PERM : Panacea or Problem?
Posted Feb 21, 2003

Regular readers of MurthyDotCom and the MurthyBulletin are familiar with the proposed overhaul of the labor certification process, known as PERM. PERM (Program Electronic Review Management System) is supposed to streamline and expedite the processing for labor certifications. The most recent announcement from the U.S. Department of Labor (DOL) stated that the final regulation would be available in April 2003, with the process to go into effect in July 2003. For more information, please see our December 27, 2002 article, PERM Projected for July 2003. With the current labor certification process plagued by significant delays, PERM provides an enticing alternative to many of our clients and readers. Understandably, we at The Law Office of Sheela Murthy have been receiving numerous inquiries regarding PERM. What follows may help those who are wondering what PERM may mean for them if it is finalized in its present state. 

Overview of PERM

Before viewing PERM as the solution to everything that ails the labor certification system, it is important to note the flaws in the execution of this effort to create a more streamlined system for certifying applications. On the positive side, PERM, as proposed by DOL in May 2002, takes some positive steps toward a faster labor certification process. However, it also contains provisions that will eliminate approvals for some occupational descriptions currently not at issue as well as the employers' ability to obtain labor certifications in certain situations.

Hopefully, the final regulation will remedy some of the problems contained in the May 2002 version of the DOL regulations but the extent of any positive changes cannot be ascertained at this time. Following are some drawbacks of PERM as it was proposed originally.

PERM Does Not Generally Allow for Special Skills

Under current labor certification regulations, employers are allowed to describe special skills they require of employees for performance of their job duties. For example, a software engineer may need to possess knowledge of a particular type of software. DOL has accepted these specific requirements as long as the skills have been normally required to perform satisfactorily in the occupation. Under the proposed PERM regulations employers would only be allowed to list job requirements in terms of the minimum number of years of experience, education, and training to perform the job. Employers would only be able to list any additional skills if a U.S. worker had held the same position within two years of labor certification filing.

PERM Would Eliminate Business Necessity

Moreover, employers currently are able to argue 'business necessity' when the DOL flags a required skill as too restrictive and beyond what is minimally needed to perform the job. For instance, as the DOL regulations now stand, an employer may list a foreign language as part of their special requirements for the position to be filled. DOL is skeptical about foreign language requirements. They may question the requirement as being unduly restrictive. If the employer really needs someone who is bilingual, then the employer may argue that the requirement is a business necessity. The employer would need to demonstrate that the foreign language requirement bears a reasonable relationship to the position in the context of the employer’s business and that it is essential to the reasonable performance of the job duties. Typical examples with respect to foreign language would involve certain international businesses which conduct business in a language other than English, as well as those businesses dealing with a large, non-English speaking clientele. Under the proposed PERM regulations, the business necessity rule is eliminated. As a result, employers would have to submit an unrealistic labor certification application that does not adequately describe the requirements of the position being offered.

PERM Would Eliminate Alternative Requirements

The proposed PERM regulations would also eliminate the employer’s requiring alternative experience as a means of qualifying for the job opportunity. For instance, the employer would not be able to express the requirements for a position as “either a Master’s degree plus two years of experience or a Bachelor’s degree plus five years of experience,” even if these were the employer’s normal requirements for the position. This use of alternative requirements reflects business reality.

Experience with Related Entity Would Not Count

Under the proposed PERM regulations an employer also would be prevented from considering experience gained by a foreign national with an entity somehow affiliated with the employer.

PERM Would Require Greater Flexibility for U.S. Workers

The proposed PERM regulations also require an employer to consider any applicant authorized to work in the U.S. even if that applicant does not meet all the requirements listed in a labor certification. Therefore, if a U.S. applicant can learn the skills needed to perform the job duties during a “reasonable period of on-the-job training,” s/he would not be considered an unqualified worker. Furthermore, the proposed PERM regulations require employers, who have laid workers off in the area of intended employment within six months of filing the labor certification application, to demonstrate that they notified and considered all qualified, laid-off U.S. workers.

PERM Would Eliminate Payment of 95% of Prevailing Wage

In addition to the above, the proposed Perm regulations require employers to pay salaries equal to or higher than the prevailing wage and allow for the revocation of labor certifications. Under the current labor certification procedures, employers are allowed to pay an actual wage that is within 95 percent of the prevailing wage determined by the DOL. The proposed PERM rule would remove this margin and, as a result, employers would have to offer foreign nationals wages that are above those wages actually offered to U.S. workers for the same position.

PERM Would Enable DOL to Revoke a Certified LC

The proposed PERM regulations also would allow DOL to revoke a labor certification for cause if the certification occurred less than one year from the date of revocation or for an application that has not received a visa number, whichever comes first. Thus, there would be uncertainty regarding the foreign national's future, even after the labor certification is approved.

Summary of PERM

The above are just a few examples of the DOL’s proposed changes for the labor certification process under the May 2002 proposed PERM regulations. These examples demonstrate that if PERM is implemented without some major amendments to this proposal, U.S. businesses and foreign nationals, both, will pay a heavy price in the name of efficiency.

In essence, employers would have to undertake more extensive recruitment of U.S. workers than is currently required. They would have to accept U.S. workers not actually qualified for the job. Also, they would not generally be able to indicate necessary specialized skills as a criterion for the hiring decision. While we understand the objective to protect the U.S. labor force, foreign workers provide key skills that often fuel our U.S. businesses, keeping them on the cutting-edge in a global market. Our businesses need the ability obtain the most qualified workers with the skills that they need when they need them, even if the applicant possessing those skills does not yet have a green card or U.S. citizenship.