Public Inspection Files
Employers should maintain two (2) separate Labor Condition Application files for each H-1B worker (in addition to the standard personnel file): a “public inspection file” (which must be available for public inspection at the worksite or principal place of business within one working day after the LCA is filed with the DOL) and a “DOL investigation file”. This will allow the employer to provide the minimum amount of information in each context while still meeting all legal requirements. Although it is possible to keep one public inspection file for all H-1B employees, it is better practice to keep separate files for each employee.
1. Public Inspection File
The public inspection file must be available for examination by the public within one (1) working day after the date the LCA is filed. The documentation in this file must be retained for one (1) year beyond the completion of the H-1B employment. The public inspection file should include the following:
a. A copy of the LCA and Cover Pages. A copy of the certified LCA (Form ETA 9035) and the Labor Condition Application Cover Pages (Form ETA 9035CP) should be maintained in the public inspection file. (Until the certified LCA is received from the DOL, a copy of the filed LCA should be kept in this file.)
b. A Statement of the Wage Rate to be paid to the H-1B worker. The LCA is sufficient if it includes the initial wage rate as opposed to a salary range. Employers must keep this wage information current throughout the duration of the H-1B worker’s employment. Each time the H-1B worker receives an adjustment in wage, the statement in the public inspection file must be updated.
c. An Explanation of the “Actual Wage”. A memorandum summarizing the system an employer used to set the “actual wage” or a copy of its pay system or scale. The actual wage is the range of wages paid to other workers who perform the same specific employment and who have similar experience and qualifications as the H-1B worker. If there are no other workers with similar experience and qualifications performing the same specific job as the H-1B worker, the wage paid to him/her is the actual wage.
The memorandum must specify the factors used in setting the wage levels, including factors that determine variations in wage levels, periodic increases and the standard used to award those increases, and the workers within the system. The documentation should be detailed enough that a third party can understand how the employer applied the system to arrive at the actual wage for its H-1B workers.
Click Here to View a Sample Wage Memorandum.
This memo is used to establish the Actual Wage paid U.S. workers in the same position as H-1B employees. If the company has an established wage scale with amounts and criteria it may be used and there is no need to prepare a memo similar to this one. Otherwise, this memo must be prepared prior to filing of the LCA. It should provide a third party with sufficient information about your wage structure to estimate the wage you would normally pay an H-1B employee comparably qualified to the U.S. worker.
Whenever adjustments are made in wages of workers similarly employed, such as cost of living increases, merit increases, other periodic adjustments, or calculation of a higher entry rate for the occupation, ABC Corporation will adjust the wage of the H-1B worker accordingly. Notations of the occurrence of these adjustments, and of any future promotions, will be reflected in an attachment to this memo. Calculations of the amount will be placed in the employee’s confidential personnel file and not in this public access file.
Sample notation of wage adjustment for Public Access File:
Effective March 1, 2008, ABC Corporation Entry Level Mechanical Engineers were given a wage adjustment of $1500 per annum. Alternative approach: Effective March 1, 2008, ABC Corporation Entry Level Mechanical Engineers were given a wage adjustment of $1000 with good performance in the prior year, $1500 with excellent performance level and $2000 with outstanding performance rating.
d. Prevailing Wage Determination. A copy of that determination is generally sufficient. If an “independent authoritative source” (published, generally available and reflecting average wages), or “another legitimate source” of wage information (a survey reflecting average wage and determined consistent with standards for prevailing wage) is used, the relevant portion of the wage survey must be copied and maintained in the public inspection file.
The DOL considers a prevailing wage determination from a State Workforce Agency (”SWA”) to be the most reliable source (a “safe harbor”). The DOL will not question the validity of a SWA determination and will not investigate a complaint alleging inaccuracy of a SWA determination (unless the SWA determination was obtained by misclassification of the job or misrepresentation of its duties). An employer relying on a SWA determination must file the LCA within 90 days of the date the SWA determines the prevailing wage.
e. Notification Documents. A copy of the actual Notice posted in two (2) locations at the worksite meets this requirement. The Notice must include the dates and locations where it was posted.
f. Notification to the H-1B Worker. Each H-1B worker must be given a copy of the certified LCA no later than the first day of work. The employer should maintain documentation that it provided the H-1B worker with a copy of the LCA (i.e., a memorandum specifying the date and manner the LCA was given to the H-1B worker or a copy of the certified LCA and proof of its delivery to the H-1B worker). Upon request, H-1B workers must be also given a copy of the Labor Condition Application Cover Pages (Form ETA 9035CP).
Documentation evidencing the benefit package offered, including all rules regarding eligibility, evidence of what benefits are provided to foreign national workers, and how costs are shared between the employer and its employees. If the employer is a multinational employer and “home country” benefits are provided, evidence of the benefits provided to the H-1B employee before and after the transfer to the U.S. should be maintained.
2. DOL Investigation File
a. Wage Rate for all other Workers in the Same Job at the Place of Employment. This documentation must be maintained for all such workers beginning with the date the LCA was filed and continuing through the H-1B worker’s employment period.
Payroll records for the employees in the same job and at the same place of employment, including:
Full name;
Home address;
Occupation;
Rate of pay;
Hours worked each day and each week (if paid on other than a salary basis or an hourly rate);
The total additions and deductions for each pay period; and
The total wages paid each pay period, the date of pay, and the pay period covered by the payment should be maintained.
b. Data used to establish the actual wage rate for the H-1B Workers. This data must show how the wage set for the H-1B worker relates to the wages paid to all other employees with similar experience and qualifications for his/her position and place of employment. You may wish to prepare a more detailed version of the memorandum used in the public inspection file. The memorandum should include the actual wage data for all comparable employees in the same job to establish how the pay system works and how it was used to set the H-1B worker’s wages. When adjustments are made in the pay system during the validity period of the LCA, the employer’s documentation must also include documentation explaining the adjustments and showing that after the adjustments were made, the H-1B worker continues to receive at least the greater of the prevailing wage or the actual wage paid to similarly employed workers.
c. Documentation supporting the employer’s prevailing wage determination. A determination provided by the SWA provides “safe harbor”. If an employer uses other wage surveys, it is not required to include the entire survey or the raw data from the survey in the public inspection file. This documentation must be maintained, however, for DOL examination upon request.
Documentation of working conditions. You do not need to maintain such documentation in anticipation of a DOL investigation, but you must be ready to produce supporting documentation in case of an investigation. As specified in the USCIS regulations, such documentation may include “any relevant information which discusses the working conditions for the industry, occupation and locale, such as published studies, surveys or articles and documentation regarding working conditions at the worksite, such as fringe benefit packages, which pre-existed the employment of the H-1B nonimmigrant”.
Failure to comply with these regulations may result in penalties by the DOL. As noted above, penalties include civil monetary fines, debarment from filing temporary or permanent petitions for at least one (1) year, assessment of back wages, and other administrative remedies deemed appropriate by the DOL.
Prospective employers of an H 1B nonimmigrant, should be aware that “the employer will be liable for the reasonable transportation costs of return transportation of the alien if the alien is dismissed from employment by the employer before the end of the period of authorized admission.” This would not apply if the employee voluntarily terminates his employment prior to the expiration of the H 1B petition validity. Employers should also be aware that an employer must notify the USCIS in writing that the employment relationship has terminated so that USCIS can revoke approval of the H-1B petition. Failure on the employer’s part to notify USCIS and pay return transportation costs (when required) would likely result in a finding that the employer has not effected a “bona fide termination” of the employment relationship rendering it liable for back wages.