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Common Areas of Concern and Violations

FREQUENT AREAS OF CONCERN IN THE H-1B AUDIT PROCESS

The H-1B visa audit conducted by the US Department of Labor (“USDOL”) is an investigation into a company’s Labor Condition Application (“LCA”) practices. Federal law requires a company sponsoring H-1B visa workers to keep certain promises called attestations, post internal notices and keep certain records. The USDOL takes these matters very seriously and will inquire as to whether the employer has complied with its promises during the H-1B audit investigation process. If certain promises were not kept, the employer may face certain penalties. The following is a list of common problems usually discovered by USDOL investigators during the audit process. Remember that many of these problems could be rectified if the employer partners with immigration counsel who can help the company avoid these pitfalls.

I.     FAILURE TO MAINTAIN A PUBLIC ACCESS FILE FOR EACH LCA

The H-1B employer must create and maintain a public access file for each LCA filed. At a minimum, the public access file must contain the following documentation: 1) A copy of the certified LCA; 2) Proof of compliance with the internal notice requirement for each worksite; 3) Documentation that provides the wage rate to be paid to the H–1B employee; 4) A full, clear explanation of the system that the employer used to set the ‘‘actual wage’’ the employer has paid— e.g., a memorandum summarizing the system or a copy of the employer’s pay system or scale; 5) Documentation the employer used to establish the ‘‘prevailing wage;” 6) Document(s) with which the employer has satisfied the employee notification requirement with; and 7) A summary of the benefits offered to U.S. workers in the same occupational classifications as the H-1B employee.

Our firm prepares an LCA public access file for each H-1B visa that we file. Hence, our clients do not have to worry about complying with any of these criteria because, as a benefit of working with our firm, we make certain that the regulatory requirements of LCA filing is strictly followed and adhered to.

The absence of the required documentation will, at least, be considered a level one violation. It is every employer’s responsibility to be aware of and follow Federal Regulations. The danger here is that the investigator could view the repeated omissions as a “willful” violation. This has the possibility of drastically increasing any assessed fines.

II.     FAILURE TO PROVIDE INTERNAL NOTICES, CREATE WAGE MEMORANDA, AND GIVE A COPY OF THE LCA TO THE ALIEN EMPLOYEE.

Before an employer files an LCA, the company is required to give notice to all employees for each worksite identified on the LCA. The notice can be physically posted or electronically sent. The absence of the required documentation will, at least, be considered a level one violation. It is possible that the USDOL could fine a company $1,000.00 for each violation. The danger here again is that the investigator could view the repeated omissions as a “willful” violation. This has the possibility of drastically increasing the maximum fine.

Such violations could require the USDOL to notify the Attorney General. This will preclude the company from filing new LCAs for a one-year period. If the violations are deemed willful, the ban will be for a two-year period.

III.      FAILURE TO FILE AN AMENDED LCA WHEN AN H-1B WORKER CHANGED LOCATIONS.

When a company files an LCA, it is required to list the location where the H-1B employee will work. The employee is only permitted to work at that location. If the change is permanent, the employer is required to immediately file a new LCA and comply with the notice and the other enumerated documentation. If an employee works for more than 30 consecutive days or 60 aggregate days within a 12 month period at a location not listed on the LCA, the employer must file a new LCA documenting that change.

IV.      FAILURE TO ACCURATELY SELECT THE APPROPRIATE WAGE LEVEL FOR AN H-1B EMPLOYEE.

An employer must select the appropriate wage level (one through four) for every H-1B employee. The appropriate wage is determined by the H-1B employee’s experience and qualifications. A company could not normally use level one to consistently apply for all of its H-1B visa employees. A pattern of selecting level one for each LCA filed could be indicative of “willful” violations which carry the institution of heavy penalties.

V.     FAILURE TO INCLUDE THE CORRECT WAGE ON THE LCA.

When an employer files an LCA, the company must ensure that the correct wage the H-1B employee will be paid is marked. Failure to pay an H-1B visa employee the proper wage as indicated is a serious matter which could cause the company to pay back wages, pay fines, and possibly be deprived of participating in the H-1B visa program.

VI.     FAILURE TO MAINTAIN RESPONSIBILITIES OF AN H-1B DEPENDANT EMPLOYER.

Under Federal Regulations, an employer becomes an H-1B dependant employer when it employs a certain amount of H-1B employees as follows:

  • If the company employs 25 or fewer full time employees and more than seven H-1B temporary workers.
  • If the company employs 26 to 50 full time employees and more than twelve H-1B workers.
  • If the company employs more than 50 full time workers and 15% or more of its employees are comprised of H-1B workers.

If a company is deemed an H-1B visa dependent employer, then it faces additional responsibilities including a bar against displacement of US workers within a period of 90 days before and ending 90 days after the filing of an H-1B visa petition based on an LCA; that the company is precluded from placing an H-1B visa worker at a third party worksite to fill a position substantially similar to one which had been filled by a displaced US worker. In addition, H-1B visa dependent employers must continually undertake good faith steps to recruit US workers for a wage equal to or more than the prevailing wage and must offer the position to any equally qualified US worker who would apply.

VII.      CONCLUSION

If an employer fails to document its compliance with these numerous responsibilities, it could be found to have violated the H-1B visa and LCA regulations. The Law Firm of Shihab & Associates, Co., LPA is experienced in representing its clients in an effective manner to insure that it continually complies with the LCA regulations. Contact the lawyers at The Law Firm of Shihab & Associates, Co., LPA to make certain that your company stays clear of any possible violations. Our law firm will partner with your company to make certain that you operate your company in a manner consistent with the regulations without worrying about compliance because that is our job. Contact an office nearest to you for an initial consultation or to connect with one if our attorneys.

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