THE NEUFELD MEMORANDUM REVISITED AND THE H-1B VISA CLIMATE: The New Face of Enforcement in the H-1B World.

As a result of increased site visits and a general inclination to decrease the number of H-1B’s approved, the U.S. Citizenship and Immigration Services (”USCIS”) published a watershed memo on January 8th, 2010 (“the Neufeld Memo”). The Neufeld Memo radically changed the way that H-1B’s were adjudicated. The Neufeld Memo also put enormous pressure on employers to satisfy additional evidence requirements justifying any work performed by an H-1B visa holder off of the H-1B visa petitioner’s premises. Additionally, the Neufeld Memo added additional requirements for H-1B petitioners to obtain H-1B extensions. It is this author’s opinion that as a result of this Neufeld Memo, employers will see automatic requests for evidence in any case where the beneficiary may be performing offsite work and for any H-1B visa extension petition. It continues to be our strong recommendation that employers add a section to their H-1B petitions which cover the issues addressed by the Neufeld Memo. Even one and one half years after this Memo was promulgated.

USCIS is still concerned about whether or not there is a valid employer-employee relationship. The Neufeld Memo basically states that hiring a person to work in the United States requires more than merely paying the wage or placing that person on the payroll of the H-1B petitioning organization. In considering whether or not there is a valid “employer-employee relationship” for purposes of H-1B petition adjudication, USCIS must determine if the employer exercises a sufficient level of “control” over the prospective H-1B employee. Clearly, if the employee will be working “on site” in the H-1B petitioner’s office, doing specific tasks for the petitioner, this will not be viewed as raising a “control” issue. However, with the publication of the Neufeld Memo, it remains our opinion that all employers need to address the “control” issue upon initial submission of an H-1B petition to the USCIS.

The prospective H-1B petitioner organization must be able to establish that it has the “right to control” when, where, and how the prospective H-1B nonimmigrant beneficiary will perform the professional and specialty occupation job and the USCIS will consider the following items to make such a determination (with no one of the following factors being decisive with regard to the issue of “control”):

(1) Does the potential H-1B petitioner supervise the prospective H-1B beneficiary and is such supervision off-site or on-site?
(2) If the supervision is off-site, how does the petitioner maintain such supervision, i.e. weekly calls, reporting back to main office routinely, or site visits by the petitioner?
(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 the tools or instrumentalities needed for the beneficiary to perform the duties of employment?
(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, i.e. progress/performance reviews?
(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 of employment?
(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 means in which the work product of the beneficiary is accomplished?

In addition to the foregoing, the USCIS provides specific examples of employment situations in which the “control” issue is not considered to be problematic. Please note that there are numerous variations of these scenarios and that each employment situation may not fit squarely into the examples provided by the USCIS.

The “Traditional Employment” Scenario:

If the prospective H-1B beneficiary works at an office location owned/leased by the prospective H-1B petitioner and the beneficiary reports directly to the petitioner on a daily basis, the petitioner sets the work schedule of the beneficiary, the beneficiary uses the petitioner’s tools/instrumentalities to perform the duties of employment, and the petitioner directly reviews the work-product of the beneficiary. The petitioner claims the beneficiary for tax purposes and provides medical benefits to the beneficiary.

The “Temporary/Occasional Off-Site Employment” Scenario:

The prospective H-1B nonimmigrant petitioner is an accounting firm with numerous clients. The beneficiary is an accountant. The beneficiary is required to travel to different client sites for auditing purposes. In performing such audits, the beneficiary must use established firm practices. If the beneficiary travels to an off-site location outside the geographic location of the employer to perform an audit, the petitioner provides food and lodging costs to the beneficiary. The beneficiary reports to a centralized office when not performing audits for clients and has an assigned office space. The beneficiary is paid by the petitioner and receives employee benefits from the petitioner.

The “Long-Term/Permanent Off-Site Employment” Scenario:

The prospective H-1B nonimmigrant petitioner is an architectural firm and the beneficiary is an architect. The petitioner has a contract with a client to build a structure in a location out of state from the petitioner’s main offices. The petitioner will place its architects and other staff at the off-site location while the project is being completed. The contract between the petitioner and client states that the petitioner will manage its employees at the off-site location. The petitioner provides the instruments and tools used to complete the project, the beneficiary reports directly to the petitioner for assignments, and progress reviews of the beneficiary are completed by the petitioner. The underlying contract states that the petitioner has the right to ultimate control of the beneficiary’s work.

The USCIS has specifically stated that the following scenarios are now NOT acceptable to meet the “control” issue with regard to H-1B employment:

The “Self-Employed Beneficiaries” Scenario:

The prospective H-1B nonimmigrant petitioner is a fashion merchandising company that is owned by the beneficiary. The beneficiary is a fashion analyst. The beneficiary is the sole operator, manager, and employee of the petitioning company. The beneficiary cannot be fired by the petitioning company. There is no outside entity which can exercise control over the beneficiary. The petitioner has not provided evidence that the corporation, and not the beneficiary herself, will be controlling her work.

The above example (cited in the Neufeld Memo) is similar to a case recently addressed by our office for one of our clients. We have successfully processed a case such as this in the past. However, it is likely that these facts will inevitably lead to a much more complex H-1B case processing procedure by the government.
The USCIS admits that a sole stockholder of a corporation can be employed by a corporation as the corporation is a separate legal entity from its owners and even its sole owner. However, an H-1B beneficiary/employee who owns a majority of the sponsoring entity and who reports to no one but him or her may not be able to establish that a valid employment relationship exists in that the beneficiary. The issue is whether the prospective H-1B nonimmigrant petitioner can establish the requisite “control”.

The Neufeld Memo states that the Administrative Appeals Office (”AAO”) correctly determined that corporations are separate and distinct from their stockholders and that a corporation may petition for, and hire, their principal stockholders as H-1B nonimmigrant employees. However, the AAO did not reach the question of how, or whether, petitioners must establish that such beneficiaries are bona fide “employees” of “United States employers” having an “employer-employee relationship.” While it is correct that a petitioner may employ and seek H-1B classification for a beneficiary who happens to have a significant ownership interest in a petitioner, this does not automatically mean that the beneficiary is a bona fide employee.

What we believe that the USCIS is saying is that if a corporation’s sole shareholder and sole employee is the H-1B nonimmigrant beneficiary, the case is likely to be denied. If the H-1B nonimmigrant beneficiary is one of several shareholders (not a majority shareholder of the corporation and is NOT the sole employee) then the USCIS can approve the case. It appears to be the case that any person who has a small company, where the H-1B beneficiary is one of the main officers or shareholders of the company, will have a very difficult time obtaining an H-1B approval. This was one of the new rules that came out of the Neufeld Memo. In addition, our office continues to find that prospective H-1B nonimmigrant petitioners which have approval of an H-1B already (that fit in this scenario) are likely to have difficulty extending the H-1B nonimmigrant professional and specialty occupation visa on a going forward basis.

The “Independent Contractor” Scenario:

The beneficiary is a sales representative. The prospective H-1B nonimmigrant petitioner is a company that designs and manufactures skis. The beneficiary sells these skis for the petitioner and works on commission. The beneficiary also sells skis for other companies that design and manufacture skis that are independent of the petitioner. The petitioner does not claim the beneficiary as an employee for tax purposes. The petitioner does not control when, where, or how the beneficiary sells its or any other manufacturer’s products. The petitioner does not set the work schedule of the beneficiary and does not conduct performance reviews of the beneficiary.

In the past, the USCIS has stated that H-1B nonimmigrants must be employees, which means that they must be paid using a W-2 (and not a 1099). The Neufeld Memo solidifies this long-standing rule and provides a basis for a denial of an H-1B where an H-1B visa holder is treated as an “Independent Contractor”.

The “Third-Party Placement/ “Job-Shop”" Scenario:

The prospective H-1B nonimmigrant petitioner is a computer consulting company. The petitioner has contracts with numerous outside companies in which it supplies these companies with employees to fulfill specific staffing needs. The specific positions are not outlined in the contract between the petitioner and the third-party company but are staffed on an as-needed basis. The beneficiary is a computer analyst. The beneficiary has been assigned to work for the third-party company to fill a core position to maintain the third-party company’s payroll. Once placed at the client company, the beneficiary reports to a manager who works for the third-party company. The beneficiary does not report to the petitioner for work assignments, and all work assignments are determined by the third-party company. The petitioner does not control how the beneficiary will complete daily tasks, and no propriety information of the petitioner is used by the beneficiary to complete any work assignments. The beneficiary’s end-product, the payroll, is not in any way related to the petitioner’s line of business, which is computer consulting. The beneficiary’s progress reviews are completed by the client’ company, not the petitioner.

This scenario eliminates personnel or consulting agency placements for the H-1B nonimmigrant visa category. All placement firms that now use the H-1B visas to place workers at third-party companies whereby the H-1B petitioner’s role is basically relegated to payroll will no longer be able to utilize H-1B visas. The only type of H-1B visas that will be allowed by personnel agencies will be for in-house positions. One good thing that comes out of the Neufeld Memo is that many current H-1B visas, being used by some Indian Job Shops, who place workers in third-party positions, will be permissible only if the “control” issues are appropriately met. As a result of the Neufeld Memo, shabby and ill prepared job shops will slowly be eliminated as they will be unable to use the H-1B classification. Ultimately, this will leave more H-1B visas available for the “traditional” employers.

As previously pointed out, H-1B nonimmigrant professional and specialty occupation worker employers will have an extra burden proving the Employer-Employee relationship on initial H-1B petitions.
The Neufeld Memo states that the prospective H-1B nonimmigrant petitioner can demonstrate an employer-employee relationship by providing a combination of the following or similar types of evidence:

• A complete itinerary of services or engagements that specifies the dates of each service or engagement, the names and addresses of the actual employers, and the names and addresses of the establishment, venues, or locations where the services will be performed for the period of time requested;

• Copy of signed Employment Agreement between the petitioner and beneficiary detailing the terms and conditions of employment;

• Copy of an employment offer letter that clearly describes the nature of the employer-employee relationship and the services to be performed by the beneficiary;

• Copy of relevant portions of valid contracts between the petitioner and a client (in which the petitioner has entered into a business agreement for which the petitioner’s employees will be utilized) that establishes that while the petitioner’s employees are placed at the third-party worksite, the petitioner will continue to have the right to control its employees;

• Copies of signed contractual agreements, statements of work, work orders, service agreements, and letters between the petitioner and the authorized officials of the ultimate end-client companies where the work will actually be performed by the beneficiary, which provide information such as a detailed description of the duties the beneficiary will perform, the qualifications that are required to perform the job duties, salary or wages paid, hours worked, benefits, a brief description of who will supervise the beneficiary and their duties, and any other related evidence;

• Copy of position description or any other documentation that describes the skills required to perform the job offered, the source of the instrumentalities and tools needed to perform the job, the product to be developed or the service to be provided, the location where the beneficiary will perform the duties, the duration of the relationship between the petitioner and beneficiary, whether the petitioner has the right to assign additional duties, the extent of petitioner’s discretion over when and how long the beneficiary will work, the method of payment, the petitioner’s role in paying and hiring assistants to be utilized by the beneficiary, whether the work to be performed is part of the regular business of the petitioner, the provision of employee benefits, and the tax treatment of the beneficiary in relation to the petitioner;

• A description of the performance review process; and/or

• Copy of petitioner’s organizational chart, demonstrating beneficiary’s supervisory chain.

Our office continues to suggest to our prospective H-1B nonimmigrant petitioners that employer’s filing initial H-1B petitions submit some or all of this information as part of their petition. If not, the employer should expect an extensive Request For Evidence (”RFE”) document from the government requesting detailed information.

The New Rule For H-1B Extension Petitions.

The new rule for H-1B extension petitions is that a beneficiary must continue to establish that a valid employer-employee relationship exists. The prospective H-1B nonimmigrant petitioner can do so by providing evidence that the petitioner continues to have the right to control the work of the beneficiary, as described above. The prospective H-1B nonimmigrant petitioner may also include a combination of the following or similar evidence to document that it maintained a valid employer-employee relationship with the beneficiary throughout the initial H-1B status approval period:

• Copies of the beneficiary’s pay records (leave and earnings statements, and pay stubs, etc.) for the period of the previously approved H-1B status;

• Copies of the beneficiary’s payroll summaries and/or Form W-2s, evidencing wages paid to the beneficiary during the period of previously approved H-1B status;

• Copy of Time Sheets during the period of previously approved H-1B status;

• Copy of prior years’ work schedules;

• Documentary examples of work product created or produced by the beneficiary for the past H-1B validity period, (i.e., copies of: business plans, reports, presentations, evaluations, recommendations, critical reviews, promotional materials, designs, blueprints, newspaper articles, web-site text, news copy, photographs of prototypes, etc.). Note: The materials must clearly substantiate the author and date created;

• Copy of dated performance review(s); and/or

• Copy of any employment history records, including but not limited to, documentation showing date of hire, dates of job changes, i.e. promotions, demotions, transfers, layoffs, and pay changes with effective dates.

If USCIS determines, while adjudicating the extension petition, that the prospective H-1B nonimmigrant petitioner failed to maintain a valid employer-employee relationship with the beneficiary throughout the initial approval period, or violated any other terms of its prior H-1B petition, the extension petition may be denied unless there is a compelling reason to approve the new petition (e.g., the petitioner is able to demonstrate that it did not meet all the terms and conditions through no fault of his own.)

Until the promulgation of the Neufeld Memo, H-1B extensions have been granted almost automatically as long as the prospective H-1B nonimmigrant petitioner stated that the beneficiary would be performing the same work as previously petitioned for. The Neufeld Memo exponentially increased the number of RFE’s and denials in extension cases.

Our office is convinced that these new and harsh rules are a result of the USCIS site visits and numerous violations USCIS has seen as a result of the site visits. The state of the U.S. economy certainly has not helped the situation any either. USCIS will no longer permit employers to flaunt the rules and “business as usual” will no longer be an acceptable mode. We continue to see an uptick in ICE, CIS, and DOL compliance issues. We continue to warn our employer clients about the government scrutiny in many areas where there may be perceive abuse of the U.S. immigration and nationality laws.

CBP Reminds Travelers about Requirements for Admission into U.S. and I-94 Permit Process.

(Tuesday, May 24, 2011)

San Diego — U.S. Customs and Border Protection (CBP) officials are reminding foreign travelers and Mexican border crossing card (or “laser visa”) holders about requirements to enter the United States, how to obtain an I-94 permit, and when an I-94 permit is required in time for the busy summer travel season.

Under U.S. immigration law, an applicant for admission into the U.S. as a temporary visitor for business or pleasure must prove to a CBP officer that their projected stay in the U.S. will be temporary.

Unless otherwise exempted, each foreign traveler admitted into the United States is issued an I-94 permit (arrival/departure record), as evidence of the terms of their admission.

Mexican citizens entering the country through the southern land border with a border crossing card (“laser visa”) are exempted from the requirement for an I-94 permit unless they are intending to remain in the U.S. for more than 30-days and/or will travel more than 25 miles from the border. Applicants who present a border crossing card (or laser visa) are not eligible to work in the United States.

Those applicants requiring an I-94 permit must demonstrate that they are financially solvent and have sufficiently strong ties to their country of origin, including a home abroad they do not intend to abandon.

“Ties” are the various aspects of a person’s life that bind him or her to his or her country or residence. Some examples of ways to document these ties can be pay stubs for a person’s employment/income, a house or apartment mortgage or rental receipt, bank account records, utility bills, etc.

It is not possible to specify the documents applicants for admission should carry, since each applicant’s circumstances vary greatly. Applicants should carry with them whatever documents they think demonstrate their individual circumstances.

All traveling family members need to be present during the I-94 application process.

The I-94 permit, which costs $6, allows visitors to travel further than 25 miles from the border and remain in the U.S. for more than 30 days.

By U.S. law, a foreign traveler must posses his or her entry documents, and if required, the

I-94 permit, with them at all times while in the United States.

In addition, at checkpoints, U.S. Border Patrol agents check foreign travelers for entry documents and the I-94 permit. Travelers not in possession of their entry documents and an I-94 permit may have their visa cancelled and be deported from the United States.

For more information about the CBP form for an I-94 permit, please visit the CBP Web site.

(Filling Out Arrival-Departure Record, CBP Form I-94, for Nonimmigrant Visitors with a Visa for the U.S. )

(Entering the U.S. – Documents required for Foreign Nationals (International Travelers)

U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation’s borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.

Contact For This News Release is:

Jacqueline Wasiluk
CBP Public Affairs San Diego
Phone: (619) 744-5245

USCIS Launches I-9 Central on USCIS.gov – May 13, 2011 – New Online Resource Provides Enhanced, Easy-to-Access Guidance for Employers and Employees.

U.S. Citizenship and Immigration Services (USCIS) today launched I-9 Central, a new online resource center dedicated to the most frequently accessed form on USCIS.gov: Form I-9, Employee Eligibility Verification. This free, easy-to-use website builds on recent employment-related enhancements by providing employers and employees simple one-click access to resources, tips and guidance to properly complete Form I-9 and better understand the Form I-9 process.

“I-9 Central is the latest in our ongoing efforts to better serve the 7.5 million employers who use Form I-9 every time they hire an employee,” said USCIS Director Alejandro Mayorkas. “It provides critical information for all employers – whether they hire a single employee or hundreds – in an accessible, intuitive and comprehensive online format.” The launch of I-9 Central follows the introduction of other important USCIS employment-related resources. These resources include E-Verify Self Check, a service launched in March that allows workers and job seekers in the United States to check their own employment eligibility status online, and an updated “Handbook for Employers: Instructions for Completing Form I-9 (M-274)” published earlier this year.

I-9 Central includes sections about employer and employee rights and responsibilities, step-by-step instructions for completing the form, and information on acceptable documents for establishing identity and employment authorization. I-9 Central also includes a discussion of common mistakes to avoid when completing the form, guidance on how to correct errors, and answers to employers’ recent questions about the Form I-9 process. I-9 Central complements existing Form I-9 resources including the current Form I-9 Web page, the form instructions, and the above-referenced “Handbook for Employers.” USCIS also offers free webinars on completing Form I-9.

By law, U.S. employers must verify the identity and employment authorization for every worker they hire after Nov. 6, 1986, regardless of the employee’s immigration status. To comply with the law, employers must complete Form I-9. Visit or link to I-9 Central at www.uscis.gov/I-9central.

For more information on USCIS and its programs, please visit www.uscis.gov or follow us on Twitter (@uscis), YouTube (/uscis) and the USCIS blog The Beacon.

WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with Restwend LLC, the corporate owner of several Wendy’s restaurants in Maine, to resolve allegations that at least one of its restaurants engaged in employment discrimination by refusing to hire individuals believed to be non-U.S. citizens.

According to the department’s findings, since at least 2009 this Restwend-owned Wendy’s instituted a policy of refusing to hire work authorized individuals whom it believed to be non-U.S. citizens. The Immigration and Nationality Act (INA) generally prohibits discrimination in hiring against authorized workers on the basis of citizenship status.

Under the terms of the settlement, Restwend has agreed to pay $14,500 in back pay, plus interest, to a victim of its citizens-only policy, plus $3,200 in civil penalties. Restwend will also train its human resources personnel about employers’ nondiscrimination responsibilities under the INA, and the company agreed to monitoring provisions.

“No one who is authorized to work in the United States should face discrimination because of their perceived immigration status,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are pleased to have reached the settlement with Restwend and look forward to continuing to work with all employers, both public and private, to educate them about their responsibilities under federal law.”

The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.

For more information about protections against employment discrimination under the immigration laws, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email osccrt@usdoj.gov; or visit OSC’s website at: www.justice.gov/crt/osc. 11-530. Civil Rights Division.

Final Rule Adopts Interim Rule to Improving Integrity of Form I-9 Process.

U.S. Citizenship and Immigration Services (USCIS) announced today a final rule, scheduled to be published in tomorrow’s Federal Register, that adopts, without change, an interim rule to improve the integrity of the Employment Eligibility Verification (Form I-9) process. USCIS received approximately 75 public comments in response to the interim rule, which has been in effect since April 3, 2009.

All employers, agricultural recruiters and referrers-for-a-fee are required to verify the identity and employment authorization of each person they hire for employment in the United States. This requirement is set forth in section 274A(a)(1)(B) of the Immigration and Nationality Act, 8 U.S.C. 1324a(a)(1)(B). The key changes made to the Form I-9 process by the interim rule and adopted by the final rule include: prohibiting employers from accepting expired documents for completion of Form I-9 and adding and modifying several documents on the Lists of Acceptable Documents. The final rule will be effective on May 16, 2011. Employers may continue to use the current version of the Form I-9 (Rev. 08/07/2009), or the previous version (Rev. 02/02/2009).

Questions and Answers

Q. What does the final rule accomplish?

A. The final rule adopts, without change, the changes made to the Form I-9 process by the Department of Homeland Security’s (DHS) interim final rule that has been in effect since April 3, 2009. The changes further DHS’s ongoing effort to increase the integrity of the employment authorization verification process. The key changes include:

* Prohibiting employers from accepting expired documents
* Eliminating from List A identity and employment authorization documentation Forms I-688, I-688A, and I-688B (Temporary Resident Card and outdated Employment Authorization Cards)
* Adding to List A foreign passports containing temporary I-551 printed notations on certain machine-readable immigrant visas
* Adding to List A as evidence of identity and employment authorization valid passports for citizens of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI), along with Form I-94 or Form I-94A indicating nonimmigrant admission under the Compact of Free Association Between the United States and the FSM or RMI

Q. Why can’t I present an expired document?

A. DHS wants to ensure that documents presented for use in the Form I-9 process are valid and reliably establish both identity and employment authorization. Expired documents are prone to tampering and fraudulent use. The requirement to present only unexpired documents takes into account the time limits placed on these documents by their issuing authorities. If a document does not contain an expiration date, as is often the case with a Social Security card, it is considered unexpired.

Q: Does this final rule make any changes to how Form I-9 is completed?

A: No. The final rule adopts, without change, the interim final rule published on December 17, 2008 and in effect since April 3, 2009. It does not make any changes to how the Form I-9 is currently completed.

Q: Is USCIS issuing a new Form I-9 with this final rule?

A: No. Because the final rule adopts the interim rule without change, USCIS is not issuing a new
Form I-9 with this rule.

Q: Which versions of Form I-9 may I use?

A: Employers may continue to use either the current version of Form I-9 (Rev. 08/07/2009) or the previous version (Rev. 02/02/2009). These dates are located on the bottom right-hand corner of the form.

Q: Where can I obtain detailed information about the comments you received and how you responded?

A: Discussion of the public comments is featured in the final rule, available for review on USCIS’s website at www.uscis.gov and published in the Federal Register. The largest number of comments addressed the interim rule’s requirement that all documents presented for Form I-9 purposes be unexpired. Several commentators suggested that the expired documents should be acceptable for some period of time after expiration, e.g., from 30 days to up to five years after expiration. USCIS did not adopt these suggestions because of its concerns about document fraud and employer confusion.

Q: Are the public comments still available for viewing?

A: Yes. The public comments are available on www.regulations.gov under DHS Docket No. USCIS-2008-0001. A description of those comments and the USCIS responses to them are also available in the final rule itself. We have posted a link to the final rule on www.uscis.gov.

Q: Where may I obtain a copy of the newly revised Employer Handbook?

A: The Handbook for Employers, Instructions for Completing the Form I-9 (M-274) was updated on January 5, 2011, and is available on the USCIS website at www.uscis.gov/files/form/m-274.pdf.

Last updated:04/14/2011

3rd Annual FREE Employment Verification Workshop

Date: June 8th, 2010

Time: 10:00 am – 4:00 pm (lunch included)

Location: Fairleigh Dickinson University, Hackensack, New Jersey Campus

Speakers: David H. Nachman, Esq., Victoria Donoghue, Esq., and invited speakers from OSC (DOJ), CIS, and ICE.

Event: This program will cover the employer’s responsibilities with regard to employment verification procedures pursuant to the Immigration Reform and Control Act (”IRCA”) of 1986 (the I-9 Form). The seminar will include a presentation on anti-discrimination provisions from the U.S. DOJ’s Office of Special Counsel, the CIS E-Verify Division and the ICE IMAGE Division. This event is pending HRCI Continuing Education Credits.

For more information, contact our office: 201-670-0006, info@visaserve.com

*** HRCI Credits available for this program.

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Employment Verification Compliance Seminar – New York

Date: June 9th, 2010

Time: 10:00 am – 4:00 pm (lunch included)

Location: The Graduate Center of the City University of New York, 365 5th Avenue (34th Street), New York, NY

Speakers: David H. Nachman, Victoria Donoghue, and invited speakers from CIS, ICE and DOJ.

Event: This program will cover the employer’s responsibilities with regard to employment verification procedures pursuant to the Immigration Reform and Control Act (”IRCA”) of 1986 (I-9 Form). The seminar will include presentation on anti-discrimination provisions from the U.S. DOJ’s Office of Special Counsel, the CIS E-Verify Division and the ICE IMAGE Division. This event is pending HRCI Continuing Education Credits.

For more information, contact our office: 201-670-0006, info@visaserve.com

*** HRCI Credits available for this program.

There are three potential “hot spots” for audits and investigations for the government related to the immigration and nationality laws. The first has to do with the documentation that the employer is required to maintain in connection with the H-1B nonimmigrant professional and specialty and occupation worker visa. The second area of potential audit concerns the employer’s obligations under the Immigration Reform and Control Act of 1986 (“IRCA”) [Pub. L. No. 99-603, 100 Stat. 3359] (known to HR Professionals as the “I-9 Process”). The third, and one more recent, area of audit surrounds the new Labor Certification Application Program called “Permanent Electronic Review Management” (“PERM”). Each of the foregoing government programs anticipates compliance through “audit”. Even a rudimentary understanding of the complex documentary requirements for each of these programs can help and employer to avoid potential liability.

First, the U.S. Department of Labor (“DOL”) regulations that govern the maintenance of professional and specialty foreign national worker require an organization to develop and produce certain documents concerning the wages and the working conditions of an H-1B nonimmigrant. These documents are referred to as the Public Access File (“PAF”). The PAF documents are required to be maintained at the H-1B worksite immediately after the employer files the Labor Condition Application (“LCA”) with the DOL. The employer is well-situated to ensure they maintain PAF documents and be sure that they continue to pay the H-1B nonimmigrant the specified wage on the LCA. Under the American Competitiveness and Workplace Improvement Act (“ACWIA”), an H-1B nonimmigrant must be offered the same company benefits as those offered to “similarly situated” non-H-1B employees in the organization.

DOL audits can arise as a result of a complaint by a disgruntled employee or as a result of a randomly conducted investigation. Upon a DOL audit (normally undertaken by the Wage and Hour Division) an employer may be found not to be in compliance with (1) paying the H-1B nonimmigrant the specified wage (which pursuant to the H-1B Reform Act of 2004 became effective on March 8, 2005 must be 100% of the federally mandated prevailing wage); and/or (2) maintaining PAF documents; and/or (3) providing the H-1B nonimmigrant with the same benefits as those provided to all other “similarly situated” non-H-1B employees. Any failure to comply with DOL requirements can result in an employer being liable to pay back wages to an H-1B employee, debarment from the use of the H-1B program and/or other potential civil and/or criminal liabilities. Also, if the employer is a government contractor, the failure to comply may result in the debarment from the government contacts.

A second potential audit area for audit and investigation of an employer concerns employment verification and employer sanction law (referred to as the “Immigration Reform and Control Act of 1986” or “IRCA”). As every HR Professional knows, IRCA is an integral aspect of every hire. Under IRCA, every employer is required to properly verify the eligibility of an employee to work in the U.S. on the Form I-9. The I-9 Form is a deceptively simple document. The I-9 Form is only one page in length but it continues to raise issues about proper preparation and retention.

Since the U.S. Department of Homeland Security’s (“DHS”) absorption of the Legacy-INS, the Immigration and Customs Enforcement Division (“ICE”) has been charged with worksite inspections and audits of I-9 documents. The “good news” for employers is that the number of I-9 inspections has been on the decline. The “bad news” for employers is that ICE Officers are not inclined to be lenient and educate employers about their responsibilities but are more likely to impose sanctions.

Given the present focus on “security” and “identity” in the workplace, it is likely that ICE Officials will be more active in their investigations in the future. ICE is not required to wait for a specific lead. The investigative authorities of the DHS have implemented a “General Administrative Plan” (the “Plan”). The Plan identifies employers from a national database and it targets specific industries that have developed a reputation for hiring unauthorized workers (e.g., restaurant, meat-packing, commercial cleaning, textile and garment). The Plan also provides for “random” audits. For example, due to national security concerns, great efforts continue to be placed on identifying those individuals who have access to the nation’s “critical infrastructures” such as airports, wastewater facilities, and highways.

Finally, the third area of interest for employers from an audit perspective is the new PERM process for Labor Certifications Applications (the “Green Card”). After pending for over two (2) years, in December 2004, the PERM regulations became “Final” and on March 28th, 2005, the old Labor Certification Application process was replaced by PERM. While PERM promises faster green card processing, the application process is much more complex. The DOL seems to be sending a message that it is easier to audit the employer as opposed to processing an Application.

The new PERM process requires an employer to obtain a Prevailing Wage Determination (the “PWD”) from the State Workforce Agency (the “SWA”) (e.g. The NJDOL, Alien Labor Certification Unit) in the State where the position has been offered. The PWD area of the law is constantly evolving. Once the PWD is obtained, an employer must undertake a rigid “recruitment process”. Recruitment consists of placing a job order with the SWA and placing two (2) Sunday advertisements in an appropriate newspaper. The recruitment process needs to be completed within six (6) months of the filing of the PERM Application.

PERM requires meticulous preparation and a thorough understanding of the Regulations. The PERM process is analogous to the administrative process that surrounds the filing of a U.S. tax return. When the return is filed, the filer makes representations, declarations, and attestations about annual income and expenses. The filer does not submit evidence about annual income and expenses. Such information is only provided if the Internal Revenue Service (“IRS”) sends the filer a notice for an audit. The PERM program is similar. A PERM Application is filed by making attestations on the new DOL Form 9089. The Form 9089 is submitted to the DOL. DOL can either certify the Form without receiving documentation, or DOL can send out an audit letter.

The new PERM Regulations state that the DOL can request an audit of any pending Labor Certification Application for cause or in the DOL’s discretion. In the event that a prospective employer is noticed for an audit, the employer will receive an audit letter that lists the documents that will have to be submitted. The audit letter shall set a date that is thirty (30) days from the date of the letter for submission of the additional documents and shall advise the employer that the Labor Certification Application will be denied if the information is not received in a timely manner. If the employer does not respond, the PERM Labor Certification Application will be denied.

It appears clearly to be the case that immigration-related programs that are undertaken by employers may be subject to either directed and/or random government audits from the DHS and/or the DOL. Failure to adequately comply with government regulations can result in penalties. The employer’s familiarity with the intricacies of the auditing and compliance are likely to save a considerable amount of both time and money.

David H. Nachman, Esq. is the Managing Attorney at Nachman & Associates, P.C. with offices located in Ridgewood, New Jersey, New York City and Canada (and having corresponding offices in Ohio, Netherlands Antilles and California). David Nachman received his BS from Georgetown University and his JD from Case Western Reserve University where he also received a Master’s Degree in Business Administration. Nachman & Associates, P.C. provided counsel throughout the U.S. on a full array of immigration law issues. Visit us at www.VISASERVE.com .com.