3.08.2012

A Brief Compliance Guidance for H-1B Employers

The National Foundation for American Policy (NFAP) has reported an increase in denials of H-1B petitions by U.S. Citizenship and Immigration Services (USCIS) in the past three years. An H-1B petition is a request for a temporary visa for foreign workers and is usually filed by a U.S. employer wishing to employ a foreign worker in a specialty occupation based on his/her education and expertise. The visa is valid for three years with the possibility of renewal for another three years through a formal application process. In recent years, the Department of Labor (DOL) has also increased the frequency of its investigations of H-1B practices and the harshness of its penalties. A DOL audit generally assesses whether there are any violations of the Labor Condition Application (LCA), a mandatory application for all H-1B employers and the first step in the H-1B process. It is always best to consult with counsel before filing an H-1B petition and related extensions, as the “do-it-yourself” approach can often lead to denials, greater appeal costs, and can have irreversible consequences for the employer and the employee.
However, employers can take the following steps to ensure compliance with all H-1B and LCA requirements.
Know Your H-1B Employees. It is essential that a company’s Human Resources (HR) department be aware of which of its employees are H-1B visa holders. This seems like a simple task; however, for HR departments of large companies that oversee the HR process for multiple subsidiaries, the situation is more complex. When entities are bought or sold, or when two entities merge, the HR representatives must inquire whether any H-1B or other foreign workers are employed by the newly added entity.
Centralize the Process. Designate one member of the HR department to keep all files related to foreign workers, including H-1B visa holders, and provide him or her with sufficient training regarding the nature and requirements of the H-1B visa process, document retention requirements, H-1B extension procedures, and what to do in case of an audit. The designated person should also keep and maintain the LCA documentation, such as the prevailing wage determinations or the public access file that must be maintained by the employer when filing an LCA.
Organize the Important Data. Create and keep a detailed log of H-1B employees, including their names, their dependents (if any), the validity of the H-1B status, the entity that submitted the H-1B petition, and the worksite for which the visa was approved. Companies that contract the work of H-1B employees to different clients or work locations should know that the employee is allowed to work only in approved locations. If the company needs to transfer the H-1B employee to another location, an immigration attorney should be consulted to ensure that the proper paperwork is filed with the DOL and USCIS.
Review Periodically. Monitor the log regularly to determine the status of H-1B workers, whether they have transferred to or are doing work for a different subsidiary, are working at a different location, and/or whether an extension is needed soon.
Request Timely Extensions. At least two months before a worker’s H-1B status expires, determine whether the status should be extended for an additional three years. It is very difficult to file for an extension of the H-1B status for an out-of-status worker, so it is important to contact an immigration attorney as soon as possible to begin the extension process. An extension denied as a result of a delay can result in devastating consequences for the employee and his family, and can have negative consequences for the employer as well.
Deal with Termination. When H-1B employment terminates, it is necessary to document the termination and formally revoke the H-1B petition. The employer should request a confirmation of the revocation from USCIS to provide a clear end to the employer’s wage obligations. DOL and courts have sometimes found that in the absence of a revocation, wages were appropriate until the confirmation date of the revocation.
No Benching. An employer that has little or no work for an H-1B employee has only three options: 1) Continue to pay the prevailing wage to the employee even if he or she is in “nonproductive status”; 2) Terminate the employee and revoke the H-1B petition; or 3) Amend the H-1B petition for part-time employment if the employer has some work.
Focus on Clean-up Work. Employers should take immediate remedial action in cases of labor or H-1B violations to show good faith and, in case of an audit, avoid harsher DOL penalties. Employers should not attempt to cover up or falsify documents, as this will make the problem worse. Some corrective steps include providing training to HR personnel regarding H-1B requirements, filing H-1B petition amendments, filing new LCAs, paying back wages, organizing documentations, and establishing a clear procedure for dealing with H-1B petitions and employees in the future.


614.723.2092
kbasko@ralaw.com

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