January 27, 2011

The H-1B Visa and Employer Responsibilities

Holland & Knight Alert
Tara L. Vance

The H-1B visa is a professional or specialty worker visa and one of the most commonly used and in demand visa types available to entities wanting or needing to hire foreign nationals. The prerequisites for an H-1B visa, which is employer-specific, are that (i) the foreign national for whom the H-1B visa petition is filed by the employer must have at least the equivalent of a U.S. Bachelor’s degree in a profession, (ii) the proposed job position must require someone with such an educational background and (iii) the proposed salary being offered by the employer to the foreign national must at least equal that which the U.S. Department of Labor (DOL) deems to be the prevailing wage rate of similarly employed individuals in the United States. Additionally, because H-1B visas are subject to an annual cap limiting the number available in any one fiscal year, there must be an H-1B visa available.

Most employers who hire foreign nationals have been faced with the situation where they have found a candidate to fill a needed position only to find out that, because the candidate is a foreign national, he or she cannot begin working immediately. Instead, before the foreign national can begin working, he or she needs to be in H-1B visa status. Additionally, with the changes in the economy, employers have to face tough decisions about cutting work forces. It is important, therefore, that employers have a complete understanding of their obligations relating to hiring and terminating H-1B visa holders. An employer’s responsibilities relating to H-1B visas stretch from the hiring of such employees to terminating the employment of an H-1B visa holder. The failure to abide by the regulations can result in the employer being subject to a fine or imprisonment.

Filing the Labor Condition Application

When a candidate is identified and the employer realizes the candidate requires an H-1B visa in order to work, the first consideration is determining whether the candidate already has an H-1B visa that he or she has been maintaining (in which case the employer files to amend that H-1B visa) or whether the candidate needs a new H-1B visa petition filed on his or her behalf. Assuming that the employer can file an amended or new H-1B visa petition on behalf of the candidate, the first step in the process is filing and obtaining certification from DOL of a Form ETA 9035E Labor Condition Application for Nonimmigrant Workers (the LCA).

In an effort to ensure that the U.S. labor market is not undermined by the hiring of foreign nationals at low wages, there are several attestations and activities required of the employer relating to the LCA. The first involves the wage being offered to the foreign national. The employer must pay the foreign national at least the higher of the wage that is, at minimum, equal to the prevailing wage rate for similarly employed individuals in the United States or the actual prevailing wage for the position, which is what the employer pays to other employees holding such a position with similar experience and qualifications. The prevailing wage rate is determined by obtaining a salary survey from DOL, or another source that is deemed acceptable to DOL, and providing this information on the LCA.

As part of the LCA, the employer also attests that it will pay the above wage to the foreign national for time in nonproductive status due to a decision of the employer or due to the H-1B foreign national not having a required permit or license, and that the foreign national will be offered benefits and eligibility for benefits on the same basis as that offered to U.S. citizen workers. Further, the employer must attest that the hiring of the foreign national pursuant to an H-1B visa will not adversely affect the working conditions of workers similarly employed and that all such foreign national hires will be afforded the same or similar working conditions as those offered to U.S. citizen workers.

The LCA also requires the employer to affirm that it is not experiencing a strike, lockout or work stoppage in the course of a labor dispute in the named occupation and that, if such an event occurs after the filing of the LCA, the employer will notify the proper DOL authorities within three days of such an event occurring, in which case the LCA is not able to be used in support of an H-1B visa petition until DOL has determined that the strike, lockout or work stoppage has ceased.

The last attestation is two-fold and involves providing notice of the LCA. As such, the LCA requires the employer to confirm that as of the date of the LCA being filed, notice of the LCA has been or will be provided to workers employed in the named occupation either through the bargaining representative or, if no bargaining representative exists, through a physical posting in two conspicuous locations where the foreign national will be employed or through electronic notification to employees in the same occupational classification. Such notice must be posted on or within 30 days prior to the LCA being filed and must remain posted for at least 10 days. Additionally, the employer must attest that the foreign national for which the LCA is filed will receive a copy of the LCA that has been certified by DOL no later than the first day of employment and, if requested, a copy of the LCA cover pages. While not an attestation, the LCA also requires the employer to confirm its status regarding H-1B dependency and being a willful violator.

While the above may seem complicated and time-consuming, completing and filing the LCA with DOL is relatively straightforward and easy. Once prepared, the LCA is filed online and is typically certified by DOL within seven to nine days. For employers filing an initial LCA, it is prudent to first pre-clear the employer’s Federal Employer Identification Number (FEIN) with DOL. Failing to pre-clear the employer’s FEIN almost guarantees that the initial LCA filed will be denied, after which the employer will need to evidence to DOL its FEIN prior to refiling the LCA.

Public Access File

As part of the LCA and H-1B visa petition process, the employer must agree to make certain information relating to the LCA available for public examination at the employer’s principal place of business in the United States or at the place of employment within one working day after the date on which the LCA is filed with DOL. Such information is referred to as the Public Access File and should consist of the following items: (i) a copy of the LCA and related cover pages; (ii) documentation providing the wage rate to be paid to the H-1B employee; (iii) a detailed explanation of the employer’s system used to set the actual wage to be paid to the employee; (iv) documentation used by the employer to determine the prevailing wage; (v) documentation evidencing the employer has complied with the union employee notification requirements, if there is a union; and (vi) a summary of the employer’s benefits offered to U.S. workers in the same occupational classification, an explanation regarding the difference in benefits offered to such employees if all employees in the same occupational classification are not offered the same benefits and, if applicable, an explanation of any home country benefits the H-1B employee will receive. Additional information is required to be placed in the Public Access File if the employer is H-1B dependent or a willful violator.

The employer should maintain a Public Access File for each H-1B visa employee, which should be separate from the employee’s personnel file. The Public Access File must be maintained by the employer for at least one year past the date of the employee’s related employment.

Employing an H-1B Visa Holder

The H-1B visa petition can only be filed when and if the LCA is certified by DOL. If the foreign national candidate already has a valid H-1B visa, the employer is able to employ the foreign national as soon as the H-1B visa petition has been filed with the U.S. Citizenship and Immigration Service (USCIS), which issues a filing receipt evidencing that the visa petition has been received and is being processed. If the candidate does not yet have an H-1B visa, the employer must first file the H-1B visa petition with the USCIS and obtain approval of the submission, after which the USCIS will issue an approval notice, the original of which must then be used by the foreign national to apply for issuance of the actual H-1B visa in his or her passport.

The employer’s responsibilities continue during the employment of the H-1B visa holder. As long as the employer continues to employ the H-1B visa holder, the employer must continue to pay the employee at least the wage indicated on the LCA and in the indicated geographic location. If there are any material changes to the employment, including with respect to the H-1B visa holder’s duties and responsibilities or a change in the location of the employment, a new LCA must be filed as well as a new or amended H-1B visa petition. Additionally, if the employer undergoes a reorganization such that any of the information set forth in the LCA is no longer accurate, steps must be taken by the employer to confirm the continued compliance with the LCA and underlying H-1B visa petition.

Terminating an H-1B Visa Holder

Upon terminating an H-1B visa holder, the employer is obligated to pay the reasonable costs associated with the employee’s return flight home. In most instances, this is not an issue because typically when an H-1B visa holder leaves one employment, he or she is accepting another employment opportunity and, as a result, does not return to his or her home country. Additionally, upon such a termination, it is in the employer’s best interest to withdraw the related LCA and to also notify the USCIS of the termination of employment pursuant to the previously approved H-1B visa petition, each of which will provide the employer with further evidence of the termination of employment and the employer’s related obligations.

Because employing foreign nationals pursuant to an H-1B visa entails many critical responsibilities for the employer, it is in the employer’s best interest to take responsibility for the preparation and filing of the LCA and related H-1B visa petition rather than permitting the employee or the employee’s lawyer to handle such matters. This further makes sense because the H-1B visa petition is employer-specific and filed by the employer on behalf of the employee. Any misrepresentations or fraudulent information set forth in the LCA or H-1B visa petition can subject the employer to a fine or imprisonment.

In these tough economic times, we are seeing an increase in H-1B visa holder hiring and terminations. Employers must therefore be careful to protect their interests and ensure that their responsibilities and obligations relating to such employment is commenced and terminated efficiently and effectively to avoid penalties of any kind.

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