Awakening of a Slumbering Giant:
The DOL steps up LCA investigations
As of June 2002, the Department of Labor (DOL) completed fifty-seven (57) Labor Condition Application (LCA) audits, found forty-four (44) violations and ordered companies to pay $1.3 million dollars. Compare those numbers to fiscal year 1999 when the DOL completed thirty-two (32) audits, found twenty-four (24) violations and ordered companies to pay only $325,000.00.
The DOL has been given the authority by Congress to investigate complaints against employers who utilize the H-1b program and allegedly violate the LCA requirements. Essentially, the LCA regulations are designed to protect the U.S. and H-1b worker from unscrupulous practices of U.S. employers as they relate to the hiring and employment of foreign workers under the H-1b program. The regulations divide employers into two distinct classifications, dependent and non-dependent, and impose different requirements based upon said classifications. A description of the two classifications and the requirements imposed is outside the scope of this article, but an explanation can be found on our web site. The scenarios described herein are relevant to both classes of companies. A forthcoming article will focus on issues specific to dependent companies.
The enforcement of the LCA regulations is a complaint driven process which mandates that the DOL receive a complaint from an interested party before an investigation can begin. Interestingly, the DOL has designated itself as an interested party and permits itself to be a complaining party. The reality, however, is that the DOL has to date only rarely used such power. The DOL reports that the vast majority of complaints come from previously terminated employees followed by current employees, and competitors.
The most common complaints are: benching without pay, pay cuts below prevailing wage, forced leave of absences, unlawful deductions from pay upon termination and most recently those relating to RIFs. The DOL reports that upon investigation, they find violations most commonly relating to unlawful benching, forced leave of absences, incorrect pay classifications, location violations, failure to post and paperwork failures.
Quite often, an employers own attempt at good will creates a violation. For example, Company ABC has employee X who has worked very hard for the company for the past two years and is in the I-140/485 stage of his green card process when his project ends and ABC determines that they must lay him off. The company knows that such an action will end his green card process so instead, they place him on a leave of absence until such time as his I-485 is pending for more then 180 days. They then expect employee X to find another similar position and finish his green card with the new employer. To cover themselves, ABC has X sign a written request for a leave of absence so he can travel the country and visit friends and family. By taking such action, ABC has committed clear LCA violations and possibly even visa fraud. ABC would likely be ordered to pay back pay to employee X and fined for their actions, possibly even facing the severe penalty of debarment. Hint: Do not place employees on an unpaid leave of absence for lack of work. Do not promise positions which do not exist simply to help your former employees complete their green card process.
A second common scenario has Company ABC filing green card cases with enhanced job descriptions/requirements so as to permit its employees to be placed in the higher EB-2 category. A common investigatory approach of the DOL is to request copies of all labor certification applications filed and compare the representations made there with those made in the H-1 and LCA applications. Unfortunately, the DOL often finds that in the H-1/LCA application the position has been classified as low as possible whereas the labor certification often classifies the position as high as possible, often without any factual justification. In these circumstances, the DOL will often award back pay at the higher level for the entire period of employment. Hint: Do not enhance labor certification applications simply to pacify a request from an employee.
A fourth common scenario has a company reducing an employees wage, often in conjunction with an across the board wage reduction, without filing the necessary amended petitions and/or new LCAs. Hint: Do not presume that you can reduce an H-1b employees wage simply because every other workers wage is being reduced. Unfortunately, many of the rules created by Congress and the DOL serve to protect the H-1b worker at the expense of the U.S. worker.
Since over 50% of the complaints are from departed employees, a company can often minimize the risk by simply not antagonizing departed employees. Think long and hard before you file a small claims court complaint to recover a small sum of money owed or before beginning an action to enforce a non-compete clause or other breach of contract.
A company can also take several steps to minimize its exposure should an audit occur. First, it should make sure that it has good, complete, Public Access Files. At a recent audit this author attended for a client, the DOL investigator reported that less then half of the companies he investigates have any type of Public Access Files. Having good Public Access files makes a good first impression and shows an attempt at compliance with the rules. These files should be audited yearly to insure that corrective action, if needed, is taken early. Secondly, an employer should be well versed in the standards to which it is being held. Many of the standards are not intuitive and belie logic so training must be a regular part of a companys HR or legal department. Thirdly, a company should not by its own behavior create an unnecessary risk by bypassing the rules to help out an employee. Lastly, a company should work closely with its immigration counsel to develop a plan for compliance which takes into consideration the specific needs of the business.
Contributor: This article is originally written by http://www.hammondlawfirm.com/ attorney firm. You can visit the website and download the entire article. I am publishing here as it is for the benefits of all those who sometime in their H1B life span got suffocation due to lack of getting adequate advise and suffered from extortion. -- Manish