Employer Responsibility – PERM Audit Compliance File10 Jul 2017
Under the PERM labor certification process, supporting documentation is not submitted to the U.S. Department of Labor (DOL) with the PERM application. Instead, the employer must retain the required documents and produce them for the DOL in the event of an audit. The requirements for document retention by employers filing PERM labor certifications are summarized here.
Employer Must Retain Audit File for Five Years
The DOL can audit a PERM labor certification either before adjudication of the application or for up to five years. This means that the employer must keep what is commonly referred to as a compliance file or audit file for five years from the date of filing. It is important to understand the required documentation that the employer must retain within the compliance file. It should be noted that employers can engage in a bit of spring-cleaning by shredding any compliance files created for cases filed more than five years ago.
Retention of Certain Company Documents
At the Murthy Law Firm, we prepare compliance files for our employer clients as part of our work in each PERM labor certification case. The compliance files we compile begin with proof of the existence of the sponsoring company. This documentation may include articles of incorporation, business license/s, and related documentation. A company brochure is also generally included.
The sponsoring employer must be prepared to document the ability to pay the proffered wage from the time of the labor certification filing. Documentation in support of ability to pay the worker generally includes: company tax returns, audited financial statements, annual reports, and other secondary evidence that establishes the company’s financial capability to pay for the proffered position.
Retention of Certain Recruitment and Wage Documentation
The next list of items pertains to the required wage determination and recruitment efforts. It is necessary to obtain a prevailing wage determination (PWD) from the DOL as part of the PERM process. This PWD needs to be retained in the compliance file. Proof of the recruitment efforts and outcome is an important component of the compliance file. Documentation of the recruitment efforts must include proof of the placement of the State Workforce Agency (SWA) job order and tear sheets from the required newspaper advertisements. Documentation for professional positions must include evidence of engaging three additional forms of recruitment. The file must also include the required notice of posting, with proof of mailing to the bargaining representative (in cases involving a union).
In some instances in which a company has experienced recent layoffs, it must be shown that the employer notified the potentially qualified, laid-off U.S. workers, and considered any of these interested, former employees. More information on the requirements for PERM applications, if layoffs have occurred, can be found in the MurthyDotCom NewsBrief, Labor Certifications After Employee Layoffs (30.Nov.2016).
The employer must also have records of the various recruitment efforts and the results of each. This essentially answers questions about who applied and why any U.S. applicants were not considered to meet the standards of ability, willingness, and qualification for the offered position. This documentation includes a summary of the results of recruitment and resumes of the applicants for the position. There must be documentation of contact with any potentially qualified applicants (including copies of eMails and telephone logs), notes from any job interviews with the candidates, and documentation of rejections of applicants.
Sponsored Employee’s Documents
The compliance file must hold proof that the sponsored employee met the requirements for the offered position. The file, therefore, must contain documentation of the employee’s relevant education, with a credentials evaluation (if appropriate). In cases where experience is required in order to qualify for the job, the file must hold proof of this prior experience, typically in the form of detailed experience letters from former employers to outline the nature of the earlier job duties. If licenses or certifications are needed for the position, evidence that the sponsored worker held these requirements as of the time s/he was hired for the position also must be included in the file.
Business Necessity Explanation in Certain Circumstances
In some cases, if the employer’s minimum requirements for the offered position exceed what the DOL believes is standard or “normal,” the company must be prepared to back up its need for the stated level of education and/or experience. This is what is known as demonstrating business necessity. In these cases, the compliance file must include a business necessity letter from the employer establishing that the particular level of education and/or experience is required by the company due to its particular business requirements. This need should be backed up by the resumes of other company employees in the specific position (to show consistency in the company’s requirements). Other documentation establishing that the employer’s stated requirements are within the industry norm should be kept in the file. This includes job ads from other employers, alternative wage surveys, and DOL publications, such as the Occupational Outlook Handbook.
Must Properly Prepare and Document Audit File
We at the Murthy Law Firm prepare compliance files (audit files) from the beginning of the PERM process, and provide the employer with this complete file once the PERM case is filed. The purpose of retaining this documentation is to satisfactorily establish that all DOL requirements were met during the PERM process. It is not enough, therefore, to simply have the advertisements and other documents. It is necessary to be sure the proper procedures were followed in order to satisfy the DOL in the event of an audit.
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