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Wage Obligations of H1B Employers

In a Q&A guideline dated February 17, 2011, the U.S. Department of Labor (DOL) discussed the obligations of an H1B petitioner. Among these obligations is the payment of the required wages.

In the labor condition application (LCA) filed with the DOL, the H1B employer must promise that it has paid or will pay the required wage for the worker for the entire period of the authorized employment.

The employer attests that it will pay whichever is higher between the actual wage rate (the rate the employer pays all other individuals with similar experience and qualifications for the position in question) or the prevailing wage (the wage paid to workers in the same occupational classification in the area of intended employment)

Wage violations carry with them sanctions such as civil penalties, back wages and debarment from the H1B program. Violations may be reported to the USCIS or DOL.

To find out what the prevailing wage is, the employer may request a prevailing wage determination from the National Prevailing Wage Center (NPWC). Alternative wage sources for the prevailing wage include the collective bargaining agreement, a wage survey conducted by an independent authoritative source, and the Bureau of Labor Statistics Occupational Employment Statistics Survey (OES) data that can be accessed online through the iCERT Portal System and the FLC Data Center. The employer should keep documentation of the offered wage on file.

The prevailing wage is valid during the validity of the H1B petition. In no case may the employer pay a wage lower than the federal, state, or local minimum wage, whichever is higher. The current federal minimum wage rate is $7.25 per hour.

The obligation to pay the required wage rate begins when the employee “enters into employment”, which is when the employee presents him/herself for work or comes under the control of the employer. According to regulations, this includes waiting for an assignment, reporting for orientation or training, going to an interview, or studying for a licensing examination. Even when the employee has not yet “entered into employment”, he/she must be placed on the payroll beginning on the 30th day after admission into the U.S. pursuant to the H1B petition, or if already in the U.S., beginning on the 60th day after he/she becomes eligible to work for the employer.

The employer is not exempted from paying an employee on nonproductive or “benched” status. If the employee works full-time, he/she must still be paid the full pro-rata amount due (if the employee is salaried) or for an entire workweek (if paid hourly). Part-time employees must be paid for at least the number of hours indicated in the H-1B petition.

Law and regulations require that the H-1B worker continues to be paid even during a temporary reduction in force or temporary shut-down. If the employee is nonproductive because of his/her own decision to be unavailable for work and for a reason unrelated to employment, there is generally no obligation to pay the wage rate.

In some instances, the employer’s obligation to pay terminates prior to the expiration of the LCA’s validity, such as when the H1B worker resigns, moves to another employer, or is terminated from work. When the employee voluntarily leaves, the employer may not charge the H1B worker a penalty fee outright or through deductions, but they may enter into an agreement for the payment of liquidated damages in case of early termination by the worker.

A bona fide termination also ends the employer’s obligation to pay the required wage. The employer must have notified both the employee and the Department of Homeland Security, and it must also pay for the worker’s cost of return transportation to his/her last place of foreign residence. This offer of transportation cost does not extend to the worker’s dependents.

Single Card for Employment and Travel of Adjustment Applicants

The USCIS announced recently that it will issue employment and travel authorization to adjustment of status applicants on a single card. Previously, only the employment authorization document (EAD) was issued in the form of a plastic card and the advance parole document was an actual paper document. A single EAD card with advance parole endorsement is more durable, secure and convenient.

According to a Policy Memorandum dated December 21, 2010, the USCIS found that it is cost-effective to adjudicate Forms I-765 and I-131 simultaneously and issue a single document if both benefits are granted. The USCIS makes separate adjudications of applications for these ancillary benefits, although the information required from the applicant and the processes followed by the adjudicator are similar.

Approximately 15% of EAD applicants with pending adjustment applications file a Form 131 concurrently with or shortly after filing the I-485, and approximately 93% of those applications are approved.

Also referred to as Form I-766, this new dual-purpose card is available to eligible individuals with pending family- or employment-based I-485 applications who have concurrently filed an application for employment authorization (I-765) and an application for travel document (I-131). Separate EAD and advance parole documents will continue to be issued if only one ancillary benefit is requested, or if they were concurrently filed but the I-131 is denied.

For adjustment applications filed under the new fee structure (on or after July 30, 2007 for family-based cases, and on or after August 18, 2007 for employment-based cases) there are no separate fees for Form I-765 and I-131,and the applicant need only pay the I-485 fee of $1,070 fee, inclusive of the biometrics fee.

On the other hand, if the adjustment application was filed under the old fee structure, the card will cost $740 which is equal to the combined costs for Forms I-131 and I-765.

An advance parole document enables an adjustment of status applicant to travel abroad and re-enter the United States. Without advance parole, an alien who leaves the U.S. is considered to have abandoned his/her adjustment application. The alien will not be permitted to re-enter the U.S. without first obtaining some kind of visa, but in such a case the adjustment application will be considered abandoned except in the case of holders of certain types of visas, such as H and L visas.

The alien must request parole at the port of entry by presenting the advance parole document. The determination to grant parole is also made at the port of entry. Once in, the alien is considered a parolee and not someone who has been “admitted” for immigration purposes.

Advance parole does not cure inadmissibility due to unlawful presence accrued prior to the filing of the adjustment application. Therefore, individuals who are subject to the 3 or 10-year bar should carefully consider whether they need to file Form I-131.

The new dual purpose card looks similar to the current EAD but has the endorsement “Serves as I-512 Advance Parole”. The USCIS may issue a card validity of one or two years depending on the availability of immigrant visas, but it may in its discretion issue the card for a longer or shorter period. The new card may be used for employment eligibility verification (I-9) by employers as a List A document.

Immigration Reform Back On Track

News came out recently that Senator Chuck Schumer (D-New York) has teamed up with Sen. Lindsey Graham (R-South Carolina) on the matter of immigration reform. According to an article from The Politico, efforts at forming alliances with unlikely allies, including Sen. Lisa Murkowski (R-Alaska), are supposedly underway.

Given the changed landscape in the present Congress, these developments augur well for a bipartisan comprehensive immigration reform (CIR) bill. Other events of note include Rep. Steve King’s (R-Iowa) failed bid for Chairmanship of the Immigration subcommittee in the House. Representative King was a known immigration hardliner but he lost out to the less controversial Rep. Elton Gallegly of California.

Senator John McCain (R-Arizona) also allegedly made a comment that could mean that he’s ready to revisit immigration reform.

Immigration reform continues to be a priority for President Obama. In his 2011 State of the Union address, he expressed his readiness to proceed with immigration reform and called on Congress to do the same. He also remarked that this country should stop deporting young talented people who could enrich the nation.

Immigration reform, he said, is needed for our economic recovery. Indeed, twelve million newly-documented immigrants could do this country a great deal economically.

Many studies have discussed immigration’s economic implications. The Center for American Progress, for example, found that a mass deportation strategy would cost $2.6 trillion in gross domestic product over the next ten years, while CIR would lead to a $1.5 trillion economic growth. A temporary worker program could raise the GDP by $792 billion, according to the study. The research group believes that CIR will raise the wage floor for all workers, produce more income and spending by newly-legalized immigrants, and result in more tax revenue for the government.

Two weeks ago, Sen. Harry Reid (D-Nevada) introduced a bill called Reform America’s Broken Immigration System Act. The bill calls on Congress to pass legislation which supports national and economic security, such as the DREAM Act and AgJobs, and aims to implement a “rational legal immigration system to ensure that the best and brightest minds of the world can come to the U.S. and create jobs for Americans while, at the same time, safeguarding the rights and wages of American workers”.

Senator Reid’s bill would require all U.S. workers to obtain identification and impose tougher penalties on employers found violating labor and immigration laws. It also proposes that those who are here illegally be held accountable by requiring them to earn legal status through a series of penalties, sanctions and requirements, or else they will face immediate deportation.

The senator said in an interview that the prospects of his proposal in the 112th Congress are good. His optimism may be buttressed by support from organized labor and business groups, both of which understand that something needs to be done with the country’s broken immigration system.

Even former House Speaker and rumored presidential candidate Newt Gingrich has joined in on the call for immigration overhaul. In an attempt to reach out to the Hispanic community, he said at a forum late last year that although he is not for amnesty, he is for applying “common sense to the immigration debacle”.

Politicians are aware that Hispanics are the fastest growing group of American voters. Republicans and Democrats alike will continue to woo them by promising immigration reform.

However, CIR is an issue that touches upon all immigrants’ lives and cuts across racial lines. The President has made clear in his address that his administration is committed to passing immigration reform on his watch. We should likewise remain hopeful and do what we can to support immigration reform.

Student Employment While Under Practical Training

In this year’s State of the Union Address, President Obama made mention of the unfortunate repatriation of international students enrolled in U.S. colleges and universities. His comment is a recognition of the significant contributions of international students and scholars to this country.

The United States gains by allowing foreign students to get training not only in terms of the economic impact of the students’ presence and the diversity and global character that they bring to the workplace, but also because the country benefits from the application of the students’ knowledge which they acquired in their advanced studies.

Apart from formal classroom education, another way that students learn is through practical training. Practical training allows qualified foreign students to gain work experience by applying their academic knowledge to a position directly related to their area of study.

Employment may be authorized for F-1 students enrolled for one full academic year in a Department of Homeland Security (DHS)-approved college, school, university, conservatory, or seminary, except students in English-language training programs.

There are two types of practical training: curricular practical training (CPT) and optional practical training (OPT).

The first type, CPT, is approved by the designated school official (DSO) for an activity that is an integral part of an established curriculum, such as a work-study program, internship or practicum offered through cooperative agreements between a school and an employer.

The DSO issues the student an I-20 with the CPT endorsement after updating the student’s information in the SEVIS, the online database that tracks information on international students and visitors who are in the U.S. under the F visa, among others. The I-20 with the CPT endorsement constitutes the student’s employment authorization.

There is no limit as to the duration of part-time (20 hours or less) or full-time CPT, but a student who has one year of full-time CPT may no longer be granted OPT at the same academic level. Part-time CPT is not accumulated or deducted from OPT.

The other type of practical training, OPT, is not limited to students who are currently enrolled in any class. Pre-completion OPTs are available for students on a part-time basis during school sessions, and on both part- and full-time basis during annual vacations and school breaks for students who are enrolled and will register for the next school session.

A maximum of 12 months OPT authorization is allowed for each educational level. This means that a student can have 12 months of OPT each for the bachelor’s, master’s, and doctoral levels. A one-time 17-month STEM extension of a post-completion OPT is possible for F-1 students who earn a degree in science, technology, engineering, or mathematics.

According to a policy guidance, employment under OPT may be part-time or full-time employment. It may be for a single or for multiple employers, for multiple short-term employers, for an agency or consulting firm, or for the student him/herself as the business owner. Unpaid volunteer work and internships are also allowed. Moreover, the student may perform work as a contractor paid on tax form 1099 and need not be an employee. However, the employment practice must not be in violation of labor laws, and in all cases the employment must be directly related to the student’s major area of study.

The student initiates the process by asking the DSO to recommend the OPT. The DSO makes such recommendation by issuing a Form I-20 with the OPT endorsement. The student will then file Form I-765 with the USCIS. If the application is approved, the student will receive a Form I-766 Employment Authorization Document. Regulations require the student to report any change of name or address or interruption of employment to the DSO.

In cases where their employers are willing to continue their employment under an H-1B visa, foreign students most of the time encounter the “cap gap” – the period between the expiration of the OPT and the start of their H-1B status, which usually occurs on October 1 of each year. Because of the limited number of available H-1B visas, highly qualified students often face difficulty in continuing their employment.

In an effort to remedy this, the USCIS implemented the “cap gap” rule which offers automatic extension of duration of status and any OPT employment authorization until October 1 of the fiscal year where the student is the beneficiary of a petition requesting a change of status to H-1B. This will allow the student to remain and continue working in the U.S. until the change of status takes effect.

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