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VISA SPOTLIGHT: DEPARTMENT OF LABOR ISSUES PROPOSED REGULATIONS FOR NEW H-1B LAW
Regular readers of this newsletter will remember the long drawn out battle that took place last year in Congress over the lifting of the H-1B visa cap. A Faustian bargain of sorts was agreed to when the final deal was struck. The cap would be lifted for three years, but in exchange a number of "worker protection" measures were added to the H-1B statute.
The Department of Labor (DOL) has now issued a massive set of proposed regulations to implement the H-1B bill (which is called the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA)). This law, which was passed last fall, provides a temporary increase in the number of available H-1B visas from 65,000 per year to 115,000 per year in 1999 and 2000, and 107,500 in 2001, after which the cap will return to 65,000 per year. The law includes special provisions applicable to H-1B "dependent" employers and employers who have been found to have willfully violated H-1B regulations. The new law also has a requirement that H-1B workers receive the same fringe benefits as U.S. workers. Furthermore, ACWIA also an additional $ 500 fee for petitions filed between December 1, 1998 and October 1, 2001, and provides for new investigative procedures and new penalties for violations.
The proposed regulations, which are open for public comment until February 4, 1999, enumerate the initial positions of the Department on a number of definitional and procedural issues. They are outlined as follows:
A. Definition of "Employer" under ACWIA
In the text of the law, Congress specified that an employer for purposes of an "H-1B dependent employer" is to be determined under the Internal Revenue Code, specifically §§ 414(b), (c), (m) or (o). The DOL is considering using this definition for all purposes under the H-1B program, and is seeking public comment on the effects this would cause, particularly on whether a new Labor Condition Application (LCA) would be required where a company undergoes a change of structure. Under current regulations, whenever an employer has to obtain a new Employer Identification Number, a new LCA must be filed. Using the single definition of employer would eliminate this requirement and allow the change of employer identity to be noted in its public disclosure file.
The use of an Internal Revenue Code definition for employer itself raises a specific complaint about the proposed regulations. Throughout the proposed rulemaking, the Department of Labor proposes to incorporate by inference (or by copying a definition word-for-word), definitions used in areas of law far different than immigration law. Examples include definitions drawn from the Employee Retirement and Income Security Act ("ERISA"), the Fair Labor Standards Act, the Equal Pay Act, the Family and Medical Leave Act and the Equal Employment Opportunity Act. By acting in this manner, the Department of Labor is making the H-1B much more complex and employers may find themselves having to hire labor lawyers, tax lawyers and immigration lawyers just to ensure that the H-1B regulations are met. 
 
A. "H-1B Dependent Employer"
Under ACWIA, "H-1B dependent employers" are subject to additional attestation requirements about the recruitment and non-displacement of U.S. workers. Therefore, the definition of such an employer is vital. 
ACWIA defines an "H-1B dependent employer" as dependent on the ratio of H-1B workers to full-time employees (FTEs). Specifically, when there are 25 or fewer full-time employees, dependency is reached with the employment of 7 H-1B nonimmigrants; when the number of FTEs is between 26 and 50, dependency is reached with 12 H-1B nonimmigrants; with at least 51 employees, H-1B dependency is determined by dividing the number of H-1B employees by the number of FTEs, and if the result is 15% of more, the employer is H-1B dependent. However, "exempt H-1B nonimmigrants" (these are certain highly paid or highly educated workers discussed at greater length below) are not to be included in these computations for the first six months following passage of ACWIA (i.e., until April 21, 1999) or until the DOL issues a final version of this proposed rule, whichever is longer.
FTE is not given a definition in ACWIA, so the DOL has proposed one. Under the proposal, the employer could define FTE how it wanted so long as the definition included at least a 35-hour work week. In the absence of such a definition, the DOL would consider an FTE to be one who works at least 40 hours a week. Employers could aggregate the hours of two or more part-time workers to make one FTE, and in no situation would an employee who works more than 40 hours a week be counted as more than one FTE.
The DOL proposes that H-1B dependency be recalculated each time an employer files a new LCA or H-1B petition under an existing LCA after the effective date of these regulations. Employers who are currently H-1B dependent would be required to file a new LCA for any H-1B nonimmigrant visa sought after the effective date of these regulations. Employers who are not currently H-1B dependent could file petitions under an existing LCA, but only after ensuring it has not become H-1B dependent. Employers who are not H-1B dependent at the time of filing any LCA after the effective date of these regulations but later becomes H-1B dependent will have an affirmative obligation to reveal this when filing a new H-1B petition under the LCA. The DOL feels this determination will not be a substantial burden for most employers, because under current usage of the program, employers are either clearly H-1B dependent or are clearly not - seldom is it a close question. Also, employers can avoid ever making the H-1B dependency determination by not filing any new H-1B petitions or extensions during the effective period of the attestation requirements. There are significant problems with this argument as noted at the very end of this article. 
The DOL believes when H-1B dependency status is clear, one way or another, no additional documentation needs to be kept. When the status is questionable, documentation of the determination needs to be preserved, and if the employer determines it is not H-1B dependent, the computation behind the determination must be shown. When the questionable employer determines it is H-1B dependent, the computation need not be preserved if this status is readily apparent from public documents. The employer should, of course, preserve copies of all H-1B petitions to determine the number of H-1B nonimmigrants employed.
The DOL has proposed that if an employer is H-1B dependent, the employer should disclose this on the LCA. For employers who are not H-1B dependent, the DOL has proposed three alternatives. First, the employer would expressly attest its non-dependency and that should it become dependent in the future, it will comply with the additional attestation requirements. Second, no attestation of status would be required, but the employer would have to attest that it will comply with the additional attestation requirements should it become dependent. Third, no attestation of status would be required, but the LCA would clearly state that it could not be used to support an H-1B petition filed after the employer became dependent.
The DOL does not expect that these new requirements will cause any substantive change in the means by which they will process LCAs.
 
A. Exempt H-1B Nonimmigrants
ACWIA exempts certain H-1B workers from being counted in determining H-1B dependency. To be exempt, the H-1B nonimmigrant must either receive an annual salary of at least ,000 or have received a master's or higher degree (or its equivalent) in an area related to employment. According to the DOL, the INS will make the initial determination as to whether the H-1B worker is exempt on the basis of the educational requirements when it adjudicates the H-1B petition. The DOL says that these determinations will be accorded great weight when the DOL makes its determination.
In determining whether the H-1B employee is receiving $ 60,000 in wages, the DOL proposes using existing DOL H-1B wage regulations. Future payments could be included if they were guaranteed, but not if they were contingent. An H-1B employee who works part-time and is paid less than $ 60,000 but who would, if he worked full-time would make over $ 60,000, does not qualify - the $ 60,000 must be actual compensation and not a prorated amount.
In determining whether the H-1B worker possesses a master's or higher degree, the DOL takes the position that this sort of academic degree cannot be demonstrated by equivalent work experience. This is because unlike INA § 214(i), which expressly allows demonstration of a bachelor's degree by equivalent work experience, ACWIA contains no such provision. The INS evaluation of the H-1B nonimmigrant's educational credentials will be given great weight by the DOL in determining whether the worker possesses the equivalent of a master's or higher degree.
For purposes of determining whether a worker is exempt on the basis of possessing and advanced degree, the degree must be in an area related to the employment. Whether the area is "related" must be a generally accepted proposition in the relevant community. The DOL says it will develop regulations in this area in close conjunction with the INS, and again will give great weight to INS determinations in this area.
The DOL also is proposing that if the employer intends to use an LCA only for exempt H-1B nonimmigrants, such intention should be attested to on the LCA.
 
A. Requirements Regarding the Displacement of U.S. Workers
Under ACWIA, H-1B dependent employers and employers who have been found to have committed willful violations of the H-1B program within the previous five years will be required to make additional attestations. The attestation would guarantee that the hiring of the H-1B nonimmigrant has not displaced a U.S. worker employed by the H-1B nonimmigrant's employer or by any other employer where there are "indicia of employment" between that employer and the H-1B nonimmigrant. This prohibition on displacement is effective for the sponsoring employer's workforce for 90 days before and 90 days after the filing of the H-1B petition, and for any other employer for 90 days before and 90 days after the placement of the H-1B nonimmigrant at that work site. This prohibition does not apply to exempt H-1B nonimmigrants.
ACWIA does not define what constitutes an employment relationship between a U.S. worker and an employer of an H-1B nonimmigrant. The DOL believes that in the absence of a congressional definition, "employment relationship" should be defined in light of Supreme Court precedent defining common law employment. This approach would involve a multi-factored balancing test of the following elements:
* The employer's right to control the worker's time, place and method of work;
* The employer furnishes the tools and materials of the job;
* The work is performed on the premises of the employer;
* The existence of a continuing relationship between the parties;
* The employer's right to give additional tasks to the worker;
* The employer sets the hours of work;
* The worker is paid by time period or salary, not on a per job basis;
* The worker's right to hire and pay assistants;
* The worker's job is part of the regular business of the employer;
* The employer is itself in business;
* The worker is not engaged in his own occupation or business
* The employer provides the worker with benefits such as insurance and workers' compensation
* The worker is considered an employee to tax purposes;
* The employer's right to discharge the worker; and 
* The parties' belief that they are creating an employment relationship.
The DOL notes that Congress seemed to show a preference for the tax definition of employment relationship, and that there are other well developed regulatory definitions of employee, such as the Fair Labor Standards Act, and welcomes all comments on which standard should be used to define such a relationship.
Also undefined by ACWIA are the "indicia of employment" between an H-1B nonimmigrant and a nonpetitioning employer necessary to find an H-1B nonimmigrant has displaced a U.S. worker employed by the nonpetitioning employer (secondary employment displacement). The DOL feels this clearly need not be a full employment relationship, but should be something more than the incidental performance of some job duties at the other employer's worksite. It proposes using a subset of the factors used in defining "employment relationship" to define "indicia of employment", namely,
* The employer's right to control the worker's time, place and method of work;
* The employer furnishes the tools and materials of the job;
* The work is performed on the premises of the employer;
* The existence of a continuing relationship between the parties;
* The employer's right to give additional tasks to the worker;
* The employer sets the hours of work;
* The worker's job is part of the regular business of the employer;
* The employer is itself in business;
* The employer's right to discharge the worker; and 
The DOL is seeking comment on possible alternative approaches. 
The prohibition on displacement of U.S. workers imposed by ACWIA applies only to those U.S. workers in an "essentially equivalent job" as the H-1B nonimmigrant. ACWIA provides that an essentially equivalent job is one that entails substantially the same responsibilities, was held by a U.S. worker with essentially the same qualifications and experience, and is located in the same area as the H-1B nonimmigrant's job. 
In comparing job responsibilities, the DOL plans to focus on a comparison of the core elements and requirements of the job. Performance of non-essential duties would not be a factor. The comparison of qualifications will be limited to those that are accepted as standard for the job and are necessary for successful job performance. The area of employment is defined in ACWIA as "normal commuting distance" from the work site, or within the same Metropolitan Statistical Area.
Under its own terms, ACWIA non-displacement provisions apply only in situations where the U.S. worker's employment was terminated because of a "lay off," and not where the termination was the result of voluntary departure or retirement, or expiration of a contract. The DOL will use the law of constructive discharge to determine whether the U.S. worker's departure was voluntary. This provision will apply to temporary staffing services.
ACWIA provides that no lay off should be considered to have occurred when the U.S. worker was offered and refused a "similar employment opportunity." The job offer must, be legitimate. The DOL interprets this to mean that the offered job should have not only a similar title, but also similar opportunities for advancement, tenure and work schedule.
Under ACWIA, a U.S. worker is not laid off if he was offered and refused a position with the same or higher compensation and benefits. In making this comparison, the DOL plans to look to factors such as any moving expenses incurred, and any differences in the cost of living between the locations of the two jobs that make have an impact on the economic worth of the compensation.
ACWIA guards against "secondary employment displacement" by requiring that the H-1B employer inquires of the other employer whether a U.S. worker will be displaced within 90 days before or after the H-1B nonimmigrant's placement at that work site. It also provides that the H-1B employer is not guilty of a violation of this provision unless it knew or had reason to know of the displacement at the time the H-1B worker was placed at the secondary work site. 
The DOL has proposed a number of methods that would satisfy this requirement. First, the H-1B employer may obtain the secondary employer's written assurance of non-displacement for the 90 days before and after the H-1B workers placement. Second, the H-1B employer may make a note for its file of the secondary employer's oral assurance of non-displacement. Third, the non-displacement requirement may be made a clause in the contract between the H-1B and secondary employers. These methods are not exclusive and the H-1B employer always has an obligation to investigate any information about possible secondary displacement.
The documentation required to prove non-displacement will be the following: for all workers laid off 90 days before or after the H-1B petition is filed, their name, last-known mailing address, job title and description, the employee's qualifications, experience and principal duties, as well as any documentation relating to the termination of the employment relationship with the U.S. worker, including any job offers made by the employer. Because the EEOC already requires most of these records to be kept, the DOL feels this will not impose any significant burden.
 
A. Recruitment of U.S. Workers
Under ACWIA, H-1B dependent employers and employers found to have committed willful violations within the past five years must take good faith steps to recruit U.S. workers for the job for which the H-1B nonimmigrant is sought. This provision does not apply, however, when the H-1B nonimmigrant is exempt under ACWIA, an alien of "extraordinary ability," an "outstanding professor or researcher," or a "multinational manager or executive." The DOL believes that because the law says the recruitment effort must be made before the LCA is filed, Congress did not intend that employers recruit for every possible position they may fill with an H-1B worker under that LCA. Therefore, the good faith recruiting requirement attestation made by a subject employer should be read to imply an ongoing obligation to recruit U.S. workers for each position as the employer needs to fill it.
ACWIA requires that employers recruit in accordance with "industry-wide" standards and procedures. Congress did not require compliance with a specific practice, and the DOL believes it is not authorized to do so. The DOL believes that this standard should include strategies that have been successful in the industry in question, including
* newspaper advertising; 
* trade, professional and special interest journals;
* internet job sites;
* outreach to trade or professional associations;
* employment and referral agencies;
* outreach to colleges or other educational institutions;
* job fairs;
* contacts with labor unions; and
* promotion from within the company.
The DOL makes a distinction between passive and active recruitment. Passive recruiting is where the employer advertises, and active is where the employer takes further active steps to provide information about its job opportunity to the relevant employment pool. The DOL proposes that if the recruitment involved at least three of the above approaches, of which one or two were active, it should be presumed to have been in good faith. Butit also believes that all good faith recruitment involves advertising in relevant print media or on the Internet (depending on which is more effective for the position) as well as an effort to recruit from within.
The requirement of good faith in recruiting is designed to ensure a level playing field. Employers should be able to affirmatively demonstrate that they have not biased their recruitment process against U.S. workers. The DOL does not propose mandating any procedures employers must follow in this regard. But it does say "where H-1B employers are demonstrably unsuccessful (or less successful than their competitors) in hiring U.S. workers, the Department intends to scrutinize the recruitment process, including pre-selection treatment, to insure that U.S. workers are given a fair chance." The DOL is also considering whether to create a presumption of good faith in recruitment if the employer hires a number of U.S. workers sufficient to create a significant reduction in the ratio of H-1B workers to U.S. workers. The DOL makes clear that while any presumption in this area will not have any effect on an individual worker's claim of discrimination, the Department will not be involved in second-guessing an employer's decision with regard to a single job candidate.
ACWIA allows an employer to require certain "legitimate criteria" for employment if they are relevant to and normally part of the job. First, the criteria must be legitimate - that is, not based on characteristics that are protected by the law, such as age, sex, and race. Second, the criteria must be relevant to the job, implying a logical relationship between the criteria and the job. Third, the criteria must be normal or customary to the job. This standard is based on industry-wide practice, not the preferences of an employer. The DOL will consider this requirement met if the criteria were found in the North American Industrial Classification System, now being developed to replace the Standardized Occupational Classifications. 
ACWIA prohibits the use of otherwise legitimate criteria in a "discriminatory manner." This refers to discrimination against members of a protected class.
The DOL does not feel it is necessary to require employers to keep copies of all advertising and recruitment efforts, but does want documentation of those efforts, including the places, dates, and contents of the recruitment effort. The DOL also proposes that the employer keep all documents related to U.S. workers who were considered for the position. Because the EEOC requires retention of most of this information anyway, the DOL does not believe it will prove a burden on employers.
 
A. Notifying Employees of Intent to Hire H-1B Nonimmigrants by Electronic Posting
The DOL believes that in allowing the employer to notify its employees of its intent to hire H-1B nonimmigrants by electronic posting, ACWIA should be read to limit this provision to those businesses in which employees have readily available access to such electronically posted messages. Otherwise, a hard copy of the notice should be placed in a conspicuous location at the workplace.
 
A. Fringe Benefits for H-1B Nonimmigrants
ACWIA requires employers to provide the same fringe benefits and opportunities for other benefits to H-1B workers during the period of employment as it does to its U.S. workers. 
ACWIA mandates that the employer must offer these benefits to the H-1B worker "on the same basis, and in accordance with the same criteria, as the employer offers to United States workers." The DOL interprets this to mean H-1B workers must be offered the same benefits package as would be offered to a similarly employed U.S. worker, and on the same terms. The Department is particularly seeking comment on the possibility of allowing an employer to offer a different but equivalent benefits plan. The DOL notes that the law provides a benefits "floor," not a ceiling, and believes that employers are free to offer H-1B workers more benefits than it would a U.S. worker, although it recognizes as a possible interpretation of the law to require literally the same benefits. The DOL believes that when a foreign branch of a U.S. employer is responsible for the payment of the H-1B worker, the U.S. employer is still obligated to ensure the H-1B worker receives a benefits package that a U.S. worker would. The DOL also proposes amending existing regulations to make clear that working conditions are to be considered part of the benefits the U.S. employer must provide.
To determine whether the benefits requirements have been met, the DOL believes employers should retain copies of all benefits plans offered, rules of eligibility, evidence of what benefits are actually provided, and how costs are shared between employer and employees.
 
A. Payment of Wages for Nonproductive Time - aka "Benching"
ACWIA requires employers to pay H-1B nonimmigrants wages while they are in "nonproductive status" - normally referred to as "benching" - in certain situations. This rule would begin to apply either 
- when the H-1B worker begins work,
- if employment has not begun by that time, 30 days after the worker's entry into the U.S., or
- if the worker was in the country when the petition was approved, not more than 60 days after approval. 
This "benching" provision is designed to prevent employers from paying H-1B nonimmigrants less than the required wage when the employer itself puts the worker into nonproductive status. The rule would not apply when the nonproductive status is due to the worker's initiative or inability to work.
Interestingly, this provision actually could mean that H-1B workers are treated BETTER than their American counterparts who are subject to benching.
 
A. Academic Salaries
ACWIA creates a specific exception to the benching provision described above for schools and other educational institutions. Such entities may continue established practices of paying a 12 month salary over less than a full year if the H-1B nonimmigrant agrees to the arrangement prior to beginning employment and if the salary practice does not otherwise violate the H-1B program.
 
A. Prohibited Penalties on H-1B Workers Leaving Employment
ACWIA prohibits employers from imposing penalties on H-1B workers who leave employment prior to a previously agreed upon date. State law is to be determinative of whether the H-1B worker was made to pay a penalty or liquidated damages. The DOL proposes a rule under which the employer must obtain a state court judgment that the amount in dispute constitutes liquidated damages, since state courts are in a better position to apply state contract law than a federal administrative agency
This provision has also drawn heavy criticism. Many employers will no doubt complain that not being able to enforce such contractual provisions absent a State court ruling is extremely burdensome and unfair.
 
A. Employer May Not Recover the $ 500 Fee from H-1B Nonimmigrants
ACWIA created an additional $ 500 filing fee for H-1B petitions, applicable to employers (the fee was implemented late last year). The law makes clear that the employer is in no way to seek to recover this fee from the H-1B worker. The DOL says it will create a provision to clarify this requirement.
 
 
A. Penalties for Employers Who Impose or Seek to Impose Impermissible Penalties or Rebates
ACWIA authorized the DOL to collect a 00 civil penalty for each violation, willful or otherwise, and may order the employer to compensate the H-1B worker for any payment made to the employer. Prohibition from participating in the H-1B program (called "debarment") is not authorized for these violations.
 
A. DOL Enforcement of H-1B Program under ACWIA
Under ACWIA, the DOL is given two powers of investigative authority. First, it now may conduct random investigations over a period of five years of employers who have been found to have willfully violated the H-1B program after October 21, 1998. Second, the DOL now has authority to investigate complaints from sources other than aggrieved parties.
In addressing complaints from persons other than aggrieved parties, the DOL will focus on whether the employer willfully violated its statutory obligations, whether it has engaged in a pattern of such violations and whether the failure is substantial in that it effects multiple employees. The allegation must be in writing, either by the complaining party or by the DOL on behalf of that party.
ACWIA also provides protection for employees who exercise their H-1B rights or participate in a DOL investigation. It is essentially a statutory enactment of existing DOL regulations providing protection for H-1B whistleblowers. ACWIA provides special protection for H-1B nonimmigrant whistleblowers, in that it directs the DOL and the Attorney General to develop a process by which such workers would be allowed to stay in the U.S. and work for another employer for the duration of their visa.
Under ACWIA, a three tiered enforcement scheme is created. 
* $ 1000 maximum fine per violation. Violations covered are 1) failure to meet obligations concerning strike/lockout and non-displacement provisions, 2) substantial failure to notify, 3) LCA specificity or misrepresentation on an LCA and 4) failure to sufficiently recruit U.S. workers.
* $ 5000 maximum fine per violation, plus minimum two-year debarment. Violations covered are 1) any willful violation of an LCA attestation or any material fact on an LCA and 2) retaliation against whistleblowers.
* $ 35,000 maximum fine per violation, plus minimum three-year debarment. Violations covered are any willful violation of an LCA attestation or material fact on the LCA that concerns the displacement of a U.S. worker.
ACWIA also authorizes the DOL to enforce "appropriate administrative remedies," which the DOL interprets to include curative measures such restitution for employees who were displaced, whistleblowers, and H-1B workers who did not receive full benefits.
 
A. Modification of Prevailing Wage Determination for Certain Employers
ACWIA contains provisions altering the method of determining the prevailing wage for the job. Institutions of higher education, nonprofit organizations related to those institutions, nonprofit research institutions and Government research institutions are to consider only the wages paid by other such institutions in determining the prevailing wage, a change which will no doubt be welcome. This new method of computing the prevailing wage will apply to both the H-1B program and the Permanent Labor Certification program. 
Employers covered by this provision are also exempt from the new $ 500 filing fee. The DOL and the INS worked to develop definitions for these employers, which were published in an INS Interim Final Rule, November 30, 1998. An institution of higher education is defined in section 801(a) of the Higher Education act of 1965; a related nonprofit organization is related by common ownership or control, or by being run by the educational institution; a nonprofit or governmental research organization is one that is engaged in basic or applied research. 
Basic research is that directed to knowledge and understanding without immediate commercial incentives. Applied research is that conducted in order to gain knowledge to determine how a specific need may be met. 
 
A. Miscellaneous Regulatory Measures 
In the proposed H-1B rule, the DOL also re-published for notice and comment many provisions from October 1995 whose enforcement had been enjoined on procedural grounds. Some of the enjoined rules are enacted by ACWIA, but a number of other provisions are not in ACWIA and are already under fire. For these, and the other provisions re-published, the DOL is publishing revised versions based on comments it has previously received. 
1. Guidelines for Short-term Placement of H-1B Workers at Sites not Listed on the LCA
Under the previous rule, the point at which the 90-day limit on use of an H-1B worker at a work site not covered by an LCA was determined by adding all the days worked by all H-1B workers at the location. When 90 days had been worked, a new LCA was required. Under the new version of the rule, the 90 days will be counted on a worker by worker basis, counting days worked in an area, not a single work site, and a new LCA will be required only when one H-1B worker reaches 90 days in an area not covered by an LCA. However, when this point is reached, no H-1B workers may be placed in area. This requirement can be avoided, and the employer may place H-1B worker(s) at work site(s) in the area if the employer agrees to the following:
* No H-1B worker(s) will be placed at any work site(s) not covered by an LCA for more than 90 cumulative days;
* All H-1B workers in the new area are compensated according to the wages stated on the LCA under which they are employed, and the H-1B workers are compensated for any travel-related expenses. Minimum compensation must equal federal government standards.
* No H-1B worker is placed at a new area when there is a strike or lockout in the same occupation at that location.
An employer may, of course, at any time file a new LCA to cover an area not previously covered. The short-term placement provisions do not apply when the H-1B worker is sent to an area covered by a LCA.
a. When Short-term Placement is Available
The short-term placement option would not apply in any of the following circumstances: The H-1B worker being sent to the new areas is initially coming into the U.S. from outside the country (i.e., such a worker must be placed at a location covered by the LCA on which the H-1B petition is based); The H-1B worker is being relocated to a new worksite within the same area of employment for which the employer already has a valid LCA (i.e., new worksite is covered by the same LCA as the previous worksite); or, The H-1B worker is being relocated from one area of employment to another, but the employer has valid LCAs covering both areas (i.e., new worksite is covered by a different LCA than the LCA for the previous worksite). 
a. Standards for Payment of Travel Expenses
The DOL wants there to be a standard to measure payment of these expenses, and proposes to use the standard the federal government uses for its employees, found in the General Services Administration regulations. The DOL rule would clarify that expenses must be paid for all days in travel status. 
1. Guidelines for Determining Actual Wage
Appendix A to Subpart H of the rule, describing the LCA, provides guidelines to help employers determine the "actual wage." Under these guidelines, employers should have documentation of the system used to determine wages, and should apply the system to H-1B workers. These documents are to be located in the public disclosure file, and should be such that a third party looking at the system could arrive at the H-1B worker's salary. Information about actual wages paid need not be contained in the file. If U.S. workers are given a raise at a specified period, H-1B workers must receive the same raise. Appendix A also contains examples to help employers understand how to comply.
1. Records of Employees' Hours Worked
The DOL proposes to make these regulations conform to record-keeping requirements of the Fair Labor Standards Act, and would require the employer to keep a record of actual hours worked only if the actual wage is expressed in hourly terms. When that is the case, such records must be kept for both H-1B and non-H-1B workers.
1. Posting Hardcopy of Notices at Work sites Where H-1B Worker is to be Placed
This notice is to be posted at the workplace on or within 30 days of filing the LCA, and is to remain posted for 10 days. When the H-1B worker is to be employed by another employer, the H-1B employer must post a notice to the new workplace. If the location the H-1B nonimmigrant is to work is not a work site, notice need not be posted there. 
1. Time Periods within which LCA may be filed
The DOL proposes to retain the current rule on the timing of filing the LCA, which requires it to be filed no more than 180 days before the starting date of the H-1B worker's employment, and within 90 days of obtaining a prevailing wage determination from a State Employment Security Agency (SESA). Only prevailing wages obtained from a SESA are subject to the 90-day limit.
1. Challenging a SESA Wage Determination
An employer who wishes to challenge a SESA issued prevailing wage determination is to do so by filing a complaint with Employment Services, not by disputing it in the hearing before the Administrative Law Judge.
 
A. Proposed Additional Interpretive Regulations
Work sites are only those locations at which the H-1B workers perform their job duties, and do not include training locations or locations at which the H-1B worker's presence is incidental to performance of the job.
The DOL understands the business need to have employees "float," but believes it is not proper for H-1B workers to "float." The only circumstances under which an H-1B worker may work outside the area covered in the relevant LCA are: 1) the location is not a "work site"; 2) the location to which the H-1B worker is sent is covered by an LCA; and 3) the H-1B worker is sent to a new work site for less than 90 days, as allowed under the short-term placement program.
All fees and costs related to filing the LCA and H-1B petition are to be borne by the employer alone. The potential H-1B nonimmigrant bears the financial burden of seeking the visa.
DOL regulations require that if there is a Service Contract Act wage determination for the occupation the employer seeks an H-1B nonimmigrant to fill, that determination is to be used as the prevailing wage.
In determining what area to consider in making the prevailing wage determination, the DOL will consider either all locations within the same metropolitan statistical area (MSA) or the same primary metropolitan statistical area (PMSA) as constituting the "normal commuting distance." The consolidated metropolitan statistical are will not be considered as the DOL feels it often covers too large a geographical area. Locations that are outside a MSA or PMSA may also be considered. 
All prevailing wage determinations that are not based on SESA reports must compute the prevailing wage using the "weighted average" statistical methodology.
Often employers file a new LCA for an area already covered by one. When this occurs, and the prevailing wage has risen, the employer may continue to pay H-1B workers employed under the first LCA according to the prevailing wage under that LCA.
Examples for these additional provisions are provided in Appendix B to Subpart H.
A. The Burden on Employers and H-1B Workers
The DOL's reasoning that these rules are not unduly burdensome on small business is based on the Department's belief that only a small number of firms and an even smaller number of small employers will be subject to the dependent employer's requirements. However, the American Immigration Lawyers Association makes an interesting argument. 
According to AILA, the DOL ignores the new burdens the rule would place on ALL employer such as the requirements for providing equal benefits, the prohibition on enforcement of certain types of contractual provisions absent a State court ruling and the attempts to reintroduce a short-term placement "objective wage system" and other provision struck down by the courts in the famous 1996 National Association of Manufacturers v. Reich case. Furthermore, according to AILA, the actual number of hours that employers will have to spend on the new paperwork will be significantly more than the amount DOL believes. 
One almost passing provision in the proposed rules may do more than any other to cause employers to pass on the H-1B program. Employers are not permitted to pass on any of the costs of applying for the H-1B visa on to employees. The DOL interprets this to mean attorneys fees even if the deduction of the fees would not cause the employee to be paid less than the prevailing wage. Employers, particularly small firms, will no doubt be very reluctant to pay the attorney fees for the process if it is possible the visa will be denied and the employee will not be able to work. 
Written comments on the proposed regulation are due by February 4, 1999. For information on submitting comments, you can download the document on our web site at http://www.visalaw.com/docs.