Articles Posted in H-1B Visa Audit

watching-time-860275-m-300x225For many years, the H-1B visa has provided a unique opportunity for foreign specialized workers to join the U.S. workforce. The visa was initially designed to supply American companies with foreign workers to offset shortages in the U.S. labor market. However, after a tumultuous presidential election, increased attention is now being placed on U.S. immigration policy and the H-1B visa is now under intense scrutiny from both sides of the political aisle. Legislation is now being introduced in the U.S. Congress that is bound to dramatically change the rules for H-1B visa holders. It is critical for foreign workers and their employers to understand the potential ramifications of these changes and to act fast.

Criticism of the H-1B visa has typically taken two forms. First, there are those who criticize the H-1B visa because they claim that it has been widely abused. The initial purpose of the visa was to help U.S. companies fill shortages in the labor market, but some companies have abused the visa in an attempt to outsource American jobs to less expensive foreign workers. These critics of the current visa rules have attempted to close loopholes that would otherwise incentivize companies to seek foreign labor in place of existing American labor. Second, there are those who broadly criticize the H-1B visa by suggesting that the program inherently harms the U.S. workforce. This second criticism of the H-1B visa is now gaining traction among both Democrats and Republicans. New guidelines for the H-1B visa are being proposed in both houses of Congress that could radically overhaul the program.

In the House, Rep. Darrell Issa (D) has introduced “The Protect and Grow America Jobs Act.” Issa claims that the legislation aims to “ensure that our valuable high-skilled immigration spots are used by companies when the positions cannot be filled by the existing workforce.” Issa’s bill would increase the salary requirement for an H-1B visa from $60,000 to $100,000. The purpose of this change, he claims, is to prevent companies from outsourcing American jobs to foreign workers. Issa represents a district of California that has unfortunately seen a lot of H-1B abuse by large corporations. But some critics in the House claim that Issa’s bill does not go far enough.

Being selected in the random H-1B visa lottery is the first challenge an H-1B visa contender faces.  For those with good bhaagy (luck in Hindi), once selected, their H-1B visa petitions must be strong on its own merits to receive approval.  Getting your H-1B visa petition approved depends on “successful preparation” which is a partnership between the H-1B visa candidate, the employer and the attorneys preparing the petition.  It is only when the partnership works to its fullest potential will the H-1B visa petition be approved.  One of the most important key elements to successful preparation is assuring that the attorneys have all relevant data for the employer and employee timely.  Our law firm has pioneered an online case management portal a decade ago wherein candidates can share their information and data in a secure manner.  The Law Firm of Shihab & Associates, Co., LPA uses a robust system that provides immediate status updates and transparency through the process. We have prepared the attached presentation to demonstrate the efficient preparation process leading up to the April 1st, 2016 filing date.

The Law Firm of Shihab & Associates strive to keep you informed about key immigration issues.

gavel-952313-m.jpgIntroduced in a separate article, the new standard for avoiding wage liability to H-1B employees (without terminating them) created in Gupta vs. Compunnel raises a serious question. Now, to escape liability in this way, employers must first have “work assigned” to the employees in question. Because, the reasoning goes, the employees must be nonproductive due to “conditions unrelated to the employment,” and if there is no work assigned it could be true that the lack of assigned work is the true cause of their nonproductive status. If it is, then the employer’s case for escaping wage liability cannot be accepted (and the burden of proof for such a case is on the employer).

Thus, what may count as “work assigned” in this context becomes of consequence. Indeed, it was a central focus in a case recently argued by Attorney Gus Shihab on behalf of an affected employer: Administrator vs. Parsetek. Parsetek is a tech consulting agency in Virginia. Employee S.M. was hired by Parsetek with an effective and prevailing wage of $51,376 per year–but was never placed on work assignment due to her being unavailable for such, but was only given a bona fide termination many months afterwards. The case revolved around Parsetek’s wage liability in light of the Gupta standard despite her never having completed any work on its behalf.

In the first two months of her being with Parsetek as an H-1B, S.M. was interviewed for a three-year assignment that would have resulted in significant profit for Parsetek. However, nothing came of it. Parsetek claims that it was because she continuously asked to delay the start date of the assignment. Not long after that, S.M. informed Parsetek that she would be leaving Virginia to join her boyfriend in Chicago. This alone did not cause serious alarm because companies like Parsetek can place workers virtually all over the nation. So, it continued to market her to several end-client employers. This went on for seven months, with S.M. seeming to cooperate. However, her responses grew less and less frequent.

ring-the-bell-pictogram-1383851-m.jpgIn a February blog article, we covered the case of an H-1B employee who had “absconded.” Specifically, she made herself patently unavailable for work by fleeing the area and being unresponsive to attempts to assign work to her. In normal circumstances, there are easy solutions to this kind of problem. But with the Department of Labor’s (DOL) support, the former employee was able to construct a somewhat persuasive case that the employer owed her a great deal of money. Luckily, however, the judge disagreed. He instead agreed with the employer–represented by Attorney Gus Shihab. To explain the case, the situation that led to the government’s coming to side with the employee must first be presented.

To hire an H-1B worker, an employer must demonstrate (through a Labor Condition Application) that the foreign worker’s presence displaces no American workers. The goal is to limit the incentive one has in hiring H-1B workers to their skills and qualifications. Nonetheless, some groups are blaming H-1B workers for certain economic woes. Perhaps because of this, the government appears to be attempting to make the hiring of H-1B workers less and less attractive.

One consequence of Labor Condition Application requirements is that hiring H-1B workers comes with a high standard for avoiding wage payment liability. In order to be released from this liability, an employer must effectuate a “bona fide” termination (which is more complicated than a normal termination) or show that the employee was unavailable for work (or in “nonproductive status”) due to “factors unrelated the employment.” If neither of these are done for any period of time (and the employee has not resigned or forfeited H-1B status), an employer is obligated to pay the employee as if he or she had been regularly working (even if this is not the case). This pay must be at least the prevailing wage of people with the H-1B worker’s same occupation in his or her area.

compass.jpgUSCIS has issued guidance describing some situations where it is required to file an amended H-1B petition. This guidance follows a ruling out of its Administrative Appeals Office on a case that we covered several weeks ago: Matter of Simeio solutions. In a blog article, we went through USCIS’ investigation and the resulting conclusion: that certain liberties taken by Simeio led, perhaps unknowingly, to violations of the H-1B program. Though the company later gave effort to correct their errors and begin compliance, USCIS revoked the concerned aliens’ H-1B visas. It seems reasonable to conclude that the guidance is intended to prevent confusion that may have led to Simeio’s violations.

In the referenced case, USCIS and State Department investigators discovered discrepancies between information provided on petitions, obtained in consular interviews, and received from direct communication with Simeio employees. These discrepancies eventually led the investigators to find that some Simeio H-1B employees were working in locations not specified in their most recent petitions–and that this fact caused them to be paid less than was required. H-1B employees must be paid no lower than their assigned “prevailing wage,” and there may be a different prevailing wage for each class of occupation in each Metropolitan Statistical Area (MSA). The MSAs from which these H-1B employees were in fact working had higher prevailing wages for their occupations than the MSAs described on their most recent H-1B petitions. Because they were paid near or at their old MSA’s prevailing wages, their switches in worksite were not allowed without certain minimum increases in pay. However, the switches happened without sufficient increases.

The new guidance has been issued in part to prevent situations like above. It can be considered a reminder of current policy along with a clarification of USCIS’ interpretation of it. The logic of the guidance is as follows:

  1. Regulations already state that when an H-1B employee’s employment situation significantly or “materially” changes, his or her employer is required to submit an amended H-1B petition (or an altogether new petition if preferred).

rejected-865417-m.jpgMany companies are pushing to increase the annual cap on H-1B visas, but this effort has found opposition. Some say the program is riddled with fraud, while others oppose the program altogether. Perhaps because of this, USCIS goes to great lengths to enforce its regulations. A recent case reveals insights into how it does so.

The case, Matter of Simeio Solutions, involves an H-1B beneficiary who was ostensibly (according to the I-129 petition) hired to complete “in-house projects” for clients at the company’s home office in Long Beach, CA. The beneficiary would thus not be sent to other worksites and would only work under the petitioner. The Labor Condition Application (LCA) and included Prevailing Wage Determination (PWD) reflected this. However, if USCIS was convinced that these circumstances would not change, it wasn’t for very long.

The beneficiary began working for Simeio as an F-1 student during OPT (which is a short-term work authorization that alien college students can take advantage of after graduation). During this time, an H-1B petition was filed on behalf of the immigrant by this same company, which was approved. The beneficiary then went home to undergo a consular interview to receive the visa. As usual, the consular officers wanted to verify some things on the petition. It is not public information what the officer said in the interview, but it is known that as a result, the petitioner was made to submit some additional evidence.

abscond.jpgA recent litigation regarding an H-1B visa audit, also known as a Labor Condition Application (LCA) Audit, raised a question that case law has not yet adequately addressed, even though the case isn’t unique. The case law in this area seems to muddle the facts without clearly addressing an employer’s obligation to pay the H-1B visa employee when he or she disappears and is never heard from. But prior to delving into the facts of our case, a review of the employer’s obligations is in order.

When does the Employer’s Obligation to Pay an H-1B Visa Employee Terminate?

The LCA obligates employers to pay H-1B employees an amount at least equal to the “prevailing wage” for their positions. (The Department of Labor (DOL) determines this wage.) There are two situations in which this obligation is known to be exempted. The first applies when an employer effectuates a bona fide termination of the employee. The second is when the employee experiences a period of nonproductive status due to conditions unrelated to the employment which take the employee from his or her duties (e.g. touring the U.S. or caring for an ill relative etc.) or render the nonimmigrant unable to work (e.g. maternity leave or an automobile accident etc.). The regulations, however, do not clearly address a situation in which the foreign national disappears.

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Under the Obama Administration, the U.S. Department of Homeland Security (DHS) and Department of Labor (DOL) have markedly increased their efforts in worksite enforcement. Consequently, there has been a significant increase in H-1B site inspections resulting in audits. United States Citizenship & Immigration Services (USCIS) has confirmed that random, unannounced onsite inspections will be a regular occurrence in the future. This will include sending investigators to the H-1B worksite to verify that the H-1B employee is working at the appropriate location and performing the work as described in the H-1B petition. The objective of the unannounced visits and investigations is to detect abuses of the visa program. These investigations can raise issues ranging from Labor Condition Application (LCA) discrepancies to committing fraud on the USCIS. However, the most commonly cited issue is non-payment of a prevailing wage to the beneficiary.

To prepare our clients for these unannounced inspections, The Law Firm of Shihab and Associates will help you compile an H-1B Public Inspection File. We can also advise you on the best practices for I-9 compliance, what records you need to keep available, and any E-Verity questions you might have. These practices will often answer all the questions that an audit or inspection might raise, limiting your company’s exposure. However, there are some situations where these questions cannot be simply answered and the issue must be litigated.

Strategies for Litigating

Once it has been determined that litigation is the most appropriate option for your company, there are several tools and strategies that can be used to build the best case for your company. Some of the most basic litigation tools include requests for admissions, interrogatories and request for production of documents and depositions. These will lay the evidentiary foundation for your case and help establish the basic facts. Other, more advanced tools include, filing a motion in limine and if a party is seeking to submit evidence from a foreign country, working within the Hague Convention to ensure that the evidence may be used in the United States.
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865417_rejected.jpgThe USCIS has recently disclosed last month, pursuant to a Freedom of Information Act (FOIA) request, a list of specific fraud indicators it uses to verify the integrity of H1B petitions in order to identify the likelihood of fraud. Once a petition has been flagged by the indicators, this will trigger further scrutiny, and the USCIS will refer the petition to the Center Fraud Detection Operations (CFDO). These indicators include:

  • The Company declares that it has less than 25 employees
  • The Company has less than $10 million in gross annual income

1077691_dark_secrets___.jpgThe Department of Homeland Security and the US Citizenship & Immigration Services released unredacted copies of documents that have been sought by the American Immigration Lawyers Association after prolonged litigation. This is the result of a Freedom of Information Act lawsuit filed by the Legal Action Center of the American Immigration Council on AILA’s behalf with Steptoe & Johnson LLP, AILA v. DHS, No. 10-01224 (D.D.C. filed July 20, 2010). The purpose of the FOIA lawsuit was to compel DHS and USCIS to release records of agency policies and procedures in connection with H-1B fraud investigations.

AILA submitted three FOIA requests to the USCIS in 2009 for documents including memoranda, standard operating procedures, and templates used for Requests for Evidence regarding H-1B petition fraud. USCIS initially decided to withhold documents. Once AILA filed suit in US District Court to compel turnover of the documents, USCIS determined that some information could be disclosed and released heavily redacted documents. The Court ordered the USCIS to better explain why the withheld information cannot be produced. Subsequently, in May 2012, USCIS disclosed the documents in full.
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