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The New Aggressive Face Of DHS (Final) – Verifying


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The New Aggressive Face of DHS - Verifying Petitions and Applications. H-1B Visa Site Visits and Investigations. Wage and Hour Investigations. Interrogations at the Port-of-Entry.

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The New Aggressive Face Of DHS (Final) – Verifying

  1. 1. The New Aggressive Face of DHS – Verifying Petitions and Applications. <ul><li>H-1B/R-1 Site Visits and Role of FDNS. </li></ul><ul><li>H-1B Investigations By the U.S. Department of Labor, Wage & Hour Division. </li></ul><ul><li>Interrogations and Inquiries at the POE. </li></ul><ul><li>Employer Compliance Program </li></ul>
  2. 2. Enforcement in the Immigration Law Arena is on the Upswing. <ul><li>DHS/CIS seems to have moved to an “Audit Model” for compliance. </li></ul><ul><li>H-1B – LCA submitted to DOL and CIS Site Visits and/or DOL Investigations may occur. </li></ul><ul><li>Form I-9 – ICE engages in Worksite Enforcement by auditing I-9 Forms. </li></ul><ul><li>PERM – Applications submitted contemplate audits and possible revocation by DOL. </li></ul>
  3. 3. Enforcement through Audits and Investigations is not surprising: <ul><li>Given that FDNS gets funding through the “fraud fee” paid for by employers in connection with various types of visas. </li></ul><ul><li>Focus of the enforcement function at DHS was honed within “ICE” as the separate law enforcement Division following 9/11. </li></ul><ul><li>Congressional Studies (OIG, GAO) show high rates of fraud in visa classifications (e.g., H-1B, L-1B, R-1). </li></ul><ul><li>CIS and DOL provide incentives for disgruntled employees to make formal complaints and get benefits under the law (e.g., regulatory complaint process, now - U visa certification issued by W&H Division). </li></ul>
  4. 4. Practical Advice for our Client Employers: <ul><li>Develop and deploy a compliance program that addresses potential investigations and/or audits that may occur. </li></ul><ul><li>Develop a “top-down” concern in the organization about immigration-related issues (modify the corporate culture). </li></ul><ul><li>Assign a “point of contact” at the organization who will interface with the auditor or investigator and reach-out for legal counsel. </li></ul><ul><li>Utilize a “cooperative” as opposed to an “adversarial” approach with investigatory authorities. </li></ul>
  5. 5. Audit or Investigation of the H-1B Employer can occur through DOL W&H Audit or a CIS Site Visit. <ul><li>Cases can be referred for Site Visit or Investigation by: (1) Random Audit; (2) Referral by another government agency; (3) complaint by a disgruntled employee. </li></ul><ul><li>Employers must maintain Public Access Files (“PAF”) after the filing of an LCA. </li></ul><ul><li>Mechanics of the Investigation/Audit varies. </li></ul>
  6. 6. H-1B DOL W&H Investigation. <ul><li>DOL charged with enforcement of the H-1B Labor Condition Application (“LCA”). </li></ul><ul><li>For LCA Enforcement - DOL Field Operations Handbook – 4/17/2006 (AILA InfoNet Doc. No. 09012871. </li></ul><ul><li>DOL Wage & Hour investigations of H-1B employers occur under several circumstances. </li></ul><ul><li>LCA – Labor Condition Application Form ETA 9035 required to be filed and approved by the DOL before the H-1B can be filed with CIS. </li></ul>
  7. 7. Labor Condition Application – ETA Form 9035 <ul><li>The LCA is the document that a prospective H-1B Employer files to initiate the employment of an H-1B worker (20 CFR 655.700(b)) </li></ul><ul><li>LCA’s require the Employer to attest to: (1) Paying the H-1B the required wage; (2) establishing the working conditions requirement; (3) establishing the no strike or lockout requirement; (4) establishing the notice requirement. </li></ul><ul><li>There are additional obligations that apply to H-1B “dependent” employers. </li></ul><ul><li>The LCA is filed online using a program called “iCert”. </li></ul><ul><li>Upon filing the LCA with the DOL the employer is required to maintain a “Public Access File”. </li></ul>
  8. 8. PAF – Prospective H-1B Employer must maintain a Public Access File. <ul><li>Copy of the LCA – Form ETA 9035. </li></ul><ul><li>Proof of Posting of the LCA for 10 business days in two (2) conspicuous locations on the premises. </li></ul><ul><li>Objective Wage Methodology – Method used to obtain the Prevailing Wage (Employer must pay 100% of PW). </li></ul><ul><li>Subjective Wage Methodology – How Employer arrived at the Actual Wage for the H-1B (e.g., criteria). </li></ul><ul><li>Proof that the H-1B received the LCA before the first day of employment. </li></ul><ul><li>Proof that the H-1B will be provided with the same benefits as those provided to U.S. Workers. </li></ul>
  9. 9. How a W&H Audit may be initiated. <ul><li>Aggrieved Party Complaints – 20 CFR 655.806. </li></ul><ul><li>Credible Source Investigations – 20 CFR 655.807. </li></ul><ul><li>Secretary-Certified Investigations – 20 CFR 655.807(h). </li></ul><ul><li>Random Investigations of Willful Violators - 20 CFR 655.808. </li></ul>
  10. 10. Mechanics of the DOL W&H Investigation: <ul><li>Meet with the Investigators. </li></ul><ul><li>Right to Legal Counsel. </li></ul><ul><li>Respond to DOL Request for Documents. </li></ul><ul><li>Cooperation vs. adversarial position. </li></ul><ul><li>Onsite vs. Offsite meetings with DOL. </li></ul><ul><li>Timing of Meetings and Deadlines. </li></ul><ul><li>Major issues regarding potential Liability. </li></ul>
  11. 11. Scope of the DOL W&H Audit: <ul><li>Wage and Benefit Provisions for all H-1B Workers (unless investigation is “limited”). </li></ul><ul><li>Public Access File. </li></ul><ul><li>Verification of employer’s dependency status ($60k? Or MA?). </li></ul><ul><li>If H-1B dependent (or a willful violator) the employer’s compliance with (1) recruitment, (2) secondary placement, (3) non-displacement provisions. </li></ul><ul><li>Generally investigation takes about 12 months. </li></ul>
  12. 12. H-1B Employer Obligations
  13. 13. Liability for Reasonable Costs of Return Transportation <ul><li>If an employer terminates an H-1B employee before the end of that employee’s period of authorized stay, the employer is liable for the “reasonable costs” of return transportation for the employee to his or her last country of residence. </li></ul><ul><li>Immigration statutes and regulations suggest that the employer’s liability is limited to the reasonable cost of physically returning the H-1B employee, and does not extend to the cost of relocating family members or property. </li></ul>
  14. 14. Liability for Reasonable Costs of Return Transportation <ul><li>If a terminated H-1B employee believes that an employer is not complying with this obligation, he or she may file a complaint with the United States Citizenship and Immigration Services (“USCIS”). </li></ul><ul><li>USCIS policy regarding enforcement of this obligation, however, is unclear, and USCIS lacks statutory authority and a regulatory mechanism to enforce this obligation. </li></ul>
  15. 15. Liability for Reasonable Costs of Return Transportation <ul><li>Employers should be aware that the statute does not impose an obligation to provide the costs of return transportation to an employee who elects not to depart the United States; however, the Department of Labor considers the payment of these costs to be a normal incident of a “bona fide termination.” </li></ul><ul><li>Employers may wish to provide terminated H-1B employees with a sum approximating the employee’s reasonable return costs and obtain a release from the employee. </li></ul>
  16. 16. Liability for Reasonable Costs of Return Transportation <ul><li>Alternatively, the employer may be able to satisfy the return transportation requirement by offering to provide a ticket for the employee within a reasonable period after the date of termination through the employer’s travel agent. </li></ul><ul><li>This approach would provide evidence that the employer made a good-faith effort to satisfy its obligation, while avoiding a windfall to an employee who elects to remain in the United States. </li></ul>
  17. 17. Liability for Reasonable Costs of Return Transportation <ul><li>A terminated employee may seek to enforce the employer’s obligation in state court; however, it is unclear whether such a suit could succeed. </li></ul><ul><li>Employers should retain records of compliance with this obligation. </li></ul>
  18. 18. USCIS Notification of Termination <ul><li>Regulations require an H-1B employer to notify USCIS “immediately” of “any material change in terms and conditions of employment” affecting an H-1B employee. </li></ul><ul><li>USCIS policy is that a termination is such a “material change”. </li></ul><ul><li>Employers may satisfy this notification obligation by sending a letter explaining the change of termination to the USCIS office that approved the petition. </li></ul>
  19. 19. USCIS Notification of Termination <ul><li>Employers should be aware that there is no sanction provided in the USCIS regulations for failing to make timely notification of an H-1B worker’s termination. </li></ul><ul><li>After receipt of a letter from an H-1B employer indicating that the H-1B employee is no longer employed by the employer, USCIS will respond with a notice revoking that employee’s H-1B petition. </li></ul><ul><li>The eventual revocation of the H-1B petition may cause a dilemma for an H-1B employee, who may have remained in the United States to seek other employment. </li></ul>
  20. 20. USCIS Notification of Termination <ul><li>Employers should consider informing terminated employees of the employer’s obligation to notify USCIS of the termination and the eventual revocation of the employee’s H-1B petition that will result. </li></ul><ul><li>Employers should retain records of compliance with this obligation. </li></ul>
  21. 21. Department of Labor Implications <ul><li>Employers should be aware that the Department of Labor (“DOL”) has issued regulations preventing the “benching” of H-1B workers-that is, underpaying or not paying an employee who is not engaged on a matter that will produce revenue for the employer. </li></ul><ul><li>These regulations impose a requirement that employees in nonproductive status or otherwise temporarily laid off “due to the decision of the employer” continue to receive their normal wages. </li></ul><ul><li>This requirement ceases once there is a “bona fide” termination of employment. </li></ul>
  22. 22. Department of Labor Implications <ul><li>DOL regulations tie the obligation to pay an employee until “bona fide” termination to the obligation to inform USCIS of an H-1B employee’s termination. </li></ul><ul><li>The DOL’s enforcement position has been that any evidence of a “bona fide” termination, such as written notice to the employee, will be sufficient to end the employer’s wage obligation. </li></ul><ul><li>A recent decision of the DOL’s Administrative Review Board, however, held that an employer’s obligation to pay the offered salary continues up until the date the employer sends notice of termination to USCIS. </li></ul>
  23. 23. Department of Labor Implications <ul><li>While USCIS’ position is that an H-1B petition is valid until revoked, so that a terminated H-1B employee whose petition has not been revoked could later begin work for the same employer immediately and would not need a new H-1B petition, the DOL’s position is that failing to file a new petition means no “bona fide” termination occurred, so that the employer is liable for wages during the entire period between the “termination” and “re-hire.” </li></ul><ul><li>Employers should maintain careful records of an H-1B employee’s termination, and immediately notify USICS of the termination, in the event that the DOL questions when the employee actually was terminated. </li></ul>
  24. 24. Consequences for the H-1B Employee
  25. 25. Maintenance of Status <ul><li>Contrary to popular belief, there is no “10-day,” “30-day” or other grace period for terminated employees holding H-1B status. </li></ul><ul><li>Once the employment relationship terminates, the H-1B employee is out of status. </li></ul><ul><li>While USCIS has proposed a 60-day period within which an </li></ul><ul><li>H-1B worker may seek new employment, that period remains only a proposal. </li></ul>
  26. 26. Maintenance of Status <ul><li>USCIS policy is that periods during which an H-1B employee receives severance payments, or remains on the employer’s payroll without reporting for work, are not periods of valid status for an H-1B nonimmigrant. </li></ul><ul><li>Technically, H-1B employees who remain in the United States after termination of their H-1B employment without changing their status are in violation of their status, and persons in violation of their status are not allowed to change, amend or extend their status. </li></ul>
  27. 27. Maintenance of Status <ul><li>In deciding whether to approve a change, amendment or extension of status for any out-of-status nonimmigrant, however, USCIS may exercise discretion on a case-by-case basis to grant the extension, change or amendment of status in spite of the failure to maintain status. </li></ul><ul><li>The longer the time out of status, the less likely USCIS will be to approve the change, extension or amendment of status. </li></ul>
  28. 28. Maintenance of Status <ul><li>If the period out of status is very short (10 days or less), a change, extension or amendment of status will usually be approved. </li></ul><ul><li>USCIS offices, however, have increasingly refused to exercise discretion in favor of laid-off H-1B workers, unless the gap in status is very short. </li></ul>
  29. 29. Maintenance of Status <ul><li>Terminated H-1B employees should be aware that time is not on their side. </li></ul><ul><li>If the employee has plans to have another H-1B petition filed on his or her behalf, or to change to another nonimmigrant status, those plans should be implemented as quickly as possible. </li></ul>
  30. 30. Difficulty in Taking Advantage of the Portability Rules <ul><li>The portability rules allow an individual in H-1B status to begin work for a new H-1B employer, if certain conditions are met. </li></ul><ul><li>One condition is that the new petition must be filed before the date of “expiration of the period of stay.” </li></ul><ul><li>USCIS has not made it clear when the expiration of the period of stay occurs, though the same language has been interpreted in other contexts to refer only to the expiration date of the nonimmigrant's Form I-94, rather than to when the nonimmigrant fails to maintain status. </li></ul>
  31. 31. Difficulty in Taking Advantage of the Portability Rules <ul><li>The dilemma for the terminated H-1B employee is that, if the period of stay expires on the last day of employment, the employee is left with little or no time to coordinate the filing of a new petition by a new employer. </li></ul><ul><li>While the legacy INS indicated it would propose a grace period to allow terminated H-1B workers to take advantage of the portability rules for a particular period of time (such as 60 days_, there has been little activity from the Department of Homeland Security on the issue so far. </li></ul>
  32. 32. Conclusion <ul><li>There are many issues to consider regarding the termination of H-1B employees. </li></ul><ul><li>The Update is a general treatment of these issues and challenges. </li></ul><ul><li>Each individual termination will present unique circumstances that may require more detailed analysis. </li></ul><ul><li>As individual terminations are carried out, both employers and employees should keep these general issues and challenges in mind and should consult with immigration counsel for an individual determination of their options. </li></ul>
  33. 33. H-1B Site Visit. <ul><li>Government internal evaluation of the H-1B program found fraud. For example, H-1Bs not being paid what they should. H-1Bs not working where they should. </li></ul><ul><li>Site Inspectors (“SI”) conducting Administrative Visits (“ASV”) at locations of employment in support of Administrative Site Visit Verification Program (“ASVVP”). </li></ul><ul><li>See “Compliance Review Report” – AILA Infonet Doc. No. 10030561 (Posted 3/5/10) </li></ul>
  34. 34. How an H-1B Site Visit may be initiated. <ul><li>Any employer filing an H-1B can be selected for a Site Visit. </li></ul><ul><li>CIS says that the audit is “random,” but CIS also mentioned that 40,000 H-1B employers were identified in FY 2009-2010 . </li></ul><ul><li>CIS states that there are “Additional Factors” that may cause a Site Visit. </li></ul>
  35. 35. Factors that may cause an H-1B Employer to get a Site Visit: <ul><li>Organizations with less then 15 employees. </li></ul><ul><li>Organizations with less then $10 Million in sales. </li></ul><ul><li>Organizations that are less then 10 years old. </li></ul><ul><li>Positions that involve accounting, HR, Business Analyst, Sales positions. </li></ul><ul><li>Employers that require on a Bachelors Degree as opposed to an Advanced Degree. </li></ul>
  36. 36. Site Visit Investigations seem to be aimed at the following violations: <ul><li>Job location not listed on the H-1B/LCA. </li></ul><ul><li>H-1B Worker not paid the required wage. </li></ul><ul><li>Fraudulent H-1B documents or worker credentials. </li></ul><ul><li>Non-existent business or office location. </li></ul><ul><li>Job duties significantly different from those listed on the H-1B/LCA. </li></ul><ul><li>Misrep of H-1B status by the H-1B worker. </li></ul><ul><li>H-1B worker paid the ACWIA Training Fee ($1500/$750) </li></ul>
  37. 37. Interrogation at the Ports-of-Entry (“POE”) <ul><li>Secondary Inspection and how it works. </li></ul><ul><li>Issues at Newark Liberty Airport for arrivals of H-1Bs placed at Third-party sites (potential Neufeld Memo issue? – No!) </li></ul><ul><li>Right to Counsel in Secondary Inspection. </li></ul><ul><li>Coaching your client about how to handle a Secondary Inspection interrogation. </li></ul>
  38. 38. Employers should work to get a compliance program in place. <ul><li>Ensure that PAFs are in order (conduct a self-audit). </li></ul><ul><li>Make sure that there is a PAF for each H-1B employee. </li></ul><ul><li>Designate a specific individual at each location should an investigator arrive. </li></ul><ul><li>Bes sure that this individual knows how to contact management and legal counsel. </li></ul><ul><li>Prepare a quick-list of information about the H-1B: workers, location, titles, wages, and responsibilities so that the information need not be assembled at the last minute. </li></ul><ul><li>Employers should consider spending some time training H-1B Employers and Employees about DOL Audits, CIS Site Visits and CBP Entry procedures. </li></ul>
  39. 39. Questions? <ul><li>Please feel free to contact our office if you still have questions: </li></ul><ul><li>[email_address] </li></ul><ul><li>201-670-0006 ext. 100 </li></ul><ul><li>http:// </li></ul><ul><li>Thank you. </li></ul>