Managing Immigration Risk for “Compliant” Employers By Jane W. Goldblum, Esq. & Jonathan A. Grode, Esq.
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Many employers would be startled to find that despite their ‘best efforts’, they have not been fully complying with Immigration and Department of Labor laws. The following real‐life, real‐practice situations highlight this startling reality: 
Example 1: In 2011, the Authors represented an employer, whose work force exceeded 60,000 employees nationwide, and who was wholly committed to hiring a wholly legal work force. This employer, in an effort to ensure compliance with Immigration and Form I‐9 requirements, contracted with a HR management company to ensure that their Forms I‐9 were completed correctly and were readily accessible via an electronic database. Subsequently, this employer was selected by Immigration and Customs Enforcement (ICE) for a random Form I‐9 audit. Such employer was asked to produce 30,000 Forms I‐9 
Jane W. Goldblum is a founder and partner of Goldblum & Hess. With 30 years of immigration experience, Jane represents some of our nation’s finest universities, medical centers, research institutions and private employers. Jane has been retained on multiple occasions as an expert witness in the field of immigration and is frequently called upon to provide immigration advice to local, state, and national elected officials. Jane is consistently listed as one of the best immigration attorneys in the United States (www.bestlawyers.com), as one of the best immigration attorneys in Pennsylvania (www.superlawyers.com) and as one of the best business immigration attorneys internationally (www.whoswholegal.com). She is a frequent author and speaker on Employment‐Based Options at national and local conferences of the American Immigration Lawyers Association (AILA). Jonathan A. Grode (formally of Goldblum & Hess) is the U.S. Director for Green and Spiegel, LLC. Having worked in the immigration field for over 13 years, Jonathan possesses significant experience dealing with DOL and DHS enforcement actions. Jonathan, who is Co‐Chair of ABA’s Labor and Employment Law Immigration Committee and Co‐Chair of the New Members Division of AILA’s Philadelphia Chapter, teaches both Business Immigration Law and Advising Global Corporations as an Adjunct Professor at Temple University’s Beasley School of Law. He has published extensively and is a regular presenter at national and international ABA conferences as well as at local AILA seminars and meetings. Jonathan was recently named a 2012 Pennsylvania rising star in the field of immigration law (www.superlawyers.com). for all of its locations in three different states. Unfortunately, it immediately came to light that the HR management company had not been doing their job well. There were thousands of “technical” deficient Forms I‐9 that were never corrected. Worse, there were hundreds of missing Forms I‐9, of which the Employer was completely unaware. When one considers, that the “record keeping fines” for such deficiencies are $110 to $1,100 per deficiency, the financial exposure of this employer was enormous. Furthermore, given the fact that this was a ‘high visibility’ employer, the additional risk of ICE using this employer as an example made the cumulative effect of such deficiencies that much more troublesome. 
Example 2: In 2010, the Authors were retained by an employer facing a Department of Labor (DOL) Wage and Hour investigation. This employer, who provided technology consulting services to a variety of corporate clients, employed at least a dozen foreign nationals in H‐1B classification over the preceding decade. The employer had used another reputable immigration law firm to prepare and submit the H‐1B petitions on its behalf. The H‐1B petitions were readily approved and properly documented. However, during the employment of such individuals, the employer repeatedly moved the H‐1B workers from worksite to worksite and when projects were not available, the foreign nationals did not receive compensation. In addition, the employer had a verbal agreement with the H‐1B workers that in lieu of the annual bonuses that all employees would receive, the bonus for the H‐1B worker would be retained in order to cover the costs associated with the H‐1B sponsorship. In 2010, a disgruntled employee filed a claim with the DOL. After a six month investigation into the employer’s H‐1B practices, the employer was levied with fines and back wages in excess of $300,000 as well as was debarred for two years from the H‐
1B program. As illustrated above, the Department of Homeland Security (DHS) and the DOL are serious about immigration enforcement. Regardless of politics and regardless of the Presidential administration, the growing trend is for the government to take a harder stance and more in‐depth look at employer hiring practices. This scrutiny is non‐discriminatory. DHS and the DOL are investigating employers that are perceived to hire a wholly legal workforce, as well as employers that are perceived to employ undocumented workers. As of September 17, 2011, ICE had conducted over 3,000 employer investigations during fiscal year 2011 (Oct. 1, 2010 – Oct. 1, 2011) which signaled an over 150% increase from those same numbers from fiscal year 2008.1 Such investigations led to 331 “Final Orders” with over $9 million in fines levied against employers. These figures dwarf those for 2008, where only 18 final orders were issued with fines totaling $675,000.2 The DOL’s Wage and Hour Division has also increased its enforcement efforts against employers, particularly those engaged in the H‐1B program (which entails petitioning for a foreign national to assume a position utilizing the foreign national’s applicable baccalaureate degree). In 2011, one particularly complex investigation alone resulted in back wage restitution and civil money penalties in excess of $4.3 million.3 In addition, there are currently over 40 employers who are barred from using the H‐1B program as a result of violating LCA regulations.4 It is safe to assume that 2012, regardless of how the political winds blow, will witness further focus and 1
Statement of John Morton, Director, U.S. Immigration and Customs Enforcement, before the House Committee on the Judiciary, Subcommittee on Immigration Policy and Enforcement: “Oversight Hearing on U.S. Immigration and Customs Enforcement: Priorities and the Rule of Law”. Release Date: October 12, 2011. Accessed via: http://www.dhs.gov/ynews/testimony/20111012‐morton‐ice‐oversight.shtm, 1/15/2012. 2
id. 3
Prince George’s County Public Schools agrees to pay $4.2 in back wages for violations of H‐1B temporary foreign worker program. Release Date: July 7, 2111. Accessed via: http://www.dol.gov/opa/media/press/whd/WHD20110996.htm, 1/15/2012. 4
http://www.dol.gov/whd/immigration/H1BDebarment.htm, Accessed: 1/15/2012. increased investigations by these two agencies, once again elevating the risk thrust upon all employers and the need for even the “compliant” employer to do what it can to manage and minimize such risk. This article, therefore, will discuss the risks faced by the “compliant” employer (referring to the employer who wants to adhere to the requirements for a legal and compliant workforce imposed by DHS and DOL regulations and seeks to hire a lawful workforce). These employers often think, naively, that they are immune to government scrutiny. As the above demonstrates, they are not! In addition, and importantly, this article will also highlight the ways such employers can better protect themselves‐ how they can manage and minimize immigration‐related risks. We will discuss in Section 1: the common problems associated with both the I‐9 as well as E‐Verify programs ; and in Section 2: the H‐1B Program through the lens of a DOL Wage and Hour audit.5 Section 1: I‐9s and E‐Verify Mandatory compliance with I‐9 regulations, and, in some instances, E‐Verify regulations, can create numerous problems for employers. Even if an employer employs no foreign nationals, the employer faces liability if it violates I‐9 requirements. This section reveals the common and often nominal mistakes made by many employers on Form I‐9, as well as the errors that carry more significant risk and costs on both a Federal and State level. The basics: Form I‐9 The Immigration Reform and Control Act of 1986 ushered in a new era of immigration enforcement in the United States. 6 As a result of this Act, the duty of ensuring that an employer engages the services of individuals authorized to work in the United States became the sole responsibility of our 5
Please note that this article is not intended to be a complete guide to immigration compliance. Rather, this article aim is point out the most common problems encountered by compliant employers in order to highlight some of the risks associated with failure to fully adhere to immigration regulations. 6
Public Law 99‐603. Nation’s employers.7 For better or for worse, this provision of law was rarely enforced during the first 15 years of its existence and many employers either ignored the duty to complete Form I‐9 Employment Eligibility Verification (Form I‐9) or did it rather haphazardly.8 However, in 2003 the perspective of the government radically changed after the reorganization of the immigration service into three separate divisions, and the creation of DHS’s U.S. Immigration and Customs Enforcement (ICE) agency. As a result, the past decade has witnessed an ever increasing trend towards employer compliance enforcement as described above and detailed below. Form I‐9, in and of itself, is not a difficult or time consuming form to complete. The employer, within three days of hire, must ask each new hire to complete his/her section of Form I‐9 and provide 9
original documents that evidence the hire’s identity and work eligibility. The documents that can be used by the employee are provided on a three column list supplement to Form I‐9. List A documents provide proof of identity and employment authorization and a combination of List B (identity only) and List C (employment eligibility only) also establish the necessary proof.10 An employer is not permitted to suggest which documents an employee is to provide to complete Form I‐9 as such suggestions can trigger anti‐discrimination provisions.11 It is a regulatory obligation for employers to retain the employee’s Form I‐9 for three years from the date of hire or one year after the employee’s last day of work, whichever is later.12 7
8 CFR § 274a. 8
See Brownell, Peter. The Declining Enforcement of Employer Sanctions. http://www.migrationinformation.org/ usfocus/display.cfm?ID=332. Visited 1/30/2012. 9
8 CFR § 274a.2(b)(1). Please note – At the time of publication, the USCIS was in the process of revising Form I‐9. While there will be some additional fields and data collection involved in the new version of the Form, Form I‐9 will continue to rely on the basic principles described herein for verifying employment authorization of an employer’s workforce. See ‐ Federal Register at 77 FR 55486. 10
8 CFR §274(b)(1)(v)(A), (B), (C). 11
8 USCA §1324b(a). 12
8 CFR 274a.2(c)(2). The basics: E‐Verify Authorized by the Illegal Immigration Reform and Immigrant Responsibility Act (IIRAIRA) in 1986, E‐Verify became available to the public in 2004.13 E‐Verify, which has gained considerable attention over the past few years with the advent of State and Federal laws making this “voluntary” program mandatory, is, in some respects, a welcomed changed to the landscape of employment verification. It is very important to note that E‐Verify cannot be used as a substitute for an employer’s I‐
9 obligation, but instead, can (or must) be used in conjunction with Form I‐9. On a fundamental level, E‐
Verify shifts the burden of ensuring employment verification from employers back to the government by allowing employers to insert employee data into an online database that either confirms or questions the new hires employment eligibility by matching DHS and Social Security records. Conceptually, using E‐
Verify should indemnify employers from potential civil and criminal liability associated with employment of undocumented workers.14 However, the use of E‐Verify (or failure to do so when required by law), creates far reaching obligations for employers that are often ignored, overlooked or forgotten. In becoming an E‐Verify participant, an employer executes a Memoranda of Understanding (MOU) with both DHS and the SSA. Once the MOU goes into effect, an employer is required to use E‐Verify for all new hires, thus creating two initial employment obligations: 1) the completion of Form I‐9 and 2) the completion of an E‐Verify inquiry. 15 The most prevalent problems associated with the basic Form I‐9 requirements and use of E‐
Verify is caused by employer complacency and ignorance. Waiting an extra day or two to complete Form I‐9 or failing to use the E‐Verify program for an employee or two who will be working in a state that 13
See DHS, E‐Verify homepage– www.uscis.gov/everify. Accessed: 1/30/2012. 14
Press Release, DHS, Remarks by Secretary of Homeland Security Michael Chertoff, ICE Assistant Secretary Julie Myers and Federal Trade Commission Chairman Deborah Platt Majoras at a Press Conference on Operation Wagon Train (Dec. 13, 2006). 15
See The E‐Verify Program for Employment Verification Memorandum of Understanding – www.uscis.gov/everify. Accessed: 1/30/2012. requires use of the E‐Verify may seem de minimis. However, when considering the size and scope of many U.S. employers, such small errors in the aggregate can have costly consequences. The following subsections highlight these and other often overlooked obligations by seemingly compliant employers. 
Employers failing to complete Form I‐9 correctly Maybe it is the fact that Form I‐9 is short and easy to complete that it creates so much havoc and potential liability. In total, there are, at most, 18 fields that need to be completed on the Form between the new hire and the employer. Yet, despite Form I‐9’s simplicity, errors are regularly made. The errors referred to in this section do not include the detection of fraudulent documents, as ICE does not expect (or want) employers to be forensic document review experts. 16 This section, instead, refers to the “technical errors”, such as not having the employee sign Form I‐9; not completing and dating Form I‐9 within three days of hire; not listing the date the employment commenced; and not ticking the box regarding the hire’s status. Indeed, any omission—however obvious or de minimus—constitutes a technical error. Another, and more significant, action item that falls within the technical error realm of Form I‐9 completion, pertains to the requirement to reverify Form I‐9 for those foreign national employees working on temporary visas. This is the only requirement associated with Form I‐9 that exists after the time of hire, and therefore, is easily missed. Form I‐9 should indicate, if applicable, the date the foreign worker’s employment authorization expires. Thus, on or before such date, the employer is required to update such employee’s employment eligibility, using the bottom portion of Form I‐9.17 Such reverification requirements apply to all nonimmigrant workers, including those in H‐1B classification, but do not pertain to permanent residents (green card holders – even if the green card itself has expired). 16
The fines for same are far more extensive, reaching upwards of $11,000 per violation and would require an entire article dedicated to same. See 8 CFR 274a.10(b)(1). 17
8 CFR 274a.2(b)(1)(vii). While such technical errors, on a case by case basis, do not create noteworthy liability for an employer and can be justified as “just” another cost of doing business, systemic institutional technical violations most certainly are of tremendous concern. Example 1 in the introduction highlights this fact. The penalties associated with technical violations can range from $110 ‐ $1,110 per violation.18 ICE (or an administrative law judge) will determine the amount of the penalty based on five factors: o
The size of the employer’s business being charged; o
The good faith of the employer; o
The seriousness of the violation; o
Whether or not the individual was an unauthorized alien; and o
The history of previous violations by the employer.19 Therefore, it is easy to understand how fast the fines can add up when an employer engages in a practice of unintentionally keeping poor I‐9 records. As a result, this one page Form most certainly cannot be dismissed as being insignificant. While it is certainly feasible to mitigate the damages levied against an employer by showing a good faith effort to comply with the law, it is far easier to complete this Form correctly and fully from the start. Based on the above it is recommended that employers create a standard Form I‐9 compliance policy to which designated officials must adhere. Items that should be included in this policy include: 
Dedicating a team or department at each company location to be responsible for the completion and retention of all Forms I‐9. This is important for ensuring that all records are stored properly (either 18
8 CFR 274a.10(b)(2). 19
Id. hard copies or electronically) and that such documentation is readily accessible in the case of an I‐9 Audit. 
Establishing and ensuring that the employer has a re‐verification tickler system in place for all provided I‐9 documentation with an expiration date, such as a nonimmigrant visa classification. This can be as simple as using an outlook calendar. 
Reviewing all completed Forms I‐9 for accuracy one month after the time of hire to ensure no errors have occurred in the original completion of the Form. If an error/omission is discovered, such error should be corrected, and the I‐9 Form should be initialed and dated as of the date of correction (never back dated). 
If the employer uses temporary employment agencies, counsel should draft strongly worded indemnification agreements regarding the use of unauthorized workers and conduct due diligence investigations into the reputation and attestations made by the agency. By doing so the employer can deflect claims of “constructive knowledge” as to the employment eligibility of such workers. 
If the employer engages a third party to perform I‐9 functions on its behalf, ensure that such service assumes responsibility and liability for the proper completion of Form I‐9, and that all records are readily available for inspection upon request by ICE. Finally, and most importantly, the best policy recommendation pertains to employers who have not reviewed their Forms I‐9 for an extended period of time. It is strongly recommended that such employer retain experienced immigration and/or labor counsel to review its Form I‐9 files to ensure compliance. The long term value of such risk management assessment far outweighs the immediate costs associated with same. Indeed, the Author recently and proactively conducted an audit of a client’s Forms I‐9. Such client felt sure they were fully compliant and expected no deficiencies. We found hundreds of technical errors and trained the H.R. professionals to more carefully and properly complete their Forms I‐9. As evidenced, even if an employer must correct hundreds of Forms I‐9, such effort can save the company thousands upon thousands of dollars should an audit be initiated by ICE for which the employer is not prepared. 
Employers failing to navigate the ever‐expanding state law E‐Verify Requirements. Most private employers that submit bids for federal contracts and receive same are all too aware of the federal mandate created by Executive Order 12989 which requires them to enroll in the E‐
Verify program and use E‐Verify to ensure that all employees working on such contracts are 20
employment eligible. This provision has been in effect since September 8, 2009 and, therefore, these employers are well‐versed in this requirement and compliance is commonplace.21 However, most private employers that do not engage in federally contracted work remain under the assumption that E‐
Verify is a voluntary program. Unfortunately, this notion could not be further from the truth. On May 26, 2011, when the United States Supreme Court held that Arizona’s 2007 law regarding the use of E‐Verify was permissible and did not preempt IRCA, the Court essentially authorized state created employment verification laws and further empowered local legislators in this regard.22 Since 20
See http://www.dhs.gov/files/programs/gc_1185221678150.shtm. Accessed: 1/31/2012. 21
Id. 22
Chamber of Commerce v. Whiting, 563 U.S. ___ (2011). Arizona’s law went into effect, a rash of additional state legislation that also mandates enrollment in the E‐Verify program has cropped up throughout the country. Buoyed by the Court’s decision, now even more states are following this trend in droves. While an employer headquartered in an E‐Verify state (e.g. Arizona) most likely is aware of its application, employers often are not aware of the E‐Verify requirements in all the states in which they do business. In fact, at the time of writing, almost half the states in the nation require some use of E‐Verify. 23 Whether it be for all or most employers (e.g. Arizona, Alabama, Georgia) or just public employees (e.g. Minnesota, Colorado), what is clear is that these regulations are complex and varied and require in‐depth study to ensure compliance. In addition, each state, as expected, has different fines associated with non‐compliance, and, as a result, the need for jurisdictional expertise is further established. Penalties can range from civil money fines to loss of business licenses. It is very reasonable to assume that an Employer headquartered in New England, where E‐Verify legislation has yet to take a foothold, would be caught completely off‐guard should a small branch office in Arizona become the target of a state driven enforcement effort. While true enforcement has yet to follow strongly worded state legislation, if the history of I‐9 enforcement is any indication of what the future holds, it is imperative for employers to start realizing that E‐Verify is a very real and concrete concern. In addition, it is the Author’s opinion that should Congress enact any immigration‐related legislation in the coming years, the mandatory use of E‐Verify will be a key component of such efforts. The bottom line is that creating E‐Verify best practices and related policy should be a priority of all employers now rather than years from now when it is far too late to mitigate the damage. 23
See www.fairus.org/site/DocServer/states_everify_use.pdf?docID=5943. Section 2: H‐1B Classification and DOL Wage and Hour Audits Obtaining H‐1B classification on behalf of a foreign national employee is a relatively complicated visa process because there are two agencies involved. On a fundamental level, however, this classification, which is the most commonly used for professional employees, rests on a very simple four part test: 1) Does the position offered to the foreign national require at least a baccalaureate degree in a specific field; 2) Does the foreign national possesses at least a baccalaureate degree in a field related to the offered position; 3) is there a H‐1B number available (only 85,000 new H‐1Bs are available annually); and 4) is the foreign national being paid at least the prevailing or actual wage for the position in the specific geographic area where the work will be performed.24 It is the last prong of this four part test that is the focus of this section of this article, because it can become the most problematic! Before the actual H‐1B petition can be filed with the United States Citizenship and Immigration Services (USCIS), the employer must first obtain a certified Labor Condition Application (LCA) from the DOL.25 The purpose of the DOL in the H‐1B program, inter alia, is to ensure that U.S. workers are protected by requiring employers to pay the foreign national worker at least the prevailing or actual wage for the position offered in the area of intended employment, whichever is higher.26 The LCA requires the employer to attest that the conditions of the labor associated with the employment of the foreign national in H‐1B classification are the same conditions under which U.S. workers are employed. It is important to highlight that the LCA is like a memorandum of understanding between the employer and the DOL. When the employer signs the LCA and it is subsequently submitted to the USCIS in conjunction with the H‐1B petition itself, the employer assumes liability for its attestations. The words of 24
See 8 CFR §214.2(h). 25
See 20 CFR §655.700(b)(1). Please note that LCA requirement also pertains to H‐1B1 and E‐3 Applications and Petitions. 26
See 20 CFR §655.700 et seq. the attestation section found on Form ETA‐9035 (the form currently used to file the LCA) are self‐
evident in this regard: By signing this form, I, on behalf of the employer, attest that the information and labor condition statements provided are true and accurate; that I have read sections H and I of the Labor Condition Application – General Instructions Form ETA 9035CP, and that I agree to comply with the Labor Condition Statements as set forth in the Labor Condition Application – General Instructions Form ETA 9035CP and with the Department of Labor regulations (20 CFR part 655, Subparts H and I). I agree to make this application, supporting documentation, and other records available to officials of the Department of Labor upon request during any investigation under the Immigration and Nationality Act. Making fraudulent representations on this Form can lead to civil or criminal action under 18 U.S.C. 1001, 18 U.S.C. 1546, or other provisions of law. For the entire duration of the requested validity period on the LCA and corresponding H‐1B petition, the employer is bound to adhere to the requirements set forth in the corresponding DOL LCA regulations. As will be discussed in greater detail below, contrary to some employer’s beliefs and practices, even if the H‐1B worker is terminated, these obligations continue to exist unless proper notice is provided to the USCIS. Most employers will engage immigration counsel to guide them through the process of obtaining H‐1B classification, and as such, these immigration firms should provide the employer with information, documentation and assistance in creating the initial evidence required to ensure regulatory compliance with posting notice obligations27 and public access documentation.28 However, while some 27
See 20 CFR §655.734 employers think that their obligations under the LCA regulations stop there, in actuality, there are a host of related H‐1B employment requirements placed on the employer that if not adhered to can lead to civil penalties and back‐wage payment obligations. It is the period between when H‐1B classification is acquired and when the employer once again contacts immigration counsel to assist with obtaining an H‐1B extension where most violations inadvertently occur. In addition, another problem area often encountered is when the employer and the foreign national employee enter into an agreement regarding fee payment and reimbursement (that are not shared with the immigration attorney). The consequences for not adhering to H‐1B and LCA regulations are expansive and, as indicated above, can lead to restitution of back wages owed and civil money penalties. The following subsections highlight these and other often overlooked obligations by seemingly compliant employers that can carry significant consequences: 
Employers requiring the foreign national to pay for part or all of the H‐1B costs Employers often see the costs associated with the H‐1B process as prohibitively expensive. In truth, the H‐1B can be the most expensive nonimmigrant visa to obtain. Between attorney fees and government filing fees, the costs can easily exceed $5,000 for an H‐1B visa. Most foreign nationals are so excited about the prospect of working in the United States, they are willing, if not eager, to assume the cost of same. They view the cost as a fee for entry into the United States labor market. It is not uncommon for employers to make side deals and special arrangements with the foreign national to furnish these costs and often such information is not shared with immigration counsel. Such side deals usually require the H‐1B worker to pay for the costs up front or in the alternative, have such costs deducted from his/her salary in installments.29 28
See 20 CFR §655.731(c) 29
It is important to note that neither LCA regulations nor the H‐1B regulations provide specific provisions requiring employers to pay all attorney fees and filing fees associated with acquisitions of this visa. However, this issue is widely debated among immigration practitioners Because the employer, when submitting the LCA , attests that it will be paying the foreign national the greater of the prevailing or actual wage and that the conditions of employment for the H‐1B worker will be the same as those for U.S. workers, problems are created by such “special” arrangements. First, if paying the fees drops the foreign national’s wage below the prevailing wage or actual wage for the position, the employer is not compliant with this threshold requirement of the LCA because the total compensation paid to the foreign national will never meet the wage requirement listed on the LCA.30 Second, H‐1B worker salary “deductions” cannot be used by the employer to offset, “attorney fees or other costs connected to the performance of the H‐1B program,” because similar deductions are not taken from U.S. worker paychecks.31 By engaging in either of these activities, the Employer is in violation of the LCA regulations and therefore subject to penalty and back wage payments. If the employer is concerned with not being able to recoup the costs associated with the H‐1B program because they fear that the foreign national will leave the job shortly after arrival, there is a solution provided in the regulations. It is permissible for an employer to “receive bona fide liquidated damages from the H‐1B nonimmigrant who ceases employment with the employer prior to an agreed date.”32 However, the subsequent section in the regulations state that there is a distinction between permissible liquidated damages and a fee that could be considered a penalty, and that such a distinction is jurisdictionally based.33 For this reason, the Authors recommend that employers seek the guidance of labor counsel to discern if a liquidated damages clause would be permissible in the relevant state. when considering all of the related regulatory entries regarding this topic. If possible, the safest course of action is for the employer to furnish all fees, including the legal fees, associated with the acquisition of H‐1B status on behalf of a foreign national employee. 30
20 CFR §655.731(a) 31
20 CFR §655.731(c)(9)(iii)(C). 32
20 CFR §655.731(c)(10)(i)(B) . 33
See 20 CFR §655.731(c)(10)(i)(C). Regardless of whether or not a valid liquidated damages clause is created, under no circumstance is an employer allowed to recoup the costs associated with the ACWIA filing fee ($750 for employers with less than 25 full‐time employees and $1,500 for employers with more than 25 full‐time employees) which is paid to USCIS when submitting the H‐1B petition.34 
Employers not filing new LCAs when an H‐1B worker changes job locations In most ordinary employment situations, the transfer of employees from one worksite to another, either on a short‐term or long‐term basis, is commonplace. However, when a foreign national working in H‐1B capacity is involved in such a scenario, the employer triggers an LCA obligation. While short term placements that do not, “exceed a total of 30 workdays in a one‐year period . . . at any worksite or combination of worksites” is permissible, longer offsite employment arrangements are not permitted unless a new LCA is filed with the DOL and all ancillary requirements, including the requirement to post a notice of the terms of the H‐1B hire, are met.35 Remember, the LCA requires that the employer meet the prevailing wage (or actual wage) for a specific position in a specific geographic location. If the H‐1B worker is moved to a new location outside of the original area of intended employment, it could trigger a requirement to pay the foreign national a higher wage. It is important to note that Form ETA‐9035 allows an employer to enter up to three worksite locations on any given LCA. If it is anticipated that an H‐1B employee could spend significant time at a secondary or tertiary location, it is recommended that such locations be included in the original LCA to avoid accidental oversight at a later date. 34
8 CFR §214.2(h)(19). 35
20 CFR §655.735(c). Please note that if the employee maintains a “desk” at the original worksite, the period of offsite work permissible increases to 60 days. 
Employers “benching” a foreign national during the validity period of an H‐1B petition During the recent recession, it was commonplace for employers to temporarily lay‐off workers or move to a reduced work week schedule. Such personnel decisions in downtimes, are viewed as a better alternative to permanently reducing staff and are often implemented across the board by an employer to avoid any suspicion of unfair or discriminatory labor practices. However, what most employers do not realize is that such actions cannot be thrust upon H‐1B workers without providing compensation as delineated in the LCA. 20 CFR §655.731(c)(7)(i) states: If the H‐1B nonimmigrant is not performing work and is in a nonproductive status due to a decision by the employer (e.g., because of a lack of assigned work) . . . the employer is required to pay the salaried employee the full pro‐rata amount due, or to pay the hourly‐wage employee for a full‐time week . . . at the required wage for the occupation listed on the LCA. Ironically, the employer who is trying to cut costs by laying off a H‐1B worker or reducing such worker’s hours during a period of economic downturn, actually increases its liability by violating LCA regulations. The best course of action under this scenario, especially if the reduced work schedule is anticipated to be of significant duration, is for the employer to file an amended H‐1B petition with the USCIS indicating that the position is now part‐time instead of full‐time based on a newly certified LCA. If the employer finds that they are unable to provide any work to an H‐1B worker for an extended period of time, the best course of action is to terminate the employment relationship. Importantly, if the employer wishes to terminate the employment relationship, notice must be provided to USCIS or the terms of the LCA remain valid and the employer is obligated to compensate the employee accordingly.36 It should be noted that even though the H‐1B worker is provided status for a specified period of time 36
20 CFR §655.731(c)(7)(ii), see also 8 CFR §214.2(h)(11). (usually three years), the employment remains “at will” unless governed by a collective bargaining agreement to the contrary. Another important clarification is the fact that if the H‐1B worker decides to temporarily cease the employment relationship due to personal reasons, the employer is not obligated to compensate the foreign national for the time away from the job.37 Such circumstances include, but are not limited to, extended vacations, maternity leave, or an automobile accident, as long as not compensating the H‐1B worker does not run contrary to federal and state statutes such as the Family Medical Leave Act or the employer’s general benefit plan.38 Essentially, the rule that should be implemented by employers is that if a leave of absence from a position is promoted by the employer, the employer must file an amended LCA and, potentially an amended H‐1B petition. If the leave of absence is desired action initiated by the H‐1B worker, the employer is void of obligation. 
Employers promoting an H‐1B worker Usually when an employee is promoted, most employers assume their obligations cease by providing a higher salary and potentially increased benefits. However, when it comes to promoting an H‐
1B worker, the LCA regulatory requirements must also be satisfied. Again, the LCA certifies the working conditions for a specific position in a specific geographic location. If the H‐1B worker is placed in a new position, the original LCA could be deemed invalid. The employer, at the very least, must file a new LCA with the DOL for the position bearing in mind that a new prevailing wage analysis is required as well as an examination of the employer’s actual wage scheme. In addition, if the nature of the position falls into a new occupation classification, such as moving from a systems engineer to a project manager, then an 37
20 CFR §655.731(c)(7)(ii). 38
id. H‐1B filing is also required.39 This standard is also applicable when looking at a situation where an employee is demoted and a lower wage is paid to the employee. 20 CFR §655.731(c)(8) states, “If the employee works in an occupation other than that identified on the employer’s LCA, the employer’s wage obligation is based on the occupation identified on the LCA, and not on whatever wage standards may be applicable in the occupation in which the employee may be working.” 
Penalties and Enforcement Any aggrieved party can bring a complaint to the DOL’s Wage and Hour Division regarding a given employer’s failure to comply with any of the LCA regulations that can trigger a violation. Of particular note is the fact that an aggrieved party includes, “a competitor adversely affected by the employer’s alleged non‐compliance with the labor condition application,” as well as any worker (H‐1B or otherwise) for the employer, bargaining representatives, and government agencies.40 This suggests that employers must comply strictly to the LCA regulations because almost any related party can cause significant problems for the non‐compliant employer. The penalties associated with violating such regulations are far ranging and carry serious consequences. While most compliant employers would never knowingly and willfully submit a false statement on a LCA, which carries fines of up to $10,000 and up to five years in prison, the penalties associated with the seemingly harmless violations discussed above can still be significant.41 Failure to pay wages owed can result in an order to pay back wages plus interest42 and other violations can result in civil money penalties per violation ranging from $1,000 for misrepresentation of a material fact to $35,000 for discrimination against a U.S. worker.43 In addition, and of utmost importance to those 39
See USCIS Adjudicator’s Field Manual Chapter 31.2. 40
20 CFR 655.715 41
20 CFR 655.805(1) 42
20 CFR 655.810(a) 43
20 CFR 655.810(b) employers working in the technology sector, such violations can lead to disbarment/disqualification from using the H‐1B program for up to three years.44 In the Authors’ practice, we have often been able to work with Wage and Hour Investigators to lessen the penalties assessed against employers by showing mitigating efforts and a good faith effort to comply with the law. However, such expansive and expensive investigations and legal representation can be avoided if the employer remains aware of the fact that LCA and H‐1B regulations impose restrictions not only when a case is filed, but, in reality, during the entire tenure of a foreign national’s employment in H‐1B classification. Conclusion The key to being a compliant employer is remaining aware of not only changes in immigration laws that impact their business, but also being aware of how trends in immigration enforcement will do so as well. Relying on the business judgment rule and abdicating responsibility to third‐party vendors does not necessarily provide immunity from sanctions. Not understanding and implementing I‐9 or LCA regulations in full is no longer an excuse. In short, even for the most well‐meaning and compliant employers, complacency and ignorance is no longer an option. Employers must engage now in immigration best practices in order to avoid and mitigate future liability. The importance of creating I‐9 and E‐Verify policies and procedures as well as instituting strict H‐1B oversight is of the utmost importance in this era of increased immigration enforcement on both the State and Federal level. By doing so, not only will an employer correct past errors and prevent future mistakes, it will ensure its overall objective of being as close to 100% compliant as possible! 44
20 CFR 655.810(d)