This document summarizes a presentation about common mistakes employers make related to H-1B visas and Labor Condition Applications (LCAs) that can result in penalties and fines from government agencies. The presentation covers 9 common mistakes to avoid, such as failing to pay required wages, benching employees, and failing to maintain required documentation. It also provides guidance on properly completing LCAs, conducting internal audits, and preparing for potential audits or investigations from the Department of Labor or Department of Homeland Security. The presentation was given by an immigration law firm to help employers avoid costly errors and comply with applicable laws and regulations.

1. H-1B Compliance:
9 Costly H-1B Visa Mistakes Employers
Make and How to Avoid Them
Presented by
Cowles & Thompson, PC
February 26, 2014

2. Ask Questions Anytime
Use your chat pane to type
and send your questions.
Questions will be answered
during the presentation and
during the Q & A session.

3. Presenters
Angela M. Lopez
Ann M. Badmus
Thu T. Nguyen

4. Webinar Agenda
H-1B Application Mistakes to Avoid
1
LCA Compliance Mistakes to Avoid
2
How To Document LCA Compliance
3
H-1B/LCA Internal Audits
4
5
DOL And DHS Investigations
Copyright 2009

5. Agencies
U.S. Department of Labor (USDOL)
U.S. Citizenship and Immigration
Service (USCIS)
Wage and Hour Division (WHD) of
USDOL

6. Enforcement and Investigation
USCIS
USDOL
WHD
• Surprise Site Visit
• Petition Denial/Revocation
• Audit
• Fines/Debarment
• Complaint Investigation
• Damages/Debarment

7. Penalties
Civil Money Damages
Back Wages
Fringe Benefit Reimbursement
Debarment
Negative Publicity

8. H-1B Application Mistakes to Avoid

9. H-1B Application Process
ETA9035
Labor Condition Application (LCA)
I-129 H Petition
I-797 Approval Notice

10. Mistake # 1
Failure to Provide Accurate Data
Employer
Information
•Correct Name
•FEIN
Employment •Rate of pay
Information •Locations
Business
Information
•H-1B employees
•Third party sites

11. Mistake #2
Failure to File on Time
H-1B Numerical Limitations
Extensions/ Renewals
Amendments

12. Labor Condition Application
Mistakes to Avoid

13. Mistake #3
Failure to Pay the Required Wage
Employers must pay higher of
actual or prevailing wage rate,
pay for nonproductive time,
and offer benefits on the same
basis as offered to U.S.
workers

14. Prevailing Wage Resources
Occupational Employment Statistics
(OES) Survey
USDOL Prevailing Wage Determination
(safe harbor)
Davis-Bacon, McNamara O’Hara Service
Contract Act
Collective Bargaining Agreement
Independent Survey

15. Prevailing Wage
Choose the appropriate
criteria
•Occupational Class
•Skill Level – I,II,III,IV
•Geographic area of intended
employment

16. Actual Wage
Documented wage paid to all other
employees with similar experience and
qualifications for the specific
employment
•Experience and qualifications
•Education
•Job responsibility and function
•Specialized knowledge
•Legitimate business factors

17. Mistake #4
Violating Wage Deduction Rules
Employers may not deduct its
business expenses from
employee’s wages
•ACWIA fee
•Anti-Fraud fee
•Attorney fee

18. Mistake #4
Violating Wage Reduction Rules
(cont.)
Employers may not require
repayment of petition costs or
related business expenses
upon employee’s termination
of employment

19. Mistake #5
Failing to Pay Wages on Time
Employer’s obligation to pay begins
when the employee is available to
work but no later than 30 days after
employee enters U.S. with H-1B visa
OR 60 days after H-1B validity date
if employee is already in U.S. in H-1B
status.

20. Mistake #6 - Benching
Employer must pay required wage for
all nonproductive time related to
employment caused by:
• Lack of work or client contract
• Lack of licensing
• Studying for licensing
• Employer required training
Payment is not required for truly
voluntary absences

21. Mistake #7 - Failing to Properly
Document Employment Termination
Written notice of termination to
employee
Bona Fide
Termination
Required
Offer of return transportation to
depart the U.S.
Written notice to USCIS
withdrawing H-1B

22. Mistake #8
Failing to Document Changes
New work locations in a different
prevailing wage location
Significant changes in job duties or
working conditions
Mergers & acquisitions or other
corporate changes

23. Mistake #9 – Failing to Maintain
Required Documentation
Public Access File - LCA and other
documents available for public
access within one day of filing the
LCA
FDNS Audit File for Surprise Site
Visits

24. How to Document LCA Compliance

25. Public Access File
Certified LCA (ETA9035)
Rate of pay for the H-1B worker
Actual wage memorandum
Prevailing wage determination
Proof of LCA posting

26. Public Access File (cont.)
Acknowledgement of receipt of LCA
by H-1B employee
Summary of benefits offered to all
workers
List of entities included as “single
employer”

27. Public Access File (cont.)
Post-employment changes must
be documented:
• Copy of new LCA for new location(s)
• New rate of pay, actual wage
memorandum, proof of posting,
employee acknowledgement of LCA,
prevailing wage determination
• Salary adjustments, e.g. cost-of-living,
promotion to advanced level in same
occupations

28. Public Access File (cont.)
Corporate organizational changes must
be documented:
• Sworn or notarized statement by successor
accepting all liabilities
• List of H-1B workers transferred to
successor
• Each affected LCA number and effective
date
• Description of actual wage system
• Successors employer identification number
(EIN)

29. Public Access File (cont.)
H-1B Dependent Employers must include
in the PAF:
• List of “exempt” H-1B workers, if LCA
indicates only exempt workers will be
employer or
• Summary of recruitment methods and
timeframes for recruitment of U.S. workers
and
• Attestation that hiring an H-1B worker will
not displace any U.S. worker in similar
position within 90 days before or after the
H-1B petition is filed.

30. LCA File
Maintain for USDOL (not disclosed to
public):
• All documents included in public access file
• LCA receipt acknowledgement from H-1B
employment
• Records showing wage rate for all other
employees for the specific employment at the
specific place of employment
• Any documentation that supports the
prevailing wage determination
• Documentation on the offer of benefits
• Documentation on working conditions

31. Retention Requirements
Public access file must be
maintained:
•At employer’s principal place of
business or at the employee’s
worksite.
•Throughout the term of the H-1B
employee’s employment and one year
after termination of employment.

32. H-1B/LCA Internal Audits

33. Benefits of an Internal Audit
Identify correctable errors
Ensure consistency and integrity of
documents
Prepare for USDOL or USCIS audit
Reduce liability by showing good faith

34. Conducting an LCA Self-Audit
•Public Access File for each
occupation
•Appropriate position
classification
•Correct prevailing wage/actual
wage
•Documentation of employment
changes

35. Conducting an LCA Self-Audit (cont.)
• Documentation of organization
changes
• Payroll records reflect compliant start
date
• Appropriate notifications/amendments
to USCIS
• Verify audit results with attorney

36. Preparing for USDOL and USCIS
Audits & Investigations

37. Preparing for an Audit/Site Visit
Review the H-1B petition
Conduct H-1B/LCA self-audit
Inform your client of potential for site visit if
employee works at third-party location
Identify company representative(s) to
meet with auditors
Establish procedures for reception and
training

38. Preparing for an Audit/Site Visit
Prepare FDNS Compliance File
•Copy of H-1B petition
•Employee W-2 forms, three months paystubs
•Previous approval notices, current passport, current I94, educational documents for employee
•Current job description, record/itinerary of off-site
assignments
•LCA if work location has changed
•Evidence of termination of employment, if applicable

39. Legal Notice
.
Facts of individual situations differ.
The information provided here is
general in nature and should not be
relied upon for specific situations.
Consult with an experienced
immigration attorney to ensure
compliance

40. Questions? Need More Information?
Feel free to contact us.
Cowles & Thompson, PC
901 Main Street
Suite 3900
Dallas, Texas 75202
214-672-2000 Telephone
immigration@cowlesthompson.com
www.cowlesthompson.com
Copyright 2009