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All in the paperwork (LCA)
September 25, 2006
Employers who use H1B visas to move their staff members to the US have certain responsibilities in terms of submitting a completed Labor Condition Application (LCA) on Form ETA 9035E in the manner prescribed by the regulations. By completing and signing the LCA, the employer agrees to several attestations regarding an employer's responsibilities, including the wages, working conditions, and benefits to be provided to the non-immigrant. Since H1Bs are extensively used to take Indian professional IT consultants, such as software engineer or systems analysts, to the US to work for employers there, it is important for executives, HR professionals and hiring coordinators to understand the rules.
An important aspect of the LCA process is that the application is pertinent to a city's prevailing wage conditions, and the employee for whom this LCA process is enabled should be employed within the specific city. "Compliance issues are particularly important for Indians because we try to take short cuts and submit false documentation thinking we can beat the system. Further, if US Immigration and Naturalization Services (USCIS) automates the application process further, better compliance will be achieved.
The LCA is approved by Department of Labor, where as H1-B application is approved by USCIS after the candidate has got the LCA," feels Raj Devireddy, representative director for India (investments), Commonwealth of Pennsylvania, who earlier worked for USCIS. "The LCA process takes into consideration the geography, demographics, employment statistics, and numerous other criteria for each case.
When companies apply for a particular case, and in reality, the employee related to that case is working elsewhere - it is necessary to file for a new LCA process at that particular city Department of Labor offices. Employers are cautioned to beware of their employee-status in this labour certification process," he adds.
To initiate a proactive monitoring of employee status, INSZoom, Inc, a California headquartered immigration software company, has created comprehensive compliance modules at every point in the immigration process. Umesh Vaidyamath, CEO, INSZoom, says: "When an alien employee is brought into the country, we understand the huge investment the company is making towards this process.
Our deeper understanding of client issues has helped us create proactive tools, alerts, and solutions that help our customers - and in turn, their employees - manage their cases better, be compliant, and create the right management." The software is easily integrated into most enterprise HRMS platforms, and can immediately raise an alert for a new LCA process requirement based on the employee's work location.
Indian IT companies which send large numbers of employees to the US on H1B visas have to stay abreast of compliance issues continuously. Says Sruthi Sagar Ananthachari, VP & head, global recruiting, Covansys India: "We have an immigration team in the US and a support team in India that takes care of all H1B related matters. We make sure that we are fully compliant and the team in the US takes help from outside attorneys from leading law firms in the areas of immigration, taxation and employment laws. We have regular compliance audits as well. We make sure our H1B employees are paid wages equivalent or more than the prevailing wages required to be paid in the US. In addition, companies are required to maintain a 'public access file' that contains information required to be available for audits by the Dept of Labor. This is again taken care of by the immigration team in the US. The public access files include copies of LCA filed with the labor department in addition to other documents."
"Typically, a department head would ask an employee to work at a different city based on the business requirements - in some cases requiring an overnight shift to the location, and quite often, both would fail to inform the immigration department of the change of work location. With our employees being posted at different locations overnight, tracking their status and ensuring compliance is critical to our being within immigration compliance rules," he adds. Immigration experts and lawyers, too, feel that the LCA document summarizes most of what is required of US employers seeking to hire H-1B workers and needs to be taken very seriously. "The LCA is a document on which the employer must make certain promises regarding work location, minimum acceptable salary. In the cases of companies whose workforce is comprised so heavily of H-1B workers they are considered 'H-1B dependent employers', they have to promise not to replace US workers with H-1B workers and to attempt to recruit US workers for a job before filing a petition for an H-1B worker. Employers must keep documentation that proves they are complying with these requirements in a public disclosure file for each H-1B they sponsor, and the documentation is fairly extensive. Though burdensome, it is important to comply with these record-keeping requirements.
Should the Department of Labor audit a company and find serious non-compliance issues, penalties can be very serious, including substantial fines and potential barring from being able to participate in the H-1B programme. For companies that subsist on bringing H-1B workers to the US to fulfill projects, this can mean potentially being fined or choked out of business. To ensure that this does not occur, companies should take proper steps to complete all public disclosure file requirements. As these requirements are exacting and extensive; it is therefore always advisable to retain legal counsel in the US that is well-versed in immigration law," says Rami D Fakhoury, from Fakhoury Law Group.
Another issue that could be confusing for Indian employers is the difference between labour certification and LCA. While labour certification is to ensure that proper labour market test has been carried out by employers prior to sponsoring an employee for permanent residency in the USA, LCA is for sponsoring an employee to work in the USA on an H or L visa.
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