Department of Labor: 64 FED REG 627

8/14/2019 Department of Labor: 64 FED REG 627

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fed

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lregisterTuesdayJanuary 5, 1999

Part IV

Department of LaborEmployment and Training Administration

20 CFR Parts 655 and 656

Labor Condition Applications andRequirements for Employers UsingNonimmigrants on H1B Visas inSpecialty Occupations and as FashionModels; Labor Certification Process forPermanent Employment of Aliens in theUnited States; Proposed Rule


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628 Federal Register / Vol. 64, No. 2 / Tuesday, January 5, 1999 / Proposed Rules

DEPARTMENT OF LABOR

Employment and TrainingAdministration

20 CFR Parts 655 and 656

RIN 1215AB09

Labor Condition Applications andRequirements for Employers UsingNonimmigrants on H1B Visas inSpecialty Occupations and as FashionModels; Labor Certification Processfor Permanent Employment of Aliensin the United States

AGENCY: Employment and TrainingAdm inistration, Labor, in concu rrencewith th e Wage and Hou r Division,Employment Standards Administration,Labor.

ACTION: Notice of Proposed Rulemaking;request for commen ts.

SUMMARY: The Departmen t of Labor isproposing regulations to implementrecent legislation an d clarify existingDepartmental rules relating to thetemporary employment in the UnitedStates of non immigrants un der H1Bvisas. Specifically, the Departmen tpu blishes this notice of prop osedrulemaking to obtain public commenton issues to be addressed in regulationsto implement changes made to theImmigration and Nationality Act (INA)by the American Competitiveness andWorkforce Improvemen t Act of 1998(ACWIA). For certain of these ACWIA

issues, the Departmen t is prop osingregulatory language for commen t; forother issues, the Department isidentifying concerns and its proposedapproach to add ressing them oralternative approaches, on all of whichcomments are requested. In addition,the Department is providin g anopportunity for additional comments oncertain p rovisions wh ich werepreviously published for comment as aProposed Rule in 1995 (60 FR 55339).

The Department is also prop osing tomod ify regulations to implement anACWIA provision w hich m odifies themethod ology for the determin ation ofthe prevailing wage un der thePermanen t Labor Certification p rogram(20 CFR Part 656), but is n ot prop osingspecific regulatory text at th is time. Thismethod ology is also applicable toprevailing wages for the H1B program.The Department is w orking in closecooperation with th e Imm igration andNaturalization Service (INS) indevelopin g these regulations, sincecertain definitions and terms mu st beconsistently app lied by the two agenciesin th eir respective regulations.

After receiving public comm ents onthis notice of proposed ru lemaking, theDepartment plans to pu blish an InterimFinal Rule (inviting further comm ent)and a Final Rule (after reviewing all thecommen ts received).

DATES: Submit written comments byFebruary 4, 1999. The Departmen tencou rages submission of comments assoon as p ossible before that date. Anycommen ts received by the Departmen tafter that d ate will be part of therulemakin g record and w ill beconsidered, fully, in subsequentrulemakin g, but they m ay not receivefull consideration in the in terimimp lementin g regulations. Congressexpressed its intent that the Departmen tact swiftly to issue regulations bywaiving the customary 60-day commentperiod.

ADDRESSES: Submit written commentsconcernin g Part 655 to Depu tyAdm inistrator, Wage and Hour Division,ATTN: Immigration Team, U.S.Department of Labor, Room S3502, 200Constitution Avenu e, NW, Washington,DC 20210. If you wan t to receivenotification th at we received yourcomments, you should include a self-addressed stamped p ost card. You maysubm it your comments by facsimile(FAX) machine to (202) 2195122.This is not a toll free nu mber.

Submit written comments concerningPart 656 to th e Assistant Secretary forEmploymen t and Training, ATTN:Division of Foreign Labor Certifications,U.S. Emp loyment Service, Emp loyment

and Training Administration,Department of Labor, Room N4456,200 Constitution Avenu e, NW,Washington, DC 20210. If you w ant toreceive notification that we receivedyour comments, you shou ld include aself-addressed stamp ed p ost card. Youmay subm it your commen ts by facsimile(FAX) machine to (202) 2085844.This is n ot a toll-free number.

FOR FURTHER INFORMATION CONTACT: OnPart 655, contact either of the following:

Michae l Ginley, Director, Office ofEnforcement Policy, Wage and Hou rDivision, Employment StandardsAdm inistration, Departmen t of Labor,Room S3510, 200 Constitution Aven ue,NW, Washington, DC 20210. Telephon e:(202) 6930745 (this is n ot a toll-freenumber).

James No rris, Chief, Division ofForeign Labor Certifications, U.S.Employmen t Service, Emp loyment andTraining Admin istration, Department ofLabor, Room N4456, 200 ConstitutionAvenu e, NW, Washington, DC 20210.Telephon e: (202) 2195263 (this is nota toll-free n um ber).

On Part 656, contact James Norris,Chief, Division of Foreign LaborCertifications, U.S. Emp loymentService, Employment and TrainingAdm inistration, Department of Labor,Room N4456, 200 ConstitutionAvenu e, NW, Washington, DC 20210.Telephon e: (202) 2195263 (this is n ota toll-free n um ber).

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act

The H1B visa program is a volun taryprogram that allows employers totemporarily secure and employnonimm igrants admitted u nder H1Bvisas to fill specialized jobs in th eUnited States. (Immigration andNation ality Act (INA), 8 U.S.C. 1101 etseq.). The statute, amon g other things,requires that an employer pay an H1Bworker the higher of its actual wage orthe locally prevailing wage, to protect

U.S. workers wages and m oderate anyeconomic incen tive or advantage inhiring temp orary foreign workers. Underthe Immigration and Nationality Act(INA), as amen ded by the ImmigrationAct of 1990 and the Miscellaneous andTechnical Immigration an dNaturalization Amend men ts of 1991, anemployer seeking to employ an alien ina specialty occupation or as a fashionmod el of distinguished merit and abilityon an H1B visa is required to file alabor condition app lication with an dreceive certification from theDepartment of Labor before theImmigration an d Natu ralization Service(INS) may app rove an H1B visapetition. The labor conditionapplication (LCA) process isadministered by the Employment andTraining Ad ministration (ETA);complain ts and investigations regardinglabor condition app lications are theresponsibility of the Wage and Hou rDivision, Employment StandardsAdm inistration (ESA).

This proposed rule would implementstatutory changes in th e H1B visaprogram mad e to the INA by theAmerican Competitiveness andWorkforce Improvemen t Act of 1998(ACWIA) (Title IV of Pub . L. 105277 ,Oct. 21, 1998; 112 Stat. 2681). TheACWIA, amon g other th ings,temporarily increases the maximumnu mber of H1B visas permitted eachyear; temporarily requires new n on-displacemen t (layoff) and recruitmen tattestations by H1B dependentemployers (as defined by ACWIA) andby employers found to have committedwillful violations or m isrepresentations;and requires all employers of H1Bworkers to offer the same fringe benefits


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629Federal Register / Vol. 64, No. 2 / Tuesday, January 5, 1999 / Proposed Rules

to H1B work ers as it offers to U.S.workers.

A. Labor Condi tion Applic ation (LCA)

Summary: The p rocess of protectingU.S. workers begins with a requ irementthat emp loyers file a labor conditionapp lication (Form ETA 9035) with th eDepartment. In this ap plication the

emp loyer is required to attest: (1) that itwill pay H1B aliens p revailing wagesor actual w ages, wh ichever are greater;(2) that it will provid e workingcond itions that will n ot adversely affectthe workin g conditions of U.S. workerssimilarly employed ; (3) that there is nostrike or lockout at the p lace ofemp loyment; and (4) that it has pu bliclynotified its employees of its intent toemp loy H1B workers. In ad dition, theemployer must provide the informationrequired in the application about thenu mber of aliens sought, occup ationalclassification, wage rate, the prevailingwage rate and the sou rce of such wagedata, the date of need an d period ofemployment.

Need: Pursuan t to ACWIA, newattestation requiremen ts becomeapplicable to H1B dependentemp loyers or w illful violators afterpromulgation of implementingregulations. The LCA, curren tlyapp roved by OMB und er OMB No.12050310, is being revised to iden tifyH1B dependent emp loyers and willfulviolators and provid e for theirattestation to the new requ irements, andto accommod ate electronic processing.

Respondents and frequency of

response: ACWIA increased the nu mberof available H1B nonim migrant visasfrom 65,000 to 115,000 in fiscal years1999 and 2000 and to 107,500 in fiscalyear 2002. Besides the in crease in LCAsfiled for these add itional workers, theproposed regulation provides that H1Bdepend ent employers could be requiredto file new LCAs. It is estimated that249,500 LCAs w ill be filed ann ually by50,000 H1B emp loyers (dep end ent andnon dep end ent). This estimate is basedon the assumption that the alternativeLCA format preferred by th e Departmentis selected.

Estimated total annu al burden: Th eonly add ed LCA burd en is foremp loyers to determine if they aredependent. In most cases employerswill be able to immed iately answ er thisquestion, withou t review of their payrollrecords. Where dependent or n on-depend ent status is n ot readilyapparent, employers would be requiredto make a mathem atical calculation todetermin e if they mu st make theadd itional attestations required of an H1B employer. (See C. below for furtherexplanation.) The time required to

review records and make thedetermin ation is estimated to take anaverage of 30 minutes p er employer.Since it is estimated that only 50 H1Bemp loyers will find it necessary to makethis calculation, ou t of a total of 50,000H1B employers, the estimate of theaverage time necessary to comp lete theform remains at 1 hour. Total annu al

burden is 249,500 hours.

B. Docum entation of Corporate Identity

Summary: Currently, the regulatoryrequiremen t is that a new laborcond ition app lication (LCA) must befiled w hen an emp loyers corporateidentity changes and a new EmployerIdentification Num ber (EIN) is obtained .Under the p roposed rule, an emp loyerwh o merely changes corporate identitythrou gh acquisition or spin -off needmerely document the change in thepu blic file (includ ing an expressacknowled gement of all LCA obligationson th e part of the successor entity),provid ed it satisfies the InternalRevenue Code d efinition of a singleemp loyer, foun d at 26 U.S.C. 414 (see 8U.S.C. 1182(n )(3)(C)(ii)).

Need: The regulation is designed toeliminate a burden on bu sinesses to filea new LCA, while at the same timeensu ring that the pu blic is aware of thechanges and that the emp loyer willcontinu e to follow its LCA obligations.

Respon den ts and Proposed Frequencyof Response: It is estimated th at 500 H1B employers will be requ ired to file thesubject d ocumentation annu ally.

Estimated total annu al burden: It is

estimated that the recording and filingof each such d ocum ent will take 15min utes for a total ann ual burd en of 125hours.

C. Determ ination of H1B Depend ency

Summary: An H1B employer mustcalculate the ratio between th e num berof H1B workers it emp loys and th enu mber of full-time equivalentemp loyees (FTEs) to determine wh etherit meets the statutory definition of an H1B depen den t emp loyer . (8 U.S.C. 1182(n)(3)(A)). When it is a close ques tion,this determination w ould ord inarily bemad e by examination of an employersquarterly tax statemen t and last p ayrollor other eviden ce as to average hoursworked by p art-time employees toaggregate their hours into FTEs, togetherwith a coun t of the nu mber of workersemployed u nder H1B petitions.Documentation of this determinationmust be made where non-dependentstatus is not readily app arent and amathematical determination must bemad e. A copy of this determinationmust be placed in th e public disclosurefile. In addition , if an em ployer chan ges

from depend ent to non-depend entstatus, or vice versa, a simp le statementof the change in status mu st be placedin the p ublic disclosure file. Anemployer must retain hours w orkedrecords or other evid ence of the averagework sched ules of part-time employeesonly, and copies of H1B petitions forits H1B workers.

Need: Documentation of adetermination of an H1B dependencywh ere it is a close question is necessaryto determine employer compliance withH1B requiremen ts, and to advise thepu blic of an employers status. Theund erlying documentation m ust beretained to allow the Department tocheck this determination.

Respondents and proposed frequencyof respon se: All employers will berequired to keep the u nderlyingdocu men tation. It is estimated thatapp roximately 50 HB emp loyers willbe required to review their records in

order to make the determination, with25 employers who are found not to bedepend ent employers required todocument this determination ann ually.

Estim ated ann ual bu rden: The makingand d ocumentation of each su chdetermination will take approximately15 minu tes, and occu r at least twiceann ually, for a total annu al burden of12.5 hours.

D. Filing of Copy of INS Documentationfor Exemp t H1B Em ployees in PublicAccess File

Summary: The ACWIA provisions

regarding non-displacement andrecruitment of U.S. workers do notapp ly where the LCA is used on ly forpetitions for exemp t H1B workers. (8U.S.C. 1182(n)(1)(E)(ii)) Where theImmigration an d Natu ralization Service(INS) determines a w orker is exempt,employers are required to maintain acopy of such documentation in thepu blic access file.

Need: Determination s as to wh ether ornot H1B workers meet therequiremen ts to be classified as exemp tH1B non immigrants will be madeinitially by the INS in th e course ofadjudicating the p etitions filed onbehalf of H1B nonim migrants bydep end ent emp loyers. In the event of aninvestigation, it is anticipated th atconsiderable weight will be given to theINS determin ation that H1Bnonimmigrants were exempt based onthe edu cational attainmen ts of theworkers, since INS has considerableexperience in evaluating the educationalqualifications of aliens. Retention ofcopies of such d eterminations will aidDOL in determin ing compliance withthe H1B requiremen ts.


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Respondents and frequency ofresponse: It is estimated that 28,125such d ocum ents will need to be filedannually.

Estimated total annu al burden: Eachsuch filing will take app roximately oneminute for an ann ual burden ofapproximately 468.8 hours.

E. Record of A ssurance of Non -displacem ent of U.S. Workers at Second

Employers Worksite

Summary: 8 U.S.C. 1182(n)(1)(F)(ii)generally requires an H1B dep end entemp loyer not to place H1Bnonimm igrant with an other employerun less it has first inqu ired as to whetherthe other emp loyer will displace a U.S.worker. The proposed regulation wouldrequire an em ployer seeking to place anH1B nonimmigrant with anotheremp loyer to secure and retain either awritten assurance from the secondemployer, a contemporaneous writtenrecord of the second emp loyers oralstatements regarding non-displacement,or a prohibition in th e contract betweenthe H1B employer and the secondemployer.

Need: Pursuant to ACWIA, 8 U.S.C.1182(n)(2)(E), an H1B emp loyer m ay bedebarred for a secondary d isplacementonly if the Secretary of Labor fou ndthat such placing employer * * * knewor had reason to kn ow of suchdisp lacement at the time of theplacement of the n onimmigrant w ith theother employer. Congress clearlyintended that the emp loyer make areasonable inquiry and give du e regard

to available information. In order toassure that the pu rposes of the statuteare achieved, the Department isdevelopin g a regulatory provision torequire that the H1B employer m ake areasonable effort to inqu ire aboutpotential secondary displacement and todocument those inquiries.

Respondents an d proposed frequencyof response: It is estimated thatapp roximately 150 emp loyers will placeH1B nonimmigrants with secondaryemployers where assurances arerequired.

Estimated total annu al burden: It is

estimated each such assu rance will takeapproximately 5 minu tes and each suchemp loyer will obtain such assuran ces 5times annually for an ann ual burden of62.5 hours.

F. Docum entation of Non -Displacemen tof U.S. Workers

Summary: ACWIA (8 U.S.C.1182(n)(1)(E) prohibits H1B d epend entemp loyers and w illful violators fromhiring an H1B nonim migrant if theirdoin g so wou ld disp lace a U.S. workerfrom an essentially equivalent job in th e

same area of emp loyment. Theregulations will require H1Bdependent employers to keep certaindocumentation with respect to eachformer worker in th e same locality andsame occup ation as any H1B worker,wh o left its emp loy 90 days before orafter an employers petition for an H1Bworker. For all such em ployees, the

Department prop oses that covered H1Bemp loyers maintain the name, last-known mailing add ress, occupationaltitle and job description, and an ydocumentation concerning theemp loyees experience andqualifications, and principalassignm ents. Further, the emp loyer isrequired to keep all documentsconcernin g the dep arture of suchemp loyees and th e terms of any offersof similar employm ent to such U.S.workers and respon ses to those offers.

Need: These records are necessary forthe Department to determine whether

the H1B employer has disp lacedsimilar U.S. workers with H1Bnonimmigrants.

Respondents an d proposed frequencyof respon se: It is estimated th at 200 H1B-dependent and willfully violatingemp loyers will need to main taindocumentation for any workers wholeave their employment du ring theprescribed period.

Estimated total annu al burden: Norecords need be created to comply w iththese requiremen ts, since the EqualEmployment Opp ortunity Commission(EEOC) already requires under its

regulations that the records d escribedabove be maintained.

G. Docum entation of U.S. WorkerRecruitment

Summary: Pursu ant to ACWIA (8U.S.C. 1182(n)(1)(G)), H1B dep end entemp loyers are required to make goodfaith efforts to recruit U.S. workersbefore hiring H1B workers. Und er theregulations, H1B employers will berequired to retain docum entation of therecruiting methods u sed, including theplaces and d ates of the advertisementsand postings or other recruitmentmethod u sed, the content of theadvertisements or postings, and th ecompensation terms. In addition, theemployer must retain anydocumentation concerningconsideration of applications of U.S.workers, such as copies of applicationsand related docum ents, rating forms, joboffers, etc. The Department has alsorequested comments regarding howemployers should determine indu stry-wide standards, and how to make thisdetermin ation available for publicdisclosure to U.S. workers and others.

Need: The documen tation notedabove is necessary for the Departmen t ofLabor to determine wh ether theemployer h as made a good faith effort torecruit U.S. workers and for the publicto be aware of the recruiting meth odsused and th e industry standard.Retention of the records regardingconsideration of app lications is required

to ensure em ployers have given goodfaith con sideration of app lications fromU.S. workers.

Respondents and proposed frequencyof respon se: It is estimated that ann ually200 H1B dependent employers willneed to d ocum ent their good faithefforts to recruit U.S. workers.

Estimated total annu al burden: Th efiling of such records will takeapproximately twenty min utes peremployer for an annu al burden ofapp roximately 66.7 hou rs. The retentionof documen ts relating to applications byU.S. workers is already requ ired by

EEOC regulations, an d therefore noadditional burden is created.

H. Documentation of Fringe Benefits

Summary: Pursu ant to ACWIA (8U.S.C. 1182(n)(2)(C)(viii)), all emp loyersof H1B employees are requ ired to offerbenefits to H1B workers on the samebasis and und er the same terms asoffered to sim ilarly employed U.S.workers. The regulations requireemployers to retain copies of all fringebenefit plans and an y summ ary plandescriptions, includ ing all rulesregardin g eligibility and benefits,

evidence of wh at benefits are actuallyprovided to individual workers and howcosts are shared between emp loyers andemployees.

Need: These records are necessary forthe Department to determine wh etherthe H1B nonim migrants are offered th esame fringe benefits as sim ilarlyemployed U.S. workers.

Respondents and proposed frequencyof respon se: Records are required to beretained for all H1B employers,estimated to total 50,000. Becausecopies of fringe benefit plan s andrecords are generally required to bemaintained by the Pension and WelfareBenefits Adm inistration (PWBA) andInternal Revenue Service (IRS)regulations, there shou ld be noadditional recordkeeping burden fromthese requirem ents. It is also believedthat a prudent businessman wou ld keepthese records, in the order course ofbusiness, in any event. However,because some plans such as unfund edvacation plans and cash bonuses maynot be docum ented, it is estimated thatapp roximately 5%, or 2,500 employers,will need to record and retain some


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documentation which would nototherwise be kept.

Estimated annual burden: It isestimated that 2,500 employers willspend approximately 15 minu tes eachdocumenting un written plans for anannu al burden of 625 hours.

I. Wage Recordkeeping RequirementsApplicable to Employers of H1BNonimmigrants

Summary: The Department has alsorepublished and asked for comment onseveral provisions of the December 20,1994 Final Rule (59 FR 65646), whichwere published for notice and commenton Oct ober 31, 1995 (60 FR 55339). AllH1B employers are required todocu men t their objective actual wagesystem to be applied to H1Bnon immigrants and U.S. workers. Theyare also required to keep payroll recordsfor non-FLSA exempt H1B workersand other emp loyees for the specificemployment in question. This proposalwould decrease the burden onemp loyers of keeping hou rly payrecords for U.S. workers, requiring suchrecords only if the worker is either notpaid on a salary basis, or if the actualwage is stated as an h ourly w age. For H1B workers, such records mu st also bekept if the p revailing wage is expressedas an hou rly rate.

Need: The statute requires that theemployer pay H1B nonimmigrants thehigher of the actual or p revailing wage.In order to determine wh ether theemp loyer is payin g the required w age,the Department m ust be able to

ascertain the system an em ployer usesto determin e the wages of non -H1Bworkers. The Department also believesthat it is essential to require theemp loyer to maintain payroll records forthe emp loyers employees in thespecific emp loyment in question at theplace of emp loyment to ensu re that H1B nonimm igrants are being paid atleast the actual wage being paid to n on-H1B workers or the p revailing wage,whichever is higher.

Respondents an d proposed frequencyof response: The Department estimatesthat approxim ately 50,000 employers

employ H1B nonimmigrants. Thedocu men tation of the actual wagesystem mu st be done only on e time foreach employer. Hourly pay recordswould have to be prepared with respectto all affected emp loyees each payperiod.

Estimated annual burden: Th eDepartment estimates that the publicburden is approximately 1 hour p eremployer per year to document theactual wage system for a total burden tothe regulated commu nity of 50,000hou rs in a year. The payroll

recordkeeping requirements arevirtually the same as those required bythe Fair Labor Standard s Act (FLSA)and any burd en required is subsumed inOMB Approval No. 12150017 for thoseregulations at 29 CFR Parts 516, exceptwith resp ect to records of hours workedfor exempt emp loyees. There will be noburd en for U.S. workers since as a

practical matter, hou rs worked recordswill be required for U.S. workers onlyif they are not exemp t from FLSA, or ifthey are exempt but paid on an hou rlybasis (certain comp uter p rofessionals).The Departmen t estimates that 55,000H1B workers will be paid on a salarybasis. Hours worked records w ould berequired for these workers on ly if theprevailing wage is expressed as anhou rly rateestimated to be 17 percentof all cases. The Departmen t estimates aburd en of 2.5 hours p er worker per year,for 9350 workers, and a total of 23,375hours.

Retention of Records: Pursuant tosection 655.760(c) of Regulations, 20CFR Part 655, copies o f the LCAs, andits docum entation are to be kept for aperiod of one year beyond th e end of theperiod of employment specified on theLCA or one year from the date the LCAwas withd rawn , except that if anenforcement action is comm enced, theserecords mu st be kept until theenforcement procedure is completed asset forth in Part 655, Subpart I. Therecordkeeping requirements in thisproposed ru le would be subject to thesame retention p eriod, except, asrequired by 20 CFR 655.760(c), the

payroll records for the H1B emp loyeesand other employees in the sameoccup ational classification, which mu stbe retained for a period of three yearsfrom the d ate(s) of the creation of therecord(s); if an en forcemen t proceedin gis commen ced, all payroll records are tobe retained u ntil the enforcementproceedin g is comp leted as set forth inPart 655, Subp art I. The existing recordretention requiremen ts in 20 CFR655.760(c) have been app roved by OMBun der OMB No. 12050310.

Total public burden: H1B employersand employees of H1B emp loyers may

be from a wide variety of ind ustries.Salaries for emp loyers and/or th eiremployees who perform the reportingand recordkeeping functions requiredby this regulation m ay range fromseveral hu nd red dollars to severalhu ndred thousand d ollars where theCorpor ate Executive Office of a largecomp any performs some or all of thesefunctions th emselves. Absent specificwage data regarding such em ployers andemp loyees, respon den t costs areestimated at $25 an hou r. Total annu alrespon den t hour costs for all

information collections are estimated at$8,105,887.50 ($25.00 x 324,235.5hours).

Request for com m ents: The pu blic isinvited to p rovide comments on thisinformation collection requirement sothat the Departmen t of Labor may:

(1) Evaluate wh ether the p roposedcollections of information are necessary

for the prop er performance of thefunctions of the agency, includ ingwhether the information will havepractical utility;

(2) Evaluate the accuracy of theagencys estimates of the bu rden s of thecollections of information, includ ing thevalidity of the m ethodology andassumptions used;

(3) Enhan ce the quality, utility andclarity of the in formation to becollected; an d

(4) Minimize the bu rden of thecollections of information on those wh oare to respond , including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techn iques orother forms of information techn ology,e.g., permitting electronic submission ofresponses.

Written comments shou ld be sent tothe Office of Information and RegulatoryAffairs, Office of Managemen t andBud get, Attention : Desk Officer forEmployment Standards Administration,U.S. Departmen t of Labor, Washington,D.C. 20503. Office of Managemen t andBud get, Attention : Desk Officer forEmployment Standards Administration,U.S. Departmen t of Labor, Washington,

DC 20503.

II. Background

On November 29, 1990, theImmigration an d Nationality Act wasamend ed by the Immigration Act of1990 (IMMACT) (Pub . L. 101649, 104Stat. 4978) to creat e the H1B visaprogram for the temporaryemploym ent in th e United States (U.S.)of non immigrants in specialtyoccupation s and as fashion m odels ofdistinguished merit and ability. TheH1B provisions of the INA wereamend ed on December 12, 1991, by the

Miscellaneous and TechnicalImmigration an d Natu ralizationAmend ments of 1991 (MTINA) (Pub. L.102232, 105 Stat. 1733). Furtheramendmen ts were made to the H1Bprovisions of the INA on October 21,1998, by en actment of ACWIA.

These cumulative amendments of theINA assign respon sibility to th eDepartment of Labor (Departmen t orDOL) for implementing severalprovisions of the Act relating to thetemporary emp loyment of certaincategories of non immigrants wh o have


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been granted entry into the Un itedStates by INS. The H1B p rovisions ofthe Act govern the temporary en try offoreign pro fessionals to w ork inspecia lty occup ation s in th e U.S.under H1B visas. 8 U.S.C.1101(a)(15)(H)(i)(b), 1182(n), and1184(c). The H1B category of specialtyoccupation s consists of occupation s

requiring the theoretical and p racticalapp lication of a body of highlyspecialized knowledge and theattainment of a Bachelors or h igherdegree in th e specific specialty as aminimum for entry into the occupationin the U.S. 8 U.S.C. 1184(i)(1). Inaddition, an H1B nonimmigrant in aspecialty occup ation must p ossess fullState licensure to p ractice in th eoccupation (if required), completion ofthe required degree, or experienceequivalent to the d egree and recognitionof expertise in the specialty. 8 U.S.C.1184(i)(2). The category of fashion

mod el requires that the n onim migrantbe of distinguished m erit and ability. 8U.S.C. 1101(a)(15)(H)(i)(b).

The ACWIA made numeroussignificant chan ges in the H1Bprovisions. One such ch ange is thetemporary increase in the maximumnu mber of H1B visas over the nextthr ee fiscal years: for fiscal years 1999and 2000, the cap is 115,000; for fiscalyear 2001, the cap is 107,500; and forfiscal year 2002 (and thereafter), the capreturns to th e original 65,000. Anothersignificant change is the imp osition ofadd itional attestation requiremen ts for

certain employers to provid e betterprotections to some U.S. workers. Theadditional attestation requirementsapp ly to an H1B depend entemp loyer and an em ployer wh o hasbeen found to have comm itted a willfulfailure or misrep resentation withrespect to the H1B requirements (forease of reference, referred to as awillfu l violator). H1B-dep end entand w illful violating emp loyers mustattest that they have not d isplaced andwill not d isplace a U.S. worker from a

job that is essen tially like the job forwh ich an H1B worker(s) is beingsought, that they will not place an H1B worker with an other employerwithout m aking an in quiry to assuresuch d isplacement will not take place,that they h ave taken good faith steps torecruit U.S. workers for the job forwh ich the H1B workers are sought, andthat they w ill offer the job to anyequally or better qu alified U.S. worker.A labor con dition app lication (LCA) foran H1B worker who is exceptional,an outstand ing professor orresearch er, or a mu ltinatio nalman ager or executive within the

mean ing of Section 20 3(b)(1) of the INA,is not subject to the recruitmentprovision. Both the displacementprotection and the recruitment/hiringprotection become effective upon thedate of th e Departments final regulationand expire with respect to LCAs filedbefore October 1, 2001. An H1Bdependent employer or willful violator

filing an LCA wh ich will be used onlyfor exemp t H1B workers is notrequired to comply w ith the newattestation requiremen ts.

Also enacted via the ACWIA is a newfee of $500, to be collected by INS, forinitial petitions and first extension sfiled on or after December 1, 1998 andbefore October 1, 2001. Institutions ofhigher ed ucation, or related or affiliatednon profit entities, non profit researchorganizations, or Governm ental researchorganizations are exemp t from the newfee. The fees are to be used for jobtraining, low-income sch olarships, and

program administration/enforcement.The ACWIA includes oth er generallyapp licable worker protections,specifically wh istleblower protection,proh ibitions against fee reimbursemen tand penalizing an H1B worker whoterminates employm ent prior to a dateagreed with th e employer, and arequirement that the employer paywages du ring nonprodu ctive time ifsuch time is not d ue to reasonsoccasioned by th e worker. The ACWIAalso requires emp loyers to offer H1Bworkers fringe benefits on th e samebasis and in accordance with the samecriteria as U.S. work ers. The ACWIA

specifies new civil mon ey penaltiesranging from $1,000 to $35,000 perviolation, along with debarmen t. Newinvestigative procedu res are created,authorizing the Department to conductran dom inv estigations of willfu lviolators durin g the five-year periodafter the find ing of such violation, andestablishing an alternative investigationprotocol based on informationind icating potential violations obtainedfrom sources other th an aggrievedparties.

The ACWIA man dates a particularmethod of comp utation of the local

prevailing wage for emp loyees of certaintypes of employers: institutions ofhigher edu cation (as defined in section101(a) of the Higher Education Act);non profit entities related or affiliatedwith such institutions; nonprofitresearch organizations; andGovernmental research organizations.Und er the ACWIA provision, theprevailing wage level is to take intoaccount on ly employees at suchinstitutions and organizations.

The rulemakin g history, as pu blishedin the Federal Register, is as follow s:

March 20, 1991, Advance Notice ofProposed Rulemaking, 56 FR 11705.

August 5, 1991, Proposed Rule, 56 FR37175.

October 22, 1991, Interim Final Rule,56 FR 54720.

Janu ary 13, 1992, Interim Final Rule,57 FR 1316.

October 6, 1993, Proposed Rule, 58 FR

52152.December 30, 1993, Interim Final

Rule, 58 FR 69226.December 20, 1994, Final Rule, 59 FR

65646.Janu ary 19, 1995, Final Rule, 60 FR

4028.September 26, 1995, Notice, 60 FR

49505.October 31, 1995, Proposed Rule, 60

FR 55339.April 22, 1996, Proposed Rule, 61 FR

17610 (Part 656).May 3, 1996, Final Rule, 61 FR 19982.September 30, 1996, Final Rule, 61 FR

51013.November 30, 1998, Final Rule, 63 FR

65657 (Part 656).

III. The Process of Developing ProposedRegulations

In developing proposed regulations,the Department has identified a numberof issues arising from th e provisions ofthe ACWIA. On som e of these issues,the Department is prop osing regulatorylanguage and is seeking comments onthose prop osals. But on other issues, theDepartment has not yet developedregulatory language and , in this n otice,is seeking public commen ts on the

issues and possible regulatoryapp roaches or alternatives wh ich are setforth.

In addition , the Departmen t iscontinu ing to examine severalprovisions that were previouslyadd ressed in a Notice of ProposedRulemaking published in the FederalRegister on October 31, 1995 (60 FR5533955348). The Departmen tconsiders it app ropriate to provide, viathis notice, an additional opportunityfor public comment on those provisions.Some of these existing Final Ruleprovisions are affected by the enactmen t

of ACWIA, and for some affectedprovisions the Department has not yetdeveloped new or modified regulatorylanguage. Other Final Rule p rovisionsare being republished for commen t,with limited proposed changes asdiscussed below.

After review of the comm entsreceived, the Department inten ds topu blish an Interim Final Rule, invitingcomments on that rule, which w illcontain th e full regulatory text. TheDepartment will then review thecommen ts and issue a Final Rule.


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The Department requests commentson each of the following issues andprop osals, and on any other relatedmatters concerning the temporaryemp loyment in the U.S. ofnonimm igrants un der the H1B visaprogram.

A. Wh at Constitu tes an Emp loyer for

Purposes of the A CWIA Provisions?In enacting certain new LCA

attestation s for H1B-dep end ent (andcertain other) employers in the ACWIA,Congress directed (in th e definition ofH1B-dep end ent em ployer) that anygroup treated as a single employerun der su bsection (b), (c), (m), or (o) ofsection 414 of the Internal RevenueCode of 1986 shall be treated as a singleemp loyer. These p rovisions, found at26 U.S.C. 414(b), (c), (m) an d (o),concern the circumstances in w hichseparate businesses are treated as asingle employer for purp oses of theIntern al Revenu e Code (IRC).Specifically, the IRC provisions concerntreatment of a controlled group ofcorporations ( 414(b)); partnersh ips,proprietorships, etc., under commoncon trol ( 414(c)); an affiliated servicegroup ( 414(m)); as well as separateorganizations, emp loyee leasing, andother arrangements ( 414(o)). SeeInternal Revenue Service (IRS)regulation s at 26 CFR 1.414(b)1,1.414(c)1. See also 26 CFR 1.414(q)1T.

Furth er, the Departmen t isconsiderin g the effect and implicationsof adopting this single definition of

emp loyer for all p urp oses un der thisprogram, to the extent it m ay serve toaccommod ate common bu sinessactivities and facilitate admin istrationand en forcemen t of the program. TheDepartment is interested in learnin gfrom commen ters the consequences of aregulation w hich w ould p rovide thatwh ere an emp loyer files an LCA andthereafter un dergoes some change ofstructure (e.g., buy-out by a successorcorporation; corporate restructuring ofsub sidiar ies), the emp loyer for LCApurp oses would be the entity whichsatisfies the Internal Revenu e Codedefinition of a single employer. TheDepartment is considering whether andhow, un der this approach, it may beable to modify its position that a newLCA mu st be filed wh en the corp orateidentity changes and a new EmployerIdentification Num ber (EIN) is obtained.Thus an emp loyer which m erelychan ges its corporate identity throu ghacquisition or spin -off would be allowedto document this change in its publicdisclosure file (includ ing an expressacknowled gment of all LCA obligationson th e part of the successor entity),

provid ed th at it satisfies the InternalRevenue Code d efinition of a singleemployer.

The Department seeks comments onthis proposed regulation and on otherrelated matters, such as wh ether andhow th e Internal Revenue Codeinterpretation of single employershould be used for other purposes in the

H1B program, such as corporaterestructuring, and whether anotherapproach should be utilized to addresscorporate restructuring.

B. Which Emp loyers are H1B-dep end ent for Purposes of th e A CWIAProvisions?

The ACWIA requires new n on-displacement and recruitmentattestations by H1B-dep end entemp loyers and by employers foun dafter the date of enactment to h avecommitted a willful violation ormisrepresen tation durin g the 5-year

period precedin g the filing of the LCA(see item M.2 below, regardin g thefind ing of such violation s). TheACWIA definition of H1B-dependentemp loyer provides a formula forcomp aring the num ber of H1Bnonimm igrants to the total nu mber offull-time equivalent em ployees(includin g H1B non immigrants) in theemployers workforce. Exempt H1Bnon immigrants are not included in theH1B-dependency compu tation du ringa certain period after enactment of theACWIA (i.e., the longer of the period ofsix month s from the d ate of enactment

(until April 21, 1999), or the date of theDepartments interim final rule on th isprovision).

The Department is developingregulations on the following issues, andseeks comments on these and any otherrelated matters.

1. What Is a Full Tim e Equivalen tEmployee?

The ACWIA definition of H1B-dep end ent emp loyer includ es a termthat is not defined: full-time equ ivalentemp loyees (FTEs), as part of thecalculation to determine an em ployersH1B dependency status based on theratio between the nu mber of H1Bwo rkers (a head coun t) and FTEs (theemp loyers w orkforce of employees,expressed as FTEs). Thus ACWIAdefines an H1B-dep end ent emp loyeras an employer that has

25 or fewer full-time equivalentemployees who are employed in theUnited States, and em ploys more than 7H1B nonimmigrants;

At least 26 but not more th an 50full-time equivalent emp loyees who areemp loyed in the United States, and

employs more than 12 H1Bnonimmigrants; or

At least 51 full-time equivalentemployees who are employed in theUnited States; and em ploys H1Bnonimm igrants in a nu mber that isequal to at least 15 percent of thenu mber of such full-time equivalentemployees.

For larger employers (at least 51 full-time equivalent employees), the nu mberof H1B workers is the nu merator andthe nu mber of FTEs is the denom inatorin this comp utation; if 15 percent ormore of the employers workforce areH1B workers, as compu ted in thisratio, then the employer is H1B-dependent.

The term full-time equivalent lendsitself to various in terpretations, some ofwh ich could significantly increase anemployers possible paperwork burden.One interpretation w ould requiremaintaining a record and computing thehou rs worked in a p eriod of time (ayear, a workweek, or some intermediateperiod of time) for each worker in th eentire workforce. For example, the totalof all hours w orked by all employeeswou ld be divided by the full-timestand ard in ord er to arrive at th e FTEfigure. Such an approach wou ldnecessitate collection and mainten anceof hourly records for all workers, not

just h ourly w age earners. Moreover, thecomplexity of such an app roach and therelated computations could make itdifficult for emp loyers to recognize ifand w hen they become H1B-depend ent. A less onerous app roach

would allow an employer to simplycoun t the num ber of workers it employson a full-time basis, using somestandard threshold (e.g., 35 hours perweek or m ore) for iden tifying a full-time schedu le. This app roach wou ldonly add itionally require a showin g ofthe average weekly hours w orked bypart-time employees, through hoursworked records or by evidenceregarding their standard workingschedu les. (It has been the Departmen tsexperience that hours worked recordsare ordinarily kep t for part-time workerssince they are ordin arily paid on an

hou rly basis and typ ically are notexempt from the Fair Labor Stand ardsAct.) The n um ber of FTEs in th eworkforce would then be determined byaggregating the average hours of thepart-time workers, dividin g that total bythe stand ard for a full-time schedu le,and ad ding the resulting num ber to thenu mber of full-time workers in theworkforce.

The Department p roposes a procedureby which the d etermination would bemad e by an examination of theemp loyers qu arterly tax statement (or


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similar document) to determine thenu mber of workers on the payroll(assum ing there is no issue as towh ether all emp loyees are listed on thetax statemen t), and a furtherexamination of the last payroll (or thepayrolls over the previou s quarter if thelast payroll is n ot representative) orother eviden ce as to average hours

worked by part-time employees, toaggregate the average hou rs of the part-time workers into FTEs based on theemp loyers d efinition of full-timeemployment. The Department w ouldaccept an emp loyers definition of full-time employm ent, provided th at it is atleast 35 hou rs or more per week; in theabsence of such an em ployer definition,the Department would u se 40 hours perweek as a full-time schedu le. However,in no case would a single employeecoun t as more than one FTE, even if theemployee commonly w orked morehou rs p er week than the full-time

schedu le. Finally, it shou ld be notedthat the count would be mad e only ofemployees of the employer, includingboth H1B non immigrants and U.S.workers, but would n ot include bona

fide consultants and indepen dentcontractors who d o not m eet theemployment relationship test describedbelow (see item D.1). It is impor tant tonote that the nu mber of H1Bnonimm igrants (the n umerator in the H1B-dependency ratio) would bedetermined by the nu mber of H1Bnonimm igrants employed by theemployer in the period reviewedasimple head countwithout regard to

their full-time or part-time status.The Department seeks commen ts on

its proposed approach to determiningfull-time equivalency, and an y otherapproaches which m ight be used toaccurately make the determinationwithout undue paperwork burden.

2. When Must an Emp loyer DetermineH1B Dependen cy?

The ACWIA definition of H1B-dep end ent emp loyer and th e new LCAattestation elements th at are required ofsuch an em ployer do not clearly definethe timing of the d ependency

determin ation. Certainly such adetermination mu st be made when anew LCA is filed. The tw o issues to beresolved are when a n ew LCA must befiled, and wh at obligations, if any, anemp loyer has if its depend ency statuschanges.

The Department is particularlyconcerned about the obligations ofemployers who already h old or maysoon obtain certified LCAs. TheDepartments curren t regulationsprovid e that an LCA is valid for threeyears from its date of certification,

du ring which time the employer mayfile petitions for H1B workers based onthat LCA (not to exceed th e nu mber ofpositions sh own on the LCA). The newrecruitment and displacementattestation p rovisions of the ACWIA areexpressly app licable to LCAs filed by acertain su bset of H1B employers afterthe d ate of issuan ce of the Departmen ts

interim final regulations. We expect thatmost H1B-dependent employers haveLCAs in effect and that man y suchemp loyers may file additional LCAsdu ring the period p rior to the effectivedate of the regulations. Thereforeifthis issue is not directly addressed bythese regulationsthese H1B-depend ent employers could avoid anyapp lication of the law s newdepend ency provisions, which areapp licable only to app lications filedbefore October 1, 2001, by contin uin g touse cu rrent or n ewly certified LCAs.Since this w ould , as a practical matter,

poten tially nullify these ACWIArequiremen ts for all or many H1B-depend ent employers, the Departmentproposes that any current (or non-dep end ent) LCA will become invalid forH1B-dependent employers byoperation of these regulations withrespect to any future H1B petitions(includin g extensions), althou gh anemp loyers obligations u nd er the LCAwould continue with respect to all H1B nonimmigrant p etitions un der thatLCA. The regulations w ould , therefore,require that all H1B-dep end entemp loyers with existing LCAs file new

LCAs if they wish to petition for anynew H1B nonimm igrants (or if theywish to seek the extension of anyexisting H1B visas) on or after theeffective date of the interim finalregulations. Similarly, an em ployer w ithan existing LCA wh ich is n ot H1B-dep end ent on th e effective date of theregulations but wh ich later becomes H1B-dep end ent, would be required to filea new LCA if it wishes to petition fornew H1B non immigrants (or seekextensions of existing H1B visas) atany time after the d ate it becomesdepend ent. An employer wh o fails totake such action but instead u ses an

existing LCA contrary to theseregulations would be subject tosanctions, including d ebarment andcivil money pen alties. The Departmentseeks comments on this proposedapproach and on any other approacheswhich might be used to ensure that U.S.workers are provided with theprotections wh ich the Act intendedwith regard to H1B-dependentemployers.

As suggested above, the Departmentalso recognizes that th e makeup of an

emp loyers workforce, and th e ratio ofH1B nonim migrants to total FTEs,could ch ange significantly over thethree-year validity period of an LCA.Thus an employer which is not H1B-dep end ent at the time it files an LCAun der these regulations might laterbecome d ependent, or an employerwhich is initially H1B-dependent

might later become non-dependent. TheDepartment, after careful con sideration,has concluded that, in order for theCongressional inten t for the newprovisions to be appropriatelyimplem ented, an emp loyers H1Bdepend ency may need to beredetermined as the composition of theworkforce changes after the filing of theLCA, where the em ployer plan s to takeactions which require recruitment andnon-displacement commitments by H1B-dep end ent emp loyers (or theirclients).

Thus, the Department proposes that

an employer would be required to makea determination of depend ency not justprior to or on the effective date of theseregulations, but when it files any newLCA or H1B petition (includin gextensions) after that date. If anemp loyer is not H1B-dep end ent at thetime an LCA is filed, it wou ld h ave acontinu ing obligation to ensure th at if itlater becomes H1B-dep end ent andwishes to file new H1B petitions(includin g extensions), it takes the stepsnecessary to comply w ith therequiremen ts of the law and th eDepartments regulations ap plicable todepend ent employers during the period

it is H1B-depend ent, with resp ect to allH1B nonimm igrant p etitions filedun der that LCA. Similarly, if anemployer which is initially depen dentand files an LCA so in dicating itsdependency later determines that it hasbecome not depen dent, it would not berequired to comp ly with the attestationelements app licable to dependen temp loyers with respect to any H1Bworkers during any period in w hich itis not dependent.

The Department believes that thisapp roach is necessary to properlyeffectuate the laws new requ irements

and d oes not believe that thiscontinuing obligation places any undueburd en on emp loyers. As a practicalmatter, the Departments experience inthe H1B program is that th e largemajority of employers which u se theprogram clearly will not meet the testfor H1B-dep end ency and th at mostprogram users w ould , therefore, beentirely un affected by this ACWIAprovision and the Departmentsregulations. With regard to th e smallminority of employers who wou ld meetthe H1B-dep end ency test, the


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Departments experience is th at mostsuch em ployers employ H1B workersin such a large prop ortion that theywou ld almost certainly be subject to thenon-displacement an d recruitmentrequiremen ts durin g the entire LCAvalidity period. As a p ractical matter,therefore, any continu ing obligation foran emp loyer to monitor its workforce

ratio would apply only in th e very rareinstance where the H1B-dependencydetermin ation is a close question for abord erlin e emp loyer on the effectivedate of these regulations, or up on thedate of a su bsequent LCA filing orpetition and thereafter.

The Department also consideredwhether the same issues would arisewith resp ect to emp loyers foun d afterthe effective date of ACWIA to havecommitted w illful violations ormisrepresentations. However, a find ingof a willful violation ormisrepresentation w ould commonly

result in debarment and consequently,invalidation of all the employers LCAs.The employer would th en be required tofile a new LCA(s) to petitio n foradd itional H1B non immigrants (or toextend p etitions) after the debarmen tperiod en ds, attesting to the newattestation elemen ts for H1Bdepend ent employers and w illfulviolators.

The Department seeks commen ts onits proposal, and sp ecifically wh etherthere are oth er ways to effectivelyaccomplish th e statutory intent that H1B-dependent employers comply withthe n ew attestation elemen ts. For

example, anoth er possible regulatoryapproach could be to have thedepend ency up-date determined on aset, regular basis, such as for eachcalendar qu arter. Alternatively, theDepartment could lim it the use of anattestation to a shorter period , such as90 or 180 days, instead of the currentthree years.

3. What Kind of Records Are RequiredConcerning the H1B-Dependen cyDetermination?

The Department is consid ering severalmatters relating to documen tation. First,the Department is examinin g the issueof the kind of record wh ich might needto be made by an emp loyer concerningits determination of wh ether it is or isnot H1B-dep end ent at the time that anLCA is comp leted and filed. It is theDepartments view that no record n eedsto be created or maintained to showhow an emp loyer made thatdetermination when its H1B-depend ency or non-depend ency statusis app arent, and it files an LCAreflecting that obviou s status. Asdiscussed above, the Departmen t

believes that for the vast majority ofemp loyers there is either such a smallor large proportion of H1Bnonimm igrants employed that anemployers dependency status will notbe a close question. With regard to anemp loyer for wh ich the H1B-depend ency or non-dependency statusis not readily apparent, the question of

app ropriate records is more difficult.The Departmen t believes that it isimportant that the employer make thisdetermination w ith proper care andconsideration. Further, the Departmentbelieves that, in the even t of an inquiryby an affected U.S. worker (concerningpossible rights regarding disp lacementor recruitmen t) or an in vestigation bythe Department, docum entation of anemp loyers determination th at it is notH1B-dep end ent need s to be availableto ascertain and evaluate the method bywhich th e determination was made.Therefore the Departmen t proposes that

such d ocumentation be requiredwherever the determination that anemployer is not dependent is not readilyapparent and a mathematicalcalculation mu st be made (i.e., wherethe ratio of H1B workers to U.S.workers is close to that set forth in th estatute for depen den cy). TheDepartment solicits commen ts onwh ether the regulations need to definean exp licit stand ard (for examp le, allcircumstances w here H1B workers are10 percen t or more of the w orkforce) todetermin e the subset of employerswhich m ust make and retain suchdocumentation wh en an attestation is

made.The Department also is considering

wh ether a record must be kept of anemp loyers H1B-dep end ency statusdetermin ations (if any) which are madeafter the filing of an LCA which is usedin sup port of a petition for an H1Bnonimmigrant worker. The Departmentbelieves thatin ord er that U.S. workersare aware of their rights concern ingnond isplacement and recruitment, andthat the Admin istrator is able to cond uctfair and effective investigations on thosemattersa record n eeds to bemaintain ed of an employers

determin ation if at any time anemployer which was non-dependentdetermin es that it is depen den t, or if anemployer which was dependen tdetermines that it is non-dependent.The Department is therefore proposingthat a copy of the determin ation and,wh ere an employer determines that it isnot depend ent, the underlyingcomputation, be placed in the pu blicdisclosure file.

The Department also requestscomments on whether it would befeasible and ap prop riate to specify that

no record of an em ployerscompu tations would be necessary, if thedetermination could be made frompu blicly available docu men ts. Thisapp roach presen ts some difficulties, inthat, for example, a p ublicly availablelist of an em ployers emp loyees may notshow the w orkers full-time or part-timestatus, or may n ot accurately reflect the

num ber of workers who meet theemployment relationship test, andthese documents may n ot be readilyavailable to U.S. workers. Th eDepartment therefore solicits comm entsas to the feasibility of this approach andwh ether there are any generallyavailable public documents whichwould normally contain th e requiredinformation.

It is also necessary that an employerhave the un derlying records necessaryto make the depend ency determination.The records required to determine thenu mber of workers on the payroll are

required by 655.731(b) of the existingregulations. An emp loyer would also berequired to have a record of the hoursworked by p art-time workers, or adocument sh owing their normal workschedu le if no records of their hours ofwork are maintained. As discussedabove (see item B.1), it has been theDepartments experience th at most part-time workers are paid on an hourlybasis and, therefore, that employersmaintain hours-worked records for suchworkers. Finally, the emp loyer wouldneed to m aintain cop ies of its H1Bpetitions, in order to determine thenu mber of H1B non immigrants on its

payroll.The Department seeks commen ts on

all of these issues and possibleapproaches.

4. What Information Will Be Requiredon the LCA Regarding an EmployersStatus as H1B-Dependen t?

The Department exp ects that everyemp loyer will need to read theinstructions for determinin g H1Bdepend ency and m ake a determinationthat it is or is not dep end ent, in orderto determine w hether to attest todep end ency. In most cases, the

Department expects that thedetermin ation will be so clear that theemployer will not need to make anymathem atical calculation. TheDepartment also believes that it isimportant that those employersconstituting the vast majority of thosefiling LCAs not be su bject to anyunn ecessary burden because of therelatively small nu mber of employerswho are dependent.

The Department believes that therevised attestation form (LCA), at aminimum , should require that every


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employer which is H1B-dependentaffirmatively acknow ledge its status an dobligations by ch ecking a box attestingto its dependency and its compliancewith th e additional attestationrequirements concerning non -disp lacement and recruitm ent of U.S.workers. Further, as discussed above,the Department prop oses that H1B-

depend ent employers which filed anLCA before these regulations becomeeffective, may not u se such an LCA insup port of an H-1B petition filed afterthe effective date, or, if they do n otbecome dependent until sometime afterthe effective date of th e regulations, maynot use su ch an LCA in sup port of anH1B petition filed after they becomedependent .

The question arises as to whatinformation should be required ofemployers who are not H1B dependentwhen they file an LCA after the effectivedate of these regulations. The

Department is considering threealternative revisions to th e LCA form forsuch employers:

1. The employer would expresslyattest that it is not depend ent and thatif it later becomes d epend ent, it willcomp ly with the add itional attestationrequiremen ts; or

2. The employer would not h ave toattest that it is not depen den t, but theLCA wou ld clearly stateand bysigning the form the emp loyer wouldagreethat th e employer is requ ired tocomp ly with the add itional attestationrequiremen ts if it does becomedepend ent; or

3. The employer would not h ave toattest that it is not depen den t, but theLCA wou ld clearly state that it couldnot be used in supp ort of any H1Bpetition filed after the employer becamedependent .

Und er all of the alternatives anemp loyer will be expected to make aninitial determination as to wh ether it isor is not depend ent; to remain cognizantas to its status if it later files a new H 1B petition; and would commitmisrepresentation if it falsely fails toattest that it is dep end ent. The first twoalternatives do not requ ire the filing ofa new LCA shou ld a formerly non-depend ent employer becomedepend ent, but such employer will beobliged to comply with th e substantiveobligations of the add itional attestationelements applicable to depend entemp loyers. The third alternative wouldparallel the approach p roposed for H1B dep end ent employers with LCAsfiled before the effective date of theregulations in that an employer whichinitially was not dependent w ould berequ ired to file a n ew LCA if it laterbecame depen dent and would be subject

to sanctions, including debarment andcivil money p enalties, if it failed to d oso .

The Department is concerned aboutthe bu rden of requiring the filing of anew LCA as well as the burd en ofrequiring the overwh elming majority ofemployers who are not dependent tocheck a box so attesting. The

Department therefore proposes to utilizethe second alternative, where the non-depend ent employer would not berequired to check any additionalbox(es). The Departmen t is aware th atun der this alternative the lack of suchiden tification will make it particularlyimp ortant that the form clearly lay outthe obligations of employers. TheDepartment therefore seeks comm entson th e above alternatives, and the layoutand clarity of the p roposed attestationform, attached as Ap pen dix I as well asany other comments on these andrelated matters.

5. What Changes Are Proposed for theLabor Condition App lication Form andthe Departmen ts ProcessingProcedures?

Based on the preceding discussion,the Department is publishin g for publiccommen t a proposed revised LaborCondition App lication form (ETA 9035),and providing advance public notice ofa plann ed chan ge in the existing systemfor processing LCAs. At presen t, suchapp lications are subm itted by mail, faxor p rivate carrier to on e of ten ETAregional offices with jurisdiction, as setforth in 655.720. The Department has

been develop ing the capacity toautomatically receive and, in m anycases, automatically process LCAssubmitted. The Department intends toimplement an automatic systemwh ereby all faxed LCAs will beprocessed in Philadelphia and SanFrancisco beginning in January 1999.This new capacity requires changes inthe LCA form as w ell as in the filinginstructions.

The Department has redesigned theLCA form (attached as Ap pen dix I) toboth reflect the statutory chan ges in th eACWIA and facilitate the autom atedreceipt and p rocessing of app lications.With the exception of the changesoccasioned by the provision s of theACWIA, as discussed in th is proposedrulemakin g, the prop osed revisions tothe LCA form are m erely aesthetic. TheDepartments revised p rocessingprocedures will not require anysubstantive chan ges with resp ect to theinformation required of emp loyers inprep aring the LCA. When th eDepartment publishes the Interim FinalRule pursuant to this p roposal,contingent up on app roval by the Office

of Management and Budget, the revisedform will become the sole form forpu blic use; thereafter, prior versions ofthe ETA 9035 will not be accepted forprocessing.

The Department p roposes that, afterthe effective date of the Interim FinalRule, all LCAswh ether su bmitted byfax or notwill be filed with one of two

ETA regional offices. Employers withinthe jurisd iction of ETAs cu rrent Boston,New York, Philadelp hia, and Atlantaregions w ill submit LCAs only to thePhiladelp hia regional office; employerswithin the jurisdiction of ETAs curren tChicago, Kansas City, Dallas, Denver,Seattle and San Francisco regions willsubm it LCAs only to the San Franciscoregional office. There will be anautomated back-up capacity in theWashington, D.C. head quarters forautomated processing of LCAs, in th eevent of a system failure in one of theregional offices.

The p roposed revised LCA form canbe comp leted in several waysinhan dw riting, in typew riting, or throughuse of a new form filler electron icprogram th at will be generally availableto program u sers. The new LCA formwill be posted and thereafter can bedown -loaded and printed from theDepartments World Wid e Web site athttp:// ww w.doleta.gov. Th e formfiller electron ic pro gram will also b eavailable to be down -loaded from thisweb site, or can be obtained from ETAheadqu arters, on request, via e-mail oron disk ette. This form filler electron icprogram will enable the u ser to easily

complete th e LCA form with a font thatcan be reliably read by th e Departmentsautomated LCA p rocessing system.

The Department p roposes that, underthe Interim Final Rule, the LCA formwh ether comp leted usin g the formfiller program, in typewriting, or inhandwritingwill be submitted byemployer app licants to one of the twoETA region al offices either b y facsimiletransmission (fax), which is preferred,or by m ail or private carrier. The InterimFinal Rule and the LCA form itself willso indicate and will provide theappropriate fax numbers. The

Department an ticipates that LCAssubm itted by fax can be readily receivedand processed by the automated system,and th at a responseapproval orrejectioncan be return ed to theemployers send ing FAX nu mber (i.e.,the telephon e num ber designated in theReturn Fax Nu mber block on the LCAform), usu ally within 48 hou rs ofsubm ission/receipt by ETA. Foremployer-applicants without thecapacity to send the LCA by FAX andreceive ETAs respon se to the emp loyer-app licants send ing FAX machin e, the


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LCA may still be subm itted by mail orother delivery in hard-copy pap er form(either typewritten or han dw ritten) tothe two ETA regional offices with

jurisdiction Su ch non -FAX subm issionswill be p rocessed by th e ETA office bybeing faxed intern ally or scannedelectronically into the au tomatedsystem, and th e ETA decision w ill be

mailed to the submitter.The automated p rocessing system will

electronically scan the incom ingfacsimile, extract the informationcontained in th e LCA, record theinformation to a database, andin mostcasesmake the app ropriatedetermin ation to approve/certify orreject the app lication, with littleintervention by system admin istrators.As un der the current manu ally-operatedsystem, the LCA will be ap proved/certified an d faxed (or mailed) back tothe subm itter if the approp riate boxesare checked and the required

information is provided on the form. Ifthe LCA is incomp lete or containsobvious in accuracies, it will be rejectedun der the automated system as it isund er the manually-operated system.

Comments are requested on theproposed electronic transmissionsystem described an d on the proposedform to be utilized.

C. Wh at H1B Worker Would be anExempt H1B Nonimmigrant?

The ACWIA provisions concernin gnon-displacement an d recruitment ofU.S. workers do not app ly where theonly H1B workers sou ght in th e LCA

at issue are exem pt H1 Bnon immigrants. In add ition, for alimited time after th e ACWIAsenactment, determining wh ether theemployer is H1B-dependent does notinclude exempt H1B workers. TheACWIA con tains alternative d efinitionsof exemp t H1B non imm igrant as onewho * * * receives wages (includingcash bonuses and similar compensation)at an ann ual rate equal to at least$60,000; or * * * [who] has at tained amasters or higher degree (or itsequivalent) in a sp ecialty related to theintended employment.

The Department notes that thestatutory language seems clearan H1B-dependent employer, or an employerfound to have committed willfulviolations, is required to com ply w iththe new attestation elements unless theonly workers employed p ursuant to theLCA are exempt workers. The n on-disp lacement obligation, for example,app lies for the period beginn ing 90 daysbefore and end ing 90 days after thefiling of any H1B petition sup ported bythe LCA. The Department thereforereads the statute as requiring that an

employer which u ses an LCA in sup portof a petition for any non-exemp t workermust comp ly with the new attestationswith respect to all of its H1Bnonimm igrants employed p ursuant tothe LCA, even th e exempt H1Bnonimmigrants.

The Department recognizes thatemployers commonly apply for mu ltiple

positions, and often for mu ltiplelocations, on the sam e LCA. Further, theDepartment recognizes that wh en anemp loyer recruits U.S. workers, it oftencannot know whether in fact the H1Bworker for wh om it eventually petitionswill qualify as exempt or non -exempt,since it is not uncom mon for bothexempt and non-exempt workers to bequalified for the same job. In an y event,the Department poin ts out that an H1B-dep end ent (or willful violating)emp loyer is free to file separate LCAsfor its exemp t and non -exempt workers,thereby obviating the requiremen t of

comp lying with the new attestationelements for its exemp t workers.Determinations as to wh ether or not

H1B workers meet the requiremen tsnecessary to be classified as exempt H1B nonimm igrants will be made initiallyby the Immigration and NaturalizationService (INS) in th e course ofadjud icating the p etitions filed onbehalf of H1B non immigrants byemployers. Employers should maintain,in th e pu blic access file, a copy of theINS determinations with the petitionsapp roved for exempt H1B workers. Inthe even t of an in vestigation, it isanticipated that consid erable weight

will be given to INS determin ations thatH1B non immigrants, based on theedu cational attainmen ts of the workers,wer e exemp t since INS hasconsiderable experience in evaluatingthe ed ucational qu alifications of aliens.However, with resp ect to H1B workersclaimed to be exempt on th e basis ofann ual wages, emp loyers will beexpected in the event of an investigationto be able to docum ent that such H1Bnon immigrants received sufficient payto satisfy th e statu tory w age floor of$60,000.

The Department seeks comments on

this proposed regulation, and on anyother related matter includ ing but notlimited to the following questions.

1. How Would th e $60,000 Ann ual Ratebe Determined ?

The ACWIA sets the wage floor foran exempt H1B nonimmigrant at$60,000 annually, which is to includecash bon uses and similarcomp ensation. In order to en sure th atthis statutory stand ard is in fact met, theDepartment is of the view that thisstandard should be interpreted

consistent w ith the existing DOLregulations for determinin g if anemp loyer has satisfied its other w ageobligations un der th e H1B program (20CFR 655.731(c)(3)). Futur e (i.e., unpaidbut to-be-paid) cash bonu ses and similarcompen sation wou ld be coun tedtoward th e required wage if theirpaymen t is assured , but not if they are

cond itional or contingent on some eventsuch as the emp loyers annu al profits(unless the emp loyer guarantees that theworker w ill receive payment of at least$60,000 per year, in the event the bon uscontingency is not met). In addition ,such bonu ses and compensation are tobe paid cash in han d, free and clear,when due * * *, meaning that theymu st have readily determinable marketvalue, be readily con vertible to cashtender, and be received by the workerwhen d ue (which must be within theyear for which th e employer wants tocount the compensation).

Similarly, in assessing payment to anH1B nonimm igrant claimed to beexempt, the Department interprets thestatutory language * * * receiveswages (includ ing cash bonuses andsimilar compensation) at an annu al rateequal to at least $60,000; * * * tomean th at the worker actually receivesthe $60,000 comp ensation in the year.Therefore, an H1B non immigrantworking part-time, wh ose actual ann ualcompen sation is less than $60,000,would not qualify as exempt on thisbasis, even if the workers earnings, ifprojected to a full-time work sched ule,wou ld theoretically exceed $60,000 in a

year.The Department seeks commen ts on

this proposal and any alternativeapproaches that would ensure the$60,000 wage standard for exemptworkers would be met.

2. How W ould the Equivalen t of aMasters or Higher Degree beDetermined?

The second definition of exempt H1B nonim migrant requires th at thenon immigrant has attained a mastersor higher d egree (or its equivalent) in aspecialty related to the intend edemp loyment. Based on the language ofthis provision, the Department and theINS are of the view th at workexperience cannot be converted to theequiv alent of an acad emic d egree atthe m asters level or higher. TheACWIAs lan guage differs from INAsection 214(i) (8 U.S.C. 1184(i)), wh ichexplicitly authorizes a timeequivalency approach. Section 214(i)provid es that one of the ways to meetthe requ irements of a bach elors orhigher d egree (or its equivalent) is byexperience in the sp ecialty equivalent to


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the comp letion of such a d egree andrecognition of expertise in thespecialty through p rogressivelyresponsible p ositions relating to thespecialty. The contrast between theseINA provisions dem onstrates that whenCongress inten ded to auth orize a timeequivalency, such au thorization w asexpressly stated. Further, the statement

of one of the sp onsors of the legislationshows the intent of Congress: the termor its equ ivalen t refers only to anequivalent foreign d egree. Any amou ntof on-the-job experience d oes notqualify as the equivalent of an advanceddegree. (144 Cong. Rec. H857 105,H8584, Sept. 24, 1998, remarks of Rep.Smith). The Departments proposedregulation, therefore, does not allow awork experience equivalency andrecognizes on ly those foreign academicdegrees as would be equ ivalent to amasters or h igher degree in th e U.S.

The Department is consultin g with

the INS on this matter, and w ill work inclose cooperation with th at agency indevelopin g regulations. As ind icatedabove, the Department w ill giveconsiderable w eight to INSdeterminations concerning the academiccredentials of H1B nonimm igrants wh oare claim ed to be exemp t. Emplo yersshou ld n ote that INS review ofacademic creden tials for itsdetermin ation on exempt H1Bnon immigrants is d istinct from itsreview of academic cred entials for itsdetermin ation on specialtyoccupation s under Section 214(i) of theINA and 8 CFR 214.2(h)(4).

The Department seeks commen ts onthis regulatory prop osal, and on anyother or alternative interpretations ofthe equivalency provision.

3. How is a Specialty Related to theIntended Employmen t Defined?

The H1B nonimmigrant who holdsan advanced academic degree would beexemp t only if th at d egree is in aspecialty related to the intend edemp loyment. The Departmen tprop oses to make it clear that, in orderfor the d egree specialty to be sufficientlyrelated to the employment, the

specialty must be generally accepted inthe indu stry or occupation as anapp ropriate or necessary creden tial orskill for the person wh o un dertakes theemployment in qu estion. Anyspecia lty wh ich is n ot generallyaccepted as approp riate or necessary tothe employment would not besufficiently related to afford the H1Bworker status as an exempt H1Bnonimmigrant.

The Department is consultin g withthe INS on this matter, and w ill work inclose cooperation with th at agency in

developin g regulations. As indicatedabove, the Department w ill giveconsiderable w eight to INSdeterminations concerning the academiccredentials of H1B non immigrants wh oare claim ed to be exemp t. Again,emp loyers should note that INS reviewof academic creden tials for itsdetermin ation on exempt H1B

non immigrants is distinct from itsreview of academic cred entials for itsdetermin ation on specialtyoccup ations und er Section 214(i) of theINA and 8 CFR 214.2(h)(4).

The Department seeks comments onthis regulatory prop osal, and on anyother or alternative interpretations ofthe related pr ovision .

4. Should the LCA be Modified toIdentify Whether it Will be Used inSupport of Exempt and/or Non-ExemptH1B Nonimmigrants?

The ACWIA pr ovid es that [a]napp lication is not described in thisclause [i.e., is not subject to the n ewattestation requ irements] if the only H1B nonimmigrants sought in theapp lication are exempt n onimm igrants.The Department is considering whetheran emp loyers intention to u se theattestation for exempt and/or non-exempt H1B nonimmigrants shou ld beind icated on the LCA, or whether thisissue should be add ressed in some otherway. The Department recognizes thatemp loyers may wish to use separateLCAs for exemp t and non -exemp t H1Bworkers, so they wou ld not be requiredto comply with the attestations with

respect to any exemp t H1B workers. Asexplained in the in troductorydiscussion , the statutory language seemsto require that an emp loyer whichinitially believed its LCA would be usedonly for exempt H1B nonimm igrantswou ld have been obliged to complywith the attestations w ith respect to allof its H1B workers u nd er the LCAexempt an d n on-exemptif it later usedthat LCA in su pp ort of a petition for anynon-exempt w orker.

The Department th erefore consideredwhether there would be any advantageto requiring such separate attestations.

The Department is aware, however, thatfor many occupation s, such as ininformation techn ology, two d ifferentworkers might both be qu alified for thesame job, but because of edu cation, forexample, one might be exemp t andanoth er non-exempt. Therefore anemployer might n ot know in advancewhether the worker will be exempt.

At the same time, the Departmentbelieves it is important th an an H1B-depend ent employer which intends touse th e LCA only for exemp t H1Bworkers attest that the LCA will only be

used to p etition for such w orkers. TheINS has made th is request so as to allowboth INS and the Department to knowfor which H1B workers the exemptstatus must be ascertained. TheDepartment therefore proposes torequire such an attestation on the LCA.Of course, this requiremen t would n otprevent an H1B-dependent emp loyer

from either using separate LCAs for itsexempt and non-exempt workers, orusing on e LCA for all H1B workers(both exempt an d non-exempt) andcomplyin g with th e new attestationelements for all such workers.

Comments are sought on thisproposed approach and on any otheralternatives.

D. What Requirements A pp ly Regardingno Displacem ent of U.S . WorkersUnder the ACWIA?

The ACWIA imp oses new obligationson an H1B-dep end ent emp loyer (seediscussion in items A and B, above) andan emp loyer found to have committedwillful violations with in the 5 yearsprecedin g the filing of an LCA(beginn ing on or after the d ate of theACWIAs enactmen t). Such an emp loyeris pro hibite d from disp lacing a U.S.worker wh o is emp loyed by theemployer or is emp loyed by som eother employer at whose worksite thespon soring employer places an H1Bnon immigrant wh ere there are ind iciaof employmen t between the H1Bworker and th at other employer. Theprohibition on displacement within theemployers own w orkforce app lies for

90 days before and 90 d ays after the dateof filing of any H1B petition based onthe LCA. The proh ibition onsecondary displacement, at anotheremployers worksite, applies for 90 daysbefore and 90 days after the placementof H1B worker(s) at the worksite. Theseprohibitions do n ot apply to theplacem ent of exemp t H1B worker s,if the emp loyers LCA in volves onlyexemp t non imm igrants. (Seediscussion in item C, above).

The Department recognizes that thenon-displacement p rovisions in theACWIA raise several issues, and

prop oses regulatory provisions on eachof the following matters. TheDepartment seeks comments on all ofthese proposed provisions, and on anyother related m atters.

1. What Constitutes Employed by theEmployer, for Purposes of Prohibitinga Covered Emp loyer From DisplacingU.S. Workers in its Own Workforce?

The ACWIA provid es that a U.S.worker employed by the employer isprotected from displacement by thatemployers H1B workers. However, the


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ACWIA contains n o definition of thephrase employed by the employer. Inthis circumstance, wh ere Congress hasnot sp ecified a legal standard foridentifying the existence of anemployment relationship, theDepartment is of the view that Sup remeCourt precedent requires the applicationof comm on law stand ards in

analyzing a particular situation todetermine whether an employmentrelationship exists.Nationwide Mutual

Insurance Co. v. Darden, 503 U.S. 318(1992). See Comm un ity for Creative

Non-Violence v. Reid, 490 U.S. 730(1989). Mindful of the Sup reme Courtsteaching that since the common -law testcontains no sh orthand formula ormagic phrase that can be applied to findthe answer , * * * a ll of the inc idents of the relationship m ust be assessed andweighed with n o one factor beingdecisive (NLRB v. United Ins. Co. of

America, 390 U.S. 254, 258 (1968)), the

Department prop oses regulatorylanguage setting out factors that w ouldind icate the existence of an emp loymentrelationship un der the common law test.These factors would include:

The firm or the client has th e rightto control when, wh ere, and h ow theworker p erforms the job;

The work d oes not require a highlevel of skill or expertise;

The firm or the client rather thanthe worker furnish es the tools,materials, and equipment;

The work is performed on theprem ises of the firm or the client;

There is a continuin g relationship

between the worker and the firm or theclient;

The firm or the client has th e rightto assign ad ditional p rojects to theworker;

The firm or the client sets the hou rsof work and the d uration of the job;

The worker is paid by the hou r,week, month or an an nu al salary, ratherthan for the agreed cost of performing aparticular job;

The worker does not hire or payassistants;

The work p erformed by the workeris part of the regular business (inclu din g

governmental, educational, and non-profit operations) of the firm or th eclient;

The firm or the client is itself inbusiness;

The worker is not engaged in h is orher own distinct occupation or business;

The firm or the client provid es theworker with ben efits such as insurance,leave, or workers compen sation;

The worker is considered anemp loyee of the firm or th e client for taxpurp oses (i.e., the entity withholdsfederal, state, and Social Security taxes);

The firm or the client can d ischargethe worker; and

The worker and the firm or clientbelieve that they are creating anemployer-employee relationship.

(Factors adapted from EEOC PolicyGuidance on Contin gent Workers,Notice No. 915.002, Dec. 3, 1997). The

Department is aware that theseanalytical factorsall of which aredrawn from the Supreme Courtsdecision in Dardenmay be expressedsomewh at differently. See, e.g.,Restatement (Second ) of Agency 220(2) (1958) (listing non exhaustivecriteria for identifying m aster-servantrelationship); Rev. Run . 8741, 19871Cum. Bull. 296, 298299 (providing 20factors as guid es in determin ingwh ether an ind ividual qualifies as acommon-law employee in various taxlaw con texts). The Departmen t is alsoaware that some factors, such as the

level of the workers skill or expertise,have little relevance in the con text ofthis program wh ere, by the terms of theAct, all of the H1B workers andsimilarly employed U.S. workers areskilled.

The Department recognizes that thereare a nu mber of legal standard sotherthan th e common law testfordetermin ing the existence of anemployment relationship. For example,it would app ear that the standard m ostanalogous to the H1B workerprotection provisions would be that

found in the Fair Labor Standards Act,which p rovides minimum wage andovertime wage protections toemployees. In addition, there is somesuggestion of a preference on th e part ofsome Members of Congress for the useof the Internal Revenue Servicestandard s for the identification of anemployment relationship und er theACWIA p rovisions (see Cong. Rec.S12751, Oct. 21, 1998; remarks of Sen.Abraham). While the Departmentconsiders both th e FLSA and taxstandards (which contain some sp ecialexemption s from the comm on law test)

to be inapp ropriate und er this statute, inlight of the Suprem e Court precedentsdiscussed above, the Departmen t wouldcarefully consider any comments whichsuggest and sup port these or otheralternate tests for determining wh etheran employment relationship exists.

The Department seeks comments onthe proposed regulation applying thecommon law standards, and on anyother, related matters regardin g theapp ropriate factors.

2. What Cons titute Ind icia of anEmployment Relationship, forPurp oses of the Prohibition onSecondary Displacemen t of U.S.Workers at Worksites Where theSpon soring Employer Places H1BWorkers?

In a provision described herein as thesecondary disp lacement p rohibition,the ACWIA proh ibits the d isplacementof U.S. workers employed by another(secon dary ) emp loyer, if an H1B-dep end ent emp loyer (or willful violator)intend s or seeks to place its own H1Bworkers with that other emp loyer in asituation wh ere, amon g other things,there are ind icia of an em ploymen trelationship between the n onimmigrantand such other emp loyer. TheDepartment, after careful con sideration,has conclu ded that this termind iciaof an emp loyment relationsh ipidentifies a relationship w hich is lessthan an employment relationship but

more than the H1B workers mereperformance of duties at the secondaryemp loyers worksite (such as beingdispatch ed for a brief part of a work dayto diagnose or repair equipmen t at thatother em ployers location). Further, theDepartment has conclud ed that, forpu rposes of clarity and consistency, thestandard s ind icative of ind icia of anemp loyment relationship with thesecondary emp loyer should beconsistent with an d a sub-set of thecriteria which are used in d eterminingan employment relationship betweenthe cov ered (or pr imary) emplo yer

and its own U.S. workers for purp osesof the displacemen t prohibitionconcerning such workers (i.e., U.S.workers employed by the employer).The Department considered p roposingthat indicia of employment w ould befound to exist wherever a certainnu mber of these criteria are met, butdoes not believe such a quan titativestandard to be appropriate since thedetermination requires consideration ofall of the relevan t facts of therelationship, w ith n o single factor or setof factors decisive.

The Department reviewed the factorsconsidered in determining employmentrelationship, as discussed above, andprop oses a sub-set of those factorswh ich it believes are most useful indetermining whether ind icia ofemp loyment are present in evaluating aplacemen t at another comp anyswor ksite (here referred to as theclient). The sub-set does not in cludethose factors which are relevant todetermin ing wheth er a worker is anemployee of any comp any (e.g. workersskill level). Such factors do not seemrelevant wh ere the H1B worker is an


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acknowled ged employee of some entity(i.e., the com pan y filing the LCA), andwou ld virtually never arise in asecondary p lacement of the H1Bworker (e.g., clients p ayment of wagesand benefits to worker). The su b-set offactors the Department believes arerelevant ind icia of an em ploymen trelationship includ e:

The client has th e right to controlwhen , where, and h ow the workerperforms the job;

The client furnishes the tools,materials, and equipment;

The work is performed on theprem ises of the client;

There is a continuin g relationshipbetween th e worker and the client;

The client h as the right to assignadd itional projects to the worker;

The client sets the hours of workand th e duration of the job;

The work p erformed by the worke

Department of Labor: 64 FED REG 627

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Transcript of Department of Labor: 64 FED REG 627