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The USCIS announced on April 5, 2013 that the H-1B cap was reached in the first week petitions could be filed for the fiscal year beginning October 1, 2013. Because more than 85,000 petitions were submitted, a computer generated lottery will be held to determine which petitions will be processed. USCIS will take a few days to data entry the information required, and then will first conduct the lottery for the 20,000 advanced degree graduates. All remaining advanced degree graduates will be entered into the regular cap lottery for the remaining 65,000 visas. The remaining petitions will be rejected and returned to the petitioners. Premium processing for those petitions both requesting premium processing (and paying the additional fee) and selected will begin to be processed on April 15. The remaining petitions will be processed over the next few months, presumably all before the designated start date of October 1, 2013.

The "cap-gap" regulation provides that beneficiaries of the selected H-1B petitions currently employed pursuant to Optional Practical Training will be permitted to continue working until the H-1B becomes effective on October 1, although the Optional Practical Training may expire before this date.

The strong demand for the H-1B visa, often referred to as the high tech visa because it is relied upon by employers seeking high skilled technology workers, reflects the growing economy. We hope that this strong demand, and the adverse affect it will have on employer's ability to hire engineers and technology professionals between now and October 2014 will encourage Congress to provide relief as Comprehensive Immigration Reform is debated over the coming weeks.
 

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It has been two weeks since a bipartisan Senate Committee of eight senators released their statement of principles for Comprehensive Immigration Reform, followed two days later by President Obama during a speech in Las Vegas. The President told the nation that the political stars have aligned and "now is the time" for serious consideration of immigration reform. Together, these statements set the stage for the debate to come.

These two statements provide a hopeful sign that the intractable problems have been reconsidered in light of the new political reality and good old-fashioned compromises have been defined. There are still many difficult decisions ahead. The devil, as they say, is in the details, and it is those details beyond the basic positional statements that will be necessary to define.

When it comes to immigration reform, the critical decisions boil down to numbers. The problem with the last comprehensive reform legislation in 1986 was that the law made no attempt to adjust the limits to changing economic conditions – immigration limits haven’t changed since they were arbitrarily set in 1990.

Immigration policy must be based upon both family reunification and the labor demands and employment opportunities, both core national values. But the law was not built to index or adjust to changing economic conditions. In fact, the Immigration Act of 1990, still in place today, permits the annual admission of 226,000 family-based immigrants, based on various family relationships; and 140,000 immigrants conditioned on the needs of U.S. employers, based on different skill sets.

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A new year brings new opportunities and challenges, and it's time for American employers to begin considering filing H-1B petitions for prospective new foreign national employees. The H-1B visa category provides for the temporary employment of foreign nationals who will work in “specialty occupations,” or those jobs for which at least a bachelor’s degree in a particular field is required (for example, engineers, teachers, accountants, and many professional information technology positions). The problem is that there are limited numbers of H-1B visas available each year, and this year we expect these numbers to be quickly claimed.

There is a limit (or "cap") of 85,000 H-1B visas available each year: 65,000 for bachelor degree-level candidates and 20,000 for advanced degree graduates of American universities. These petitions can be submitted to U.S. Citizenship and Immigration Services (USCIS) on or after April 1, 2013 for employment beginning no earlier than October 1, 2013 (this is the beginning of the government's 2014 fiscal year, which runs from October 1, 2013 to September 30, 2014). However, we anticipate that the available H-1B visa numbers will be exhausted within the first week employers are eligible to file new H-1B petitions. If this occurs, USCIS will conduct a computer-generated random selection process, or lottery, for submitted H-1B petitions to select which petitions will be accepted for adjudication. If approved, H-1B employees will be eligible to receive an H-1B visa number and begin working for their petitioning employers.

The limit of 85,000 H-1B visas is specific for potential employees initially seeking to acquire H-1B visa or status, and does not impact current H-1B employees. Accordingly, cap-subject individuals include those acquiring the H-1B visa or status for the first time, such as foreign (F-1) students changing to H-1B status and individuals abroad who plan to enter the U.S. for the first time using an H-1B visa.

Each year the H-1B cap typically is reached well before the end of the fiscal year. For the fiscal year 2013, all H-1B visas were exhausted by June 11, 2012. Due to an improving economy, as well as an uncertain number of H-1B candidates who failed to get a visa number last year or who are waiting to apply this year, we advise employers to be proactive and move quickly to ensure their H-1B petitions are prepared and ready to file no later than April 1, 2013.

Once the H-1B cap has been reached, no new petitions may be filed until the next fiscal year (April 1, 2014 for employment beginning October 1, 2014). This can make both hiring and planning an employment start date difficult. For example, although employers can file petitions up to six months in advance of the requested effective date, which makes the April 1 filing date so critical, the approved petition will not be valid until October 1 of that year. Thus, even though employers may file petitions on or after April 1 for the next fiscal year, the petition will not be effective until October 1. This issue particularly impacts foreign (F-1) students, who often have post-graduate work authorization to allow them to remain in the U.S. and work while awaiting the H-1B effective date. In limited situations, other visa categories may be available in lieu of the H-1B. For other cap-subject individuals, such as those currently abroad or who do not have H-1B status, they must wait until October 1 before commencing employment.

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The Board of Alien Labor Certification Appeals (BALCA) recently issued three decisions reversing the Certifying Officer's (CO) denials of certification.

In Matter of Cognizant Technology Solutions US Corp., (Nov. 29, 2012), the employer had submitted a PERM application for the position of Business Development Manager which required a master's degree and 12 months of experience. As part of the recruitment process and as required by the regulations, the employer placed a job order with the New Jersey State Workforce Agency stating the said requirements for the position. Due to an automatic conversion programmed into the job order form, the posted job order stated that the experience requirements for the position was "Mid Career (2-15 years)." The CO denied certification on the basis that the job order's experience requirement exceeded the 12month requirement stated on the PERM application. Finding that the employer could not prevent the automatic conversion to a pre-determined range, BALCA concluded that the employer conducted a good faith recruitment effort as required by the regulations. In reversing the CO's denial, the BALCA reiterated its earlier finding in Federal Insurance Co., (Feb. 20, 2009), that denying certification where a deficient form prevented an employer from complying with the regulations offends fundamental due process.

In Matter of Infosys Technologies Limited, (Nov. 16, 2012), BALCA stated: "Our analysis is guided by the purpose of regulation which is to assist employers in adequately testing the labor market." BALCA found that the employer adequately tested the labor market for a consultant-type employee where the recruitment ads were placed in the San Francisco Chronicle and its related job search website, indicating that the position was located in San Francisco which may require multiple long-term assignments within the region. Due to the limitations of the PERM application form for consultant-type positions with unanticipated client sites, the application indicated the employer's headquarter office, located in Fremont, California, as the location of job opportunity. The CO had determined that San Francisco and Fremont were not in the same Metropolitan Statistical Areas (MSA) and that the geographic area of employment in the ads did not match the geographic area of employment in the PERM application. BALCA found that any U.S. worker reading the ads would realize that the job location may be anywhere within the San Francisco area, which would include Fremont, and reversed the CO's denial of certification.

In Matter of Bottomline Technologies, (Oct. 18, 2012), the CO had denied certification on the grounds that the employer did not adequately document the employer referral program as one of the recruitment steps. Specifically, the CO noted that the documents did not show that the program was in effect during the relevant period of recruitment and that the employees were on notice of the job opening. While commenting that the employer's evidence "could have been better presented," BALCA found that the employer submitted enough documentation to show that the program was in effect and that the employees were on notice when considering all the evidence submitted by the employer in its response to the PERM Audit and its motion for reconsideration. As to the CO's finding that the program documentation did not include the employer's name or the job location, BALCA found that the job posting in the employer's website clearly included the employer's name and the job location, and further stated as follows: "Perhaps the CO was looking for this information to be on the employee handbook description of the employer referral program itself, but that is not a reasonable or realistic expectation."

BALCA is to be commended for exercising reason and common sense in its interpretation of the regulations in deriving these decisions. We hope that BALCA continues to be guided by the purpose of the regulations and will not seek technical reasons to deny certifications for applications filed and processed in good faith.

(For a general description of the PERM process, please see our previous post.)
 

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The State Department released the January 2013 Visa Bulletin last week. Among the items of interest was the disappointing news that the visa cut-off date for the EB-2 category for India remains September 1, 2004, for the fourth straight month since the new fiscal year began in October. This means that cases with a priority date on or before the cut-off date can be processed, all other applications must wait for an available visa. The visa cut-off date for the EB-3 category for India again showed a slight movement of one week to November 8, 2002, from the previous month's cut-off date of November 1, 2002. Since the beginning of the fiscal year, that's a movement of a whole month for Indian born applicants in the EB-3 category.

(For those still confused about the visa cut-off dates: the foreign employee's priority date must be prior to the visa cut-off date published in the monthly Visa Bulletin for the employee to be able to file an application to adjust status, the final step in the process for permanent residence. If the application to adjust status has already been filed, it cannot be approved until the posted cut-off date reaches the individual's priority date. The priority date is set by the filing date of the PERM application or the immigrant visa petition, whichever comes first.)

The problem for Indian born applicants is the per country limitation. The law limits each country to 7% of the total applicants if a classification is oversubscribed, meaning that there are more applicants in line than the law allows in any one year. Congress set the limit for employment-based visas at 140,000 in 1990, and has not updated the law since then. Because this limit includes not only the employees being sponsored, but each of their family members, the sponsored immigrant requires an average of 2.3 visas, further reducing the availability of visas. The allocation for the EB-2 and EB-3 categories are 40,040 each, and because both have been oversubscribed, the per country limitation has been effective since April 2000. This means that there are 2,803 (7% of 40,040) visas available for Indian born applicants in each of the two employment categories.

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In its latest decision, Matter of Select National Inc. (Sept. 19, 2012), the Board of Alien Labor Certification Appeals (BALCA) affirmed the denial of a labor certification by holding that even if a potential U.S. worker applicant did not appear to meet the required amount of experience, the employer had a duty to investigate further where the resume demonstrated a "broad range of experience, education and training." (For a general description of the PERM process, please see our recent post).

Select National Inc., follows two decisions issued earlier in the year, Matter of Goldman Sachs & Co. (June 8, 2012), and Matter of Kennametal, Inc. (March 27, 2012), both affirming denials based on employer's duty to investigate further.

In Select National Inc., BALCA stated as follows: "We agree with the Employer that (the U.S. applicant) does not appear to meet the minimum requirement of three years' experience in the job offered. However, even if the applicant did not have the exact experience required, the Employer was under a duty to investigate the applicant further."

In all three cases, BALCA acknowledged that the U.S. applicants did not meet the requirements as specified in the recruitment ads and the PERM application, whether it was the required degree or the specific skill set. However, BALCA reasoned that because all three employers had included a variation of the "magic" Kellogg language ("any suitable combination of education, training or experience is acceptable") in the PERM applications and/or the recruitment ads, the employer had the duty to further investigate the credentials of the U.S. applicants. Furthermore in Kennametal, BALCA reasoned that the employer failed to consider whether some of the applicants could be qualified "after a reasonable period of on-the-job training."

These BALCA cases emphasize both the importance of appropriately drafting the recruitment ads and the PERM application while considering any business necessity for the specified education and experience being sought and the importance of properly conducting and documenting the recruitment process in accordance with the regulations.

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An application for Labor Certification, known by the acronym PERM (Program Electronic Review Management) is often the first of three steps required by an employer who wishes to sponsor a foreign national employee for permanent resident status. This post will provide some background and general explanation for the PERM process. We anticipate more posts in the coming months to explain some of the detailed processing issues that are of interest to employers and individuals working through the PERM process.

In most instances, the "green card processing" involves three steps:

1. A U.S. employer wanting to hire a foreign worker on full-time permanent basis, files a PERM application with the U.S. Department of Labor Employment and Training Administration (DOL-ETA) for certification; 
2. Upon certification, the U.S. employer files an I-140 Immigrant Petition for Alien Worker with the U.S. Citizenship and Immigration Services (USCIS, fka INS), an agency of the U.S. Department of Homeland Security; and
3. Upon approval of the I-140 petition and upon availability of a visa number, the foreign worker files an I-485 Application to Register Permanent Residence or Adjust Status.

Only by successfully completing all three steps, the foreign worker will become a Lawful Permanent Resident of the United States, or "will have a green card."

The PERM application satisfies the statutory requirement that the U.S. employer demonstrate that there are no U.S. workers who are able, willing, qualified, and available to perform the work being given to the foreign worker and that the employment of the foreign worker will not adversely affect the wages and working conditions of similarly employed U.S. workers. This last requirement has been interpreted to mean that the position must be offered at the "prevailing wage" as determined by the DOL.

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On Aug. 13, 2012, the U.S. Citizenship and Immigration Services (USCIS) announced that the most recent version of Form I-9 remains valid notwithstanding the OMB expiration date of Aug. 31, 2012 (located in the upper right hand corner on the form). Until further notice, the current form, which was last revised on Aug. 7, 2009 (located in the lower left hand corner), should continue to be used for new employees. USCIS published a proposed new form in March, and requested comments, but has not published the revisions in final form.

The Form I-9 must be prepared by new employees not later than the first day of employment, and supporting documents must be reviewed by the employer and section 2 of Form I-9 must be completed within three business days of the first day of employment. Employees are required to present proof of identity and proof of employment eligibility with the completion of Form I-9. For more information on the rules governing I-9 compliance requirements, please see our previous post.

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The Supreme Court has issued its long awaited decision on the constitutionality of the Arizona Immigration law known as SB 1070. The case came before the Court following a decision by the lower courts to grant a preliminary injunction enjoining the application of four provisions of the Arizona law. The Ninth Circuit determined that it was likely the United States would prevail on its challenge that the provisions of the Arizona law were preempted by Federal law and were therefore unconstitutional. The Supreme Court held that three of the four provisions were unconstitutional, and it was premature to determine if the fourth provision was unconstitutional until the Arizona courts could interpret and apply it to specific facts.

Justice Kennedy, writing for the majority, held that the provisions of the Immigration Reform and Control Act were carefully drafted to provide a balance between enforcement and humanitarian concerns. Congress debated, and specifically rejected, provisions that would have made it a Federal misdemeanor to engage in unauthorized employment. Instead, Congress opted for a scheme of enforcement that places the onus of employment verification on the employer. While there are consequences to the individual for engaging in unauthorized employment, including being subject to deportation or the prohibition for certain future benefits, there are complex statutory schemes to strike a balance between enforcement and humanitarian concerns.

The following three provisions were held unconstitutional because they conflict with the Federal Government's right to make laws regarding immigration and to conduct foreign policy:

• The Arizona provision made it a crime under state law for immigrants to fail to register as required under a federal law.
• For the first time, Arizona made it a crime for unauthorized immigrants to work or to try to find work, and
• Local and state police were granted authority to arrest people without warrants if they have probable cause to believe that they have done things that would make them deportable under federal law.

The fourth provision challenged by the Department of Justice, known as the "show me your papers" provision, requires the police to make a reasonable attempt to determine the immigration status of every person detained by the police if there is a "reasonable suspicion" that the individual is not authorized to be present in the United States. Justice Kennedy, while determining that this provision was not clearly unconstitutional, did note that there were limits to how this provision should be interpreted. He stated that "Detaining individuals solely to verify their immigration status would raise constitutional concerns." The majority opinion specifically avoided a determination that it would be lawful to detain an individual solely because he lacked valid immigration status and held that this determination would have to be made after the Arizona courts interpreted and applied the statute to actual facts. Instead, Justice Kennedy merely determined that it was not unconstitutional to require the state officials to communicate with Federal officers regarding the status of any particular individual. Whether this provision will ultimately be found to be constitutional will depend upon the manner in which the Arizona officials apply the law. The Supreme Court's decision, however, makes it clear that there are limits to Arizona's enforcement of Federal immigration laws.
 

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Yesterday, the U.S. Citizenship and Immigration Services announced that the H-1B cap has been reached for the Fiscal Year 2013, which begins October 1, 2012. Accordingly, no H-1B petitions can be filed until April 1, 2013, for potential employees who are cap-subject to be able to begin working on October 1, 2013.

Each fiscal year, the law permits 20,000 "master cap" cases for the H-1B beneficiaries who have obtained graduate degrees from U.S. universities and 65, 000 "regular cap" cases. In most instances, cap-subject individuals are those who are acquiring H-1B status for the first time, such as international students who are seeking to change status from F-1 to H-1B or those who are seeking to enter the U.S. for the first time on H-1B status.

Accordingly, those who have already obtained H-1B status and are merely seeking to change employers or extend the H-1B status for additional years are not subject to the cap. Certain employer are exempt from the cap including: (1) institutions of higher education, (2) a nonprofit organizations affiliated with an institution of higher education, and (3) nonprofit or governmental research organizations. Individuals who have been working for a "cap exempt" employer and are seeking to change to a "cap-subject" employer must wait for an available visa beginning on October 1, 2013.

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This afternoon, the USCIS announced that it has received sufficient petitions for the H-1B visa to reach the statutory cap for Fiscal Year 2012. The H-1B cap is 65,000 per fiscal year, and an additional 20,000 visas are allocated to advance degree graduates of United States universities. The "masters cap" was reached on October 19, 2011, and the regular cap was reached on November 22, 2011. Thus, any petition not filed before November 22 will be rejected. Filing will open up again for Fiscal Year 2013 on April 1, 2012 to begin work on or after October 1, 2013.

The cap does not affect individuals who have already been granted H-1B status and are extending their stay or moving to a new employer. Additionally, certain employers including universities and affiliated non-profit research centers and hospitals, are not subject to the cap. For more information on the H-1B cap, see our previous posting.
 

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USCIS announced the status of the H-1B cap filings as of October 21, 2011 for the fiscal year that began on October 1, 2011. For background, the law permits 65,000 regular "cap" cases and 20,000 master cap (graduates of U.S. universities with an advanced degree) each fiscal year. Because filings are permitted six months in advance, the annual filing season begins on April 1 each year and continues until the cap has been reached.

As of October 21, 2011, the full 20,000 complement of masters cap cases has been exhausted, and 46,200 regular cap petitions have been filed. This leaves 18,800 remaining for the fiscal year that began this month. Although this is reduced by 6800 visas reserved for Chile and Singapore under Free Trade Agreements, additional visas not used under the agreements from last year are added back in to the total. This leaves approximately 19,000 visas for the remainder of this fiscal year. Employers can expect that that the H-1B cap will again be reached shortly before or after the first of the calendar year and should plan accordingly.

After the cap has been exhausted, cap subject petitions cannot be filed until the following April 1 for a start date on October 1, 2012. There are a myriad set of rules that help cover the gap caused by the shortage of H-1B visas. Individuals currently working with existing H-1B visas that have already been counted under the cap in previous years are not subject to the cap. Additionally, universities and certain affiliated non-profit hospitals and research institutes are cap exempt. Finally, recent graduates from American universities with Optional Practical Training may be eligible for the "cap-gap" extensions of work authorization under the USCIS regulations. However, if there is no exemption or alternative employment authorization, H-1B beneficiaries subject to the cap may not be able to begin work until the beginning of the next fiscal year (October 1, 2012).
 

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On October 7, 2011, we reported that the USCIS changed its procedures regarding the delivery of approval notices. Effective September 12, 2011, notices were sent to the applicants or petitioners instead of counsel, as had been the long standing practice. There were numerous complaints through several channels, and the USCIS hosted a "Stakeholder Engagement" session to receive feedback on October 12. A week later, Director Alejandro Mayorkas announced that the policy would be reversed, and the USCIS would again send approval notices to counsel of record. The reprogramming of the system to restore the policy will take approximately 6-8 weeks, but should eliminate the problems created by the sudden change in this long standing practice.
 

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On September 12, 2011, U.S. Citizenship and Immigration Services changed their long standing practice for the distribution of original approval notices for petitions and applications seeking immigration benefits, including the change or extension of nonimmigrant stay. Notices have previously been sent to counsel of record, but now are sent directly to the petitioner or applicant. Employers and individuals have immediately noted several unattended consequences of this change in long-standing policy.

Many approval notices include a revised or extended Form I-94, Arrival and Departure Record. This original document advises foreign nationals of their current nonimmigrant status and the date on which that status expires. Many governmental agencies, including the state motor vehicle departments, will not provide services to foreign nationals (for example, a driver's license) unless the original document is provided. The distribution to the petitioner, usually the employer, complicates this process.

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Today, the Justice Department announced that it has filed a lawsuit against Farmland Foods, Inc., a major producer of pork products based in Kansas. The lawsuit, which will be heard by an Administrative Law Judge, alleges that the employer engaged in unlawful discriminatory acts by requiring foreign born and non-citizen employees to provide additional documentation of employment authorization beyond what was required by law and the documents required from U.S. citizens. While we have not yet heard the full facts or Farmland Food's position, the lawsuit highlights the fine line employers must walk to satisfy both the obligation to verify employment eligibility for all employees, and avoid unfair discrimination against employees born in other countries or with foreign sounding names.

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On Thursday, the Supreme Court issued a divided opinion on the constitutionality of Arizona's law requiring every employer to register for E-Verify as a condition of conducting business in Arizona. Chamber of Commerce v. Whiting.

E-Verify, a voluntary pilot program operated by the Department of Homeland Security, requires participating employers to verify employment eligibility of all new employees within three days of hire through an Internet based system of Federal records. By a 5-3 vote (Justice Kagen did not participate in the decision), the Court upheld the constitutionality of the law against the Chamber of Commerce's argument that the Federal Immigration Reform and Control Act of 1986 pre-empted state regulation. Several other states have enacted similar requirements, although only a few states (Arizona, Mississippi, Utah and South Carolina) require all employers to register. Eight other states require state contractors to register, and two states require state agencies to register. In addition, several municipalities, counties, townships and other local governments have begun to pass similar legislation.

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Employers may recall several years ago when they received letters from the Social Security Administration informing them that the Social Security Numbers they reported did not match the corresponding employees' names. A new round of letters is on the way beginning this month. Employers will need to review the letters carefully, perform due diligence to determine the possible cause of the mismatch and give identified employees a reasonable opportunity to resolve the situation. If not already in place, employers should develop procedures to address no-match letters and then follow the procedures consistently.

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We previously reported on an interim I-9 rule from December 2008 (see U.S. Citizenship and Immigration Services Announces Revised I-9 Form).  Citizenship and Immigration Services now has finalized the interim rule. The final rule is effective May 16, 2011. As a practical matter, the final rule continues the provisions we discussed in this previous blog from two years ago. Employers therefore simply should continue to follow these provisions as they have for the past two years.

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The Proposed Regulation

U.S. Citizenship and Immigration Services (CIS) announced a proposed rule that would require employers of H-1B workers to complete a pre-filing registration before submitting petitions for individuals subject to the annual H-1B cap. The earliest it would go into effect would be January 2012. Once effective, employers will complete an online registration for each prospective, cap-subject H-1B employee. CIS then will provide a confirmation instructing that the employer may file a petition on behalf of the specific person. Employers still may file petitions for more than one person, but a separate pre-registration will be required for each sponsored employee.

The goal of the new rule is to allow H-1B filings only for cases that will secure one of the limited H-1B visas each year. The current system allows filing of H-1B petitions until CIS announces that the cap has been reached. Because there usually is a delay between the announcement and employers continuing to file petitions, many petitions often are rejected. The new rule seeks to alleviate this problem by allowing only pre-registered employers to file cap-subject H-1B petitions.
 

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Investors likely gave no thought to I-9 compliance when buying shares in the Mexican fast food restaurant Chipotle. The Immigration and Customs Enforcement I-9 audits of the company's restaurants that began late last year and are ongoing already have resulted in hundreds of allegedly unauthorized workers losing their jobs. That was just the beginning. With the ever-widening government investigations and audits of the company's workforce, investors are starting to take notice. A report this week indicated that at least one investor intends to approach Chipotle about its workforce woes.

Clearly it's too early to predict what impact the I-9 audits and resulting terminations will have on Chipotle's financial health. Nonetheless it is yet another reminder of the piecemeal approach to reform our nation's immigration laws. After the attempt at comprehensive reform failed in 2007, the government increasingly has focused on workplace enforcement. The few voices in Congress still pushing for immigration reform see this as a vital issue that must be addressed before attempting any meaningful discussions with members generally opposed to changing the current system. The theory is that once there is uniform compliance and enforcement of the nation's workforce, as well as secure borders to the north and south, a dialogue can begin to address other issues such as employment-based visa quotas and family reunification. (In some cases, individuals for employment-based immigration sponsorship can expect to wait 20 or more years to get their green cards.)

If recent headlines are any indication, 2011 will be an interesting year for the immigration debate. I-9 audits continually appear to be on the uptick. Senators John McCain of Arizona and Lindsey Graham of South Carolina this week indicated they may pursue immigration reform once again in the Senate. In the meantime consumers can enjoy a few more burritos.

If you missed our recent webinar, Before the Government Comes Knocking:  Benefits of Conducting an I-9 Self Audit, we invite you to listen to the recording. 

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As of January 26, 2011, Citizenship and Immigration Services indicated that it received sufficient H-1B petitions to reach the annual cap of 65,000 visas for fiscal year 2011 (October 1, 2010 – September 30, 2011). As of December 22, 2010, it had received more than 20,000 petitions toward the annual exemption amount for individuals with U.S. graduate degrees. Employers now must wait until April 1, 2011 to file "new" H-1B petitions for an October 1, 2011 effective date, which is the start of fiscal year 2012.

A “new” H-1B petition refers only to individuals acquiring the H-1B visa or status for the first time, such as F-1 students changing to H-1B status and individuals abroad who plan to enter the U.S. for the first time using an H-1B visa. These cases often are referred to as “cap-subject” cases because they require one of the 85,000 allotted visas (65,000 for bachelor-level candidates and 20,000 for U.S. graduate degree candidates). The cap does not apply to one who already has an H-1B visa or status. An exception that private sector employers should note, however, is that an H-1B foreign national currently working for a university or affiliated nonprofit, a nonprofit research organization or a governmental research organization in most cases will be subject to the cap. These organizations are exempt from the H-1B cap, and when a foreign national transitions to a non-exempt employer, he/she then becomes cap-subject.

Each year the H-1B cap typically is reached before the end of the fiscal year. Once the cap has been reached, no new petitions may be filed or approved until the next fiscal year. This can make planning an employment start date difficult. For example, although employers can file petitions up to six months in advance of the requested effective date, which makes the April 1 filing date each year so critical, the approved petition will not be valid until October 1 of that year. Thus, even though employers may file petitions in the April 1 – September 30 timeframe for the next fiscal year, the petition cannot be effective until October 1. F-1 students often have work authorization to allow them to remain in the U.S. and work while awaiting the H-1B effective date. For other cap-subject individuals, such as those currently abroad or do not have H-1B status, they must wait until October 1 before commencing employment.

The H-1B visa category is for the temporary employment of foreign nationals who will work in “specialty occupations.” Specialty occupations generally are those jobs for which at least a bachelor’s degree in a particular field is required. Examples include engineers, accountants and many information technology positions.
 

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The U.S. Department of Labor announced this week a $638,449 back wage consent order and $126,778 civil fine against a New Jersey IT consulting firm, Peri Software Solutions, Inc. The announcement indicated that the back wages resulted from the employer's failure to compensate the H-1B workers as required under Department of Labor regulations. The civil fine arose from two issues:  the employer failed to provide notice of its intent to employ H-1B workers and it sued former employees "for early cessation of employment."

The announcement may raise more questions than it answers concerning the specific facts involved, but it serves as a good reminder for H-1B employers that the applicable regulations are very exacting and can be costly when disregarded.  While this case appears to have involved a failure to pay the required wage rate, employers may be surprised to learn that the wage obligation continues as long as the H-1B petition remains valid, which in many cases can be for up to three years. Even after an H-1B worker has resigned or been terminated, the Department of Labor requires the employer to pay the worker's wages until U.S. Citizenship and Immigration Services (USCIS) has revoked the H-1B petition. The H-1B regulations in fact require employers to notify USCIS when the H-1B worker's employment ends. Requesting revocation of the petition therefore complies with USCIS regulations and avoids a potential Department of Labor assessment of back wages.

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The U.S. Department of Justice this week announced a settlement with Catholic Healthcare West and two subsidiaries over alleged document abuse violations related to hiring practices. The Justice Department determined that the employer violated the discrimination provisions of the Immigration Act by permitting native-born U.S. citizens to choose which documents to provide but demanding additional documents from non-citizens and naturalized citizens. While the law requires the employer to verify employment authorization, the employer may not discriminate against non-citizens or naturalized citizens.  The Justice Department alleged that by requiring additional documentation, the employer had crossed the line from verification to discrimination. 

The settlement included several provisions. Catholic Healthcare West agreed to pay $1,000 in back pay and offer employment to the individual who brought the claim and pay a $257,000 civil penalty to the government.  In addition, there were strict provisions for further monitoring of the employer's practices and records, with frequent reports to the Government over the next several years.  The key factor cited to justify the assessment of damages and the fine was that the employee was required to miss work to get the additional documentation. 

This settlement highlights the fine line that employers must walk on I-9 verification issues.  We have seen a steady increase over the past few years in the fines and penalties assessed against employers for the failure to properly verify new employees' authorization to accept employment.  This penalty was assessed against an employer who requested too many documents as part of that verification process.  The very expensive lesson that Catholic Healthcare West learned was that employers must verify each new employees' employment authorization but must be very careful to avoid a request for too much documentation, which will be considered unlawful discrimination. 
 

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U.S. Citizenship and Immigration Services published a final rule outlining filing fee increases for immigration benefits petitions and applications. The announcement and related questions and answers mention several times that CIS receives approximately 90% of its $2.4 million budget from filing fees. As a result, CIS explains that it needs to increases the fees to recover the costs of its operations.

The new filing fees applicable to employers concern the I-129 petition for temporary visa categories (e.g. E, H-1B, L, O, TN) and green card processing (e.g. I-140 immigrant worker petition and I-485 application to adjust status). The I-129 petition fee increases only slightly, from $320 to $325. The I-1-140 petition fee will increase from $475 to $580. The I-485 application increases to $1,070, up from $1,010. The most substantial increase is for the optional premium processing fee for 15-day service. It will jump from $1,000 to $1,225. Finally, for employees with family members who require dependent status, such as H-4, the filing fee for the I-539 application actually will decrease by $10, from $300 to $290.

CIS maintains a complete list of filing fees at www.uscis.gov.  As noted above, the new fees go into effect on November 23, 2010.

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Immigration and Customs Enforcement (ICE) announced this week that it will serve Notices of Inspection to 500 employers across the United States. According to ICE, the Notices stem from leads and other reports alleging the employment of unauthorized workers, payment of unfair wages or other unlawful working conditions. This new announcement confirms ICE's intent to increase its worksite enforcement activities, as we reported last year (see October 7, 2009 posting). Employers that receive notices from ICE should contact experienced immigration employment counsel before the inspection. We can assist with an internal audit and advise on other proactive measures to identify and limit potential exposure.   

The announcement this week provides another reminder to employers to review their I-9 practices and ensure they are complying with employment authorization verification requirements. Employers must use the I-9 Form to verify the work authorization of any employee hired after November 6, 1986. (For further information on general I-9 requirements, see our posting from July 22, 2010.)

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On August 13, 2010 President Obama signed into law H.R. 6080, which primarily is an emergency appropriations bill for border security. Of interest to a small group of employers of H-1B and L (including both L-1 and L-2) foreign nationals are provisions that require a new, enhanced filing fee. Employers that have 50 or more employees in the United States must pay an additional amount if more than 50% of their employees are H-1B or L workers. The additional amount is $2,250 for L-1 petitions and $2,000 for H-1B petitions.

In determining the number of H-1B and L employees, Citizenship and Immigration Services (CIS) confirmed during a teleconference that L-2 spouses (who are present in the United States as the dependent spouse of an L-1 worker) working for a company under an Employment Authorization Document must be counted. When questioned about the practicality of how employers are to determine whether an employee may be such an L-2 worker, CIS responded that it expects employers to review and be familiar with the various codes printed on Employment Authorization Documents. Indeed, this presents a unique challenge to potentially-impacted employers and likely will require training from and consultation with immigration counsel.

The supplemental fees apply to petitions with a postmark date of August 14, 2010 or later. They expire September 30, 2014. The employer must pay this new fee with the first petition to sponsor an H-1B or L-1 foreign national employee. The fee is not required when extending H-1B or L-1 status of an existing employee.

The employer still must pay the base filing fees: $320 processing fee, $750 or 1,500 training fee (if applicable) and $500 fraud prevention and detection fee.

As a practical matter, few employers will need to pay the enhanced fee. In most cases, H-1B and L-1 workers comprise a very small percentage of the employer's U.S. workforce.

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In April of this year, Arizona Governor Janice K. Brewer signed into law an immigration enforcement statute and series of amendments, known as SB 1070, which some hailed as a welcome crackdown on illegal immigration and others viewed as an overreaction that will result in widespread racial profiling and civil rights violations. The law seeks increased enforcement against undocumented immigrants by giving local law enforcement agencies greater authority to verify the immigration status of persons arrested or stopped by the police in Arizona. 

There has been vigorous public debate as to the need and the merits of this approach, most of which has focused on the language in the law that requires police to make inquiries regarding immigration status when they have reasonable suspicion that a person does not have legal status. The law also criminalizes violations of several federal immigration laws, both for employers and undocumented employees. The Department of Justice filed suit in U.S. District Court on July 6 to block implementation of SB 1070 before it was scheduled to become effective today.

In a carefully crafted opinion issued yesterday, U.S. District Judge Susan R. Bolton granted the Department of Justice's motion for a preliminary injunction for several parts of SB 1070. The primary argument asserted by the Department of Justice in United States of America vs. Arizona was that the U.S. Constitution grants the federal government the authority to develop and enforce immigration laws. The doctrine of preemption therefore prohibits states from intruding into the federal government's exclusive jurisdiction. The State of Arizona defended the statute by arguing that the state law merely enhanced and assisted in the enforcement federal law and did not conflict with them.

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The Department of Homeland Security announced a final rule this week that makes minor changes to the June 2006 interim rule concerning electronic storage of I-9 forms. The final rule is effective August 23, 2010. Please note that this final rule concerns only the preparation and storage of the actual I-9 forms. The online E-Verify system, which some employers may be using, is a separate system that employers may use in addition to, but not instead of, the basic I-9 process.

The June 15, 2006 Interim Rule

Since June 15, 2006, employers may prepare, sign and store I-9 forms electronically. The regulation does not specify any particular format or software. Employers opting for electronic preparation and storage of I-9's simply must follow the regulatory guidance. In particular, the electronic system must be accurate and reliable, have security features to prevent unauthorized or accidental changes to the documents, provide for periodic quality assurance self-audits, have a searchable indexing system and allow for high-quality image viewing and printing. The electronic signature feature must affix the signature to the document at the time the form is prepared and contain a record verifying the signatory's identity.

The July 22, 2010 Final Rule

The final rule makes only a few changes to the June 2006 interim rule:

• Resolves a prior inconsistency in the timing to review the employee's documents and complete Section 2 of the I-9 form. Previously, there were references to "within three business days of the hire" and "within three days of the hire." This made it unclear whether the applicable period is business or calendar days. The final rule clarifies that the employer must review the employee's documents and complete Section 2 of the I-9 within three business days of the hire. (This is interpreted to mean that if the employee starts Monday, the employer must complete Section 2 by the end of the employee's shift on Thursday.)

• Requires an electronic storage and retrieval system to provide an audit trail of only the original creation and all subsequent modifications to the I-9 forms. The interim rule also required an audit trail of every time someone accessed or viewed the I-9.

• Requires the employer to provide a printed copy of the electronic I-9 transaction only if the employee requests one. The interim rule required the employer to provide a copy regardless of whether the employee requested it.

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The U.S. State Department announced this week that visa application fees at consular posts abroad will increase on June 4, 2010. The current fee of $131 has been in effect since January 1, 2008 and applies to all visa categories. According to the State Department, security enhancements and processing costs have increased, such that it now will charge different application fees depending upon the visa category. The new fees will range from $140 to $390.

Common employment-related visas that the change will impact are the H-1B, L-1A, L-1B, E-1 and E-2 categories. The application fee for H-1B (specialty occupation workers) and L-1 (intracompany transferees) will increase to $150. The fee for E-1 (treaty traders) and E-2 (treaty investors) will be $390. Employers and employees therefore can plan now for the increased fees for visa applications at U.S. consulates abroad beginning June 4.

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As of April 15, 2010, Citizenship and Immigration Services indicated that it had received 13,600 "new" H-1B petitions toward the annual cap of 65,000 visas. It received an additional 5,800 petitions under the 20,000 exemption amount for individuals with U.S. graduate degrees. Similar to last year's reduced filings, it appears that H-1B visa numbers will be available for several months to come. These petition numbers are for the next fiscal year, which runs October 1, 2010 to September 30, 2011. For the prior fiscal year, the cap was not reached until December 2009.

A “new” H-1B petition refers only to individuals acquiring the H-1B visa or status for the first time, such as F-1 students changing to H-1B status and individuals abroad who plan to enter the U.S. for the first time using an H-1B visa. These cases often are referred to as “cap-subject” cases because they require one of the 85,000 allotted visas (65,000 for bachelor-level candidates and 20,000 for U.S. graduate degree candidates). It does not apply to one who already has an H-1B visa or status. An exception that private-sector employers should note, however, is that an H-1B foreign national currently working for a university or affiliated nonprofit, a nonprofit research organization or a governmental research organization in most cases will be subject to the cap. These organizations are exempt from the H-1B cap, and when a foreign national transitions to a non-exempt employer, he/she then becomes cap-subject.

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On Tuesday, March 16, 2010, Senator Bill Seitz introduced Senate Bill 238 to the Ohio General Assembly. If passed, this bill would amend Ohio’s Revised Code to prohibit illegal and unauthorized aliens from receiving compensation and benefits under Ohio’s Workers’ Compensation Law.

Currently, illegal and unauthorized aliens are afforded the same benefits under Ohio Workers’ Compensation Law that other workers are. In other words, illegal and unauthorized workers who are injured in the course of and arising out of their employment are allowed to file workers’ compensation claims and receive benefits and treatment for their injuries.

Since this bill was just introduced this week, it is too early to predict the likelihood of passage or what changes may be added before it is ultimately voted on by the Ohio General Assembly. We will continue to monitor the bill and provide updates as it proceeds through the legislative process.

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U.S. Citizenship and Immigration Services (CIS) announced today that the H-1B cap was reached on December 21, 2009. CIS will conduct a random lottery among the petitions it received on December 21 to allocate the remaining visa numbers. The cap does not apply to H-1B employees changing employers or to individuals who will work at an institution of higher education or related nonprofit entity, a nonprofit research organization or a governmental research organization. Cap-subject employers now must wait until April 1, 2010 to file petitions for the next fiscal year (October 1, 2010 – September 30, 2011).

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At a December 1, 2009 seminar in New York, representatives of U.S. Citizenship and Immigration Services (USCIS) provided an update on the H-1B cap numbers for the October 2009 – September 2010 fiscal year (please see my earlier post for more on this topic -- The H-1B "Cap" - 2010 Fiscal Year Is The Canary In The Mine) .

While a recent report indicated that 58,900 petitions had been filed against the 65,000 cap, USCIS explained that the low number of filings for nationals of Chile and Singapore (who benefit from a set aside of 6,800 visas) means that there still are visas available. USCIS also confirmed that there were approximately 2,000 petitions filed in late November. This makes it difficult to predict how much longer visas will be able for the current fiscal year. Once the cap has been reached, employers will need to wait until April 1, 2010 to file a petitions requesting an October 1, 2010 effective date. Given this recent announcement, employers that still want to file H-1B petitions for the current fiscal year likely will need to do so soon. Experience has shown that there is a rush of petitions as the filings approach the 65,000 cap. The USCIS announcement concerning recent filings suggests that this rush already has begun.

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In response to Senator Charles Grassley's September 29, 2009 inquiry into the H-1B visa program and fraud detection efforts, Mr. Alejandro Mayorkas, Director of Citizenship and Immigration Services, indicated that the H-1B fraud detection site visits would increase five-fold. For the most recent federal fiscal year, October 1, 2008 – September 30, 2009, there were approximately 5,000 site visits. The goal for fiscal year 2009 – 2010 is to complete 25,000 such visits. Therefore, as outlined in the previous posting on this topic, employers can continue to expect site visits as part of the H-1B petition process.  

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Since June 6, 2008 certain low-risk U.S. citizen, U.S. national and U.S. permanent resident travelers have been able to enroll in the Global Entry program to allow for expedited clearance upon arrival at U.S. airports from travel abroad. Rather than wait in the traditional passport control line, program participants proceed to a kiosk to scan their travel documents, provide electronic fingerprints and a photograph and receive a receipt to present to a Customs and Border Protection Agent. The program requires an online application (available at www.globalentry.gov), criminal background check, and an in-person interview at a Customs and Border Protection facility. The application fee is $100, and the average processing time for approval is one week.

The pilot program began with three airports and since has expanded to include the following 20 international airports: Atlanta (Hartsfield-Jackson), Boston-Logan, Chicago O'Hare, Dallas/Ft. Worth, Detroit, Ft. Lauderdale Hollywood, Honolulu, Houston (George Bush), Las Vegas, Los Angeles International, Miami International, Newark Liberty, New York (JFK), Orlando International, Orlando-Sanford International, Philadelphia International, San Francisco, San Juan, Seattle-Tacoma and Washington Dulles.

The proposed permanent program would be available to U.S. citizens, U.S. nationals and U.S. permanent residents aged 14 and older. Children aged 14-17 would require the consent of a parent or legal guardian to participate. The proposed program also contemplates expansion to certain nonimmigrants (e.g. individuals traveling with a visa, such as B, E, H or L) provided certain reciprocal programs are in place with the individual's country. Risk factors that would disqualify applicants from participating include false or incomplete applications, prior arrests or convictions, prior violations of customs, immigration or agriculture regulations in any country, current criminal investigations or inclusion on a government watch list. Program participants still would be subject to primary inspection by CBP agents based upon random selection or declaration of certain goods, restricted items or more than $10,000 in currency or monetary instruments.

Interested parties may view the entire regulation and provide comments by searching for "Global Entry Program" at www.regulations.gov. The regulation was published on November 18, 2009. Comments are due by January 19, 2010.

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You may find out soon. After several years of collecting the $500 fraud fee from employers filing H-1B petitions to sponsor foreign national employees, the U.S. Department of Homeland Security ("DHS") has increased its investigatory activities by dispatching officers and independent contractors to the places of employment indicated on the visa petition forms. Since 2005, employers have paid the $500 fraud fee with the first petition they file on behalf of new H-1B employees. With 85,000 new H-1B visas available each year, this means DHS collects at least $42.5 million annually for just the new visa numbers. That amount very well may be dwarfed by the numerous other petitions employers file. Each time an H-1B worker changes employers, the new employer must pay the fee with the petition. DHS therefore likely collects substantially more than the $42.5 million it receives from the quota-based petitions.

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The U.S. Department of Homeland Security (DHS) is to publish a final rule today in which it formally rescinds the August 2007 "No-Match / Safe Harbor" regulation. Following its review of public comments after the August 19, 2009 announcement of the proposal to rescind the No-Match / Safe Harbor regulation, DHS now confirms that the rescission will take effect in 30 days. In the final rule, DHS responds to various arguments for and against the safe harbor provisions. The general tenor of DHS' position is that it plans to continue its I-9 enforcement activities. At the same time, DHS encourages employers to take proactive measures to comply with I-9 employment eligibility verification requirements. DHS suggests that the No-Match protocol is a reactive approach to employment authorization verification. In contrast, according to DHS, employers can be more proactive by participating in programs such as E-Verify and IMAGE and following the guidance set forth in the I-9 Handbook for Employers (Form M-274, available at www.uscis.gov).

As outlined in our August 20, 2009 posting, there are advantages and disadvantages for employers to consider before enrolling in the E-Verify or IMAGE programs. Employers also need to be aware that DHS' rescission of the No-Match / Safe Harbor regulation does not alter the I-9 landscape. Employers need to continue to follow proper protocols in verifying the work authorization status of their employees. Employers also need to take immediate and reasonable steps to inquire further upon receiving credible information that an existing employee may not have authorization to work in the United States.

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As a follow up to our recent post on e-Verify, many of our financial institution clients have been asking whether they are required to comply with the new federal e-Verify requirements for federal contractors.

Under federal affirmative action laws, many banks are considered federal contractors because they are issuing and paying agents for U.S. savings bonds or they are insured by FDIC. However, as explained below, issuance and payment of U.S. savings bonds and FDIC insurance do not trigger e-Verify obligations.

Clarifying language in the e-Verify regulations states that:

Agreements or activities performed by financial institutions that are not subject to the FAR (Federal Acquisition Regulation) are not required to comply with the e-Verify provisions and clauses of the FAR.

This statement in the e-Verify regulations is given in response to a specific question about whether banks and other financial institutions whose federal contracts are limited to serving as issuing and paying agents for U.S. savings bonds or being insured by the FDIC should be excluded from e-Verify requirements. Since issuance of or payment on U.S. savings bonds and FDIC insurance are not covered by FAR, they do not trigger e-Verify obligations. Similarly, the clarification notes that financial agency agreements (FAAs) between banks and the federal government are not subject to FAR and, therefore, do not trigger e-Verify obligations.

For all of these reasons, so long as the only federal contracts for your bank are of the sort described above, you can rest assured that you do not have to comply with the federal e-Verify requirements. 

The e-Verify regulations do not address specifically federal share insurance of the sort that credit unions have under the National Credit Union Insurance Fund.  However, the rationale for concluding that FDIC insurance does not trigger e-Verify requirements would  apply also to federal share insurance for credit unions. 

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You may have noticed a spate of recent articles and announcements indicating that “all federal contractors” will be required to begin using the federal government’s E-Verify system beginning September 8, 2009. Originally set to take effect on January 15, 2009, there have been three prior delays in implementing mandatory use of E-Verify for federal contractors. On August 26, however, a federal district judge rejected a request for further delay, so it appears the E-Verify regulations will actually go into effect on September 8. (See our recent blog post.) In light of this, current contractors should start thinking about how E-Verify will affect them – if at all.  

Even though many of the articles on this topic indicate that “all federal contractors” are required to start using the system on September 8, the reality is that not all contractors will be covered and that even covered contractors have time after September 8 to enroll and start using E-Verify. 

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On August 26, 2009, a U.S. District Court in Maryland cleared the path for the E-Verify requirement applicable to certain federal contractors to go into effect on September 8, 2009. This decision follows several delays of the E-Verify requirement dating to earlier this year. Several plaintiffs, including the U.S. Chamber of Commerce, Associated Builders and Contractors, Inc., Society for Human Resource Management, the American Council on International Personnel and the HR Policy Association, filed suit against the Department of Homeland Security to block implementation of the E-Verify requirement under various constitutional and regulatory grounds. The court rejected the claims and essentially stated that employers that do not want to use the E-Verify system simply can choose not to do business with the federal government.

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On August 19, 2009, the Department of Homeland Security (DHS) announced that it was rescinding its August 2007 and October 2008 regulatory amendments concerning actions employers can take to benefit from "safe harbor" protection after receiving notification from DHS or the Social Security Administration that an employee's reported work authorization or Social Security information does not match government records. In October 2007 a U.S. District Court in California preliminarily enjoined implementation of the regulations. Under the revised regulations, if employers took certain actions within prescribed timeframes, they could shield themselves from liability for allegedly employing individuals who lacked authorization to work in the United States. For additional information on the revised regulation, please review prior blog postings on this topic. 

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As of August 14, 2009, Citizenship and Immigration Services indicated that it had received approximately 45,000 H-1B petitions toward the annual cap of 65,000 visas. An additional 20,000 petitions had been filed toward the 20,000 exemption amount for individuals with U.S. graduate degrees. Therefore, there remain approximately 20,000 H-1B visas for the next fiscal year, which runs October 1, 2009 to September 30, 2010. In recent years the entire 85,000 visa slots were allocated before the fiscal year began (employers can file up to six months in advance of when visas are available). The H-1B visa filings thus have become one of the proverbial canaries in the mine as an indicator of the overall economic situation. With the staggering number of layoffs and dearth of hiring among employers, the demand for H-1B visas to employ foreign national employees has decreased substantially. Monthly H-1B filings are averaging less than 1,000. This means H-1B visas for "new" hires likely will be available well into the 2010 fiscal year.

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The Immigration and Customs Enforcement (ICE) announced on July 1, 2009 that I-9 audit notices have been presented to 652 employers across the country. (To read the press release, click here.)

Notwithstanding the Obama Administration’s announcement that it will change the focus of immigration enforcement to concentrate on abusive employers, this announcement reflects a new initiative to step up I-9 enforcement actions.

By contrast, only 503 similar notices were issued during the entire FY2008. The ICE announcement included the point that these employers were not randomly selected but have been identified from leads and other investigative information.

If past experience is a guide, we can expect that at least some of these notices will result in further enforcement actions against the identified employers.

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The Courts and the Obama Administration continue to struggle over the proper role of E-Verify, particularly the proposed rule mandating E-Verify for Federal contractors. The Government has agreed with the litigants challenging the rule to delay implementation of the proposed rule until September 8, 2009, with strong hints that it will be delayed further as that date approaches. The proposed rule will not apply to any government contracts before the effective date.

For a more comprehensive review of the proposed rule and E-Verify generally, please review our article: E-Verify: Coming Soon to a Theater Near You.

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Representative Courtney Combs, a Republican from District 54 in Butler County, has introduced H.B. 184 to the Ohio House of Representatives. The bill would require all employers in Ohio, both public and private, to register and participate in E-Verify, a voluntary, federal program designed to supplement the I-9 employment verification process for all new employees. We have written a more extensive article on E-Verify for interested employers. 

As introduced, H.B. 184 would require all employers to certify their participation in the E-Verify program on state income tax forms. As a result, although the bill does not provide direction to the Department of Taxation on the enforcement mechanisms for this provision, it would appear that some additional burden of enforcement would also be imposed upon the Department of Taxation. Presumably, failure to register for the E-Verify program would not excuse a non-compliant employer from its income tax obligations. Additional responsibilities for the administration of federal immigration laws are also assigned to local law enforcement agencies and the Department of Corrections in other parts of this bill. Congress is expected to address immigration reform over the next several months, so the future of State initiatives such as H.B. No. 184 is not clear. 

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Resolving a split among the circuit courts, the U.S. Supreme Court yesterday in Flores-Figueroa v. United States significantly limited a tactic used by U.S. Immigrations and Customs Enforcement (ICE) to address the issue of undocumented workers. 
 

In particular, ICE has used the Identity Theft Penalty Enhancement Act as a way to pressure undocumented workers.  That Act created the crime of “aggravated identity theft,” which occurs when a person “knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person” in connection with the commission of certain enumerated felonies, including immigration violations. Because violation of the Act carries a mandatory two-year jail sentence, ICE had been using the threat of prosecution for aggravated identity theft to convince undocumented workers to plead guilty to other lesser immigration offenses such as the misuse of social security numbers. 
 

Under the Court’s decision, however, the Act requires the Government to prove that the defendant-worker knew that the means of identification at issue actually belonged to another person, not merely that the worker knew that the means of identification used to obtain employment were fraudulent. This holding makes the threat of prosecution under the Act much less realistic because ICE will have to prove that the individual using the false identification information also knew that the information belonged to a specific individual – as opposed to information relating to an entirely fictitious identity.
 

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Last week, the Obama Administration reiterated its commitment to enact comprehensive immigration reform during the first year of the new administration. On Tuesday, the New York Times reported that a coalition of unions have agreed to support the Administration’s initiative, joining the business community and the Chamber of Commerce, who have long supported immigration reform. Of course, with immigration reform, as with other contentious legislation, the devil is in the details, and different advocates define immigration reform differently. 

The Unions, Chamber of Commerce and the Administration agree that key elements of reform will include a reduction in the excessive backlogs for permanent resident status in both the employment and family based application tracts. There also appears to be an agreement coalescing among the interested stakeholders that will include a path to citizenship for the estimated 12 million undocumented immigrants in the country. 

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We just ran across a wage and hour case out of Texas with a unique twist on the usual overtime claim. Bustamente, an undocumented immigrant, alleged that the El Palenque Mexican Restaurant and Cantina forced him to work under another identity to avoid overtime.  

According to Bustamente, the kitchen manager realized he lacked the documentation to work legally in the country but told him it wouldn’t be a problem if he had some documents. Bustamente began working under his brother’s identity. (He actually brought the case as Jesus Bustamente, the brother– he only confessed that his real name is Cristoforo one week prior to trial). Soon after, Bustamente alleged that the restaurant had him fill out an application using his nephew’s identity in order to avoid overtime pay. He worked the early shift as his brother, the evening shift as his nephew. Bustamente testified that he received two separate paychecks. 

The restaurant’s defense was straightforward – Bustamente and his nephew were both employees. The company used a fingerprint timekeeping system, making it difficult to impersonate someone. Witnesses remembered the nephew as taller than Bustamente. The company did pay overtime to other employees.  Most important, the company produced payroll records showing that Bustamente and his nephew actually worked the same shift on one occasion. In light of the conflicting testimony and confusing payroll records, the court found that Bustamente could not prove his claims. 

While the facts of this case are amusing and hopefully not likely to repeat themselves often, it serves as a good reminder that clear, accurate payroll records can be an employer’s best friend in a wage and hour case.   Cristoforo Bustamente, a/k/a Jesus Bustamente, a/k/a Angel Bustamente, v. El Palenque Mexican Restaurant and Cantina, Inc., Case No. No. H-07-2506, (S.D. Tex, February 3, 2009).

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The USCIS has announced that there were not sufficient H-1B petitions filed within the first five days of the filing period to reach the H-1B cap. Therefore, all petitions filed through April 7, 2009 will be accepted and processed. The USCIS will continue to accept petitions until the cap is reached. On the day that the cap is reached, USCIS will conduct a lottery of the petitions received on that date (assuming that the number of petitions received exceeds the number of available visas) for the remaining visas.

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After a two-month delay for the Obama Administration to review the new form and related policies, today (April 3, 2009) marks the introduction of the yet another version of the I-9 form. Employers are required to use the new form to verify the employment eligibility of all newly hired individuals on or after today's date  - April 3, 2009. 

There are two changes from the previous editions of the form. First, the last page of the form, which identifies acceptable documents, has some modified language and adds additional documents that can be accepted to verify employment eligibility in both List A (documents that establish both identity and employment eligibility) and List C (documents that establish employment eligibility). Employers may now accept a passport from the Federated States of Micronesia or the Republic of the Marshall Islands with an I-94A admission document as proof of both identity and employment authorization. This modification is based upon a recent compact between these two territories and the United States. The second modification requires the new employee to identify their status as a citizen, permanent resident, national of the United States, or an alien temporarily authorized to work. Prior versions of the form included citizen or national with the same check mark, but the new form differentiates between the two classifications. Neither of these changes will impact many individuals, but the new form is nevertheless required for all newly hired employees beginning on April 3, 2009. 

The new form is available at this link on the USCIS web site.

A new version of the employer’s I-9 Handbook is also available on the USCIS web site.

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The conference committee negotiating the American Recovery and Reinvestment Act of 2009 (H.R.1), also known as the stimulus bill, agreed to include one controversial immigration provision, but deleted a second. The first provision prohibits all financial institutions receiving TARP funds from hiring any employee in H-1B status unless the company complies with the H-1B dependent provisions. These provisions inhibit the ability by an employer to hire H-1B employees by requiring a recruiting process similar to an application for labor certification before filing the petition. This will make it very difficult for any recipient of TARP funds to hire or retain H-1B employees, and will deny banks and other recipients the ability to hire highly skilled individuals for some positions.

Opponents of the bill have argued that rather than stimulating the economy, this provision could actually have the opposite effect by stifling the ability of troubled businesses to hire and retain the expertise needed for their operations. The second provision, requiring the expansion of E-Verify to even more employers, has been deleted.

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On Friday, January 30, 2009, USCIS announced that it was delaying the implementation of the new I-9 form and regulations published during the final days of the Bush Administration. On January 20, President Obama issued an executive order requiring review of all new regulations not yet effective.

Implementation of the new I-9 form, which for the first time requires new employees to distinguish between a representation of U.S. citizenship or non-citizen nationality and also reduces the number of acceptable documents, has been delayed for another 60 days. The new effective date for this form and the new requirements is April 3, 2009. The regulations also prohibited the use of some expired documents to demonstrate citizenship or identity. Existing regulations permit the presentation of expired driver’s licenses or passports. The now delayed regulation, however, requires all documents to be valid at the time they are submitted.

Unlike prior changes in the I-9 form, employers cannot use the new form until its effective date, and must use it after the effective date. Prior changes permitted the use of either form until the effective date of the new form, usually announced several months in advance. Thus, employers should continue to use the existing I-9 form until April 3, 2009. It is also possible that the new Administration may change the form or regulations before the new effective date.  Please continue to check our blog for future updates.

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The Department of Homeland Security recently published amendments to the regulation governing the US-VISIT program. This Final Rule, which will become effective January 18, 2009, requires all non citizens (with some exceptions noted below), including lawful permanent residents, to register with US-VISIT, upon admission to the United States. US-VISIT is the electronic registration program implemented at land, air and sea ports in the wake of the September 11 attacks. The program has been implemented in stages over the past few years, and now requires all visitors and temporary residents to register at a US-VISIT kiosk upon admission to the United States. Non citizens are required to provide biometric data, meaning fingerprints and electronic photographs, as the system registers both admissions and departures. Effective January 18, 2009, the program has been extended to permanent residents returning to the United States from a temporary trip abroad. 

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On December 12, 2008, U.S. Citizenship and Immigration Services (CIS) announced an interim final rule to modify the Employment Eligibility Verification Form I-9. The new form will be effective 45 days from the date of the interim final rule. There are two major changes. The first is to limit the number of acceptable documents for verifying a new employee's identity. The second is to prohibit accepting expired identification documents. Employers must complete and maintain the form for all employees hired after November 6, 1986. The new form should be available on the CIS website (http://www.uscis.gov/i-9) toward the end of January 2009.

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On October 16, 2008, the Department of Homeland Security adopted the May 9, 2008 proposed regulation without change. Therefore, effective October 16, 2008, qualifying individuals now may obtain initial periods of TN status or extensions of status for up to three years. As noted in the prior post announcing the proposed regulation, this new development certainly is good news for TN employers and employees alike.

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Organizations with overseas operations in certain countries that routinely send employees to the United States for short-term business travel now need to plan ahead before sending employees to the airport. In its ongoing efforts "to strengthen the security of travel to the United States," the U.S. Department of Homeland Security has implemented a new protocol for Visa Waiver travelers. On August 12, 2008 the U.S. Customs and Border Protection’s "Electronic System for Travel Authorization Web Site" went live (available at www.cbp.gov/travel). All foreign nationals seeking to enter the United States using the Visa Waiver Program now must access the secure web site, enter requested information and receive authorization before boarding an aircraft. The airline will verify a traveler’s authorization status through an electronic verification from Customs and Border Protection before allowing the passenger to board. CBP recommends obtaining the authorization at least three days before any planned travel using the Visa Waiver Program. Upon approval, the authorization will be valid for two years unless revoked sooner.

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On June 12, 2008, U.S. Citizenship and Immigration Services (USCIS) informed the American Immigration Lawyers Association that the H-1B random selection process has been completed. USCIS completed the intake and receipt processes for all filings as of May 24, 2008 and began mailing rejection notices the week of June 9. Therefore, if an employer has not yet received a filing confirmation (Form I-797C Notice of Action), it likely means that the petition was not selected in the random process and that the rejection notice will be forthcoming.

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On May 9, 2008, Citizenship and Immigration Services published a proposed regulation to extend the permitted period of admission in TN status for Canadian and Mexican professionals under the North American Free Trade Agreement (NAFTA) up to three-years. NAFTA allows individuals from Canada or Mexico to enter the United States to work for or provide services to an organization in the U.S. provided the proposed services fall within one of the designated occupations, including Computer Systems Analysts, Economists, Engineers and Management Consultants.

At present, the maximum period of admission in TN status is one year. The new regulation would apply both to applications at the border as well as to applications filed with CIS to extend TN status for individuals already present in the United States. The goal of the new regulation is to reduce the administrative burden of annual renewal applications. If the regulation eventually becomes effective, it will be a welcome change to many individuals who either make annual trips to the border or file applications to extend their TN status.

There is no limit on the period of time an individual may qualify for TN status, provided the nature of the services continues to be temporary. In this regard, however, the commentary to the new regulation specifically confirms that the doctrine of “dual intent” does not apply to TN professionals. Dual intent allows a foreign national to be in the United States temporarily yet at the same time pursue lawful permanent resident status (i.e. “a green card”) to be able to remain indefinitely. Currently, only the H-1B and L-1 visa categories benefit from dual intent. Accordingly, individuals with TN status need to continue to plan carefully if they desire to obtain lawful permanent resident status.

The comment period ends June 9, 2008. Comments may be submitted via the Internet at  http://www.regulations.gov or by e-mail to rfs.regs@dhs.gov. Comments need to include a reference to “DHS Docket No. USCIS-2007-0056.” There also is the option to submit comments by mail or courier.

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U.S. Citizenship and Immigration Services announced on April 18, 2008 a special "cap gap solution" for F-1 students whose Optional Practical Training (OPT) expires before October 1, 2008. An April 8, 2008 interim final rule automatically extended OPT for F-1 students, but it applied only in those cases where the employer requested a "change of status" on the H-1B petition. To be eligible for the change of status from F-1 student to H-1B temporary worker, however, the student must have had less than a 60-day gap between when the OPT expires and October 1, 2008. Therefore, when employers filed H-1B petitions on April 1, it was not possible to request a change of status for any F-1 student/employee whose OPT expired on August 1, 2008 or earlier. Therefore, there were many individuals who could have benefited from the new regulation had it been published before April 1.

Recognizing the inequity of the situation, the solution announced on April 18 allows employers whose H-1B petitions are accepted on behalf of an F-1 student to amend the petition and request a change of status. The OPT then will be extended to October 1, and the individual will be permitted to remain in the United States and continue working without interruption. This is a significant benefit for individuals who otherwise were planning to spend several months abroad after their OPT expired and before they could obtain H-1B visas and return on or after October 1, 2008. After the H-1B filing confirmation has been issued (all notices are to be issued by June 2, 2008), the employer will have 30 days to amend the petition and request the change of status.

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As a follow up to my earlier post, Citizenship and Immigration Services ("CIS") announced today that it has received sufficient H-1B petitions for the next fiscal year, which begins October 1, 2008, for both the base amount of 65,000 and the additional 20,000 for U.S. master's or higher graduates. For those who have been following this situation, the announcement should come as no surprise. CIS accepted petitions through April 7, 2008 to allow for delivery of the expected, large number of petitions at the two designated service centers. On a date it has yet to announce, CIS will conduct a random selection to identify the first 20,000 master's/higher petitions. Thereafter, any remaining master's/higher petitions will enter the random selection for the 65,000 remaining visas. CIS will return, with the filing fees, any petition that is not successful in the lottery. For employers that filed duplicate petitions (for the same person and same job) in hopes that at least one would be successful in the random selection, CIS will keep the filing fees for both as a punitive measure against such employers.

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The Department of Homeland Security (DHS) again published the so-called “No-Match Regulation” on March 26, 2008. The regulation, first proposed on June 14, 2006, and published in final form on August 15, 2007, was withdrawn when the federal court in San Francisco enjoined enforcement actions based on the regulation. DHS now proposes to re-publish the rule in the identical form as it was published last August but with further commentary and justification. The supplemental commentary and justification reads more like an appeal brief challenging the district court’s injunction against the regulation than a review of the comments and considerations typical in Administrative Procedure Act proceedings. The regulation  has no new effective date, but the public is invited to provide comments before April 25, 2008. 

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The Government can file enforcement actions for hiring unauthorized employees in either criminal or civil proceedings. Criminal proceedings may result in either fines or prison sentences while civil proceedings result in administrative fines. Attorney General Mukasey announced on Friday, February 22, 2008, that the administrative fines would increase effective March 29, 2008 to adjust for inflation. The minimum fine for the first offense of the knowing hire of an unauthorized individual will increase by $100 to $375. The maximum civil penalty for the first violation increases to $3,200. For multiple offenses, the maximum penalty increases from $11,000 to $16,000. 

The Attorney General announced these increases as routine adjustments for inflation, but noted that the increases were also part of the initiative announced last August as part of enhanced effort to improve interior and worksite enforcement. Current efforts, however, remain focused on the criminal prosecution of employers for the hiring of unauthorized immigrants. In one recent press release, Immigration and Customs Enforcement noted that 57 undocumented workers were arrested in Utah, and many of the workers as well as the employer would be indicted for various criminal charges. The press release also noted that the Department of Labor participated in the investigation and processing of the arrested workers to be sure the proper wages had been paid for work before the arrest. The workers were then processed for criminal charges and deportation. 

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Today's Columbus Dispatch features an op-ed I wrote titled "Immigration crackdown hurts economy," which discusses my thoughts on how the Administration's immigration policy impacts our struggling economy. 

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On February 13, 2008, the Department of Labor (DOL) proposed amendments to the regulations and streamlined the application process for temporary agricultural workers. Interested parties will have 45 days to submit comments in response to the proposed rule. Although it is not clear when the new rules will become effective, the regulatory process is not expected to be completed in time for the 2008 growing season. 

Known by the technical classification H-2A, the temporary agriculture worker program is only one part of the more generic guest-worker program discussed in the popular press. In its announcement, the DOL noted that employers hired only 75,000 workers through this program last year, while they estimate that the undocumented workforce was between 600,000 and 800,000. The application process is lengthy, expensive, and difficult to navigate. Duplication of efforts between the state workforce agencies and DOL contributed to the dysfunctional nature of the program. Comments to the proposed rule quoted several news sources discussing the adverse impact this program had on the agricultural industry and explained the need to streamline the process to provide a realistic legal alternative for agricultural employers to hire the required workforce. 

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With the April 1, 2008 filing opportunity for “new” H-1B petitions looming, employers can begin planning now to try to obtain one of the limited number of H-1B visas available for the next federal fiscal year, which runs from October 1, 2008 to September 30, 2009.

A “new” H-1B petition refers only to individuals acquiring the H-1B visa or status for the first time, such as F-1 students changing to H-1B status and individuals abroad who plan to enter the U.S. for the first time using an H-1B visa. These cases often are referred to as “cap-subject” cases because they require one of the 85,000 allotted visas (65,000 for bachelor-level candidates and 20,000 for U.S. masters graduates). It does not apply to one who already has an H-1B visa or status. An exception that private sector employers should note, however, is that an H-1B foreign national currently working for a university in most cases will be subject to the cap. Universities are exempt from the H-1B cap, and when a foreign national leaves a university for the private sector, he/she then becomes cap-subject.

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A recent wage-and-hour case illustrates the effect payroll deductions can have on minimum wage compliance. In Rivera v. Brickman Group, Ltd., No. 05-1518 (E.D. Pa. Jan. 7, 2008), a company brought Guatemalan and Mexican workers to the United States for seasonal employment under H-2B visas. Although the workers were paid amounts that appeared to be above the minimum wage, the company failed to take into account certain travel expenses and other employment-related costs incurred by the workers – expenses that reduced the workers’ earnings below minimum wage levels.

In particular, the court found that transportation expenses, costs involved in obtaining visas, and fees charged by the company’s recruiters were incurred by the workers primarily for the company’s benefit. Therefore, the company violated the Fair Labor Standards Act because the deductions brought the employees’ earnings below the minimum wage. In reaching its decision, the court rejected the company’s argument that the Immigration and Nationality Act and the Portal-to-Portal Act supersede the FLSA with regard to H-2B workers’ wages and do not require employers to bear the travel expenses of such employees. The company has not yet announced whether it will appeal the decision.

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