LCA Obligations for Employers Who Hire H-1Bs, H-1B1s, and E-3s

Employers who wish to sponsor foreign national employees in H-1B status (specialty occupations requiring at least a Bachelor’s degree or equivalent), H-1B1 status (specialty occupations for those from Singapore and Chile), or E-3 status (specialty occupations for those from Australia), must first file and receive a certification of a Labor Condition Application (LCA) from the U.S. Department of Labor (DOL).

LCA Attestations & Notice

By filing the LCA, the employer makes several attestations about the working conditions of the proposed employment, as well as the impact of such employment on other U.S. workers. Specifically, the employer agrees to:

• Pay the required wage to the foreign national employee(s) covered by the LCA. The required wage is the actual wage or the prevailing wage, whichever is higher. The actual wage is the wage that the employer pays all other individuals with similar experience and qualifications who are performing the same job. The prevailing wage is a wage determined by the DOL, a professional wage survey, or other legitimate source, for other workers in the same occupational classification in the same area of intended employment
• Provide the foreign national employee(s) working conditions that will not adversely affect the working conditions of similarly employed U.S. workers by guaranteeing the same hours, shifts, vacation periods, and benefits based on the same criteria as the employer offers its U.S. workers
• Ensure that there is no strike, lockout, or other similar labor dispute in the same occupational classification and place of employment at the time of filing the LCA
• Provide notice of its intent to hire a foreign national in H-1B, H-1B1, or E-3 status to the bargaining representative (where there is a collective bargaining agreement for the occupational classification of the intended foreign national employee(s) covered by the LCA), or by posting a notice to its employees (where there is no collective bargaining agreement). A notice to employees may be posted physically for ten consecutive business days in two conspicuous locations at the place of employment, or by electronically notifying its employees

The employer must also provide a copy of the LCA to the foreign national employee(s) by no later than the first day of employment.

There are additional LCA attestation requirements for employers that are considered to be “H-1B dependent” due to employing a certain percentage of individuals in H-1B status, for employers that are considered to be “willful violators” because government has found that they have violated the terms and conditions of the H-1B program, and for employers that have received TARP funding. These employers must agree:

• Not to displace a U.S. worker within a period of 90 days before and 90 days after the filing of the H-1B petition
• Not to displace a U.S. worker in another employer’s workforce
• To take good faith efforts to recruit U.S. workers for the position

LCA Public Access File & Recordkeeping

Employers are required to create and maintain an LCA public access file, which must be available to the public and the DOL upon request throughout the period of H-1B, H-1B1, and/or E-3 employment, and for a specified period beyond. The public access file must be available within one working day after the filing of the LCA and must contain the following:

• Signed and certified LCA
• Documentation used to establish the prevailing wage
• Proof of satisfying the notice requirement
• Documentation of the wage rate to be paid the H-1B, H-1B1, and/or E-3 foreign national employee(s)
• Description of the employer’s actual wage system
• Summary of the benefits offered to comparable U.S. workers and an explanation of any differentiation in benefits
• Where the employer utilizes the “single employer” definition in the Internal Revenue Code, the file must also contain a list of any entities included as part of the single employer for purposes of determining whether it is “H-1B dependent”
• Where there has been a change in corporate structure, the file must also contain a sworn statement explaining that the new entity assumes all rights and obligations of the predecessor’s LCAs and list the affected LCAs
• Where the employer is “H-1B dependent”, a “willful violator”, or a TARP recipient, the file must also contain documentation related to the recruitment of U.S. workers (unless filing the LCA for exempt foreign nationals who earn more than $60,000 a year or possess a Master’s degree or higher, or its equivalent, in a specialty related to the occupation)

The DOL may also require that the employer provide additional documentation in the event of an audit, investigation, or inquiry, which may include, but is not limited to: payroll records; names, addresses, occupations, and social security numbers of workers; rate of pay, hours worked, gross and net pay, and deductions of workers; benefit plans provided; adjustments made to the actual wage system; and calculation used to determine “H-1B dependent” status.

Enforcement

The DOL’s LCA obligations and requirements attempt to protect both the H-1B, H-1B1, and E-3 foreign national employee, as well as the U.S. worker, by ensuring that employers do not take advantage of foreign nationals and do not depress the wages of U.S. workers. A DOL investigation may be triggered by complaint from an aggrieved party or by a random audit. If the DOL finds that the employer violated its LCA obligations, it may impose fines, award back pay or reimbursement for improper deductions, or debar a company from filing future H-1B, H-1B1, and E-3 petitions, amongst other administrative remedies.

Please contact one of the immigration attorneys at Minsky, McCormick & Hallagan, P.C., if you have questions about your company’s LCA obligations, need assistance in conducting an internal LCA self-audit, or require representation in responding to a DOL investigation or audit.