature of the occupation (not just the nature of the employer's business) is peripatetic, and the visits are on a casual, short-term basis. The strike and lockout prohibitions apply, and the employee cannot spend more than five (5) consecutive workdays on any single visit.
  • Occasional Travelers. Again recognizing the need for freedom of movement in performing services for clients, the DOL regulations also provide an exception for the occasional traveler. Workers who spend most of their time at one worksite, which would be covered by a certified LCA, may also travel to another location without filing a new LCA if the visit is on a casual, short-term basis, which can be recurring but not excessive, and no single visit exceeds ten (10) consecutive workdays.
  • Employee Development Activities. In addition, H-1B workers may attend conferences, seminars, training meetings, and other events without filing a new LCA. Note that this exception does not cover workers who are regularly engaged in providing the training or otherwise working at the conferences or events.
Care should be taken when determining if an assignment qualifies under these exceptions. The five day limitation per visit for peripatetic occupations may lead an employer to mistakenly believe they can contract with a client to provide an on-site support technician for four days a week to support an ongoing project that will last several months, and then have the H-1B worker spend just one day a week back at the primary worksite. Such a contractual or planned arrangement does not qualify as a "casual, short-term basis," and an LCA would likely be required for the work location.

SHORT-TERM PLACEMENTS

If the H-1B worker's transfer does not meet any of the "non-worksite" exceptions, the regulations outline additional circumstances where a new LCA is not required. An H-1B employee may take on a short-term assignment or placement at a new location outside the geographic area(s) listed on the original certified LCA if the employer meets all of the conditions listed in the regulations and detailed in the attached checklist.[24] Short-term placement under these provisions is only available if the employer has not yet filed an LCA for the particular occupational classification within the same geographic area of the short-term assignment.

In addition to continuing to meet all of the LCA obligations for the original, permanent worksite, the employer must also pay the actual cost of lodging, travel, meals, incidental and miscellaneous expenses for both workdays and non-workdays throughout the temporary assignment.[25] The duration of the assignment is limited to a total of 30 workdays within a one-year period, combining all worksites within the geographic area. This time limit is extended to 60 workdays if the H-1B employee continues to maintain a residence in the area where his or her permanent worksite is located, the permanent worksite has a dedicated workstation and telephone for the employee, and the employee spends a substantial amount of time at the permanent worksite during the year.[26] At the end of the 30 or 60 day period, the employer must either transfer the employee back to a permanent worksite or file a new LCA for the new location.[27]

Short-term placement is a viable option for employers seeking to develop a presence in new geographic areas, but the option cannot be used to continuously rotate workers into the area in order to avoid filing an LCA or providing notice at the new site.[28] Also, if any worker exceeds the workday limits within the one year period, the employer has violated the terms of the LCA and cannot use short-term placement again for the same occupational classification within that geographic area.

CONCLUSION

Sponsoring an individual for an H-1B visa is not a process to be taken lightly. Employers petitioning for H-1B workers assume significant legal obligations when they file the required Labor Condition Application. Wage, working conditions, notice, and other requirements provide legal protections to both H-1B workers and U.S. workers, and careful planning and preparation are needed prior to filing the LCA. Changes in working conditions, such as a permanent or temporary transfer, may necessitate filing a new LCA and, in some cases, a new or amended H-1B petition with USCIS. Furthermore, failure to comply with all of the attestations made in the LCA not only places the employee's immigration status at risk, but also exposes the employer to government enforcement actions and assessments for back pay and fines. Employers with a mobile workforce should pay particular attention to the LCA requirements and exceptions for temporary transfers and short-term placements, outlined in this article and the attached checklists.

Appendix A: LCAATTESTATIONCHECKLIST

Appendix B: LCATRANSFERCHECKLIST


Endnotes

1 Immigration and Nationality Act § 214(g). The annual visa cap includes 65,000 new H-1B applicants, plus 20,000 visas reserved for applicants holding advanced degrees from U.S. institutions. Certain educational institutions and nonprofit or government research organizations are exempt from the cap. Special cap number allocations are also available to H-1B nonimmigrants who are nationals of Chile or Singapore pursuant to certain free trade agreements.

2 8 CFR § 214.2(h)(4)(i)(B).

3 Employers are required to use the online application system at http://www.lca.doleta.gov/eta_start.cfm. Employers without internet access or with disabilities may apply by mail only if a written request is approved by DOL prior to submitting any applications by mail.

4 The attestations are made under penalty of perjury, fraud or misuse (18 USC §§ 1546, 1621), as well as separate penalties for knowingly and willingly furnishing any false information, or aiding or counseling someone else to do so. (18. U.S.C. 1001).

5 20 CFR § 655.731(a).

67 20 CFR § 655.731(a)(1). If the H-1B worker is the only employee in the position at the location, then the "actual wage" is simply the wage offered to the H-1B worker.

7 20 CFR § 655.731(a)(2), (b)(3).

8 20 CFR § 655.731(c).

9 20 CFR § 655.731(c)(9).

10 20 CFR § 655.731(c)(3).

11 20 CFR § 655.731(c)(10).

12 20 CFR § 655.731(c)(7).

13 20 CFR § 655.731(d).

14 20 CFR § 655.732.

15 20 CFR § 655.733.

16 20 CFR § 655.734.

17 20 CFR § 655.734(a)(1)(ii)(A)(2).

18 20 CFR § 655.734(a)(3).

19 20 CFR § 655.734(a)(1)(i). For most employers, the notice must state: "Complaints alleging misrepresentation of material facts in the labor condition application and/or failure to comply with the terms of the labor condition application may be filed with any office of the Wage and Hour Division of the United States Department of Labor." H-1B dependent employers filing for nonexempt workers must provide a more detailed statement from the regulations.

20 20 CFR § 655.736.

21 20 CFR § 655.760(a).

22 20 CFR § 655.760(c). If enforcement action is taken against the employer, the payroll records must be maintained until the enforcement proceedings have ended.

23 20 CFR § 655.715.

24 20 CFR § 655.735.

25 20 CFR § 655.735(b)(3).

26 20 CFR § 655.735(c).

27 20 CFR § 655.735(f).

28 20 CFR § 655.735(e).

D. Ray Mantle, Attorney at Law


About The Author

D. Ray Mantle practices immigration law in Frisco, Texas. After receiving his Juris Doctorate, cum laude, from the J. Reuben Clark Law School at Brigham Young University, Mr. Mantle served as an Attorney Advisor in the Department of Justice - Executive Office for Immigration Review, and worked as an associate with a leading corporate immigration law firm before opening his own practice. Mr. Mantle is a member of AILA and the Texas Bar Association. He can be reached by email at dray@mantleworks.com.


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