The prevalence of document fraud in the workplace was the subject of Immigration and Customs Enforcement Deputy Assistant Director Waldemar Rodriguez’s testimony yesterday before the U.S. House of Representatives House Committee on the Judiciary, Subcommittee on Immigration Policy and Enforcement. She noted that because immigration-related crime poses a significant threat to national security and public safety, ICE continues to prioritize investigation of identity fraud.
 

Identity fraud is regularly found in investigations involving critical infrastructure protection, worksite enforcement, visa compliance enforcement, and national security. “While commonly used by aliens attempting to enter or remain in the United States typically to obtain work, document and benefit fraud have also been used by terrorists and other criminal organizations to facilitate illicit activity,” she said. To address the risk and thwart the activity, ICE created Document and Benefit Fraud Task Forces (DBFTFs)—19 in all throughout the United States. The DBFTFs work hand-in-hand with the U.S. Attorney’s Office, U.S. Citizenship and Immigration Services, U.S. Department of Labor, U.S. Department of State, and the Social Security Administration.

Since 2009, ICE Worksite and DBFTF teams have audited more than 7,000 employers suspected of hiring illegal labor, debarred nearly 600 companies and individuals from federal contracts, and imposed over $80 million in civil penalties.  Rather than comment on the prevalence of fraudulent document usage, DAD Rodriguez instead advised that employers—concerned that they might be the subject of an I-9 inspection that results in civil fines, debarment, and, ultimately, criminal prosecution—should turn to the ICE IMAGE program to protect themselves from identity thieves.

Two elements of the IMAGE program are:

(1) participating in the E-Verify program to take advantage of its Photo Tool for new hires that present U.S. Passports, Lawful Permanent Resident Cards, Employment Authorization Documents, and, for the time being, Mississippi driver’s licenses; and
(2) providing forensic document training to hiring managers and HR staff that may involve the use of blue light devices and magnifying lenses.
 

Participating in IMAGE presents challenges. Employers need to educate themselves about the risks. Each I-9 audit brings with it the potential for a criminal investigation. So, prior to heeding DAD Rodriguez’s advice, employers should take a long look at their internal compliance strategy and partner with specialized immigration counsel for advice.
 

As of April 4, 2012, USCIS has received 22,500 H-1B non-immigrant visa petitions needed to meet the regular and master’s degree caps, according to information released by the agency on H-1B non-immigrant visa petitions for Fiscal Year 2013. Approximately one-third of the petitions received are counted toward the 20,000 master’s degree cap. The H-1B regular cap is 65,000. The rate of petitions so far represents a 50% increase over FY2012, when the cap was not reached until November 21, 2012. If this pace continues, it is unlikely that H-1Bs will be available beyond this summer.Employers should file any needed H-1Bs as early as possible.

Jackson Lewis will continue to provide updates on the cap numbers as they become available.

The Obama administration is launching another round of worksite investigations. ICE officials indicate approximately 500 employers have been visited during the past couple of days by Special Agents who have requested not only the employment verification forms (Forms I-9), but also evidence of the corporate structure, contracts with subcontractors and temporary employment agencies, and payroll records. Generally, businesses are required to make sure they are hiring only people who can legally work in the U.S.
 

As previously noted, the Obama administration’s worksite strategy differs from that of the Bush administration, which focused on high-profile raids that led to arrests of hundreds of workers at a single work site. ICE still conducts raids—they’re just “silent” now; requiring employers to terminate significant portions of their workforce without the grand mass arrests or flashy news releases. Because of criticism that the Administration was auditing only small businesses, larger employers that are being re-inspected have the most to lose.

Notices of Inspection (NOIs) instruct companies that they have three (3) days to present the Forms I-9 of their employees for inspection. ICE will review companies’ hiring records to determine whether they are complying with the Immigration Reform and Control Act of 1986 (IRCA). ICE continues to consider these inspections an important enforcement tool enforcement —especially in light of recent critical comments from Lamar Smith (R-San Antonio), the current Chairman of the House Judiciary Committee . This initiative continues reflect a renewed department-wide focus in targeting employers involved in the hiring of unauthorized workers and related criminal activity.
 

What to do if you receive a Notice of Inspection (NOI)?

Receipt of a NOI should be taken very seriously without regard to the size of your company— especially if you have been targeted on more than one occasion. It is critical that you act immediately to secure a team of experienced compliance experts to guide you through the ICE inspection process. We recommend taking the following steps immediately upon receiving an NOI:
 

• Notify your management and executive teams
• Retain experienced immigration counsel
• Gather I-9s and supporting documentation
• Consider proactive compliance planning, where appropriate

Diligent employers must redouble their compliance efforts, and those who have not yet instituted compliance initiatives must undertake a comprehensive review of their records, policies and protocols.
 

USCIS is seeking public comments on its proposed revised Form I-9 (Employment Eligibility Verification form). As all employers in the United States are aware, employers must complete the Form I-9 for all newly-hired employees to verify their identity and authorization to work in the United States.

Highlights of the proposed changes include:
• The 5-page form and instructions would expand to 9 pages, with nearly 6 pages of instructions
• “Employers” is defined in the instructions
• “Time of hire” is redefined as “no later than the first day of work for pay”
• Last name has been clarified to include “two last names or a hyphenated last name”
• Employees are instruction to note, “N/A” if they have no maiden name
• P.O. boxes are no longer acceptable in the address field
• An email and telephone number field has been added (to assist DHS in contacting the employee)
• The citizenship or immigration status boxes have been defined
• A new set of instructions for minors and certain disabled employees
• The Thursday Rule (providing for completion of section 2 prior to close of business on the Thursday after a Monday hire) is identified and authorized
• Specific instructions are provided to employers hiring foreign students
• Employers are authorized to receive expired documents and receipt notices is certain instances
• Attempts by employers to use section 3 to reverify U.S. citizens and Lawful Permanent Residents is strictly prohibited
• The election as an “alien authorized to work” has been greatly expanded to include separate sections for alien registration/USCIS number identification (limited to 9 digits) AND for aliens presenting an I-94 (expanded to 11 digits)
• An alien authorized to work utilizing an I-94 is also required to include his/her foreign passport number and country of issuance
• The list of acceptable documents has two significant changes: the List A foreign passport/I-94 combination is divided into subparts, and the List C Social Security Card section now provides examples of the annotations that make the card invalid for I-9 purposes
The current I-9 form and instructions are accompanied by a 63-page manual. The new form and instructions likely will come with a longer manual, which has yet to be released.

Employers interested in providing comments are encouraged to contact counsel to discuss how to effectively express how the proposal will affect their ability to conduct profitable business. Comments must be submitted by May 29, 2012.

The tide seems to be turning and the EB-2 immigrant visa numbers may again retrogress for nationals of India and China. Charlie Oppenheim, Chief, Visa Control and Reporting at the Department of State, speaking at the recent AILA Midwest Regional Conference in Chicago, advised American Immigration Lawyers Association Members that he will likely retrogress India and China-Mainland born Employment-Based Second Preference (EB-2) priority dates back to August 2007. The April 2012 Visa Bulletin reports priority dates of May 1, 2010 for this immigrant visa category. This retrogression will likely be effective with the May or June 2012 Visa Bulletin. The EB-2 immigrant visa category is the route to Permanent Residence (a “Green Card”) for employer sponsored applicants who possess an advanced degree. The Visa Bulletin generally controls when these applicants are permitted to apply for the final stage and receive their Green Cards based upon their priority date (the date their applications were filed) matching the dates reported by the Visa Bulletin.

This proposed retrogression will end the dramatic advancements of that green card category over the past months. The implications for this retrogression for employers is that employees who were ready to file their final stage of their Green Card and receive that card, may again be subject to a significant wait.
 

Reversing many of the critical reforms initiated in 2009 that streamlined the H-2B application process, the U.S. Department of Labor has amended its regulations governing the certification of the employment of foreign workers performing temporary or seasonal non-agricultural labor or services under the H-2B visa program. The Final Rule will take effect on April 23, 2012. The H-2B visa program allows up to 66,000 visas each year for the entry of low-skilled, non-agricultural guestworkers.
 

The Final Rule significantly and fundamentally changes the H-2B visa program by imposing onerous and costly new conditions and requirements on H-2B employers. The changes mirror those introduced to the H-2A agricultural worker visa program in 2010. Major features of the Final Rule include the establishment of a national electronic job registry for all H-2B jobs to improve U.S. worker access to these temporary jobs, extension of H-2B worker protections to corresponding U.S. workers, and the “three-fourths guarantee” (employers must guarantee employment and wage payment for a certain period of time).

The Final Rule makes participation in the H-2B visa program more burdensome. These changes, in particular the “three-fourths guarantee” and extension of worker protections to corresponding workers, taken with the new prevailing wage determination methodology rule introduced in 2011, may lead some employers to consider abandoning the H-2B program for other options. As with many burdensome regulations, talented immigration counsel can make the difference between the seemingly impossible and the probable.

Prior to the April 23, 2012, implementation date, employers should consider taking the following steps:

1. File any “ready” H-2B labor applications under the current regulations;
2. Educate staff about the new rules and timelines involved so they can plan for filings once the changes take effect. Under the new bifurcated application process, employers will be required to begin the H-2B application process approximately seven months before the date when new H-2B workers are needed;
3. Develop a uniform H-2B policy that takes account of all financial arrangements with H-2B workers, such as employee relocation expenses and deductions for housing, and contains mechanisms for payment or reimbursement of transportation expenses and visa fees;
4. Review contracts or agreements with all staffing and recruitment companies to ensure they can pass muster or scrutiny under the new regulations with regard to prohibited payments by H-2B workers; and
5. Update document retention policies and procedures to ensure compliance with the proposed document retention requirements.
 

At a time of increasingly aggressive enforcement of immigration laws, the California Service Center of the U.S. Citizenship and Immigration Service has notified certain stakeholders that the USCIS will be ramping up “administrative site visits” in connection with H-1B petitions filed by U.S. employers. This is an effort at enhanced enforcement in response to the H-1B Benefit Fraud Analysis report released in September 2008. While thus far, this is the agenda of the California Service Center, we can expect to see similar moves from other service centers. Employers should take the opportunity to prepare for what to expect of a site visit.

The USCIS advised that petitioners should be prepared for administrative site inspectors to ask questions that pertain to any aspect related to the terms and conditions of employment, including job duties, salary, work location, and work hours. Further, inspectors regularly would ask whether the employee has paid any fees in association with the filing of the H-1B petition. There are specific requirements regarding who may legally pay H-1B fees.

Site inspections typically occur at the work location listed on the Form I-129 petition. If an employee will be working anywhere else, the employer should include an itinerary for all worksites and ensure the Labor Condition Application corresponds to all locations as necessary.

Inspectors typically will request to speak to a company representative (i.e., the signatory of the petition or the listed contact person) and the beneficiary employee. The inspector also may ask to review documentation related to the petition, as well as to visit the employee’s desk or workspace.

Site inspections are made on a random basis and may occur more than once. Employers should prepare in advance by having on hand relevant information, such as where the employee works, where the petition documents are located and, of course, how to get in touch with counsel, if necessary.
 

Secretary Janet Napolitano has released the U.S. Department of Homeland Security’s Strategic Plan for Fiscal years 2012-2016. The plan, released on February 13, outlines broadly the Department’s missions and goals to align program activity to better serve the public. More importantly, the plan revisits mission performance benchmarks and projects how those benchmarks will change as the Department “successfully” implements its objectives.

Employers should be interested especially in the third “primary” mission of the Department: Enforcing and Administering Our Immigration Laws. The Department emphasizes its commitment to reducing the demand for illegal immigration by eliminating conditions that encourage unauthorized employment. In order to meet that objective, the Department predicts that over the course of the next four fiscal years, it will initiate nearly double the number of criminal prosecutions of employers for criminally hiring unauthorized employees—from 296 this past fiscal year to 478 employers arrested or sanctioned in the current fiscal year (through nearly 600 employers by the end of FY 2016). It will do so by increasing the number of administrative I-9 audits, by further perfecting the intelligence sharing capability of its member bureaus, and by continuing to support the roll-out of E-Verify and IMAGE initiatives that encourage employers to transmit sensitive employee information to government databases. Thus, the risks of faulty compliance have never been greater.

Employers should consult with compliance counsel to review the protocols and to sample I-9s to ensure any compliance failures are quickly remedied. They should not trust to chance that systems they have instituted will work as planned. The best defense to allegations of criminal violations is a robust internal (attorney-supervised) audit. The government credits employers who pro-actively address failures and institute compliance protocols. In other words, an employer need not be perfect to protect against criminal investigation, but needs to know enough to seek assistance.
 

Many multinational companies with global operations use L-1 visas to facilitate the transfer of their executives, managers and specialized knowledge personnel into the U.S. for temporary assignments. In the last couple of years, these companies have experienced extreme backlogs, denials and inconsistent challenges by U.S. Citizenship and Immigration Service and Consular Offices.

The U.S. Chamber of Commerce recently hosted a business community discussion on L-1 legal and policy issues with Director Alejandro Mayorkas, Director of USCIS, Donald Neufeld, Associate Director for USCIS’s Service Center Operations, Robert Silvers, Senior Counselor to the Director, and David Donahue, Assistant Deputy Secretary for Visa Service.

The Chamber noted that in the last few years, L-1B visa denials and processing delays have increased by 200 to 300 percent . These denials and delays have caused tremendous loss of business opportunities for the affected companies due to the inability to timely transfer critical specialists to the U.S. Companies and practitioners know that certain consular offices are more likely than others to deny L-1 petitions. In addition, the U.S. government has begun to take a more restrictive view as to what constitutes specialized knowledge, indicating that if a significant proportion of a company’s personnel possessed specialized knowledge, then none of them could be deemed specialized.
During the Chamber meeting, representatives from multinational companies reported that extensive follow-up documentation requests from Consulates or denials of petitions outright have cause them delays of seven to eight months, or more, in bringing essential specialized knowledge employees, particularly those who possess critical technology expertise, to the U.S.  In a much-welcomed statement, Director Mayorkas confirmed that the government agencies recognized the importance of providing clarity to the L-1 specialized knowledge standard and are committed to providing updated policy guidance to the public. In response to a question about denials based upon the number of specialized knowledge employees within a company and an earlier agency interpretation that if everyone is special, no one is special, Director Mayorkas confirmed that during the USCIS’s November 2011 training, field adjudicators and officers were instructed that the number of specialized knowledge employees in a company should not be a basis in determining if an L-1B specialized knowledge petition would be approvable. Director Mayorkas indicated that further guidance on this would be available soon.

Practitioners and employers who rely on intracompany transfers as an important part of overall staffing strategies welcome the USCIS’s willingness to clarify this issue. Facilitating the transfer of workers with needed specialized skills to the United States is consistent with the intent of Congress in enacting the L-1B specialized knowledge regulations and helps American businesses to operate more competitively in the global economy.

The National Foundation for American Policy (NFAP), a non-profit, non-partisan public policy research organization, recently released an analysis of U.S. Citizenship and Immigration Services (USCIS) data on the number of H-1B and L-1 petition denials issued by the Agency in each fiscal year from 2003 to 2011. The results reveal a significant increase in the number of H-1B and L-1 denials beginning in FY2008 and continuous increase through FY2011, with a significant spike in FY2009, during which every visa category had a dramatic increase in denials.

The denial rate for L-1B visa petitions increased from 9% in FY2003 to 27% in FY2011. The denial rate for H-1B visa petitions increased from 12% in FY2003 to 17% in FY2011, peaking at 29% in FY2009. The data also shows that if a company received approval of its visa petition, it likely had to first overcome a Request for Evidence (RFE). In the past, RFEs were issued when USCIS case officers needed clarification or additional information to adjudicate a petition. Based on the statistics, it appears either the majority of employers have abruptly stopped filing complete petitions, or, more likely, USCIS has decided that they require more information than actually set forth in the regulations to adjudicate a case.

Most alarming is the increase in the number of RFEs issued for L-1B and L-1A cases, in particular. RFEs for L-1B cases more than tripled from FY2003 to FY2011, from 16% to 63%. Similarly, RFEs for L-1A cases went from 12% to 51% over the same period. Employers now are statistically guaranteed that one in every two L-1 petitions they file will be issued an RFE.

As there has been no significant change in the regulatory criteria for H-1B and L-1 status approval, this increase in petition denials and RFE issuance is an indication that USCIS adjudicators have changed their internal standards of review to make it more difficult for skilled foreign nationals to obtain work authorization in the United States.

The data also shows that USCIS denies more L-1B petitions for Indian nationals than any other country. Whether this is indicative that the Agency has targeted Indian nationals is unclear; however, employers who seek skilled Indian employees should be prepared for additional scrutiny. L-1 visa issuance declined at U.S. Consulates in India in FY2011, but actually rose overall for the rest of the world.

The NFAP study confirms what many U.S. employers already know: it is now more difficult than ever to hire or transfer critical foreign national employees whose presence is required to ensure continued product development and profitability. Jackson Lewis attorneys have experience in addressing and overcoming RFEs and visa denials on behalf of U.S. employers. We will continue to monitor and report USCIS trends and policy changes.