DOL Seeks More Detail About Third-Party Placement of Foreign Workers

 

Roy Maurer By Roy Maurer June 29, 2018
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​U.S. employers that hire and place foreign workers with H-1B visas at third-party worksites will have to provide more details about their end-user clients and potential worksites during the petition process if changes to a critical form are approved.

The U.S. Department of Labor (DOL) released final proposed changes to ETA Form-9035, commonly known as a labor condition application (LCA), used by employers to request permission to bring H-1B workers to the United States. Changes were initially proposed in August 2017. The DOL made modifications to its original proposal based on public comment and intends to issue the finalized form this year.

Before an H-1B petition is submitted to U.S. Citizenship and Immigration Services (USCIS), the DOL must certify LCAs containing wage and location information about the proposed H-1B employment and standard employer attestations.

The DOL said that the additional information will allow it to better track employer use of the program, to better identify systematic violations and potential fraud, and to provide greater transparency to the public.

[SHRM and CFGI eLearning: Hiring Foreign Nationals: Nonimmigrant Visas]

The LCA "indicates that employers must list all worksites of intended employment on the form, even if there are more than one in the same metropolitan statistical area," said Justin Storch, manager of agency liaison for the Council for Global Immigration (CFGI), an affiliate of the Society for Human Resource Management (SHRM). "In that sense, the new requirements fall on all employers—and it's not just related to third-party sites, but also multiple physical locations for the primary employer."

Current practice requires employers to list the addresses for all intended worksites, said Marcela Mendoza, an attorney in the Denver office of Jackson Lewis. "The proposed changes would require U.S. employers to provide the legal business name of the end-user client at whose worksite the H-1B worker intends to work. This new requirement directly targets U.S. employers who place foreign national workers at third-party worksites," she said.

The proposal increases employers' reporting requirements by asking for identification of not only known worksites but those at which there is a "reasonable expectation" of placement, she added.

In response to public comments, the DOL decided to accommodate entry space for up to 10 additional intended worksites on one form, saving employers from having to file additional forms to list all intended places of employment.

"The DOL estimates that the number of hours needed to process the additional information required will increase almost threefold—this appears to be accurate given the vast increase in information potentially being provided," said Leigh Ganchan, an attorney in the Houston office of Ogletree Deakins.

Some companies have raised privacy concerns about disclosing client names, specifically staffing firms that have confidentiality agreements with some of their end-user clients, Ganchan explained. It was also noted in public comments that the information being requested could tip competitors off to the work U.S. companies are doing and jeopardize the competitiveness of those companies, she said.

"From time to time Intel may temporarily place key talent at non-Intel locations pursuant to strategically sensitive collaboration engagements or joint ventures," said Sheila Heider, U.S. immigration operations manager for the company. "Since [the form] is publicly available, forcing Intel and other employers to reveal the number of foreign national employees assigned and the name and location of the third-party company where they are assigned could tip off Intel's competitors to its strategic plans, disclose information subject to a nondisclosure agreement and jeopardize the global competitiveness of U.S. companies."

Ganchan said that "employers may want to consider their own confidentiality issues to determine if they will need to amend contract terms or to obtain consent from end-user clients before disclosing identifying information on the LCA if these changes are adopted."

SHRM and CFGI both weighed in with recommendations during the initial call for public comments. Some of the organizations' requested changes were accepted, including changing the term "secondary employer" on the prior proposed version of the form to "secondary entity."  

"The term secondary entity is more accurate, as these secondary entities do not have the ability to perform activities such as setting wages or hiring and firing the employees of the employer requesting the LCA," the organizations said.

SHRM and CFGI also expressed appreciation for the clarification that employers will not be required to file a new LCA in cases where a company name changes but the Federal Employer Identification Number remains the same, or when a worksite address undergoes a minor change, such as moving to a new floor in the same building.

"This will alleviate concerns of some of our members and minimize the frequency with which they might feel compelled to file new LCAs."

The new form also places new disclosure requirements on H-1B dependent employers and willful violators, Storch said. "If they are claiming exemption from attestations based on attainment of a master's degree or higher, they are required to list the number of H-1B employees for whom that exemption applies, as well as the university, field of study and date the degree was awarded."

The proposed form changes are the latest in a series specifically targeting employers who distribute talent to third-party worksites. In February, USCIS issued a policy memo requiring employers to provide detailed itineraries for the entire duration of H-1B petitions involving off-site employment. In April, the agency updated its policies to essentially prohibit foreign students from working at third-party worksites during their Optional Practical Training.

"Employers should expect renewed scrutiny on where H-1B employees are working, whether they are working at third-party sites and, if so, whether the arrangement is permissible," Storch said.

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