[Federal Register Volume 60, Number 210 (Tuesday, October 31, 1995)]
[Proposed Rules]
[Pages 55339-55348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26921]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 655
RIN 1205-AA89
Wage and Hour Division
29 CFR Part 507
RIN 1215-AA69
Labor Condition Applications and Requirements for Employers Using
Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion
Models
AGENCIES: Employment and Training Administration, Labor; and Wage and
Hour Division, Employment Standards Administration, Labor.
ACTION: Proposed rule.
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SUMMARY: This rule is being proposed to obtain comments on certain
provisions of the Department's Final Rule implementing provisions of
the Immigration and Nationality Act (INA) as it relates to the
temporary employment in the Untied States (``U.S.'') of nonimmigrants
admitted under H-1B visas.
DATES: Public comments are invited. Comments shall be received by
November 30, 1995 in order to expedite the Department's ability to
provide additional guidance through issuance of a final rule.
ADDRESSES: Comments may be mailed to John R. Fraser, Deputy
Administrator, 200 Constitution Ave., NW., Room S3510, Washington, DC
20210.
FOR FURTHER INFORMATION CONTACT:
On 20 CFR part 655, subpart H, and 29 CFR part 507, subpart H, contact
Flora T. Richardson, Chief, Division of Foreign Labor Certifications,
U.S. Employment Service, Employment and Training Administration,
Department of Labor, Room N-4456, 200 Constitution Avenue, NW.,
Washington, DC 20210. Telephone: (202) 219-5263 (this is not a toll-
free number).
On 20 CFR part 655, subpart I, and 29 CFR part 507, subpart I,
contact Thomas Shierling, Office of Enforcement Policy, Immigration
Team, Wage and Hour Division, Employment Standards Administration,
Department of Labor, Room S-3510, 200 Constitution Avenue, NW.,
Washington, DC 20210. Telephone: (202) 219-7605 (this is not a toll-
free number).
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act of 1995
As discussed above, this Proposed Rule is a republication for
notice and comment of various provisions published in the Final Rule.
It is also proposed that Sec. ______.731(b)(1) be revised to require
less recordkeeping than had been required in the Final Rule. Reporting
and recordkeeping requirements contained in the regulations have been
submitted for review to the Office of Management and Budget under
Section 3507(d) of the Paperwork Reduction Act of 1995.
Title: Wage recordkeeping requirements applicable to employers of
H-1B nonimmigrants.
Summary: This Proposed Rule requires that employers document an
objective actual wage system to be applied to H-1B nonimmigrants and
U.S. workers. it also requires that employers keep payroll records for
non-FLSA exempt H-1B workers and other employees for the specific
employment in question.
Need: The statute requires that the employer pay H-1B nonimmigrants
the higher of the actual or prevailing wage. In order to determine
whether the employer is paying the required wage, the Department
requires an employer to have and document an objective wage system used
to determine the wages of non-H-1B workers. The Department also
believes that it is essential to require the employer to maintain
payroll records for the employer's employees in the specific employment
[[Page 55340]]
in question at the place of employment to ensure that H-1B
nonimmigrants are being paid at least the actual wage being paid to
non-H-1B workers or the prevailing wage, whichever is higher.
Respondents and proposed frequency of response: The Department
estimates that approximately 26,480 of the 110,000 employers who file
labor condition applications actually employ H-1B nonimmigrants. The
Department further estimates that the public burden is approximately 1
hour per employer per year to document the actual wage system for a
total burden to the regulated community of 26,480 hours per year.
The payroll recordkeeping requirements are virtually the same as
those required by the Fair Labor Standards Act and any burden required
is subsumed in OMB Approval No. 1215-0017 for those regulations at 29
CFR Parts 516, except with respect to records of hours worked required
to be maintained for H-1B nonimmigrants who are exempt from the FLSA.
The Department estimates that the number of employers who are required
to keep such hourly records is approximately 2,251. The Department
estimates that each employer accounts for approximately 2.45 workers
and that the burden to employers to keep hourly records is 2.5 hours
per employee per year. Thus, the total burden for keeping hourly
records per employer is 6.125 hours per year for a total yearly burden
to the regulated community of 13,787 hours per year.
Estimated total annual burden: The Department estimates, based on
the figures above, that the total annual burden on the regulated
community is 40,267 hours per year.
The public is invited to provide comments on the collection of
information requirements of these provisions so the Department may:
(1) evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
(3) enhance the quality, utility, and clarify of the information to
be collected; and
(4) minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Written comments should be sent to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Attention: Desk
Officer for Employment Standards Administration, U.S. Department of
Labor, Washington, D.C. 20503.
II. Background
On November 29, 1990, the Immigration and Nationality Act (8 U.S.C.
1101 et seq.) (INA or Act) was amended by the Immigration Act of 1990
(IMMACT), Public Law 101-649, 104 Stat. 4978. On December 12, 1991, the
INA was further amended by the Miscellaneous and Technical Immigration
and Naturalization Amendments of 1991 (MTINA), Public Law 102-232, 105
Stat. 1733. These amendments assign responsibility to the Department of
Labor (Department of DOL) for the implementation of several provisions
of the Act relating to the entry of certain categories of employment-
based immigrants, and to the entry and temporary employment of certain
categories of nonimmigrants. One of the provisions of the Act governs
the temporary entry of foreign ``professionals'' to work in ``specialty
occupations'' in the U.S. under H-1B nonimmigrant status. 8 U.S.C.
1101(a)(15)(H)(i)(b), 1182(n), and 1184(c).
The H-1B category of specialty occupations consists of those
occupations which require the theoretical and practical application of
a body of highly specialized knowledge and the attainment of a
bachelor's or higher degree (or its equivalent) in the specific
specialty as a minimum for entry into the occupation in the U.S. 8
U.S.C. 1184(i)(1). In addition, a nonimmigrant in a specialty
occupation must possess full State licensure to practice in the
occupation (if required), completion of the required degree, or
experience equivalent to the degree and recognition of expertise in the
specialty. 8 U.S.C. 1184(i)(2). The category of ``fashion model''
requires that the nonimmigrant be of distinguished merit and ability. 8
U.S.C. 1101(a)(15)(H)(i)(b).
The rulemaking history, as published in the Federal Register, is as
follows:
March 20, 1991, Advance Notice of Proposed Rulemaking, 56 FR 11705.
August 5, 1991, Proposed Rule, 56 FR 37175.
October 22, 1991, Interim Final Rule, 56 FR 54720.
January 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.
January 19, 1995, Final Rule, 60 FR 4028.
September 26, 1995, Notice, 60 FR 49505.
III. Proposed Provisions
The Department hereby republishes and reproposes several provisions
adopted in the Final Rule (59 FR 65646, December 20, 1994) to provide
the regulated community and the public an opportunity to comment on
these provisions which were not specifically set forth in this format
in the proposed rule. The Department also proposes to make an amendment
to Sec. ______.731(b)(1) as it appeared in the Final Rule.
With the exception of the Department's limited enforcement position
on the recordkeeping provision of Sec. ______.731(b)(1) (see 60 FR
49505, September 26, 1995), all provisions remain in effect and the
issuance of this notice does not affect their enforcement. The
Department will carefully consider all comments and will make any
appropriate revisions to these provisions.
The preamble explaining each of these provisions in the Final Rule
is set forth below for the convenience of the public, with minor
modifications where appropriate.
1. Labor Condition Application Filing Dates
(See Sec. ______.730(b).)
Through administration and enforcement of the H-1B program, the
Department became aware that some employers were filing labor condition
applications for periods of anticipated employment which were well in
the future (e.g., one year after the application filing date). This
practice poses dangers of abuse and frustrates Congressional intent to
protect the jobs and wages of U.S. workers. The prevailing wage,
strike/lockout, and notice obligations are based, in large part, upon
actions taken and conditions which exist at the time the labor
condition application is filed. Therefore, in the Final Rule the
Department established a time limit in advance of the beginning date of
the period of employment that an employer may file a labor condition
application. The Final Rule required and continues to require that a
labor condition application can be filed no earlier than 6 months
before the beginning date of the period of
[[Page 55341]]
employment. Labor condition applications which are received by an ETA
regional office more than 6 months prior to the beginning date of the
period of employment will be returned to the employer as unacceptable
for filing. This procedural change imposes few, if any, additional
burdens on employers and facilitates the achievement of the statutory
purposes.
2. Actual Wage
(See Sec. ______.731(a)(1) & Appendix A)
As the H-1B program evolved, the Department became aware that
inconsistent and perhaps confusing interpretations had, on occasion,
been provided in response to public inquiries concerning the
Department's enforcement position on the employer's responsibilities
under the ``actual wage'' provisions of the statute and regulation. To
rectify any misunderstanding within the regulated community, the
Department provided in the Final Rule the following guidance regarding
its enforcement policy concerning determination of the actual wage.
In determining the required wage rate, the employer must not only
obtain the prevailing wage, but also determine the actual wage for the
occupation in which the H-1B nonimmigrant is to be employed by the
employer. In establishing its compensation system for workers in an
occupational category, of course, an employer may take into
consideration objective standards relating to experience,
qualifications, education, specific job responsibilities and functions,
specialized knowledge, and other legitimate business factors. The use
of any or all these factors is at the discretion of the employer. The
employer must have and document an objective system used to determine
the wages of non-H-1B workers, and apply that system to H-1B
nonimmigrants as well. It is not sufficient for the employer simply to
calculate an average wage of all non-H-1B employees in an occupation;
the ``actual wage'' is not an ``average wage.''
The documents explaining the wage system must be maintained in the
public disclosure file. The explanation of the compensation system must
be sufficiently detailed to enable a third party to apply the system to
arrive at the actual wage rate computed by the employer for any H-1B
nonimmigrant. The computation of the H-1B nonimmigrant's individual
actual wage rate shall be documented in the H-1B nonimmigrant's
personnel file.
In the event the employer has not developed and documented an
objective system and/or has not calculated the actual wage rate for an
H-1B nonimmigrant, the Administrator--in determining the actual wage
rate for enforcement and back wage computation purposes--may need to
average the wages of all non-H-1B workers who are employed in the same
occupation, rather than make determinations for each individual H-1B
nonimmigrant; the employer in such circumstances would be cited for
failure to comply with the requirements for determination of the actual
wage.
Assuming the actual wage is higher than the prevailing wage and
thus is the required wage rate, if an employer gives its employees a
raise at year's end, or if the employer's compensation system provides
for other adjustments in wages, H-1B nonimmigrants must also receive
the adjustment (consistent with legitimate employer-established
criteria such as level of performance, attendance, etc.). This is
consistent with Congressional intent that H-1B nonimmigrants be
provided the same wages as similarly-employed U.S. workers.
Where the employer's pay system or wage scale provides adjustments
during the validity period of the labor condition application--e.g.,
cost-of-living increase or other annual adjustment, increase in the
entry-level rate for the occupation due to market forces, or the
employee moves into a more advanced level in the same occupation--the
employer shall retain documentation explaining the changes and clearly
showing that, after such adjustments, the wages paid to the H-1B
nonimmigrant are at least the greater of the adjusted actual wage or
the prevailing wage for the occupation in the area of intended
employment.
3. Validity Period of a SESA Prevailing Wage
(See Sec. ______.731(a)(2)(iii)(A)(1).)
Through administration and enforcement of the H-1B program, the
Department became aware of confusion and potential adverse effect on
workers' wages in situations in which employers filing LCAs relied on
SESA prevailing wage determinations which were obtained on dates
considerably earlier than the time of the filing (e.g., six months
prior to LCA date). Employers were obtaining prevailing wage rates and
holding them indefinitely before using them in conjunction with filing
an LCA. The Department concluded that a practicable limit should be set
on the use of prevailing wage rates, and that 90 days is a reasonable
practicable limit.
In order to alleviate confusion and to better assure the
achievement of the Congressional purposes of protecting the wages of
U.S. workers, the Department clarified the regulation to set a deadline
for an employer's reliance on a SESA prevailing wage determination. An
employer that obtains a SESA prevailing wage determination must file
the labor condition application under which that rate will be paid
within 90 days from the date of the SESA's determination.
4. Challenges of Prevailing Wage Determinations Only Through Employment
Service Complaint System
(See Sec. ______ .731(a)(2)(iii)(A)(1), Sec. ______ .731(d)(2) and
Sec. ______ .840(c).)
Section ______ .731(a)(2)(iii)(A) lists the State Employment
Security Agency (SESA) as one source for obtaining a prevailing wage
determination. Although DOL regulations provide an avenue for an
employer to challenge an SESA determination through the Employment
Service (ES) complaint process (under 20 CFR part 658, subpart E), the
Interim Final Rule did not make it sufficiently clear that challenges
to SESA prevailing wage determinations were to be made only through
that process. In designing the program, the Department had envisioned
that the ES complaint process would be used for all prevailing wage
challenges. However, after substantial enforcement litigation
experience, the Department found that some employers were instead
attempting to contest such determinations through the hearing provided
under Sec. ______ .835. These enforcement procedures were not intended
to handle such challenges.
The Final Rule provided needed clarification by directing the
employer to the ES complaint process and alerting the employer that a
challenge of an SESA prevailing wage determination could be made only
prior to filing an LCA in which that SESA determination is used.
Implicit and essential in this process is the requirement that once an
employer obtains a prevailing wage determination from the SESA and
files an LCA using such determination without challenging it through
the ES complaint process, the employer, in effect, has accepted the
determination and waived its right to challenge the determination.
Permitting an employer to operate under a SESA prevailing wage
determination and later contest it in the course of an investigation or
enforcement action is contrary to sound public policy; such a delayed,
disruptive challenge would have a harmful effect on U.S. and H-1B
employees, competing employers, and other parties who may have received
notice of and/or relied on the prevailing wage at issue. Section ______
.731(a)(2)(iii)(A) of the Final Rule
[[Page 55342]]
explicitly stated the Department's clarification of the use and
consequences of the ES complaint process. Challenges to SESA prevailing
wage determinations can be made only through the State agency's ES
process. See 20 CFR 658.410 et seq.
Where the prevailing wage determination is made by the SESA prior
to the filing of the LCA, the employer's avenue of appeal is through
the ES complaint system, entering the system at the State level. See 20
CFR 658.410 et seq. However, where the prevailing wage determination is
made by ETA (with or without consultation with the SESA) during the
course of a Wage and Hour Division enforcement action, the employer's
avenue of appeal also is through the ES complaint system, but the
employer enters the system at the ETA regional office level. The
employer will be notified where to file any appeal. For purposes of the
H-1B program only, this is a collateral change to the ES complaint
system regulations, which generally require all complaints to be filed
at the SESA level (see 20 CFR 658.420 et seq.) and is notwithstanding
the provisions of 20 CFR 658.421(a) and 658.426. Similarly, Sec. ______
.731(d) provides that, where the employer does not have a valid
prevailing wage determination, the Administrator, during the course of
an investigation, may obtain a prevailing wage determination from ETA,
which, in turn, may consult with the SESA and then determine the
appropriate prevailing wage. Some employers also were contesting these
ETA prevailing wage determinations at the Wage and Hour enforcement
hearing provided under Sec. ______ .835. The Department believes that
the proper forum for all prevailing wage determination challenges--
whether the wage determination was obtained by the employer or by the
Administrator (where the employer does not have a valid prevailing wage
determination)--is the ES complaint process. Once the prevailing wage
determination is final, either through the lack of a timely challenge
or through the completion of the ES process, the determination will be
conclusive for purposes of enforcement. In such cases where the
prevailing wage determination is made by ETA at the Administrator's
request, any challenge must be initiated at the ETA regional office
level within 10 days after the employer receives the ETA prevailing
wage determination. Section ______ .731(d) was amended in the Final
Rule to reflect this clarification.
Finally, Sec. ______.840(c) provides that where the Administrator
has found a wage violation based on a prevailing wage determination
obtained by the Administrator from ETA, the Administrative Law Judge
(ALJ) in the enforcement proceeding ``shall not determine the
prevailing wage de novo, but shall * * * either accept the wage
determination or vacate the wage determination.'' This provision had
been interpreted by some employers as permitting a challenge of
prevailing wage determinations obtained by the Administrator for ETA.
Section ______.840(c) was not intended to function as a mechanism from
such challenges. Accordingly, Sec. ______.840(c) was clarified in the
Final Rule to reflect that once the Administrator obtains a prevailing
wage determination from ETA and the employer either fails to challenge
such determination through the ES complaint process within the
specified time of 10 days, or, after such a challenge, the
determination is found to be accurate by the ES complaint process, the
ALJ must accept the determination as accurate and cannot vacate it. As
with other final decisions of the Department, the employer continues to
have access to Federal district court if the issues are not
satisfactorily resolved.
5. Documentation of the Wage Statement
(See Sec. ______.731(b)(1).)
Section ______.731(b)(1) of the Final Rule requires that, in
documenting its compliance with the wage requirements, an employer
shall maintain certain documentation, not only for the H-1B
nonimmigrant(s), but for ``all other employees for the specific
employment in question at the place of the employment.'' In the
preamble to the Final Rule, the Department stated that ``[t]his
information is ordinarily maintained by the employer for purposes of
showing compliance with other applicable statutes (e.g., the Fair Labor
Standards Act) and will permit the Department to determine whether in
fact the required wage has been paid'' (59 FR 65654, December 20,
1994).
Upon further consideration, the Department issued a Notice of
Enforcement Position (60 FR 49505, September 26, 1995) announcing that,
with respect to any additional workers for whom the Final Rule may have
applied recordkeeping requirements, the Department would enforce the
provision to require the employer to keep only those records which are
required by the Fair Labor Standards Act (``FLSA''), 29 CFR part 516.
The Department concluded that, in virtually all situations, the records
required by the FLSA would include those listed under the H-1B Final
Rule.
An amendment is proposed to be made to Sec. ______.731(b)(1)(v).
This section requires employers to retain records of hours worked for
all employees in the same specific employment as the H-1B nonimmigrant
if employees are paid on other than a salary basis or if the actual or
prevailing wages are expressed as an hourly wage. The Department finds
that it is unnecessary to require employers to retain records of hours
worked for FLSA-exempt, similarly employed non-H-1B workers when the
employer expresses its actual wage as a salary, even if the prevailing
wage is expressed as an hourly wage. Therefore, the Department is
proposing to amend Sec. ______.731(b)(1)(v) so that employers are not
required to retain records of hours worked for FLSA-exempt, similarly
employed non-H-1B workers if the actual wage is expressed as a salary
but the prevailing wage is expressed as an hourly rate.
6. Enforcement of Wage Obligation
(See Sec. ______.731(c)(5).)
The Act requires an employer to state that it is offering and will
offer the H-1B nonimmigrant, during the period of authorized
employment, wages that are at least the required wage rate. The
required wage rate is the actual wage rate or the prevailing wage rate,
whichever is greater. Furthermore, the employer is required to indicate
on the LCA whether an H-1B nonimmigrant will work full-time or part-
time. Under the Secretary's statutory authority to implement the Act,
the regulations do not authorize an employer to fail to pay the
required wage rate. In enforcement proceedings, however, the Department
has encountered confusion over an employer's obligations in
circumstances where the H-1B nonimmigrant is in a nonproductive status
or circumstance.
There is no statutory or regulatory authorization for a reduction
in the prescribed wage rate for any H-1B nonimmigrant who is not
engaged in productive work for the LCA-filing employer due to
employment-related conditions such as training, lack of work, or other
such reasons. The H-1B program was not intended and should not operate
to provide an avenue for nonimmigrants to enter the U.S. and await work
at the employer's choice or convenience, as has been found to be
occurring. Compare 8 U.S.C. 1101(a)(15)(H)(iii). Instead, the H-1B
program's purpose is to enable employers to temporarily employ fully-
qualified workers for whom employment opportunities currently exist.
The employer, having attested to the duration and scope of the intended
[[Page 55343]]
employment (i.e., beginning and ending dates; full or part-time),
controls the nonimmigrant's employment status. The Immigration and
Nationality Act (8 U.S. C. 1182(n)(1)) requires that once the H-1B
status has been approved for the period specified by the employer, the
employer controls the status and work of the H-1B nonimmigrant, who is
unable to accept employment elsewhere without a certified labor
condition application and approved I-129 petition filed on the worker's
behalf by another employer.
For the purpose of DOL administration and enforcement of the H-1B
program pursuant to these regulations, an H-1B nonimmigrant is
considered to be under the control or employ of the LCA-filing employer
from the time of arrival in the United States and throughout the period
of his or her employment--regardless of whether the nonimmigrant is in
training or other nonproductive status, unless during the period
employment an H-1B nonimmigrant experiences a period of nonproductive
status due to conditions which are unrelated to the employment and
render the nonimmigrant unable to work--e.g., maternity leave,
automobile accident which temporarily incapacitates the nonimmigrant,
caring for an ill relative. In such circumstances where a period of
nonproductive status is due to conditions unrelated to employment, the
employer shall not be obligated to pay the required wage rate during
that period, provided that the INS permits the employee to remain in
the U.S. without being paid and provided further that such period is
not subject to payment under other statutes such as the Family and
Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with
Disabilities Act (42 U.S.C. 12101 et seq.).
It is the Department's position that an LCA-filing employer has no
prereogative--other than in circumstances described above--but to pay
the required wage beginning no later than the day the H-1B nonimmigrant
is in the United States under the control and employ of that LCA-filing
employer, and continuing throughout the nonimmigrant's period of
employment. Any H-1B nonimmigrant to be employed under an LCA in a
full-time capacity (the part-time block not having been checked on Item
7(b) of the LCA) shall be guaranteed full-time pay (ordinarily 40
hours' pay) each week, or the weekly equivalent if paid a monthly or
annual salary. If an employer's LCA shows ``part-time employment,'' the
employer will be required to pay the nonproductive employee for at
least the number of hours to be worked per week indicated on the I-129
petition filed by the employer with the INS. If the employer indicates
on the LCA that an employee is to work only part-time and subsequent
investigation discloses that, in fact, the employee was working full-
time in a majority of the weeks during the period covered by the
investigation, the employer will be responsible for full-time pay
including during nonproductive periods for which the worker received
either no pay or less than the required wage.
7. Notification
(See Sec. ______. 734(a)(1)(ii)(D).)
Section 212(n)(1)(C) of the INA requires that an employer seeking
to hire an H-1B nonimmigrant shall notify, at the time of filing the
application, the bargaining representative of its employees of the
filing of the labor condition application or, if there is no bargaining
representative, post notice of filing in conspicuous locations at the
place of employment. 8 U.S.C. 1182(n)(1)(C). The interim final
regulations at Sec. ______. 730(h)(1) implemented this statutory
requirement.
Based on program experience, the Final Rule clarified the
regulations to better assure the worker protections which Congress
intended the notice requirement to achieve. The Department had become
aware that some employers which place H-1B nonimmigrants at new
worksites within areas covered by existing LCA's failed to fulfill
their LCA obligations, but, because notices were not posted at the new
worksites, potentially adversely affected workers were not informed of
the LCA conditions or of their own rights to examine certain documents
and to file complaints. The Department recognized that it could take
the position that an employer wishing to place H-1B nonimmigrants at
worksites where notice had not been given could be required to both
post a notice and file a new LCA before placing H-1B nonimmigrants at a
new worksite within an area of intended employment. However, such a
two-step requirement appeared to the Department to be burdensome. The
protections intended by Congress can be effected by notice posted by
the employer at each new worksite within an area of intended employment
at the time the H-1B nonimmigrants are sent there to work, without the
employer being required to file new LCA's. The Final Rule, therefore,
imposed a less burdensome but equally worker-protective standard, by
providing that the employer shall post worksite notices on the first
day of work by an H-1B nonimmigrant at a new worksite, which will
remain posted for at least ten days.
A clarification of the regulation, based upon program experience,
was also made in the Final Rule with regard to the timing of an
employer's notice of filing an LCA. The Department became aware of
confusion and potential adverse effects in situations in which
employers provided the required notice of filing the application to the
bargaining representative, or to its employees by posting at the place
of employment, considerably in advance of the date the application was
filed (e.g., six months prior to filing). In order to alleviate
confusion and to better assure the achievement of Congressional intent
that U.S. workers who work side-by-side with H-1B nonimmigrants be
notified of the employer's intent and their ability to file complaints
if they believe violations have occurred, the Final Regulation required
that notice, provided by the employer under the fourth labor condition
statement, was to be provided on or within 30 days prior to the date
the labor condition application is filed.
8. Short-Term Placement of H-1B Nonimmigrants at Worksites Outside the
Location(s) Listed on the LCA
(See Sec. ______.735.)
Until the October 1993 NPRM, the Department had indicated that job
contractors would be treated like any other employer under the H-1B
program. After obtaining considerable programmatic experience regarding
the operations and effects of job contractors using H-1B nonimmigrants,
the Department proposed in its NPRM to clarify how LCA's should be
completed by job contractors, and proposed to amend the regulations to
create certain additional standards for such employers.
In the NPRM, as part of the proposal to develop special procedures
for job contractors, the Department defined the term ``job contractor''
and the proposed requirements to be met, including the general
requirement to assure that the information provided on the LCA in Item
7 (occupational information) must pertain to the location(s) (city and
State) of any and all worksites where H-1B nonimmigrants would be
employed. The Department further proposed that a job contractor filing
an LCA must indicate thereon the place of employment at which the H-1B
nonimmigrant will actually work (and for which the prevailing wage must
be determined) as opposed to the employer's headquarters or other
office location, if such location is different from the place of
employment. The Department also proposed that, if the
[[Page 55344]]
contractor wishes to relocate an H-1B nonimmigrant to work at any
location not listed on a certified LCA, a corresponding LCA shall be
filed and certified (and the appropriate prevailing wage determined)
before any H-1B nonimmigrant may be employed at that location. The NPRM
addressed other job contractor matters, such as the contractor's actual
wage obligation.
Of the 264 comments received in response to the NPRM, 171 commented
on these proposals and 153 (nearly 90%) opposed it--128 of those 153
coming from business commenters. The negative comments related to the
concept as a whole or related to a part of it--such as the nationwide
actual wage, worksite posting, and place of employment designation on
the labor condition application.
Concerns were expressed about an employer's ability to find workers
to fill health care needs, especially in the physical therapist
occupation. Other commenters expressed concern that the proposed rule
would impose special hardships on job contractors, would be onerous,
and would be discriminatory. Several commenters suggested that the
Department consider a time test methodology, rather than a ``job
contractor'' concept, in identifying the responsibilities of an
employer which places H-1B nonimmigrants at worksites owned or
controlled by entities other than the employer. Suggestions for the
allowable duration of temporary placement ranged from 30 days to 180
days.
Of the comments received in response to the January 13, 1992,
Interim Final Rule, concerning the worksite movement of H-1B
nonimmigrants, 13 commenters (11 of which were businesses) expressed
the view that the initial LCA filing should be sufficient when an H-1B
nonimmigrant is transferred between temporary worksites such as branch
offices or customer offices. These comments advocated the position that
an employer should be able to move H-1B nonimmigrant employees to
worksites where the tour of duty would be of a short or temporary
nature.
In promulgating the Final Rule, the Department carefully considered
the comments concerning the job contractor concept as proposed, and
decided based thereupon not to establish special procedures applicable
only to those businesses operating as job contractors. Based on the
overwhelming weight of the comments and the Department's experience in
the program, the Final Rule contained a modification of the proposed
rule, consistent with commentors' suggestions, to implement a ``time
test'' for short-term assignments of H-1B nonimmigrants to worksite(s)
outside the area(s) of employment covered by already-certified LCAs,
whether the new worksite is another establishment of the employer or is
the worksite of another entity (e.g., a customer of a job contractor
providing H-1B nonimmigrants or services provided by H-1B nonimmigrants
at the customer's location.) The Final Rule is both less burdensome for
employers and more protective of workers than was the provision as
proposed in the NPRM.
The Department recognizes that it is common practice for
employers--not only job contractors, but also other employers which
operate in more than one place of employment within the United States--
to move employers from one place of employment (worksite) to another
for short periods of time in response to business demands. The Final
Rule takes into consideration the practical and real world experience
of such short-term placement of employees.
The Final Rule applying to all LCA-filing employers includes a 90
workday placement option within a three-year period, beginning with the
first work day at any worksite in a new area of intended employment,
for an employer who shifts H-1B nonimmigrant workers to any worksite(s)
outside the location listed on the employer's already-certified LCA.
The 90-day option applies separately for each area of intended
employment (e.g., 90 cumulative days for Los Angeles, 90 cumulative
days for San Francisco). Under this option an employer may place H-1B
nonimmigrant(s) at such worksite(s)--without filing a new LCA (and thus
without meeting the notice, prevailing wage, and actual wage
requirements for such area of intended employment)--provided that the
employer complies with three requirements:
1. Unless an LCA has been filed and certified for the new area of
intended employment, no H-1B nonimmigrant continues to work at a
worksite in such area after 90 cumulative workdays by H-1B
nonimmigrants at all worksites within the area (starting with the first
day on which any H-1B nonimmigrant worked at any worksite in the area)
and the employer makes no further placement of H-1B worker(s) in such
area within the three-year period which began with the first day of
placement.
2. The H-1B nonimmigrant(s) working in the area is (are)
compensated at the required wage rate applicable under the employer's
already-certified LCA plus expenses for the other area of employment
when placed. The Department has incorporated the regulations
promulgated by the General Services Administration (``GSA'') for
Federal employees as the basis for such travel expenses as it is
unaware of any other universally available source of this information
for employers. GSA advises us that the rates are based on surveys of
two-star hotels and comparable restaurants. Furthermore, under IRS
guidelines, employers are not required to provide receipts for employee
travel expenses if the employer has used the Federal per diem rates.
(See IRS Rev. Proc. 94-77). Finally, some Federal District Courts have
found Federal per diem rates to be a ``fair method of compensation.''
(See PPG Industries, Inc. v. Celanese Polymer Specialties Co., 658
F.Supp. 555 (W.D.Ky. 1987), rev'd on other grounds, 840 F.2d 1565 (Fed.
Cir. 1988) and Arthur S. Langenderfer, Inc. v. S.E. Johnson Co., 684
F.Supp. 953 (N.D.Ohio 1988)). Thus, GSA per diem rates are recognized
as providing reasonable reimbursement for travel expenses.
3. No H-1B nonimmigrant is placed at a worksite where there is a
strike or lockout in the same occupational classification.
Of course, at any time an employer may file a new LCA covering the
new area of intended employment (complying with all LCA requirements,
including determination of actual and prevailing wage rates as well as
notice to employees). This filing can be done in advance of the
placement or, if such new LCA is filed and certified after placement
and the employer complies with any obligations attendant to the new
LCA, the employer could cease payment of per diem and transportation
rates. If, at the accumulation of 90 workdays, the employer has H-1B
nonimmigrants at any worksite(s) in the new area of intended
employment, the employer must have filed and received approval of a new
LCA and complied with all requirements attendant to such filing.
This 90 workday placement option does not apply to the placement of
H-1B nonimmigrants at any new worksite(s) within an area covered by an
already-certified LCA filed by the employer. Such worksite(s) would be
encompassed within and fully subject to the requirements of that LCA,
including prevailing wage and worksite notice(s) (see Sec. c.1.b
NOTIFICATION, above, regarding notification at new worksites). The only
additional action required for the employer in this circumstance is to
post notice for a period of 10 days at the new worksite.
[[Page 55345]]
IV. Executive Order 12866
The Department has determined that this Proposed Rule is not an
``economically significant regulatory action'' within the meaning of
Executive Order 12866, in that it will not have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or State, local, or tribal
governments or communities.
V. Regulatory Flexibility Act
The Department of Labor has notified the Chief Counsel for
Advocacy, Small Business Administration, and made the certification
pursuant to the Regulatory Flexibility Act at 5 U.S.C. 605(b), that the
rule does not have a significant economic impact on a substantial
number of small entities.
Catalog of Federal Domestic Assistance Number
This program is not listed in the Catalog of Federal Domestic
Assistance.
List of Subjects
20 CFR Part 655
Administrative practice and procedure, Agriculture, Aliens,
Crewmembers, Employment, Enforcement, Fashion models, Forest and forest
products, Guam, Health professions, Immigration, Labor, Longshore work,
Migrant labor, Nurse, Penalties, Registered nurse, Reporting and
recordkeeping requirements, Specialty occupation, Students, Wages.
29 CFR Part 507
Administrative practice and procedures, Aliens, Employment,
Enforcement, Fashion models, Immigration, Labor, Penalties, Reporting
and recordkeeping requirements, Specialty occupation, Wages, Working
conditions.
Adoption of the Joint Rule
The agency-specific adoption of the joint rule, which appears at
the end of the common preamble, appears below:
Signed at Washington, DC, this 24th day of October, 1995.
Tim Barnicle,
Assistant Secretary for Employment and Training.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Accordingly, certain amendments to part 655 of chapter V of title
20, and part 507 of chapter V of title 29 of the Code of Federal
Regulations, as published earlier in the Federal Register, are
republished for comment, and other amendments are proposed, as follows:
TITLE 20--EMPLOYEES' BENEFITS
PART 655--TEMPORARY EMPLOYMENT OF ALIENS IN THE UNITED STATES
1. The authority citation for Part 655 continues to read as
follows:
Authority: Section 655.0 issued under 8 U.S.C. 1101(a)(15)(H)(i)
and (ii), 1182(m) and (n), 1184, 1188, and 1288(c); 29 U.S.C. 49 et
seq.; sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2103 (8 U.S.C.
1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat. 4978, 5027 (8
U.S.C. 1184 note); and 8 CFR 214.2(h)(4)(i).
Section 655.0 issued under 8 U.S.C. 1101(a)(15)(H)(ii), 1184,
and 1188; 29 U.S.C. 49 et seq.; and 8 CFR 214.2(h)(4)(i).
Subparts A and C issued under 8 U.S.C. 1101(a)(15)(H)(ii)(b) and
1184; 29 U.S.C. 49 et seq.; and 8 CFR 214.2(h)(4)(i).
Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184, and
1188; and 29 U.S.C. 49 et seq.
Subparts D and E issued under 8 U.S.C. 1101(a)(15)(H)(i)(a),
1182(m), and 1184; 29 U.S.C. 49 et seq.; and sec. 3(c)(1), Pub. L.
101-238, 103 Stat. 2099, 2103 (8 U.S.C. 1182 note).
Subparts F and G issued under 8 U.S.C. 1184 and 1288(c); and 29
U.S.C. 49 et seq.
Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b),
1182(n), and 1184; 29 U.S.C. 49 et seq.; and sec. 303(a)(8), Pub. L.
102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1182 note).
Subparts J and K issued under 29 U.S.C. 49 et seq.; and sec.
221(a), Pub. L. 101-649, 104 Stat. 4978, 5027 (8 U.S.C. 1184 note).
TITLE 29--LABOR
CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
Part 507--Enforcement of H-1B Labor Condition Applications
Subparts A, B, C, D, E, F, and G--(Reserved)
2. The authority citation for part 507 continues to read as
follows:
Authority: 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184, and
29 U.S.C. 49 et seq.; and Pub. L. 102-232, 105 stat. 1733, 1748 (8
U.S.C. 1182 note).
3. In Sec. ______.730, in paragraph (b), the first sentence is
republished as follows:
Sec. ______.730 Labor condition application.
* * * * *
(b) Where and when should a labor condition application be
submitted? A labor condition application shall be submitted, by U.S.
mail, private carrier, or facsimile transmission, to the ETA regional
office shown in Sec. ______.720 of this part in whose geographic area
of jurisdiction the H-1B nonimmigrant will be employed no earlier than
six months before the beginning date of the period of intended
employment shown on the LCA. * * *
* * * * *
4. In Sec. ______.731, paragraph (a)(2)(iii)(A)(1) is republished
as follows:
Sec. ______.731 The first labor condition statement: wages.
(a) * * *
(2) * * *
(iii) * * *
(A) * * *
(1) An employer who chooses to utilize a SESA prevailing wage
determination shall file the labor condition application not more than
90 days after the date of issuance of such SESA wage determination.
Once an employer obtains a prevailing wage determination from the SESA
and files an LCA supported by that prevailing wage determination, the
employer is deemed to have accepted the prevailing wage determination
(both as to the occupational classification and wage) and thereafter
may not contest the legitimacy of the prevailing wage determination
through the Employment Service complaint system or in an investigation
or enforcement action. Prior to filing the LCA, the employer may
challenge an SESA prevailing wage determination through the Employment
Service complaint system, by filing a complaint with the SESA. See 20
CFR 658.410 through 658.426. Employers which challenge an SESA
prevailing wage determination must obtain a final ruling from the
Employment Service complaint system prior to filing an LCA based on
such determination. In any challenge, the SESA shall not divulge any
employer wage data which was collected under the promise of
confidentiality.
* * * * *
5. In Sec. ______.731, paragraph (b)(1) is revised to read as
follows:
Sec. ______.731 The first labor condition statement: wages.
* * * * *
(b) Documentation of the wage statement. (1) The employer shall
develop and maintain documentation sufficient to meet its burden of
proving the validity of the wage statement required in paragraph (a) of
this section and attested to on Form ETA 9035. The documentation shall
be made available to DOL upon request. Documentation shall also be made
available for public examination to the extent required by
Sec. ______.760(a) of this part. The employer shall also document that
the
[[Page 55346]]
wage rate(s) paid to H-1B nonimmigrant(s) is (are) no less than the
required wage rate(s). The documentation shall include information
about the employer's wage rate for all other employees for the specific
employment in question at the place of employment, beginning with the
date the labor condition application was submitted and continuing
throughout the period of employment. The records shall be retained for
the period of time specified in Sec. ______.760 of this part. The
payroll records for each such employee shall include:
(i) Employee's full name;
(ii) Employee's home address;
(iii) Employee's occupation;
(iv) Employee's rate of pay;
(v) Hours worked each day and each week by the employee if:
(A) The employee is paid on other than a salary basis; or
(B) The actual wage is expressed as an hourly rate; or
(C) With respect only to H-1B nonimmigrants, the prevailing wage is
expressed as an hourly rate.
(vi) Total additions to or deductions from pay each pay period by
employees; and
(vii) Total wages paid each pay period, date of pay and pay period
covered by the payment by employee.
* * * * *
6. In Sec. ______.731, paragraph (c)(5) is republished as follows:
Sec. ______.731 The first labor condition statement: wages.
* * * * *
(c) * * *
(5)(i) For the purpose of DOL administration and enforcement of the
H-1B program, an H-1B nonimmigrant is considered to be under the
control or employ of the LCA-filing employer, and therefore shall
receive the full wage which the LCA-filing employer is required to pay
beginning no later than the first day the H-1B nonimmigrant is in the
United States and continuing throughout the nonimmigrant's period of
employment. Therefore if the H-1B nonimmigrant is in a nonproductive
status for reasons such as training, lack of license, lack of assigned
work or any other reason, the employer will be required to pay the
salaried employee the full pro-rata amount due, or to pay the hourly-
wage employee for a full-time week (40 hours or such other numbers of
hours as the employer can demonstrate to be full-time employment for
the occupation and area involved) at the required wage for the
occupation listed on the LCA. If the employer's LCA carries a
designation of ``part-time employment,'' the employer will be required
to pay the nonproductive employee for at least the number of hours
indicated on the I-129 petition filed by the employer with the INS. If
during a subsequent enforcement action by the Administrator it is
determined that an employee designated in the LCA as part-time was in
fact working full-time or regularly working more hours than reflected
on the I-129 petition, the employer will be held to the factual
standard disclosed by the enforcement action.
(ii) If, however, during the period of employment, an H-1B
nonimmigrant experiences a period of nonproductive status due to
conditions unrelated to employment which render the nonimmigrant unable
to work--e.g., maternity leave, automobile accident which temporarily
incapacitates the nonimmigrant, caring for an ill relative--then the
employer shall not be obligated to pay the required wage rate during
that period provided that the INS permits the employee to remain in the
U.S. without being paid and provided further that such period is not
subject to payment under other statutes such as the Family and Medical
Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities
Act (42 U.S.C. 12101 et seq.).
* * * * *
7. In Sec. ______.731, paragraph (d)(2) is republished as follows:
Sec. ______.731 The first labor condition statement: wages.
* * * * *
(d) * * *
(2) In the event the Administrator obtains a prevailing wage from
ETA pursuant to paragraph (d)(1) of this section, the employer may
challenge the ETA prevailing wage only through the Employment Service
complaint system. See 20 CFR part 658, subpart E. Notwithstanding the
provisions of 20 CFR 658.421 and 658.426, the appeal shall be initiated
at the ETA regional office level. Such challenge shall be initiated
within 10 days after the employer receives ETA's prevailing wage
determination from the Administrator. In any challenge to the wage
determination, neither ETA nor the SESA shall divulge any employer wage
data which was collected under the promise of confidentiality.
(i) Where the employer timely challenges an ETA prevailing wage
determination obtained by the Administrator, the 30-day investigative
period shall be suspended until the employer obtains a final ruling
from the Employment Service complaint system. Upon such final ruling,
the investigation and any subsequent enforcement proceeding shall
continue, with ETA's prevailing wage determination serving as the
conclusive determination for all purposes.
(ii) Where the employer does not challenge ETA's prevailing wage
determination obtained by the Administrator, such determination shall
be deemed to have been accepted by the employer as accurate and
appropriate (both as to the occupational classification and wage) and
thereafter shall not be subject to challenge in a hearing pursuant to
Sec. ______.835 of this part.
* * * * *
8. In Sec. ______.734, paragraphs (a)(1)(ii) (C) and (D) are
republished as follows:
Sec. ______.734 The fourth labor condition statement: notice.
(a) * * *
(1) * * *
(ii) * * *
(C) The notices shall be posted on or within 30 days before the
date the labor condition application is filed and shall remain posted
for a total of 10 days.
(D) Where the employer places any H-1B nonimmigrant(s) at one or
more worksites not contemplated at the time of filing the application,
but which are within the area of intended employment listed on the LCA,
the employer is required to post notice(s) at such worksite(s) on or
before the date any H-1B nonimmigrant begins work, which notice shall
remain posted for a total of ten days.
* * * * *
9. Sec. ______.735 is republished as follows:
Sec. ______.735 Special provisions for short-term placement of H-1B
nonimmigrants at place(s) of employment outside the area(s) of intended
employment listed on labor condition application.
(a) Subject to the conditions specified in paragraph (b) of this
section, an employer may place H-1B nonimmigrant(s) at worksite(s)
(place(s) of employment) within areas of employment not listed on the
employer's labor condition application(s)--whether or not the employer
owns or controls such worksite(s)--without filing new labor condition
application(s) for the area(s) of intended employment which would
encompass such worksite(s).
(b) The following restrictions shall be fully satisfied by an
employer which places H-1B nonimmigrant(s) at worksite(s) (place(s) of
employment) within areas of employment not listed on the employer's
labor condition application(s):
(1) The employer has fully satisfied the requirements of
Secs. ______.730
[[Page 55347]]
through ______.734 of this part with regard to worksite(s) located
within the area(s) of intended employment listed on the employer's
labor condition application(s).
(2) The employer shall not place, assign, lease, or otherwise
contract out any H-1B nonimmigrant(s) to any worksite where there is a
strike or lockout in the course of a labor dispute in the same
occupational classification(s) as the H-1B nonimmigrant(s).
(3) For every day of the H-1B nonimmigrant's(s') placement outside
the LCA-listed area of employment, the employer shall pay such
worker(s) the required wage (based on the prevailing wage at such
worker's(s') permanent work site, or the employer's actual wage,
whichever is higher) plus per diem and transportation expenses (for
both workdays and non-workdays) at rate(s) no lower than the rate(s)
prescribed for Federal Government employees on travel or temporary
assignment, as set out in 41 CFR Part 301-7 and Ch. 301, App. A.
(4) The employer's placement(s) of H-1B nonimmigrant(s) at any
worksite(s) in an area of employment not listed on the employer's labor
condition application(s) shall be limited to a cumulative total of
ninety workdays within a three-year period, beginning on the first day
on which the employer placed an H-1B nonimmigrant at any worksite
within such area of employment. For purposes of this section,
``workday'' shall mean any day on which one or more H-1B nonimmigrants
perform any work at any worksite(s) within the area of employment. For
example, one ``workday'' would be counted for a day on which seven H-1B
nonimmigrants worked at three worksites within one city, and one
``workday'' would be counted for a day on which one H-1B nonimmigrant
worked at one worksite within a city. The employer may rotate such
workers into worksites within such area of employment or may maintain a
constant work force. However, on the first day after the accumulation
of 90 workdays, the employer shall not have any such H-1B
nonimmigrant(s) at any worksite(s) within such area of employment not
included on a certified LCA.
(c) At the accumulation of the 90 workdays described in paragraph
(b)(4) of this section, the employer shall have ended its placement of
all H-1B nonimmigrant(s) at any worksite(s) within the area of
employment not listed on the labor condition application, or shall have
filed and received a certified labor condition application for the
area(s) of intended employment encompassing such worksite(s) and
performed all actions required in connection with such filing(s) (e.g.,
determination of the prevailing wage; notice to collective bargaining
representative or on-site notice to workers).
(d) At any time during the 90-day period described in paragraph
(b)(4) of this section, the employer may file a labor condition
application for the area of intended employment encompassing such
worksite(s), performing all actions required in connection with such
labor condition application. Upon certification of such LCA, the
employer's obligation to pay Federal per diem rates to the H-1B
nonimmigrant(s) shall terminate. (However, see
Sec. ______.731(c)(7)(iii)(C) regarding payment of business expenses
for employee's travel on employer's business.)
10. Appendix A to Subpart H--Guidance for Determination of the
``Actual Wage'' is republished as follows:
Appendix A to Subpart H--Guidance for Determination of the ``Actual
Wage''
In determining the required wage rate, in addition to obtaining
the prevailing wage, the employer must establish the actual wage for
the occupation in which the H-1B nonimmigrant is employed by the
employer. For purposes of establishing its compensation system for
workers in an occupational category, an employer may take into
consideration objective standards relating to experience,
qualifications, education, specific job responsibility and function,
specialized knowledge, and other legitimate business factors. The
use of any or all these factors is at the discretion of the
employer. The employer must have and document an objective system
used to determine the wages of non-H-1B workers, and apply that
system to H-1B nonimmigrants as well. It is not sufficient for the
employer simply to calculate an average wage of all non-H-1B
employees in an occupation; the actual wage is not an ``average
wage''.
The documents explaining the system must be maintained in the
public disclosure file. The explanation of the compensation system
must be sufficiently detailed to enable a third party to apply the
system to arrive at the actual wage rate computed by the employer
for any H-1B nonimmigrant. The computation of the H-1B
nonimmigrant's individual actual wage rate must be documented in the
H-1B nonimmigrant's personnel file.
Assuming the actual wage is higher than the prevailing wage and
thus is the required wage rate, if an employer gives its employees a
raise at year's end or if the system provides for other adjustments
in wages, H-1B nonimmigrants must also be given the raise
(consistent with legitimate employer-established criteria such as
level of performance, attendance, etc.). This is consistent with
Congressional intent that H-1B nonimmigrants and similarly employed
U.S. workers be provided the same wages.
Where the employer's pay system or scale provides adjustments
during the validity period of the LCA--e.g., cost-of-living increase
or other annual adjustments, increase in the entry-level rate for
the occupation due to market forces, or the employee moves into a
more advanced level in the same occupation--the employer shall
retain documentation explaining the changes and clearly showing
that, after such adjustments, the wages paid to the H-1B
nonimmigrant are at least the greater of the adjusted actual wage or
the prevailing wage for the occupation in the area of intended
employment.
The following examples illustrate these principles:
(2) Worker A is paid $10.00 per hour and supervises two
employees. Worker B, who is similarly qualified and performs
substantially the same job duties except for supervising other
employees, is paid $8.00 per hour because he/she has no supervisory
responsibility.
The compensation differential is acceptable because it is based
upon a relevant distinction in job duties, responsibilities, and
functions: the difference in the supervisory responsibilities of the
two employees. The actual wage in this occupation at the worksite
for workers with supervisory responsibility is $10.00 per hour; the
actual wage in this occupation at the worksite for workers without
supervisory responsibility is $8.00 per hour.
(2) Systems Analyst A has experience with a particular software
which the employer is interested in purchasing, of which none of the
employer's current employees have knowledge. The employer buys the
software and hires Systems Analyst A on an H-1B visa to train the
other employees in its application. The employer pays Systems
Analyst A more than its other Systems Analysts who are otherwise
similarly qualified.
The compensation differential is acceptable because of the
distinction in the specialized knowledge and the job duties of the
employees. Systems Analyst A, in addition to the qualifications and
duties normally associated with this occupation at the employer's
worksite, is also specially knowledgeable and responsible for
training the employer's other Systems Analysts in a new software
package. As a result, Systems Analyst A commands a higher actual
wage. However, if the employer employs other similarly qualified
systems analysts who also have unique knowledge and perform similar
duties in training other analysts in their area of expertise, the
actual wage for Systems Analyst A would have to be at least
equivalent to the actual wage paid to such similarly employed
analysts.
(3) An employer seeks a scientist to conduct AIDS research in
the employer's laboratory. Research Assistants A (a U.S. worker) and
B (an H-1B nonimmigrant) both hold Ph.D's in the requisite field(s)
of study and have the same number of years of experience in AIDS
research. However,
[[Page 55348]]
Research Assistant A's experience is on the cutting edge of a
breakthrough in the field and his/her work history is distinguished
by frequent praise and recognition in writing and through awards.
Research Assistant B (the nonimmigrant) has a respectable work
history but has not conducted research which has been
internationally recognized. Employer pays Research Assistant A
$10,000 per year more than Research Assistant B in recognition of
his/her unparalleled expertise and accomplishments. The employer now
wants to hire a third Research Assistant on an H-1B visa to
participate in the work.
The differential between the salary paid Research Assistant A
(the U.S. worker) and Research Assistant B (an H-1B nonimmigrant) is
acceptable because it is based upon the specialized knowledge,
expertise and experience of Research Assistant A, demonstrated in
writing. The employer is not required to pay Research Assistant B
the same wage rate as that paid Research Assistant A, even though
they may have the same job titles. The actual wage required for the
third Research Assistant, to be hired on an H-1B visa, would be the
wage paid to Research Assistant B unless he/she has internationally
recognized expertise similar to that of Research Assistant A. As set
out in Sec. ______.731(1)(A) the employer must have and document the
system used in determining the actual wage of H-1B nonimmigrants.
The explanation of the system must be such that a third party may
use the system to arrive at the actual wage paid the H-1B
nonimmigrant.
(4) Employer located in City X seeks experienced mechanical
engineers. In City X, the prevailing wage for such engineers is
$49,500 annually. In setting the salaries of U.S. workers, employer
pays its nonsupervisory mechanical engineers with 5 to 10 years of
experience between $50,000 and $75,000 per year, using defined pay
scale ``steps'' tied to experience. Employer hires engineers A, B,
and C, who each have five years of experience and similar
qualifications and will perform substantially the same
nonsupervisory job duties. Engineer A is from Japan, where he/she
earns the equivalent of $80,000 per year. Engineer B is from France
and had been earning the equivalent of $50,000 per year. Engineer C
is from India and had been earning the equivalent of $20,000 per
year. Employer pays Engineer A $80,000 per year, Engineer B $50,000,
and Engineer C $20,000 as the employer has had a long-established
system of maintaining the home-country pay levels of temporary
foreign workers.
The INA requires that the employer pay the H-1B nonimmigrant at
least the actual wage or the prevailing wage, whichever is greater,
but there is no prohibition against paying an H-1B nonimmigrant a
greater wage. Therefore, Engineer A may lawfully be paid the $80,000
per year. Engineer B's salary of $50,000 is acceptable, since this
is the employer's actual wage for an engineer with Engineer B's
experience and duties. Engineer C's salary, however, at a rate of
$20,000 per year, is unacceptable under the law, even given the
employer's ``long-established `home country' system,'' since $20,000
would be below both the actual wage and the prevailing wage. The
latter situation is an example of an illegitimate business factor,
i.e., a system to maintain salary parity with peers in the country
of origin, which yields a wage below the required wage levels.
11. In Sec. ______.840, paragraph (c) is republished as follows:
Sec. ______.840 Decision and order of administrative law judge.
* * * * *
(c) In the event that the Administrator's determination(s) of wage
violation(s) and computation of back wages are based upon a wage
determination obtained by the Administrator from ETA during the
investigation (pursuant to Sec. ______.731(d) of this part), and the
administrative law judge determines that the Administrator's request
was not warranted (under the standards in Sec. ______.731(d) of this
part), the administrative law judge shall remand the matter to the
Administrator for further proceedings on the issue(s) of the existence
of wage violation(s) and/or the amount(s) of back waged owed. If there
is no such determination and remand by the administrative law judge,
the administrative law judge shall accept such wage determination as
accurate. Such wage determination is one made by ETA, from which the
employer did not file a timely complaint through the Employment Service
complaint system or from which the employer has appealed through the ES
complaint system and a final decision therein has been issued. See
Sec. ______.731 of this part; see also 20 CFR 658.420 through 658.426.
Under no circumstances shall the administrative law judge determine the
validity of the wage determination or require source data obtained in
confidence by ETA or the SESA, or the names of establishments contacted
by ETA or the SESA, to be submitted into evidence or otherwise
disclosed.
* * * * *
[FR Doc. 95-26921 Filed 10-30-95; 8:45 am]
BILLING CODE 4510-27-M
