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The Importance of H-1B Compliance: Safeguarding Employers and Employees

The H-1B visa program is a vital pathway for U.S. employers to hire highly skilled foreign workers for specialized roles, driving innovation and addressing critical labor shortages. However, participation in the H-1B program comes with stringent compliance obligations that demand meticulous attention from employers. Failure to adhere to these requirements can result in severe penalties, reputational damage, and even debarment from the program.

This compliance article explores the key areas of H-1B compliance, including Form I-9 verification, Public Access File (PAF) maintenance, and Labor Condition Application (LCA) obligations under the Department of Labor (DOL) regulations. By understanding these requirements and implementing best practices, employers can protect their organizations and foster a fair, transparent work environment for H-1B employees.

Form I-9 Compliance: Verifying Employment Authorization

Overview of Form I-9 Requirements

Form I-9, mandated by the Immigration Reform and Control Act (IRCA) of 1986, is a critical component of compliance for all employees, including H-1B workers. Employers must complete and maintain this form to verify the identity and work authorization of every employee.

The Form I-9 process involves three key steps:

  1. Section 1: The employee must complete Section 1 on or before their first day of employment, attesting to their work authorization.
  2. Section 2: The employer must review original documents provided by the employee, verify their authenticity, and complete Section 2 within three business days of the employee’s start date.
  3. Reverification: Employers must track expiration dates of temporary work authorizations and re-verify eligibility by completing Section 3 as needed.

Common Compliance Issues

Employers often encounter the following compliance pitfalls with Form I-9:

  • Missed Deadlines: Delays in completing or updating Form I-9.
  • Incorrect Documentation: Failure to follow the guidelines for proper documentation on List A or List B + List C.
  • Errors in Data Entry: Mistakes such as misspelled names or incorrect document details.
  • Improper Storage: Failure to maintain Form I-9 records for the required retention period (three years after hire or one year after employment ends, whichever is later).
  • Discrimination: Unlawful practices, such as over-documentation or selective enforcement, which can lead to penalties under anti-discrimination laws.

Best Practices for Employers

To ensure compliance, employers should:

  • Implement electronic tracking systems to monitor Form I-9 deadlines.
  • Train HR personnel on proper I-9 completion and anti-discrimination practices.
  • Conduct periodic internal audits to identify and correct discrepancies.
  • Retain copies of supporting documents for H-1B, and other immigrant employees, to substantiate work authorization claims.

Additional Considerations for Remote Work

The rise of remote work has introduced unique challenges for Form I-9 compliance. While the COVID-19 protocols allowing remote verification have been made permanent, employers must enroll in E-Verify to use this option. Employers must examine documents and conduct live video interactions to ensure the documentation is genuine and relates to the individual.

Public Access File (PAF): Ensuring Transparency and Accountability

What Is the Public Access File?

The Public Access File (PAF) is a critical component of H-1B compliance, mandated by the DOL to ensure transparency in the employment of foreign workers. Employers must create and maintain a PAF for each H-1B (as well as H-1B1 and E-3) employee, making it available for public inspection upon request.

Contents of the Public Access File

The PAF must include the following:

  1. LCA Documentation: A copy of the submitted/certified Labor Condition Application (LCA) submitted to the DOL.
  2. Wage Information: Documentation of the wage rate offered to the H-1B worker, ensuring it meets or exceeds the prevailing wage.
  3. Explanation of Wage System: A memorandum explaining the system used to determine the wage rate.
  4. Prevailing Wage and Its Source: Documentation showing where the prevailing wage was obtained.
  5. Documentation that the notice requirement was satisfied: This includes notification to the employee, any union, and the public posting requirement.
  6. Summary of Benefits: A description of employee benefits offered to U.S. workers and H-1B employees, demonstrating equal treatment.
  7. List of Entities included as a “single employer”
  8. Corporate Change Documents (if needed)

Common PAF Issues

Non-compliance with PAF requirements can lead to DOL investigations and penalties. Common issues include:

  • Incomplete Files: Missing documents or information in the PAF.
  • Failure to Update: Neglecting to update the PAF when changes occur, such as amendments to the LCA or worksite relocations.
  • Accessibility Issues: Not maintaining the PAF at the principal place of business or failing to make it available for public inspection.

Best Practices for Employers

To mitigate risks, employers should:

  • Use checklists to ensure the PAF is complete and up-to-date.
  • Regularly review and audit PAFs for accuracy and compliance.
  • Train staff on PAF maintenance and accessibility requirements.

Digital Solutions for PAF Management

Employers can leverage technology to streamline PAF compliance. Digital tools enable secure storage, automated reminders for updates, and easy retrieval during audits or public requests. Adopting these tools reduces administrative burdens and minimizes the risk of errors.

Labor Condition Application (LCA) and DOL Regulations

Role of the LCA in H-1B Compliance

The LCA, certified by the DOL, is the cornerstone of the H-1B program. It ensures that the employment of foreign workers does not adversely affect the wages and working conditions of U.S. workers. Employers must file an LCA before submitting the H-1B petition to U.S. Citizenship and Immigration Services (USCIS).

Key LCA Obligations

H-1B employers must adhere to the following commitments outlined in the LCA:

  1. Wage Compliance: Paying the H-1B worker the greater of the actual wage or the prevailing wage for the role and geographic location.
  2. Working Conditions: Ensuring the employment of H-1B workers does not adversely affect the working conditions of similarly employed U.S. workers.
  3. Notice Requirements: Posting notices of the LCA filing at the intended worksite(s) or providing electronic notice to employees.
  4. Non-Displacement: Certifying that hiring the H-1B worker does not displace U.S. workers within the organization. This is required for H-1B dependent employers.
  5. Strike or Lockout Prohibition: Attesting that there is no ongoing strike or lockout at the worksite.

LCA Compliance Challenges

Employers face several challenges in maintaining LCA compliance:

  • Prevailing Wage Disputes: Determining the correct prevailing wage can be complex and subject to audit scrutiny, especially if using an improper source or SOC Code.
  • Worksite Changes: Relocating an H-1B worker to a new site may require an amended H-1B.
  • Documentation Gaps: Failure to retain evidence supporting LCA attestations, such as wage calculations and posting notices.

Best Practices for Employers

To ensure LCA compliance, employers should:

  • Maintain detailed records of wage determinations and payments.
  • Develop protocols for monitoring worksite changes and filing LCA amendments when necessary.
  • Regularly review DOL guidance to stay informed of regulatory updates.
  • Conduct internal audits or work with an external firm to identify and address compliance gaps.
  • Ensure team members are prepared for audits or know who direct audit questions to.

Navigating Remote Work and LCA Requirements

Remote work arrangements have introduced complexities in LCA compliance. Employers must ensure that any new worksite, including a home office, complies with notice posting requirements and wage obligations. Failure to address these nuances can trigger compliance issues during audits.

Consequences of Non-Compliance

Non-compliance with H-1B obligations can have serious repercussions, including:

  • DOL Investigations: Employers found in violation may face investigations, fines, and debarment from the H-1B program.
  • Civil Penalties: Penalties may include back wages, fines, and liquidated damages for affected employees.
  • USCIS Denials or Revocations: Non-compliance may lead to the denial or revocation of H-1B petitions.
  • Reputational Harm: Public exposure of violations can damage the employer’s reputation and deter future talent acquisition efforts.

Long-Term Impact on Business Operations

Beyond immediate penalties, non-compliance can disrupt business operations. For example, debarment from the H-1B program may limit access to skilled talent, affecting project timelines and client relationships. Employers must weigh these risks when assessing their compliance strategies.

The Strategic Value of Compliance

Investing in H-1B compliance is not just about avoiding penalties—it’s about building a sustainable and ethical workforce. Employers who prioritize compliance demonstrate their commitment to fair labor practices, which can enhance their reputation and attract top talent. Additionally, staying compliant reduces the risk of costly disruptions, such as delayed projects or lost clients due to workforce shortages.

By adopting proactive compliance measures, such as regular training, internal audits, and leveraging technology, employers can streamline processes and minimize risks. Staying informed about regulatory updates and seeking legal counsel when necessary can further strengthen an organization’s compliance framework.

Conclusion

H-1B compliance is a multifaceted responsibility that requires careful attention to Form I-9 verification, PAF maintenance, and adherence to LCA obligations under DOL regulations. Employers who prioritize compliance not only safeguard their organizations from penalties but also foster a fair and transparent work environment for their H-1B employees.

By implementing robust compliance practices, conducting regular audits, and staying informed of regulatory changes, employers can successfully navigate the complexities of the H-1B program and contribute to a thriving workforce. The investment in compliance is not just a legal necessity but a strategic advantage in today’s competitive labor market.

Reddy Neumann Brown PC located in Houston, Texas, has been serving the business community for over 25 years and is Houston’s largest immigration law firm focused solely on U.S. Employment-based and investor-based immigration. We work with employers, employees and investors helping them navigate the immigration process quickly and cost-effectively.

By: Steven Brown

Steven A. Brown is a Partner at Reddy Neumann Brown PC, where he leads the firm’s Litigation Team, addressing delays and denials of immigration benefits, FOIA requests, and policy and regulatory challenges. Steven is dedicated to delivering practical and effective solutions for clients facing unreasonably delayed or unlawfully withheld immigration benefits, including Employment Authorization Documents (EADs), advance parole, green cards, 221(g) decisions, EB-5 delays, and other immigration-related matters. His litigation efforts were instrumental in Shergill, et al. v. Mayorkas, a landmark case that led to the U.S. government recognizing that under the INA, L-2 and E visa spouses are authorized to work incident to their status, eliminating the need for separate EAD applications. This case has transformed work authorization for thousands of families across the United States.