PERM Update: In Total System Services Inc., BALCA Overrules CO's Denial of PERM Application on Issue of Adequacy of Notice Re Employee Referral Program

The Board of Alien Labor Certification Appeals (BALCA) overruled the US Department of Labor (USDOL) denial of a PERM application on the basis that the employer insufficiently provided notice of the incentives in its pre-PERM filing Employee Referral Program.

The US Department of Labor Certifying Office has recently been focusing on the sufficiency of the Employee Referral Program provided by employers as one of the alternative recruitment measures employers are required to undertake prior to filing of the PERM application. In a recent decision, the importance of meticulous compliance with the format requirements included in the PERM regulations was again confirmed in the decision of Total Systems Services Inc. handed down by BALCA recently.

By way of background, employers wishing to file for permanent residence under the second or third preference employment-based categories for one of its employees in a professional occupation, must first file application with the US Department of Labor attesting that it had searched the market and that there are not any US worker who is qualified, able and willing to occupy such a position. PERM regulations are intricate and complex and they require the employer to engage in rigorous pre PERM filing recruitment measures to demonstrate that it had in fact tested the labor market in good faith. There are four levels of recruitment steps: 1) the employer must publish and advertisement in a newspaper of general circulation; 2) the employer must post a job order with the State Workforce Agency having jurisdiction over the place of employment; 3) the employer must also choose from ten (10) alternative recruitment steps; and finally 4) the employer must post an internal notice of the filing of a PERM application.

The employee referral program is one of such ten (10) alternative recruitment steps that could be chosen by the employer in its pre PERM filing campaign. It is an inexpensive recruitment step that the employer can easily implement. Even if the employer did not have an existing employee referral program, it can establish one for the purpose of a pre PERM filing recruitment process. The regulatory provision governing the employee referral program is somewhat tacit and can be found under 20 C.F.R. § 656.17. It states: The use of an employee referral program with incentives can be documented by providing dated copies of employer notices or memoranda advertising the program and specifying the incentives offered.” Emphasis added. Recently the USDOL has been critical of any such “employer notices” which do not specify the “incentives offered.” Put in other words, any notice posted by the employer in a recruitment steps involving an employee referral program must clearly state what gain an employee will realize if he or she referred a successful candidate to the employer in connection with the job vacancy. If the notice did not clearly post such an incentive, the USDOL is recently denying cases on this basis.

The employee referral program preceded the creation of the PERM process in the pre-PERM labor certification Reduction In Recruitment (“RIR”) rules. Those who practiced immigration law prior to the enactment of the PERM regulations in 2005 recall the RIR program. At that time, the USDOL came up with ad hoc rules which basically said that pre-labor certification filing recruitment activities will forgive a supervised recruitment process. Under the RIR rules, the employer was required to show three recruitment steps which included at least one print advertisement. There were no rules about the format of the recruitment activities. Hundreds of thousands of labor certificate applications were filed and approved through a culture of loosely implemented recruitment campaigns including employee referral programs. This culture somewhat survived the introduction of the PERM regulations despite the clear definition of the PERM regulations in this subject matter. Recent enforcement measures by the US Department of Labor relative to the employee referral program will now force employers to sharpen their pencils when they are drafting such a recruitment step.

In Total System Services Inc., BALCA examined the sufficiency of the employer referral program utilized by the employer as one of its pre PERM filing recruitment steps. In reversing the US Department of Labor denial, BALCA stated that the employer’s employee referral program recruitment step was adequate. In this case, Total System Services Inc.’s PERM application was audited by the USDOL. The employer submitted proof of its recruitment activities including a notice pursuant to its employee referral program. The notice stated:

For the Project Manager position, you may refer a friend by submitting resume to Kerri Alexander, Human Resource Manager, 1600 1st Ave Columbus, GA 31902

The USDOL denied on the basis that the employee referral program notice did not “specify the incentives offered” pursuant to regulations. The employer filed a motion for reconsideration arguing that the employer had separate documentation which clearly described the program in details and provided monetary incentives. Such additional documentation was provided to the company’s employees via the intranet. This documentation was originally offered in the response to the audit request. The Employer further argued that the regulation at 20 C.F.R. § 656.24(g)(2)(ii) allows it to present such documentation on reconsideration since it had previously been presented in the audit response. The USDOL denied the motion for reconsideration. Upon appeal to BALCA, the Board stated that any issue with the employer’s program was cleared by the reconsideration. It determined that the US Department of Labor must had overlooked these submittals in the audit response.

Two propositions emerge from recent BALCA cases involving employee referral programs: 1) that the looseness of pre PERM regulations vis-à-vis the format of the employee referral program will cause the unwary employer to receive denial of its PERM application unless the notice of the employee referral program clearly enunciates an incentive; and 2) a poorly documented PERM audit response will lead to additional heartache and costly time and money wasted on meaningless appeals.

Attorney Gus M. Shihab’s current and prior firm filed in excess of 1000 labor certificate and PERM applications with a success rate more than 98%. Our success is largely caused by our deeply rooted culture of meticulousness and attention to details. If you have would like to file a PERM application contact one of the experienced lawyers at The Law Firm of Shihab & Associates, Co., LPA at (800) 625-3404 for a free initial consultation. You will be pleased with the innovative manner in which our law firm will handle your case and the technologically savvy service that you will receive.