Further Analysis on LC Substitution Elimination Regulation
Posted Jun 01, 2007
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Visitors to MurthyDotCom and subscribers of the MurthyBulletin were informed on May 16, 2007 of the recent U.S. Department of Labor (DOL) regulation eliminating the substitution of labor certifications (LCs). This regulation seeks to implement all of the following: eliminate labor certification substitution cases; prohibit certain "improper" payments in connection with labor certifications; limit the validity of labor certifications to 180 days; and provide for other mechanisms meant to minimize or eliminate fraudulent practices. Based on the advance copy released, we at the Murthy Law Firm posted our initial analysis of this regulation in our May 16, 2007 NewsFlash, LC Substitution Elimination Reg Effective July 16, 2007, available on MurthyDotCom. Since the publication of the regulation in the Federal Register on May 17, 2007, we have had an opportunity to review it in further detail for the benefit of our clients and our readers.
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Payment of LC Fees by a Third Party
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As already reported, under this new regulation, the employer has to pay all relevant legal fees and costs related to the labor certification filing. Many foreign nationals about to start the process are concerned that their employers may be unwilling or unable to bear the entire cost of a labor certification and, thus, may not be able to sponsor a case. The regulation, however, provides for a "third party exception," where a third party "to whose benefit work to be performed in connection with the job opportunity would accrue" could bear the cost, if that third party is an entity with an "established business relationship with the employer." This exception potentially opens more opportunities for cost sharing in situations where, for example, the employer is a consulting company with multiple clients to whose worksites its employees are sent. The client of the employer would serve as a third party and could likely share the cost of the labor certification filing because it benefits from the employee's services and has a business relationship with the employer. The regulation does not give this as an example in its preamble explanation of the third-party arrangements. This interpretation, however, appears to be consistent with the precise wording of the regulation.
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Typographical Errors Could Result in LC Denial
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Our August 11, 2006 MurthyBulletin article, BALCA Approves PERM Case : DOL Requests Return of Denied PERMs, reported that the Board of Alien Labor Certification Appeals (BALCA) decided in Matter of HealthAmerica that a typographical error in the labor certification should not result in its denial. In the new regulation, the Certifying Officers are authorized to deny labor certifications if "the deficiency that caused denial resulted from the applicant's disregard of a system prompt or other instructions." While it may sound as if the Certifying Officers have been given complete discretion as to whether to deny labor certifications containing typographical errors or other minor deficiencies, the regulation does not appear to override the earlier BALCA decision. It still allows for the denial only if the online filing system has given the applicant error or warning signs that s/he disregarded and, nevertheless, filed his or her labor certification.
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Duplicate LC has Same Filing Date as the Original
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The new regulation sets new rules for requesting and obtaining duplicate labor certifications. It provides that the duplicate LC will have the same filing date and the same expiration date as the original. In the past, a duplicate could have a new filing date as of the date of its issuance. Since the LC validity is limited to 180 days, during which the employer or Petitioner has to file an I-140 petition, filing a request for a duplicate will not extend the validity period, as it will be the same as that of an original LC.
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Conclusion
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As we work further with this regulation and explore its nuances, any updates will be shared with our readers. The regulation potentially could be challenged on a number of legal grounds by employers and organizations affected by it, as it is controversial in some respects. We will continue to inform MurthyDotCom and MurthyBulletin readers on these matters.