Avoiding H-1B Visa Audit Violations and Penalties

Avoiding H-1B Visa Audit Violations and Penalties

H-1B visa audits by the USDOL are on the rise and penalties can be severe. 

The U.S. Department of Labor (USDOL) is conducting more H-1B visa audits, according to immigration law practitioners, and this trend is increasing. H-1B visa audits, also known as investigations of Labor Condition Applications (or LCA investigations), which are conducted by the Wage and Hour (WH) Division of the USDOL can result in severe penalties. Violations found against H-1B employers can range from $1,000 to $35,000 per violation. The employer can also be banned from employing H-1B workers for between one to three years. Our immigration lawyers at the Law Firm of Shihab & Associates, Co., LPA have extensive experience in this area, and we can competently represent your interests during the LCA process to avoid H-1B visa audits. Contact us for a consultation.

What usually triggers an H-1B visa audit?

Normally, an H-1B visa audit results from a complaint from another party, such as an unhappy H-1B employee, a disgruntled co-worker, government agency, or even a rival company. Such investigations are time consuming and intrusive. A USDOL investigator will interview current and former H-1B employees to verify that the pay rates, dates of employment, benefits, and duties match the LCA, and the investigator will demand copies of company records including payroll, public access files, and previous H-1B petitions.

Avoiding H-1B visa audit violations

There are five kinds of LCA violations that the USDOL looks for. These include (1) paying a wage lower than the required wage, (2) employing a worker outside of the dates allowed, (3) making improper deductions from a worker’s wage, (4) failure to follow LCA posting requirements, and (5) displacing U.S. workers as an H-1B dependent employer.

  1. Paying a wage lower than the required wage

    H-1B employers are required to pay wages to H-1B employees that at least equal what U.S. workers would receive for the same type of occupation. Knowing what wage the USDOL will accept and what wage will be considered too low can be a complicated and delicate process. This involves consideration of what a typical U.S. worker’s wage would be for the specific occupation and job title. This can vary greatly depending on the geographical location of the workplace, and careful planning is necessary to be sure the wage meets or exceeds the prevailing wage for that specific area. The USDOL investigator will look at job descriptions, job titles, duties, wages, benefits, as well as other factors to determine whether an H-1B employer is in violation of wage requirements.

  2. Employing a worker outside of the dates allowed

    There are strict start and end dates of H-1B employment in which the employee is allowed to work, and the employer must be sure that the H-1B worker’s employment is within those dates. The investigator may look at factors including the date the I-9 form was completed, when the benefits package was offered, and dates such as when the H-1B worker was first admitted into the U.S., the date of H-1B petition approval, the date of change of immigration status if any, and the date the H-1B worker changed employers if applicable. Termination of an H-1B employee before the end date may be a violation unless the termination was bona-fide and the employer follows proper USDOL procedures.

  3. Making improper deductions from wages

    Improper deductions from an H-1B worker’s wages may cause the wage to fall below the required minimum level and can be a violation. Deductions must be required by law, reasonable and customary, or voluntary. Deductions can be deemed involuntary even if the employee agrees to them. Examples of such deductions include business expenses, immigration attorney fees and costs, travel and living expenses that exceed the fair market value or actual cost, as well as deductions that exceed 25% or otherwise violate garnishment laws.

  4. Failure to follow LCA posting requirements

    H-1B employers are required to provide notice of LCA filing to the employee’s bargaining representative, or if none exists, must post a hard copy or electronic notice at each place of employment. Hard copies must be posted in two conspicuous places for 10 days, and electronic notices must be provided to all affected employees in that occupational classification. Notices must be drafted according to USDOL standards. Employers are required to maintain an LCA Public Access file as evidence that the employee has complied with all LCA posting requirements.

  5. Displacing U.S. workers as an H-1B dependent employer

    Employers that are deemed to be “H-1B dependent” or a “willful violator” are subject to additional requirements. An employer is considered to be H-1B dependent when it has:

    • 25 or fewer full-time employees, and at least eight H-1B employees, or
    • 26 to 50 full-time employees and at least 13 H-1B employees, or
    • 51 or more full-time employees and 15% or more are H-1B employees, or
    • Received funds from the federal government under title I of the Emergency Economic Stabilization Act of 2008 38 or section 13 of the Federal Reserve Act and has not repaid those funds.

    An employer is considered to be a willful violator when it was previously found to have willfully committed a violation or made a misrepresentation of material fact during the H-1B visa audit process.

    H-1B dependent employers are required to actively recruit U.S. workers for the H-1B jobs, and such recruitment must meet several criteria. In addition, H-1B dependent employers must not displace U.S. workers by its hiring of H-1B nonimmigrants, which is also determined by several criteria.

    However, these two requirements to actively recruit and non-displacement do not apply for “H-1B exempt” nonimmigrants, which are those who receive an annual wage of at least $60,000, or have a master’s degree or higher in a specialty related to the occupation.

Consequences of LCA violations

An employer that has been found to have committed LCA violations are subject to civil fines ranging from $1,000 to $35,000 per violation. The employer is also subject to a one to three-year debarment from employing H-1B workers. These consequences can be devastating, and therefore it is crucial to retain competent legal counsel to properly and legally negotiate the LCA process.

How to contact us

If you have questions about the LCA process, or concerns about an H-1B visa, immigration visa, green card matter, or any other immigration process, please contact our immigration attorneys or call The Law Firm of Shihab & Associates, Co., LPA at the nearest office close to you to consult with an attorney. Our law firm handles various matters including Green Cards and Permanent Residence, family immigration, immigrant visas, non-immigrant visas, employment visas and H1B visas, Investor Visas, PERM applications, and many more. Please contact us and experience how our law firm can assist you in your immigration matters. Whether you are an employer, an employee or a family member, the Law Firm of Shihab & Associates, Co., LPA has competent, responsive and innovative lawyers who can make your immigration experience pleasant and seamless.

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