Published on March 1, 2014
H-1B Compliance: 9 Costly H-1B Visa Mistakes Employers Make and How to Avoid Them Presented by Cowles & Thompson, PC February 26, 2014
Ask Questions Anytime Use your chat pane to type and send your questions. Questions will be answered during the presentation and during the Q & A session.
Presenters Angela M. Lopez Ann M. Badmus Thu T. Nguyen
Webinar Agenda H-1B Application Mistakes to Avoid 1 LCA Compliance Mistakes to Avoid 2 How To Document LCA Compliance 3 H-1B/LCA Internal Audits 4 5 DOL And DHS Investigations Copyright 2009
Agencies U.S. Department of Labor (USDOL) U.S. Citizenship and Immigration Service (USCIS) Wage and Hour Division (WHD) of USDOL
Enforcement and Investigation USCIS USDOL WHD • Surprise Site Visit • Petition Denial/Revocation • Audit • Fines/Debarment • Complaint Investigation • Damages/Debarment
Penalties Civil Money Damages Back Wages Fringe Benefit Reimbursement Debarment Negative Publicity
H-1B Application Mistakes to Avoid
H-1B Application Process ETA9035 Labor Condition Application (LCA) I-129 H Petition I-797 Approval Notice
Mistake # 1 Failure to Provide Accurate Data Employer Information •Correct Name •FEIN Employment •Rate of pay Information •Locations Business Information •H-1B employees •Third party sites
Mistake #2 Failure to File on Time H-1B Numerical Limitations Extensions/ Renewals Amendments
Labor Condition Application Mistakes to Avoid
Mistake #3 Failure 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
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
Prevailing Wage Choose the appropriate criteria •Occupational Class •Skill Level – I,II,III,IV •Geographic area of intended employment
Actual Wage Documented wage paid to all other employees with similar experience and qualifications for the specific employment •Experience and qualifications •Education •Job responsibility and function •Specialized knowledge •Legitimate business factors
Mistake #4 Violating Wage Deduction Rules Employers may not deduct its business expenses from employee’s wages •ACWIA fee •Anti-Fraud fee •Attorney fee
Mistake #4 Violating Wage Reduction Rules (cont.) Employers may not require repayment of petition costs or related business expenses upon employee’s termination of employment
Mistake #5 Failing 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.
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 training Payment is not required for truly voluntary absences
Mistake #7 - Failing to Properly Document Employment Termination Written notice of termination to employee Bona Fide Termination Required Offer of return transportation to depart the U.S. Written notice to USCIS withdrawing H-1B
Mistake #8 Failing 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
Mistake #9 – Failing to Maintain Required 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
How to Document LCA Compliance
Public Access File Certified LCA (ETA9035) Rate of pay for the H-1B worker Actual wage memorandum Prevailing wage determination Proof of LCA posting
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”
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
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)
Public Access File (cont.) H-1B Dependent Employers must include in the PAF: • List of “exempt” H-1B workers, if LCA indicates only exempt workers will be employer or • Summary of recruitment methods and timeframes for recruitment of U.S. workers and • Attestation that hiring an H-1B worker will not displace any U.S. worker in similar position within 90 days before or after the H-1B petition is filed.
LCA File Maintain for USDOL (not disclosed to public): • All documents included in public access file • LCA receipt acknowledgement from H-1B employment • 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
Retention Requirements Public access file must be maintained: •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.
H-1B/LCA Internal Audits
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
Conducting an LCA Self-Audit •Public Access File for each occupation •Appropriate position classification •Correct prevailing wage/actual wage •Documentation of employment changes
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
Preparing for USDOL and USCIS Audits & Investigations
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
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 I94, 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
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
Questions? Need More Information? Feel free to contact us. Cowles & Thompson, PC 901 Main Street Suite 3900 Dallas, Texas 75202 214-672-2000 Telephone firstname.lastname@example.org www.cowlesthompson.com Copyright 2009
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