A new Department of Labor (DOL) memo promises to complicate operations and bring potentially serious problems to companies that employ H-1B visa holders and place them at client sites. The memo on “Compliance with the H-1B Notice Requirement by Electronic Posting” warns there are new obligations for companies that employ H-1B professionals, particularly businesses in the information technology (IT) services industry.
To better understand the Department of Labor memo and what it means, I interviewed Andrew Greenfield, managing partner of the Washington, D.C. office of the Fragomen law firm.
Stuart Anderson: What are the “notice” requirements for employers of H-1B visa holders in DOL regulations?
Andrew Greenfield: H-1B rules require sponsoring employers to provide employees with notice that it will employ H-1B workers. The notice needs to include information about wages and occupations, the location of the Labor Condition Application (LCA) employers must file with DOL for inspection and how to lodge H-1B-related complaints with DOL.
Under DOL regulations employers may comply with the Notice requirement by providing “notice” to the collective bargaining representative or, if the job is not unionized, then employers may either post paper notices at the worksite or may provide notice electronically. The provision regarding electronic notice was published by DOL in 1998 and makes no reference to internet sites, neither mandating nor prohibiting their use.
Anderson: What are the consequences for failing to comply with the requirements?
Greenfield: Potentially grave. If DOL determines, after investigation and the completion of any appellate process, that the employer has engaged in a “substantial failure” to comply with the Notice requirement, the law compels the government to debar or disqualify the employer from sponsoring any foreign nationals for employment in the United States for at least one year. For employers who rely on foreign professionals to supplement their U.S. workforce, debarment can devastate the employer’s U.S. business.
Anderson: How does the new guidance issued by the Department of Labor affect or change the Notice requirement?
Greenfield: The new memo is not a regulation and does not have the authority of regulation. However, it provides insight into how DOL now interprets the electronic Notice regulation. Accordingly, employers that provide notice electronically, especially where H-1B workers are located at customer or third-party sites, should examine and, where necessary, adjust current practices to prevent a serious violation.
The regulation, among other things, provides that electronic notice must be “readily available” and that employees at the worksite have “direct access” to the notice. The new memo clarifies that these regulatory mandates mean that affected workers – professionals in the same occupation and location as the H-1B worker – must be capable of accessing the electronic notice and have knowledge of the electronic resource where the notice is posted.
The memo takes a novel turn, at least as it pertains to H-1B workers employed at customer or third-party sites. DOL clarifies that “H-1B petitioners may provide electronic notification on their public websites, so long as the affected workers at the third-party worksite are aware of the notice and able to determine which notice is applicable to their worksite.”
DOL’s position appears to be that because affected workers employed by the customer and working alongside H-1B workers at the customer site may not know that H-1B workers are present at the site or who employs them, H-1B employers must take the additional steps of 1) informing affected workers that they may review the H-1B employer’s website to read the regulatory notices, and 2) ensuring it is apparent to affected workers which website notices apply to their worksite.
Anderson: How could employers limit the risk of a potentially devastating violation?
Greenfield: DOL’s position places an additional burden on certain employers that is not explicitly required by the regulations. To reduce the risk that DOL would find a violation of the Notice requirement during an enforcement action, employers that place H-1B workers at customer sites should create a reasonable nexus between the worksite and the notice on the employer’s website.
For example, the DOL memo suggests that the employer may accomplish this by posting a hard-copy message in a conspicuous location at the worksite and point interested parties to the location of the notice on the employer’s website. The hard-copy at the worksite need not repeat the content of the notice but could simply provide enough information to identify the employer and location of the notice, such as a URL. Employers should label notices on their website by occupation and location to avoid potential major problems during a Department of Labor investigation.
Anderson: Which types of companies do you believe should be most concerned about the new H-1B guidance?
Greenfield: All companies that provide notice electronically should review their practices. The companies that most likely will need to make adjustments are those that employ H-1B workers at third-party sites, such as IT services companies.
Anderson: What do you think will be the biggest challenge for companies?
Greenfield: Companies that employ H-1B workers at third-party sites will need to engage their customers about the impact of the new memo. This will mean sharing the message the employer would like to post at the customer site, which points affected workers to the employer’s website, and seeking the customer’s permission to post the message on the premises.
Employers should think through who is best positioned to have the conversation with the customer, including who has the ability to explain the genesis of the new obligation and why it’s important. Similarly, customer companies will need to consider how to handle requests from vendors seeking to post notices or messages on their premises.
Anderson: Do you see any Administrative Procedure Act (APA) issues with the new guidance?
Greenfield: The Administrative Procedure Act does not permit federal agencies to revise their regulations via memo. This raises the issue whether obligating H-1B employers who choose to provide notice on their websites to also post some form of additional posting or message at customer sites – an action that neither the statute nor regulations require – impermissibly alters the Notice regulation. DOL considered and rejected the idea of such additional notices in drafting the Notice regulation. Courts, however, may view the new memo as merely “interpretive” of the regulation and uphold it if challenged under the APA. If H-1B employers and their customers have difficulty complying with the memo then a lawsuit against the memo will become more likely.
Anderson: What advice do you give clients to ensure they comply with the new electronic notice obligations?
Greenfield: Where clients could do more to reduce risk, we have developed strategies to adjust current practices and have encouraged clients to engage with their customers on solutions. In the current immigration enforcement environment, it’s far better to be safe than sorry.
Note: This article has been updated to reflect a revised response to the question “Do you see any Administrative Procedure Act (APA) issues with the new guidance?”
