Labor Immigration Law

Effective January 1, 2010, the Department of Labor (DOL) centralized all prevailing wage determinations needed in connection with certain programs – PERM, H-1B, H-2B and E-3.   All prevailing wage requests now must be submitted to DOL for processing and not to the state workforce agencies, as it was done before.

Because DOL was not ready to accept electronic submissions on January 1, it announced that it would accept paper prevailing wage submissions until the iCert system is modified to accept prevailing wage requests on Form 9141.   As a result, many prevailing wage requests from early this year were submitted via mail.  On or about January 15, 2010, DOL launched the online prevailing wage request form and is now accepting online submissions.

Prevailing Wage Determinations Currently Take Three to Four Weeks

Unfortunately, delays in the processing of the prevailing wage requests are widely reported.  In many instances, paper request forms submitted before January 15th took one or two weeks to be entered into the system and confirmed as submitted.  We are seeing that it currently takes between three and four weeks for DOL to provide prevailing wage determinations.

In communications related to the new system, DOL has indicated that prevailing wage determinations may take up to 60 days.  This is in a sharp contrast to the pre-January 1, 2010 system where state workforce agencies were often able to provide prevailing wage determinations within 1-2 days.

We hope that DOL is experiencing adjustment issues to the new system and once system glitches are ironed out, DOL will staff the prevailing wage determination bureau properly so that determinations can be issued promptly.   To avoid delays in H-1B petitions associated with prevailing wage determinations, our office uses alternative prevailing wage surveys.  However, for PERM labor certification applications, the new prevailing wage determination system adds one to two months of additional PERM preparation time.

The American Immigration Lawyers’ Association (AILA) has provided some guidance and information from Customs and Border Protection (CBP) at the Newark, New Jersey airport.

Background

Starting in December of 2009, our office has been receiving alerts from current and prospective clients about a number of incidents where holders of valid H-1B stamps were questioned and, in some cases, offered the opportunity to withdraw their request for admission into the U.S. or be subject to expedited removal proceedings;  in many cases, such H-1B holders were not admitted into the U.S. and sent back to their home country and have had their H-1B visas cancelled.

Due to the lack of information from CBP and the seriousness of the situation, a number of misleading and sometimes false rumors have began circulating among communities of H-1B holders on the Internet.    We hope that this alert will provide helpful information and understanding of what happens at Newarj, NJ airport and what can be done about it.

USCIS/ICE Employer Fraud Investigations Cause Scrutiny of H-1B Employees

CBP has confirmed that at least several of these cases involved companies which were under investigation by Immigration and Customs Enforcement (“ICE”) and/or USCIS for ongoing H-1B program fraud.  CBP noted that they use as much advance information as possible to target specific individuals who warrant additional inspection.  CBP also noted that recent enforcement cases reviewed ranged from simple documentary deficiency to visa/petition fraud. Upon an inadmissibility finding, the determination to either allow the applicant to withdraw his or her application for admission or to subject the applicant to expedited removal is based on “the totality of the circumstances and reviewed on a case by case basis.”

In the Newark enforcement actions, CBP Newark worked closely with USCIS – Fraud Detection and National Security (“FDNS”) and the Department of Labor – Office of Investigations.  CBP stated that those questioned were offered the opportunity to contact their consulate and that CBP officers contacted the petitioner and/or current employer when clarification was needed.  CBP confirmed that they screen ALL employment-based visa holders to determine admissibility and ensure compliance with entry requirements.

Newark, NJ Airport New Policy to Verify L-1 and H-1B Employees

CBP has also announced that the Newark, New Jersey airport has instituted a new policy which involves conducting random checks for returning H-1B, L-1, and other employment-based visa holders.  Based upon the initial check, if the person’s admissibility is questionable, then he or she will be sent to secondary inspection for further interview. In some cases, if CBP discovers discrepancies in previously filed petitions, then the applicant may be asked to withdraw his/her application for admission into the United States or be subject to expedited removal.

Public Information May be Consulted During or After Inspection

Employers should be advised that the government may review information in any public venues such as websites and other media for consistency with petition content. Thus, keeping such public information accurate and current is essential.

Note the new fraud related language added to I-797 approval notices –

NOTICE: Although this application/petition has been approved, DHS reserves the right to verify the information submitted in this application, petition, and/or supporting documentation to ensure conformity with applicable laws, rules, regulations, and other authorities. Methods used for verifying information may include, but are not limited to, the review of public information and records, contact by correspondence, the Internet, or telephone, and site inspections of businesses and residences. Information obtained during the course of verification will be used to determine whether revocation, rescission, and/or removal proceedings are appropriate. Applicants, petitioners, and representatives of record will be provided an opportunity to address derogatory information before any formal proceeding is initiated.

Conclusion: Proper Pre-Travel Preparation is Essential

It should be noted that although the recent news were linked with Newark, New Jersey airport, CBP may expand its policy and enforcement to other airports at any time.  In light of these developments, it becomes increasingly important for holders of H-1B and L-1 visas to prepare well for their return trip into the U.S., regardless of the port of entry they use to enter the U.S.

We advise all of our clients to thoroughly prepare for their trip to the U.S. and their inspection upon application for admission.  H-1B and L-1 visa holders should review all pertinent documents to their petition and to consider carrying evidence to support the assertions made in the petition filed on their behalf by their employer.  In addition, the H-1B or L-1 employers must be prepared for telephone inquiries from CBP officers at ports of entry to confirm the assertions made in any nonimmigrant petition and supporting documentation.  Finally, employers should ensure that public information, such as websites and/or other materials, may be consulted by CBP agents to determine whether a particular H-1B or L-1 petition is valid.

We wrote in late October and early November of 2009 about the USCIS Ombudsman’s recommendation that USCIS (1) accept H-1B filings without a certified LCA but with a proof of filed and pending LCA and (2) to excuse late H-1B filings where the delay in filing was caused by pending LCA or employer’s Federal Employed Identification Number (“FEIN”) verification.

In November of 2009, USCIS agreed to temporarily (for a period of 120 days) create a policy in line with the USCIS Ombudsman’s recommendations.   In a Memorandum dated as of January 28, 2010, by Alejandro Mayorkas addressed to the USCIS Ombudsman, USCIS announces that it will make permanent policy changes in line with the October 2009 Ombudsman recommendations.

USCIS Will Accept H-1B Petition With Evidence of Initial LCA Filing

H-1B petitions will be accepted with evidence of initial LCA filing if the H-1B has been filed at least 7 calendar days after the LCA was filed with DOL.   The petitioner must include a copy of the LCA submission’s email confirmation as evidence.

Petitioners who seek to use this H-1B filing procedure must wait until they receive an RFE before they can submit the already DOL-certified LCA in support of the H-1B filing.  The certified LCA must be the same LCA which was filed with the original H-1B petition, unless the petitioner provides an LCA which was certified prior to the submission of the H-1B petition.

Late Filings Due to LCA/FEIN Verification Delays Should Be Excused

In addition, USCIS has confirmed that it will continue to excuse late H-1B filings under 8 C.F.R. 214.1(c)(4) or 8 C.F.R. 248.1(b) when the delay in filing of the H-1B petition requesting an extension of H-1B stay or change of status to H-1B was related to LCA issuance delays beyond the control of the petitioner and/or denials by DOL due to employer’s FEIN verification issues.

Our office handles a fair amount of appeals with the Administrative Appeals Office (AAO) and we often receive inquiries not only about about the procedural aspects of an AAO appeal but also about the current processing times for AAO cases.

About the AAO

The AAO is an appeals office which handles appeals of certain decisions made by USCIS field offices and regional procssing centers.  The Freedom of Information Act (FOIA) requires that all AAO decisions be made available to the public.  As a result, AAO decisions are accessible in reading rooms at USCIS headquarters here in Washington, DC and at field offices.  Also, some (but not all) AAO decisions are available online.

Current AAO Processing Times

USCIS has released the average processing times for cases pending at the Administrative Appeals Office (AAO) as of January 4, 2010.  Overall, there is not much change in comparison to the December 2, 2009 report.

Among the most notable AAO processing times:

• H-1B appeal takes 13 months (increase by one compared to December 2, 2009);
• I-140 EB1 Extraordinary Ability takes less than 6 months (no change), Multinational Manager or Executive takes 11 months (no change) while EB1 Outstanding Professor or Researcher category is current (meaning less than 6 months);
• I-140 EB2 (Advanced Degree) takes 24 months (two months improvement) while EB2 (NIW) takes 6 months (or current, meaning less than 6 months); and
• I-140 EB3 Skilled Worker takes 23 months (no change) while EB3 Other Worker takes 23 months on appeal (no change).

Read the full AAO Processing Times report.

The Neufeld Memorandum of January 8, 2010, has generated a substantial amount of discussion with its newly-proposed standard for “employer-employee” relationship applied to third-party H-1B employee placements, which are very common for consulting companies.  Our office has handled many consultations and inquiries relating to the Neufeld Memorandum and what it means for the thousands of H-1B employees currently on H-1B visa and for their employers.

AILA Seeks Rescission of the Neufeld Memorandum

Our office has revised its standard H-1B preparation guidelines for third-party worksite H-1B petitions to comply, to the extent possible, with the new requirements imposed by the Neufeld Memorandum.  In the meantime, the American Immigration Lawyers Association (AILA), in a January 26, 2010, Memorandum addressed to the Chief Counsel of USCIS, calls for the rescission of the Neufeld Memorandum effective immediately and for the issuance of a new memorandum to redefine the employer-employee relationship differently, considering legal precedent.

The AILA Memo is quite lengthy (24 pages) and goes into a great detail to substantiate its main claims that (1) the Neufeld Memorandum improperly creates substantive new rule outside the proper channel for making such rules and (2) that the employer-employee relationship definition in the Neufeld Memorandum is improper and is against congressional intent.

The Neufeld Memorandum is Improper Rulemaking

As an initial matter, AILA argues that the Neufeld Memorandum is issued improperly  because it seeks to change substantive rules without the necessary process.  Change in substantive rules must be done by following the required notice and comment procedures.  AILA argues that the “guidance” in the Neufeld Memorandum is a substantive rule change which cannot be imposed by a memorandum;  instead it should follow the normal rulemaking process.  As a result, AILA argues that the Neufeld Memorandum should be set aside as a violation of the Administrative Procedures Act (APA).

The Neufeld Memorandum Definition of Employer-Employee Relationship is Incorrect

As its main argument for seeking the rescission of the Neufeld Memorandum, AILA argues that the sweeping definition of “employer” is inconsistent with the law, impedes its intent and purpose and is inconsistent with decades of precedent.  The AILA Memo then goes into great detail and legal analysis of its claim to conclude that the Neufeld Memorandum, in addition to certain recent AAO’s non-precedent decisions and the accompanying adjudications at the Service Centers that are applying these decisions to current filings seek to overturn over fifty years of consistent precedent and regulatory interpretation to categorically deny eligibility for benefits to an entire class.

Conclusion

The AILA Memorandum is a well researched and substantiated request for the rescission of the Neufeld Memorandum.  However, we do not know yet what USCIS’ position would be in response and whether USCIS will take any steps in response to this memorandum.  We will continue to provide updates on this topic as it is of great interest of our clients, readers and a large portion of the employment-based immigration community.

About the Electronic System for Travel Authorization

ESTA is an electronic travel authorization that all citizens of VWP countries must obtain prior to boarding a carrier to travel by air or sea to the United States under the Visa Waiver Program (WVP). ESTA has been mandatory since Jan. 12, 2009 for all nationals of VWP countries traveling to the U.S under the VWP. The requirement does not affect U.S. citizens returning from overseas or citizens of VWP countries traveling on a valid U.S. visa.

ESTA applications may be submitted at any time prior to travel, and once approved, generally will be valid for up to two years or until the applicant’s passport expires, whichever comes first. Authorizations are valid for multiple entries into the U.S. The Department of Homeland Security recommends that ESTA applications be submitted as soon as an applicant begins making travel plans.

VWP travelers are required to log onto the ESTA Web site and complete an online application. The web-based system prompts applicants to answer basic biographic and eligibility questions typically requested on a paper I-94W form; ESTA is expected to completely replace the paper I-94W in the coming months. A third party, such as a relative, a friend, or a travel agent, may submit an application on behalf of a VWP traveler.

ESTA Registration Mandatory – New Enforcement Campaign

We have written in the past about the Electronic System for Travel Authorization (ESTA) which became mandatory more than one year ago, on January 12, 2009, for all Visa Waiver Program (VWP) travelers into the U.S.

The Department of Homeland Security (DHS) has recently announced a 60-day campaign to enforce ESTA registration.  Pursuant to this campaign, DHS will use its authority to deny entry to all VWP travelers to U.S. who have not registered with ESTA.   Beginning January 20, CBP will initiate a 60-day transition to enforce ESTA compliance for air carriers; VWP travelers without an approved ESTA may not be allowed to board a U.S.-bound plane.

Our office received many inquiries by both H-1B sponsor companies and employees about what kind of fee payment arrangement is permissible under the H-1B regulations.

Background of H-1B Filing Fees

There are several H-1B filing fees, which are applied differently depending on the employer (private employer v. university or non-profit research entity) and on the type of petition (new H-1B, first extension or second/subsequent extension).  We are happy to guide on the applicability of these fees.

Regardless of their applicability, the H-1B filing fees are:

1. H-1B filing fee – $320;
2. Fraud prevention fee – $500;
3. ACWIA fee – $750 (for employer with 25 or less employees) or $1,500 (for employers with 26 or more employees); and
4. Premium processing fee (optional) – $1,000.

Fraud Prevention Fee Must be Paid by Employer

The only requirement with respect to who pays a specific H-1B fee is that the $500.00 fraud prevention fee be paid only by the employer.  The rest of the H-1B filing fees can be paid by either the employer or the employee.

What Happens if the Employee Pays the $500 Fraud Prevention Fee?

In cases where the $500.00 fraud prevention fee is paid by the employee, this cost will be deducted from the total wage paid to the H-1B beneficiary when determining whether s/he has received the required wage.   Pursuant to H-1B regulations, the “required” wage is the higher of the actual or prevailing wage.  The “actual” wage is defined as the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question.

As a result, if the employee is paid an amount which is $500.00 or less more than the required wage (as defined above), then the employer may be deemed to be in violation of the H-1B regulations requiring payment of the so called required wage.

Conclusion

To avoid uncertainties associated with whether the employer has paid the required wage, we urge our H-1B clients to structure the fee payment in a way that the $500 fraud prevention fee is paid by the employer.   The rest of the fees may be paid by either the employee or employer, as the parties negotiate or as the employer’s policies dictate.

In a January 8, 2010, Memorandum, Donald Neufeld, the Associate Director for Service Center Operations, provides some guidance on the standards for H-1B petitions filed by independent contractors, self-employed beneficiaries, and beneficiaries working at third-party worksites.

Focus on Employer-Employee Relationship

The guidance is primarily concerned with the employer-employee relationship.  Pursuant to the H-1B regulations, an employer who seeks to sponsor a temporary worker in an H-1B specialty occupation is required to establish such employer-employee relationship.  USCIS deems that such relationship is established when the employer has the right to control the means and manner in which the work is performed.

Some of the factors which are helpful in determining whether such employer-employee relationship exists are the employer’s ability to pay, hire, fire, supervise or otherwise control the work of the employee.

Who Is Most Affected by the New Guidance?

While the employer-employee relationship must be established in all H-1B cases, in practice, the right to control and the employee-employer relationship issues arise in self-employment, contractor (or consultant) companies or with beneficiaries placed at third-party worksites.  The right to control issue should be addressed also with in-house H-1B petitions, although in many cases it would be easy to establish such right to control when the employee is working on the employer’s premises.

Establish the Employer’s Right to Control

Under the Neufeld Memorandum guidance, with each H-1B petition, USCIS must determine if the employer  has a sufficient level of control over the employee.

The right to control can be established when considering the following factors:

1. Does the petitioner supervise the beneficiary and is such supervision off-site or on-site?
2. If the supervision is off-site, how does the petitioner maintain such supervision (weekly calls, progress reports, site visits, etc.)?
3. Does the petitioner have the right to control the work of the beneficiary on a day-to-day basis if such control is required?
4. Does the petitioner provide tools or instrumentalities needed by the beneficiary?
5. Does the petitioner hire, pay and  have the ability to fire the beneficiary?
6. Does the petitioner evaluate the work-product of the  beneficiary?
7. Does the petitioner claim the beneficiary for tax purposes?
8. Does the petitioner provide the beneficiary any type of employee benefits?
9. Does the beneficiary use proprietary information of the petitioner in order to perform the duties?
10. Does the beneficiary produce an end-product that is directly linked to the petitioner’s line of business?
11. Does the petitioner have the ability to control the manner and the means in which the work product of the beneficiary is accomplished?

The Neufeld Memorandum provides that these factors should be weighed in the “totality of the circumstances” which allows some flexibility to focus on some, but not all, factors.

Additional Evidence Required in H-1B Filings by Consulting Companies and Third-party Worksite Employers

As a result of the Neufeld Memorandum, USCIS establishes a new level of evidence to be submitted as part of all new, transfer and even extension H-1B petitions filed by employers which intend to place the beneficiary at a third-party worksite.

Currently, such third-party worksite H-1B applications require evidence to establish the exact position and duties in which the beneficiary will be engaged at the third-party worksite.  In addition, as a result of the new guidance, H-1B petitioners will have to now include information to satisfy all or many of the right to control factors described above.

Pursuant to the field guidance, such right of control test is applied to all new, transfer and even H-1B extensions with the same employer.

Conclusion

The Neufeld Memorandum creates another set of information and documents which will have to be prepared and provided as part of each H-1B filing by a consulting, self-employment and third-party worksite petitioner.

While the guidance is intended to apply for all H-1B beneficiaries, regardless of where they are employed, the guidance is most likely to be more rigorously enforced against employers who file H-1B petitions on behalf of employees placed at a third-party site or off-site.

Petitioners who regularly place employees off-site should become familiar with the 11 factors described above  and be prepared to answer and document the petitioner’s right to control the intended H-1B beneficiary.

About EB-5 and the Regional Center Program

In 1990, the U.S. Congress created the fifth employment-based preference category (EB-5) for qualified foreign entrepreneurs seeking to invest in a business that will benefit the U.S. economy and create or save at least 10 full-time jobs. The basic amount required to invest is $1 million, although that amount is reduced to $500,000 if the investment is made in a rural or high unemployment area.  Of the approximately 10,000 EB-5 green cards available each year, 3,000 are reserved for foreign nationals who invest through a Regional Center.

A Regional Center is a private enterprise or corporation or a regional governmental agency with a targeted investment program within a specific region.   The Regional Center Investment Program allocates 3,000 green cards each year for people who invest in designated Regional Centers.  The program does not require that the foreign investor’s enterprise itself directly employ 10 U.S. workers.  Instead, it is enough if 10 or more jobs will be created directly or indirectly as a result of the investment. As a result, he Regional Center Investment Program aids foreign investors by directing and professionally managing their investment in the designated business and geographic focus of their Regional Center.

Current Regional Centers

An updated list of approved EB-5 Regional Centers can be found at USCIS’ website below:

Immigrant Investor Regional Centers (external link)

As of the date of this article, there are 75 approved Regional Centers and there are approximately 50 Regional Center applications pending for review at USCIS California Service Center.

Contact Us for Information and Help

Please contact us if we can help you  understand the EB-5 Regional Center program, help you establish eligibility and guide you through the process.