MEMORANDUM

H-1B PETITION AND THE LABOR CONDITION APPLICATION PROCESS

The purpose of this memorandum is 1) to provide you with detailed background information regarding the qualifications for an H-1B visa, and 2) the specific requirements of the Labor Condition Application ("LCA") process, so that you may employ a foreign national in the H-1B nonimmigrant visa category.

I.              H-1B PETITION PROCESSING

The classification of H‑lB Temporary Worker in a "Specialty Occupation" is available to any employer in the United States in order to hire foreign professionals for a temporary assignment. Foreign nationals are eligible for H‑lB classification if they qualify as members of a professional occupation. This includes physicians, engineers, teachers, lawyers, nurses, scientists, and any other occupation for which attainment of at least a bachelor's degree in a specific course of study is the usual minimum requirement for an entry‑level position in the occupation. To qualify, an individual must show that he has the requisite four‑year U.S. college degree or its equivalent. In addition, the foreign national must have satisfied any U.S. state licensure requirements of his particular profession before being eligible for H‑lB classification. For example, in most states public school teachers, certain engineers, lawyers, physicians, dentists and nurses ‑ be they U.S. or foreign citizens ‑ must obtain state licenses before being authorized to practice their profession. Thus, foreign nationals without state licensure in those professions cannot obtain H‑lB classification.

Not only must the H‑lB foreign national satisfy the foregoing criteria, but also, the position in which he intends to work in the United States must require the employment of a person having such professional qualifications. In addition, the employer's intent must be to hire the foreign national for only a temporary period.

The H‑lB nonimmigrant can be admitted typically for an initial period of three years, with extensions available up to a maximum consecutive stay of six

To obtain H‑lB classification, the U.S. employer first must submit a Form I‑129 nonimmigrant visa petition to the USCIS for its decision regarding the foreign national 's eligibility for H‑lB classification, followed by the individual's applying to an American embassy or consulate abroad for issuance of an H‑lB visa with which he may seek entry into the United States. (This same procedure applies to the H‑2 and H‑3 categories as well.) The application process for the actual H visa includes presenting the Form I‑797, Notice of Approval (used by the USICS for both H and L petitions). The H‑lB foreign national’s spouse and minor dependent children will be eligible to apply for H‑4 visas with which to accompany or join the principal H‑lB foreign national in the United States.

Since passage of IMMACT '90, H‑lB specialty occupation visa holders no longer must demonstrate they have a foreign residence which they do not intend to abandon during their temporary stay in the United States; rather, H‑lB workers now need express merely the generalized intent to return home after conclusion of their temporary U.S. work assignment.

In addition, the H‑lB category is now subject to an annual "quota" limitation of 65,000 foreign national’s ‑ a limitation which so far has not been exceeded but could be in the near future.

II.            LABOR CONDITION APPLICATION REQUIREMENTS

Employers must file an LCA with the appropriate regional office of the Department of Labor ("DOL"), prior to the filing of both new H-1B visa petitions and applications to extend H-1B status.  The LCA supposedly enables the federal government to protect the wages and working conditions of similarly employed workers in the area of employment from being adversely affected by the employment of H-1B temporary workers.

The LCA process consists of two steps.  First, we must determine the prevailing wage for the occupational classification in the area of employment.  This is done by filing a request with the State Department of Labor ("SDOL").   The SDOL will respond with a prevailing wage for the position.  DOL generally takes approximately seven days to certify the LCA.  The certified LCA must be included with the H‑1B Petition which is filed with the USCIS.

A.            Summary of the LCA Requirements

In filing the LCA, Form ETA 9035, the employer is attesting to the following:

1. That for the entire period of authorized employment, the employer will offer to the H-1B foreign national(s) 
    the higher of:

1. the prevailing wage level for that specific occupational classification in the area of intended employment; or
2. the actual wage level paid by the employer to all other similarly employed H-1B workers.

When calculating the actual wage, only those individuals with similar experience and qualifications for the specific employment in question need be taken into consideration.
 

2. That for the entire period of authorized employment, the employment of the H-1B worker will not adversely affect the working conditions of other similarly employed workers.  "Working conditions" are defined as including "hours, shifts, vacation periods, and fringe benefits."
3. That on the date the LCA is signed and submitted, there was not a strike, lockout, or labor dispute work stoppage in the relevant occupations at the place of employment.
4. The employer has provided notice of the filing of the LCA to the bargaining representative of the employer's employees in the occupational classification, or, if there is no bargaining representative, the employer has posted notice of the filing of the LCA on the employer's premises.

B.            Retention of LCA Records for Public Access

In filing the LCA, the employer also agrees to develop and maintain documentation supporting each labor condition application statement within one working day of the filing of the LCA with DOL.  This documentation must be retained on the employer's premises for public inspection for one year beyond the end of the employment period specified on the LCA.  The necessary documentation is outlined below.  The following documentation must be made available on or before the day of filing of the LCA with the DOL:

1. The original or a copy of the LCA form.
2. Prevailing wage documentation.  This will be the either the GDOL prevailing wage letter, an independent wage survey, or another legitimate source of wage information.
3. The Actual Wage Memorandum stating that the wage the employer is offering the foreign national is the wage paid by the employer to all other individuals "with similar experience and qualifications for the specific employment in question."
4. The executed disclaimer evidencing the employer's compliance with the working conditions requirement.
5. The executed disclaimer evidencing the employer's compliance with the strike/lockout condition.
6. Copies of the actual posted employee notifications and employer's certification of the postings or a copy of the dated notice that the employer provides to the collective bargaining representative.

C.            Maintaining the LCA Documentation

Besides the above-mentioned binder containing the LCA documentation, the employer must, at the employer's principal place of business in the United States, or at the place of employment, make payroll record documentation available for inspection by the DOL upon investigation of a complaint.  Note that actual payroll records showing the rate of pay to the prospective H-1B foreign national need not be made available for public examination.  This documentation must be retained by the employer for a period of three years from the date of the creation of the records, except that if a timely complaint is filed, the employer must retain the records until the complaint is resolved.  The documents that must be maintained are as follows:

Payroll records for all other individuals with experience and qualifications similar to the prospective H-1B foreign national in the position at the place of employment, beginning with the date the LCA is submitted and continuing throughout the period of employment.  The payroll records for each employee must include:

1. Employee's full name;
2. Employee's home address;
3. Employee's occupation;
4. Employee's rate of pay;
5. Hours worked each day and each week by the employee if paid on other than a salary basis or if the prevailing or actual wage is expressed as an hourly wage;
6. Total additions to or deductions from each pay period;
7. Total wages paid each pay period, date of pay, and pay period covered by each payment.

Generally, the company will already have collected this information for other government agencies, such as the IRS and the Wage and Hour Division of DOL. 

D.                       Finalizing the Process

1. Federal law requires DOL to make the determination to certify or not certify the LCA within seven days of filing.  Once the LCA has been certified by DOL, the H-1B Petition is filed with the USCIS.  Remember that the law prohibits an employer from employing an foreign national as an H-1B worker until the USCIS approves the H-1B Petition, and either USCIS approves the corresponding application for change of status to H-1B classification, or a U.S. consular officer abroad grants the H-1B visa and the foreign national enters the U.S. in H-1B status, unless the foreign national already has employment authorization under a different category. 
2. Once the LCA has been certified, it is vital that the company contact us immediately if the foreign national does not begin, or prematurely leaves, employment with the company.  Unless the certified LCA is formally withdrawn, the company will continue to be bound by the wage, working condition, strike/lockout, and notice statements in the LCA.
3. Prevailing wage level information must be updated every 36 months, the duration of the LCA.

E.             Employer Considerations Associated with Filing an LCA

Currently, the LCA procedure is complaint driven; that is, an investigation into the accuracy of the LCA will occur only if a complaint is filed by an aggrieved party.  If a complaint is filed, the DOL Wage and Hour Administrator (the "Administrator") will investigate the complaint and determine whether the employer failed to meet a condition specified in the LCA or misrepresented a material fact.

Under the new regulations, DOL can initiate its own investigations without a formal complaint.  Obviously, this creates a greater problem for employers, who now must be sure to comply fully with all document retention requirements.

In the event that the Administrator determines that the employer made a misrepresentation of a material fact in the application, or that the employer does not meet the applicable standard regarding each of the attestation elements, the Administrator may (1) impose a $1,000 fine per violation; (2) bar the employer from obtaining future visas (both for immigrants and H, L, O, and P nonimmigrants) for a period of at least one year; and (3) order the employer to provide for payment of back wages.  Any interested party may, within 15 days from the date of the investigative determination, request a hearing before an Administrative Law Judge.  If no request for hearing is made, the determination of the Administrator becomes final.

Material misrepresentation on the LCA can also subject the company itself and the individual company representative signing the LCA to penalties for perjury including fines against the company and fines and incarceration of the individual representative of the company.  Obviously, the care taken in preparing the LCA is intended to eliminate the risk of misrepresentation and the imposition of any of these penalties.

Obviously, this is not a simple process.  But, with planning and care the process can be smooth and problem free.  We will do everything in our power to ease the reporting and paperwork burden on the employer and the foreign national.

PREPARED BY:

Charles H. Kuck

Kuck Casablanca LLC

8010 Roswell Road, Suite 300

Atlanta, GA  30350

404-816.8611

(F) 404-816-8615

www.immigration.net

ckuck@ immigration.net