U.S. immigration laws require employers to hire only individuals who may legally work in the United States:
- U.S. citizens
- Noncitizen nationals
- Lawful permanent residents
- Aliens authorized to work
To comply with the law, employers must verify the identify and employment authorization of each person they hire by completing and retaining Form I-9, Employment Eligibility Verification for each employee. At the same time, employers must refrain from discriminating against individuals on the basis of national origin or citizenship. All employers must complete Form I-9 for every new employee that is hired after November 6, 1986.
All H-1B and E-3 employers are required to make certain attestations to the U.S. Department of Labor (DOL) on a Labor Condition Application (LCA) Form ETA 9035E:
- Wages: An H-1B or E-3 employer must pay at least the prevailing wage or the employer’s actual wage, whichever is higher, for the occupation.
- The wage, for this purpose, cannot include discretionary bonuses, commissions, benefits, etc.
- No “benching” — the employer must pay H-1B and E-3 workers for non-productive time — e.g. lack of assigned work, economic hardship, period of time while obtaining a license, or any other reason due to a decision of the employer.
- Benefits offered to H-1B workers must be on the same basis and criteria as those offered to similarly situated U.S. workers.
- Working Conditions: An H-1B or E-3 employer must provide working conditions for H-1B and E-3 workers which will not adversely affect the working conditions of workers similarly employed.
- Working conditions include hours, shifts, vacation periods, and benefits such as seniority-based preferences for training programs and work schedules.
- Strike, Lockout or Work Stoppage: An H-1B or E-3 employer must attest that there is no strike, lockout, or work stoppage in the named occupation at the place of employment.
- Notice: An H-1B or E-3 employer must attest that a notice to the union or to workers has been or will be provided in the named occupation at the place of employment. A copy of the LCA will be provided to each H-1B or E-3 worker employed pursuant to the application.
- The required notice must be provided on or within 30 days before the LCA is filed.
- Where there is no collective bargaining representative (i.e. union) for the occupational classification in which the H–1B or E-3 worker will be employed, the notice must be posted for 10 business days in two conspicuous locations at each worksite where an H–1B or E-3 worker will be employed (whether such place of employment is owned or operated by the employer or by some other person or entity). In case of consulting companies which assign H-1B or E-3 workers to an off-site or client worksite location, the mandatory notice must be posted at all off-site and/or client worksite locations.
- A copy of the LCA must be provided to the employee on or before the first day of employment.
Additional H-1B Employer Obligations
In addition to the labor condition attestations, an H-1B employer also has the following responsibilities:
- Payment of the ACWIA Training Fee — As part of the American Competitiveness and Workforce Improvement Act, an H-1B employer is required to pay a training fee of $750 (if the company has 25 or fewer employees) or $1,500 (if the company has 26 or more employees) for initial H-1B petitions (including change of employer petitions) and the first H-1B extension petition on behalf of the same H-1B employee. While it is permissible for foreign nationals to pay some of the H-1B government filing fees, provided that such payment does not depress the foreign national’s wage below the minimum prevailing wage, an H-1B worker cannot pay the ACWIA training fee or reimburse the employer for part or the entire ACWIA training fee.
- Payment of “reasonable costs of return transportation” — If an H-1B employer terminates or lays off an H-1B employee, the employer must offer the H-1B employee “reasonable costs of return transportation” to the H-1B employee’s residence abroad. This employer obligation does not apply in cases where:
- The H-1B employee voluntary resigns; or
- The H-1B employment expires.
- Notification requirement — If an H-1B worker is terminated, laid off, or voluntary leaves employment before the H-1B expiration date, the H-1B employer must notify the U.S. Citizenship and Immigration Services (USCIS) of the termination and withdraw the H-1B petition and the LCA.
An H-1B amendment must be filed if there are material changes involved. An amendment is required in some of the following scenarios:
- Demotion or promotion or any kind of changes to an H-1B worker’s job duties or job title;
- Change in physical location of an H-1B worker’s worksite;
- Change in hours from full-time to part-time or from part-time to full-time;
- Merger, acquisition or any type of corporate restructuring;
- Reduction in salary.
H-1B Audits & Investigations
USCIS created the Fraud Detection and National Security (FDNS) unit to strengthen USCIS’ efforts to ensure that immigration benefits are not granted to individuals who pose a threat to national security or public safety, or who seek to defraud the immigration system. There are about 1,500 FDNS investigators who conduct unannounced visits at H-1B work sites. So, if you have ever filed an H-1B or H-1B extension, don’t be surprised if you are paid a “friendly” visit by an FDNS officer.
The FDNS investigators are typically contractors and are not Department of Homeland Security (DHS) officers. They typically have a copy of the H-1B petition and ask to meet with the H-1B worker as well as with an HR Manager or supervisor. Most questions relate to the job duties to ensure consistency with the information that was included in the H-1B petition (job duties, job title, salary, number of hours worked). FDNS investigators typically asks to see payroll records to ensure payment of the prevailing wage.
PERM Labor Certification Application (Green Card) Costs
The PERM labor certification process is typically the first of step of the permanent residency (or “green card”) application process. The current DOL rules governing labor certification applications prohibits the foreign worker from paying employer-incurred costs, including attorney’s fees, related to the labor certification application. This means that all legal fees and any associated costs related to a PERM labor certification must be paid by the sponsoring employer (NOTE: the foreign worker may pay for the next steps — I-140 immigrant visa petition and I-485 adjustment of status application — of the green card application process). Any agreement that would require the foreign worker to reimburse the sponsoring employer for some or all of the labor certification fees is considered by DOL as a violation of the regulation. This could result in the denial of a pending application, debarment of the U.S. employer from the labor certification program for up to three (3) years, or any combination of the three. DOL takes the position that the sponsoring employer cannot truly conduct a “good faith” recruitment effort if the foreign worker pays for the PERM labor certification process.