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NPZ Immigration Law Blog

Thursday, September 24, 2015

WHAT HR MANAGERS AND BUSINESS OWNERS NEED TO KNOW ABOUT “ONBOARDING” NEW H-1B EMPLOYEES?


By: Michael Phulwani, Esq., David H. Nachman, Esq., and Rabindra K. Singh, Esq.

October 1st marks the beginning of the "onboarding" of new H-1B employees at many companies throughout the United States. Winning the lottery and having H-1B Petitions approved by United States Citizenship and Immigration Services (USCIS)[1] were just two initial steps involved in the hiring and retaining process of talented foreign nationals in the United States. Carefully onboarding the H-1B employee is as crucial as selecting, hiring and bringing them into the United States (or assisting in changing their nonimmigrant status in the United States). This article briefly addresses few very basic, but very important topics, that HR Managers and Professionals, and Business Owners should be aware of, and religiously comply with, in order to avoid potential pitfalls pertaining to the onboarding of new H-1B employees.

Diligently Complete Employment Eligibility Verification (Form I-9) Requirements.

Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States. Form I-9 is made up of three sections.

Newly hired employees, including H-1B employees, must complete Section 1 of Form I-9 no later than the first day of employment. Each employee hired on or after November 7, 1986, must complete the designated portion of the I-9 Form. Form I-9 requires the employee to attest, under penalty of perjury, that he or she is authorized to work in the United States as a U.S. citizen, lawful permanent resident, or nonimmigrant with a time-limited form of work authorization. Within three (3) business days of hire, the employee must also submit certain original documents that establish identity and employment authorization to the employer for review. Employers cannot specify which document(s) employees may present from the Lists of Acceptable Documents, found on the last page of Form I-9, to establish identity and employment authorization.

Employers or their authorized representative must complete Section 2 of the I-9 Form by examining evidence of identity and employment authorization submitted by the employee within three (3) business days of the employee's first day of employment. If the employee has provided a document expiration date in the employee's section of the I-9 Form, the employer also must re-verify the employee's employment eligibility before that date has passed. The employer must retain the completed I-9 Form for at least three (3) years or one (1) year after employment terminates, whichever is later. This is referred to as the "retention period."

Employers who do not complete and retain I-9 Forms for every employee hired on or after November 7, 1986, may face civil fines by the U.S. Immigration and Customs Enforcement (ICE)[2] for failing to properly prepare each I-9 Form. The severity of the penalty is be determined by: (i) the size of the business; (ii) the employer's good faith efforts to comply with the law; (iii) the number of unauthorized employees; and (iv) whether the employer has a history of violations. In addition, ICE may impose civil sanctions for each unauthorized foreign national employee. Note that the Employers are liable for both “actual” and “constructive” knowledge that an employee is not authorized to work. There are other sanctions and penalties involved which are beyond the scope of this article.

Comply with LCA Requirements to Avoid DOL’s Investigation.

Since 1990, all employers submitting H-1B visa petitions must first have a Labor Condition Application ("LCA") certified by the U.S. Department of Labor's (DOL) Employment and Training Administration. The LCA requires employers to attest that: (i) the H¬I B nonimmigrant will be paid at least the local prevailing wage[3] or the employer's actual wage, whichever is higher, and paid for non-productive time; (ii) the H-1B nonimmigrant will be offered benefits on the same basis as U.S. workers; (iii) employment of H-1B nonimmigrants will not adversely affect the wages and working conditions of similarly employed workers; (iv) there is no strike, lockout, or work stoppage; and (v) notice of the LCA filing has either been posted for at least ten (10) days or provided to the bargaining representative, if one exists.

The DOL's Wage and Hour Division ("WHD") receives complaints by aggrieved persons or organizations or through its own initiated investigation relating to misrepresentation or failure of the employer to meet the conditions stated in the LCA. An aggrieved employee has twelve (12) months after the latest date on which the alleged violations were committed to file a complaint with the DOL; however, this Statute of Limitation (SoL) does not apply to an employer's back pay liability.

WHD may conduct investigations, enforcement proceedings, and impose sanctions on employers that violate the LCA provisions. Violations may include: (i) making a material representation on an LCA; (ii) willful failure to pay the required wage or to provide the required working conditions; (iiii ) filing an LCA during a strike; (iv) failing to provide notice of the LCA filing; (v) substantial failure to be specific on the application; (vii) charging an employee an "early-termination penalty"; and (viii) failing to post notice of the filing of the LCA for at least ten (10) days.

In response to any of these violations, the WHD may: (i) assess civil monetary penalties; (ii) require the employer to pay back wages to aggrieved workers; and/or (iii) bar the employer from filing LCAs, employment-based immigrant petitions, and H, L, O, or P nonimmigrant petitions for at least one (1) year. The DOL may also impose other administrative remedies. Additionally, criminal sanctions may be imposed for the knowing submission of false statements to the U.S. Federal Government.

Be Aware of the 30/60 Days Rule to Start the Payroll & Payment of Salary in "Inactive Status"

Regulations require that employers must begin paying LCA-stated wages when the employee "makes him/herself available for work" but not later than 30 days of employee's entry or 60 days from Change of Status if in the U.S. Liability begins to accrue when the person "enters into employment" with the employer. Thus, even if the worker has not yet "entered into employment," when the H-1B worker is present in the U.S. on the date of the approval of the H-1B petition, the employer shall pay to the worker the required wage beginning 60 days after the date the worker becomes eligible to work for the sponsoring employer. The H-1B worker becomes "eligible to work" for employer on the date set forth in the approved H-1B petition filed by the employer.

An employer must continue to pay an H-1B employee who is not working due to a nonproductive status at the direction of the employer (e.g., benching because of lack of work, lack of a permit or license). This regulation applies even if the H-1B employee is receiving training either provided by the employer or through some other external arrangement at the direction of the employer. Thus, the employer is liable for both nonproductive time as well as productive time once employee becomes eligible for work. Employers who do not pay non-terminated H-1 B employees may face civil penalties. Employers are, therefore, advised to pay an H- I B employee his or her salary as listed on the LCA until that employee has been terminated and the USCIS has been notified of the request to withdraw the H- IB Petition.

Changes in Employee Work Location: Whether or Not to Submit New/Amended Petition.

Putting an end to the confusion that prevailed among Immigration Practitioners for almost two decades, the Administrative Appeals Office (AAO), through a Precedent decision, Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015), clarified that an amended H-1B Petition, with the corresponding LCA, is required to be submitted to United States Citizenship and Immigration Services (USCIS) when there is a “material change” in the terms and conditions of employment.

In Simeio Solutions, the AAO specifically stated that when H-1B employees change their place of employment to a worksite location that requires employers to certify a new Labor Condition Application (LCA) for Nonimmigrant Workers to the Department of Homeland Security, this change may affect the employee’s eligibility for H-1B status; it is therefore a material change for purposes.

Later, USCIS issued a new guidance clarifying whether or not the employers are required to submit H-1B amended petition depending on when and where the employee moved. This guidance also clarified the time-line for submitting the amended petitions.

As per the new guidance, if an H-1B worker moved to a new location not covered by the existing petition prior to or on April 9th, 2015, the date on which the Simeio Solutions decision was published, the “…USCIS will generally not pursue new adverse actions (e.g., denials or revocations) solely based upon a failure to file an amended or new petition.” Simply put, an H-1B amended petition involving a location change outside of an MSA would be required if the change happened after April 9th, 2015. However, it needs to be noted that this guidance will not protect H-1B employers if an adverse action was initiated prior to July 21st, 2015.
Further, the recent Memorandum provides a Safe Harbor Period for all moves requiring an H-1B amended petition, which happened between April 9th, 2015, and August 19th, 2015. If any move took place during this period of time then petitioning employers must submit H-1B amended petitions by not later than January 15th, 2016. Additionally, any change in the place of employment (outside the MSA listed on the LCA) after August 19th, 2015, shall require an amended H-1B Petition. For quick reference, here is a helpful chart of when H-1B amended petitions need to be submitted.

Date of Employee(s) Movement Outside The MSA Listed on LCA.

What Action Needs to be Taken?

On or before April 9, 2015.

No amended H-1B petition required.

After April 9, 2015, but prior to August 19, 2015.

Must submit H-1B amended or new petition by January 15, 2016.

On or After August 19, 2015.

Must submit H-1B amended or new petition.


What Regulations Say About “Roving” H-1B Employees.

An employer who needs to temporarily place an H-1B nonimmigrant worker in a place of employment that is not listed on an existing certified LCA may do so under the short-term placement provision without filing a new LCA for the temporary geographic area of employment. Note that this provision may only be used for an H-1B nonimmigrant worker who is already in the United States and working for the employer.

There are certain obligations that employers need to satisfy when utilizing the short-term placement option. Specifically, the employer must pay that worker: (a) The required wage rate (applicable to the permanent work site on the supporting LCA); (b) The actual cost of lodging (for each workday and non-workday); and (c) The actual cost of travel, meals, and incidental or miscellaneous expenses (for each workday and non-workday).

Additionally, there are certain limitations too for using the short-term placement option. An employer may place an H-1B worker in short-term placement only if there is no strike/lockout in progress in the H-1B worker's occupation at the short-term location and the employer does not already have an LCA on file for the geographic area of employment. Moreover, the placement of the individual H-1B worker at any site in an area of employment should not exceed 30 workdays (consecutive or non-consecutive) within a one-year period. Such placement may be for an additional 30 workdays, but for no more than 60 workdays, in a one year period, where the employer is able to show that the H-1B nonimmigrant maintains ties to the home worksite (e.g., a dedicated workstation at the permanent worksite; the employee's abode is located near that worksite), and the worker spends a substantial amount of time at the permanent worksite.

First Come, First Serve: Potential Benefits of Starting the Green Card Process Early for H-1B Employees.

It is never too early to start the employment-based Green Card process, especially if the H-1B workers are from India and China[4] or other quota countries. For H-1B workers from India, it may take more than a decade to finally obtain an employment-based Green Card[5]. With such a humungous wait time, it does make a difference to have H-1B workers join the Green Card wait line as early as possible. Understandable, joining the Green Card cue may not provide any immediate relief to the H-1B workers but it may allow spouses of certain H-1B workers to work if they are able to show an intention to live and work in the United States permanently.

The Department of Homeland Security (DHS) has extended extend employment authorization to dependent spouses (not dependent children) of certain H-1B workers. The new rule allows H-4 dependent spouses of certain H-1B nonimmigrant workers to request employment authorization, as long as the H-1B worker has already started the process of seeking lawful permanent residence through employment. Eligible individuals includes H-4 dependent spouses of principal H-1B workers who: (1) Are the beneficiaries of an approved Form I-140, Immigrant Petition for Alien Worker; or (2) Have been granted an extension of their authorized period of stay in the United States under the American Competitiveness in the Twenty-first Century Act of 2000 ("AC21") as amended by the 21st Century Department of Justice Appropriations Authorization Act.

With the recent changes in Visa Bulletin, effective October 2015, another major potential benefit of starting the Green Card petition is that it may allow the principal beneficiary and his/her dependent(s) in the United States to obtain Employment Authorization Document (EAD) and Advance Parole much earlier than getting the actual Green Card using the new “Filing Date” Chart.

Conclusion

Onboarding H-1B employees require strictly adhering to the H-1B regulations and many practical nuances associated with those regulations. Although H-1B regulations have been called a “Toothless Tiger” in the past, they certainly are not. HR Managers/Professionals and Business Owners should ‘Play it Safe’ when it comes to handling the onboarding of new H-1B employees as not abiding by the regulations may result in huge monetary fines and/or civil/criminal charges. There is also a possibility of getting the Employer debarred from using the H-1B program in future, and it could even impact using other nonimmigrant and immigrant visa categories for any future projects.
________________________________________
[1] an agency of the Department of Homeland Security (DHS) that oversees lawful immigration to the United States.
[2] Principal investigative arm of the DHS
[3] If required to pay the prevailing wage, the wage must be 100% of the Federally-Mandated Prevailing Wage Rate.
[4] mainland born
[5] Projections based on October 2015 Visa Bulletin released by the Department of State.

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