What records are required to be kept for H-1B nonimmigrant employees?
Employers of H-1B, H-1B1, and E-3 nonimmigrant employees must comply with Department of Labor (DOL) requirements regarding record keeping. These records should be kept as part of the company’s H-1B Public Access Files (PAF) that are made available to the public upon request. It is important to keep these records up to date and accurate as the DOL’s Employment and Training Administration (ETA) has the right to review and audit the files. Additionally, proper maintenance of a PAF for an employee can provide strong evidence in the event of a DOL Wage and Hour Division investigation.
What Records Must be Kept?
20 CFR § 655.760(a) states that “the employer shall make a filed labor condition application and necessary supporting documentation available for public examination at the employer’s principal place of business in the U.S. or at the place of employment within one working day after the date on which the labor condition application is filed with DOL.” (emphasis added). The PAF can be kept as a physical file or can be done as a digital document.
20 CFR § 655.760 provides the exact list of documents that must be added, completed, signed, and maintained:
- Original signed LCA
- The employer must retain the original signed LCA in the public access file.
- Rate of pay for the H-1B worker
- The employer must retain a statement listing the exact wage to be paid to the worker in actual salary and not an estimate or wage range.
- This should match the LCA and is typically base annual salary.
- Description or summary of the actual wage system
- “Actual wage” is a technical term for the average wage that the employer pays all other individuals with similar experience and qualification for the specific employment in question.
- In determining the actual wage level, the employer can consider experience, qualifications, education, job responsibilities and function, specialized knowledge, and other legitimate business factors.
- This memo must include enough information about the employer’s method for calculating the actual wage to provide a “full and clear” explanation.
- At a minimum, this should identify the job that the nonimmigrant work holds and then identify the job title and job level that the nonimmigrant worker falls under due to the job duties, the worker’s education, experience, and other factors.
- The salaries of all employees who fall within the same title and job level are then averaged to determine the “actual wage.”
- Prevailing wage rate and its source.
- The employer must submit a full and clear explanation of the system the employer used to set the “prevailing wage.”
- The prevailing wage is “the going rate” or the average paid to similarly employed workers in the same geographical location.
- The OES survey that is posted on the OFLC online data center satisfies this requirement.
- Documentation that the notice requirement was satisfied.
- Employers must post the LCA in at least two conspicuous locations at the worksite for at least 10 business days.
- The employer should keep a record indicating that the LCA was posted at the worksite(s), who posted it, where it was posted, and for how long.
- Summary of benefits offered to U.S. workers and H-1B workers.
- Employers should include a brief statement that all employees are provided with the same benefits and provided a summary of what those benefits are. Alternatively, if similarly employed workers are provided with the same benefits regardless of immigration status, then state this and provide a summary of the benefits offered.
In addition to the above records that must be kept for all LCAs, there are a few specific records requirements that are part of 20 CFR § 655.760 that only apply to certain situations.
- Summary of the entities included as a “single employer.”
- If the company utilizes the definition of “single employer” as addressed in the Internal Revenue Code, the employer must keep a list of any entities included as part of the single employer in making the determination as to its H-1B dependency status.
- Notice of corporate changes.
- If the employer undergoes a change in corporate structure, they must include 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. This must be kept with a list of each affected LCA, its date of certification, a description of the actual wage system, and the FEIN of the new employing entity.
- H-1B dependent and/or willful violator employer
- If an employer is an H-1B dependent company, based on DOL regulations and guidance, and/or a willful violator, and indicates on the LCA(s) that only “exempt” H-1B nonimmigrants will be employed, the company must keep a list of such “exempt” H-1B nonimmigrants.
- If the company is not filing as exempt, they must keep a record of the recruitment methods used and the time frames of recruitment of U.S. workers.
Once an H-1B case is approved, there are additional documents which should be kept as part of the public access file:
- Copy of the H-1B worker’s pay statements and W-2 forms
- Explanation of any deductions made from the wages, if applicable
- If any legal deductions are made from the wages, a sheet explaining the deduction should be inserted, with an explanation.
- While not required, companies should also keep records of time off requests to show why a beneficiary did not receive payment for a period of time.
- Copy of termination notice, if applicable
- In the event of a termination of an H-1B worker’s employment, the notice of termination to USCIS (H-1B withdrawal letter) should be inserted into the PAF.
- Documentation showing any liquidated damages or penalties sought or collected from terminated H-1B workers, including relevant contracts, demands, lawsuits, and settlement agreements, if applicable, must be included.
How long must these records be kept?
A copy of a nonimmigrant worker’s PAF must be kept for one year beyond the expiration (or withdrawal) of the LCA. These records must be kept, maintained, and made available for the public. Payroll records must be kept for three years beyond the expiration (or withdrawal) of the LCA. The documents should be retained at the employer’s principal place of business in the United States or at the place of employment. The location will be governed by the box marked on the LCA noting where the records will be kept.
By: Steven Brown
Steven Brown is an attorney in the firm’s H-1B Department and represents our business clients throughout the entire H-1B, H-4, and H-4 EAD process. Additionally, Steven works with clients with Department of Labor Compliance included assistance with wage and hours investigations. Steven prides himself in being able to provide his clients with creative solutions to complex immigration problems.