9 Costly H-1B Visa Mistakes to Avoid

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Whether you employ one H-1B employee or 100 H-1B employees, the Department of Homeland Security (DHS) and the Department of Labor (DOL) require you to follow very specific rules. Failure to comply with these rules can lead to heavy fines, penalties, payment of back wages, debarrment, and negative publicity for your business. The DOL has ordered millions of dollars in back wages and imposed thousands of dollars in fines on companies after auditing their records and practices. With the right information, you can avoid this outcome for your company and safely hire and retain key H-1B employees.

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9 Costly H-1B Visa Mistakes to Avoid

  1. 1. H-1B Compliance:9 Costly H-1B Visa Mistakes Employers Make and How to Avoid Them February 22, 2012
  2. 2. Ask Questions AnytimeUse your chat pane to typeand send your questions.Questions will be answeredduring the presentation andduring the Q & A session.
  3. 3. Presenters Angela M. Lopez has more than 8 years of experience representing and counseling employers in all aspects of immigration law. Ann M. Badmus has more than 18 years of experience providing strategic advice and counsel to employers on various issues of immigration law.
  4. 4. Webinar Agenda 1 H-1B Application Mistakes to Avoid 2 LCA Compliance Mistakes to Avoid 3 How To Document LCA Compliance 4 H-1B/LCA Internal Audits 5 DOL And DHS Investigations Copyright 2009
  5. 5. Agencies U.S. Department of Labor (USDOL) U.S. Citizenship and Immigration Service (USCIS) Wage and Hour Division (WHD) of USDOL
  6. 6. Enforcement and Investigation • Surprise Site Visit USCIS • Petition Denial/Revocation • Audit USDOL • Fines/Debarment • Complaint Investigation WHD • Damages/Debarment
  7. 7. PenaltiesCivil Money DamagesBack WagesFringe Benefit ReimbursementDebarmentNegative Publicity
  8. 8. H-1B Application Mistakes to Avoid
  9. 9. H-1B Application Process ETA9035 Labor Condition Application (LCA) I-129 H Petition I-797 Approval Notice
  10. 10. Mistake # 1Failure to Provide Accurate Data Employer •Correct Name Information •FEIN Employment •Rate of pay Information •Locations Business •H-1B employees Information •Third party sites
  11. 11. Mistake #2Failure to File on Time H-1B Numerical Limitations Extensions/ Renewals Amendments
  12. 12. Labor Condition Application Mistakes to Avoid
  13. 13. Mistake #3Failure to Pay the Required Wage Employers must pay higher of actual or prevailing wage rate, pay for nonproductive time, and offer benefits on the same basis as offered to U.S. workers
  14. 14. Prevailing Wage Resources Occupational Employment Statistics (OES) Survey USDOL Prevailing Wage Determination (safe harbor) Davis-Bacon, McNamara O’Hara Service Contract Act Collective Bargaining Agreement Independent Survey
  15. 15. Prevailing Wage Choose the appropriate criteria•Occupational Class•Skill Level – I,II,III,IV•Geographic area of intended employment
  16. 16. Actual WageDocumented wage paid to all otheremployees with similar experience andqualifications for the specificemployment•Experience and qualifications•Education•Job responsibility and function•Specialized knowledge•Legitimate business factors
  17. 17. Mistake #4Violating Wage Deduction Rules Employers may not deduct its business expenses from employee’s wages •ACWIA fee •Anti-Fraud fee •Attorney fee
  18. 18. Mistake #4Violating Wage Reduction Rules(cont.) Employers may not require repayment of petition costs or related business expenses upon employee’s termination of employment
  19. 19. Mistake #5Failing to Pay Wages on Time Employer’s obligation to pay begins when the employee is available to work but no later than 30 days after employee enters U.S. with H-1B visa OR 60 days after H-1B validity date if employee is already in U.S. in H-1B status.
  20. 20. Mistake #6 - Benching Employer must pay required wage for all nonproductive time related to employment caused by: • Lack of work or client contract • Lack of licensing • Studying for licensing • Employer required trainingPayment is not required for trulyvoluntary absences
  21. 21. Mistake #7 - Failing to Properly Document Employment Termination Written notice of termination to employeeBona FideTermination Offer of return transportation toRequired depart the U.S. Written notice to USCIS withdrawing H-1B
  22. 22. Mistake #8Failing to Document Changes New work locations in a different prevailing wage location Significant changes in job duties or working conditions Mergers & acquisitions or other corporate changes
  23. 23. Mistake #9 – Failing to MaintainRequired Documentation Public Access File - LCA and other documents available for public access within one day of filing the LCA FDNS Audit File for Surprise Site Visits
  24. 24. How to Document LCA Compliance
  25. 25. Public Access File Certified LCA (ETA9035) Rate of pay for the H-1B worker Actual wage memorandum Prevailing wage determination Proof of LCA posting
  26. 26. Public Access File (cont.) Acknowledgement of receipt of LCA by H-1B employee Summary of benefits offered to all workers List of entities included as “single employer”
  27. 27. Public Access File (cont.) Post-employment changes must be documented: • Copy of new LCA for new location(s) • New rate of pay, actual wage memorandum, proof of posting, employee acknowledgement of LCA, prevailing wage determination • Salary adjustments, e.g. cost-of-living, promotion to advanced level in same occupations
  28. 28. Public Access File (cont.) Corporate organizational changes must be documented: • Sworn or notarized statement by successor accepting all liabilities • List of H-1B workers transferred to successor • Each affected LCA number and effective date • Description of actual wage system • Successors employer identification number (EIN)
  29. 29. LCA FileMaintain for USDOL:• All documents included in public access file• Records showing wage rate for all other employees for the specific employment at the specific place of employment• Any documentation that supports the prevailing wage determination• Documentation on the offer of benefits• Documentation on working conditions
  30. 30. Retention RequirementsPublic access file must bemaintained:•At employer’s principal place of business or at the employee’s worksite.•Throughout the term of the H-1B employee’s employment and one year after termination of employment.
  31. 31. H-1B/LCA Internal Audits
  32. 32. Benefits of an Internal Audit Identify correctable errors Ensure consistency and integrity of documents Prepare for USDOL or USCIS audit Reduce liability by showing good faith
  33. 33. Conducting an LCA Self-Audit •Public Access File for each occupation •Appropriate position classification •Correct prevailing wage/actual wage •Documentation of employment changes
  34. 34. Conducting an LCA Self-Audit (cont.) • Documentation of organization changes • Payroll records reflect compliant start date • Appropriate notifications/amendments to USCIS • Verify audit results with attorney
  35. 35. Preparing for USDOL and USCIS Audits & Investigations
  36. 36. Preparing for an Audit/Site Visit Review the H-1B petition Conduct H-1B/LCA self-audit Inform your client of potential for site visit if employee works at third-party location Identify company representative(s) to meet with auditors Establish procedures for reception and training
  37. 37. Preparing for an Audit/Site Visit Prepare FDNS Compliance File•Copy of H-1B petition•Employee W-2 forms, three months paystubs•Previous approval notices, current passport, current I- 94, educational documents for employee•Current job description, record/itinerary of off-site assignments•LCA if work location has changed•Evidence of termination of employment, if applicable
  38. 38. Legal Notice. Facts of individual situations differ. The information provided here is general in nature and should not be relied upon for specific situations. Consult with an experienced immigration attorney to ensure compliance
  39. 39. Questions? Need More Information? Feel free to contact us.Badmus Law Firm, PLLC11325 Pegasus StreetSuite S-215Dallas, Texas 75238469-916-7900 Telephone469-916-7901 Facsimileimmigration@badmuslaw.comwww.badmuslaw.com Copyright 2009

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