11.20.08

H-1B Employers to watch Strategy in the Slow Economy

Posted in Policy at 7:25 pm by Lalita Haran

Foreign workers in the U.S. and their U.S. employers need to be more careful, during the current economic downturn, so as to stay in compliance with the immigration and labor laws as businesses reorganize in an attempt to survive. In a recent statement, the Department of Labor (DOL) said that the department is well aware of the recent trends in the job market with rising rate of unemployment in certain industries and with a view towards enforcing existing regulations, would be closely monitoring the U.S. employers’ hiring practices of foreign nationals on H-1B and L visa.

The announcement has great significance to the U.S. employers, hiring foreign workers on H-1B, and L-3 visa categories. Employment in both these categories requires a labor condition application (LCA) to be certified by the DOL. The LCA contains basic information about the employment eg. rate of pay, period of employment and work location. It also carries four attestations or promises by the employer. Violation of any of the condition or the attestation of the LCA is met with sanctions that include back pay, civil fines and penalties and disqualifications from hiring foreign workers in future.

As the economy tumbles, employers resorting to various ways to cut costs including employment costs should be watchful of compliance requirements, lest they may find themselves in violation of the labor and immigration regulation. Resort to layoff, benching (where the employee is neither required to report to work nor is paid for the non productive period) or adjusting the work hours or salary and benefits package is common. A U.S. employer hiring foreign worker could be violating the terms of the LCA for adopting these practices.

A U.S. employer hiring foreign worker, is required to offer reasonable return transport to its H-1B employee in case of involuntary termination eg. layoff and must report to the USCIS to avoid liability for back wages. Violation of LCA could also occur for failure to pay full time or part time wages at the rate stated in the visa petition, or failure to pay a foreign worker the required wages within 30 days of admission into U.S. or within 60 days of hire if the employee is already present in the U.S. Similarly, benching, a nonproductive unpaid employment, is an unacceptable practice and violates the LCA.

Employer of a foreign worker may neither safely adjust the work hours nor the salary or other benefits without violating the terms of the LCA. The employer is required to pay the higher of the actual or the prevailing wage and has to offer the same benefits as those offered to similarly situated U.S. worker under the same eligibility criteria. While some of these changes may be incorporated by filing a new LCA and an amended H-1B petition, some forethought on the possible outcome is essential.

PERM (employment based greencard) filing, i.e. seeking DOL certification to hire the foreign worker as a permanent employee, may be another new challenge. The process requires employer to carry out recruitment efforts to hire U.S. workers and prove that no qualified worker turned up for the position. With the vast layoffs in some industries and increasing unemployment, DOL thinks there may be plenty of U.S. workers available for the position and appears skeptical of the employers’ claim that no U.S. workers were available. A careful and extensive documentation is essential to provide proof of compliance of the relevant regulations. As always, DOL would be looking for bonafide recruitment efforts to approve PERM applications.

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