ABCs OF H-1Bs – Part 3

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What H1-B Employers need to know about the LCA to avoid potential DOL compliance pitfalls.

The H-1B visa program allows U.S. employers to temporarily hire nonimmigrant workers for specialized jobs. The Immigration and Nationality Act (INA) requires that employers pay H-1B workers the higher of the actual or prevailing wage to protect U.S. workers. Before hiring an H-1B worker, an employer must receive an approved Labor Condition Application (LCA) from the Department of Labor (DOL). The LCA ensures that employers comply with wage and working condition standards.

Employer Responsibilities for the LCA

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Employers must exercise caution when making attestations on the LCA, as providing false information or aiding in fraud can result in fines, imprisonment, and other penalties. Misuse of the LCA or perjury on Form ETA 9035 carries severe legal consequences. Employers must also ensure that all information submitted in the LCA, such as work location, job title, and salary, is accurate and up-to-date.

Posting Notice of the LCA

Employers must provide notice of the LCA filing, either by:

• Sending notice to a collective bargaining representative (if applicable), or
• Posting a hard copy in two prominent locations at the worksite, or
• Posting an electronic notice to all employees in the occupational classification.

The notice must be posted for 10 days and be placed no later than 30 days before the LCA is filed. If the H-1B worker is placed at a third-party worksite, the employer is responsible for ensuring compliance. Failure to properly post the notice at an end-user worksite can result in substantial penalties. Employers must also document the posting dates and locations and keep copies for future audits or inspections by the DOL.

H-1B Dependent Employers and Willful Violators

An employer is considered H-1B dependent if:

• It has 25 or fewer employees and at least 8 H-1B workers,
• It has 26-50 employees and at least 13 H-1B workers, or
• It has 51 or more employees with at least 15% of them on H-1B visas.

Employers uncertain about their dependency status can use the “snapshot” test to compare H-1B workers to the total workforce. If an employer has willfully violated LCA requirements within the past five years, it must comply with additional attestations unless hiring an exempt H-1B worker.

H-1B dependent employers and willful violators must:

• Certify they have not displaced U.S. workers,
• Make displacement inquiries when placing H-1B workers at third-party worksites,
• Conduct good-faith recruitment efforts,
• Offer jobs to equally or better-qualified U.S. workers.

Additional obligations include proving that U.S. workers have been actively recruited through standard hiring processes before hiring an H-1B employee. Employers may be required to keep records of recruitment efforts to demonstrate compliance during audits.

Employer Record-Keeping Requirements

Employers must maintain accurate wage records demonstrating that H-1B workers receive at least the actual or prevailing wage, whichever is higher. If an employee claims unpaid wages, the burden shifts to the employer to provide evidence of compliance. Failure to maintain precise records can lead to financial liability, including back pay. Employers should also document benefits and working conditions provided to H-1B employees to ensure they meet regulatory standards.

Back Pay Liability

Employees must file wage complaints within 12 months of the last violation, but there is no statute of limitations on back pay liability. If the DOL’s Wage and Hour Division (WHD) finds an employer failed to pay the required wage, back pay and other remedies may be ordered. The WHD may also verify wage compliance through documentation such as employer letters and I-129 petition forms.

Employers who fail to comply with wage obligations may be subject to extensive investigations and could be ordered to compensate employees retroactively. These wage-related penalties serve as a deterrent against non-compliance and protect the integrity of the H-1B program.

Civil Money Penalties and Debarment

Employers violating H-1B regulations face civil money penalties (CMPs):

• Up to $5,000 per willful wage violation,
• Up to $1,000 per U.S. worker displacement violation,
• Additional fines for failure to properly post notices or misrepresent material facts.

CMP assessments consider factors like prior violations, number of affected workers, violation severity, and financial gain from non-compliance. Employers found guilty of willful wage violations may face at least two years of debarment from the H-1B program. Substantial failures to post LCA notices or make displacement inquiries can also result in one-year debarments. Employers cannot excuse non-compliance by blaming attorneys or employees.

Consequences of Non-Compliance

If an employer is found guilty of misrepresentation, violations related to underpayment, or failure to meet recruitment requirements, they may face further legal action. Debarment from the H-1B program can significantly impact business operations, particularly for employers that rely heavily on skilled foreign workers. Additionally, fines and penalties can result in substantial financial losses.

The risks associated with non-compliance make it essential for employers to thoroughly review all LCA-related documentation, follow DOL guidelines, and ensure proper wage payments and working conditions for H-1B employees.

Conclusion

Employers must adhere to LCA requirements to avoid DOL enforcement actions. Ensuring proper posting, maintaining wage records, and following displacement rules are crucial for compliance. The risks of fines, back pay orders, and debarment make strict adherence to H-1B regulations essential.

For more information on H-1B compliance, contact the immigration attorneys at Nachman Phulwani Zimovcak (NPZ) Law Group, P.C. via www.visaserve.com or info@visaserve.com, or call 201.670.0006 (x104).

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