DOL Proposes Elimination of LC Substitutions and Other Changes
Posted Feb 17, 2006
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The U.S. Department of Labor (DOL) published what promises to be a controversial proposed regulation pertaining to labor certifications. The proposed regulation was published in the Federal Register on Monday, February 13, 2006. There is a sixty-day comment period, concluding on April 14, 2006. The stated purpose of the regulation is to reduce incentives and opportunities for fraud and abuse. In this regard, it seeks to make sweeping changes, including: ending the labor certification (LC) substitution process; limiting the validity period of a labor certification to 45 days; banning the sale, barter, and purchase of labor certifications; and prohibiting the LC beneficiary from paying for attorney fees and other costs related to the LC process.
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As previously noted, we at the Murthy Law Firm abhor fraud in the immigration process and recognize that there have been significant abuses in this area. The proposed regulation, however, is too broad and too blunt to accomplish its purpose without causing disruption and prejudicing those legitimately involved in the LC process.
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LC Substitutions
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Various investigations have revealed instances of fraud in the process of substituting beneficiaries in the labor certification process. There have been certain unscrupulous individuals and companies who have engaged in schemes involving the sale of pre-approved labor certifications to the highest bidder. Acknowledging wrong-doing and the presence of flaws in the system does not justify the elimination of the entire LC substitution alternative, however. Additionally, limiting the validity of labor certifications to 45 days in order to avoid substitution through the USCIS is too broad, impacting every case, not just LC substitution cases.
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Eliminate Substitution via DOL
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The proposed regulation addresses the substitution issue in two ways. First, since it is a DOL regulation, it can direct DOL procedures. Thus, it would eliminate the substitution of beneficiaries at the labor certification stage entirely (i.e. in a pending or approved labor certification). Once the labor certification is approved, though, it is possible to request substitution through the USCIS at the stage where the I-140 petition is filed. This I-140 petition filing process is out of the hands of the DOL, so they are attempting to maintain control by substantially limiting the validity of the labor certification.
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45-Day Rule for LC Validity
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Since the DOL cannot control the USCIS, the proposed regulation attacks the possibility of substitution at the I-140 petition stage, which falls under the USCIS, by establishing a 45-day rule. Historically, labor certifications have been valid indefinitely. There is no timeframe within which the employer must file the I-140 petition once the labor certification is approved. To avoid the likelihood of an employer requesting substitution of beneficiaries at the I-140 filing stage, the regulation would limit the validity of labor certification approvals to 45 calendar days following certification. This rule would apply to both PERM and pre-PERM cases.
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Unrealistic Deadline for LC Validity
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This limit is simply too tight. It is intended to make substitution disappear, but will have the effect of wreaking havoc with all cases. This deadline is particularly unrealistic for labor certifications coming from the DOL backlog processing centers. Many of these cases have been pending for years, and there is no way to know when or if they will be approved. For this reason, companies often do not prepare the I-140 petitions in advance for these cases. Delays are also quite common in I-140 preparation due to the need for documentation or a signature from an individual who is unavailable. There are numerous valid, non-fraudulent reasons that an I-140 petition might not be filed within 45 days of labor certification approval. Not the least of these is stalled receipt of the labor certification approval due to mail and delivery problems.
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As one justification for the 45-day rule, the DOL points to the likelihood that, over time, the certified job opportunity would no longer exist. The labor market test and wage rates also would become less accurate or stale. Thus, the I-140 needs to be filed promptly. Timeliness is important. The delays in action on the cases in question are largely attributable to the DOL, however. Under this rule, for example, a case filed under PERM on January 1, 2006 might be approved on March 1, 2006. With a 45-day rule, the I-140 would have to be filed by mid-April 2006. Thus, a PERM case filed on January 1, 2006 would be considered outdated four and a half months later. There are labor certification cases, however, that have been pending with the BPCs since they were filed in 2001, and perhaps even earlier. These are not considered obsolete. The decision as to whether there is an ongoing, valid job offer is a USCIS decision that needs to be made in connection with the I-140 and I-485 filings.
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Staleness is not the real concern. The DOL is attempting to eliminate LC substitution at the USCIS. Because the DOL does not determine USCIS rules, the method they are left with is not tailored to the actual issue. The problems of fraudulent and black market labor certifications and related matters should be attacked at their source rather through means that create problems for the majority of the cases that are bona fide.
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Prohibition on Sale of LCs : Attorneys Fees Included
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The proposed regulation would prohibit employers from seeking or receiving payment of any kind, from any source, for filing a labor certification or for any other labor certification-related action. This would include fees for hiring the foreign national, receiving any sort of "kick back," or paying the beneficiary at a reduced rate. Included in this change would be a prohibition against the beneficiary paying, directly or indirectly, attorney's fees and costs related to preparation, filing, and obtaining a labor certification.
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The rationale for this is that, if the foreign national is subsidizing the employer's costs, the employer is less likely to offer the job to a U.S. worker. They specifically mention the recruitment effort costs in this theory.
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DOL Rationale on Employer Savings Does Not Add Up
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While we at the Murthy Law Firm agree that labor certifications and job offers should not be bought and sold, we disagree with the DOL's rationale for prohibiting the named beneficiary's payment of costs expended in connection with his/her labor certification. The foreign national is not subsidizing the employer by paying for the labor certification-related costs. These costs do not exist for a U.S. worker. Thus, even if the foreign national pays for them, the company sponsor has no net savings and still has other potential inconveniences associated with hiring a foreign national. 
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The only employer cost that might be reduced is that of the advertisements. If the DOL takes issue with the foreign national paying for the ads, then they should seek to prohibit that payment alone. To do otherwise is simply too broad. Moreover, the employer, in many circumstances, already paid to advertise for the recruitment of the foreign national, initially. These ads are often too old for use with the labor certification case by the time the employer is willing to sponsor the foreign national under the DOL regulations for the LC process. Thus, the job has to be re-advertised in an additional effort to locate U.S. workers. Even when this is not the case, any payment given to the employer towards advertisement costs is more than outweighed by the additional work, time, and effort expended by the employer in the labor certification preparation process. No employer agrees to take this step simply to get ads paid for by the foreign national.
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There are many costs that are sometimes paid by the employer and sometimes by the employee, depending upon the particular circumstances and the market. The payment of the labor certification-related costs is similar to the payment of relocation expenses. An employer might pick up all of this expense (in some cases, even paying closing costs for housing on both ends), some of this cost, or none of this cost. Without the relocation, the worker cannot perform the job. Relocation of a desirable employee to an area where there is a position that s/he desires, benefits both the employer and the employee.
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The same is true of a labor certification. The employee cannot work for the employer on a long-term basis without the "green card" or permanent resident status. Both employer and employee benefit. The employee (and often his/her family) ultimately gets the life-time benefit of the green card. With AC21, the employer may not even get a particularly long-term employee, as s/he has the legal right and ability to change employers simply by finding the same or similar work anywhere in the U.S. Thus, the division of the legal fees and the related costs should remain as a privately negotiable benefit between the parties, outside the purview of the DOL.
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Conclusion
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The need to address fraud and black market labor certifications is clear. The methods employed by the DOL in this regulation extend well beyond their stated goal, however. The proposed regulation needs to be revised, possibly overhauled entirely, so that the objective will be accomplished without creating new and additional problems for all parties within the system. If employers have to re-file with new PERM cases in order that the I-140s can be filed within 45 days, then any progress the DOL has made in streamlining or saving time and resources will be outweighed by the multiple, repeated filings of cases by employers who have already filed these cases. It is time for the DOL to carefully think through the repercussions of this proposal.