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ABCs of H-1Bs (This Is Part Iii Of An Viii Part Series): What H-1B Employers Need To Know About The Lca To Avoid Potential Dol Compliance Pitfalls.<!–END ARTICLE TITLE–>
</h3><h4><i>by <a href=”http://discuss.ilw.com/articles/articles/393002-article-abcs-of-h-1bs-this-is-part-iii-of-an-viii-part-series-what-h-1b-employers-need-to-know-about-the-lca-to-avoid-potential-dol-compliance-pitfalls-by-david-h-nachman-esq-michael-phulwani-esq-and-ludka-zimovcak-esq#bio”>
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David H. Nachman, Esq., Michael Phulwani, Esq. and Ludka Zimovcak, Esq.
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The H-1B visa program permits a United States employer (“employer”) to
temporarily employ nonimmigrants to fill specialized jobs in the United
States. The Immigration and Nationality Act (the “INA” or the “Act”)
requires that an employer pay an H-1B worker the higher of the actual wage
or the local prevailing wage, in order to protect U.S. workers and their
wages. Under the Act, an employer seeking to hire a foreign national in a
specialty occupation on an H-1B visa must receive permission from the
Department of Labor (“DOL”) before the foreign national may obtain an H-1B
visa. The Act defines a “specialty occupation” as an occupation requiring
the application of highly-specialized knowledge and the attainment of a
bachelor’s degree or higher. The Act requires an employer seeking
permission to employ an H-1B worker to submit and receive an approved Labor
Condition Application (“LCA”) from the DOL.
The employer should be extremely cautious in making attestations on the LCA
and complying with the regulations governing it. Knowingly and willingly
furnishing any false information in the preparation of the LCA and any
supporting documentation, OR even aiding, abetting, or counseling another
to do so is a federal offense, punishable by fine or imprisonment up to
five (5) years or both. Other penalties may also apply to the fraud or
misuse of the LCA and to the perjury with respect to the ETA 9035.
Where and When Should Employers Post Notice of the LCA?
The notice requirement of an LCA mandates that employers post notice of
their intent to hire nonimmigrant workers. An H-1B employer must provide
notice of the filing of an LCA. When there is a collective bargaining
representative for the occupation in which the H-1B worker will be
employed, the employer must provide such notice to that collective
bargaining representative by way of a copy of the LCA or other document
which contains all the required information.
When there is no bargaining representative, the employer must provide such
notice in one of the two following manners. A hard copy notice of the
filing of the LCA must be posted in two conspicuous locations at each place
of employment where any H-1B nonimmigrant will be employed (whether such
place of employment is owned or operated by the employer or by some other
person or entity). Alternatively, the electronic notice of the filing of
the LCA may be posted by providing electronic notification to employees in
the occupational classification (including both employees of the H-1B
employer and employees of another person or entity which owns or operates
the place of employment) for which H-1B nonimmigrants are sought, at each
place of employment where any H-1B nonimmigrant will be employed. Further,
the H-1B employer is required to post notice on or within 30 days before
the date the labor condition application is filed and should remain posted
for a total of 10 days.
In situations involving H-1B workers working at end-site users (third party
placements), it is the duty of an H-1B employers to post the notice of
filing of the LCA at the secondary sites. Even if the H-1B employer makes a
good faith attempt to post notice but the end-site user refuses to post
notice at its worksite, the H-1B employer will be found to have
substantially and willfully violated the law. The end-site users have no
obligation under the Act to post the notice.
Additionally, the posting requirement mandates that employers note and
retain the dates when, and locations where the notice was posted and to
retain a copy of the posted notice.
Additional Obligations for H-1B Dependent Employers and Willful Violators.
An employer is considered H-1B dependent if it has: 25 or fewer full-time
equivalent employees and at least eight (8) H-1B nonimmigrant workers; or
26 – 50 full-time equivalent employees and at least 13 H-1B nonimmigrant
workers; or 51 or more full-time equivalent employees of whom 15 percent or
more are H-1B nonimmigrant workers.
An employer whose dependency is not readily apparent or is on the
borderline may use the “snap- shot” test. The snap-shot test requires a
comparison of the total number of all H-1B workers to the number of the
total workforce (including H-1B workers). If a small employer’s snap-shot
calculation shows that the employer is dependent, the employer must then
fully calculate its dependency status. If a large employer’s calculation
exceeds 15 percent of its workforce, that employer must fully calculate its
The employer is a willful violator if the employer has been found at any
time during the past five (5) years preceding the date of the application
(and after October 20, 1998) to have committed a willful violation or a
misrepresentation of a material fact (two of the Labor Condition
Application (LCA) attestations). A willful violator employer must comply
with additional attestations under any LCA it files within five (5) years
of the finding of a willful violation. The only exception is when an LCA is
filed for and used exclusively for exempt H-1B workers.
H-1B dependent employers and/or willful violators must attest that they
have not displaced a U.S. worker at the time of filing an H-1B visa
petition. Additionally, H-1B dependent employers and/or willful violators
are required to make displacement inquiries. Displacement inquiry is an
obligation of the H-1B dependent employers and/or willful violators when
they desire to place an H-1B nonimmigrant with another/secondary employer
where there are indicia of an employment relationship. Further, such
employers must attest that they have taken good faith steps to recruit U.S.
workers, and that the employer offered the job to any equally or better
qualified U.S. worker who applied for the job for which the H-1B worker is
An Employer’s Duty to Keep Records of Wages Paid to H-1B Employees.
The Act also provides that the LCA, filed by the employer with the DOL,
must include a statement to the effect that the employer is offering to an
alien status as an H-1B nonimmigrant, that wages for H-1B visa holders are
at least equal to the actual wage level paid by the employer to all other
individuals with similar experience and qualifications for the specific
employment in question, or the prevailing wage level for the occupational
classification in the area of employment, whichever is higher, based on the
best information available at the time of filing the application.
Decades back while addressing a claim brought under the Fair Labor
Standards Act, the United States Supreme Court in a landmark decision held
that once an employee shows that he has performed work and was not properly
paid for it, and he produces sufficient evidence of the amount and extent
of work as a matter of just and reasonable inference, the burden shifts to
the employer to produce evidence of the precise amount of work that was
performed or evidence to negate the inference created by the employee’s
evidence. The Court explained that it is the employer’s duty to keep
precise records and that such a burden should not fall on the employee and
bar the employee from recovery when such records cannot be produced.
Thus, acting on the sufficient evidence produced by the employee, if the
Administrator of the Wage and Hour Division (WHD) establishes that the
employer has failed to properly compensate the H-1B nonimmigrant worker
then the employer bears the burden of establishing the existence of
circumstances that warrant the wages not being paid or benefits not being
offered, by a preponderance of the evidence. Failure to do so would result
in the employer being held liable for the payment of back wages and other
Back Pay Liability Not Subject to One-Year Statute of Limitation.
DOL accepts complaints by aggrieved persons or organizations or through its
own initiated investigation relating to misrepresentation or failure of the
employer to meet the conditions stated in the LCA. An aggrieved employee
has 12 months after the latest date on which the alleged violations were
committed to file a complaint; however, this Statute of Limitations does
not apply to an employer’s back pay liability.
If the employer fails to pay an H-1B worker the “required wage,” it can be
ordered to pay back pay or make-up the deficiency. The regulations require
the WHD Administrator to determine whether an employer has the proper
documentation to support its wage attestation. The Administrator may
contact the Employment and Training Administration (ETA), a part of DOL, to
get the prevailing wage. The regulation is permissive, and the ETA’s
determination is merely an option that the Administrator can use in its
investigation. If the employer fails to support, through proper
documentation, how it arrived at the prevailing wage level, the
Administrator can use the employer’s Letter of Support and I-129 Forms
submitted to the United States and Citizenship Services (USCIS) for the
approval of H-1B petition in determining whether the employee was
appropriately classified at the specific wage level.
Civil Money Penalties for H-1B Violations and Debarment for Non-Compliance.
The WHD Administrator may assess Civil Money Penalties (CMPs) not to exceed
$5,000 per violation for a willful violation pertaining to wages. The
Administrator may also assess a penalty not to exceed $1,000 per violation
for displacement of U.S. workers, a substantial violation pertaining to
notification, labor condition application specificity, recruitment of U.S.
workers, or a misrepresentation of any material fact on the LCA.
The regulations require the Administrator to consider seven factors for the
assessment of CMPs: (1) Previous history of violation, or violations, by
the employer; (2) The number of workers affected by the violation or
violations; (3) The gravity of the violation or violations; (4) Efforts
made by the employer in good faith to comply with the provisions of the law
and regulations; (5) The employer’s explanation of the violation or
violations; (6) The employer’s commitment to future compliance; and (7) The
extent to which the employer achieved a financial gain due to the
violation, or the potential financial loss, potential injury or adverse
effect with respect to other parties.
Moreover, the regulations state that an employer that willfully fails to
pay wages shall be debarred for a period of at least 2 years. Further, a
substantial failure to provide notice may result in a one year debarment.
Additionally, an H-1B dependent employer’s failure to make displacement
inquiry may result in one-year debarment. Last but not the least, an H-1B
employer’s ignorance of the INA’s requirements or contention that
non-compliance was due to an attorney or an employee will not excuse
The prospect for debarment for an H-1B employer is scary. Debarment is a
very strong deterrent from non-compliance since debarment strikes at the
very heart of an H-1B employer’s livelihood. H-1B employees are necessary
to generate the income that allows “body shops” to exist.
For more information about the
H-1B nonimmigrant work visa
process or to consider H-1B nonimmigrant work visa options, the immigration
and nationality lawyers and attorneys at the Nachman Phulwani Zimovcak
(NPZ) Law Group, P.C. invite you to visit them on the web at
www.visaserve.com or to email them at email@example.com or to call the
firm at 201.670.0006 (x107).
About The Author<br/>
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<a><b>David Nachman, Esq. </b></a>is one of the Managing Attorneys at the Nachman Phulwani Zimovcak (NPZ) Law Group, P.C., a pre-eminent International Immigration and Nationality Law Firm dedicated to providing a wide array of business and family immigration law services for skilled U.S.-and Canada-bound workers. The Attorneys in our Law Firm assist clients with waivers, marriage cases, citizenship applications, I-130 sponsorship for family, etc.</p>
<a><b>Michael Phulwani, Esq. </b></a>is admitted to practice law in New York and India. He has been practicing law for about 40 years in the field of US Immigration and Nationality Laws. He has successfully handled many complex immigration matters with the Immigration and Naturalization Service and Consular Processing cases at American Consulates abroad and especially in India.</p>
<a><b>Ludka Zimovcak, Esq. </b></a>is a Managing Attorney at NPZ Law Group, PC. Mrs. Zimovcak’s passion for excellence in immigration law derives from her own family’s first-hand immigration experiences. She is fully licensed to practice as an Attorney in Slovakia and New York.</p>
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