1. What must a employer keep in its public access file?
2. What is the downside of a Department of Labor (DOL) audit?

What records are to be made available to the public and the DOL in the public access file?

            To comply with the documentary requirements of the labor condition application (LCA) procedures, certain documents must be made available to any interested party, upon request, within one working day.  The public access file must be maintained “at the employer’s principal place of business in the U.S. or at the place of employment . . .”.  20 CFR 655.760(a).  The employer must maintain a separate public access folder for each LCA filed, containing the following:

1. A copy of the certified labor condition application (Form ETA 9035 or Form ETA 9035E) and cover pages (Form ETA 9035CP).  [The employer should substitute the “approved” LCA after it is returned by the DOL.]  If the Form ETA 9035 is submitted by facsimile transmission, the application containing the original signature shall be maintained by the employer in its files.  If the Form ETA 9035E is submitted electronically, a printout of the certified application shall be signed by the employer and maintained in its files.
2. Documentation which provides the wage rate to be paid to the H-1B nonimmigrant;
3. A full, clear explanation of the system that the employer used to set the “actual wage” the employer has paid or will pay workers in the occupation for which the H1B nonimmigrant is sought, including any periodic increases which the system may provide—e.g., memorandum summarizing the system [of how the actual wage was computed] or a copy of the employer’s pay system or scale (payroll records are not required, although they shall be made available to the Department in an enforcement action).
4. A copy of the documentation the employer used to establish the “prevailing wage” for the occupation for which the H-1B nonimmigrant is sought (a general description of the source and methodology is all that is required to be made available for public examination; the underlying individual wage data relied upon to determine the prevailing wage is not a public record, although it shall be made available to the Department in an enforcement action); and
5. A copy of the document(s) with which the employer has satisfied the union/employee notification requirements of §655.734 of this part.
6. A summary of the benefits offered to U.S. workers in the same occupational classifications as H-1B nonimmigrants, a statement as to how any differentiation in benefits is made where not all employees are offered or receive the same benefits (such summary need not include proprietary information such as the costs of the benefits to the employer, or the details of stock options or incentive distributions), and/or, where applicable, a statement that some/all H-1 nonimmigrants are receiving “home country” benefits . . .
7. Where the employer undergoes a change in corporate structure, a sworn statement by a responsible official of the new employing entity that it accepts all obligations, liabilities and undertakings under the LCAs filed by the predecessor employing entity, together with a list of each affected LCA and its date of certification, and a description of the actual wage system and EIN of the new employing entity . . .
8. Where the employer utilizes the definition of “single employer” in the IRC, a list of any entities included as part of the single employer in making the determination as to its H1-B-dependency status . . .
9. Where the employer is H-1B-dependent and/or a willful violator, and indicates on the LCA(s) that only “exempt” H-1B nonimmigrants will be employed, a list of such “exempt” H-1B nonimmigrants . . .
10. Where the employer is H-1B-dependent or a willful violator, a summary of the recruitment methods used and the time frames of recruitment of U.S. workers (or copies of pertinent documents showing this information) . .

20 CFR 655.730(a)(1-10).  Further, we highly recommended that employers include the following in the file:

1. A statement identifying the two posting locations and the dates of postings made while recruiting; and
2. A statement confirming that a copy of the approved LCA was provided to the H-1B worker.

          Certain documentation regarding the wage statement, attested to in the Form ETA 9035 or 9035E, must be maintained.  The documentation must be sufficient to meet the employer’s “burden of [proof, to prove] . . . the validity of the wage statement” the LCA.  20 CFR 655.731(b).  The wage statement is required in the LCA. 

The employer shall . . . document that the wage rate(s) paid to H-1B nonimmigrant(s) is (are) no less than the required wage rate(s).  The documentation shall include information about the employer’s wage rate(s) for all other employees for the specific employment in question at the place of employment, beginning with the date the labor condition application was submitted and continuing throughout the period of employment.  The [wage rate] . . . records for each such employee shall include:

1. Employee’s full name;
2. Employee’s home address;
3. Employee’s occupation;
4. Employee’s rate of pay;
5. Hours worked each day and each week by the employee if:
   1. (a) The employee is paid on other than a salary basis (e.g., hourly piece-rate; commission); or
   2. (b) With respect only to H-1B nonimmigrants, the worker is a part-time employee (whether paid a salary or an hourly rate).
6. Total additions to or deductions from pay each pay period, by employee; and
7. Total wages paid each pay period, date of pay and pay period covered by the payment, by employee.
8. Documentation of offer of benefits and eligibility for benefits provided as compensation for services on the same basis, and in accordance with the same criteria, as the employer offers to U.S. workers . . . :
   1. (a) A copy of any document(s) provided to employees describing the benefits that are offered to employees, the eligibility and participation rules, how costs are shared, etc. (e.g., summary plan descriptions, employee handbooks, any special or employee-specific notices that might be sent);
   2. (b) A copy of all benefit plans or other documentation describing benefit plans and any rules the employer may have for differentiating benefits among groups of workers;
   3. (c) Evidence as to what benefits are actually provided to U.S. workers and H-1B nonimmigrants, including evidence of the benefits selected or declined by employees where employees are given a choice of benefits;
   4. (d) For multinational employers who choose to provide H-1B nonimmigrants with “home country” benefits, evidence of the benefits provided to the nonimmigrant before and after he/she went to the United States. . .
9. If the employer used a wage determination issue pursuant to the provisions of the Davis-Bacon Act . . . or the McNamara-O’Hara Service Contract Act, . . . the documentation shall consist of the determination showing the wage rate for the occupation in the area of intended employment.
10. If the employer used an applicable wage rate from a union contract which was negotiated at arms-length between a union and the employer, the documentation shall include an excerpt from the union contract showing the wage rate(s) for the occupation.
11. If the employer did not use a wage [determination discussed above] . . ., the employer’s documentation shall consist of:
    1. (a) A copy of the prevailing wage finding from the SESA for the occupation within the area of intended employment; or
    2. (b) A copy of the prevailing wage survey for the occupation within the area of intended employment published by an independent authoritative source.  [If a company decides to use this sort of survey, there are several requirements for the survey to be suitable.] . . .

20 CFR 655.731(b)

            The public access file will be examined by the DOL if a complaint is filed, or if the DOL selects the employers on a random basis for an audit.  In addition to making the public access file available to anyone upon request, the company must make other documents available to the DOL, if requested.  These other documents may include payroll records, to substantiate the rate of pay to employees in comparable occupations.  The company must also be prepared to establish that the working conditions of the H-1B worker and any other employees in the same occupational classification are similar to working conditions existing in like business establishments in the local area of employment.

            It is important to segregate the public access file from all other employee and business files.  Although the DOL does not require a segregation of the public access file from all other files, if a DOL audit should occur, as a safety precaution segregation will expedite the audit and possibly save the employer from any liability due to mingled or misplaced files.  For example, if the public access file is not segregated from other files, the DOL may see things, such as possible wage and hour violations.  The DOL would normally have no right to see information during an audit that could create other legal issues for the employer; however, if the files are not segregated the DOL may take action on other non-related violations or they may start new investigations, based upon what they see in the files.

            Audits may occur on a random or profile basis.  A random audit occurs when the DOL selects an employer to audit, without any reason.  On the other-hand, a profile audit has a bit of reasoning.  A profile audit occurs when the DOL discovers a significant variation of offenses in a particular industry or area and the employer is part of the same industry or area, or the DOL has a profile for violators and the employer meets the profile.  An employer can expect an audit, at some point in time, as it is the DOL’s intent to eventually audit all employers who file LCAs.

            The public access file must be maintained “for a period of one year beyond the last date on which any H-1B nonimmigrant is employed under the labor condition application or, if no nonimmigrants were employed under the labor condition application, one year from the date the labor condition application expired or was withdrawn.”  20 CFR 655.760(c).  The required wage rate records “for H-1B employees and other employees in the occupational classification shall be retained . . . for a period of three years from the date(s) of the creation of the record(s), except that if an enforcement action is commenced, all . . . [wage rate] records shall be retained until the enforcement proceeding is completed . . . Id.        

What is the downside of a Department of Labor audit?

     A DOL audit may expose a employer to liabilities.  If, after a compliant and an investigation, the employer is found in violation of any attestation requirements, the DOL may order the following:

The assessment of back-pay for the H-1B worker, if the employer has failed to pay required wages;

1. The payment of civil money penalties of up to $1,000 per violation;
2. The disqualification of the employer from filing any temporary or permanent employment-based immigration petitions for a period of a least one year; and/or
3. The payment of the difference in salary, between an acceptable salary (based upon a survey) and the amount actually paid.  The difference must be paid to all employees (including non-aliens) in like positions.