H-1B/PERM Update – Who Can Pay Fees?

punitive-damagesRecently, an Administrative Law Judge ruled against the Department of Labor (DOL) in a very interesting case allowing the employer to recoup fees from an employee for the H-1B visa process.  Before going into the specifics of the case, it is important to understand what the DOL regulations are in this area.

The DOL, in its regulations governing both the PERM and H-1B process, has stated that the employer must pay the employee the higher of the actual wage for the position at the employer OR the prevailing wage.  The DOL has gone further stating that certain deductions from an employee’s paycheck, while allowable under the law, are not permissible under the prevailing wage laws.  Therefore, if those deductions bring the employee’s salary below the higher of the actual wage or the prevailing wage, then the employer is violating the regulations.  These impermissible deductions include the filing fees and attorney fees (in fact all fees) for the H-1B and PERM processes, as the DOL sees all those fees as the employer’s responsibility.

One other issue in this area is what exactly is the “actual wage”.  It would seem to make sense that it is the wage that the employer is actually paying the employee.  However, the Department of Labor has not interpreted it this way.  Instead, the Department of Labor makes the employer average the wages of all employees in the same OR substantially similar positions (positions that require the same education and skills).  The Department of Labor reasoning is that they do not want the employer to impose a lower wage on a foreigner that a US worker, even if that lower wage is higher than the Prevailing Wage.   This is the formula the DOL mandates for determining what the minimum wage that can be paid to an employee would be.

Now we can discuss the actual case.  The case was Administrator v. Woodmen of the World Insurance Society (10/26/2016).   In the case, the Woodmen of the World Insurance Society (employer) hired an H-1B non-immigrant had them sign a repayment agreement for the attorney and other fees.  This particular employee was let go prior to the end of the H-1B, and the employer deducted the fees from the employee’s final paycheck, which included unused vacation time.  It is important to note that the unused vacation time more than covered the H-1B fees that the employer recouped.  The DOL audited the case (it is unclear if the employee complained (most probable) or it was a random audit) and determined that the money that the employer deducted was an impermissible deduction from the employee’s paycheck.

The DOL made two important findings.  First, the DOL stated that, despite the fact that the employee was paid higher than the prevailing wage and the actual wage (as determined using the formula above), the employer was still liable.  The DOL stated that in such cases the actual wage is actually just the wage paid to the employee.  Therefore ANY impermissible deduction would bring the wage below the actual wage.  The DOL further stated that the payments made to the employee for his unused vacation time in his last paycheck also could not be used to make payments as doing so would put the employee in a worse position than similarly situated US Citizen employees who do have these fees deducted from their paycheck.   However, it is important to note that the DOL said that the fees for premium processing where NOT an impermissible deduction and therefore the employer could deduct those.

The Administrative Law Judge looking at this case only looked at the second argument relating to the vacation time and did NOT rule on what the actual wage was as it was not necessary for the case.  In his ruling, the Judge stated that it IS permissible to make such deductions from unused vacation time as long as the employer makes similar deductions from US Citizen paychecks.  For example, the Judge stated that the employer in the case at bar also deducted tuition that the employer had paid for an employee from such paychecks if the employee did not meet the terms of the repayment plan agreement.  Therefore, according to the Administrative Law Judge, such deduction do NOT affect wages and, since US Citizens are treated similarly, does not put non-immigrants in a worse position than US Citizens.  Once again, it is important to note that the unused vacation time payment more than covered the fees in question (the employee was due about $9000 in unused vacation and the attorney and filing fees were only about $4000).

This is the first time I am aware of, that an employer has been allowed to recoup such costs from an employee and sets out clear parameters for employers who would like to have such repayment agreements to follow.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

Timelines for Prevailing Wage Determinations Now More Than 4 Months

Screen Shot 2016-10-11 at 9.31.54 AM.pngThe DOL recently reported that Prevailing Wage requests for both H-1B and PERM cases are taking about 5 months to process.  For those planning to file an employer sponsored PERM case, this means really advance planning is needed.  Prior to advertising it is important to have the prevailing wage determination, otherwise you may have to re-do the advertising if the determination comes back higher than anticipated.   For this reason we almost always advise our clients to wait for the prevailing wage determination before advertising.

Practically, this means you need to prepare the prevailing wage request (usually about a 2-4 week process), wait for the determination (5 Months), begin advertising and recruitment (2.5 months) and then you can file the PERM and wait for a decision (3-10 Months depending on whether you are audited or not).  In total you are looking at a minimum of about one year for the entire process.   Waiting to begin until your last year of H-1B is simply not possible anymore.  Waiting to begin until your last two years, is still putting things off until to late, considering the PERM road is very rarely without some unforeseen delay.  Really, you should try to begin as soon as possible, just to make sure that should there be any issues, there is sufficient time to redo any steps that need to be redone.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

PERM and Inadvertent Errors

images.jpegThe current labor certification process known as PERM has been around for several years now.  While it was originally touted as being a streamlined, easier way to do the labor certification process that would get rid of backlogs, etc.  it has not turned out that way at all.  Instead, it has become what I would call a mess.  The Department of Labor is no longer interested in just protecting workers, which is what the labor certification process was created to do.  The idea behind the system was to ensure that employers followed a process that was intended to appraise US Workers of the actual job and job requirements and that those US Workers were not scared off from applying, and were given a fair chance at the job opening.  In addition, the process makes sure that those US Citizens are only denied the job for valid, job related reasons.  The Department of Labor, however, has decided that any mistake in paperwork, no matter how minor, should be grounds for a denial whether or not it actually affects whether US workers were adequately appraised of the opportunity and whether or not it means that the employer did or did not follow the correct procedures.  A couple recent cases illustrate this.

The first case (Matter of Karam Kaur Khasriya LLC, 7/14/16) shows that BALCA (the appeals board for denied labor certification cases) does have a sense of irony.  In this case an employer submitted a recruitment report that stated that “no qualified persons applied” and that “there were no resumes to submit” to the DOL.  The DOL officer determined that the statement “no qualified persons applied” could mean that unqualified people applied, and therefore, the employer should have provided those resumes and a complete recruitment report in response to the Audit, which it did not.  Therefore the officer denied the Labor Certification.  In its motion to reconsider, the employer did submit a revised report clearing up the language by saying that “no person applied”.  The DOL Officer stated that the revised report did not overcome the deficiency and upheld the denial

BALCA, in looking at this case, determined that the officer was correct in denying the labor certification initially because its interpretation of the language was reasonable.  In looking at the revised report, BALCA noted that documents submitted in a Motion to Reconsider are not automatically part of the record unless the officer agrees to consider the document.  In this case, BALCA stated, the officer stated that the revised report did not overcome the grounds for denial, therefore, according to BALCA the officer considered the report.  Furthermore, BALCA stated that the officer did not explicitly state that the report would not be accepted, therefore a reasonable interpretation of the language used by the officer was that the report was accepted.  BALCA then went on to find that the revised report clearly showed that no one applied and overcame the grounds for denial, so the case was certified and approved.  BALCA showed that “reasonable” interpretations are a two way streak.

In two other cases, BALCA overturned denials where the advertisements where not exactly what was listed in the Labor Certification application.  In one case the ads listed a wage range, whereas the labor certification application listed one wage.  In the second case, the ad listed 24 months of experience without stating what job titles or areas would suffice for the experience and the labor certification application listed 24 months experience in a particular job area AND, in the alternative, 24 months experience in other job areas.  In both cases BALCA stated that the ads reasonably appraised applicants of the job being offered and did not create an impediment to anyone applying.   Considering that the differences between the ads and the application were  inconsequential at best, it is hard to understand why the case was denied by the Department of Labor to begin with.

The above demonstrates two important principles.  First, the Department of Labor will sometimes deny cases on very spurious and minimal grounds.  It pays to check and double check all paperwork and try to make it all as consistent as possible and to follow the rules.  However, because of the DOL’s tendency to pick on very small issues, there is no way to protect against all possibilities.  This leads to the second principal: Appealing such a denied case can be a good idea in many cases.  While it use to be that BALCA would basically act as a rubber stamp for the DOL (except in some egregious cases), recently (in the past year or two) BALCA  has become much more independent and is now truly carrying out its function of overseeing this process.  BALCA is now infinitely more reasonable in its interpretations and willingness, when it can, to overlook small mistakes as long as the overall process was sound.  Considering the point of the process is to protect US Workers NOT to penalize employers who make inconsequential mistakes, this approach is welcome.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

Recent PERM Issues resolved by BALCA

dol Recently, BALCA (Bureau of Alien Labor Certification Appeal), the agency that hears appeals when a Labor Certification is denied, has made several important decisions.  This post will describe a couple of the most important decisions.

Accent-Media Productions, Inc., 2012-PER-712 (September 23, 2015)

We advise all our clients on the documents that need to be kept.  In that list we include documentation of contact with those who apply for the position.  While this documentation is not listed as a required document that needs to be retained under the statute or regulations, we have seen DOL ask for it before and it is a good practice to keep it.  Now, this is doubly true.

An employer was requested by the DOL during an audit to provide the evidence of his contact with the applicants.  The employer had contacted the applicants by email, but  did not provide such documentation to the officer and the case was denied.  While it should have been a simple matter for the employer to provide the emails in a motion to reconsider, that is not allowed.  Only documentation that is either asked by the officer (for the motion to reconsider) OR information that was unavailable to the employer at the time of the initial request can be included in the Motion to Reconsider.  Instead, the employer appealed the case to BALCA claiming that the documents were not required to be retained by the employer, and, therefore the the employer was not required to provide them to the officer and the case could not be denied on that basis.

While the above is correct, there is a provision that allows the officer to request additional evidence if the request is reasonable and a failure to provide the additional evidence would amount to “substantial failure…to provide required documentation.”  Now, while it is clear that the evidence requested was reasonable, how could it be said that by not providing this information (which is not “required documentation”) could be viewed as a substantial failure to provide required documentation?  According to BALCA it was necessary evidence to determine whether the applicants were rejected for lawful, job related reasons.  I think what BALCA is trying to say is that the officer has a right to have confirmation that what they employer states on the recruitment report actually occurred as reported.  In other words, the officer is not required to trust the word of the employer that it did what it said it did.

DGN Technologies 2012-PER-00423 (September 3, 2015)

In this case, the employer filed a PERM case with the DOL.  The DOL officer sent out a Audit Notification Letter requesting documentation about the recruitment process to the employer.  When the employer did not respond, the case was denied.  In a Motion to Reconsider, the employer argued that it had not received the notice send out by the employer and requested the case be reopened and the notice send out again.  BALCA re-opened the case and ordered that the officer re-send the notification and give the employer the requisite time to reply.

BALCA stated two reasons for overturning the denial:  First, since the Officer had no proof that the document was mailed (outside of its word) and did not provide proof of the mailroom procedures to the judge to show that such procedures would lead one to believe that the document was mailed, that there is no presumption that the document was mailed or received.  Second, the judge stated that even if such documentation were available and there were a presumption that it was mailed and received, it is a weak presumption and the affidavit of the employer that it did not receive the documents, and the lack of motive for the employer to ignore the audit notice, all lead to the conclusion that the notice was not received by the employer.  Therefore, the denial was vacated.

This shows that BALCA is not above requiring the same type of documentation (proof of mailing, etc.) from the DOL as it requires from employers.  But more importantly, it also shows that when there is sufficient indication of honesty, the DOL should trust the word of the employer.  This is in contrast to the above case in which an employer could have serious reasons to mis-represent the reasons for denial of a particular applicant as it could help the case be approved.  Therefore the DOL does not have to rely solely on the word of the employer in that case.

It is always important to remember that PERM cases are difficult not because the procedures are necessarily difficult, but because the Department of Labor is looking for any reason to deny the application.  Even the fact that the employer did not receive a notice from the DOL, is enough for them to deny a case and make you start over from the beginning.  Competent is important for these type of cases.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.