The Department of Homeland Security and the Department of Labor have issued a joint interim final rule that establishes a new methodology for calculating prevailing wages under the H-2B low-skilled, nonagricultural guestworker program. This is in response to a March 21 district court decision, in Comité de Apoyo a los Trabajadores Agricolas v. Solis, vacating a portion of the DOL 2008 H-2B Wage Rule (see Federal Court Vacates 2008 H-2B Wage Rule).

The interim rule also responds to another court’s ruling that DOL does not have any authority over the H-2B program. The rule clarifies that DHS is the Executive Branch department charged with making determinations regarding eligibility for H-2B classification and that it consults with DOL about matters with which DOL has expertise, such as the methodology for setting the H-2B prevailing wage.

The agencies stated, “Notwithstanding the Eleventh Circuit’s decision in Bayou, or the Departments’ joint issuance of this interim rule, DOL and DHS continue to maintain, as the Louisiana Forestry Association court held, that DOL does have independent legislative rulemaking authority for the H-2B program…. However, due to these inconsistent court rulings on DOL’s authority to issue independent legislative rules, DOL and DHS are issuing this joint regulation revising the prevailing wage methodology in the H-2B program in order to respond to the court order in CATA v. Solis, and also to dispel questions regarding the respective roles of the two agencies and the validity of DOL’s regulations as an appropriate way to implement the consultation specified in section 214(c)(1) of the INA.”

Under the interim rule, DOL will not use the four-level approach, which was vacated by the court, in its prevailing wage methodology.  The agencies stated, “The prevailing wage will no longer be the mean of the particular wage level, but will be the overall mean of all persons in the occupation in question.”

Key features of the rule:

(i) DOL will use either the Occupational Employment Statistics (OES) wage survey, collective bargaining agreements, the Davis-Bacon Act, the Service Contract Act, or employer-provided surveys, depending on the circumstances, to determine H-2B prevailing wages;
(ii) The prevailing wage will be based on the arithmetic mean wage listed in the OES survey for all persons in the occupation in question;
(iii) DOL will use the prevailing wage set by an applicable collective bargaining agreement where that agreement was reached after arms’ length negotiations between the union and the employer;
(iv) The interim rule permits employers to use the Davis Bacon Act (DBA) or Service Contract Act (SCA) prevailing wage rate, if applicable, and an employer may offer a higher DBA or SCA rate if it chooses to do so; and
(v) Employers may present their own wage surveys, as in the 2008 wage rule, if they provide specific information about the survey methodology so DOL can determine the data accuracy and validity of the methodology and the data are collected within 24 months of the date of submission.

With the publication of the interim rule, DOL has resumed issuing prevailing wage determinations, and USCIS has also resumed adjudicating H-2B visa petitions.

For more information on H-2B visas, H-2B labor certification applications, DOL H-2B audits or investigations, please contact your Jackson Lewis attorney or any member of the Jackson Lewis Immigration Practice.

AUTHOR: Melina V. Villalobos.
 
As we previously blogged about on April 17th, a comprehensive immigration reform bill has been introduced in the U.S. Senate, Border Security, Economic Opportunity, and Immigration Modernization Act of 2013.  While many critics have focused on the new pathways for legal migration to the U.S. contained in the 850-page bill, the new bill contains some powerful enforcement provisions that employers need to keep at the forefront of their minds.
 
One such enforcement provision deals with E-Verify.  E-Verify is an internet-based system sponsored by the Department of Homeland Security that allows businesses to determine the eligibility of their employees to work in the United States.  E-Verify is seen as a tool to ensure that employers employ a legal workforce as well as provide a disincentive to individuals who seek to work illegally in this country.  E-Verify currently is mandatory only in a handful of states; however, the new legislation would make E-Verify mandatory for all employers across the nation.  The phase-in period, ranging from 90 days to four years, would vary according to the company’s number of employees.

In addition, the bill includes language indicating that employers will be presumed to have knowingly hired an unauthorized worker if they do not verify the individual’s work authorization via E-Verify after their mandatory enrollment date. The new bill would permit employers to utilize a three-day grace period for re-verifying the work authorization of employees with expired work authorization.  It also calls for the Social Security Administration (SSA) to create tamper-resistant Social Security Cards to combat document fraud.  Lastly, the new legislation provides for enhanced photo-matching tools to close-up loopholes that have allowed employees to circumvent E-Verify through identity-theft and ID-borrowing.

Jackson Lewis will continue to monitor developments surrounding comprehensive immigration reform and provide additional updates about issue-specific proposals as we continue to assess the proposed changes contemplated by this bill. 
 

The highly anticipated immigration reform bill has been formally introduced by a bi-partisan group of Senators.  The proposal for significant changes to the nation’s immigration system (consisting of almost 850 pages), the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, includes provisions for increased border security, legalization for individuals present in unlawful status, and modernization of the legal immigration system.  A complete summary of the article is available at  http://www.jacksonlewis.com/resources.php?NewsID=4447.

AUTHOR:  Davis C. Bae.

The USCIS announced on April 8, a week after it began accepting H-1B petitions, that it has received a sufficient number of H-1B petitions to reach the statutory cap for fiscal year (FY) 2014. It received approximately 124,000 H-1B petitions, including petitions for the advanced degree exemption. This likely will mean that more than 40,000 applications will be rejected. Employers will not be able to obtain new H-1B visas for employees until October 1, 2015. (The H-1B quota generally does not affect current H-1B status holders who are being sponsored by a new employer.)

While the demand for H-1B visas is generally a strong indicator of the health of the U.S. economy, this does not help employers requiring qualified employees. Employers with rejected petitions will be scrambling for other options for their employees and candidates, many of whom are working under a different but expiring visa category.

Employers can look to other visa categories and solutions to extending work authorization.  Individuals from certain countries may be eligible for professional visa categories that mimic the H-1B. For example, Australians can qualify for E-3 visas, while Singaporean and Chileans can qualify for H-1B1 visas. Mexican and Canadian citizens may qualify for certain professional category positions under the TN category.

In addition, employers who utilize E-Verify may be able to extend the work authorization of F-1 students for an additional 17 months if the employee is a graduate of a STEM (Science, Technology, Engineering or Math) program. Lastly, other categories, such as the O-1, P-1, L-1, E-1/2 and B-1, may help employers bridge the H-1B visa shortage.

Employers are encouraged to consult their immigration counsel at Jackson Lewis to determine if one of these solutions is appropriate. The H-1B shortage highlights the need for immigration reform that supports our rebounding, but fragile, U.S. economy.

 

Author:  Harry J. Joe.

Job shops and staffing firms use of H-1B visas, but that do not actually and directly employ the alien workers, that assign such workers to third-party worksites and otherwise bench (practice of placing H-1B visa holders in nonproductive status, without pay, while they wait for placement with other employers), and not pay such workers when work is not available can be open to government prosecution. The H-1B visa system was intended for the H-1B worker to perform services for the petitioning company. When employers fail to disclose in their visa petitions and labor condition applications for H-1B alien workers that the workers would be placed at third-party worksites, would be benched, would be paid only for work performed at such sites, would not be employed directly by the petitioning employer and at an employer’s place of business, and that they would not be paid a salary as represented in the filings, they can be criminally prosecuted for visa fraud, wire fraud, harboring, employment of unauthorized workers and money laundering. Both employers and their principals can be open to accusations of criminally misuse of the H-1B visa program.
 
A criminal indictment was filed on February 20, 2013, in the U.S. District Court for the Northern District of Texas against six principals of Dibon Solutions of Carrollton, Texas. It alleged Dibon, along with its six principals, engaged in an unlawful conspiracy to commit visa fraud by sponsoring foreign workers for H-1B visas with the stated purpose of working at Dibon Solutions’ headquarters in Carrollton. In fact, the workers provided services to third-party companies located elsewhere. Moreover, contrary to statements in the petitions and applications, Dibon only paid the workers an hourly wage for work performed at the third-party worksites and only if such third-parties first paid Dibon for the work. When not working, the workers were “benched” and not paid as required by H-1B labor condition application regulations.

The government’s theory of criminal liability was that the H-1B visa system was intended for the worker to perform services for the petitioning company, i.e., Dibon Solutions. Not informing or disclosing in its filings that the workers would be employed at or assigned to a location other than the Carrollton address is contrary to the stated requirements in the petition and the application.
 
The Dibon indictment further alleged the named defendants had unlawfully engaged in wire fraud. The government also is seeking forfeiture of assets procured by the defendants that arose from their criminal enterprise.
 
In its latest criminal prosecution, the government alleged on March 19, 2013, in the U.S. District Court for the Western District of North Carolina that Phani Raja Bhima Raju, founder and principal owner of iFuturistics, recruited and hired foreign nationals with specialized skills in computers and information technology so they could work at other U.S. companies
 
Raju and others were accused of knowingly and willfully conspiring to conceal in iFuturistics’ H-1B petition and labor condition application filings that the workers would be employed at other locations, the actual terms of their employment as to wages and hours of work, and that the workers would be benched. Raju and others also were accused of unlawfully misrepresenting the place of employment as Pineville, North Carolina, and falsely stating that the workers would be employed full-time and paid the stated salary. In fact, the workers were benched and not paid until assigned to a third-party worksite.

According to the allegations against Raju, a bona fide H-1B petitioning employer is a “valid employer,” not a “job agent,” “subcontractor,” or “hiring agent” and the valid employer could not engage in “benching.”

On March 22, 2013, Raju pleaded guilty to five federal charges, ranging from conspiracy to file fraudulent immigration documents to money laundering in a fraudulent scheme to obtain H-1B visas for foreign workers.

Moreover, iFuturistics was ordered by the USDOL Wage and Hour Division on January 4, 2013, to pay back wages to seven H-1B workers in the amount of $149,009.51 and civil monetary penalties of $18,000.
 

On April 9, 2013, U.S. Citizenship and Immigration Services (USCIS) published a notice in the Federal Register clarifying the date by which the new Form I-9 must be used instead of prior versions of the form.  Employers are advised that they must use the new Form I-9 beginning on May 7 or they will be subject to penalties under Section 274A of the Immigration and Nationalization Act (INA), 8 U.S.C. 1324a.  On March 8, USCIS released a revised version of the Form I-9.  The new Form includes significant changes including expanded instructions, new information fields, and a two-page format.  Although the new Form I-9 was for immediate use, employers were given 60 days to adapt their internal processes. USCIS instructions were unclear whether the last date that prior versions of the Form I-9 could be was May 7 or May 8.  The original Federal Register notice itself was internally inconsistent on this, indicating both dates in different sections of the notice.  The April 9, 2013 notice clarifies that prior versions of the form cannot be used beginning on May 7.

USCIS announced today that it "received approximately 124,000 H-1B petitions during the filing period, including petitions filed for the advanced degree exemption." On April 7, 2013, these applications were processed through a computer-generated random selection process known as the lottery to determine which ones would receive the 65,000 visas generally allocated for H-1Bs as well as the 20,000 allocated for holders of advanced degrees from the US. USCIS will reject and return the petitions not selected in the lottery along with the filing fees.

http://www.uscis.gov/H-1B Cap

 

AUTHOR:  Davis C. Bae

U.S. Citizenship and Immigration Services (USCIS) announced today that it has received a sufficient number of H-1B petitions to reach the statutory cap for fiscal year (FY) 2014. USCIS has also received more than 20,000 H-1B petitions filed on behalf of persons exempt from the cap under the advanced degree exemption. After April 5th, USCIS will not accept H-1B petitions subject to the FY 2014 cap or the advanced degree exemption.

All cases received by the USCIS by April 5, 2013 will be eligible for the H-1B visa “lottery."  The lottery will be held to determine which of the applications received by April 5th will be considered, while all other applications will be rejected.
 
Jackson Lewis will continue to provide updates on USCIS announcements on this important issue for employers.
 

A bill seeking to make the Conrad State 30 J-1 visa waiver program permanent and improve the pathway for physician immigration to the U.S. with changes to H-1B visas, Green card issuance and national interest waiver requirements has been introduced by a bipartisan group of four Senators: Amy Klobuchar (D-MN), Jerry Moran (R-KS), Susan Collins (R-ME), and Heidi Heitkamp (D-ND).

The Conrad State 30 Program, also known as the J-1 Visa Waiver program, was enacted in 1994 as a national initiative that permits states to recommend visa waivers for physicians recruited to care for patients in rural and underserved areas.  Under the Program, foreign medical graduates who undertake medical residency and fellowship training in the U.S. agree to practice medicine in underserved communities for at least three years in exchange for a waiver of certain visa restrictions, including the two-year foreign residency requirement. These physicians cannot obtain work visas, such as H-1B, or apply for U.S. permanent residency unless they obtain a J-1 waiver or reside abroad for at least two years. The Program, due to sunset September 30, 2015, has been extended numerous times.

The Conrad State 30 and Physician Access Act (S. 616), introducedMarch 19, 2013, would provide additional incentives for more doctors to participate in the Program. S. 616substantially builds on S. 1979, the Conrad State 30 Improvement Act, introducedby Senator Kent Conrad (D-ND) in the last Congress. S. 1979would have permanently reauthorized the Program.   S. 616 seeks to remove the sunset of the Program, improve its functioning, and allow expansion to better meet U.S. healthcare needs. A physician shortage crisis of as many as 200,000 doctors is projected by 2020.  This shortage will be felt hardest in rural, inner city, and other medically underserved communities.  

Key provisions of S. 616 include:

  • providing a mechanism to increase Conrad 30 waivers each time 90% of waivers are filled nationwide;
  • creating three new Conrad 30 slots per state dedicated for academic medical centers;
  • instituting Conrad 30 program physician employment protections, such as:

(a)    expanding definition of 90-day rule within which to begin J-1 waiver employment to the later of 90 days after receiving waiver, or 90 days after completing graduate medical training, or 90 days after receiving nonimmigrant status or employment authorization;

(b)   permitting J-1 waiver physician to change employers during the 3-year period if: i) USCIS determines existence of extenuating circumstances; or ii) interested State agency that requested the waiver attests that extenuating circumstances exist; or iii) where alien elects not to pursue a determination of extenuating circumstances, if terminated J-1 waiver physician is employed for the remainder of the 3-year period, “and 1 additional year for each termination,” at another designated health facility/organization;

(c)    granting terminated J-1 waiver physician a grace period of 120 days within which to file a petition with USCIS for employment with another employer in a medically underserved area (physician considered to be maintaining lawful status in an authorized stay during the 120-day period);

(d)   granting dual intent to foreign physicians seeking graduate medical training;

  • clarifying physician eligibility for national interest waiver green cards by:

(a) extending the “Flex 10” concept to the physician NIW Green card context;

(b) broadly defining the 5-year service requirement to include period spent working during or in conjunction with J-1 training;

(c) clarifying that an alien physician with a foreign medical degree deemed sufficient for acceptance to an accredited U.S. medical residency/fellowship program is a member of the professions holding an advanced degree or its equivalent;

  • better aligning visa terms with residency training and physician practice. It cures H-1B cap-gap problem for foreign physicians completing medical training in H-1B status by automatically extending nonimmigrant status and work authorization to October 1, provided an H-1B extension petition is timely filed with USCIS. Such automatic status and employment authorization will terminate 30 days from the date such petition is rejected, denied or revoked.  However, a physician’s status and employment authorization will automatically extend to October 1 of the next fiscal year if all H-1B visas are issued.
  • clarifying that J-1 spouses and children are not subject to Section 212(e) foreign residency requirement.

The “Gang of 8” senators working on comprehensive immigration reform likely will include S.616 as part of a broader package.

Jackson Lewis attorneys in the Immigration Group are available to assist healthcare employers with all their immigration needs, including visa sponsorships for physicians, nurses, physical therapists, speech therapists, J-1 waivers for physicians, and Form I-9 and E-Verify compliance.    

UPDATE:

On March 28, 2013, DOL suspended issuance of H-2B Prevailing Wage Determinations due to the Court’s decision on the 2008 wage rule.

http://www.foreignlaborcert.doleta.gov/news.cfm

Further, effective March 22, 2013 U.S. Citizenship and Immigration Services (USCIS) temporarily suspended adjudication of most Form I-129 H-2B petitions for temporary non-agricultural workerswhile the government considers appropriate action in response to the Court’s decision on the wage rule.

******

In a four-year battle over the Department of Labor’s rule regarding the methodology for setting H-2B prevailing wage rates, a federal district court has vacated the 2008 H-2B Wage Rule, granting permanent injunctive relief and remanding the case to the DOL.  The court gave the DOL 30 days to comply.  Comite de Apoyo a los Trabajadores Agricolas v. Solis, No. 09-240 (E.D. Penn. Mar. 21, 2013).  The court answered “yes” to the question: “Whether the DOL’s continued use of the 2008 Wage Rule—which has been found procedurally invalid by this Court and substantively invalid by the DOL—justifies vacating the Rule and barring the Rule’s continued use.”

Before requesting H-2B non-agricultural temporary worker classification from the U.S. Citizenship and Immigration Services (USCIS), the employer must apply for and receive a temporary labor certification from DOL that, among other things, certifies that the H-2B workers would be paid at least the prevailing wage assessed by DOL. Over the past three decades, the DOL has periodically changed its methodology for calculating prevailing wages, without notice and comment, and often without explanation. The 2008 Wage Rule introduced the “arithmetic mean.” It states: “the prevailing wage for labor certification purposes shall be the arithmetic mean . . . of the wages of workers similarly employed at the skill level in the area of intended employment.”  The DOL divides each unskilled, H-2B occupation into four separate skill levels and calculates a prevailing wage for each level.

The 2008 H-2B wage methodology rule was promulgated without seeking public comment during the rulemaking process.  A federal district court, on August 30, 2010, ruled the 2008 Rule violated the Administrative Procedure Act (APA) and ordered the DOL to promulgate new, APA-compliant rules for calculating the prevailing wage rates.  Even though DOL published a new final H-2B Wage Rule on January 19, 2011, its implementation has been held up due to delays by Congressional “appropriations concerns” denying DOL funding.

The court found that H-2B labor certifications issued under the 2008 Wage Rule exceeded the authority delegated to the DOL.  The Rule “…artificially lower wages to a point that they no longer represent market-based wages for the occupation” and “have a depressive effect on the wages of United States workers,” according to the court.  Consequently, the Court concluded that labor certifications issued under the 2008 Wage Rule fall “directly outside the narrow range of circumstances under which the DOL is authorized to issue labor certifications and exceeds the bounds of the DOL’s delegated authority under Section 706(2)(C) of the APA.”

For more information on H-2B visas, H-2B labor certification applications, DOL H-2B audits or investigations, please contact your Jackson Lewis attorney or any member of the Jackson Lewis Immigration Practice.

Links:
http://dl.dropbox.com/u/27924754/CATA%20168%203-21-13.pdf