Cite as "AILA InfoNet Doc. No. 15re9010 (posted Feb. 19, 1999)"
February 19, 1999
Mr. Raymond L. Bramucci
Assistant Secretary for Employment and Training
ATTN: Division of Foreign Labor Certifications
U.S. Employment Service
Employment and Training Administration
U.S. Department of Labor
200 Constitution Avenue, NW
Washington, DC 20210
Ms. Suzanne B. Seiden
Acting Deputy Administrator
Wage and Hour Division
ATTN: Immigration Team
U.S. Department of Labor
200 Constitution Avenue, NW
Washington, DC 20210
Re: Notice of Proposed Rulemaking on 20 CFR Parts 655 and 656, Labor Condition Applications and Requirements on Employers Using Nonimmigrants on H-1B Visas; Labor Certification Process for Permanent Employment of Aliens in the United States, 64 Federal Register 628 (January 5, 1999)(RIN 1215-AB09)
Dear Assistant Secretary Bramucci and Ms. Seiden:
Please find attached the comments of the American Immigration Lawyers Association to the above-cited proposed rule.
In submitting these comments we ask that the Department of Labor pay close attention to the comments and suggestions made within. As you are aware, the American Immigration Lawyers Association is the bar association of almost 6,000 attorneys and professors in the immigration field. Our experience of the H-1B program is extensive and unique, as we represent the entire spectrum of employers and employees who are affected by the program.
We remain available to discuss the contents of these comments with the Department and look forward to working with the Department as it works through its regulatory obligations.
Associate Director for Liaison
THE AMERICAN IMMIGRATION LAWYERS ASSOCIATION
THE NOTICE OF PROPOSED RULEMAKING
ISSUED BY THE U.S. DEPARTMENT OF LABOR
REGARDING THE H-1B PROGRAM
64 FEDERAL REGISTER 628 (JANUARY 5, 1999)
SUBMITTED FEBRUARY 19, 1999
The following are the comments of the American Immigration Lawyers Association in response to the above-described notice of proposed rulemaking (NPRM). The proposed rule seeks to implement significant provisions of the American Competitiveness and Workforce Improvement Act of 1998, which amended the H-1B nonimmigrant visa program for certain professionals in specialty occupations.
The American Immigration Lawyers Association (AILA) is a bar association of almost 6,000 attorneys and law professors practicing and teaching in the field of immigration and nationality law. AILA’s mission includes the advancement of the law pertaining to immigration and naturalization, the promotion of reforms and the facilitation of justice in the field. Its members represent the entire spectrum of temporary visitors and immigrants, and the U.S. citizens, families, and employers who sponsor them for temporary and permanent residence in this country.
AILA’s members are well acquainted with the H-1B program, having significant experience representing and educating both the employers who have need of essential international personnel and the employees who meet that need. The members of our association represent large and small businesses, academic institutions, research facilities, and government entities who employ foreign nationals. AILA is thus uniquely qualified to comment on the NPRM issued by the Department.
As an initial matter, AILA appreciates the openness with which the Department has approached its rulemaking responsibility in this instance. AILA has met twice with DOL representatives to express its general and specific concerns, and considers this process a valuable step to DOL’s understanding of the issues from the points of view of its many external stakeholders. We anticipate that this process will continue through the rulemaking process in the months to come.
The NPRM implements many of the provisions found in the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), Title IV, Division C of Public Law 105-277. The regulation also purports to republish (in most cases, in changed form) other provisions that have been the subject of legal or factual dispute in the long history of the rulemaking process by the Department of Labor for this nonimmigrant visa category (for a summary of the rulemaking history, see the Supplementary Information to the NPRM, 64 Fed. Reg at 632).
We commend the speed with which the Department of Labor (the Department or DOL) promulgated both the rule and the revised Labor Condition Application (Form ETA-9035) by which employers attest to their compliance with the statutory and regulatory mandates in the H-1B program. We are extremely concerned, however, that in its desire to issue a proposed rulemaking as quickly as possible, the Department has sacrificed the careful consideration and process that are its obligation to Congress and the public pursuant to the Administrative Procedure Act (APA). For the reasons described in more detail below, we ask that the Department withdraw the NPRM and issue an Advance Notice of Proposed Rulemaking in order to give the affected public adequate time, as well as adequate regulatory indications of the Department’s intentions, in order to focus on the issues and prepare a considered response.
II. THE EXTENT OF AILA’S CONCERNS REGARDING THE NPRM AS A WHOLE REQUIRE THE DEPARTMENT TO WITHDRAW THE NPRM
A. The Affected Public Has Not Been Provided With A Meaningful Opportunity To Comment
1. The short space of time is not necessitated by the legislation and is contrary to principles of the APA if not the clear letter of the law.
The time for the affected public to prepare comments to the NPRM is forty-five days (increased from thirty). The NPRM itself is over 50 pages long, covering not only the new legislation but going over many unresolved regulatory issues left over from the nine-year history of the contemporary incarnation of the H-1B program. ACWIA itself states that "In first promulgating regulations to implement the amendments made by [Section 412] in a timely manner, the Secretary of Labor and the Attorney General may reduce to not less than 30 days the period of public comment on proposed regulations." While we appreciate the extension granted by DOL of an additional two weeks, we remain concerned that the timeframe is still too short to provide an adequate and reasoned response to the many new issues raised in the NPRM, especially in the absence of actual regulatory language.
We appreciate the Department’s concerns that many legislative provisions are finite and that the need for final regulations in order to implement some of ACWIA’s provisions further urges a shortened process. The need to have a process that works for both employee and employer, however, urges exactly the opposite. The lack of actual regulatory language, and DOL’s many requests for comments on alternative regulatory proposals, argue for a comment period even longer than the typical sixty days. A longer period would provide for more complete consideration of the comparative value of the proposed alternatives in the Supplementary Information. We hope that the Department takes this into serious consideration when considering its next rule promulgation in this area.
2. Most of the proposals are without clear regulatory language.
The proposals contained in the NPRM are discussed without any guidance as to what their regulatory language would look like. General proposals are discussed sometimes in comparative terms, without any reference to actual regulatory language. An NPRM so absent in actual proposed regulatory language does not provide the affected public with a meaningful opportunity to comment. In order to provide the required notice and opportunity for public comment, the Department must publish its proposed rules and take comments from the public.
3. The Supplementary Information offers choices of proposals without any indication of what the agency is likely to do.
In implementing several significant provisions of ACWIA, DOL provides discussion of general ideas and alternative proposals, without a clear indication of what the agency is likely to promulgate in its actual rulemaking. As the next step is likely to be an interim rule with immediate effect, AILA is dismayed that the affected public will have no opportunity to comment on regulatory language prior to enforcement, but only on sometimes contradictory proposals. Comparing one proposal to another deflects precious resources—and the most precious in this accelerated comment period, that of time—from evaluating the proposals as stand-alone ideas in contrast to the legislation itself.
B. In Many Areas DOL has Exceeded Its Obligations or Imposed Burdens on Employers that are UltraVires
DOL exceeds its authority in implementing the legislation by imposing burdens not contemplated by the statute in several key areas. DOL’s requirements in these areas, discussed in more detail below, are nothing short of ultra vires. For example, the substantive and documentary burdens imposed on dependent employers subject to the recruitment attestation are simply not required by the statute. These areas, addressed in some detail below, should be withdrawn and rewritten to comply with the statute rather than go beyond it.
C. References to Other Areas of Law Will Confuse and Burden Employers’ Representatives
In many places the NPRM refers to complex labor law issues, policies, and regulations or laws with which the affected public is not familiar. Such instances, which are discussed in detail below, will require human resource professionals and attorneys to develop a thorough understanding of these areas of law as well as their impact on the employer obligations in the H-1B program immediately upon publication of an interim rule. The lack of time with which to make that transition is of significant concern to our members and their clients. Particularly in the case of larger employers, this education will prove burdensome and problematic.
If the Department insists on promulgating an interim rule, it should allow for delayed implementation and an educational period to provide employers’ representatives and their attorneys with needed time to develop familiarity in the additional areas of responsibility set out in these proposed regulations.
D. The Treatment of the Legislative History is Selective
AILA is disappointed to observe that the use in the NPRM of the legislative history of ACWIA is extremely selective and biased. Representative Lamar Smith, who sponsored the legislation that would become ACWIA in the House, is referred to as "one of the sponsors of the legislation." Senator Spencer Abraham, however, who sponsored the legislation that would become ACWIA in the Senate, is only referred to as one of "some members of Congress." See, e.g., 64 Fed. Reg. 639 (discussing the use of the IRS standards for identifying an employment relationship). In places such as these, the remarks of Rep. Smith are cited as dispositive of Congressional intent, while Senator Abraham’s remarks, which evidence a different view, are dismissed. In other instances, Rep. Smith is cited as the sole purveyor of Congressional intent, even when contrary remarks exist from Senator Abraham. This discrimination against a chief architect of the compromise legislation that ACWIA would become undermines the Department’s credibility as a neutral implementing agency of legislative intent.
E. The Paperwork Burden on Employers is Grossly Underestimated
1. Paperwork Reduction Act and Executive Order 12866.
The Paperwork Reduction Act (PRA), 44 U.S.C. § 3501 et seq., requires a government agency to make an accurate estimate of the burden the agency’s regulations are likely to impose on the public. The agency must consider why particular information is necessary in order to implement a legislative provision, and require the minimum information necessary to carry out its mandate. If the agency fails to comply with the provisions of the PRA, the Office of Management and Budget (OMB) has the duty to require compliance before it may approve the collection of the information. Similarly, Presidential Executive Order 12866 (issued September 30, 1993, published at 58 Fed. Reg. 51735, Oct. 4, 1993) instructs federal agencies to minimize the burden on the public, including the business community, to the maximum extent feasible when regulations implementing legislation are promulgated.
AILA believes that DOL severely underestimates the additional burden on H-1B employers that will result from the implementation of its proposed rules and has, as a result, failed to satisfy the requirements of the PRA or Executive Order 12866. DOL has done so by underestimating the number of H-1B dependent employers, ignoring the burden on all H-1B employers (not just those who are dependent) that arise from the agency’s new regulatory provisions, and grossly underestimating the respondent costs of implementing the regulations. We believe that before regulations are imposed in final form (whether interim final or final), DOL must first provide a more accurate and reasonable estimate of the burden created by its regulatory provisions, using reliable data and computation. Should DOL be unable to provide such reasonable estimate due to insufficiency of available data, we urge the agency to adopt regulations that are less burdensome, until such time as a reasonable estimate is obtained. Finally, should the DOL fail to provide a more reasonable estimate of the burden imposed, we urge the OMB to intervene and to require the DOL’s compliance with the PRA as well as with the APA and Executive Order 12866.
2. DOL Has Made an Incorrect Estimate of the Number of H-1B Dependent Employers.
The Department estimates that no more than 200 U.S. employers nationwide will be burdened by the proposed rules due to their status as an H-1B dependent employer or a willful violator. A close review of DOL’s assessment, however, reveals that there is absolutely no logical connection between DOL’s premises and its conclusion, and that its estimate is nothing more than a random number unsupported by any reliable data.
DOL expressly admits that "there are no data available to determine precisely how many ‘H-1B dependent’ employers will exist under the rule." 64 Fed. Reg. at 658. Nevertheless, DOL sets the "upper limit" of H-1B dependent employers at 1,425. It then concludes, without making any logical connection, that "[r]ealistically, we estimate the actual number of H-1B-dependent employers and willful violators under the rule to be no more than from between 100 and 200 employers" Id. at 659.
DOL’s estimated "upper limit" of 1,425 H-1B dependent employers is based on an unsupported assumption that employers generally file "blanket LCAs." First, there is no marked connection between the use of blanket LCAs and the likelihood of H-1B dependency. Second, based on our collective experience with LCA filings under the current H-1B program, the use of blanket LCAs is the exception rather than the rule, and the DOL fails to offer any evidence to convince us otherwise. Similarly, the DOL’s conclusion that there are only between 100 and 200 H-1B dependent employers bears no logical connection to any of its premises.
AILA cannot overemphasize the need for accuracy in estimating the number of H-1B dependent employers, as this count is used by the DOL to determine the time burden created on H-1B dependent employers by specific regulatory provisions, and is offered as the DOL’s justification (albeit an inaccurate one) of how the remaining H-1B employer population is allegedly burdened only minimally by the proposed regulations.
3. DOL fails to consider the burden on all employers.
DOL virtually ignores the burden on all H-1B employers arising from the agency’s new regulatory provisions including, but not limited to, the documentation of H-1B dependency computation, actual and prevailing wages, benefits, and secondary employment, as well as the completion of the new and longer LCA form. AILA’s collective experience suggests that this failure to consider the extra burden drastically increases the number of employers subject to new paperwork burdens. The number of affected employers and the resultant burden may be significantly higher than the DOL suggests.
- Documentation of H-1B dependency computation. DOL estimates that only "50 employers will find it necessary to make [the H-1B dependency] calculation." 64 Fed. Reg. at 629. However, DOL is proposing to require that "where an employer determines that it is not dependent, the underlying computation, be placed in the public disclosure file (emphasis added)." Id. at 635. This means that every H-1B employer, whether it is clearly non-dependent or "borderline," must calculate the number of its full-time equivalent employees ("FTEs"), and in borderline cases must document the necessary calculation in order to comply. As DOL estimates most of the employers would be non-dependent, most of the employers would be subject to this additional burden.
- Documentation of fringe benefits. Without supporting evidence, DOL estimates that only 5% of the nation’s H-1B employers will require additional documentation beyond what they currently keep regarding fringe benefits in order to comply with the provisions of ACWIA, and that such additional recordkeeping task would only take 15 minutes per employer. 64 Fed. Reg. at 630-31. These are both gross underestimations. DOL fails to consider the additional burden of comparing fringe benefits offered by similar employers in the area, which it is proposing to require of H-1B employers. Similarly, although the DOL suggests it will consider comparable foreign benefits in cases involving foreign transfers, it fails to consider the additional burden the documentation of such comparison would cause.
- Documentation of the actual wage and periodic adjustments to include numeric pay differentials. Without any foundation, DOL estimates that the burden of documenting the actual wage system is only one hour per employer. 64 Fed. Reg. at 631. Again, DOL underestimates by failing to take into account the fact that each H-1B employer must apply that system to determine and document the actual wage for each H-1B employee. We have been informed by a number of employers that a comprehensive determination and documentation of the actual wage required for each H-1B worker pursuant to the current regulations take approximately three to five hours. Moreover, the DOL fails to consider the additional burden that will arise from its new mandate which now for the first time would require the employer in every H-1B case to make periodic adjustments in the actual wage memorandum that must include a precise numeric weighting system or range of wage adjustments that could be considered by DOL auditors as a means of validating any pay differentials utilized by the employer.
- Documentation of hourly wages for professional employees who are otherwise FLSA exempt. The DOL declares that only 17 percent of cases have the prevailing wage expressed as an hourly rate. 64 Fed. Reg. at 631. DOL provides no source for this statement. In our experience, the State Employment Security Agencies ("SESAs") regularly provide employers and attorneys with the prevailing wage stated as an hourly rate. Thus, we believe the number of cases that would be subject to this additional recordkeeping burden would be much greater. The DOL fails to provide any evidence to suggest that an adequate study was done to determine this number. Moreover, the DOL states that "there will be no burden for U.S. workers since, as a practical matter, hours worked records will be required for U.S. workers only if they are not exempt from FLSA, or if they are exempt but paid on an hourly basis (certain computer professionals)." Id. The DOL’s statement is wholly inconsistent, as it admits there will be categories of U.S. workers for whom such records will be required, and yet concludes that there will be no additional burden with regard to U.S. workers.<
- Secondary employment. The DOL is proposing to require a pro-active inquiry regarding possible layoffs by the secondary employer by obtaining a written or verbal assurance, or by including such a clause in the contract. This requirement imposes additional burdens which the DOL failed to consider. There will be burdens associated with creating a verification form or revising a contract. Burdens will also arise from the need for the H-1B dependent employers and worksite entity to evaluate each contract situation to determine whether "indicia of employment" exists.<
- Completion of the LCA. The DOL estimates the average LCA burden under its proposed regulations to be one hour. 64 Fed. Reg. at 629. It should be noted that the DOL’s estimated average burden for the current LCA form, ETA-9035, is 1-¼ hours. While Form ETA-9035 is a single-page form, the new LCA form is four pages long and contains a number of additional boxes to check off, attestations to review and comprehend, and fine print to read. Even the mechanical act of faxing the form to the DOL will take four times as long. Moreover, before an employer can complete the LCA, it must review and digest the statutory language of ACWIA, as well as of the DOL regulations implementing ACWIA and IMMACT90. The DOL’s assumption that the new LCA requirement will impose no additional burden - - and in fact impose less burden than the current form - - is completely unrealistic and without foundation.
- Objective wage system. The proposed regulation would require that employers develop an objective wage system and apply it to non-H-1B workers and well as H-1B workers. Since most employers do not have such a system, much less apply one, the burden that this provision would impose is virtually incalculable. Most companies would need to develop such a system, which would involve hundreds of hours of the time of high-level compensation professionals. The system would then have to be implemented, involving several hundred more hours by human resources professionals. Some of our members’ client companies have estimated that they would need to devote the equivalent of one year of a $60,000 per year professional’s time merely to develop and implement this system.
4. DOL has made an incorrect estimate of respondent costs.
DOL estimates the respondent costs of implementing the proposed regulations at $25 an hour. Again, the department provides absolutely no basis for this estimate, claiming it does not have "specific wage data regarding such employers and employees [who perform the reporting and recordkeeping functions required by this regulation]." 64 Fed. Reg. at 631.
AILA believes DOL’s estimate is groundless. Actual respondent costs will be much higher in light of the complexity of the proposed regulations. To comply with the regulatory requirements, an H-1B employer must understand all the legal concepts set forth in the rules and review and digest as well as the extensive rulemaking history. The faithful execution of this responsibility absolutely requires the services of legal experts (in-house or outside counsel, or both) who must analyze the labyrinthine regulatory history and apply the various provisions to the particular employer. Because of the grave consequences of H-1B violation (including fines and potential debarment from use of the immigration laws for virtually all future job applicants), the analysis of the rules must usually be discussed in great detail with top-level executives and management of the company, who must then review and revise as necessary the company’s personnel policies and procedures in connection with the hiring of H-1B workers. The regulations must also be thoroughly understood by the employer’s human resource department, which must apply the company’s personnel policies and procedures pursuant to the regulations.
As discussed above, these regulations are extremely complex and their understanding and application require highly technical and specialized professional skills. Thus, the costs of personnel involved would alone exceed $25 per hour. Fees for legal advice from an outside counsel range from $100 to as high as $300 per hour. An in-house counsel with sufficient expertise costs about the same. Compensation of a human resources director or a manager involved would easily exceed $25 per hour, as would compensation for technical recruiters, who command high salary due to the increasing demand for human resource professionals with technical knowledge and background. In addition to the increase in personnel costs and fees for legal advice, the DOL also fails to consider the burden of additional filing fees imposed by ACWIA.
5. DOL has made an incorrect estimate of the total public burden.
Based on a number of unfounded estimates and wrong assumptions, the DOL concludes that "the reporting and recordkeeping requirements of the rule are not overly complex, and in most cases simply require that a copy be kept of a record made for other purposes or that a simple arithmetic calculation be performed. There are no requirements for technical, specialized or professional skills to comply with the reporting or recordkeeping provisions of the rule." 64 Fed. Reg. at 659. This conclusion has led DOL to estimate the total public burden (total respondent hour costs) at $8.105 million.
As discussed above, the agency’s estimate of the burden arising from information collection is incorrect with regard to a number of provisions. Similarly, its estimate of the respondent costs is inaccurate. As the total public burden is calculated by multiplying the respondent costs and the total number of hours required for information collection, the Department’s estimate of the total public burden is unrealistic and unreliable.
6. DOL’s promulgation of the NPRM violates other statutes.
In developing a process by which it promulgates a proposed regulation, DOL is governed by several statutes, over and above the Paperwork Reduction Act, including the Small Business Regulatory Enforcement Fairness Act, the Unfunded Mandates Reform Act, the Regulatory Flexibility Act, and relevant Executive Orders. As a result, the agency must perform a more thorough study of the burden that will arise as a result of its regulations, and determine a more reasonable, reliable estimate. As the Executive Order 12866 (58 Fed. Reg. 51735, Oct. 4, 1993) mandates, "[e]ach agency shall base its decisions on the best reasonably obtainable scientific, technical, economic, and other information concerning the need for, and consequences of, the intended regulation." Accordingly, DOL should not be allowed to enforce the burdensome requirements proposed in its regulations until it is able to make an accurate determination of the total burden imposed on H-1B employers based on reliable information.
DOL attempts to justify its failure to comply with the regulatory process and nonetheless impose unprecedented additional burdens on employers by referring repeatedly to the H-1B program as "voluntary." There is, however, very little that is "voluntary" about the H-1B program. Congress clearly documented an urgent need for additional qualified professionals to fill thousands of positions, particularly in international commerce and areas affected by it (including the high-tech field). Such qualified workers are necessary for these companies to survive in the competitive global marketplace. As discussed above, it is this finding by Congress that led to the enactment of ACWIA.
Businesses participate in the H-1B program because it is the only way they can obtain the qualified workers to fill the required positions. The H-1B "program" is in reality a government monopoly, where businesses have no choice but to accept extremely burdensome requirements of the program only because highly skilled foreign workers are absolutely necessary for their survival.
DOL states repeatedly that because its proposed regulations will not likely result in an annual effect on the economy of $100 million or more, the rules are not subject to a full economic impact analysis or to review by Congress as an unfunded mandate. We do not believe this is readily apparent given that the agency has grossly underestimated the adverse impact of the proposed rules.
On the contrary, when the real costs and burdens are tallied carefully, the cost of this involuntary program may well exceed $100 million per year, will adversely and materially affect small businesses, and cause substantial harm to a significant segment of the economy. These costs and burdens, as noted, include:
- the fee-shifting (both the $500 fee for new hires and first extensions, and the base fee),
- the cost of legal experts, Human Resources professionals and clerical personnel required to understand and comply with the regulations,
- the DOL fiat on payment of H-1B attorney fees, and
- the analysis, monitoring, copying and storage costs associated with the agency’s voluminous paperwork requirements.
AILA believes, that unless and until the DOL first takes steps to develop accurate data on which to make projections of cost and burden, and complies with all operative federal statutes and executive orders, the agency should not proceed with further rulemaking. Moreover, as noted in the following section, DOL should reverse its thinly veiled presumption that employers are generally law violators, and instead (in light of the paucity of successful DOL enforcement actions over the eight-year history of the present H-1B program) adopt a greater number of streamlined general presumptions of good-faith employer compliance. Thus, DOL, in complying with the cited statutory mandates governing the rulemaking process, should endeavor to adopt a larger number of "design" rather than "performance" standards. Absent full compliance by the DOL, however, the OMB should exercise its proper rulemaking oversight responsibilities in order to ensure full agency adherence to the applicable laws governing agency rulemaking.
F. The Tone and Tenor of the Regulation Treats Employers as Presumed Violators.
We are concerned that the tone of the entire NPRM conveys to the public the impression that all employers that use H-1B professionals do so in order to exploit a vulnerable population at the expense of the American workforce. This is apparent in the many areas in which the Department has taken a statutory mandate and placed the burden of proof on the employer rather than presume employers seek to comply with their legislative and regulatory burdens. This is particularly true where DOL oversteps its legislative limitations, as is discussed in more detail below. For example, ACWIA contains a savings clause in the provision regarding recruitment (Sec. 412(a)(3), which states that "nothing in this [section] shall be construed to prohibit an employer from using legitimate selection criteria relevant to the job that are normal or customary to the type of job involved, so long as such criteria are not applied in a discriminatory manner"). However, DOL establishes an elaborate paperwork burden on employers to demonstrate that they are conducting recruitment pursuant to DOL’s understanding of industry-wide standards. DOL’s lack of understanding of employers and their participation in the H-1B program is nowhere as evident as it is here. Any employer, with few exceptions, will hire workers pursuant to H-1B visas because the workers have a unique or special set of skills that is unavailable to that employer through the American workforce. Given the additional reporting and substantive burdens of ACWIA, this will only continue to be even more the case.
We perceive that much of the perception of abuse, and the consequent burdens placed on employers in the proposals in the NPRM, result from the role the Department itself plays in the H-1B context. It provides both the "adjudication" (in the limited role of rubber-stamping an LCA) and the investigation. It is clear from the regulatory history of the program and the stand taken by the Administration during ACWIA negotiations that DOL perceives that there are far more abuses of the program than the agency has the power to investigate. In order to achieve what it perceives as a higher level of compliance, DOL mandates up-front recordkeeping requirements on employers rather than relying on the investigative process. This flies in the face of the original Congressional intent of the program, affirmed through ACWIA, to be an attestation based, enforcement-driven process. By overregulating the details by which employers meet their burdens, the Department is belittling its own investigatory processes.
III. SPECIFICS OF THE NPRM, AS ORDERED IN THE FEDERAL REGISTER NOTICE
A. What Constitutes an "Employer" for Purposes of the H-1B program?
1. Application of the IRS "Single Employer" concept to the entire H-1B program is unnecessary and would be inconsistent with H-1B program goals.
Section 412(b)(1) of ACWIA provides that any group that constitutes a "single employer" under Internal Revenue Code provisions governing employee benefit plans shall be treated as a single employer for purposes of ascertaining H-1B dependent status. The NPRM requests comment on whether the single employer concept should be extended for all purposes under the H-1B program. The Department suggests that this would better accommodate corporate restructuring activities and facilitate program administration and enforcement. AILA believes it would be contrary to the plain language of ACWIA and Congressional intent to extend the single employer concept to all aspects of the H-1B program, and in addition would not facilitate corporate concerns in administering an employer’s obligations.
Section 412(b)(1) of ACWIA provides that any group that constitutes a "single employer" under the Internal Revenue Code provisions governing employee benefit plans shall be treated as a single employer for purposes of ascertaining H-1B dependent status. ACWIA specifically provides that the IRC single employer definition is to be used "for purposes of this subsection [the H-1B dependent employer definition]." ACWIA Section 412(b)(1).
There is no basis to infer that Congress intended to expand this extraordinary broad definition to the entire H-1B law. The "single employer" concept is designed to prevent the avoidance of employee benefit requirements though the use of separate organizations, employee leasing or other arrangements. See, e.g., IRC Section 414(n). Accordingly, to prevent discrimination in employee benefits in favor of highly compensated employees, the "single employer" encompasses all entities that are related by financial interest (ownership or transactional). In contrast, the H-1B program seeks to protect US workers. To promote this purpose, an "employer," at a minimum, should have an employment relationship with respect to covered workers, as defined by the ability to hire, fire, pay and other indications of control. In keeping with this purpose, the Department’s traditional definition of "employer" in the H-1B program, as in other H programs, is rooted properly in the existence of an employment relationship with respect to covered employees, as indicated by control-related factors. See 20 C.F.R. §§655.715 (H-1B program); 655.100 (H-2A program); 655.302 (H-1A program). Without explicit statutory authority, departure from this longstanding definition would be improper.
Furthermore, we do not believe that extending the definition of "single employer" would serve any useful purpose in facilitating corporate restructuring and efficient H-1B administration. In fact, it would have the opposite effect. Blanket application of this definition would likely mean that multi-entity corporations could have to coordinate many functions among the various entities, including benefits, wages, movement of H-1B employees for all entities, layoffs, and other purposes, every time an H-1B is hired, promoted, or moved. This tracking necessity would only add to an employer’s administrative burdens.
In short, we believe that DOL should not use the definition of single employer as found in the IRS code for any purpose other than the limited one expressly authorized by ACWIA.
2. DOL should not require a new LCA when an employer changes its EIN.
The NPRM requests comment on whether the Department should modify its current requirement of a new LCA upon a change in the Employer Identification Number (EIN). AILA strongly supports this change.
The filing of a new LCA upon a change in the EIN unduly taxes the resources of both the Department and employers, and we urge the Department to eliminate this requirement. However, blanket extension of the single employer concept to the entire H-1B program is unnecessary to achieve this result. Alternatively, common business restructuring practices can and should be accommodated by application of the well-established successor-in-interest doctrine, which obviates the need for a new filing where a successor in interest is substituted for a new employer. See Memorandum by James J. Hogan, INS Exec. Assoc. Comm'r for Operations, Guidelines for the Filing of Amended H and L Petitions, File Nos. CO 214h-C, CO 214l-C (Oct. 22, 1992), reproduced in 69 Interpreter Releases 1448 (Nov. 9, 1992) (noting that a change in ownership does not necessarily create a new entity; it "is understood that the new owner(s) of the firm assumes the previous owner's liabilities"). We understand that the requirement for filing a new LCA upon a change in EIN was based on the Department’s reliance on the EIN to keep track of employers having LCA obligations. However, DOL’s willingness to reconsider this requirement suggests that its ability to administer the program is no longer linked solely to the EIN. Indeed, we expect that the procedures proposed for scanning all LCA information into a master database will reduce further the Department’s reliance on the EIN as the exclusive means of tracking covered employers. Accordingly, we urge DOL not to impose a requirement for filing a new LCA upon a change in EIN.
B. Which Employers are H-1B Dependent?
1. The proposed calculation of "full time equivalent" (FTE) workers is unduly burdensome and unrealistic.
DOL’s proposed formula for calculating FTE’s includes a determination of the average number of hours worked by part-time employees (individually and in the aggregate), adding the sum of part-time hours, and dividing the result by the number of hours in the employer’s normal full-time work week. DOL speculates that this task will not burden employers since most part-time workers are paid on an hourly basis, and the law requires employers to maintain records of hours worked by hourly paid workers.
The justification for this method of counting FTE’s suggested by the DOL is that records of hours worked is required for FLSA compliance by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). See 29 CFR § 516 et seq. Executive, administrative, and professional employees are exempt from the requirements of the Act, including recordkeeping, provided the employer pays exempt employees "on a salaried basis" and otherwise complies with the "salary basis" rules. See 29 CFR § 541 et seq. H-1B employees generally will meet the requirements for the professional employee exemption, except where the employer pays them on an hourly basis and/or fails to comply with the salary basis rules found at 29 CFR § 514.118. Those records, consequently, will not be kept for H-1B workers, forcing employers to have to create them for purposes of this calculation. This burden makes no practical sense.
AILA suggests that a simpler method of calculating FTEs be proposed. As noted by DOL, most employers who employ H-1B workers are not H-1B dependent. The proposed calculation of FTEs placed upon those employers is unduly burdensome and contrary to the intention of the statute. A safe harbor should be established whereby when it is readily apparent that an employer is not H-1B dependent, no further calculation or record maintenance should be required.
In identifying when it is "readily apparent" that an employer is non-H-1B dependent, an employer should be able to make a threshold calculation that is simple and straight-forward. AILA suggests that if the number of H-1B workers, divided by the number of full-time employees, is less than 15%, this demonstration should be sufficient. (Any employees that are employed less than full-time will not increase the percentage, but decrease it.) Only where this number is more than 15% does the introduction of FTEs into the calculation become necessary.
When it is not readily apparent that an employer is not H-1B dependent, the employer will need to calculate FTEs. As the DOL proposal for FTE calculation is unworkable for FLSA exempt workers, AILA proposes that each full time worker be counted as one FTE; each FLSA exempt worker be calculated as one FTE; each FLSA nonexempt worker paid hourly who works over a threshold of 20 hours per week be counted as one FTE. FLSA nonexempt workers who are paid on an hourly rate and work for less than 20 hours per week could be counted as the DOL suggests by average hours worked.
Another defect with the NPRM proposal is that the calculation of "full time" is to be measured by a standard full time work week. Employers utilize numerous methods of calculating full time work. For example, some institutions of education count credit hours taught rather than hours worked. A law firm might count hours paid for by the client. Other full time workers are paid per contract price. We suggest that the term "full time" be defined by the employer consistently with that employer’s standards and business practices (assuming those are not otherwise contrary to labor laws), not by a work week defined by DOL.
The calculation of H-1B workers measured for the numerator proposed by the DOL measures each H-1B worker as one FTE, even though the worker may not be working full time. If an employer feels it is clearly non-dependent, it can opt for a simple "head-count" for both the FTE and H-1B counts. If the employer is less clear as to its dependency, it may proceed to count in the manner proposed by DOL for FTEs for both its FTE and H-1B workers. In either case, consistency is achieved; the employer must count its FTEs & H-1Bs using the same method.
Lastly, there is one additional flaw of major consequence in this section of the proposed regulations. The DOL departs unjustifiably from the intent of Congress in mandating the inclusion in the dependency calculation of contractor personnel who meet the overly broad and imprecise "indicia of employment" test. Lacking any hint of support in the statute or legislative history, the DOL must redraft it regulations to eliminate any contractor personnel in the H-1B employer’s headcount of workers for purposes of dependency determinations.
2. When must an employer determine dependency?
The DOL proposes to invalidate any current LCA for purposes of future H-1B petitions of employers who are or become H-1B dependent. DOL seems to be proposing that it is the employer’s responsibility to monitor dependency - - not only on LCAs but also as to beneficiaries of I-129s already filed. See 64 Fed. Reg.At 634. Such retroactive rulemaking is prohibited by Supreme Court precedent. See, e.g., Bowen v. Georgetown University Hospital, 488 U.S. 204 (1988), (an agency may not issue a rule that has retroactive effect unless there is an "express" grant of retroactive rulemaking power, even "where some substantial justification for retroactive rulemaking is presented,…" Id. at 208-09.); see also Kenneth C. Davis & Richard J. Pierce, Jr., Administrative Law Treatise, 3d ed. (1994 and Supp. 1997). Indeed, DOL previously has declined to give its rules retroactive effect explicitly because of the prohibition established in Georgetown (see Service Employees International Union v. County of San Diego, 60 F. 3d 1346 (9th Cir. 1995)(FLSA regulation). Additionally, DOL followed this rule, at least implicitly, in grandfathering pre-existing LCAs of 6-year validity when it promulgated regulations reducing the LCA validity period to 3 years.
Not only is ACWIA devoid of an "express" grant of retroactive rulemaking authority, but the clear language of the statute specifically limits its application to prospective LCAs. ACWIA states that the new attestations apply to applications filed "on or after the date final regulations are first promulgated…and before October 1, 2001, by an H-1B dependent employer…or by an employer that has been found…to have committed a willful violation…." (ACWIA Section 412(d)). DOL is precluded from applying the law retroactive and invalidating existing LCAs, because by definition no employer is subject until after the regulations are effective. Accordingly, while retroactive application of these rules to invalidate preexisting LCAs may well promote ACWIA’s purpose, DOL is statutorily precluded from doing so.
AILA recommends that the calculation of dependency be made each time a Form ETA 9035 is used by the employer, as the attestations are relevant to the individual H-1B worker to be employed and it is only at the time the Form I-129 petition is filed that that worker is identified. There is no requirement upon the employer to monitor dependency as to beneficiaries of Forms I-129 which have already been filed, or to take any action as to the additional attestations applicable to dependents with respect to H-1B workers who are the beneficiaries of Forms I-129 filed when the employer was not dependent.
3. What records are required for demonstrating H-1B dependency?
The NPRM proposes to require all employers, including those that have made a determination that they are not H-1B dependent, to create documentation of the dependency calculation and retain the documentation in a public access file. AILA believes that recordkeeping of the dependency calculation should not be required of any employer.
A non-dependent employer should be allowed the option whether or not to retain documentation of the calculation. If the same employer is later under an investigation and DOL determines an error in the calculation, then the employer will bear the consequences of not having retained its documentation.
But to require the non-dependent employer to retain such documentation and keep it in the public access file imposes a burden on the employer not contemplated by statute. Furthermore, such a requirement would amount to invasion of privacy because the employer would be publicly disclosing information that is not statutorily mandated to be made public. As such, DOL exceeds its rulemaking authority by proposing to force non-dependent employers to retain dependency calculations in the public access file.
4. Information required on the LCA regarding dependency -- please see Appendix
5. LCA Procedures and New Form ETA 9035–- please see Appendix
C. Exempt H-1B Nonimmigrants
1. ACWIA does not require the INS to determine whether or not an H-1B worker is "exempt."
In its proposed regulations for the implementation of ACWIA, the DOL proposes that the determination as to whether or not an H-1B worker is "exempt" will be "made initially by the Immigration and Naturalization Service ("INS") in the course of adjudicating the petitions filed on behalf of H-1B nonimmigrants by employers." This delegation of authority is without basis in the statute or legislative history. Moreover, this unmandated and unfunded delegation of authority to the INS to determine whether a particular H-1B nonimmigrant is exempt will prove procedurally unwieldy, remote in time from actual filing of the LCA, and create undue delays in the H-1B adjudicatory process. Such review of representations made by an employer on an LCA is also unprecedented and is contrary to the nature of the LCA as an employer attestation document, enforceable through DOL investigation.
Under the proposed procedure, an employer could obtain an approved LCA for an exempt H-1B nonimmigrant and file the H-1B petition with the INS, only to have the INS--perhaps months later--determine that it does not agree with the employer's assessment of whether the employee is exempt. At this point, the employer would have two choices: the employer could either rebut the finding of the INS, or begin the entire process again by filing a new LCA. Given the current delays in various regions around the country in H-1B processing, the determination of whether the employee is exempt could be so remote in time from the employer's initial assessment that there may be new circumstances, such as salary adjustments, that would in any event change the classification of an H-1B worker as exempt or non-exempt. Such likely and substantial delay in processing the petition would be contrary to the first and foremost intent of ACWIA to ameliorate the short-term shortage of qualified professionals.
Even if there were no INS processing delays in the adjudication of H-1B petitions, the delegation of the determination as to whether an H-1B nonimmigrant is exempt will still add considerable time to the adjudication of an H-1B. Currently, INS examiners must review several factors in adjudicating H-1B visa petitions, including whether the individual has a baccalaureate or equivalent, whether the degree is related to the specialty occupation, and whether the degree is a standard minimum job requirement for the occupation. With the addition of the determination of whether an employee is "exempt," the INS must delve into new areas of inquiry, areas wherein the standards may not be entirely consistent with the typical standards for H-1B adjudication (e.g., INS regulations permit work experience equivalencies for baccalaureate degrees; DOL proposed regulations would not allow such equivalencies for Master's degrees.) INS examiners will have to undergo training to learn the new standards, and will have to ensure that they are applying them correctly. The additional adjudicatory burden on the INS, as mentioned above, is unnecessary according to the plain language of the statute and the legislative history. Moreover, as a practical matter, the INS simply lacks the resources to make two separate adjudications on each H-1B petition. That ACWIA did not intend to create an additional burden on the Service is clearly evidenced by the absence of such discussion in the statute or in the managers’ reports, as well as the lack of any resource allocation by Congress to INS to perform this burdensome task.
2. DOL should implement a procedure whereby the employer's determination of "exempt" status on an LCA is sufficient for processing both the LCA and the H-1B petition, and can be challenged by DOL in enforcement actions.
Clearly, formal "pre-approval" review and adjudication of any statement made under oath and under personal liability on an LCA is a radical departure from past LCA procedure and from the general understanding of the LCA as an "attestation" document. When the LCA was introduced as an additional element of the H-1B process in IMMACT 90, the LCA was viewed both by Congress and DOL as a document containing representations made under oath, requiring limited review in the adjudicatory phase, but legally binding and enforceable on the employer by the DOL in an investigation. Employers are presumed to have understood the definitions inherent in the attestations, and there is no review during the LCA approval process to determine, for example, whether the employer correctly calculates the actual wage, or compares the beneficiary of the LCA to the appropriate group of workers with "similar experience and qualifications." It is a self-monitored process and where employers err, either willfully or otherwise, this is to be discovered by DOL through enforcement actions. ACWIA is void of any language that suggests an overhaul of this self-monitored attestation system.
DOL's proposed rules regarding the determination of H-1B dependency create a system wherein the employer makes the initial assessment, which assessment is accepted when attested to under oath on the LCA, and is enforceable by DOL in investigations. The employer is expected to self-monitor its dependency and take action when there are changed circumstances, or face possible penalties. There is no basis for treating the determination of whether an employee is "exempt" in any other fashion.
Rather than slow down the H-1B adjudicatory process by adding new issues for INS examiners to review, DOL should treat the determination of whether an employee is "exempt" as another LCA attestation or statement made under oath and enforceable by DOL. The Department could simply set forth understandable criteria for the definition of "exempt" (perhaps in consultation with INS) and hold employers responsible for self-monitoring. Again, as with all other statements on the LCA, DOL could deal with any misclassifications in an enforcement action. But where the employer makes a reasonable determination that an employee is exempt, DOL must accept that determination; or if DOL determines that the reasonableness of the employer’s determination is valid, but the determination itself is incorrect, that employer should not be subject to penalties. Such a system would be far more consistent with the H-1B program as envisioned by Congress.
3. There is no basis for departing from the well-established rule that degree equivalency can be achieved through work experience.
In its proposed rule, DOL announces that in determining whether an employee possesses a Master's degree for the purpose of assessing whether the employee is "exempt," INS and DOL will not accept work experience equivalencies. DOL claims that this is supported by the language of the statutory provision and the statements of Representative Lamar Smith.
Notwithstanding the comments of Representative Smith, Congress chose to use the term "Master's degree or equivalent." Congress did not use the term "Master's or equivalent foreign degree." The use of more general--and generous-- language appears to support the well-established procedure of allowing equivalencies to be established through either degree equivalents or work experience. Moreover, it is a sound principle of statutory construction that when Congress enacts a statute, it can be presumed to know of, and incorporate, previous interpretations of similar language used in the same law.
INS allows work experience to be equated to a degree in two specific instances. The first is for the establishment of the Bachelor's degree requirement for the H-1B visa. For this purpose, INS regulations state that the equivalent of a Bachelor's may be obtained through a combination of education and work experience, and that for this purpose three years of professional work experience equal one year of university study. The second instance in which INS allows for a work experience equivalency is with respect to establishing the Master's degree requirement for the second preference employment category, for which a Bachelor's degree and five years of experience are considered the equivalent of a Master's degree.
It would be inconsistent and administratively impractical to allow for work experience equivalencies in some instances and not in others, particularly where the rules will be different for two aspects of the very same process. This will only cause added and unnecessary delay in the adjudicatory process.
AILA accordingly believes DOL has no reasoned choice but to adopt a rule that is consistent with current INS practice in this area.
4. The interpretation of "specialty related to the intended employment" should be consistent with current INS practice.
AILA believes there is no statutory authority for the "appropriate or necessary" standard the DOL proposes. ACWIA requires only an attainment of the degree "in a specialty related to the intended employment," and does not require it to be "sufficiently" related, nor define what that means. The terms "appropriate" and "necessary" have very different meanings, and "related" does not mean "necessary." Moreover, Congress could not have intended that the specialty be "necessary", as virtually few occupations today have the one "necessary" degree that must be attained in order to enter into that occupation. Rather, a number of "related" fields of study are "appropriate" to most occupations.
We further believe that the employer should be able to determine what studies it considers "appropriate" to a particular position. Today, educational curricula at the Master’s level are constantly changing, especially in the areas of technology, engineering and related fields. New emerging fields of study are appearing almost annually across the United States and abroad. The employer who is hiring the workers to perform the duties of the position is in the best place to know what fields of study are "related" to a position.
DOL proposes to make clear that, in order for a Master's degree to deem the H-1B nonimmigrant exempt, "the specialty must be generally accepted in the industry or occupation as an appropriate or necessary credential or skill for the person who undertakes the employment in question." AILA urges DOL not to depart from current H-1B practice as already established by the agency responsible for its determination, the INS.
In adjudicating H-1B visa petitions, the INS must determine whether a particular baccalaureate degree is related to the specialty occupation. In so doing, INS examines not only industry standards, but will often look to the university transcript to determine whether there is sufficient coursework that is related to the occupation, even if the major is not related on its face. An example of this would be a degree in astrophysics for a software developer position. While a degree in astrophysics may not seem to be directly related to the occupation, the H-1B nonimmigrant's course work may have included a wealth of software development coursework that provides the necessary background for the position. To define "specialty related to the intended employment" merely by reference to industry standards is too restrictive an approach and fails to take into account that recruiters, human resource professionals and hiring managers often search for a particular educational background that might not be evident merely from the department which conferred the degree. Thus, DOL should allow employers to establish that the degree bears a reasonable relationship to the employment through a variety of means, including industry standards as well as specific coursework. Moreover, even when the degree requirement cannot be shown to be an "industry standard," the employer should be permitted to show that the degree is related to the employment by showing that it is a standard company requirement and that all others in the same position have the same credentials, as currently allowed in INS regulations.
D. DISPLACEMENT ATTESTATION
1. What constitutes "employed by the employer" for purposes of prohibiting a covered employer from displacing U.S. workers in its own workforce?
In its intended definition of the phrase "employed by the employer," the Department proposes to adopt a broad common-law standard in order to determine whether an employment relationship exists, citing the "precedent" of two U.S. Supreme Court cases, Nationwide Mutual Co. v. Darden, 503 U.S. 318 (1992) and Community for Creative Non-Violence v. Reed, 490 U.S. 730 (1989). The factors cited in the proposed regulations are adapted from EEOC Policy Guidance on Contingent Workers, Notice No. 915.002 (December 3, 1997).
We submit that the Department’s reliance on the common-law test and the application of EEOC Policy Guidance on Contingent Workers is misplaced. Even the Department cites language from the Supreme Court decisions that since the common-law test contains "no shorthand formula or magic phrase that can be applied to find the answer, ... all of the incidents of the relationship must be assessed and weighed with no one factor being decisive." The EEOC Enforcement Guidelines on Contingent Workers were developed to assist EEOC investigators in determining the existence of an employment relationship for purposes of charging an entity as "Employer" under Title VII, ADA, ADEA and EPA. The guidance states that under certain circumstances the client of temporary help agency may qualify as an "Employer" subject to the requirements of the anti-discrimination statutes enforced by the EEOC.
The Department’s efforts to apply the common-law principles in conjunction with the EEOC Policy Guidance on Contingent Workers to the definition of "employed by the employer" create a standard which lacks predictability. The business community structures its workforce relationships based upon a variety of federal and state laws, principally in the areas of taxes and benefits. In making the determination of whether an employer-employee relationship exists, we suggest the adoption of the clearest available test: i.e., if a U.S. worker is classified as an independent contractor for tax and benefit purposes, such U.S. worker is not an employee for purposes of the anti-displacement rules. We want to ensure that employers can rely on one standard for all purposes, not only to simplify recordkeeping burdens but also to enhance their ability to meet all obligations. Employees considered to be independent contractors for IRS purposes, but not for immigration purposes, will cause confusion and uncertainty. A single applicable standard, by contrast, lessens confusion and increases employer compliance.
We believe DOL should not rely on a common law definition of employment established over three decades ago. Many events in today’s global and technologically advanced economy have superseded the business environment of 1968, and the factors listed are no longer indicative of an employment relationship. Thus, the provision of tools and worksite, and the setting of hours when the worksite is open, are simply of little, if any, relevance to the determination of "employer/employee" status.
2. What constitutes "indicia of an employment relationship" for purposes of the prohibition on secondary displacement of U.S. workers at worksites where the sponsoring employer places H-1b workers?
In addressing the "secondary displacement prohibition" of ACWIA, the Department has arbitrarily selected a subset of factors from the EEOC Policy Guidance on Contingent Workers. In effect, the Department has established "control test" criteria in determining the existence of an employment relationship between the H-1B worker and the client employer where the H-1B worker has been placed by the covered employer. This approach will substantially expand the universe of covered U.S. workers to a variety of the independent contractor relationships not intended by Congress to be impacted by the legislation. In his remarks on this provision of ACWIA, Senator Abraham made the following statement:
Section 412 (a) next adds a "secondary non-displacement" attestation by amending section 212 (n) (1) of the Immigration and Nationality Act to include a new subparagraph (F). This attestation requires a covered employer to pledge to make certain inquiries before placing a covered H-1B worker with any other employer where the H-1B worker would essentially be functioning as an employee of the other employer. The requirement that there be "indicia of employment" between the employer with whom the covered employer is placing covered H-1B worker and the H-1B worker is intended to operate similarly to the provisions in the Internal Revenue Code in determining whether or not an individual is an employee.
144 Congressional Record at S12751. We submit that the business community needs the clearest available test in order to determine compliance with the secondary non-displacement attestation: if the H-1B worker would be classified as an independent contractor for tax and benefit purposes, there would not be indicia of an employment relationship for purposes of the anti-displacement rules. Congressional intent was clearly to limit the definition to the Internal Revenue Code provisions for that determination. The Department’s broader and more vague test is beyond statutory intent, leaving employers and employees uncertain of the level of required compliance.
3. What constitutes an essentially equivalent job?
For purposes of the layoff attestation DOL proposes that a required employer may not lay off a U.S. worker from a job that is essentially the equivalent of the job for which the H-1B nonimmigrant is sought. A job is not "essentially equivalent" unless it (a) has essentially the same responsibilities, (b) was held by a U.S. worker with substantially equivalent qualifications and experience, and (c) is located in the same area of intended employment.
a. Essentially same responsibilities. DOL proposes a standard that involves essentially the same responsibilities and describes this phrase as meaning ". . . core elements of and competencies for the job. . .to the exclusion of . . . peripheral, non-essential duties that could be tailored to the particular abilities of the individual worker." Additionally, the DOL proposes to use the Equal Pay Act when determining the essential equivalence of the jobs.
We take issue with the first "core elements" approach and conclude that it is too broad a definition from a statutory perspective and too difficult as a practical matter for the employer to fully comply. The statute requires employers to attest that they have not laid off a worker in essentially the same job. The statute does not mention "core competencies" and "peripheral versus non-peripheral job duties." Indeed the statute and the legislative history contemplate that the employer would make the determination using a straight job to job comparison.
The legislative history notes that the original intent of the displacement attestation was to assure that companies would not replace an American worker with a foreign born professional. Senator Abraham notes that the term "displace" was used in the final version of the legislation because:
it was thought desirable to include within the scope of this prohibition situations where an employer sought to evade this prohibition by laying off a U.S. worker, making a trivial change in the job responsibilities, and then hiring the H-1B worker for a `different' job.
144 Cong. Rec. at S12750.
Senator Abraham explains that
. . . the final version of this language is significantly narrower than the original language proposed by the House, which sought to prohibit not only one-to-one replacements of laid off U.S. workers with H-1Bs, but the hiring of any H-1B with similar qualifications to those of any recently laid off U.S. worker. As a result, the original definition of `displace' in the House did not contain the key phrase `from a job that is essentially the equivalent of the job for which the [H-1B worker] is being sought.’ That phrase was added to make clear that this provision is not intended to be a generalized prohibition on layoffs by covered employers seeking to bring in covered H-1Bs, but rather a prohibition on a covered employer's replacing a particular laid-off U.S. worker with a particular covered H-1B.
144 Cong. Rec. at S12750 (emphasis added).
Senator Abraham was explicit in his understanding that there would be no violation of the displacement attestation "unless an H-1B worker is being brought in to replace a particular laid-off U.S. worker and do that particular U.S. worker's job." 144 Cong. Rec. at S12750.
By broadening the comparison to core elements and competencies of the job rather than the whole job, the Department of Labor attempts to revert back to the House version of the displacement attestation, which was deliberately excluded from the language of ACWIA, as it was negotiated out of the compromise that became the final piece of legislation.
From a practical perspective, an employer seeking to abide by its obligations under the displacement attestations would find it difficult if not impossible to comply with the proposed core elements of the job analysis. While it is practical and reasonable to compare job responsibilities to determine whether the H-1B job and the U.S. worker job are essentially the same, the language proposed by DOL forces the employer to expand the comparison to unrelated division , and project assignments within the organization. For example, an employer may be seeking to employ an H-1B worker in a position of Software Engineer for a telecommunications project involving software for devices such as cellular phones. In the same facility, the same company may also employ Software Engineers who have software development responsibility for administrative functions such as billing and internal accounting. If the proposed "core elements of the job" analysis is used, a layoff of the Software Engineer in the administrative area would preclude the hiring of the telecommunications Software Engineer. The two Software Engineers appear to have the same core job duties: designing software for the company. The truth of the matter is that the Software Engineers are in very different positions requiring different types and content of expertise and knowledge.
The Department also proposes as an alternative using the standards under the Equal Pay Act ("EPA"). AILA believes that this analysis of the essential equivalence of jobs is more in keeping with the legislative intent. Although the EPA is a statute that prohibits discrimination in pay on the basis of gender for the performance of "equal work," it does require an analysis of the equal skill, effort and responsibility of the jobs in question. This type of analysis, based upon the substantial equality of job duties, more accurately tests whether the position is essentially the same. We propose a test that would rely on the employer’s existing job requirements and duties and the requirements of duties of the H-1B employee to determine if the positions are essentially the same and involve essentially the same responsibilities. In this age of high tech innovation and growth and the resulting specializations within an occupation, it is unrealistic to implement a generic "core elements and competencies for the job standard."
b. Substantially equivalent. The second prong of the test is to determine whether the U.S. worker had substantially equivalent qualifications and experience as to the H-1B worker. The Department has correctly proposed that this analysis be confined to an evaluation of the qualifications that are "normal and customary" for the job. An evaluation of the necessary education, skills and experience necessary to perform the job, as determined by the employer, is an appropriate and common sense method of applying this test. As the Department suggests, there may be occasions when an H-1B candidate possesses higher educational and experience levels than the U.S. worker. Nevertheless, if the position does not require those credentials, an evaluation of the normal and customary requirements should be conducted.
c. Area of Intended Employment. The last test is whether the H-1B is located in the same area of intended employment as the U.S. worker. The Department's proposal concerning the area of intended employment and the normal commuting distance standard is reasonable and realistic.
Layoff and permissible termination.
The concept of "constructive discharge" arises under both state and federal employment law. Generally speaking, a constructive discharge is said to have occurred where an employer subjects an employee to wages and/or working conditions which are so intolerable that no reasonable employee would accept them. Likewise, where an employer threatens an employee with adverse consequences if he does not resign, a resignation submitted under such circumstances would be deemed to be involuntary.
AILA is concerned that basic statutory provisions were left out of the Department’s discussion of what constitutes a permissible termination. The statute clearly states that "discharge for inadequate performance, violation of workplace rules and cause" are not to be considered a "layoff." This was overlooked in the proposal regarding permissible termination, and we would expect that the Department would include these explicit statutory considerations in its regulatory language.
DOL must also consider a broad concept of permissible termination that includes the many legitimate real-life factors that employers use when terminating an employee. Employers use legitimate criteria in today’s at-will working environments to determine the suitability and acceptability of a person to be or remain employed. Inadequate performance or violation of an employer’s policies pertaining to use of equipment, workplace standards, or drug use policies are just some of the areas where an employer could legitimately terminate and not have that termination constitute a layoff.
Whether the alternate job offer is "similar employment"
DOL proposes that this provision provides an affirmative defense to an employer who can establish that it offered "a bona fide transfer opportunity to the worker." 64 Fed.Reg. at 641. We agree that the offer must be bona fide; indeed, we submit that the factors listed by DOL, in general, reflect the "determination of similarity" mandated by Congress.
6. Equivalent or higher compensation and benefits
DOL implies that an employer who makes an offer of employment in a different geographic area is somehow a suspect actor. By citing Representative Smith for the proposition that such an offer, without offering cost differentials and relocation expenses, is suspect, the Department ignores other legislative history as well as the plain language of the statute itself.
ACWIA states a layoff does not include "any situation in which the worker is offered, as an alternative to such loss of employment, a similar employment opportunity with the position from which the employee was discharged." ACWIA Section 412(b)(4)(D)(I)(II). The provision makes no reference to geographic area. In determining what was an "essentially equivalent" job for purposes of defining a layoff, Congress did include geographic area. That it chose not to restrict the geographic area in this provision where is indicative of an intentional mission. Moreover, Senator Abraham’s statement acknowledges that
It is the intent of Congress that the determination of similarity take into account factors such as level of authority and responsibility to the previous job, level within the overall organization, and other similar factors, but that it not include the location of the job opportunity.
144 Cong. Rec. S12750 (emphasis added). To require relocation expenses and cost of living differentials in light of language in the statute and the statement of the chief architect of the compromise legislation flies in the face of legislative construction.
DOL proposes to look to the EPA and the Family and Medical Leave Act ("FMLA") to determine whether an employer has offered a U.S. worker "similar employment" in lieu of lay off. By offering a U.S. worker a job in a different geographic location, or under different working conditions (e.g., itinerant vs. fixed location employment), it is our understanding that the job offer would not be deemed substantially equivalent for EPA purposes. The EPA concept therefore cannot be used in this instance. Both Senator Abraham and Representative Smith were clear that ACWIA contemplates allowing an offer of employment in a different geographic location. The regulation must expressly allow for a geographic transfer.
The FMLA requires a covered employer (50 or more employees) with a covered facility (50 employees within a 75 mile radius) to offer a covered employee who is returning from FMLA leave the same job, or a job that is substantially equivalent to that which the employee held prior to the onset of the protected leave. DOL defines "equivalent" for FMLA purposes to mean a position "that is virtually identical to the employee’s former position in terms of pay, benefits and working conditions, including privileges, perquisites and status, involving the same or substantially similar duties and responsibilities, requiring substantially equivalent skills, effort, responsibility and authority." (29 CFR Section 825.215) This definition is also not appropriate for the ACWIA standard. "Virtually identical" employment is not the same as "similar."
We understand the Department’s concern that the alternative offer be the "similar employment opportunity" called for in the statute. However, that determination should not be subject to government-imposed findings of adequate cost of living adjustments and relocation expenses. We submit that equivalent or higher be determined on a case by case basis, in light of all circumstances of the offer.
We urge DOL to promulgate regulatory language that does not adopt the EPA or FMLA standards in this context, as they are inappropriate. We suggest that DOL instead adhere to the plain meaning of the statute in determining the ability of the employer to make a bona fide offer outside the geographic location of the terminated job.
7. Duty to Inquire of Another Employer about Layoffs
The Department’s proposed requirement that H-1B dependent (or willful violator) employers take steps that include, among other things, contractual provisions, written statements from potential business customers and/or (apparently) detailed displacement-related conversations (that appear to rise to the level of an investigation) with their existing and potential customers overreaches Congressional intent and creates unrealistic obligations on employers. Moreover, these obligations would often have to be generally carried out during a period in which the employer is engaged in sensitive contract negotiations with its potential clients (second employer work sites), possibly jeopardizing perfectly legitimate business opportunities.
It is difficult to believe that Congress, by expanding the H-1B program, also sought to strain legitimate business relationships in this manner. The statute requires only that the placing inquire, and have no knowledge of, a displacement or an intent to displace. ACWIA Section 412(a)(1)(F). As written, the Department’s comments appear to denigrate the value of a straightforward displacement-related question (and answer) between business entities as value-less "pro-forma" questions and answers, without explaining why this basic but specific exchange would not suffice. Yet the Department still offers a vague option of a conversation with the second employer as one option. Since a direct question and answer is not acceptable, this leaves open the possibility that the Department seeks something approaching a detailed investigation by the placing employer into the secondary employer’s business, a practice that is inconsistent with the Department’s own words that employers make a "reasonable minimal effort" to inquire into displacement.
Congress could not have intended for "placing" employers to interrogate their customers in such a manner. Many employers and clients, unfamiliar with Department of Labor regulations, are likely to interpret this detailed discussion/investigation (as well as the written client statements or contract provisions) not so much as a request for a statement of their intent as much as a guarantee to not terminate any of its U.S. workers. Few clients would be willing to make a representation that would be perceived as a contractual guarantee, regardless of whether it is verbal or written.
Placing employers should be provided the flexibility to ascertain from the business context whether there is a realistic possibility of displacement of a (U.S.) worker, and therefore, whether further inquiry is necessary. In most cases it simply is not. For example, in a "staffing extension" situation, a worker is placed, on a short-term basis, to supplement a second employer’s workforce, because the customer has stated a need for assistance on a short-term project, or otherwise to provide services during a business peak. The employer is generally seeking additional, short-term workers, not replacement workers. The Department has failed to justify injecting contract provisions and more detailed discussions about U.S. worker displacement into these negotiations.
Another common business context for placing employers involves special projects, such as sending a team of I.T. professionals to a second employer for the purpose of creating a specialized type of computer system. The placing employer’s team is placed at the client site solely to create the special system over a set period of time. The contract usually calls for the second employer’s business and/or I.T. team to be trained in using the new system. This investment in technology is highly unlikely to be part of a plan to displace U.S workers. Moreover, the placing employer’s billing rates/mark-up in these short-term situations usually makes displacement impractical and non-solicitation clauses in the contract between the entities prevent hiring the placing employer’s workers, again making displacement by the H-1B worker highly unlikely. Thus, again, little more is needed than a straightforward questions and answer between the parties, with a note to the file.
DOL proposes that even if the H-1B employer complies with one of the above assurances as mandated by the regulations the employer "should not be able to ignore other information that comes to its attention – such as newspaper reports of relevant layoffs by the secondary employer – if such information becomes available before its placement of H-1B workers with that other employer." 64 Fed. Reg. At 642. DOL’s proposal wholly lacks an articulable point at which the H-1B employer is deemed to have made sufficient, reasonable efforts. DOL also fails to provide any guidance as to when certain information would be deemed to have given the employer a "reason to know" of a possible displacement.
Senator Abraham has made clear that, for purposes of debarment liability, the proper time reference is "at the time of the placement with the other employer." 144 Cong. Rec. at S127545. Thus, if the placing employer makes proper inquiry and has no actual knowledge or reason to know of a prohibited layoff "at the time of the placement with the other employer," then debarment is not permitted, and the DOL regulations should expressly so state.
The secondary placement provision also does not allow for any curative action on the part of the H-1B employer to be able to avoid the $1000 civil monetary fine, even though the displacement may be entirely out of the employer’s control. DOL should allow for curative measures, similar to those permitted when an H-1B employer discovers that there is a strike at the location of work, and has three working days to withdraw the alien from that work site.
8. Documentation to Be Required
DOL’s reliance on the EEOC Enforcement Guidelines on contingent workers indicates that the agency believes that the documentation it wants to require is already kept by employers. It is our understanding, however, that it is not required unilaterally. DOL should not rely on such standards in the absence of a clear requirement.
DOL’s reliance upon the EEOC Enforcement Guidelines indicates its anticipation that most H-1B dependent employers will be temporary help firms. The EEOC Guidelines were developed to assist EEOC investigators in determining the existence of an employment relationship for purposes of charging an entity as an "employer" under Title VII, the ADA, the ADEA, and the EPA. The Guidance states that under certain circumstances the client of the temporary help agency may qualify as an "employer" subject to the requirements of the anti-discrimination statutes enforced by the EEOC. Curiously, DOL has cited the EEOC Guidelines as the basis for determining the existence of an employer-employee relationship between the petitioning employer and its U.S. workers. By contrast, DOL proposes to use only a subset of the EEOC Guidelines to define the existence of an employer-employee relationship between the client and its U.S. workers.
The IRS has long held that an employer’s decision to classify a certain group of workers as "employees" for payroll deduction purposes will presumptively determine the status of similarly situated workers who the employer has elected to classify as independent contractors. In other words, governmental tax authorities require consistency in employee classification. Thus, election to treat computer consultants as "employees" for H-1B purposes could have devastating effects on the employer’s withholding and payroll tax obligations for U.S. consultants subject to similar working conditions. Where those working conditions fall within the EEOC Guidelines (which themselves are derived from the IRS Guidelines), that liability can almost be assured.
E. Recruitment Attestation
1. How are "industry wide standards" for recruitment to be identified?
The Department lists a number of recognized methods for successfully soliciting U.S. worker applicants and then states that good faith recruitment will ordinarily involve several of these methods, both passive and active. Although DOL states that the statute does not require employers to comply with any specific recruitment regimen or practice and that it does not believe it is authorized to prescribe any explicit regimen or practice, in fact it creates such a regimen, by which it establishes a presumption of good faith recruitment. The regulation would recognize that if an employer uses at least 3 of these recognized solicitation tools with at least one or two being "active," it will be presumed to meet the "good faith" standard. It states that good faith recruitment must, at a minimum, involve solicitation efforts which include:
1. Advertisement in relevant and appropriate print media or the Internet (where common in industry); and
2. Advertisement in publications and at facilities (higher education institutions) commonly used by the industry; and
3. Solicitation of U.S. workers within the employer’s organization (internal recruitment).
The Department is clearly ignoring the intent of the statute by proposing this "safe harbor" practice. As an initial matter, we note that the establishment of such minimum standards by DOL flies in the face of Congressional intent, expressed clearly in the statute as well as its legislative history, that DOL is not to require specific standards or practices by employers. (ACWIA Section 412(c)(1)).
In his analysis of this provision of ACWIA, Senator Abraham made the following statement:
Section 412 (a) is the "recruitment" attestation, to be set out in new paragraph (G) of section 212 (n) (1). It requires a covered employer to state that it has taken good faith steps to recruit U.S. workers for the job for which it is seeking the H-1B worker, and has offered the job to any equally or better qualified U.S. worker. This provision allows employers to use normal recruiting practices standard to similar employers in their industry in the United States; it is not meant to require employers to comply with any specific recruiting regimen or practice or to confer any authority on DOL to establish such regimens by regulation or guideline."
144 Cong. Rec. at S12751.
Not only is DOL’s establishment of this "active/passive" standard in direct conflict with congressional intent, by doing so DOL makes a mistaken assumption that all customary recruitment patterns are uniform in various industries in which H-1B workers may be found. The Department’s discussion of what constitutes a "good-faith" standard places an emphasis on advertising in relevant and appropriate print media or the Internet, and in publications and at facilities commonly used by the industry. No consideration is given of industry wide recruitment standards in those industries which rarely, if ever, conduct print advertising, but rely instead inclusively on headhunters, recruitment firms, outreach through colleges, universities, job fairs or Internet listings. In addition, no consideration is given by the Department for differences within an industry, such as the size of the employer or the geographic location. There may be widely disparate recruiting practices between large and small employers or variations based on geographical location and local job market conditions. In certain industries or for a certain size of corporation, national job searches may be customary, whereas in other situations, strictly local recruitment is the norm.
Further, by prescribing a specific regimen, the Department ironically and unjustifiably requires more ambitious recruitment efforts for H-1B employment than what it currently requires for permanent labor certification. DOL clearly contradicts the position it takes in the area of Reduction in Recruitment Labor Certification Applications. In the Department’s General Administration Letter (GAL) No. 1-97 on Measures for Increasing Efficiency in the Permanent Labor Certification Process, the Department specifically did not establish a presumptive regimen for employers filing RIR labor certification applications. The language of GAL 1-97 states, "the employer can show an adequate test of the labor market…through sources normal to the occupation and industry." Since the issuance of the GAL 1-97, the Department has made a point of not establishing a presumption of minimum activity which will create a "safe harbor" for the employer and has continually stated that each recruitment pattern must be viewed on a case-by-case basis.
DOL should therefore adopt for H-1B purposes the reasonable recruitment approach it now allows in the Reduction in Recruitment method of labor certification, which takes into account recruitment practices normal to industry today. It should refrain from mandating "guidelines" and instead evaluate the employers’ efforts on a case-by-case basis in an investigation. Taking this broader approach will allow for the normal variations in any industry that occur due to market conditions, geographic location and the size of the employer. It will then allow for an employer to utilize any legitimate or customary process that is recognized in its industry as normal recruitment activity. To codify a specific regimen that applies to all H-1B employers, regardless of market conditions, size and geographic location, creates an arbitrary and static rule that does not permit a covered employer to effectively recruit based on then-current industry conditions.
2. Good Faith Recruitment
The Department’s proposed rule contemplates an enforcement scheme for the recruitment attestation that will, to some extent, base the Department’s decision on whether or not good-faith recruitment was conducted, on the results of the recruitment in attracting U.S. workers. This type of results-oriented determination is outside of the scope of the statute, which only requires that employers make a good-faith attempt to recruit U.S. workers, and, should any U.S. workers apply who are equally or better qualified than any foreign workers, that the position be offered first to those U.S. workers. The statute does not mandate that the employer demonstrate that attempts at recruitment have been successful. In fact, as stated by the Department, the statute allows companies to use industry-wide standards of recruitment "even though, in some cases at least, these have been demonstrably unsuccessful." (64 Fed.Reg. 643). AILA urges DOL to remember the very premise supporting the enactment of ACWIA, which is the current deficiency of qualified U.S. workers to fill the vacant positions. The Department’s proposed approach penalizes those very employers whose employee shortage ACWIA was enacted to ameliorate, by establishing a "performance" rather than a "design" standard.
Senator Abraham clearly stated that the statute was carefully worded to avoid any type of "disparate impact" analysis or "validation" of selection criteria as mandated under Title VII of the Civil Rights Act of 1964. The Senator states: "Given the absence of any kind of record that employers use hiring criteria as a covert mechanism for preferring non-U.S. workers, such an analysis would make no sense in this context." (144 Cong.Rec. S12751). The Department does not have the statutory authority to examine an employer’s selection criteria.
Legitimate Selection Criteria
The Department proposes to narrowly define the statutory standard requiring an employer to use "legitimate selection criteria relevant to the job that are normal or customary to the type of job involved." The statute includes the allowance of "legitimate selection criteria" not as an affirmative requirement on employers, but as a savings clause to aid in statutory interpretation. To wit: "Nothing in paragraph (G) shall prohibit an employer from using legitimate selection criteria…." This clause does not require an employer to affirmatively justify or document its selection criteria unless the agency conducting an investigation (which should be the Attorney General, not the Department of Labor – see the discussion below) believes that such criteria did not meet the exclusion in this paragraph, i.e., were not "legitimate," were not "relevant," or were applied in a discriminatory manner.
It is evident from the legislative history that:
it is the intent of Congress that this provision not require an employer to set aside its normal standards for selection and recruitment of employees, including, but not limited to, legitimate objective criteria and legitimate subjective criteria. . . The purpose of this language is to make clear that an employer may use ordinary selection criteria in evaluating the relative qualifications of an H-1B worker and a U.S. worker. . . It is intended to emphasize that the obligation to hire a U.S. worker who is "equally or better qualified" is not intended to substitute someone else's judgment for the employer's regarding the employer's hiring needs. Rather, the employer remains free to use ordinary hiring criteria, whether subjective or objective, in deciding who in the employer's view is the right person for the job. Moreover, its judgment as to what qualifications are relevant to a particular job is entitled to very significant deference.
144 Cong. Rec. S12751. The DOL proposal violates ACWIA’s clear mandate to DOL not to interfere with the enforcement of the "selection" aspects of an employer’s recruitment practice. The statute specifically sets up a separate remedial mechanism for alleged violations of the "selection" portion of the recruitment attestation, while including a savings clause that states that this section does not restrict either the Department of Labor’s nor the Attorney General’s enforcement authorities with respect to other violations.
Senator Abraham’s statement makes this distinction clear:
This savings clause, however, is not meant to serve as a backdoor way around the exclusivity of the remedy set out in 212(n)(5) for a violation of the selection attestation itself. It should also be noted that by setting up separate mechanisms, one lodged at Labor concerning recruitment and one lodged at Justice concerning selection, this provision contemplates that the two different kinds of violations be handled differently. Thus, it does not contemplate, for example, recharacterizing a "failure to select" complaint as a "failure to recruit in good faith" and then using the enforcement regime for the latter category of violations to pursue what in fact is a "failure to select" complaint. . . .It should be noted that nothing in this section should be construed to give the Attorney General or the Department of Labor any authority to write regulations or guidelines concerning permissible and impermissible selection criteria or mechanisms for determining when such selection criteria are permissible or impermissible.
144 Cong. Rec. S12754 (emphasis added). Thus the Department’s mere suggestion that use of criteria from the North American Industrial Classification System or the Standardized Occupational Classifications "would satisfy" the requirement that the selection criteria be legitimate is beyond the authority of the Department. Further, the Department’s entire regulatory proposal with regard to its examination of the selection criteria used by employers is beyond its statutory authority. For these reasons, DOL should withdraw any attempt to control the selection aspects of recruitment.
Documentation of Recruitment
With regard to documentation of recruitment efforts, Senator Abraham stated: "The intent is not to require employers to retain extensive documentation in order to be able retroactively to justify recruitment and hiring decisions, provided that the employers can give an articulable reason for the decisions that it actually made." 144 Cong. Rec. S12754.
The Department states that it does not believe it necessary to maintain copies of advertisements provided an employer maintains documentation of the recruitment methods used, including places and dates of the advertisements, postings or other recruitment methods, the content thereof and the compensation terms. Unfortunately, DOL’s proclamation excusing the employer from document retention in this instance is an illusion -- for how else would an employer document the content and dates of these ads other than by keeping a copy of the ads?
The requirement of retaining every resume received also qualifies as extensive documentation. For example, attendance at a large job fair will generate several thousand resumes even though many of the resumes will not relate to the specific position offered. If a large employer attends several job fairs at multiple locations in the U.S., it may have to retain an enormous number of resumes for purposes of this documentation requirement.
The DOL’s reliance on EEOC guidelines for the creation and maintenance of such documentation is also misplaced. The referenced guidelines only require that if such documentation is created or retained, that it be done consistently. By imposing this requirement, DOL is creating a paperwork burden where none currently exists.
It makes more sense to briefly summarize recruitment over the past six months in a manner similar to the Reduction in Recruitment program in the permanent labor certification context. This would provide a sufficient overview to evaluate the employer’s good faith, especially when it is still recruiting for open positions and when the practice is to hire U.S. workers in addition to H-1B workers. However, the Department’s comments suggesting that this summary be made available in the public access file not only is not required under the statute, but it does not make commercial sense in that it invites competitor intrusion into the H-1B employer’s recruitment practices. This would include not only a review of specific recruitment avenues used by the H-1B employer, but an indication of that employer’s recent growth and hiring needs in specific geographic markets, none of which is appropriately divulged to competitors. Such a memo should be required only upon request by the Department in the course of an investigation.
F. Electronic Posting
The regulations should be amended to clarify that an employer may satisfy its electronic posting obligation by providing the notification on its internal network or website. With respect to those employers which actively send the notice out by email the regulations should specify that notification sent to a distribution group of "affected workers" satisfies the electronic posting requirement.
A primary employer should be able to satisfy its obligation to document that an electronic posting was made at the work site of a third-party employer in a number of alternative ways including (a) a statement in the contract between the parties requiring the notification to be made; (b) an written statement by a responsible party at the third party location ; or (c) a printout of the electronic communication with a certification about when, how, and to whom it was sent.
G. ACWIA Equal Benefits Requirements
ACWIA has added to the INA an express statement of the inherent obligation of all H-1B employers, under the first attestation element on wages, "to offer to an H-1B nonimmigrant, during the nonimmigrant's period of authorized employment, benefits and eligibility for benefits (including the opportunity to participate in health, life, disability, and other insurance plans; the opportunity to participate in retirement and savings plans; and cash bonuses and non-cash compensation, such as stock options (whether or not based on performance) on the same basis, and in accordance with the same criteria, as the employer offers to United States workers." ACWIA Section 4B(a)(viii). Under ACWIA, a violation of the benefits requirement is treated as a violation of the wage requirement.
ACWIA’s equal benefits language was promulgated to ensure that the benefits of U.S. workers are not eroded by the use of foreign professionals. Nowhere in the statute or legislative history was it suggested that the new equal benefits obligations should result in additional administrative requirements for employers to assume before employing an H-1B worker. Congress declined to include such an administrative burden in order to encourage employers to offer benefits. It recognized that employers might be even less likely to offer fringe benefits if the provision of benefits becomes too much of an administrative burden.
As noted in Senator Abraham’s statement in the Congressional Record, the equal benefits clause was provided to add "additional clarification" about an employer’s obligations under the wages attestation. 144 Cong. Rec. S12753. The statute contains two key clauses for interpretation, "same basis and same criteria," and "benefits and eligibility for benefits."
1. The meaning of Same Basis and Same Criteria
The "same basis and same criteria" language in ACWIA has been interpreted by the Department to require that the employer take into account the types of workers to whom the benefits are being offered, and the comparison is between "similarly employed workers." AILA agrees but would like to clarify this interpretation further. As noted in the legislative history, "care must be taken to find the right U.S. worker to compare to the H-1B worker in terms of access to benefits." 144 Cong. Rec. S12753. Comparison of "similarly-employed workers" must be confined to the employer’s own workforce, and not include other employers in the area of employment. The legislative history is devoid of any suggestion that "similarly employed" workers include anyone other than the employer’s own workforce.
There are many factors that the Department should take into account in determining whether employees of an employer are similarly situated. Just a few of these factors include:
- Part time vs. fulltime status;
- Seniority with the company;
- The intended employment term (whether short or long term);
- Whether the job involves travel;
- Whether the employees are in the same company department or category; and
- Whether the position requires incentives to inspire performance (e.g. business development positions).
The Department will have to concede that there is no bright line test in any such case, and that to uphold a finding of similarity between workers would entail a case by case evaluation.
2. The meaning of Benefits and Eligibility for Benefits
The Department has proposed to modify Section 655.732 of the existing regulations to require that an employer must provide the H-1B worker "at least" the fringe benefits provided to the employer’s U.S. workers. 64 Fed. Reg. 646. AILA disagrees with this modification because it would eliminate the administrative flexibility that Congress intended with the language "benefits and eligibility for benefits."
As noted in the legislative history, great care was taken to eliminate "any ambiguity" by including the words "benefits and eligibility for benefits" in ACWIA. 144 Cong. Rec. S12753. Besides ensuring that H-1B employees received benefits, Congress also wanted to make it very clear that to obtain certain benefits one must be or make oneself eligible for such benefits. As noted in Senator Abraham’s statement, "in order actually to receive many kinds of benefits, employees are frequently required to take some action from their end, whether to select a plan, to provide partial payment for the benefits, to work for the employer for a certain period of time, or to perform at a high level." In contrast, the Department’s choice of "at least" seeks to impose a strict inflexibility that Congress never intended. It is AILA’s position that the statutory language provided in ACWIA should be adopted within section 655.732, not a highly narrowed interpretation of it.
3. "Different but Equivalent" or "Higher" Benefit Packages
The Department has also requested comment on whether the legislative intent behind ACWIA allows an employer to provide "different but equivalent" or "higher" benefits packages to its H-1B workers. AILA agrees with DOL that the provision indeed allows employers to provide greater or additional benefits to H-1B workers than are offered to U.S. workers. As to "different but equivalent benefits," AILA believes ACWIA clearly contemplates these. As noted above, the legislative intent was to provide employers with flexibility in creating different packages and levels of benefits for employees who have dissimilar employment factors. Moreover, allowing for "different but equivalent" benefits is the only way to accommodate foreign-transfer employees, as discussed below.
4. Treatment of Foreign Benefit Plans
DOL proffers contradictory suggestions, and therefore fails to provide clear guidance, on how it plans to treat foreign benefits plans. On one hand, DOL states that it will consider "non-equivalent but nonetheless equitable benefits, including in light of actual length of stay of the H-1B worker in the U.S." On the other hand, DOL proposes to instruct that although U.S. employers "may cooperate with their corporate affiliates(s) in the H-1B worker’s home country with regard to payment of wages and maintenance of benefits (such as that country's retirement system) … the ultimate responsibility for all employer obligations under this Act, including the provision of benefits to the H-1B worker at least equal to those offered its U.S. workers, must lie with the U.S. employer which brings nonimmigrant workers into this country." 64 Fed. Reg. at 646.
AILA believes ACWIA contemplates "non-equivalent but nevertheless equitable" benefits. Multi-national employers must be allowed to preserve their practice of keeping foreign transferees on the foreign affiliate’s benefits program, as requiring the transferees to switch their benefits package to those offered by the U.S. employer may cause the transferees to lose their long-term foreign benefits.
Senator Abraham extensively discussed what he called "this important principle," stating that:
[A multi-national corporation] should be allowed to keep the H-1B worker on its foreign payroll and have that employee continue to receive the benefits package that other workers stationed at its foreign office receive in order to allow the H-1B worker to maintain continuity of benefits. In that instance, the basis on which the worker is being disqualified from receiving U.S. benefits (that he or she is receiving a different benefits package from a foreign affiliate) is one that, if there were any U.S. workers who were similarly situated, would be applied in the same way to those workers. Hence the H-1B worker is being treated as eligible for benefits on the same basis and according to the same criteria as U.S. workers. It is just that the criterion that disqualifies him or her happens not to disqualify any U.S. worker. Or to put the point a little differently: the H-1B worker is being given different benefits from the U.S. workers not because of the worker’s status as an H-1B worker, but because of the worker’s status as a permanent employee of a foreign affiliate with a different benefits package.
144 Cong. Rec. S12753. AILA believes that, in these situations, the U.S. employer has the responsibility to ensure that the H-1B workers in fact receive the opportunity to maintain their benefits abroad, not to force them to switch over to its U.S. benefits system that will adversely affect the transferees upon their return abroad. AILA further believes that the "non-equivalent but equitable" standard is the only workable approach to implementing this provision in these situations because one simply cannot compare the dollar value of each benefits program that exist in each country.
DOL also suggests that it may impose an "actual length of stay in the U.S." test to determine whether a foreign transfer will be allowed to maintain his or her foreign benefits program, i.e., a foreign transfer will be allowed to maintain his or her foreign benefits program if his or her stay in the U.S. is within a proscribed time limit. Such suggestion wrongly assumes that the practice of maintaining a foreign benefits program is a matter of convenience, when in fact, the practice is maintained because the disruption often causes the employee to lose a vested interest in a benefit plan. See, e.g., Matter of Pozzoli, 14 I & N Dec. 569 (1974) (an L-1 case holding a foreign employee should not be required to risk losing his or her benefits abroad in order to accept a temporary assignment in the U.S.). Whether the foreign employee’s actual stay in the U.S. is 6 months or 6 years, the employee still has an interest in maintaining his or her foreign benefits plan until his or her return abroad. In order to avoid disruption of the foreign benefits plan in such situations, DOL should adopt a rule that allows a foreign transferee employee to maintain his or her foreign benefits as long as such benefits plan is administered abroad continuously without interruption.
5. Higher Benefits and Special Incentive Packages for Foreign Workers
AILA also urges the Department to recognize that a reasonable application of the basis and eligibility requirements imposed by ACWIA, with an ability to provide greater or additional benefits to H-1B workers than are offered to U.S. workers, also supports the common business practice of offering special incentive plans for foreign employees. The market for high-level employees now is unquestionably international in scope. As a matter of simple business reality, U. S. companies often must dangle the carrot of benefit incentives above and beyond those normally offered in order to lure foreign-based employees with critical skills and abilities to work in the United States. These allowances include housing allowances, tuition for children, and company cars, to name but a few. So long as these packages are offered on the same basis and in accordance with the same criteria to both U.S. and foreign nationals based abroad being lured to the United States, they comport with dictates of ACWIA.
6. Need for a Definition of "Benefits"
The Department has advised that it seeks comment on whether to define "benefits" in its regulation, give a list of examples, or refer to the definition from other labor laws, such as ERISA or the Service Contract Act. For the simple reason that Congress was very clear in its definition of benefits in ACWIA, even listing many examples, AILA sees no reason for further rule-making on this issue. Just as any employer who funds the provision of fringe benefits for its employees is highly aware of the benefits it provides, the Department should have no difficulty determining exactly what benefits are being provided in a given employment situation.
7. Fringe Benefit Documentation Requirements
AILA is extremely concerned with the Department’s contradictory stances on the need for documentation of fringe benefits. On the one hand, in its Supplementary Information, the Department states that it believes employers must, at a minimum, keep copies of: fringe benefits plans and summary plan descriptions provided to employees; all rules regarding eligibility; what benefits were actually provided to individual workers; and how the costs of those benefits are shared between workers and employers. p. 646. To this effect, the Department has attached a modified version of the LCA form to the Proposed Regulations that expressly requires an employer to attest that it will "develop and maintain" documentation of working conditions and benefits. This language, which seems to require substantial up front measures for employers, is a radical change from current practice. As noted above, employers are presently required to provide such documentation only in the course of a Department investigation.
On the other hand, just below the minimum requirements paragraph noted above, the Department emphasizes that it does not intend to require employers to assume additional obligations in connection with benefits documentation. The Department states its understanding that "these records are currently kept for most fringe benefits, pursuant to the requirements of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Service." P 646-647. Similarly, in its Paperwork Reduction Act analysis, the Department states that "there should be no additional recordkeeping burden from these [fringe benefit documentation] requirements." P 630. Then to confuse matters worse, the Department equivocates this language by estimating that, for at least 2,500 employers, additional recordkeeping will be required. P. 630-631.
The Department’s views on this issue are confusing and conflicting. There is the danger that the Department will create an independent violation of the LCA process for the mere failure to keep benefits records in each LCA file. Such an exercise of rulemaking authority is without support anywhere in ACWIA. AILA vigorously demands confirmation that no additional documentation requirements will be imposed on U.S. companies in connection with the provision of fringe benefits.
It would be unduly burdensome and against the intent of Congress in devising the LCA to streamline the H-1B process for the Department to require employers to "develop" such documentation a priori. For example, just requiring a copy of a three page health benefit plan in each LCA file would result in over 750,000 extra photocopies based on the Department’s own estimates of 250,000 LCA filings in a calendar year. Besides creating an explosion in paperwork for the LCA process, such a rule would waste thousands of work hours for photocopying, filing and updating the LCA files. Accordingly, making the benefits documentation a pre-filing requirement would create an unnecessary burden on the LCA process, which was originally designed to facilitate easy administration. Instances of noncompliance should be based on a finding of a violation of the letter and spirit of ACWIA, not a Department-mandated photocopying requirement. It would simply serve to increase administrative complexity and the net result would discourage employers from extending fringe benefits to workers.
8. Special Documentation Requirements for Foreign Benefit Plans
In connection with an employer’s allowance of foreign and other specialized benefit plans, Department proposes that an employer must be required to keep detailed information. This would consist of information regarding the benefits provided to the H-1B worker and information to demonstrate the value of these benefits, as well as the benefits provided to U.S. workers. The Department has solicited suggestions regarding exactly what records would be necessary for such determinations if different benefits are provided.
As discussed above, additional pre-filing documentation requirements for benefits is inconsistent with a streamlined LCA process, and would create a sudden and dramatic increase in administrative burdens for U.S. employers. The Department must maintain the integrity of the current complaint-driven nature of the LCA investigation process and not over-burden the majority of U.S. businesses that comply with the program with needless pre-filing documentation requirements.
For the above reasons, any pre-filing requirements in connection with the provision of benefits cannot be recommended. The employer should bear the burden of proving in an investigation the "equivalency" of the foreign benefits.
9. Prevailing working conditions
The proposed regulation’s discussion includes a statement that AILA can only assume was inserted by accident, inasmuch as it is so contrary to the plain meaning and legislative history of ACWIA as to be shocking. Mention is made that the working conditions portion of the regulation will be amended to require comparison of working conditions, including benefits, "…to prevailing conditions in the area of intended employment in some circumstances." 64 Fed. Reg. 646. Such a prevailing benefits test was specifically rejected during the formulation of ACWIA. What was specifically rejected in a bipartisan agreement cannot now be enacted by Department fiat.
H. No Benching
ACWIA requires the employer to pay wages after the H-1B employee "enters into employment" and no later than the 30 days after entry (where the beneficiary was outside the U.S. at the time of approval of the H-1B petition) or 60 days after the employee is eligible to begin working (where the beneficiary was in the U.S. at the time of petition approval). In its Supplementary Information (64 Fed. Reg. 647), DOL asks whether "enters into employment" should be interpreted to mean the date subsequent to approval on which the employee makes himself "available for work" or the date when he or she actually begins the orientation, training, or work. This question applies only to the days prior to the 30-60 day deadlines described above after which the employer is mandated to commence the payment of wages. AILA urges that "enters into employment" occurs when the employee actually commences the orientation, training or work because ACWIA, in mandating payments by the 30-60 day deadlines, appears to provide the employer with discretion regarding the starting date prior to those deadlines. DOL should also adopt this interpretation because "make available for work" is too vague a standard and does not provide employers with sufficient guidance as to when the employer’s obligation would begin.
ACWIA and the proposed regulations make clear that an employer must pay wages during the "nonproductive time" of H-1B employees where such time occurs for employment-related reasons such as the lack of work to be assigned. One rationale offered by DOL is that H-1B employees have permission to work only for their H-1B employers while Americans can work elsewhere. This rationale is inapposite where the H-1B employee becomes the beneficiary of an H-1B petition filed by a second employer. In that circumstance, the first H-1B employer’s obligation to pay wages should cease, an instance that the final rule should expressly note.
ACWIA and the proposed regulation expressly recognize that the employer is not required to pay wages during nonproductive work time where (1) non-work-related factors are present such as a voluntary request of the H-1B employee or (2) where circumstances render the employee unable to work. The Supplementary Information to the proposed regulation (p.647), however, removes these exceptions where the payment of wages for nonproductive time is required by some other statute such as the Family and Medical Leave Act (FMLA) or the Americans with Disabilities Act (ADA). AILA believes these references to the FMLA and ADA should be withdrawn by DOL because an employer’s obligation to pay wages, or lack of such obligation, is unaffected by the requirements of the FMLA and the ADA. FMLA requires only unpaid leave and ADA proscribes employment discrimination on the basis of disability. Neither of these statutes addresses whether an employer must pay for nonproductive time.
The Supplementary Information expressly recognizes that the employer’s obligation to pay wages ends if the employer terminates the H-1B employee, notifies INS and is responsible for return transportation obligation. Another option for the employer should also be recognized. Where the employer has less work than anticipated after filing an I-129 petition for full-time work, the employer may secure approval of a new I-129 petition for part-time work, after which the employer is obliged to pay only for the part-time work.
Further, the Supplementary Information errs in stating that "in all particulars" the ACWIA provision on benching "is a statutory enactment" of the earlier, enjoined regulation. The rules differ in a number of respects, not the least of which is ACWIA’s omission of the Department’s self-empowerment to redefine the number of hours the employer must use an employee designated as part-time. If omission of this language in ACWIA were not enough to establish Congressional intent, Senator Abraham’s comments leave no doubt:
Nothing in subclause (II) is intended to preclude H-1B employment on a part-time or assigned basis, so long as that is the understanding on which the H-1B employee was hired, or to impose or authorize the Secretary of Labor or the Attorney General to impose any new requirement that the employer designate in advance the hours a part-time H-1B employee is expected to work. Additionally, nothing in subclauses (I) or (II) is intended to give the Department of Labor the authority to reclassify an employee designated as part-time as full-time based upon the employee’s actual workload after the employee begins employment.
144 Cong. Rec. S12753. Yet this is exactly what the Department proposes to do.
Similarly, the proposed regulation would add a proviso that the INS must permit the H-1B employee to remain in the United States without being paid. Inasmuch as no such procedure exists or has been proposed by INS, this provision would have the practical effect of canceling the clear legislative language allowing employee-originated leaves without pay.
I. Academic Salaries—Prevailing Wage Computation (see N, below)
Finally, AILA submits that one additional exception should be recognized by DOL in its final rule. Many industries have a common practice of implementing a short-term, periodic "shut-down" of part or all operations. An example is the practice of the automobile industry of giving all its employees an annual unpaid two week leave while the assembly lines are retooled for production model changes. Where such objective economic reasons are present, it is inappropriate to require the payment of wages only to the H-1B employees.
J. Impermissible Penalty and Rebate
1. Determination of Penalty vs. Liquidated Damages
ACWIA prohibits employers from requiring an H-1B nonimmigrant "to pay a penalty for ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer." ACWIA directs DOL to "determine whether a required payment is a penalty (and not liquidated damages) pursuant to State law."
In the Supplementary Information to the Proposed Rules, DOL recognizes that "[t]his provision embodies well-established principles in employment contract law" (p. 648). Rather than imposing its own interpretation as to what constitutes permissible liquidated damages under relevant State law, DOL proposes to leave "what may be difficult legal questions" to State courts. DOL proposes to do so by requiring H-1B employers "to obtain a State court judgment as a condition for seeking to enforce such provisions (i.e., an employer may not obtain such recovery from the worker without a State court judgement.)"
AILA agrees with DOL that the determination of penalty versus liquidated damages is a matter of State employment contract law, and that ACWIA does not contemplate creating a new, federal definition of "penalty." AILA believes, however, that requiring employers to obtain a State court judgment as a condition to enforcing liquidated damage clauses is not contemplated by ACWIA and is contrary to public policy.
ACWIA only requires a determination of whether the payment is a penalty "under relevant State law," and puts the onus on DOL to determine whether a penalty would be impermissible in the context of an investigation. ACWIA does not suggest that litigation is required to reach this determination, and it certainly does not suggest that the burden should be placed on the employer to obtain a State court judgment in order to enforce its payment provision. Indeed, in light of extensive backlogs in many State courts and of public policy to promote amicable resolution of disputes without resort to litigation, it is unlikely that Congress intended this provision to increase the workload of the already overburdened state judicial system. DOL’s approach of benign neglect in enforcing ACWIA’s choice of law provision is contrary to accepted principles of freedom of contract and promotes needless litigation. AILA believes DOL should promote amicable dispute resolution, thereby furthering congressional intent and public policy, and avoiding needless burden on the State court system.
AILA also believes DOL should not establish a presumption that any "agreed damage" is an unenforceable penalty. By establishing this presumption and shifting the burden of proof to H-1B employers, the DOL is reaching beyond the choice of law provision in ACWIA and attempting to influence the outcome of the dispute, rather than allowing the dispute to be resolved under the relevant State law. DOL should remain neutral on this issue, and specify only that liquidated damages are permissible, while penalties are prohibited. Should there be a dispute between the employer and the employee that cannot be resolved outside of the courts, the relevant State court will decide whether the payment is a penalty. Further, if the state court determines that a liquidated damages provision is invalid as a penalty in a given case, the employer must provide actual damages in order to recover.
Finally, the employer should not be subject to multiple fines for including similar contract language in its agreements with other employees, as the determination of whether a penalty has been imposed and employee payment required is dependent on the facts and circumstances in each employee’s case. Hence, the regulations should expressly prohibit any class-based relief or res judicata effect and limit any administrative finding of penalty and corresponding remedy solely to the particular H-1B nonimmigrant.
2. Reimbursement of Legal Fees and Costs
The DOL’s Proposed Rules, in the Supplementary Information (64 Fed. Reg.656) and in Appendix B (64 Fed. Reg.666), state that the payment of all costs associated with filing an LCA and an H-1B petition, including legal fees, are the employer’s responsibility. As discussed below, AILA believes such requirement is not supported by statute or congressional intent, and should be removed. DOL states that "[t]his interpretation is fully consistent with the ACWIA provision relating to the new $500 petition filing fee" Id. 656). AILA does not agree. In ACWIA, Congress expressly spoke on the issue of responsibility for payment of fees, and specifically required the employer to be responsible for paying the new $500 training fee in Section 413(a)(vi)(II). In contrast, Congress remained completely silent as to the responsibility for payment of all costs and fees including legal fees other than the new $500 training fee. Congress’ specific reference only to the new, additional $500 fee suggests its lack of intent to hold the employer solely responsible for the payment of costs other than the $500 training fee. AILA believes that if Congress had intended to require the employer to take responsibility for all costs, it would have expressly stated this in the statute. AILA therefore believes that responsibility for payment of costs other than the $500 training fee, including legal fees and other filing fees, are issues to be determined between the employer and the employee. (See below for additional discussion of why these fees can be attributable to the employee.)
If the DOL insists on making the employer responsible for paying such fees despite the evidence of contrary Congressional intent, AILA believes the DOL should specify that such fees may nevertheless be recovered by the employer if they are determined to be permissible liquidated damages pursuant to relevant State law. If the DOL’s basis for requiring the employer to pay these fees is that such fees are the employer’s business expense, then they should be expenses recoverable as permissible liquidated damages if determined as such under relevant State law as a result of injury suffered as a result of the alien’s premature and voluntary termination of employment.
K. Impermissible Penalty and Rebate
ACWIA requires that the employer not accept the fee $500 training fee from the employee, making it a violation to do so. The statute does not, however, limit the entities from whom the employer can accept reimbursement of the fee. While we agree that arrangements that would have the employee indirectly paying the fee are proscribed by the statute, we do not concede that the statute forbids any third party reimbursement. There are legitimate arrangements where payment of the training fee by another entity (a joint employment arrangement, a cooperative or joint venture, etc.) where, for example, one entity who is the sponsoring employer could reasonably be reimbursed by the other.
L. Impermissible Penalty/Payment – Sanctions (see above)
M. Enforcement changes
1. Remedies and Penalties
As an initial matter, AILA is concerned that the terms "substantial" and "pattern and practice" remain undefined. "Substantial" failures relating to notice, LCA specificity, and good-faith recruitment may lead to debarment. Allegations of "pattern and practice" violations by non-aggrieved parties may result in an investigation which in turn results in debarment. Clear definitions are thus critically important. We suggest that a "substantial" failure is a failure creating a "high likelihood" that notice to the employer's employees could not succeed, that U.S. worker recruitment could not succeed, or that the LCA was "highly" inaccurate. It appears to have been the intent of Congress that DOL interpret the "substantial violation" narrowly|||. Failures that are not material or are minor errors or inadvertent misstatements are some examples of what constitute a non-substantial failure. Moreover, the Department is to look at the whole of an employer’s compliance with the H-1B program, not just the violation at issue, to determine whether a substantial violation has occurred. A "pattern and practice" allegation should be supportable only if the employer has previously been found to have violated the LCA attestations.
More importantly, AILA is concerned that the Department of Labor overbroadly interprets "administrative remedies" to include "make-whole" relief. We believe that this section is contrary to Congressional intent as well. Senator Abraham’s statements discuss in detail the legislative history behind the provision at issue, clearly evidencing the intent of the final compromise legislation not to include "make-whole" remedies. Specifically, the Senator stated:
This construction of the phrase is reinforced by the fact that suggestions from a number of quarters, including the Administration, that the Secretary should be granted the authority to issue orders of this type with respect to U.S. workers, were advanced and ultimately rejected in the final version of this legislation. In the course of negotiations leading to the bill currently before the Senate, the Administration ultimately was forced to accept the reality that authority of this type could not be conferred without radically transforming the way this program operates and indicated that acceptance by withdrawing its demand for this authority in favor of other concessions.
144 Cong. Rec. S12752. The Senator goes on to describe Point 7 of the Proposed Administration Revisions to H.R. 3736 dated July 29, 1998, which stated that "Reference in the bill to "administrative remedies" includes the authority to require back pay, the hiring of an individual, or reinstatement" (reproduced at 144 Cong. Rec.S12756), and the subsequent deletion of the same Point in the Administration Package dated September 14, 1998 (reproduced at 144 Cong. Rec.S12757).
Administrative remedies, reasonably understood, should defend and support the H-1B program's integrity, and not act as a compensatory mechanism for displaced workers, whistle-blowers, or H-1B workers. Administrative remedies might include, for example, required notice to workers.
The Act already specifically provides for back-wage awards to H-1B employees at INA Section 212(n)(D). The back-wage provision was included in the statute even though the statute already provided for "administrative remedies" at INA § 212(n)(2)(C)(i). If the "administrative remedies" language provided the authority to order back-pay awards (a type of make-whole relief), the back-wage provision at INA § 212(n)(2)(D) would have been pointless. As a matter of statutory interpretation, statutory language should not be interpreted in such a way as to make specific statutory language redundant. Hence, the language "administrative remedies" does not provide the authority to order make-whole relief. If it did provide that authority, INA § 212(n)(2)(D) would be redundant.
2. Random investigations for willful violators.
Where the Secretary of Labor finds an employer’s willful failure to meet a condition on the labor condition application (LCA) or a willful misrepresentation of material facts on the LCA, ACWIA DOL the power to conduct "random" investigations of the employer during a five-year period following findings by the Secretary of DOL or by the Attorney General (AG) of such willful violations. The Rule proposes that the triggering finding be the agency’s final action (e.g., the DOL Secretary’s decision following a hearing, a settlement agreement between DOL and the employer, or the AG’s decision after an arbitration proceeding. The last relates to an arbitration arising from the employer’s obligation to offer employment to equally or better qualified U.S. workers). DOL seeks comments on whether it should trigger these random investigations at an earlier point, e.g., the date of an ALJ finding or the Administrator’s investigation finding. AILA does not believe it should look to any earlier action than the final action. We suggest that, given the severity of the consequences of a random investigation, an appeal of the final action by the employee, if upheld, should serve to nullify any investigations or action on information gained in the course of random investigations conducted pursuant to that final actions.
3. New DOL authority to conduct investigations based on sources other than aggrieved parties.
ACWIA provides for the investigation of possible violations based on sources other than aggrieved parties. The Supplementary Information states that the "focus of such investigations will be on whether an employer has willfully failed to meet its statutory obligations, has engaged in a pattern or practice of such failure, or where the employer’s failure is substantial and affects multiple employees." 64 Fed. Reg. 649. ACWIA specifies that the source of the allegations must be outside DOL, or if within DOL, the source must have gathered the information during the course of a lawful investigation. The source must provide specific credible information alleging the violation. The information shall be summarized on a form to be created by DOL. Finally, the information supporting the allegations must provide "reasonable cause" to believe that an employer has engaged in the above violations.
The Department fails to provide specific guidance and suggested regulatory text to clarify which persons or entities are properly characterized as either "aggrieved parties" or "non-aggrieved parties" under ACWIA. The proposed regulations fail to modify the current regulations in a manner that adequately takes into account the statutory changes to the enforcement scheme envisioned by Congress. In particular, the regulations as proposed fail to distinguish mere "aggrieved-party" claims from the more egregious allegations involving willful violations or substantial pattern-and-practice violations affecting multiple employees originating from a "source" with knowledge of an employer’s practices and conditions of employment. See ACWIA, Section 413(e).
In granting DOL additional investigative authority with regard to "specific" and "credible" allegations arising from such a "source" whose "identity is known" to the DOL, Congress established a higher threshold for the DOL than existed under prior law in order to initiate investigation of more serious charges of H-1B violations. In doing so, Congress repudiated and eliminated the so-called "self-directed" authority to initiate investigations that the agency arrogated to itself in the prior regulations.
The current regulatory definition of aggrieved party should be revised, therefore, to comport with the common understanding of the term and the INA. To be truly "aggrieved" there should be some requirement of demonstrating articulable injury in fact, and not some speculative and intangible "impact" on a government agency with an H-1B "program". Certainly, aliens, U. S. workers, competitors and unions can conceivably be aggrieved, but it takes a contortion of language to the breaking point to include government agencies within this definition.
Thus, a fair reading of ACWIA suggests that governmental entities other than DOL should be removed from the current regulatory definition of "aggrieved party" and instead be allowed to present claims under Section 413(e) of the new law. By providing a more restrictive avenue for DOL investigation of egregious H-1B violations, and incorporating a number of due process safeguards to protect investigated employers, the Congress clearly envisioned that the agency would modify its overly broad then-current definition of aggrieved parties currently found at 20 CFR § 655.715.
Consequently, the DOL and other government agencies should be expressly excluded from the current regulatory definition of an aggrieved party as "a government agency which has a program that is impacted by the employer’s alleged non-compliance with the labor condition application". The DOL should therefore eliminate from Proposed Regulation Section 655.805 the generalized catch-all power of the Wage and Hour Division Administrator to direct investigations "on his or her own initiative". Moreover, government agencies other than the DOL should be allowed to make claims only under Proposed Regulation Section 655.806 with respect to egregious, willful or pattern-and-practice violations, thereby allowing a re-definition of aggrieved party at 20 CFR § 655.715 so that the term is limited to persons or entities truly injured by an employer’s H-1B violations.
Lastly, AILA requests an opportunity for the public to review and comment on the "form" the Department is creating to implement the new provision for allegations of egregious, willful or pattern-and-practice violations. We believe that before implementation of new investigative procedures the PRA mandates such a meaningful review and comment on the actual draft of the form in order to assure a minimum paperwork burden and implement adequate due process safeguards as envisioned by ACWIA.
4. Whistle-blower Protections
ACWIA's "reasonably believes" language tracks the "reasonably believes" language of the Whistleblower Protection Act of 1989, 5 U.S.C.S. § 1213(a) (1994). The courts have interpreted that language to not cover disclosures of "minor or inadvertent miscues occurring in the conscientious carrying out of one's assigned duties." Frederick v. Department of Justice, 73 F.3d 349 (Fed. Cir. 1996). Only reports of a "genuine infraction of law" are covered. A de minimis violation should not be the basis for a $5000 fine and a two year debarment even if the whistle-blower was terminated on account of the disclosure. The whistle-blower provision's purpose is to protect the H-1B program's integrity. A de minimis violation does not threaten the H-1B program's integrity. The proposed regulatory language should be amended at 20 C.F.R. § 655.800(d)(i) to read as follows: "Disclosed information to the employer, or to any other person, that the employee reasonably believes evidences a violation of section 212(n) of the INA or subpart H or I of this part (the alleged violation must be other than a de minimis violation)."
Once the criteria for invoking the whistle-blower protections are met, employment authorization must be expeditiously granted to the whistle-blower, if needed. The Department should therefore expeditiously determine whether the criteria have been met and immediately notify INS that work authorization must be granted. The whistle-blower provisions will not protect the H-1B program's integrity if the whistle-blower cannot work for a three month period. In addition, the work authorization granted must provide that the whistle-blower resides in the U.S. in lawful status for all relevant periods.
N. Academic Salaries – Prevailing Wage Computation
AILA is concerned that the Supplementary Information to the proposed regulations too narrowly construes ACWIA's prevailing wage revisions.
ACWIA's structure at Section 415 creates at least two separate groups over which prevailing wage determinations should be made. Congress defined two different employer groups in two different subparagraphs - Section 212 (p)(1)(A) and § 212(p)(1)(B). ACWIA's structure thus evinces a Congressional intent to create at least two groups over which the prevailing wage should be calculated since Congress would otherwise have simply defined the groups in a single subparagraph. The bifurcation between institutions of higher education and nonprofit research institutions cannot rationally be interpreted as accidental since the whole point of the amendment was to address the over generalization created by Hathaway Children's Services v. Department of Labor, 91-INA-388 (1994). The bifurcation must be taken as a conscientious decision by Congress to at least treat the two groups separately.
The comments define a "nonprofit research organization" as a nonprofit "organization or entity that is primarily engaged in basic research and/or applied research." In defining the terms "basic research" and "applied research," the comments introduce the term "scientific." In common parlance, "science" connotes a natural science like chemistry or physics, but not a social science like history or sociology. In addition, the distinction between basic research and applied research is often a distinction drawn within the natural sciences. The comments thus imply that the Department of Labor believes that the ACWIA amendment covers only nonprofit organizations engaged in natural science research. The ACWIA amendment, however, broadly refers to research and nowhere introduces language limiting the amendment to natural science research.
Congress amended the prevailing wage provision, in part, to alleviate the hardship caused by Hathaway on nonprofits engaged in research. AILA therefore suggests that the Department of Labor drop reference to "science" and the distinction between "basic" and "applied" research. AILA suggests that research be defined as the "concerted effort in accord with some field's basic principles and methods to gain more comprehensive knowledge or understanding of the subject under study or to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. The research may or may not be related to a specific commercial objective." Congress broadly provided for a "nonprofit research organization." The language clearly encompasses a nonprofit organization engaged in some form of research other that what is traditionally meant by natural science.
The term "research" would also include a nonprofit organization researching current medical treatments and preparing a review of the current options in treatment. This research should proceed in accord with the principles of library science and would gain knowledge or understanding to determine the means by which a specific need may be met - better medical care.
The Department also seeks to restrict "government to the Federal government. Yet Congress made no such restriction. A "governmental research organization" should include those of state and/or local governments as well.
The Department also introduces an overly restrictive approach to interpreting "nonprofit research organization" where it defines that language as an entity "primarily" engaged in research. The ACWIA amendment is meant to remedy the threat Hathaway posed to a vital research environment in the United States. Nonprofit organizations engaged in substantial research should thus be covered by the ACWIA amendment whether or not research is the nonprofit's primary purpose. For example, a group of medical doctors may incorporate a nonprofit corporation in order primarily to provide patient care to people who have contracted HIV. As an essential aspect of the patient care services, however, the medical personnel may engage in clinical research advancing knowledge of effective treatment regimens and drugs. This research is essential to effectively meeting the nonprofit's primary goal which is patient care but is not itself the nonprofit's primary goal. The research is an essential element of the nonprofit's mission due to the highly dynamic nature of AIDS treatments. As another example, a large nonprofit organization may primarily exist for some reason other than research, but actually have a division which is engaged in research. In this context, substantial research is being performed and so the principles underlying the ACWIA prevailing wage amendment apply. We suggest that the Department define a "nonprofit research organization" to include organizations primarily engaged in research and organizations engaged in research as an essential or significant element of their operations.
The groups over which the prevailing wages are calculated should only include similarly employed individuals. That means individuals in positions that are substantially comparable within an occupation. A prevailing wage based on a survey over a group of occupations would violate the law. The INA at Section 212(n) defines the prevailing wage for the occupational classification in the area of employment, not a group of occupations. In addition, the Department’s regulations at 20 C.F.R. § 656.40(b) define "similarly employed" as having substantially comparable jobs in the occupational category ..." Defining a prevailing wage over a group of occupations would thus violate the regulatory language, and even if the regulations were amended, such a broad group would still be illegal in light of the statute's language which precisely addresses the point at issue.
In addition, the regulatory language should provide that reference should be made to the skills and knowledge required by the position offered as one factor for deciding whether two positions are similarly employed. This would make it clear that a Philosophy professor and a Computer Science professor, for example, are not similarly employed.
O. Other H-1B Regulatory Matters Addressed in NPRM
1. Short-Term Placement of H-1B Workers at Worksites Outside the Locations Listed on the LCA
This provision has continued to demonstrate the department’s lack of rational understanding of the business world. The slight modifications to the proposed rule, referenced in the proposal, do not address AILA’s continuing fundamental concerns.
a. 90 Days
To analyze this rule, let us break it down to its principal elements. First is the 90-day period itself. You will likely receive comments that other periods would be more appropriate: perhaps 6 months; perhaps 45 days. The fact that such a wide array of time periods can be argued reflects the fundamental flaw in attempting to legislate a time-test rule. Time alone is a near-meaningless factor when determining whether a place of employment has changed. All of the facts and circumstances of the situation need to be examined to see if a shift actually has occurred. Has the employee’s place of abode also changed? Does the employee’s business card show the new address? Does the employee have a telephone line and dedicated work station at the different location? These are but a few of the factors that could be examined. Since Congress made clear that the LCA process is to be enforcement-driven, rather than process-driven, these factors should be examined in an enforcement context and not regulated in this manner.
If a time test is to be imposed at all, it should operate as a presumption rather than a bright-line rule. In other words, if an H-1B employee should remain at a different location for longer than a period such as 90 days, a presumption that the place of employment has changed arises. That presumption can be rebutted by a showing that all the facts and circumstances indicate that the placement was temporary and not a shift in the place of employment.
b. Within 3 Years
Use of a 3-year period to measure the time test shows the unreasonableness of the provision. Limiting visits to 90 days within a 3-year period allows only an average of 30 days per year to a particular area. Due to the increasing national scope of many businesses, many companies have need to visit locations all across the country. Limiting an individual employee to only 30 days per year in any one geographic area would severely limit a company’s ability to do business in the area.
c. Time Cumulation
The remaining elements of the time test rule are wholly irrational. That the rule is cumulative in its impact on all H-1B workers makes no sense whatsoever. The reason for this element of the rule has never been properly explained, and this element is the main reason that many employers cannot comply with the rule. Larger companies, with numerous locations, divisions, and dispersed human resources functions, find it physically impossible to track where all of their different H-1B workers are at any given time in order to count the 90 days to see if any worker has spent more than that period in any given area.
This rule essentially requires the development and imposition of a new tracking and record keeping system that is beyond the capabilities of even the best organized and administered companies in the United States. Compliance is simply not feasible for the large percentage of companies that use H-1B workers on a sporadic and dispersed basis.
The proposal attempts to resolve the inherent difficulty by positing that it is no longer a "cumulative" rule, but rather requires calculation on a per employee basis. However, the rule prohibits any H-1B worker from being in that area after any one H-1B worker has cumulatively been more than 90 days in any given three year period in the affected area. The record-keeping and filing systems must therefore be in place for all workers; the only difference between this and the earlier proposal is that the new required system can focus on cumulative days of each worker. In the normal course of modern business, this is a difference which in fact makes no difference, and is no more reasonable, logical or palatable.
d. Area of Intended Employment
A similarly perplexing element of this rule is its coverage of an entire area of intended employment. Particularly in combination with the bar on temporary trips for all H-1B workers if only one exceeds the 90-day period, we fail to see the logic of including all time in a given area, rather than all time at a given site, in counting the 90 days. This becomes a particular problem where, as frequently occurs, worksites are outside of metropolitan statistical areas.
For example an H-1B worker may be in one location in a rural area for a few days, and then at a site 30 miles from that location the next day, and then at a site 30 miles from the second location but 60 miles from the first location for another few days, and then at a site 30 miles from the third locations but 90 miles from the first location for another period of time. Each successive location probably would be considered within commuting distance of the previous location, but not of the previous two locations. Thus, it is impossible to determine when the 90 days are accumulated.
e. A Practical Problem
The Department argues that an employer can avoid the 90-day rule altogether "simply by filing an LCA covering the new area of intended-employment." Obtaining a certified LCA is not always a simple task and in many states can take several weeks or more to obtain. For example, if an employer needed to file a new LCA in the Kansas City area, the employer would have to wait over six weeks to obtain certification of the LCA. This lengthy period does not even include waiting for the local SESA to provide a prevailing wage determination (which would be virtually compelled if the proposed regulation with respect to SCA wages is finalized). Thus, in many cases, even if the employer begins the LCA process on the first day in which an H-1B worker visits a new area, the LCA may not be certified within 90 days. For reasons discussed in the context of the new filing process proposed in the NPRM, it does not appear likely that this situation will change.
f. Travel Expenses
The Department of Labor proposes to "clarify" the requirements for reimbursement of travel expenses to an H-1B nonimmigrant worker when he is traveling to a work site outside the LCA-listed area of employment. This proposal is well beyond the authority of the Department. Nothing in the law permits DOL to take upon itself the power to regulate how private entities reimburse for travel. In addition, the proposal itself defies logic.
In many instances, the businesses that hire H-1B workers already have reimbursement policies in place for their U.S. workers. Since U.S. workers are not subject to the GSA regulations, a U.S. worker and an H-1B worker could be reimbursed different amounts for the same business travel, depending upon the employer's criteria for reimbursement. It is unreasonable and burdensome to require an employer to implement two standards for reimbursement of its workers. Moreover, if it is the intent of the law to have parity in benefits between H-1B workers and U.S. workers, there should also be parity in reimbursement of travel expenses for U.S. workers and H-1B workers. It makes no sense to require employers to institute an entirely separate reimbursement structure solely for its H-1B workers, and imposes significant burdens on their recordkeeping.
Furthermore, the GSA regulations specify a procedure for a government employee to request a location survey for reevaluation of expenses in the event that a per diem rate is insufficient to meet necessary expenses. The Department does not state whether this procedure will be available to an H-1B worker. This bureaucratic process of reevaluation is time-consuming and onerous. Meanwhile, the employer would only be obligated to pay the per diem rate to the H-1B worker even though insufficient to cover the travel expenses. Ironically, this is the very situation that the Department intended to avoid by instituting the use of the GSA regulations.
Finally, mandating the use of the GSA regulations for reimbursement of H-1B workers oversteps the authority of the government and interferes unnecessarily with private industry. Such interference encourages disparate treatment of U.S. and H-1B workers. Employers should be allowed the freedom to institute their own criteria for reimbursement of all workers, both U.S. and H-1B, rather than be required to use a standard which is fundamentally unfair to employers and workers alike.
If reimbursement of travel expenses is a concern, then it should be treated as one of the facts and circumstances examined in an enforcement action to determine whether a visit in fact rises to the level of a new place of employment, requiring a new labor condition application as discussed above. This is not a subject for regulation; at most it is a factor that might be raised in an enforcement context. Remember, the labor condition process was to be enforcement-driven.
This NPRM does not address the still-extant issue of its lack of statutory authority to impose such a rigid scheme. Although the court did not reach this substantive issue in National Association of Manufacturers v. Department of Labor, Civ.No. 95-CV-00715 (RCL) (hereinafter "NAM"), it clearly suggested that this and other similarly over-reaching parts of the regulatory scheme present "very substantial questions that may ultimately cause the court to strike the regulations as exceeding defendants’ statutory authority under the Act." (Memorandum Opinion, page 45).
2. Nonproductive Time
This proposal is discussed above in these comments in connection with the ACWIA-related "benching" rules.
3. Guidelines for Determining & Documenting Actual Wage System (and Appendix A)
AILA is startled to see the Department re-propose such a burdensome rule that is so plainly in opposition to its statutory mandate. The requirement that employers "have and document an objective system used to determine the wages of non-H-1B workers," is unworkable and overreaching. For the "crime" of operating in the international market or in the high-technology sector and thus needing an H-1B worker, it requires an extraordinary revamping of a company’s entire salary structure.
a. Application to Non-H-1B Workers
Employers with professional employees in the same occupational category as the new H-1B employee would be required to develop this new system and apply it to all workers. Employers would therefore be required to revisit the wages of hundreds or even thousands of employees. The analysis, implementation and administrative costs alone prohibit this requirement.
As was raised to DOL in a number of comments to the October 1995 proposed regulation, this requirement is contrary to the language and intent of MTINA. Undoubtedly, it is one of the "very substantial questions that may ultimately cause the court to strike the regulations as exceeding defendants’ statutory authority...." (NAM Memorandum Opinion at p. 45). The Act, by its very terms, requires the actual wage to be paid only to H-1B workers, and does not dictate the wages of U. S. workers. Senator Simpson, one of the sponsors of the bill, stated that "employers are known to use a variety of legitimate methods for determining appropriate wages and we do not intend to mandate any specific changes to these practices." 137 Cong.Rec S18, 243 (daily ed., Nov. 26, 1991).
b. "Occupation" as Frame of Reference
The regulation is further flawed by the requirement that the employer must establish the actual wage for the "occupation" in which the H-1B nonimmigrant is employed. The statute requires that H-1B workers be paid the actual wage of those with similar qualifications and experience employed in the "specific employment," a term that is not synonymous with occupation. Since many workers in a given occupation do not perform the same "specific employment," the actual wage determinations required by Congress involve the calculation of wages of a far smaller group of workers than the system imposed here.
As a workable alternative, employers should be required to analyze which jobs are comparable for actual wage purposes, and pay the H-1B worker at least as much as the employees in those jobs. There is no statutory or practical reason to penalize employers with an entirely new and burdensome wage system.
c. Third Party Review
The requirement that "the explanation of the compensation system be sufficiently detailed to enable a third party to apply the system to arrive at the actual wage rate computed by the employer for any H-1B nonimmigrant" is unrealistic and unworkable. One need only look at some of the factors suggested in the regulation to see the problem. Consideration of an individual’s education and experience requires an evaluation of the reputation of the university and prior employer, an evaluation influenced by the evaluator’s personal point of view. The same is true when considering specific job responsibility and function, which may deviate drastically based on the evaluator’s perception and understanding of the position. Indeed, to enable a third party to arrive at the actual wage, employers would be required to establish the very "elaborate...’grid’ type pay system" that the regulation purports not to be proposing. However, notwithstanding the statement that the Department is not proposing such a system, the regulation requires nothing less than an elaborate grid-and-points system, similar to the system used only by the federal government, to meet the third-party reviewability test.
Determination of the actual wage level does not lend itself to a rigid system. Instead an employer must analyze whether any of its other employees are comparable for actual wage purposes, and then ensure that the H-1B employee is paid at their level. Elaborate systems and documentation make no sense in this context. It is, moreover, inconsistent with the purpose of the PRA. The reality of whether the actual wage was paid is within the purview of enforcement action, not regulation. It is more consistent with legislative intent and reality to have employers make the analysis of comparable employees, leave to the employers the wisdom of creating documentation of that analysis, and leave the rest to enforcement.
4. Posting of notices at other worksites.
The proposed regulation adds an electronic posting option, but otherwise is essentially unchanged from the regulation struck down by the NAM court. Under the terms of the proposal, employers would be required to post notices at every location where an H- 1B employee performs work within the area covered by the LCA, with virtually no regard to the duration of the placement and only scant attention to the nature and meaningfulness of the presence. The LCA must be posted on the first day of the H-1B employee’s visit, and it must remain posted for at least 10 days. This posting requirement applies whether or not the employer of the H-1B nonimmigrant owns or has any control whatsoever over the worksite, and also applies virtually without regard to the duration of the placement, be it an hour, a day or several months, with very limited exceptions of highly questionable logic.
The regulation would compel employers of H-1B workers to post the required notice at all work sites, including client sites, where the H-1B employee will perform services. If a client refuses to post the notice, then the H-1B worker cannot be sent to that site. Many employers contract to undertake work that would involve employees with very high-level, specific skills spending time at particular client sites. The inability to send these workers could result in a loss of business. It will also affect the reputation of the employer as a business unable to meet its obligations and could even result in an action for breach of contract.
Because of the employer’s lack of control over the client’s workplace, the employer would have no way of knowing if, indeed, the posting remained visible for 10 days or, for that matter, if the posting was actually placed at all. To hold an employer responsible for matters out of his control is unreasonable, and to fine and possibly even debar an employer for a matter it cannot control is a deprivation of due process. Indeed, Congress did not even go so far as to impose absolute liability resulting in debarment for H-1B dependent employers in third party worksites where there have been layoffs. It is totally unreasonable to hold nondependent employers to such an extreme level of liability.
The complex and severe problems involved in posting the LCA at third party sites are best illustrated by companies that employ H-1B workers who visit a number of work sites during the course of a day or a week. An example is a service engineer who travels to a number of client sites to install, debug, adjust and repair very complex scientific instrumentation, machinery or software. The applicability of the regulation to this situation, in light of the "place of employment" definition, is discussed elsewhere. These kinds of visits tend to be the least premeditated with little opportunity for the H-1B employer and its client to discuss the issue of posting, much less come to an agreement. Assuming that they do agree, and the H-1B employer could be reasonably sure that the LCA indeed would be posted, it still would be impossible for the H-1B employer to guarantee that the LCA would remain posted for the required 10 days. Once the H-1B employer leaves, it has no further presence at that site, yet remains subject to penalties for failure to comply.
For these reasons, it will be impossible for many employers to comply with the posting requirements of the rule. If such a rule is imposed, it must be tempered with a provision that forgives failure to post where the employer has no control over the site. However, it is best if the Department makes a rule that is actually within its authority under the Act -- that the posting be made at the place of employment, the place where the individual is employed rather than any place the employee happens to visit in the course of performing his job.
5. Time periods for prevailing wage determinations.
The 90-day validity period for SESA prevailing wage determinations is an arbitrary period, which bears no relation to "real world" wage assessments by US employers. Most US employers assess their wage calculations, including salary increases and cost of living adjustments, annually, not quarterly. As a result, requesting a prevailing wage from SESA every 90 days places an undue burden on US employers. This is especially true for those US employers who regularly employ professionals nationwide and therefore, must obtain prevailing wages from a number of different SESAs in any given 90-day period.
Moreover, with the exception of a few, SESAs are already overburdened by the large number of prevailing wage requests that they must process. Some SESAs appear to be so overburdened that it takes them weeks and sometimes months to issue a prevailing wage determination. As a result, it is conceivable that an employer, who will employ an H-1B professional in more than one state during a period of employment, may obtain a prevailing wage from one state, which subsequently expires prior to the receipt of a prevailing wage from another state. To comport with "real world" business practices and to avoid an undue burden on employers, SESA prevailing wages should be valid for a period of one year.
SESAs rely on the OES (Occupational Employment Statistics) survey to obtain salary information for purposes of issuing prevailing wage determinations. Because the OES is an annual survey, it follows that SESA prevailing wage determinations should be valid for the same period: one year. To require US employers to obtain a new SESA prevailing wage determination every 90 days (quarterly) when the OES wage data is updated annually, not quarterly, unduly burdens both employers and the SESAs and does nothing to further the Department’s purpose of preventing use of "stale" prevailing wage determinations. Wage data based on an annual survey is unlikely to change every 90 days. Therefore, SESA prevailing wage determinations should be valid for a period of one year to be consistent with the "annual nature" of the OES survey.
An employer is not required to rely on a SESA prevailing wage and may use other legitimate wage sources, such as published wage surveys. The regulations allow use of such surveys published within the last 24 months and based on data gathered within 24 months before publication. Yet, in order for an employer to use a SESA wage, the determination must be less than 90 days old. This inconsistent treatment of wage data underscores the arbitrariness of the 90-day validity period. A one-year validity clearly protects against "stale" wages while alleviating the burden of obtaining a new SESA determination every 90 days.
6. Challenging a SESA-issued prevailing wage determination.
The Department has sought further comment on 20 CFR §§655.731(a)(2)(iii)(A)(1), 655.731(d)(2), and 655.840(c) regarding the use of the Employment Service ("ES") complaint system to challenge SESA prevailing wage determinations. An informal poll of our membership and various Department of Labor officials reveals that few, if any, challenges have ever been made through this system. There are several critical reasons for the failure to use it. First, it has not been widely publicized by either the Employment Service or the SESA Prevailing Wage Unit. Despite the stated obligation at 20 CFR §658.410(4)(d), state agencies have not publicized the use of the ES Complaint System through the prominent display of an ETA-approved ES Complaint System poster in each SESA local office. The sector of the public, i.e., the employers of H-1B workers, are unfamiliar with the Employment Service Complaint System. They are experienced with challenges to prevailing wages through the Board of Alien Labor Certification Appeal ("BALCA") unit under the permanent labor certification program and will use a system with which they are familiar.
Second, the ES Complaint System provides a laborious, complicated procedure to challenge prevailing wages whereby one must first initiate the complaint at a local office, where the complaint is reviewed and then passed to the state office for resolution or further action. Thereafter, the complaint follows a seemingly tortuous path to the ETA Regional Office. Where the prevailing wage determination is made by the SESA prior to filing the LCA, the employer must enter the complaint system at the state level. Only after the complainant has exhausted the State agency administrative remedies set forth at 20 CFR §§658.410 through 658.418, will the matter be transferred to the regional level. The ETA Regional Office is also responsible for handling appeals; however, the opportunity for a hearing before a DOL administrative law judge is permitted only at the sole discretion of the Regional Administrator.
The third reason for the failure to use the ES complaint system is that it is too time consuming and protracted. Lastly, without the opportunity for meaningful review of a SESA wage determination by an impartial judicial tribunal, such as in a hearing before an administrative law judge, employers feel that a meaningful and fair review might not be possible under the ES Complaint System.
Now, more than ever before, employers need an expeditious and fair procedure to challenge SESA prevailing wage determinations made by SESAs throughout the nation. Ever since the obligation to determine the prevailing rate of pay for H-1B workers was mandated by Congress, and Department of Labor was given the responsibility to make prevailing wage determinations, our organization has raised at liaison meetings with the Department of Labor (ETA & ESA) the issue of the arbitrary and unreliable manner in which wage determinations are being made. This topic has been discussed on numerous occasions at the regional and national levels without satisfactory resolution. Over the years our members have provided numerous examples of inconsistent adjudications, where the same job description and job requirements will yield a different prevailing wage determination at the same local office.
Partially in response to the business community’s charges of inconsistent adjudications and unavailability of wage data in various geographic locales, on October 31, 1997 ETA published General Administrative Letter No 2-98 ("GAL 2-98") entitled "Prevailing Wage Policy for Nonagricultural Immigration Programs." As of January 1, 1998, the Employment and Training Administration directed field offices to use the Occupational Employment Statistics ("OES") Wage Survey. Unlike the vast majority of published wage surveys, including those of the Bureau of Labor Statistics ("BLS") the OES recognizes only two levels of skill required by the employer for the job opportunity, and thus publishes just two wage levels, Level I and Level II. The entire universe of H-1B professional workers, including those with bachelor’s, master’s and Ph.D. degrees, those with one, four, ten, or twenty years of experience are lumped into just one of two skill categories. For example, under GAL 2-98, a professional with a master’s degree and no experience would be given a Level II wage, as well as a worker with a Ph.D. and ten years of experience. According to GAL 2-98 a licensed architect with no years of experience and a licensed architect with ten years of experience would both be accorded the same wage determination - a Level II wage.
The OES Survey has clearly been no panacea for the business community. It has only added more fuel to our position that ETA has failed to provide employers with a valid, reliable means to determine the prevailing rate of pay, and the method developed by ETA to challenge the prevailing wage determination, only through the Employment Service complaint system, is woefully inadequate.
Any system designed to provide a meaningful challenge to a prevailing wage determination must contain the following features: first it must be expeditious. Within 72 hours of the receipt of a complaint, the review procedure must be commenced. Decisions should be rendered within five working days and strict time tables should be adhered to. Second, the complaint review procedure should be easy to follow and clear guidance and communication regarding the procedure should be clearly set forth and made available to the aggrieved party. Third, any meaningful challenge to wage determinations should include an opportunity for review before an administrative law judge in an expeditious fashion.
P. Additional "Interpretive" Regulations
1. Definition of Worksite and "Floating" and "Roving" Employees
We oppose the Department’s attempts to use the H-1B regulatory process to legislate how companies in the international marketplace conduct their business. However, if the Department is going to micromanage employers’ commerce, it must at least endeavor to do so in a manner that is comprehensible. Apparently fearing the illogic of imposing its peculiar workplace rules in the context of a "place of employment," the Department defines the statutory "place of employment" as "worksite," and then proceeds to define worksite. Thus, we have the absurd result that an auditor performing a lengthy audit is operating at a worksite under the regulation’s proposal. However, the auditor is clearly not at his place of employment -- if the client site were his place of employment he would not have the impartiality required of an outside auditor.
The introduction of Appendix B brings to light the flaw in the regulation that has made the roving employee problem so intractable. The Department is attempting to define its definition term, rather than to define the term used in the statute. This entire area requires a re-thinking based on the concept of "place of employment," and a complete rejection of Appendix B.
2. Costs of the H-1B Petition Process as Employee’s Business Expense
It apparently is not sufficient for the Department to attempt to regulate how U.S. employers pay their non-H-1B workforce, how employers can send H-1B employees on visits to clients, and what employers must pay as a travel allowance. Venturing into Constitutional sixth amendment territory, the Department now seeks to regulate whether and to what extent H-1B workers may have assistance of counsel.
Any first year law student can tell you that the party whose attorney drafts a contract is the party in the strongest position to control the terms of the contract. Similarly, the party whose attorney drafts the H-1B petition is the party who has strongest control over the terms and conditions laid out therein. While the employer is the party who files the petition, the legal rights of both the employer and the employee are affected by its contents. While an employer may be wise to have its attorney prepare the documentation, the employee is also wise to have his attorney handle the documentation. The employee has significant legal interests in the H-1B petition. It is by the petition that the employee’s status is maintained or lapses. Denial of a petition means that the employer does not employ a needed worker, but that is not all it means. The denial of a petition can be catastrophic for the employee. If he loses his status, he becomes removable and, if his out-of-status condition lasts for too long, he will be barred from entering the U. S. for many years. Private relationships with counsel are not a matter for involvement by anyone but the parties. To dictate that the employee is not permitted the power to draft the documents is to deny an employee effective counsel in a matter of pivotal importance to his fundamental rights, and is unconscionable.
The Department is correct that ACWIA imposes a new $500 training fee and places responsibility for its payment on the employer. That action demonstrates that Congress is fully capable of assigning responsibility for certain payments to employers. It chose to assign only the $500 specifically to employers. It knew the existence of another INS fee for the petition, yet did not include that fee in the employer’s obligations. Congress knew that there are other expenses in obtaining an H-1B, but assigned only the $500 expense (and, in IMMACT90, the reasonable costs of return transportation abroad) to employers. By imposing these expenses, it clearly chose to leave the assignment of other expenses to the private parties, where U.S. law has always left such matters.
Indeed, Congress imposed a penalty on employers for shifting the payment of the $500 fee to the H-1B worker. It imposes no such penalty for not paying other expenses.
An analogous "expense" would be costs of relocation. Some employers reimburse all relocation expenses, some offer partial reimbursement, while others offer no reimbursement whatsoever. Like attorney fees and filing fees, relocation is in the interests of both employer and employee, yet it would be unthinkable to require employers to pay relocation expenses of H-1B workers when they do not assume such expenses for U.S. workers. Relocation expenses, when not reimbursed, are merely viewed as a worker's cost in accepting a new position.
3. Use of SCA Wage as Prevailing Wage
The proposed regulations impose an undue burden on employers and an unintentional burden on SESAs in requiring use of an SCA wage for prevailing wage purposes. By designating the SCA wage as the prevailing wage, the Department not only ignores the dictates of IMMACT90, it virtually requires employers to use SESA determinations instead of the other wage sources permitted by law. Since employers are not equipped to determine whether an occupation falls under the SCA, the only alternative will be to seek a SESA determination in every case, or risk being in violation of the employer’s wage obligations. The practical effect of this will be to back up an already choked SESA system, possibly to the point of breaking.
Also importantly, imposition of such a requirement is clearly contrary to IMMACT90. The legislative history includes the clear statement from Senator Simpson that employers "are known to use a variety of legitimate methods for determining appropriate wages, and we do not intend to mandate any specific change to these practices." 137 Cong.Rec. S18,243 (daily ed., Nov. 26, 1991). The Department would effectively preclude employers from using these other sources, contrary to Congressional intent.
Additionally, most SCA wages do not conform to the weighted average, which is required of wages in non-SCA occupations. Since the only logical reason to require use of SCA is a belief that the SCA determinations are the most accurate, requiring SCA wages would call into question the legitimacy of the entire prevailing wage scheme of the regulations, which strongly emphasize weighted averages. Further, there appears to be no tangible benefit in requiring the employer to determine the applicability of the SCA. SCA wage quotes are, as a whole, not significantly different from other surveys.
Finally, we are concerned that the proposed regulation cavalierly disregards a well established law that is intricately woven into SCA labor rules, namely the exemptions from SCA wages for professional employees. No reason for eliminating the exemption is given. Moreover, this exemption has been recognized in permanent labor certification practice as outlined in the Technical Assistance Guide at page 114. In light of the Department’s use of the permanent labor certification process as justification for imposing SCA wages in the LCA context, it seems odd to then disregard permanent labor certification practice in the application of the rule.
DOL declares that "if there is an SCA wage determination for the occupational classification in the area of employment for which an employer is filing an LCA, that SCA wage determination is considered by the Department to constitute the prevailing wage for that occupation in that area." If the Department insists on requiring the adoption of SCA wages as the prevailing wage in these circumstances, then it must do so consistently. It cannot selectively require the SCA in certain situations and prohibit the use of SCA in others. Specifically, the Department cannot disregard the SCA for certain occupations in the computer industry where the SCA wage is stated as $27.63, because of the prevailing wage cap imposed by the SCA.
4. Metropolitan Statistical Areas
The proposed regulation requires private surveys for petitions involving positions in Metropolitan Statistical Areas (MSAs) to be geographically limited to areas within reasonable commuting distance. While we agree that the employer should make good faith efforts to utilize surveys which fit this geographical area, it is not always possible. Some established wage surveys include data based on metropolitan statistical areas as well as consolidated metropolitan statistical areas. Wherever the survey has a wage narrowed to the metropolitan statistical area encompassing the employer’s worksite, this wage should be used. For some occupations, however, there may be an insufficient sampling for the survey to have MSA data, but the survey may have CMSA data. Also, the worksite may be within a CMSA, but not within an MSA, and thus only CMSA data is available. In these instances, the employer should be able to use CMSA data. Generally, employers should be able to use broader geographic surveys where no valid local surveys can be found.
Indeed, the OES surveys used by the SESAs often are not able to provide data confined to the MSA. If an adequate sampling is not found, the data is expanded to a "balance of" sampling. A balance of state sampling does not appear to be necessarily smaller than the geographical areas defined under the consolidated metropolitan statistical survey. The major difference is that balance of state is confined to one state while a CMSA can incorporate areas in two or more states and is based on a comprehensive economic and demographic area.
5. Effect of New Wage Determinations on Existing Applications
The proposed regulation includes a welcomed acknowledgement that a prevailing wage on an LCA is not changed by later prevailing wage determinations. However, we are very disturbed by an apparent disregard of the clear language of the statute in the proposed regulation’s indication that actual wages must be revisited throughout the duration of the LCA. The INA requires that an H-1B worker be paid at least the prevailing wage or the actual wage, "whichever is greater, based on the best information available as of the time of filing the application." (emphasis added). The LCA is as much a "snapshot" in time for actual wage as it is for prevailing wage. To require constant reconsideration of either wage is a massive burden on employers that Congress clearly did not intend to impose.
In reviewing these comments we can come to but one conclusion: DOL must withdraw the NPRM and either reissue its substance as an Advance Notice of Proposed Rulemaking or produce regulatory language in the form of a proposed rule so that the public may be afforded a meaningful opportunity to comment on the complex substance contained in particular in DOL’s ideas for implementation of ACWIA. The lack of regulatory language, and the lack of concrete indication of the Department’s likely actions in several significant areas of implementation affecting all H-1B employers, necessitate serious consideration of withdrawal and republication. To do less is to ignore the department’s responsibility in implementing its legislative mandate.
We, of course, remain available to further discuss the substance contained herein with the Department at any time.
American Immigration Lawyers Association
H-1B ACWIA Implementation Task Force
Appendix -- LCA Procedures and New Form ETA 9035
Congress intended to protect domestic workers by instituting the LCA process as a monitoring device, envisioning the LCA to be a complaint-driven safeguard that would neither burden H-1B employers nor require close Department surveillance of their employment practices. The LCA requirement was in theory designed for administrative ease in facilitating the hiring of foreign personnel without compromising the wages and working conditions of U.S. workers. The proposed LCA form and procedures should continue this focus on administrative ease as well as improve processing times that have fallen far from the seven-day benchmark.
New LCA Procedures
In general, AILA welcomes the new LCA procedures, as they promise to improve the backlogged certification process. AILA looks forward to working with the Department, through our liaisons, to assist the Department in the rollout and evaluation of these new procedures. However, we are concerned about implementing the procedures precipitously, since existing pilot programs have shown considerable down-time.
The Department has published a revised LCA form intended to be machine readable to enable automated processing. Upon publication of Interim Final Rule, all LCA filings are to be centralized in Philadelphia and San Francisco with automated back-up capacity in Washington in event of system failure. After the effective date, the Department mandates that all LCAs be filed on the new form, and must be machine-readable.
The Department will offer the form electronically, and a "form-filler" program available for downloads to ensure its machine readability. AILA members have had difficulty obtaining the new "form filler" program for testing and therefore are unable to comment on it. AILA encourages the Department to make sure this program is downward compatible with older PCs and available by mail in diskette format.
According to the Department, forms (both faxed and mailed) will be scanned electronically and an automated approval will be faxed to the "return fax number" specified on the form, usually within 48 hours of receipt. AILA members welcome the promise of a speedy turnaround for LCA certification.
The NPRM is unclear on LCA rejection procedures with the new automated system. This is a key area of concern to employers and their representatives. The regulations specify that if the LCA form is incomplete or containing obvious inaccuracies, will be "rejected under the automated system as it is under the manually operated system." Employers and their legal counsel would appreciate clarification of the rejection procedures. Further, AILA requests the Department’s commitment to ensure that LCA rejections are also issued within the same time frame as certifications.
Finally, we have concerns regarding the regional offices chosen for "exclusive jurisdiction" over LCAs. At least one of these offices has demonstrated a chronic history of delays, consistently exceeding the statutorily-required seven-day processing time by several weeks. Any restructuring must include assurances that DOL will meet its statutory timing obligations.
H-1B Dependent Information in Part 7 and 8
To implement ACWIA the Department has proposed three new attestations to Form ETA 9035 ("the LCA"). These attestations implement the displacement, secondary displacement and recruitment obligations for H-1B dependent employers (or willful violators) employing non-exempt H-1B workers.
The NPRM proposes that every employer, for every LCA, first make the determination of dependency status. P. 636. The proposed LCA form has a check a box for the employer to confirm if it is either H-1B dependent or has been found to be a willful violator. Conversely, not checking the box will mean that the employer is claiming that it is not H-1B dependent.
This proposal overlooks the fact that ACWIA does not require an employer to make the new attestations on LCAs for exempt H-1B nonimmigrants with a master’s degree in the field of intended employment or over $60,000 in annual wages. [Sec 412(a)(1)(E)(ii), "an application is not described in this clause if the only H-1B nonimmigrants sought in the application are exempt H-1B nonimmigrants"]. Thus, pursuant to the clear language of ACWIA, an H-1B employer need not confirm dependency or willful violator status in a LCAs for these exempt H-1B workers.
Many employers who may be on the threshold of becoming dependent due to new H-1B arrivals and/or U.S. worker attrition, would obviously find it preferable to claim this exemption whenever possible to avoid the burden of calculating, for each and every LCA, whether or not they are in dependent status. If an employer miscalculates, even if by just one worker, it can be held liable for the more severe penalties for misrepresentation. It is administratively easier for a company or its legal counsel to determine whether the wages paid or the employee’s degree will qualify for exempt status. This would also serve the needs of the Department and the Service by providing a clear method of identifying which employers are claiming the exempt H-1B nonimmigrant exception.
Along these same lines, an employer that is clearly non-dependent at the time of filing the LCA would also want to insulate itself from potential liability by clearly notifying the Department of its non-dependent status. The three new check box choices on the form represent the following choices:
1. The LCA is used only for exempt H-1B employee(s) and no additional attestations are made, OR
2. The employer is not an H-1B dependent employer and no additional attestations are required, OR
3. The employer is H-1B dependent, and the worker is not exempt, and the employer and makes the three additional attestations.
Retroactive Application of New Attestations
The Department has added language to the proposed ETA 9035 that would retroactively invalidate LCAs certified before the date of interim final regulations if an employer "is or becomes H-1B dependent, or is found the have committed a willful violation." ETA 9035 P. 3 Item 7. As noted elsewhere in this comment, such retroactive rulemaking is prohibited by Supreme Court precedent and is patently inconsistent with ACWIA’s plain language, which limits application of the law to LCA’s filed on or after the date of final regulations.
In addition to the language on the proposed ETA 9035, the NPR seeks comment on three variations on an attestation format. These three alternative revisions are:
1. The employer would expressly attest that it is not dependent and that if it later becomes dependent, it will comply with the additional attestation requirements; or
2. The employer would not have to attest that it is not dependent, but the LCA would clearly state--and by signing the form the employer would agree--that the employer is required to comply with the additional attestation requirements if it does become dependent; or
3. The employer would not have to attest that it is not dependent, but the LCA would clearly state that it could not be used in support of any H-1B petition filed after the employer became dependent.
Under all three versions an employer will subject to the additional attestations for a particular employee if it became dependent after filing an LCA . . . .
Other Issues with the Form
Lack of Macintosh software. The Department has issued form-filing software for the form that is incapable of being used in a Macintosh computer. In certain sectors of H-1B employers (such as higher education), the lack of software will make it difficult or impossible to use the automated process. DOL should either develop a software usable by Macintosh computers or publish it in a platform-neutral format.
First page. Insert "Please read the attached instructions when completing this form."
Part 5. Add in "or" between SESA box and OTHER box.
Part 6. Requires employers to develop and maintain documentation in connection with (b) the benefits requirement. As noted elsewhere in this comment, absent the clear intent of the legislature the Department lacks the authority to impose additional paperwork burdens to the LCA process. Reference to subsection "(b)" must be removed.
Part 9. Absent the clear intent of the legislature, the Department lacks the authority to hold an employee "personally" liable for compliance with the LCA attestations. The personal liability language should be eliminated from the revision of Form ETA 9035.