One of the grave mistakes that employers make, after they are successful at obtaining an H-1B for their foreign employees, is to ignore the wage commitments made in the Labor Condition Application (LCA) submitted to the U.S. Department of Labor. The LCA needs to be submitted as a precondition to the I-129 (H-1B) Petition filing with U.S. Citizenship and Immigration Services (USCIS). To recap, an employer makes a committment in the LCA to pay the foreign national employee a particular wage that squares with Labor Department wage guidelines. The rule, generally, is that the employer shall pay the employee the employer’s standard wage or the prevailing local wage, whichever is higher. For employers who ignore the wage commitment or improperly terminate their employees, it is the Labor Department– not USCIS– which can prove the more dangerous government watch-dog. Three Labor Department Administrative Review Board (ARB) decisions prove the point:

In one decision–In Re Ken Technologies, ARB Case No. 03-140–the ARB determined that the employer had failed properly to terminate its foreign employee, which exposed the employer to claims for unpaid wages and penalties. According to the ARB’s findings, the employer was obliged, but failed, to notify USCIS “immediately” when it terminated the foreign national employee. The general rule is that an employer is required to notify USCIS when an H-1B employee has been terminated or otherwise when there has been a change in the conditions of the foreign national’s employment that may affect his/her eligibility for H-1B status.  Significantly, however, the ARB held that the employer’s failure to notify USCIS of the termination constituted only some–not conclusive- evidence of termination. The Appellate Panel went on to hold, however, that, even so, the employer failed to show by a preponderance of the evidence that it, indeed, terminated the foreign national: The facts showed that when the foreign national appeared for work, there was no work to be had, and that he was, essentially, left to his own devices to find projects on which to work. The employee eventually left his employment. Subsequently, the employee complained to the Labor Department’s Wage and Hour Division concerning wages that were not paid to him while he was in unproductive status. In its defense, the employer argued that it had terminated the employee, but the ARB found that the employer had failed to communicate to the employee that the latter had been terminated and, on this basis, awarded back wages.  

In another decision—In Re Infinite Solutions, Inc., ARB Case No. 03-072–the ARB held that a new employer was liable to pay back wages to an H-1B employee who it benched through the date on which the H-1B petition was approved. The ARB concluded that the employee started earning wages on the date that she made herself available to the employer for work and not, as the employer contended, from the date that the employee’s petition for new employment was approved by USCIS.  The ARB awarded the employee back wages.  

In a third case– In re Prism Enterprises of Central Florida, Inc., ARB Case No. 01-080– one of the issues was whether a financial contribution made by an employee to the enterprise, pursuant to a separate agreement with the employer, constituted an improper deduction from wages. In that case, the employee was not only the beneficiary of an H-1B petition approval but, pursuant to the terms of a separate contract with the employer, made a $30,000 capital contribution to the enterprise in consideration of a percentage of future revenues, which were, in part, received. Subsequently, the employee resigned and filed a complaint with the Labor Department claiming unpaid wages. The ARB determined that the employee was owed unpaid wages, but held that it would not set off as against those wages earnings received by the employee pursuant to the separate revenue sharing agreement entered into with the employer.  Significantly, the ARB determined that the revenue sharing agreement was “voluntary” and stood separate and apart “from the H-1B wage requirements.” In addition to the ARB’s award of back wages, it also modified and affirmed an award of civil penalties.

In sum, the obligations of an employer do not end when the H-1B is approved, but continues throughout the employment term and requires continued monitoring. Employers that fail to pay an acceptable wage for the type of work performed or fail properly to terminate an H-1B employee can be hit by administrative claims for back unpaid wages and penalties.  At the same time, it would appear that agreements entered into as between an employer and an employee, concerning revenue sharing arrangements separate and apart from the wage obliged to be paid to the employee pursuant to the LCA, are enforceable and are not in and of themselves considered “wages” for Labor Department purposes. In the final analysis,  managing H-1B employees requires that both the employer and immigration counsel revisit on a regular basis the status of their employement. A little bit of risk management can go a long way to protecting employers from unanticipated wage claims brought by disgruntled H-1B workers. ¼/p>

For many employers caught between a rock and a hard-place as to what to do about their undocumented workers, the risk of continuing to employ them and/or assisting them in their efforts to avoid deportation, is increasingly exposing employers to civil penalties and even criminal prosecution. In our last C-G posting, we reported on a Kentucky case involving a landlord accused of “harboring.” In light of that decision and the confusion surrounding what “harboring” is, we felt that it would be instructive to readers to visit this issue.

To begin with, it is illegal to engage in a “pattern or practice” of knowingly hiring and employing illegal aliens. The crime of unlawful hiring and/or employment carries with it a fine of not more than $3,000 per undocumented alien involved, and up to a 6-month jail term for the entire illegal activity. The reader should note that an employer’s failure to fill out I-9 forms completely or properly can translate into a separate series of civil and criminal penalties. 

By contrast, “harboring” requires that a person not only knowingly hire and/or employ undocumented aliens, but intends to help them avoid detection by law enforcement personnel. The maximum penalty for harboring is five years jail time for each alien harbored, and in the case where the crime is committed for commercial advantage, the penalty is up to 10 years jail time per harboring charge. 

The distinction between “harboring” and not “harboring” can be very subtle, i.e. in the Kentucky case (see our July 9, 2008 Post), the U.S. District Court held that renting to illegal aliens in and of itself was not “harboring,” unless it could have been shown beyond a reasonable doubt that in renting the premises to the undocumented persons, the landlord did so with the intent of shielding such persons from the law. Similarly, knowing that an employee is undocumented does not necessarily mean that the employer is “harboring,” unless the employer has taken some action to shield the employee from immigration enforcement by directly, or even indirectly, facilitating the employee’s illegal stay in the U.S., i.e. aids and abets the employee’s obtaining false documents like a social security card or passport. An employer who refers undocumented workers to third parties for the purposes of “straightening out” their papers, can also be subject to prosecution for “attempting, aiding and abetting and conspiring to harbor.”      

Under either statute, to convict a person for illegal employment or harboring, the Government must show that the defendant knowingly hired, employed or harbored an illegal alien, or engaged in such conduct in “reckless disregard” of the fact that the alien was illegal. It is because of this “reckless disregard” standard that great care needs to be paid to efforts to address social security no-match letters. An employer who receives no-match letters should confer with competent counsel about establishing procedures designed to minimize the employer’s risk of being accused of ignoring evidence of unauthorized employment.  

In short, employers tempted to hire undocumented workers and/or assist them in avoiding deportation and removal need to consider the criminal and civil penalties to which such conduct exposes them. An employer who learns that a segment of its workforce is undocumented  may not be able to avoid conflict with the authorities by simply turning a blind eye to the employees’ lack of documentation.   The answer is in businesses devising policies to minimize risks to employers if and when the authorities come calling, and in actively lobbying for changes in the immigration laws to take account of the difficult labor environment many businesses face in industries where it has been difficult to attract and employ legalized labor.

      ¼/p>

A client recently inquired of C-G concerning language it proposed for a lease making the lease terminable were the tenants later found to have violated the immigration laws. Because of the anti-discrimination provisions promulgated pursuant to the 1986 Immigration Reform and Control Act, we did not think such a termination provision was advisable. Nevertheless, the situation highlighted a potential problem confronted by landlords who lease to persons whom they suspect may be undocumented, i.e. could the landlord become subject to prosecution on the basis of “harboring” illegal aliens?  Unfortunately, as it happened, the question has not been just theoretical, but in certain jurisdictions has been played out. Today, the American Immigration Lawyers’ Association posted on its website a very telling article about such a criminal prosecution of a landlord, which happily resulted in his being cleared of all charges, but which underscores the more threatening enforcement environment we are in. The article is set forth in full, as follows:   

Cite as “AILA InfoNet Doc. No. 08070968 (posted Jul. 9, 2008)”

On 06/27/08, William Jerry Hadden, a Kentucky landlord who faced 62 charges in US District Court of renting apartments without verifying the immigration status of the future tenants, was found not guilty on all charges.

The trial is thought to be the first time the federal government has prosecuted a landlord for renting to undocumented immigrants, defense attorneys said in court filings.

Hadden’s defense attorneys steadfastly maintained his innocence and claimed that the federal government was twisting the intent of harboring laws, which they say were intended to target human traffickers or employers who are trying to hide their work forces. They further noted that it is not illegal to rent to undocumented immigrants, and Hadden therefore had no legal obligation to check any tenant’s immigration status.

The court agreed with the defense and ruled that there had to be evidence that the defendant intended to violate the immigration laws by concealing or hiding tenants.

On June 20, 2008, the U.S. Department of State published in the Federal Register (Vol. 73, No. 120 [June 20, 2008]) an amendment to the J-1 visitor program adding a new J-1 visa category–College and University Student Interns. The stated purpose of the J-1 Visa Intern Program is to offer foreign students an opportunity to study in the United States at a post-secondary accredited academic institution or to participate in a student intern program.  One of the principal qualifications that needs to be met is that the foreign national be enrolled in and is pursuing a degree at an accredited post secondary academic institution outside the U.S. and is participating in a student internship that will help fulfill degree requirements. J-1 Intern programs last 12 months.  The rule also describes how “third parties,” i.e. businesses, academic institutions, non-profit corporations, etc. can serve as host organizations under the J-1 internship program. The Rule also describes the responsibilities of  sponsoring organizations to review internship programs and the qualfications of their host organizations.¼/p>

H-1B visas for members of specialty occupations is a very valuable commodity nowadays as this past season’s H-1B lottery proved. But even for lucky beneficiaries of this highly sought after visa status, there comes a time when it ends—– or does it?

H-1B visa holders can stay in the U.S. and work for up to six years, but there are situations where H-1B holders  can extend their status beyond the six year period. One way is for an H-1B to recapture time spent outside of the U.S. on business, pleasure or for personal reasons.  For example, an H-1B on assignment outside the U.S. can, in effect, recapture this time, which can be tagged on to the end of the formal H-1B period. Another way of obtaining additional time is to file and have approved an I-140 immigrant petition.  In circumstances where immigrant visa petitons are approved but a visa is not available to the beneficiary, the H-1B can seek an extension of the H-1B in increments of three year periods.  In instances where an I-140 petition or Application for Labor Cetification had been filed and has been pending for at least 365 days, H-1B visa holders can extend their status in increments of up to 1 year at a time. But what happens to the H-1B who is coming to the end of her status and has neither an approved I-140 or Labor Certification/I-140 pending for 365 days. Formerly, these individuals were out of luck: When their H-1B status expired, so did there official stay in the U.S.  To address this too frequent problem, very recently (on June 16, 2008) USCIS announced a new regulation which would allow H-1B’s to file I-140s (immigrant petitions based on employment) on an expedited basis, called premium processing.  According to the regulation, an H-1B can request premium processing in connection with an I-140 filed within 60 days of the termination of H-1B status. Under premium processing, USCIS is mandated to advise the petitioner within 15 days whether the petition is approved or not.  As previously discussed, once an I-140 is approved, the H-1B beneficiary can then apply for an extension of H-1B status for an additional three year period (if the immigrant visa applied for is not immediately available). Why should the the Immigration Service try to help H-1Bs stay in the U.S.? This is hard to answer, but the trend seems to be that in reaction to the political paralysis that has made immigration reform impossible, there is tangible effort being made to ease the burdens on skilled nonimmigrants. We saw this, for example, with the new regulation allowing beneficiaries of optional practical training to extend this training for up to 17 months [which was discussed in a prior C-G posting.  The fact of the matter is that without some tinkering by USCIS, the pressure on skilled non-immigrants is so great that many of them otherwise would likely leave the U.S. for good or never come here in the first place. We need not express further the patently stupid situation that American employers have been forced to confront as the result of this inanely counterproductive crunch on skilled immigration. ¼/p>

For businesses involved in the manufacture and sale of dual use technologies, i.e. technology that can have a military as well as a commercial use, bringing a foreign national  into the U.S., even as a business visitor, can become problematic, not because of any particular immigration law per se, but on account of Export Control Laws promulgated by the U.S. Department of Commerce and other U.S. Agencies.

Of particular significance to the immigration practitioner is the, so called, “deemed export rule”  and the existence of a Technology Alert List, which is a list of particular dual use technologies that the U.S. government is especially sensitive about. As provided under the Export Administration Regulations (EAR) an export, contrary to popular belief, does not necessarily require sending physical products outside of the U.S., but can also involve disclosing information about a technology to a foreign national while he or she is in the U.S. In the parlance of the U.S. Department of Commerce’s Bureau of Industry and Security, such a disclosure of information is, in fact,”deemed” an export event, which could make it necessary for the foreign employer to obtain an export license.  

The upshot of the “deemed export rule,” as far as immigration is concerned, is that there is a heightened risk of a violation of the rule when an alien enters the U.S. for the purpose of visiting a company in an industry that falls within the purview the Technology Alert List. Such an alien could unwittingly become the subject of an extensive security review called a Visa Mantis Security Check, which can involve the U.S. Department of State’s soliciting the views of upwards of a dozen agencies regarding the  background and bonafides of the foreign national before issuing a visa. In many cases, such reviews have taken anywhere from three to six months to complete and can result in the imposition of severe restrictions on what the foreign national can actually do in the U.S. 

For businesses involved in fields involving technologies that can potentially have military uses,  it is important to take proactive steps, even when trying to bring in a foreign national technologist as a business visitor, to arm the alien with a documentary presentation that details what the foreign national’s background is and what he or she will be doing in the U.S. According to one commentator, the foreign national may need, among other things, (1) a letter from the employer detailing its work and whether and to what extent the alien would be exposed to technical know-how; (2) documentation showing that the technology at issue is not protected and is in the public domain, (3) the resume of the foreign national and recommendation letters from U.S. sources; and (4) documentation from the Department of Commerce showing that the technology at issue is not subject to an export license. 

What is also important for businesses that operate in sensitive industries to understand  is that not only can a foreign national employee or consultant be denied a visa, but that the authorities in reviewing the immigration status of an individual alien via a Visa Mantis Security Check, may also initiate an inquiry into a host-company’s possible, previous violations of the nation’s export control laws. Like with employer sanctions in the immigration context, violations of U.S. export control laws can expose a business to significant civil and even criminal penalties. ¼/p>

Below is a list of EB-5 Regional Centers active as of October 2007. On June 9, 2008 the U.S. House of Representatives passed a Bill extending the Regional Center Pilot Program to 2013. This measure must now be addressed by the U.S. Senate. For more information on the EB-5 Immigrant Investor Category see C-G’s May 7, 2008 Post.

EB-5 Regional Centers Active as of October 2007

We thought that the following post on the American Immigration Lawyer’s Association (”AILA”) website, entitled  “Regulations, Rumors and the Unified Agenda”, was educational from the standpoint of how regulations are formulated and ultimately enacted by U.S. government agencies. As we move into an election year where it is likely that there will be increased discussion about immigration reform, it will be important to understand how the regulatory and legislative process works in practice. 

The AILA Post States: 

“From time to time, a rumor will emerge that a particular regulation “has been” or “is about to be” published by a government agency-usually DHS or one of its components. These rumors often spread in on-line chats in which individual clients participate. The rumors are usually bolstered by the presence of a link to a government website where a summary of, and timetable for, the purported regulation can be found. The client then contacts the attorney, demanding to know why the attorney has not notified him or her of this regulation. The attorney searches InfoNet and cannot find this regulation.

Has InfoNet fallen down on the job? No. What has happened is that yet another group of clients have stumbled upon something called the Unified Regulatory Agenda.

The Unified Agenda is issued semi-annually by the Executive Branch of the government, in compliance with the Regulatory Flexibility Act. It is, in essence, each agency’s list of what regulations are, or might be, under development somewhere within the agency. Each time the Agenda is published, the agency inserts an estimate of when it thinks the next action on the regulation will take place (except for those regulations listed under “Long Term”-for those, usually only a history of actions on the regulation is provided).

How predictive the list is depends largely on the agency in question. For example, AILA’s observation has been that the Department of Labor usually does bring forward the regulations that it lists, and generally does so within a couple of months of the projected date. By contrast, we have observed that neither the projected dates nor even the prospect of the regulation ever seeing the light of day can be relied upon for regulations listed by USCIS. Some of the regulations on that agency’s list have been there since its inception in 2003 (and even before that, on INS’ list) without any discernable movement. Yet, twice a year, the regulations are listed, usually with a date in the very near future listed.

It is discovery of these listings that gives rise to the periodic spate of rumors.

The most recent such rumor is that “a regulation eliminating concurrent filing of I-140s and I-485s is imminent.” Indeed, there is a regulation titled “Halting Concurrent Filing of Form I-140 Immigrant Petition With a Form I-485 Application” listed on USCIS’ Unified Agenda, complete with a summary that indicates the agency is considering disallowing such filing and a timetable indicating publication of a proposed rule in June 2008.

So, is such a regulation coming? Well, consider these factors:

(1) This item has been listed on USCIS’ Unified Agenda since December 2006. At that time, the projected publication date was March 2007.

(2) Another item on the current Agenda is titled “Allowing for the Filing of Form I-140 Visa Petition Concurrently With a Form I-485 Application in Certain Circumstances.” It is listed under long-term actions, indicating that also on USCIS’ plate is the finalization of this currently interim regulation. Yes, the exact opposite action from the other one is also listed on the same Agenda.

(3) Before any USCIS regulation is published in the Federal Register, it first must be cleared by multiple units within USCIS, then by other immigration-related components of DHS, then by the Secretary’s office. Once it clears all those hurdles, it is then sent to the OMB, which has 90 days to review the regulation (and usually takes the full 90 days, unless the regulation is on a fast track). OMB maintains a website showing what items it has under review and what it has cleared within the past 30 days. This regulation has yet to appear on OMB’s website.

This is not to say that this rulemaking will never happen. Obviously, it has some supporters within the agency or it would not be on the Unified Agenda. But is it imminent? It certainly doesn’t appear so.

If you want to follow the Unified Agenda, it can be found on the Regulations.gov website. Also, previous editions can be found on AILA InfoNet by using Advanced Search and checking the box for Regulatory Agendas under Filters. (Note that the Agenda used to be published twice a year in the Federal Register. It is now published in its entirety only in November or December, but is updated on the Regulations.gov website in the spring as well.)”

On April 10, 2008, legislation (Senate Bill 2839)– the proposed Global Competiveness Act of 2008– was introduced to the U.S Senate and referred to that body’s Judiciary Committee. Over all, S. 2839 proposes to ease restrictions on the number of visas available to skilled employees while at the same time raising filing fees for some categories of employers and imposing more restrictions on the manner in which H-1B workers can be employed in the U.S.  At the outset, S. 2839 raises for fiscal years 2009-2011 the H-1B visa quota from the current 65,000 visas to 115,000 visas. With respect to foreign graduates of  American MA and PH.d programs, the visa quota would be raised from the current 20,000 to 30,000. At the same time, the Bill proposes substantially to raise filing fees: For employers with 25 workers or more the current filing fee is $1,500; this corporate filing fee  would be raised to $2,250. The Bill also  purports to eliminate the ability of U.S. employers to outsource their H-1B employees to third-party employers. As provided by the proposed Bill, U.S. employers would be prohibited from allowing H-1B workers to be employed at the worksites of third-party employers unless the H-1B is performing a service or providing a product on behalf of the petitioner-employer. The objective of the Bill in this respect is to preclude U.S. employers from outsourcing their H-1B employee for purposes of providing labor to non-petitioning employers.  The bill would also preclude employers (who are not H-1B dependant) from advertising their job positions in a manner that would discourage U.S. applicants by representing that the positions are only available to H-1B nonimmigrants or that H-1B non-immigrants would be given priority. The Bill would also double the sanctions that could be imposed on employers for violating  H-1B regulations.

On its face, C-G’s view is that the Bill does not adequately address the H-1B visa quota crisis while imposing on employers higher filing fees and yet more strictions on how they can recruit and employ H-1B workers.  Since, in 2008, 130,000 employers filed petitions, applying for under 65,000 visas, the 115,000 quota cap proposed by S.2839 is clearly inadequate to address anticipated demand. It would also appear that the 115,000 visa quota would persist only through 2011, leaving open the possibility that the quota could again be reduced. Finally, the proposed substantial hike in the H-1B corporation filing fee is likely to make it even more difficult for midsized businesses to participate in the H-1B program. On the positive side, it would appear that the Bill does not raise filing fees for small-gage employers (employing less than 25 workers).