 
 
 |
|
H1B LCAs & DOL Investigations : Understanding the Basics of Compliance
Posted Aug 13, 2008
This article was written by the attorneys of the Murthy Law Firm for
Murthy's Corporate Bulletin. If you are an employer or HR manager,
interested in the services offered by our firm, contact our
Corporate Services Manager.
The
August 6, 2008 teleconference, held by the Murthy Law Firm for employers and
their representatives, focused on the critical importance of complying with
and meeting the U.S. Department of Labor (DOL)'s laws and regulations under
the H1B Labor Condition Application (LCA) program. The terms "company" or
"employer" are used interchangeably in this article, although we realize
that many businesses are not necessarily incorporated, but may be LLCs,
general or limited partnerships, or other types of legal entities conducting
business and employing individuals. Both the DOL and the Immigration and
Customs Enforcement (ICE) are starting to investigate many technology-based
consulting companies, since they believe that LCA and H1B violations are
commonplace in companies of this type. This edition of Murthy's Corporate
Bulletin carries information that should help employers understand how the
LCA works and how employers can avoid violations that potentially would lead
to investigation. We also provide information on how to attempt to minimize
the fines or penalties, if there is an investigation.
LCA Program Background and Requirements
The LCA
program requires a U.S. employer who wants to sponsor a foreign national to
work in H1B status, to first submit the ETA Form 9035 to the DOL. The LCA is
filed online and requires the sponsoring employer to attest that the
required wage will be paid to the H1B worker, that the working conditions of
similarly-employed workers will not be adversely impacted, that there is no
strike or lockout at the time of filing the LCA, and that notice of the
filing has been provided to the bargaining representative or, in the absence
of a union, posted in the area of intended employment to notify other
employees. As the DOL is devoting greater resources to enforcing the LCA
program rules, it has become even more important to ensure that an employer
dedicates appropriate resources to compliance with the law. The Murthy Law
Firm has been successfully helping and guiding employers on compliance
issues as investigations and the possibility of penalties increase. We have
found that the best way to proceed is by setting a strong foundation when an
employer sponsors a foreign national for H1B status, so that the employer is
fore-armed with the tools and knowledge needed to effectively respond to any
investigation. Some of the questions discussed in this recent teleconference
are reviewed here.
-----
Q: I file the LCA with the Employment & Training Administration. Do they
also conduct the LCA compliance investigations?
No. Investigations are conducted by the DOL's Wage and Hour Division (WHD).
The WHD is one of the programs administered by the Employment Standards
Administration. The WHD's mission is to
promote
and achieve compliance with labor laws in the U.S. Often after the DOL has
concluded its investigation or during the WHD investigation, ICE
investigators will conduct their own separate investigation against the
employer for violations under the H1B documents. There are serious penalties
for an employer if a violation is found, since H1B documents are signed
under penalty of perjury and there are both civil and criminal penalties.
-----
Q: What triggers an investigation by the DOL WHD?
Generally, an investigation and, possibly, administrative proceedings can
be triggered in two ways: (1) A complaint filed with the DOL by someone who
claims to have been adversely affected by the alleged LCA violation/s. An
example of a common violation is an employer's failure to pay the wage
required by the LCA. (2) An investigation can be initiated
by the DOL itself. Since 2004, the DOL's investigative authority has been
expanded by the passage of a new law that permits the government to conduct
an investigation upon receipt of credible information from known sources.
-----
Q: Are there specific violations or problems for which the DOL investigator
will be looking?
The DOL investigator generally looks for violations that include material
misrepresentations, failure to pay the required wage, or failure to provide
notice of the filing of the LCA. Two other common types of violation for
which the DOL looks are the inappropriate acceptance of pay reimbursements
from employees for fees that the law states must be paid by the employer
filing the LCA and the failure to keep a Public Access File with all the
documentation that must be included by law for review.
-----
Q: Can the company being investigated still file LCAs? Will they be
approved?
During the DOL investigation, the company’s LCAs should still be
processed and approved if the LCA meets all of the law’s requirements. The
DOL regional offices should still be adjudicating LCAs because the
investigation by itself does not prohibit a company from filing new LCAs. Of
course, the employer must be more careful in filing new LCAs, to ensure that
they are in compliance with LCA laws and regulations, since they are under
greater scrutiny at this time.
-----
Q: What happens at the end of the DOL investigation?
At the end of the DOL
investigation, the investigator may conclude that there were no violations.
That, of course, would be the best result from an employer's perspective! If
the investigation reveals a violation, then a formal determination of a
violation or violations is issued. The determination should specify the
nature of the violations and penalties, called "remedies" by DOL. Penalties
include substantial fines, payment of back
wages, debarment from filing new LCAs for a period of up to three
years, and various other requests for future compliance. In addition, an
employer may become subject to criminal penalties. The determination should
also provide that the employer / company has the opportunity for a hearing
before a DOL Administrative Law Judge (ALJ). However, a hearing can be
requested by any interested party, including the original complainant. If no
hearing is requested, then the findings in the determination will become
final and the penalties will apply. If a hearing is requested, then an ALJ
becomes responsible for supervising the proceedings and guiding the matter
to a final resolution.
-----
Q: What can a company do if it knows that there are LCA violations? Can the
employer do something instead of waiting for a DOL investigation?
Yes, the employer should make every possible effort to comply with the
LCA and H1B requirements. If the company identifies past violations, it may
be possible to avoid harsh penalties if there was an attempt to correct the
errors and comply with the rules to avoid similar problems in the future.
Also, the DOL often may consider factors or circumstances to increase fines
or penalties where the employer's violations will affect a large number of
employees.
-----
Q: What measures should the employer take to avoid investigations by the
DOL?
The best way to avoid investigations
is, of course, avoid violations and attempt to comply with all the required
laws and regulations on the LCA. Every employer should have an established
internal system for complying with the LCA program and H1B rules. This may
seem obvious and sound quite simple but, in fact, most employers are so busy
running their businesses that they don't like to be bothered with technical
rules and paperwork. The employer should set up a system to include internal
monitoring of the H1B process, proper wage determinations and payments of
proper wage rates, maintaining the Public Access File with the documents
required by law, and periodic audits of their documents with outside
monitoring, whenever possible.
-----
Q: What is an internal audit? What is the best way to conduct internal
audits?
An internal audit is a proactive investigation by a company or business
of its own procedures and practices in connection with LCAs. It is generally
a good idea for the employer's internal audit to be conducted by a
designated outside entity, experienced with LCA and H1B compliance issues.
-----
Conclusion
- Murthy Law Firm Can Support You and Your Business
The Murthy Law Firm has successfully conducted LCA and H1B audits for
employers; both those undergoing investigations and those before an
investigation is started. After our initial assessment requiring the review
of a company’s records, our attorneys make recommendations on specific
violations found, as well as on general business practices with regard to
the LCA and H1B process. While the Murthy Law Firm’s team of experienced
attorneys is available to represent clients in negotiations with the DOL and
before the ALJ, our philosophy is that advance planning is best. This
includes conducting internal audits to identify and resolve problems, as
well as establishing an LCA and H1B process that satisfies DOL requirements.
This provides an employer with the greatest peace of mind and shows the DOL
good faith on the employer's part, which will be considered when penalties
are imposed. We at the Murthy Law Firm look forward to working with you and
helping you and your business succeed, so that you can focus on running a
profitable business!
©MurthyDotCom
We know immigration matters!
SM
Copyright © MURTHY LAW
FIRM. All Rights Reserved
|
|
|
