Vol. 1, No. 2, January 1999

The Department of Labor (DOL), in early January, published its proposed regulation implementing the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). (The text of the proposed rule can be found in the January 5, 1999 Federal Register on page 628.) The more than 50 page proposed rule covers most areas of the new law and some areas left unresolved after the 1997 National Association of Manufacturers (NAM) lawsuit struck down several parts of DOL's last interim final H-1B regulation.

This regulation will not be effective until it is published as an interim final rule. Many portions of the proposed rule are not yet in regulatory language. Employers are encouraged to contact their immigration attorney to determine what affect these proposals would have on their operations. Employers significantly impacted are encouraged to file comments on the proposed rule with the DOL. Comments are due on or before February 4, 1999.

The following issues are covered in proposed regulations:

Definition of employment relationship: DOL will use a "common law" test to define when an "employment relationship" exists, and cites a broad list of factors that must be considered, including the control of when, where and how the work is performed, the furnishing of tools and equipment, the presence of a continuing relationship, whether the work is part of the employer's regular business, and the belief of creating an employer-employee relationship.

Benching: The proposed rule implements the ACWIA prohibition on "benching", or placing an H-1B worker in unpaid, nonproductive status and includes some examples of activity that would not constitute benching, such as leaves of absence requested by the employee.

Electronic posting: The proposed regulation also implements the ACWIA provision allowing for electronic posting of H-1B notifications via a company's Intranet or via e-mail, with some restrictions.

Short-term placement: The proposed rule resurrects, with some minor changes, the "short-term placement" provisions of the previous interim final rule that were struck down by the NAM lawsuit. Generally, this regulation allows H-1B workers to be placed at a site not covered by a certified LCA for the employer for up to 90 days before a new LCA must be filed.

Documentary Requirements: The proposed rule also resurrects the "Objective Wage System" proposal from the earlier regulation, which states that an employer must document an "objective" system for calculating actual wages for all workers and that the document must be "sufficiently detailed to enable a third party to apply the system to arrive at the actual wage rate."

New Definitions: The proposed regulation includes a new definition of "place of employment" and "worksite," defining both as the place where the work is actually performed, making some exceptions, including situations where there is (1) employee developmental activity (meetings, conferences) or (2) where the employee's job functions mandate travel, if certain requirements are met. The "roving employee" concept, however, is limited to certain restrictions and standards. The appendix also reintroduces the prohibition on making or even allowing the employee to pay attorney's fees or other costs of the LCA or the petition as a failure by the employer to meet the required wage obligation.

Although DOL states that this proposed rule is made pursuant to ACWIA, it does not provide draft regulatory language on many of the new law's more complex and controversial provisions. Instead, the DOL includes a lengthy discussion of these issues in the preamble, in some cases alluding to its "preferred" course of action, but not clearly stating a position. These issues include:

Calculation of "dependency": ACWIA requires new recruitment and non-displacement attestations from those employers considered to be "H-1B dependent." The Supplementary Information suggests that DOL will require documentation for close determinations, with a copy of the mathematical determination in the public access file. DOL also reviews possible approaches for calculating a "full-time equivalent employee" (since that term is not defined in the statute), for mandating when an employer must determine its dependency; and for deciding whether employers must file new LCAs when/if their status changes.

Automated Filing of the LCA: DOL indicates in the preamble its intent to begin automated processing of faxed LCAs in two central locations (San Francisco and Philadelphia) by late January. [See related article later in this issue.]

Exempt workers: To determine if an H-1B worker is "exempt" and therefore not subject to the new attestations even if working for a dependent employer, DOL intends to look only to a degree equivalent to a U.S. master's degree, rather than allowing equivalent experience. In the alternative, it would require actual payment (cash-in-hand) of at least $60,000 in compensation for the year.

Non-displacement: DOL would require H-1B dependent employers to keep certain documentation on each former worker in order to prove that they have not been displaced by H-1B workers, as prohibited by ACWIA. The proposal also looks at what criteria DOL could use to determine what is an "essentially equivalent job" from which a U.S. worker was unlawfully displaced.

Recruitment: DOL discusses how it would determine good-faith recruitment processes and how employers could document their recruitment met "industry-wide standards" and their selection processes, including requiring that certain information be available for public disclosure.

Damage/penalty distinction: DOL proposes to limit an employer's ability to enforce damage provisions against employees departing prior to an agreed-upon date, requiring that employers first obtain a state court judgment.

For more information about the proposed rule and on how your organization can provide comments on it, please contact your immigration attorney. Please see box on page 7 for details.

The INS squeaked in just under the deadline by issuing its interim final rule on the new $500 H-1B required under ACWIA. Comments on the regulation will be accepted until January 29, 1999. This interim final regulation, issued in late November, establishes the procedure for filing the new $500 fee required of most employers for the initial H-1B petition and first extension filed by that employer for the employee. The regulation requires that employers filing certain H-1B petitions on or after December 1, 1998 must pay the $500 fee on top of the existing $110 filing fee. The regulation requires that the fee be paid in one check. However, the INS has informed AILA that two checks also are acceptable. The INS cannot waive this fee. The new regulation further makes clear that the employer must ultimately pay the $500. The employer cannot require or accept reimbursement from the H-1B worker. DOL's proposed regulation reconfirms this request. (See previous article.)

The regulation defines those few employers who are exempt from the fee: Colleges and universities, non-profit institutions that are affiliated with a college or university, nonprofit research institutions, and Governmental research institutions. The regulation also creates a Form I-129W (Petition for Nonimmigrant Worker, Filing Fee Exemption) which those employers must file with evidence that the organization qualifies for the exemption. The fee also does not have to be paid for amended petitions with the same employer, unless the petition also seeks to extend the employee's status and is the first petition to extend status.

INS in November suspended processing all applications for adjustment of status (the final stage in applying for permanent residence) filed with the INS Service Centers and District Offices on or after April 1, 1998. INS Headquarters shortly will issue a written announcement regarding the hold. According to the agency, the processing suspension allows the CIA to complete required name checks on all adjustment applicants. (A computer reprogramming oversight had missed cases filed between April and July, 1998.) While the software problem appears to be resolved, other computer problems (notably a Y2K compliance review) suggest that it is unlikely that any adjustment of status application filed on or after April 1, 1998, (including cases where an applicant or dependent will turn 21 and thus lose eligibility for permanent residence) will be completed prior to February, 1999. The Service has confirmed, however, that no fingerprint data has been lost and applicants should not have to be re-fingerprinted.

DOL is poised to expand nationwide its pilot program for electronic processing of Labor Condition Applications (LCAs) for H-1B visa petitions. Under current law, before an employer can file a petition with the INS for an H-1B nonimmigrant, the employer must first file an LCA with the Department of Labor attesting that it will, among other things, meet certain wage and benefit requirements, notify its workers of the hiring of a foreign professional and not use the foreign worker during a labor dispute. Currently the LCA is filed with the Regional Certifying Office of the Department of Labor with jurisdiction over the location of employment.

Since last year, DOL has operated a pilot program for this automated system within the jurisdiction of its Region III office in Philadelphia, PA (which includes Pennsylvania, Maryland, Delaware, Virginia and the District of Columbia). Under this pilot program, registered employers and attorneys could fax their LCAs to the regional office, which would use a computerized program to automatically scan the LCA and send back a faxed determination usually within 48 hours.

With the publication of its proposed rule on the new H-1B law, the DOL proposes to expand this automated processing system by the end of February 1999 to the rest of the country. All LCA processing then would be centralized in its Philadelphia and San Francisco offices. Employers filing their LCAs with one of these two offices using a new, proposed machine-readable LCA form. The DOL would make available free of charge at your request the form and a computer program for filling out the form.

The DOL hopes that by February employers across the country will voluntarily use the new system. After publication of a Final Rule sometime this spring, the new form and the new filing system will be mandatory.

• Final regulations reducing the number of documents allowed for Employment Eligibility Verification (Form I-9).

• A regulation implementing statutory changes to Section 245(i) that would define who are the eligible beneficiaries.

• A regulation regarding the new inadmissibility grounds and bars to admissibility from IIRAIRA.

by Greg Boos, Esq., AILA Member, Bellingham, WA

Recognizing that national immigration policy can profoundly impact regional and local business and economies, a cross-border association of government and business leaders in the Pacific Northwest has taken an active role both regionally and nationally in advocating for business immigration issues, and serves as model for other local and regional associations. The Pacific NorthWest Economic Region (PNWER) is a public/private partnership that represents the states of Alaska, Idaho, Montana, Oregon and Washington, and the Canadian provinces of Alberta and British Columbia and the Yukon territory. At $350 billion, PNWER's Gross National Product (GNP) is the ninth largest in the world. PNWER is governed by a bipartisan Delegate Council consisting of legislators and governors of its member states and provinces and assisted by a Private Sector Council made up of business leadership from throughout the region.

"PNWER recognizes that restrictive immigration policies can adversely affect regional economies," says Matt Morrison, Acting Executive Director of the group. "That's why the organization includes advocacy on behalf of immigration issues as part of its agenda."

Since its creation in 1991, PNWER has worked to remove barriers that impede trade, commerce and tourism between the U.S. and Canada and to make border crossing between the two nations simpler and more efficient. These efforts have included active support for the "Open Skies Agreement" as the deregulation of air travel between the two countries increased the number of flights between destinations within the PNWER region, thereby enhancing cross-border tourism. As the organization continued to look at ways to enhance the PNWER region as an international tourism destination, it backed efforts to make the Visa Waiver Pilot Program (VWPP) permanent and pioneered the idea of expanding VWPP coverage so that it would more closely parallel Canada's visa waiver program. In 1995, PNWER delivered testimony on these issues before the U.S. Commission on Immigration Reform.

PNWER's involvement with immigration issues has continued to expand, and the organization strives to confer regularly with the congressional delegations of its member states. "PNWER supported efforts to make 245(i) [the section of immigration law that allowed certain foreign nationals to obtain permanent residence in the United States without having to travel abroad] permanent and to expand the H-1B [temporary professional worker] program," says Morrison. "The repeal of Section 110 [of the 1996 Immigration Act, which requires a new automated entry-exit system for all non-citizens] as it applies to land-border crossings continues to be a priority item on the PNWER agenda, as does the elimination of INS' expedited removal powers. Such laws have a chilling effect on international trade, commerce and tourism."

"Immigration issues are complicated, and the willingness of [American Immigration Lawyers Association (AILA)] members to share their expertise with us has clearly been a factor which has enhanced PNWER's effectiveness as an advocate for well reasoned federal laws and policies to enhance rather than impede cross-border trade and commerce," continues Morrison. "Economic development organizations similar to PNWER exist in many regions throughout the U.S. I am certain that these organizations would welcome similar involvement. Meanwhile, PNWER continues to welcome new members as well."

For more information about PNWER, visit its website at www.pnwer.org .

National business leaders, officials from the Immigration and Naturalization Service, and immigration advocates met in Washington, DC in early December, 1998 at a "town meeting" sponsored by the American Immigration Law Foundation ("AILF") and hosted by Senator Spencer Abraham (R-MI), Chair of the Senate Immigration Subcommittee. The topic of this town meeting was the current state of our nation's employment immigration system and was part of AILF's Global Competitiveness Project, which focuses on how U.S. immigration policy affects the ability of American business to compete globally.

Business was represented on the panel by Susan Conlon, Director of Recruiting for Kearney Technology Group, and Larry Langrehr, Vice President of Cable & Wireless. They discussed the financial impact for their companies of lengthy delays in processing temporary and permanent visas for key employees; their frustration with an immigration system that does not recognize the realities of modern business practices; the need to remain competitive by both recruiting and hiring in a timely manner the best candidates for their positions, regardless of nationality.

Ms. Jeanne Butterfield Executive Director of the American Immigration Lawyers Association (AILA) emphasized that the INS still suffers from "mission overload," in spite of dramatic increases in its annual budgets. The agency is tasked with issuing over 200 sets of regulations to implement the ever-changing immigration laws Congress passes, while it also faces increasing backlogs and delays in adjudicating petitions and applications. Butterfield also argued that the dis connect between immigration law and business practice is causing problems for businesses in utilizing foreign workers.

Demitrious Papademitriou, a Senior Fellow at the Carnegie Foundation for International Peace, and Director of its International Migration Project, emphasized the need for lawmakers and business to formulize new ways of thinking about our "economic stream" of migration, that goes beyond individual job openings or labor shortages. He proposed a "point system," similar to ones used in Canada and Australia, that would use factors to assess the potential of immigrants to contribute to the economy, including education and training, language skills, specific job-related skills, and existing ties within the community.

Finally, Linda Dodd-Major, Director of the Office of Business Liaison at INS, noted that, while INS seeks to help the business community, its first priority is to enforce the laws. Because INS sees some instances of fraud and misrepresentation, the agency must institute processes to prevent such abuses. These processes can conflict with the ideal of a "service-oriented" agency.

All participants urged Congress and the Administration to engage in a new, broad, and constructive discussion about how immigration can enhance global competitiveness.

Connect! is published monthly by the American Immigration Lawyers Association and distributed to you as a service by its member attorneys. For more information about the stories in this newsletter or how to get involved in advocacy on these and other issues, please contact your immigration attorney.

Priority Dates as of February 1, 1999 for Employment-Based Immigrant Visas

Source: Department of State Visa Bulletin

Federal Agencies that publish regulations to implement laws must notify all interested parties by publication in the Federal Register of their proposals and allow public comment on proposed regulations before they become effective. For the H-1B regulations mentioned in this issue, the relevant comment information is as follows:

Due Date: January 29, 1999

Submit to: Director, Policy Directives and Instructions Branch

Immigration and Naturalization Service

425 I Street, NW, Room 5307, Washington, DC 20536

Instructions: Comments must be in an original and two copies and should reference INS No. 1962-98.

Due Date: February 4, 1999

Submit to: For Part 655 (H-1B Program) - Deputy Administrator, Wage and Hour Division
ATTN: Immigration Team

U.S. Department of Labor

Room S-3502, 200 Constitution Avenue, NW, Washington, DC 20210

Fax: (202) 219-5122

Assistant Secretary for Employment and Training

ATTN: Division of Foreign Labor Certification

U.S. Employment Service

Employment and Training Administration

U.S. Department of Labor

Room N-4456, 200 Constitution Avenue, NW, Washington, DC 20210

Fax: (202) 208-5844

Instructions: To receive notification of receipt of the comment, enclose a return self-addressed, stamped post card. Comments may be submitted by facsimile to the numbers above.

Send to a Friend

Schedule A Legal Consultation

Return to Table of Contents

Return to Immigration Guide Homepage