To: H-1B/L-1/offshoring e-newsletter 177

I usually don't post articles like the one below, because abuse of the
H-1B program is primarily due to exploiting huge loopholes of the law,
rather than to weak enforcement of the law.  However, I feel the need to
state this periodically, to inform new subscribers to this e-newsletter,
and for that matter, to remind the existing ones.

Once again, folks, it is LEGAL to pay H-1Bs below-market wages.  Yes,
they must pay something called the "prevailing wage," but the legal
definition of that term is full of major loopholes, which are exploited
by employers, including the large, mainstream firms.  So, while it's
true, that some employers do break the law, most find no need to do so,
as they can use the H-1B visa for cheap labor while complying fully with
the law.

Therefore, audits cannot fix the H-1B cheap labor problem.  Nor can they
fix the loophole referred to by Professor Hira in his remark about
circumventing the U.S. labor market--there is no legal requirement that
employers try to fill jobs with U.S. citizens and permanent residents
before resorting to hiring H-1Bs, and thus THERE IS NOTHING TO AUDIT in
this regard.  (I thus don't see Ron's point, and suspect he's been
misquoted.)

So, why engage in these audits, especially in such a high-profile manner
as we see in the enclosed article?  There are two possible answers:  (a)
DOL is naive, and truly wants to fix the perceived problem, or (b) DOL
is grandstanding, trying to deflect attention away from the real issue,
the loopholes.  I've pointed out before that the industry lobbyists love
to see highly-publiczed raids on bodyshops, precisely because of (b),
and since both major parties are beholden to the tech industry on the
issue due to campaign contributions (prominent Republicans have admitted
this publicly, and of course it's true for the Democrats too), I must
say that (b) may well be the cause for the sudden audit blitz.  On the
other hand, as a longtime admirer of DOL chief Hilda Solis, I hope the
cause is instead (a).  If it is (a), it's still sad that she is so
uninformed, given her vow at her confirmation hearing to address the
H-1B issue.

Again, fraud is NOT the main problem.  Yes, there was a study that found
a 21 percent noncompliance rate, but as the article mentions, many of
the "violations" were merely technical.  Even most of the ones violating
prevailing wage requirements probably involved only a small dollar
amount; in cases in which a DOL audit on prevailing wage resulting in
the department ordering employers to give workers back pay, the typical
payment has been about $2,000 per worker.  These violations are probably
not deliberate.  By contrast, making use of the loopholes can save the
employer ten times that amount, or more.

The excellent Durbin/Grassley bill would, if enacted intact, plug the
loopholes.  However, if the bill ever does somehow pass, I believe the
loophole-plugging portions would be removed, leaving only some
provisions to beef up enforcement, for the most part useless.

Norm

http://www.computerworld.com/s/article/9136578/H_1B_Visa_Sponsors_Surprise_You_re_Being_Audited?taxonomyId=

Computerworld

H-1B Visa Sponsors: Surprise! You're Being Audited

By Stephanie Overby
August 12, 2009 09:34 AM ET

CIO - Large U.S.-based technology companies and Indian IT outsourcing
firms are paying close attention to proposed legislation aimed at
tightening restrictions on and increasing oversight of the
non-immigrant professional visas they use to place foreign
professionals in roles stateside. But while the H-1B and L-1 Visa
Reform Act, introduced by Senators Chuck Grassley (R-IA) and Dick
Durbin (D-IL), remains in congressional committee, U.S. Citizenship &
Immigration Services (USCIS), the agency that administers the H-1B and
L-1 visa programs, has been increasing its anti-fraud enforcement
efforts in response to reported abuse of the temporary worker programs.

Recently, the USCIS has begun making "surprise visits" to the U.S. work
sites of companies that sponsor H-1B and L-1 visa holders, including
some large U.S.-based financial services companies, says Elizabeth
Espin Stern, a partner in the Washington, D.C. office of law firm Baker
and McKenzie. USCIS assessors come with a checklist of questions
designed to confirm the identity of the employer who petitioned for the
visa and the visa beneficiary and to verify that both are in compliance
with the terms and conditions of the visa.

USCIS spokesperson David Santos confirmed that the agency has begun
conducting random on-site inspections as part of the expansion of its
Administrative Site Visit and Verification Program, launched at the
beginning of this fiscal year. Prior to beefing up the verification
process, only religious organizations were subject to mandatory site
inspections and compliance reviews. Today any non-immigrant petition
could be subject to workplace audits after approval and prior to any
potential adjudication.

The objective of the unannounced on-site visits is clear: to detect
fraud and abuses of the visa program. A study conducted last year by
the Office of Fraud Detection and National Security estimated that 21
percent of H-1B visa petitions violate H-1B program rules. The offenses
range from technical violations to outright fraud. The most common
violation was not paying a prevailing wage to the H-1B beneficiary.

Those who have voiced concerns about the propensity for H-1B fraud in
the past say the impromptu inspections are a step in the right
direction. "Remember the H-1B grants a license-a privilege-to a firm to
circumvent the U.S. labor market," says Ron Hira, assistant professor
of public policy at Rochester Institute of Technology and co-author of
the book Outsourcing America. "With this privilege must come
responsibilities. A random auditing process seems like the most
sensible way to ensure this integrity."

But USCIS investigation tactics often exceed what is necessary and
reasonable to obtain H-1B application verification information,
according to Stein. Unlike the Department of Labor, which has the
statutory authority to investigate an employer's compliance with visa
obligations but rarely conducts audits unless there are complaints, the
USCIS has no statutory or regulatory authority to enter the workplace
of H-1B and L-1 visa holders. And investigators do not arrive with
search warrants or subpoenas, says Stein.

What's more, USCIS has hired contract workers, who complete a USCIS
training course, to conduct the site visits. But many of the
contractors lack expertise about how companies maintain employment
records or demonstrate employment terms, adds Stein.

USCIS spokesperson Santos confirms that compliance with the
investigation is voluntary. However, employers taken off guard by an
unplanned visit may not be aware of that fact.

The Protocol for an H-1B Visa Audit

Investigators request to interview the petitioner, review documents
that support the visa application, and enter the workplace to confirm
visually that the visa recipient is employed according to the terms and
conditions of the H-1B visa.

Stein advises her clients to designate a leader from the general
counsel's office or human resources to guide those who could be
involved in a potential USCIS site visit. Although a cooperative and
courteous attitude is advisable, company representatives may reasonably
request more time to provide documents or other information.

"Employers are not obligated to submit to disruptive or unreasonable
requests for access to company employees or company property," Stein
says.

Companies who sponsor foreign professionals for visas should always
prepare for potential visits or audits in advance by identifying what
documents they are willing to share with inspectors and who will
provide the records. Proving compliance with the H-1B program is the
tricky part.

"The H-1B labor process is complicated," says Allen Erenbaum, a partner
in the Los Angeles office of law firm Mayer Brown.

For one, employers must prove that they determined the prevailing wage
for the occupation in the metropolitan area and that the H-1B salary
exceeds both that market wage and the actual wage it pays to other
employees in similar roles. The company must also show that it prepared
a memo describing the factors-experience, qualifications, education,
job responsibilities-considered in determining the wage, posted a
public notice of the H-1B employee's job and salary in two locations
for ten days, and maintains a public access file containing all
information relevant to the H-1B, which can be reviewed by any member
of the public at any time.

"In addition," says Erenbaum, "the employer should maintain additional
information which will be helpful in the event of an investigation,
including payroll records showing the wage rates for the position, any
data used to establish the actual wage for the position, and a copy of
documents given to employees describing employee benefits."

Employers also should ensure that visa petitions are kept up to date,
says Stern. If wages or work location for an H-1B holder changes,
companies must move to amend the original visa petition.

"If an employer gets audited," says Erenbaum, "it's too late to begin
to get ready."