In this video, with accompanying transcript, Attorney Michael Murray delves into an important aspect of H-1B Compliance – the public access file. This video is for those who have hired the H-1B worker and filed the Labor Condition Application, and who are looking at the back-end processing and compliance of those documents. For more information about H-1B Compliance, download our complimentary, 10-page Guide to H-1B Visa Sponsorship. Business immigration law can be confusing and high stakes -if you have questions about H-1B sponsorship or compliance, or any other business immigration concern, contact FordMurray today.

H-1B Compliance: Getting the Public Access File Right

Transcript of Video:

Hello and welcome to FordMurray’s monthly webinar on immigration law topics. I’m Mike Murray, immigration law attorney, and today we’re going to talk about H-1B compliance and, specifically, the public access file and how to get it right. This is one of those topics where I get calls from clients, and they sound kind of sheepish or even flat-out scared of the topic. It’s one of those things that kind of goes unaddressed. There’s a bunch of files or documents lurking in a folder, and you just don’t want to deal with it. And it’s that way because, in truth, the rules and the regulations, they’re dense, they’re pretty burdensome, and kind of getting your head around the whole process is not easy.

So what I want to do today is to demystify the process, pull back the curtain, and just kind of help you step-by-step understand how to build that public access file. I think once you get into it, once we get to the end of the webinar, you’ll see that it’s really not that difficult. And we’re also going to give you some tools to help you build the file correctly. Generally, what we’re talking about here is what you need to do after you hire the H-1B worker, when you’ve filed the Labor Condition Application, it’s the back-end processing and compliance of those documents.

First I’m going to give you a bit of background, kind of a conceptual foundation of what is the LCA, what is the public access file, why is this important to the government? I’m not going to break down the entire H-1B and LCA process for you. That’s really for our H-1B webinars. We’ll want to zero in on the public access file today, but I’ll have to go into some of that in order to give you the ideas and concepts that you need to understand what the public access file is all about, so I’ll do that first. Then we’re going to take a scenic tour of the LCA, and I call it a scenic tour because we’re not going to spend a lot of time on it. Again, I’m just going to highlight the things that I think you need to know in order to use the form for compliance reasons.

Then we’ll actually getting into how do you build a proper public access file, and we’re going to kind of build some momentum up into slide 11, which is where I give you a secret recipe for everything you need to have in a public access file. Luckily, I control the clicker, so you can’t go ahead and spoil the surprise. It’s not much of a surprise, it’s just a list, but you’ll have to bear with me until we get to that slide 11.

Then I’m going to talk about some deadlines and retention rules, how to retain that public access file once you’ve built it, and then penalties enforcement, why we’re here, why we care about this topic, because the government will punish us if we don’t do it correctly.

So what is an LCA and why is it important? This LCA is the Labor Condition Application. This is the application that we have to retain and properly post notice of and put into our public access file. Looking at the word “Labor Condition”, what does that mean? Well, to the Department of Labor, in this context, it means that we have to make sure that the right wage is being paid to the H-1B worker. This is the first phase of the H-!B visa sponsorship process, and when you hire a foreign worker, the government wants to make sure that one outcome is not that that H-1B worker is being paid less than a similarly situated US worker. They don’t want the foreign worker to put a downward pressure on US wages. That’s what the entire Labor Condition Application is all about.

So it’s a mechanism to protect US wages. It’s also … well, the public access file then is a process of showing the government that you’ve done that properly. You got the LCA, and you posted notice to the world, and now you’ve retained it and kept it in the proper order so that the government can check your work and make sure you did it right. So that’s why we’re undertaking this process of building the public access file.

One common area of confusion that I see is confusing a Labor Condition Application with a Labor Certification. Two very different things. They sound very similar. The Labor Certification is a part of the green card or perm process. That’s where you do a full-fledged labor market test, which means that you put in advertisements and recruitments to see if you can find a US worker who’s willing to do the job that you propose to give to the foreign worker in H-1B status. That’s a very different thing. Here we’re talking about the Labor Condition Application and making sure that the wage paid to the H-1B worker is proper.

Now, what is that proper wage? In the DOL regulatory language, it’s known as the “required wage”, and that’s broken down into two further concepts, one being the prevailing wage, and then the actual wage. The prevailing wage is a determination by an external source of what the wage needs to be. That can be a collective bargaining agreement if you have such things in your organization. It can be a state workforce determination. Mostly, however, it’s going to be based on salary surveys, and that fourth prong there, occupational employment statistics, that is the government, the federal database for wage information, and most prevailing wage determinations are going to be based on that database and their wage surveys.

Those of you who work with H-1B’s a lot will probably know that those wages sometimes come out really high, wildly high, and are just out of sync with reality. So there is a way to use a private wage survey if it qualifies under a 20-factor test of the DOL rules, but those private wage surveys can sometimes also be a determination point for the prevailing wage.

Then we have the actual wage, and the actual wage is your wage, the internal wage that you pay for a certain position, a certain department, and you have to make sure that you’re paying the H-1B worker at least what his or her peers are making at the organization. The required wage has to be the higher of the prevailing wage or the actual wage. That’s a key point. Many employers miss that second part, the actual wage. The prevailing wage is one requirement, and then the actual wage is something you also have to check to make sure you’re meeting the required wage requirement. The prevailing wage and actual wage, as you will see, will become key parts of the public access file. We need to document those things. You’ll see that I italicized the word “documented scale or system”, and we’ll show you how to properly do that for the public access file.

The last piece of this puzzle here, in terms of paying correctly the H-1B worker, is benefits. That’s another form of compensation, and the rules say that the employer has to offer benefits to H-1B employees on the same basis as they are offered to US workers, and that too is going to be a part of our public access file.

Let’s start our scenic tour of the form. As I mentioned, I’m really going to kind of breeze through this and just give you some highlights of what you need to know for the public access file. If you’re new to LCA’s and public access files, this will be great for you to kind of put some flesh on the bones and actually see what we’re talking about. If you’ve done hundreds of these, sometimes it’s good to kind of slow down and kind of take a closer look at what we do.

This first page here is page 1 of 1. It is the employer certification, and I’ll just draw your attention to that section A or that question A. That’s the employer attestation that you’re going to abide by the H-1B and the Labor Condition Application rules. And if you look at that second prong there under A, it says, “I will maintain a signed hard copy of the LCA in my public access file.” So that is where you’re kind of signing on the dotted line, and you’re raising your hand, and you’re saying, “I will do this. I will create this public access file properly.” So this is where you’re kind of signing on for your mission to create a proper public access file.

This is page 2 of 5 of the LCA. It just briefly, looking at that box A, we’re going to indicate what kind of visa classification we have. An LCA can be used for an H-1B worker, which is what we’re focusing on, also E-3’s for Australians and then H1B1’s for Brazilian and Singaporean … I’m sorry, Chilean and Singaporean citizens. In B, we’re going to give some information about what is the job title. We’re going to provide some codes to the government in 2 and 3 to make sure they put this position in the right buckets over there. Is it full-time or part-time? And then we’re going to have our dates of employment in box 5, and for H-1B’s we’re talking about employment or status usually in three-year increments, up to a maximum of six years.

Now over to page 3 of 5. This is where the rubber meets the road for our purposes. This is what I call kind of the business end of a Labor Condition Application. At section F, we’re going to input our rate of pay. You can use a range. You want to make that the low end of the range is at a point where the foreign national is actually being paid. They need to fall within that range there. And then down in G, we’re going to give the worksite information, which is very important for the LCA. And then starting from 7 down through 11b, really the most important part of the LCA is where we’re telling the government what our determination of the prevailing wage is and what the source of that determination is, whether down there in box 11, that OES, which is that federal database, or a collective bargaining agreement in that second box, and the year and the source of that prevailing wage.

The final steps in processing for the Labor Condition Application are as follows, and this becomes important for our job here. It’s filed electronically to the Department of Labor. It will be certified and processed within seven days. If you file these yourself, you’ll get the email back from Department of Labor. If you use an attorney, they would be sure to send that on to you as well. And then you have to do your public notice obligation, the posting. This is required because, as we mentioned at the beginning, the government wants to make sure there is not downward pressure on US worker salaries. The public notice is a way to get the public, and really your employees at the worksite, to make sure that everything’s on the up-and-up. They get to look at the LCA. They get to look at the job title and the wage, which is an extra check on your process. On that LCA, you’ll see that there’s information as to who they can contact if they have any concerns about misrepresentation or some other kind of violation.

That’s why the public notice is important. You’ve got to put the notice up for at least 10 business days at two conspicuous locations at the worksite. That’s the requirement. And at each worksite. If there’s more than one, you would list all of them on the LCA, and you’d have to post two notices at each of those sites. The deadline for getting the postings up, very, very tight. The government’s very aggressive here. You have to put them up the same day the LCA is filed, or up to 30 days beforehand, and you can simply put up a copy of the LCA itself. That’s sufficient as a posting. You can come up with a more detailed posting document if you’d like, but most employers would just put up the LCA itself.

This is kind of interesting, and it’s one point of confusion that I often see in the public access file world, and that’s that the notice that you’re going to put up is necessarily not a certified LCA. It’s just the filed LCA. And so you’ll see that in our public access file, we’re going to have two types of LCA’s that we’re going to put in the file: these notices that were put up, the uncertified LCA’s, and then the certified, signed LCA, which we’ll talk about in a little bit. But just to throw that out there. I know it’s very confusing for some of my clients, who come back and say, “What are all these LCA’s? What do I have to do with them? They all look the same, but they’re different. What’s going on here?” So that’s what it is. Because you have to make the posting so quickly, you cannot post a certified LCA. You’re going to have to post an uncertified one, and those copies are going to go into your public access file. We’ll talk about that in more detail here as we go.

It’s a good practice to create an acknowledgment from the employer that those postings were put up, and here is a sample of the kind of acknowledgment you would want to attach to each of the postings that you put up after you take them down. Very straightforward. The job site’s there, the dates of posting’s there, and then the employer representative will sign those acknowledgments, attach those to the actual uncertified LCA’s that were posted, and then place those in the public access file.

Okay, so now we know what an LCA is, we know why the government cares about it, we know what it looks like. I’m just about to hit the slide, slide number 11, that’s going to give us the secret recipe for what needs to go in a public access file. But before I do that, just one more topic here to talk about, and that’s deadlines. When do you have to complete the public access file? The rules tell us that the public access file has to be made available within one day after the LCA is filed. That’s very aggressive. This is the government basically being really overzealous in the timeframe that they’re giving us.

It’s overzealous because it’s impossible to actually have a completed public access file one day after the LCA is filed. The reason for that is that one, you won’t have a certified LCA, and that’s a key piece of the public access file. It will take at least a week longer to get that. You’re just not going to have it. And two, your postings are still going to be up. They’re still going to be up for another two weeks or so. You simply won’t have that for the public access file either.

So what is the purpose of having a public access file made available within one day when you don’t have most of the key ingredients that you need? There really is no purpose. It’s just that these are the rules, and we have to follow them. So how best to deal with that conundrum? What we would recommend is to create some kind of physical file, within one day after the LCA is filed. The public access file does not have to be fancy. It can just be a manila folder with a sticker that says, “Public Access File” on it. Make that available, and then start building the file, as we’re going to go through here just in a second, putting the pieces in as they become available down the line.

And here we are. This is the secret sauce, the ingredient list for your public access file. We’ve culled through scores of pages of government regulations that are very, very boring to read and hard to understand, and we’ve distilled it down to this five-point checklist. If you have these items in your public access file, you’re going to be good to go. I’m going to just read them briefly, and then we’ll go into them in detail, point by point.

First, you’ll need that certified LCA, signed by the employer. So after it’s sent back after the seven-day period, you’ll actually have the certification, you’ll sign it, put it in the file. I’m going to show you in a second what that looks like. The posting acknowledgments that I told you about, you’ll also want to bring those down, sign them, put them in the file. Documentation, the prevailing wage. I’ll show you in a minute what that looks like. And then a full and clear explanation of the system for setting the actual wage. We’ll call that the wage memorandum. This is again one of those kind of scary pieces that many employers just don’t want to deal with, but we’ll show you how to pretty easily and quickly comply with that component. Then finally, we’ll need the benefit summary.

Piece number one of our public access file is going to be that certified LCA, signed by the employer. One common mistake that is made is that an uncertified LCA is signed and then placed in the file, and that would be incorrect. You want to make sure that the one that you’ve signed is the certified version, and the way you make sure that’s the case is that you go to page 5 of 5, and you’ll see there at M the government officer certifying the application. You’ll see over there to the right, it says, “certified”. You want to see that. It’s not going to be an original signature. It’s going to be electronic, as you see there, but that’s the one you want. And then you’ll go back to page 4 of 5 and sign an original signature as the employer representative, and then you’ll be done with that first ingredient of the public access file.

You’ll also want to put the postings, the uncertified LCA’s … there are going to be at least two of them, right? … into the public access file. And you’ll want to print and sign these acknowledgments that we showed you, attach them to each of those postings, and place them in the public access file. Now, as I mentioned before, you may have more than one worksite, and so you’re going to pull two postings from each site and put those in the file, so you could have three types of LCA’s or five or seven, one original and then all of the uncertified duplicates that were posted in that public access file, depending upon the location or the worksites for that position.

The documentation of the prevailing wage, this goes back to that source of determination of what the prevailing wage is. As I mentioned, usually that’s going to be some kind of salary survey, and what I’m showing you here is a printout from that federal government database that I mentioned is the most common source for these types of salary surveys. This is what it looks like, and if you work with us, we would send you a copy of that. If we used a private survey that was accepted by the government, you would want to print off the appropriate wage page there. If it’s a collective bargaining agreement, then you would put a copy of the wages provision of that agreement into the public access file. That would give us the proper documentation of the prevailing wage and pretty straightforward prong here for the file.

A little more difficult is the actual wage determination and documentation of that. The rules say that we have to show a full and clear explanation of the system for setting the actual wage, and we call that a wage memorandum. If you have an internal document that’s been developed for your different positions, which show different wage scales for that position, then you could use that document if it’s already ready and prepared. If you don’t, and most organizations that I’ve worked with do not, then you would want to put something like this together. If you work with us, we would help you create this document. It’s an actual prevailing wage memo, and this tells us about the position, the job duties, and then the different factors that go into the actual wage or peer wage for that person at your company. You would obviously want to customize this for your employee or your company, but you would want something that looks like this.

This is a headache for a lot of employers, and this probably stops a lot of people from completing the public access file obligation altogether, but if you create a memo like this, or let us help you create one, you’ll see that there aren’t a whole lot of data points here, but it’s a qualifying document, and you can really systematize the actual wage part of the public access file pretty straightforwardly and stop it from being such a headache.

Then the last piece of our public access file is the benefit summary. As I mentioned, the employer has to make sure that they’re offering benefits on the same basis to the H-1B worker as they are to the US worker. This certification here would be enough to do that. You would append to this your benefits handbook or some kind of explanation of benefits that you provide to your workforce, making sure that that same document and those explanation of benefits applies to all of your employees within the same group, whether in H-!B status or whether a US worker.

That is our big five ingredients. I think you’ll agree that it’s not as complicated and difficult as it seems. There are a lot of different pieces there, but once you think about the concepts of the LCA and what the government is trying to accomplish, you can see that you can follow that recipe lockstep and be in compliance readily easily. There is one step that we would recommend, which is updating the wage that’s in the public access file as you go. If there’s a raise or a decrease in the salary paid to the H-1B worker, making a note of that in the public access file is a recommended best practice. It’s also good because, as you probably know, the H-1B worker can never make less than the wage that is in the Labor Condition Application. If the wage falls below that, then the company’s in violation, and the non-immigrant, the worker, is also in immigration violation. And so updating the public access file is a way to just check in, to look at the LCA again and make sure that you’re not going below the wage that’s required.

One final piece of the LCA puzzle. This isn’t necessarily about the public access file, because this part actually does not go into the public access file, but it’s one of those follow-up obligations that you always want to be thinking about and making sure that you’re taking care of, and it’s another notice provision. You have to give notice to the H-1B employee him- or herself of the LCA, and the way you do that is to provide them a copy of the certified LCA that’s also signed by the employer, and you have to do that on or before the first day of employment. So you don’t have a whole lot of time to take care of that after the employee starts.

At least this deadline is not way at the very beginning of the LCA process, but again, you have stay on top of that pretty quickly. It’s also good practice to get a signed acknowledgment from the employee that in fact they did receive it, in the case if the government ever challenges you or the worker ever challenges you as to receipt of that document. And again, this does not go into the public access file. It can be placed in the immigration file or the employee file for the worker.

Now that we’ve built our public access file, we have all the pieces there, what do we do with it? Public access files should be kept separate from an immigration file or a general employee file, because the government wants quick access. They want a discrete, organized folder that they can look at and quickly verify your compliance under the Department of Labor rules. So the worst thing you can do is to have your postings, certified LCA’s, wage memos just scattered through an immigration file or employee file, because you simply won’t be able to put all that documentation together in time for the government when they want to see it. So have a discrete public access file for each employee, and then the second step there would be to take all those public access files and put them in a consolidated place, so that when the Department of Labor, if they should ever happen to knock on your door, can quickly get the files that they need to see in an organized, consolidated fashion. Those files have to be retained either at the worksite or at the employer’s place of principal business, corporate headquarters. And how long do you have to keep them? Certainly you have to keep them as long as the employees are in H-1B status and their LCA’s are valid. Then you have to keep them for one more year beyond that. So remember that plus one. You can’t simply purge them once the H-1B employee leaves your employment for whatever reason. You have to keep them for that plus one, that plus one year.

And finally, the reason we’re here at all, talking about public access files, is because the government will fine us if we don’t, and, in fact, we know that quite a lot of fines have been happening over the past five-year period. There have been lots of fines for several hundred thousand dollars. In 2011, there was a $4 million fine for H-1B and LCA compliance violations of a large public school down in Maryland. These investigations certainly happen. Why do they happen? They can happen on their own initiation by the government, but the reason it’s more likely to happen is an aggrieved worker, whether it’s the US worker who feels there is a foreign worker onsite who is not being paid what he should be paid, or the foreign worker who thinks that there’s some kind of violation as well, in the benefits he receives or the salary he or she receives.

And all they have to do is make a call to the Department of Labor, send in their complaint, and then the Wage and Hour Division of DOL will call you and perhaps ask for your files. And the first thing they’re going to do is ask to look at your public access files, and not just for that one employee. They’re going to ask to look at all of your public access files. The fine framework is here: 1,000 per violation of the public access file rules or LCA rules, 5,000 per violation for willful violations. And what does that mean? Well, that could mean you didn’t feel like following the rules, so you didn’t. It can also mean that you had reckless disregard. You simply didn’t have a public access program at all, because you just never took the time to do it and to focus on it. That could amount to a willful violation, and so then you’d be up at the 5,000 violation level there. Then there’s a 35,000 level, which you don’t often see, but this is when there’s been a violation that leads to the displacement of a US worker by an H-1B worker.

A large part of penalties that you see can also be back wages, if you weren’t paying your H-1B workers enough, but even more impactful for that, for some organizations, is a suspension from using H-1B visas or LCA’s to sponsor foreign workers, or, for your current workers, a suspension in the employer’s ability to sponsor them for a green card or permanent resident status. If you work in this field long enough, you’ll know that those employees will be quite upset if they lose that path to permanent residence in the United States. So in the end, the monetary damages can be high, but the practical impact as well on your foreign national staff can be really high as well.

Well, I hope that this webinar has helped you to kind of get your hands around the public access file, has demystified that process a little bit and made it more approachable and accessible. Hopefully, you can use some of the tools that we’ve provided you with there to make your job a little easier. I thank you for attending. If you have follow-up questions, go ahead and send us an email. We’d be happy to get back to you, even if you’re watching this after the live session. Also, if you’d want a copy of these slides, give us an email and we’ll get that right back to you. Thank you. Have a good day.