Beware of Fraudulent LC Substitution Cases
Posted Sep 09, 2005
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The practice of substituting beneficiaries into labor certifications recently has come under greater scrutiny, as regular MurthyDotCom and MurthyBulletin readers are aware. There is a U.S. Department of Labor (DOL) proposal to end the practice entirely. This proposed regulation has not yet been published, but it appears to be of great concern, affecting both U.S. employers and foreign workers. More information on the proposed regulation is available in our August 26, 2005 MurthyBulletin article, Proposal to End LC Substitution and Require Prompt I-140 Filing, available on MurthyDotCom.
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Substitution, essentially, is the replacement of the named beneficiary in a labor certification (LC) with another, equally qualified individual. We at The Law Office of Sheela Murthy wish to warn our readers to be careful to avoid involvement with improper LC substitution cases. Although there are certainly genuine substitution cases; there are also many that may be fraudulent. The DOL and USCIS are keenly aware of the fraudulent cases and are investigating and taking action when such fraud is detected.
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The process of obtaining a labor certification from the DOL was traditionally a slow process, as many of our readers are personally aware. Depending upon location, prior to the start of PERM in March 2005, labor certification processing could take years. With LC substitution, an individual gets to skip that entire lengthy process, use an already approved labor certification, and move forward with filing to obtain the "green card" by directly filing the I-140 petition. It is an enormous benefit to the substituted individual. It also saves the employer the effort of redoing the labor certification and avoids all of the associated expenses. The individual additionally gains certain benefits, including H1B extension eligibility, based upon the filing date of the initial labor certification.
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Illegal Sale of LC Substitutions
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The problem is that, because the labor certifications are so sought after by the foreign national, some employers and unscrupulous individuals apparently have created a market to sell these labor certifications to the highest bidder. The scale of this fraud has only recently come to light.
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The increasing interest in these previously-approved LCs appears to be tied, in part, to AC21 provisions. The value of the substituted labor increased as a result of specific AC21 provisions that allow for approval of a green card case through an employer other than the labor certification petitioner. Thus, some people seek out substitution cases through employers for whom they have never worked. They then try to use AC21 to obtain green card approval. Another incentive for abuse is the benefit under AC21 is that the priority date on the labor certification can be used as the basis for an H1B extension beyond the six year limitation. This often provides relief for an individual who is coming to the end of the six years on H1B, but who does not have a pending green card case. With so much at stake, the incentives for fraud of the labor certifications are high.
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What Makes a Labor Substitution Fraudulent?
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This ability to profit from having the valuable certification provided incentives for filing labor certifications that were not bona fide from the beginning. That is, there may not have been a genuine job offer or a genuine beneficiary of the initial case. Additionally, even if the case was good at the start, the sale of the labor certification means that there may not be a genuine job offer underlying the substitution case. That is, the company may just have sold the labor certification, but may not really intend to hire the individual on a full-time, permanent basis, as required by law, upon the approval of the permanent resident status based on that approved LC. Maybe the individuals are just using the labor certification to extend their H1B statuses; maybe the intent is, as discussed above, just to buy time or to try to use AC21 portability to get a green card case approved through a different employer without working for the substitution company. This is considered improper and fraudulent.
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Fraud can have many consequences, including criminal charges. From an immigration perspective, a case that is based upon a fraudulent labor certification can be terminated or revoked. That is, if an employer files an I-140 petition based upon a fraudulent labor certification, the I-140 can be revoked based upon the fraud. So, one could spend a great deal of money for the labor certification only to find that s/he ends up without a green card and no means to recover all the money spent. Of course, one could also become the target of fraud investigation. The government is aware of the improper use of LCs and is taking action.
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There are many ways a company could come to the attention of the DOL or USCIS. Cases that are filed reveal company size and financials. The USCIS can track the number of filings made by an employer. If it is disproportionate to the size of the company, i.e. many green card cases filed by an employer with relatively few employees, this may be an indicator that something is wrong. They may investigate employers with repeated substitution cases. They may investigate lawyers and other individuals whose names are associated with these repeated cases, and make connections in that manner. The government is experienced with investigations of fraud and has the resources to conduct those investigations which they feel are important.
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How to Avoid an Association with Fraudulent Substitution
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When considering whether to have an LC Substitution case filed by a particular employer, the individual should consider the general reputation of the employer. If they are in the business of selling labor certifications to anyone wishing to buy them, avoid that employer. Labor certifications are supposed to represent a job offer. Companies are supposed to make offers to those they select for employment, not someone merely willing to pay a fee for the process. A legitimate employer that happens to have some labor certifications that were approved for prior employees, using substitution can be a valuable shortcut to the green card.
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It is always best to know your employer's reputation and to choose carefully. Even if every aspect of one's case is legitimate, problems can arise if the employer has been engaged in fraud. The USCIS can challenge I-140 filings if the company has filed more cases than it can support. Thus, even if one's case is genuine, it can encounter problems if the employer has filed others that may not be bona fide. Employers must show that they can pay the prevailing wage for the job offered. The USCIS sometimes asks for proof pertaining to all pending cases, not just a single case. If the company has offered more jobs than there are funds to support, all of the cases could run into problems.
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Conclusion
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Anyone who may have gotten involved with the practice of fraudulent substitution, innocently or otherwise, may need to review his or her immigration situation. If the labor substitution case is questionable, it may be time to, at the very least, consider working with a reputable and experienced immigration lawyer who is able to navigate the system, offering advice and options within the legal framework.