Criticism of DOL's H1B Regulations
Posted May 25, 2001

Senator Sam Brownback, Chairman of the Senate Immigration Subcommittee, wrote a detailed letter on April 23, 2001 to U.S. Secretary of Labor Elaine Chao and to Michael Gimley at the Office of Enforcement Policy at the Wage and Hour Division of the U.S. Department of Labor (DOL), commenting on his concerns with the DOL's Interim Final Rule on H1Bs.

The Interim Final Rule, published December 20, 2000, has been the subject of negative public comments from a wide variety of observers and groups, including the American Immigration Lawyers Association (AILA) as well as business owners.

Senator Brownback was also highly critical of the DOL's rule. He began by commenting that in some countries, an all-powerful bureaucracy purposely makes the rules so complicated that compliance is nearly impossible, and agencies can simply decide arbitrarily which rules to enforce against whom. However, he comments, immigrants come to America because the system does not work that way here.

Senator Brownback also notes that the Clinton Administration rushed to publish these rules toward the end of the term, and expresses the hope that the Bush Administration will review them carefully and make changes. Senator Brownback declares that the overall thrust of the regulations shows a bias against foreign workers and the companies that employ them. He also points out that many of the rule's provisions are contrary to the law and also contrary to the contemporaneous guidance of Senator Abraham, who is currently the Secretary of Energy. Senator Abraham was the chief author of the 1998 H1B law known as ACWIA (American Competitiveness and Workforce Improvements Act) that the rule seeks to implement.

Some of Senator Brownback's specific objections are described below.

Traveling Employees

The DOL regulation requires employers to keep detailed records of the movement of H1B employees, including all locations and the amount of time spent at each location. The definition of "worksite" or "location of employment" is very unclear, so that it is difficult for employers to determine which locations are considered worksites and which are just places one visits in the course of doing the job. Since the rules as to when a new LCA is required, depend on making the determination of whether a place is a worksite, employers who try in good faith to comply will never really know if they are doing it right. It is not a standard business practice to develop elaborate monitoring systems for travel of employees, and Congress did not give DOL the authority to require such systems.

An even more problematic issue is that, in some instances, the regulation requires employers to post notices regarding H1B workers at third party sites, even though they have no control over those sites. If the third party refuses to post the notice, or takes it down before the 10-business day requirement, the primary employer can be subject to enforcement and penalties. It is both unreasonable and beyond the agency's authority to impose a requirement that is impossible to meet.

Legal Fees as a Business Expense

The proposed regulation states that employers must pay all costs of the H1B process, including legal fees. Senator Brownback points out that the law specifically requires employers to pay the $1000 "training fee" but intentionally does not specify who pays the other expenses. Issues of who pays for what are more properly the subject of negotiation between the employer and employee. The government should not involve itself in this issue. Senator Brownback found it "disturbing" that DOL considers attorney's fees to be a business expense of the employer, when so much is at stake for the employee in ensuring that the papers are filed properly. The employee should be free to hire an attorney of his or her own choosing, and to pay the attorney's fees. DOL does not have the authority to insist otherwise.

LCA and Documentation Requirements

The statute states that DOL is to review the LCA form only for "obvious inaccuracies," and then to certify it, within seven business days. The LCA filing is an attestation process, meaning that the employer is reporting information and making promises. If DOL later finds that the employer misrepresented the information and failed to comply with the promises, there are enforcement mechanisms allowed by law. However, the regulatory scheme proposed by DOL imposes substantial burdens on employers at the outset, before any violation is suspected or found.

For example, for the purpose of determining the actual wage paid to similarly employed workers at the company, DOL requires that the employer have a "wage system." In fact, the regulation requires employers to keep almost 30 different types of records and information on file; the actual wage documentation is only one of those items.

DOL's Failure to Process LCAs within 7 Days as Required by Law

The Immigration and Nationality Act specifically mandates that LCAs be processed within seven days of filing. Yet the current, "faxback," system is wholly inadequate, resulting in significant processing delays. Previously, employers had a choice of systems to use: the faxback, or a backup mail-in system. Now, however, faxback is the only means available for filing an LCA.

The Senator proposes an electronic filing system. The technical problem of signature recognition can be solved by allowing DOL to process an unsigned form, while requiring the signed form to be sent to INS.

AC21 "Portability" and LCAs

As many MurthyBulletin readers are aware, section 105 of the October 2000 law known as AC21 allows an H1B worker to start a new job once the new employer files the petition with INS. Previously, it was necessary in all cases to wait for INS approval of the H1B Petition.

However, the DOL regulation improperly requires that the new LCA be certified before the worker can be employed at the new company. Senator Brownback accuses DOL of thwarting the intent of Congress by requiring a certified LCA, especially in view of the fact that DOL is unable to process the LCA on a timely basis.

Furthermore, the Senator points out that it is within the authority of INS, not DOL, to decide which non-citizens are authorized to work in this country. As stated in prior MurthyBulletins, INS has been continuing to accept H1B petitions with uncertified LCAs, in order to mitigate the hardship caused by DOL's failure to certify LCAs in a timely manner.

Recruitment Methods and Documentation

Certain employers classified under ACWIA as being H1B dependent, based upon the proportion of H1B workers to the total workforce, are subject to additional promises, or "attestations" on the LCA. One of these attestations obligates the employer to make good faith efforts to recruit U.S. workers for the job. Chairman Brownback quotes Senator Abraham's comments that the recruitment attestation requires employers to engage in the normal recruiting methods that are common in the industry. Senator Abraham states that employers should not be given a particular set of steps to follow, and that the DOL does not have the authority to establish such a scheme by regulation either.

Yet, in its rule, the DOL attempts to do just that. DOL directs employers to use both active and passive recruitment methods and to recruit both inside and outside their own organizations. Senator Brownback states that DOL has no authority to establish these requirements and would not have the authority to bring enforcement actions against employers for failing to follow them.

Moreover, according to Senator Abraham's comments, ACWIA does not require employers to keep extensive records so that they can retroactively explain any hiring decisions. Yet, as Senator Brownback points out, the DOL regulation requires employers to keep every single document connected with a job applicant.

New Violations and Penalties

Perhaps the most stunning example of overreaching in the regulations is DOL's attempt to expand its enforcement power. According to Senators Brownback and Abraham, the regulation sets forth a variety of new violations and new remedies. Some of the violations are expressed in such broad, vague language that DOL would appear to have huge latitude in deciding when a violation exists. Of course, such a broad interpretation of violation can be a trap for an employer who tries in good faith to comply, but cannot determine what the rules actually are. Senator Brownback declares, "No agency should have this kind of unfettered power, and it certainly was not authorized by any of the statutes governing the H-1B process."

For example, after listing specific violations, the regulation includes a catch-all provision, allowing penalties for any other failure to comply that is not otherwise mentioned. In addition to the penalties that are authorized in the law, DOL further gives itself the power to impose any other penalties that DOL may find appropriate. Again, this language is much too broad.

In fact, Senator Abraham's comments specifically address the possibility that the DOL may try to exceed its authority under the law. The comments therefore provide specific guidelines as to what constitutes a violation and what penalties can be imposed. Senator Brownback quotes a section of Senator Abraham's comments in which he describes earlier attempts of DOL to have the language of ACWIA grant it broader authority, and the Senate's refusal to comply with DOL's suggestions. Senator Brownback criticizes DOL for using the regulatory process to grant itself this additional authority.

A New Attitude

Senator Brownback declares that by passing AC21, Congress was recognizing the important contributions of foreign workers to the U.S. economy. Yet DOL's regulation shows a contrary view, by imposing a burdensome set of requirements that make all employers guilty until proven innocent. Since willful violations have been few, Senator Brownback asks why all employers should be forced to spend time and resources complying with this complex regulatory scheme. Rather, he expresses the hope that the regulation be revised so that it does not exceed the requirements of the statute, and does not unduly burden U.S. employers.