Vision System Case
How Could This Have Been Avoided?
Employers in the immigration bar are seeing federal investigators focus on alleged frauds in the hiring and assignments of temporary foreign workers in the H-1B visa category. Particular investigatory interest is being directed at consulting firms that employ so-called 'roving employees'. There is some concern that this means that hiring consulting firms that employ H-1B workers for assignments at employer sites is now illegal or will get the contracting company and the subcontractor into trouble. This is simply not the case, provided that certain commonsense legal standards are observed.
Vision System Case
In its latest enforcement action last month, US Immigration and Customs Enforcement (ICE) led a taskforce that indicted New Jersey H-1B employer Vision System Group. This resulted in the arrest of 11 individuals on visa and mail fraud charges and a forfeiture claim of $7.4 million. What stands out from this, and other recent immigration-related indictments, is that this is the age of federal taskforces and substantial investigative resources – including data-mining by multiple agencies – are now being used in even routine investigations. In the Vision System Case, a government taskforce culled information from immigration filings and tax filings in combination to form its charges of conspiracy, mail fraud, wire fraud and making false representations in an immigration application. Altogether, at least four federal agencies and the US Attorney's Office were involved. The 28-page indictment alleges the following criminal violations:
- Vision System filed labour condition applications and applications for temporary employment certification (Form ETA 9035E), allegedly containing prevailing wages for a location other than where the employees would actually be employed.
- Vision System then tried to conceal this by filing tax wage reports to support the location listed on the immigration filings, rather than the actual work locations.
- The government also used the immigration filings to support a charge for mail fraud.
- Vision System is accused of filing bogus H-1B petitions and labour condition applications without truly intending to employ the workers at the stated job site. The labour condition applications indicated that workers would be employed at a low-wage jurisdiction while the H1B applicants actually worked at high-salary destinations.
- Vision System also allegedly accepted money from its workers in return for filing H1B petitions with the US Citizenship and Immigration Services (USCIS), which is a violation of law.
How Could This Have Been Avoided?
In order to avoid a similar fate employers must appreciate both what they are permitted to do with H-1B workers and what they must never do with H-1B workers.
Don'ts for H-1B workers
Employers should bear the following in mind:
- Never start a H-1B worker at a client worksite without first filing an amended I-129 petition and labour condition application for that site, unless that assignment is short term (lasting no more than 30/60 days during any year at any particular site).
- Never 'bench' a H-1B worker – even if there is no assignment available, and it costs money out of pocket, the H-1B worker must continue to be paid at least the wage specified on the current petition for as long as he or she remains your employee.
- Never falsify tax statements, withholding reports or any other document or paper that is going to be filed with the federal government. If it goes to one federal agency, assume it goes to all of them – because today it can and it will do if there is an investigation. Keep complete records of any outside assignments with the labour condition application compliance file for your employee. Audit your records (or hire a competent firm to do so) and file corrected statements if you find any discrepancies.
Dos for H-1B workers
You may assign H-1B employees to client sites as short-term 'roving employees'. This may be done legally for short-term assignments without filing any additional paperwork with USCIS or the US Department of Labour. The specific USCIS regulation that allows provides that:
"[A] H-1B in the [United States] under [a labour condition application] may be sent to a new worksite which is not covered by [a labour condition application], but only up to a maximum of 30 days each year, and up to 60 days each year if the H-1B spends substantial time at a permanent worksite, if s/he continues to maintain an office or work station at the permanent worksite and if her [US] residence or place of abode is located in the area of the permanent worksite."(1)
For longer-term outside assignments, you must file an amended petition for the H-1B worker. If you are filing an amended H-1B petition to allow the worker to carry out longer-term duties at a client site, you must demonstrate that your company maintains control over the employee and that the employment is not 'speculative'. Demonstrating to the USCIS that the employment is not speculative may be difficult and complicated. In some cases, particularly for assignments lasting more than 60 days, it may be easier for the client company to hire that employee directly or to enter into a co-employer relationship. The H-1B employment may start work with a new petitioning H-1B employer on the day the H-1B petition notice of receipt is obtained from the USCIS service centre where it was filed. Regardless of whether that new petition is approved, it is legal for the worker who has maintained H-1B non-immigrant status, and has had an employer file a timely, non-frivolous H-1B transfer or extension petition, to start work for the new petitioning employer the day the receipt is issued. That lawful practice is known as 'porting' and is allowed under the law. The following section of the law describes the context in which a foreign national may work for the sponsoring H-1B employer while the petition is pending:
[A] nonimmigrant who was previously issued [a] H-1B visa or provided H-1B nonimmigrant status may begin working for a new H-1B employer as soon as that new employer files a nonfrivolous H-1B petition on the nonimmigrant's behalf, if:
• The nonimmigrant was lawfully admitted to the United States;
• The nonfrivolous petition for new employment was filed before the end of their period of authorized stay; and
• The nonimmigrant has not been employed without authorization since his or her lawful admission to the United States, and before the filing of the nonfrivolous petition. In order to port, an alien must meet all the requirements of INA § 214(n), including the requirement that the new petition must be filed while the alien is in a 'period of stay authorized by the [a]ttorney [g]eneral.'"(2)
As with all matters involving compliance with complex regulatory requirements, the employer should work closely with competent immigration counsel before applying for any benefits under the Immigration & Nationality Act.
A company that refers its own H-1B worker for subsequent assignment at the work site of a client firm will be treated under the law as a referring agency and has a duty to insure that the worker maintains lawful non-immigrant status. Accurate and complete records showing maintenance of legal status must be kept. This will require the employer to engage in due diligence to keep and maintain legal contracts and accurate records covering its relationship with the customer, as well as the H-1B employer-employee relationship. These records should include documentation of:
- the employee's actual place of employment;
- the work performed;
- the source and amount of all payments made to the employee; and
- a description of the ongoing means by which the employer maintains control over the work of the H-1B employee during outside assignments.
Corporations may continue to benefit from the H-1B visa programme. However, efforts must be made diligently to comply with all labour and immigration laws.
For further information on this topic please contact Rami D Fakhoury at Fakhoury Law Group PC by telephone (+1 248 643 4900) or by fax (+1 248 643 4907) or by email (rami@employmentimmigration.com).
Endnotes
(1) 20 CFR §655.735(c), www.dol.gov/dol/allcfr/title_20/Part_655/20CFR655.735.htm.
(2) USCIS Memo on AC21/ACWIA — Guidance for I-140 and I-129 H-1B Petitions, and Form I-485 Applications (June 7 2008), http://thevisabulletin.com/2008/ac21-acwia-memo-from-uscis-neufeld/.
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