The Presidential election of 2024 is behind us. Inauguration Day will bring a new Administration to Washington which has vowed to bring significant change “from Day One.” For Americans who voted for the new Administration, the promised change offers welcome solutions. To others, the rhetoric of our next President combined with his post-election nominations, triggers concern about how executive power will be used.
One target at which the next President will take aim is immigration. Immigration was among the leading concerns of voting Americans. And, following a well-used script from our political past, stoking fears about immigrants undoubtedly contributed to the outcome of the election. Now, as the new Administration prepares to take office, it is not surprising to see anti-immigrant hardliners nominated for top positions.
For U.S. employers from all sides of the national political debate, the change of administration is expected to bring enhanced enforcement of workplace rules connected to the employment of non-U.S. workers. Assuming that the next Administration can find the resources to do so, U.S. companies can expect to see a variety of compliance enforcement actions by the Departments of Homeland Security and Labor which will have a purposefully chilling effect on the employment of non-U.S. workers.
As always, enforcement actions will be directed against a very small percentage of the overall economy. Regardless, anticipating the likely tactic of assessing maximum penalties as a means of deterring non-compliance, it is important for U.S. employers with non-U.S. workers to give attention to compliance and to take steps to reduce exposure to costly fines.
- Employment Eligibility Verification (“I-9”) –Avoiding Assessment of Costly Fines
One area that impacts all U.S. employers are the legal requirements associated with Employment Eligibility Verification Form or I-9. Since the I-9 was first introduced in 1986, enforcement has varied. In some years, the number of on-site inspections, audits and fines has been up; in other years, it has declined. In the years ahead, with changes coming at the top of the Dept. of Homeland Security and Immigration and Customs Enforcement (ICE), employers can anticipate that the next Administration will increase the number of I-9 audits and on-site inspections.
It is important to recognize that, although the “worksite enforcement strategy” is primarily aimed at employers who hire undocumented workers, it also strikes unforgivingly at employers who fail to strictly comply with rules relating to Employment Eligibility Verification. And with fines of up to $2,800 per I-9 just for paperwork violations and up to $5,500 for the hiring of undocumented workers, civil penalties can quickly add up.
Please note: while punishing fines can be levied for hiring the undocumented, fines can also be imposed solely for paperwork violations including such minor omissions as failing to fully complete the forms, failing to complete forms in a timely manner, failing to sign and/or date forms or failing to retain forms as required by law.
II. Wage and Hours Violations – Small Mistakes Can Add Up to Big Penalties
Employers of H-1B, H-1B1 and E-3 workers are subject to rigorous rules associated with the Labor Condition Application (LCA) including obligations relating to prevailing wage, benefits and working conditions, notices and post-approval recordkeeping, material change and a slew of ancillary regulations.
The LCA is an attestation by a U.S. employer that it will comply with the labor-related requirements connected to these visa types. The obligations imposed by regulations are monitored by the Wage and Hour Division (WHD) of the U.S. Dept. of Labor (DOL) through both random and lead-driven post-filing audits. In view of the incoming Administration’s belief that these programs are rife with abuse, employers should expect heightened enforcement by DOL, aimed at deterring non-compliance with labor-related regulations and, by doing so, discouraging the sponsorship of qualified foreign talent for jobs in the U.S.
As with any initiative based more on suspicion than on facts, DOL efforts will undoubtedly reach not only employers who commit abuses but will also impact employers who are substantially compliant but who may, through oversight, have failed to strictly comply with one or more of the requirements arising under DOL rules.
If an employer of H-1B workers is the subject of a DOL Audit, it can expect to be served with a burdensome demand for immediate production of payroll records, public inspection files and other documents associated with its employees. Upon review of these records, DOL will issue Findings which identify instances of non-compliance relating to notices, public inspection files and payment of prevailing wage. This will often lead to the imposition of fines in maximum amounts and, in instances where there are gaps between prevailing wage and actual wage, charges for back pay, interest and civil penalties.
With DOL likely to use the Wage and Hour Audit as a weapon in its campaign against the H-1B program, it is important for employers to recognize that relatively minor deviations or instances of non-compliance – especially relating to prevailing wage requirements – can result in Findings which include months and years of back pay and civil penalties which are entirely out of proportion to the nature of the deviation.
- Administrative Site Visits – Expect the Unexpected
Organizations that employ H-1B workers or any work-authorized non-immigrant are subject to Administrative Site Visits (ASV) by government agents who are charged conducting inspections of premises and documents to preventing fraud and abuse.
By way of background, USCIS’s Fraud Detection and National Security (FDNS) unit was created to investigate and prevent immigration benefit fraud. As part of its efforts to ensure the integrity of the immigration benefit process, FDNS runs the Administrative Site Visit and Verification Program (ASVVP). Under the program, USCIS carries out random Administrative Site Visits to verify the existence of sponsor employers, to confirm the actual employment of the sponsored employees, to assess compliance with salary requirements, to ensure consistency between the information submitted to USCIS and actual conditions of employment and to otherwise evaluate compliance with regulatory requirements.
An ASV may take place unannounced at the employer’s principal place of business, or at a third-party worksite associated with the H-1B. This means that an FDNS agent can come unannounced to an address identified on the LCA including a headquarters office, an H.R. office, or a client site, to ask questions about an H-1B worker. It is important that your organization be aware of the possibility of an ASV by an FDNS agent and that it be prepared to respond appropriately.
Note that, if an FDNS agent arrives at your office or at a third-party work site for an ASV, he or she will introduce themselves, show identification and ask to speak with the person who signed the application for immigration benefits. If that person is not available or is no longer with the company, the agent may ask to speak with another employer representative. Also during the visit, the representative may ask – without prior warning – to tour the facility, to take photographs and to speak with the beneficiary about his/her job title, job duties, salary, etc. The representative may ask to see the Public Inspection File, as well as payroll records, tax returns, quarterly filings, records of other immigration filings and other business records.
If a work site visit occurs, the employer’s representative should request the name, title, and contact information for the USCIS/FDNS agent. In general, it is a good practice to have a witness present and to prepare a short memo with details relating to the ASV, including questions asked. It is normal for agents to request a large volume of documents and to set an unrealistic deadline. If that happens, it is appropriate and permissible to request additional time to gather, review, scan and send the requested documents.
- Conclusions and Recommendations:
It is important to know what not all U.S. employers will be subject to I-9 inspections, Wage and Hour Audits and/or Administrative Site Visits. The likelihood that your business will be the target of a compliance initiative is small. However, it is important that you, your front-line workforce and representatives at locations where H-1B workers are assigned be aware of the possibility and that they be prepared for such an occurrence.
In reference to Forms I-9, it is important to conduct a self-audit to ensure that the company’s records include Forms I-9 for all workers, regardless of their country of citizenship or immigration status. Forms I-9 must be complete, signed, updated where necessary and must include information to verify the employment eligibility of ALL employees. Forms I-9 must be retained with original, signed Form I-9s for three years from the date of hire or for one year after termination of employment, whichever is later. NOTE: Employers are not required to keep copies of supporting documents with the Forms I-9; but if the employer does make and keep copies, it must do so for all employees.
In reference to Wage and Hour Audits, it is important for employers to confirm that H-1B (and E-3 and H-1B1) employees are being paid consistently with the wage set forth in the DOL-approved LCA. It is also important to be sure that the H-1B worker is working at the place of employment identified in the LCA in the role or position identified in the LCA. In the event of any variance between the wage set forth in the LCA and the actual wage or if the employee is not physically working in the place of employment identified in the LCA or if the employee has had a material change in his/her employment, it may be necessary to file a new LCA and, in some cases, file a Petition to Amend the H-1B.
In reference to Administrative Site Visits, if you have H-1B workers, it is important to have a plan in place so that, if a USCIS officer from the FDNS unit arrives at an office address – or at any address identified in an LCA, even a third-party worksite or a home worksite – there is an understanding of what to do and how to respond.
By taking proactive steps to ensure compliance with regulations and requirements associated with the I-9, the LCA and the H-1B, your organization can mitigate the risk of penalties or issues arising from a USCIS site visit. Our team of immigration experts is ready to assist you in this process, to conduct a review of records and procedures and to provide guidance on any necessary adjustments to your recordkeeping procedures. If you are interested in setting up a review or want to discuss such an initiative, please contact us at 215-330-5244 or visit our website at www.shglawpa.com to schedule a consultation.
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