[Federal Register Volume 59, Number 243 (Tuesday, December 20, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-31114] [[Page Unknown]] [Federal Register: December 20, 1994] _______________________________________________________________________ Part V Department of Labor _______________________________________________________________________ Employment and Training Administration _______________________________________________________________________ 20 CFR Part 655 _______________________________________________________________________ Wage and Hour Division _______________________________________________________________________ 29 CFR Part 507 Labor Condition Applications and Requirements for Employers Using Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion Models; Final Rule DEPARTMENT OF LABOR Employment and Training Administration 20 CFR Part 655 RIN 1205-AA89 Wage and Hour Division 29 CFR Part 507 RIN 1215-AA69 Labor Condition Applications and Requirements for Employers Using Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion Models AGENCIES: Employment and Training Administration, Labor; and Wage and Hour Division, Employment Standards Administration, Labor. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Employment and Training Administration (ETA) and the Employment Standards Administration (ESA) of the Department of Labor (DOL or Department) are promulgating regulations governing the filing and enforcement of labor condition applications filed by employers seeking to employ foreign workers in specialty occupations and as fashion models of distinguished merit and ability under the H-1B nonimmigrant classification. Under the Immigration and Nationality Act (INA), as amended by the Immigration Act of 1990 (IMMACT), an employer seeking to employ a nonimmigrant in a specialty occupation or as a fashion model of distinguished merit and ability is required to file a labor condition application with DOL before the Immigration and Naturalization Service (INS) may approve an H-1B visa petition. The labor condition application process is administered by ETA; complaints and investigations regarding labor condition applications are the responsibility of ESA. The Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (MTINA) amended the INA and the IMMACT to change substantially the H-1B labor condition application program, retroactive to October 1, 1991. EFFECTIVE DATE: January 19, 1995. FOR FURTHER INFORMATION CONTACT: On 20 CFR part 655, subpart H, and 29 CFR part 507, subpart H, contact Flora T. Richardson, Chief, Division of Foreign Labor Certifications, U.S. Employment Service, Employment and Training Administration, Department of Labor, Room N-4456, 200 Constitution Avenue, NW., Washington, DC 20210. Telephone: (202) 219-5263 (this is not a toll- free number). On 20 CFR part 655, subpart I, and 29 CFR part 507, subpart I, contact Solomon Sugarman, Wage and Hour Division, Employment Standards Administration, Department of Labor, Room S-3502, 200 Constitution Avenue, NW., Washington, DC 20210. Telephone: (202) 219-7605 (this is not a toll-free number). SUPPLEMENTARY INFORMATION: I. Paperwork Reduction Act In accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the information collection requirements included in this rule have been submitted to the Office of Management and Budget (OMB). A technical amendment will be issued following OMB PRA approval. II. Background On November 29, 1990, the Immigration and Nationality Act (8 U.S.C. 1101 et seq.) (INA or Act) was amended by the Immigration Act of 1990 (IMMACT), Public Law 101-649, 104 Stat. 4978. On December 12, 1991, the INA was further amended by the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (MTINA), Public Law 102-232, 105 Stat. 1733. These amendments assign responsibility to the Department of Labor (Department or DOL) for the implementation of several provisions of the Act relating to the entry of certain categories of employment- based immigrants, and to the entry and temporary employment of certain categories of nonimmigrants. One of the major provisions of the Act governs the entry temporarily of foreign ``professionals'' to work in ``specialty occupations'' in the U.S. under H-1B nonimmigrant status. 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184(c). Before the Immigration and Naturalization Service (INS) will approve H-1B status for a foreign worker, the employer which intends to employ the alien, must have on file with the Department's Employment and Training Administration a Labor Condition Application for H-1B Nonimmigrants (LCA), Form ETA 9035. Pursuant to the Interim Final Rule, in filling out the LCA, an employer must specifically indicate, among other things, the H-1B nonimmigrant's job title, the number of H-1B nonimmigrant(s) sought, the rate of pay to be paid the nonimmigrant(s), the nonimmigrant's anticipated period of employment, and the location where the H-1B nonimmigrant(s) will work. Additionally, the employer attests to four statements: 1. H-1b nonimmigrants will be paid at least the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question or the prevailing wage level for the occupation in the area of employment, whichever is higher; 2. The employment of H-1B nonimmigrants will not adversely affect the working conditions of workers similarly employed in the area of employment; 3. On the date the application is signed or submitted, there is not a strike, lockout, or work stoppage in the course of a labor dispute in the occupation in which H-1B nonimmigrants will be employed at the place of employment. 4. As of this date, notice of this application has been provided to workers employed in the occupations in which H-1B nonimmigrants will be employed. The H-1B category of specialty occupations consists of those occupations which require the theoretical and practical application of a body of highly specialized knowledge and the attainment of a bachelor's or higher degree (or its equivalent) in the specific specialty as a minimum for entry into the occupation in the U.S. 8 U.S.C. 1184(i)(1). In addition, a nonimmigrant in a specialty occupation must possess full State licensure to practice in the occupation (if required), completion of the required degree, or experience equivalent to the degree and recognition of expertise in the specialty. 8 U.S.C. 1184(i)(2). The category of ``fashion model'' requires that the nonimmigrant be of distinguished merit and ability. 8 U.S.C. 1101(a)(15)(H)(i)(b). INS identifies and defines the occupations covered by the H-1B category and determines an alien's qualifications for such occupations. DOL only administers and enforces the labor condition applications relating to the employment. The rulemaking history, as published in the Federal Register, is as follows: March 20, 1991, Advance Notice of Proposed Rulemaking, 56 FR 11705. August 5, 1991, Proposed Rule, 56 FR 37175. October 22, 1991, Interim Final Rule, 56 FR 54720. January 13, 1992, Interim Final Rule, 57 FR 1316. October 6, 1993, Proposed Rule, 58 FR 52152. December 30, 1993, Interim Final Rule, 58 FR 69226. III. Analysis of Comments A. Comments to the Proposed Rule Comments regarding the October 6, 1993, Notice of Proposed Rulemaking (NPRM) were received from 264 entities. Over half (157) were submitted by businesses; 33 by educational facilities; 23 by attorneys; and 21 by the general public. The rest of the commenters were distributed among members of Congress (3), the AFL-CIO (1), the Embassy of India (1), Federal Government employees (5), State governments (6), and trade associations (15). The proposals eliciting the most comments were those regarding the job contractor concept and the related requirement of posting notice at the place of employment or worksite(s). Of the 157 business comments, 128 concerned the job contractor proposal. In total, there were 171 comments concerning the job contractor proposal, of which 153 (nearly 90%) opposed the proposal. Educational institutions commented primarily on the proposal to require the employer to identify the prevailing wage source on the labor condition application. These commenters uniformly advocated a check-off system, whereby the LCA-filing employer would check a block on the form to indicate whether the prevailing wage source was a State Employment Service Agency (SESA) determination, an authoritative source, or another legitimate source. The majority of the general public commenters were critical of the H-1B program in general, and suggested that businesses utilizing H-1B nonimmigrants should pay user fees and should be assessed substantial fines if found in violation. In further opposition to the H-1B program, several commenters (in addition to the general public) advocated that the proposed regulations did not go far enough and that LCA employers should be required to report the H-1B nonimmigrant's wage earnings to the Internal Revenue Service and to trade associations in order to facilitate better monitoring of the LCA employer's activities. B. Comments to the Interim Final Rule Dated January 13, 1992 There were 45 comments to this rule. Three issues commented on are germane to this Final Rule: The movement among worksites of H-1B nonimmigrants, in-kind perquisites, and the definition of ``aggrieved party.'' Worksite movement of H-1B nonimmigrants is discussed in item 2.a below; in-kind perquisites in item 2.b; and definition of aggrieved party in item 1.f. C. Additional Discussions and Comments On December 8, 1994, a meeting was held at OMB pursuant to E.O. 12866. Other than representatives from the Department and OMB the organizations represented were the American Immigration Lawyers Association, the American Council on International Personnel, the Information Technology Association of America, the National Association of Foreign Student Advisors, and the American Council on International Priorities. Written comments were subsequently received by the Department from the American Council on International Personnel, the Information Technology Association of America and the American Immigration Lawyers Association. D. Matters Addressed in the Final Rule While the Department maintains its discretion to engage in additional rulemaking, and such proposed rulemaking is presently under consideration, this final rule culminates this series of rulemaking activities. 1. Provisions Adopted as Proposed a. Geographic/Occupational Scope of the LCA (See Sec. ________.730(c)(2).) The Department and the public presently are not receiving a true indication of the valid job openings for which employers anticipate the need for H-1B nonimmigrants. EPA's operating experience indicates that some employers have been filing LCA's containing ``laundry lists'' of occupations and areas where an H-1B nonimmigrant might be needed, in many cases on a single labor condition application. When this practice is coupled with the potential 6-year validity period of the applications, the information disclosed to the Department and to the public can be substantially misleading with respect to the amount of hiring activity actually occurring pursuant to this program. The Department proposed to limit an individual labor condition application to a single occupation and to geographic areas only within the jurisdiction of a single ETA regional office. The Department expressed its view that, under such a rule, employers would be more likely to file LCA's for the actual number of job openings for which H- 1B workers are sought, ETA would be able to better manage and collect data on the H-1B program, INS could exercise more control over the petitions filed pursuant to a labor condition application, and the Department would be better positioned to carry out enforcement activities under this program. Additionally, the Department requested comments on this proposal with specific reference to whether and to what extent this change should promote the objective of receiving applications which more accurately represent actual job openings for which H-1B nonimmigrants are being sought, and whether the change might occasion any unintended operational consequences. Nearly all of the 39 commenters on this issue indicated that if the Department wanted to get a truer picture of actual practice, instead of limiting the LCA to one occupation and ETA regional area, the Department should limit the number of workers who could be ``procured'' on one LCA. Of the 39 commenters, there were 23 against the proposal and 16 for it. One commenter recommended that the LCA be limited to one occupation, but with a nationwide filing. Several commenters from the general public advocated that each user of this program should have to pay fees in order to participate. Concerning user fees, the Department has taken no action in the Final Rule. Concerning the ``single occupation'' LCA filing requirement, the Department has carefully considered the comments and its own program experience and has concluded that--without any significant additional burden for employers--the proposed provision, combined with other clarifications in this Final Rule, such as changing the LCA validity period (item 1.d below) and LCA filing dates (item 4.d below), will promote the Department's desired result: a truer indication of valid job openings. Therefore, the proposal is adopted as it appeared in the NPRM. However, concerning the ``single region'' LCA filing requirement, the Department has concluded, based on program experience and the comments on the NPRM, that it is possible to achieve the Department's goals (under statutory obligations) without modifying the Interim Final Rule's provisions permitting the employer to file the LCA with the ETA regional office having jurisdiction over the initial place of employment if the H-1B nonimmigrant is to be employed sequentially in various places in more than one ETA regional jurisdiction. b. Notification (See Sec. ________.734(a)(2).) Section 212(n)(1)(C) of the INA requires that an employer seeking to hire an H- 1B nonimmigrant shall notify, at the time of filing the application, the bargaining representative of its employees of the filing of the labor condition application or, if there is no bargaining representative, post notice of filing in conspicuous locations at the place of employment. 8 U.S.C. 1182(n)(1)(C). The interim final regulations at Sec. ________.730(h)(1) implement this statutory requirement. In the course of investigations under this program, the Wage and Hour Division has found that some employers have made false statements regarding wages and worksite locations and have failed to fulfill the obligations attested on the applications (for example, by not paying the H-1B nonimmigrants the rate specified). As a means of curbing such abuses, the Department proposed that employers also be required to provide to each H-1B nonimmigrant a copy of the labor condition application, no later than the date the H-1B nonimmigrant reports to the place of employment. Of the 29 commenters on this issue, 26 supported the proposal. Several suggestions as to the appropriate timing of the notice to the H-1B workers were made by commenters: the employer should be allowed 10 days to meet this requirement; the employer could fulfill the requirement by providing the H-1B nonimmigrant a copy of the certified LCA; the employer should comply with this requirement at the time the visa petition is filed, before the H-1B nonimmigrant reports for work; and the employer should have the H-1B nonimmigrant sign the notification. One commenter opposing the proposal said that the notice should be provided only if the nonimmigrant requests it. After careful consideration of the comments and the Department's program experience, the Department is promulgating this proposal as it appeared in the NPRM, in order to better assure the protections intended by Congress and to better safeguard workers (both foreign and domestic) against abuses by employers. The Department is of the view that notification at the time the H-1B worker begins work and receives other employment related documents, such as tax withholding and I-9 information, is the most appropriate time to provide the copy of the LCA. A further clarification of the regulation, based on program experience, is being made in recognition of abuses and to better assure the protections of workers which Congress intended the notice requirement to achieve. The Department has become aware that some employers which place H-1B nonimmigrants at new worksites within areas covered by existing LCA's have failed to fulfill their LCA obligations, but, because no notices were posted at the new worksites, the adversely affected workers were not informed of the LCA standards or of their own rights to examine certain documents and to file complaints. The Department recognizes that it could take the position that an employer may employ H-1B nonimmigrants only at worksites where notice had been given, and therefore could require an employer to take two steps before placing H-1B nonimmigrants at a new worksite within the same area of intended employment: post a notice and file a new LCA. However, such a dual requirement appears to the Department to be burdensome. The protections intended by Congress can be afforded by having a notice posted by the employer at each new worksite within the same area of intended employment at the time the H-1B nonimmigrants are sent there to work, without the employer being required to file new LCA's. The Final Rule, therefore, imposes a less burdensome but equally worker- protective standard, by providing that the employer shall provide such worksite notices on the first day of work by an H-1B nonimmigrant at that worksite which will remain posted for at least ten days. A clarification of the regulation, based upon program experience, is also being made in recognition of potential abuses with regard to the timing of an employer's provision of notice of filing an LCA. The Department has become aware of confusion and potential adverse effects in situations in which employers provide the required notice of filing the application to the bargaining representative, or to its employees by posting at the place of employment, considerably in advance of the date the application is filed (e.g., six months prior to filing). In order to alleviate confusion and to better assure the achievement of Congressional intent that U.S. workers who will be working side-by-side with H-1B nonimmigrants be notified of the employer's intent and their ability to file complaints if they believe violations have occurred, the Final Regulation requires that notice, provided by the employer under the fourth labor condition statement, must be provided on or within 30 days prior to the date the labor condition application is filed. c. Prevailing Wage Identification on the LCA (See Sec. ______.730(c)(1)(vi).) Pursuant to the H-1B interim final regulations, employers must file with ETA a completed and dated original labor condition application and one copy. No documentation of the attestation elements must be submitted to ETA. The Department proposed that employers be required to identify (on the LCA) the prevailing wage rate and the source utilized to obtain the wage information. This would impose no additional burden on an employer acting in compliance with the program's requirements and would provide additional impetus for compliance by those employers who might not properly determine the prevailing wage prior to filing the LCA. ETA would continue to certify an LCA where all items on the LCA have been completed and information submitted on the form is not obviously inaccurate. However, an LCA which fails to contain this additional information or which indicates a prevailing wage date source not consistent with regulatory requirements would be rejected. Forty-four commenters specifically addressed this issue: 31 opposing the proposal and 13 supporting it. Generally, opposition was based on the commenters' concern that ETA would reject LCA's more frequently and/or would refer the LCA to ESA which would initiate an investigation. Eighteen representatives of educational institutions, the most frequent commenters on this issue, advocated a check-off system whereby the employer merely would check whether its prevailing wage source was a SESA determination, independent authoritative source, or another legitimate source of information. The Department has considered fully the views of the commenters and has reviewed the experience and information obtained through the program. The Department is modifying the proposed form to incorporate the suggestions of commenters to some extent. The form will provide that if the employer obtains a prevailing wage rate from a SESA, the employer may check the box for SESA and enter the prevailing wage rate obtained. When the prevailing wage rate is obtained from any other source, the employer must enter the identity of the source and the wage rate. Some commenters have expressed concern regarding this change in apprehension that there will be a greater rejection rate of LCAs on the part of ETA. ETA will continue to follow the guidance of the statute and the regulation and will not reject an LCA unless there are obvious omissions or errors. Of course if the employer fails to enter the identity of the source of a prevailing wage rate, or enters a source that is obviously not an acceptable source, ETA will reject the LCA. d. LCA Validity Period (See Sec. ________.750(a).) Pursuant to section 214(g)(4) of the Act, the period of authorized admission as an H-1B nonimmigrant may not exceed 6 years. Section ________.750 of the interim final H-1B regulations published at 57 FR 1316 (January 13, 1992) provides that a certified labor condition application shall be valid for the period of employment indicated on Form ETA 9035; in no event can the validity period of a labor condition application (LCA) exceed 6 years. However, the INS's regulations, at 8 CFR 214.2(h)(9)(iii)(B) (1) and (3), limit the validity of a certified petition to 3 years or the expiration of the validity period of the labor condition application, whichever comes sooner. The Department proposed to bring the validity period of LCA's into conformity with INS's regulations by reducing the validity period of a labor condition application from 6 years to 3 years. The validity period would begin with the starting date entered by the employer in the ``Period of Employment'' section of Item 7 on the LCA or the date ETA certifies the LCA, whichever is later. Any LCA previously filed with and certified by ETA, however, would remain valid for up to six years or the ending date of employment as certified. Thirty commenters addressed this issue--16 opposing the proposal (primarily businesses and attorneys) and 14 advocating the proposal (primarily educational institutions and State governments). Trade associations were divided--4 pro and 4 con. Those opposing the proposal generally expressed concerns that there would be too much paperwork, that the proposal was burdensome, and that the proposal would hamper valid users. Several of those supporting the proposal expressed the view that the LCA should not be valid for more than 1 year. While the Department is mindful of the concerns expressed by commenters opposed to the proposal, the need for uniformity in the DOL and INS administration of the program and avoidance of confusion among H-1B employers and nonimmigrants outweigh any potential burdens. Therefore, the Department is promulgating this proposal as it appeared in the NPRM. This proposal, in conjunction with the deletion of the prevailing wage update provision, should reduce the burden on employers by providing a consistent timetable for DOL and INS filing requirements. e. Strike-Lockout (See Sec. ________.733(a)(1).) Section 212(n)(1)(B) of the INA requires that an employer seeking to hire H-1B nonimmigrants shall file an application with the Secretary stating that ``[t]here is not a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment.'' The Department's interim final H-1B regulations at Sec. ________ .730(g) provide that: [A]n employer seeking to employ H-1B nonimmigrants shall state on Form ETA 9035 that there is not at that time a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment. A strike or lockout which occurs after the labor condition application is filed by the employer with DOL is covered by INS regulations at new 8 CFR 214.2(h)(17). The Department became aware that this regulatory provision did not address the potentially abusive situation in which an employer with a certified labor condition application could petition for additional H- 1B nonimmigrants in the event of a labor dispute subsequent to the filing and certification of the application, and thus use H-1B nonimmigrants to break a strike or to weaken the bargaining position of U.S. workers. Such use of H-1B nonimmigrants to weaken U.S. workers' bargaining position contrary to the clear intent of the law could be achieved by employers hiring H-1B nonimmigrants directly or obtaining such workers from job contractors. Therefore, to prevent this potential abuse, the Department proposed to amend the regulations to prohibit an employer from using a certified labor condition application to file visa petitions with INS for an occupation in which a strike, lockout, or work stoppage in the course of a labor dispute occurs at the H-1B nonimmigrant's worksite. Further, to prevent employers from obtaining H-1B nonimmigrants in the event of a labor dispute, the Department proposed, through the proposed new Sec. ________.733, to prohibit employers from placing H-1B nonimmigrants in employment at worksites in occupations that are involved in a strike, lockout, or work stoppage in the course of a labor dispute. Modification of Form ETA 9035 was proposed so that employers would be required to attest that they would not use the labor condition application in support of any petition filed with INS for H- 1B nonimmigrants if a strike, lockout, or work stoppage in the course of a labor dispute involves the occupation covered by the LCA at the place of employment at any time during its validity period after the labor condition application is certified. The Department also proposed to amend the regulations to require employers to notify DOL within 3 days of the start of a strike, lockout, or other work stoppage in the course of a labor dispute in the occupation of the H-1B nonimmigrant(s) at any worksite. Upon receiving such a notification, the Department would undertake the necessary factfinding to determine whether the Secretary shall issue a strike determination to the INS pursuant to the INS's regulations at 8 CFR 214.2(h)(17). Comments from 18 parties addressed this issue specifically, with over half against the proposal. However, all those comments opposing this proposal were conditional, suggesting that the restriction would be acceptable if it is limited to the occupation in which the H-1B nonimmigrant is employed (i.e., nonimmigrant's employment would be permitted in an occupation other than one(s) subject to strike/ lockout). Since the proposal was, in fact, so limited, these commenters' concerns would be alleviated by careful attention to the regulatory language. After careful consideration of the comments, the Department is promulgating this proposal as it appeared in the NPRM, applicable not only to job contractors but to all employees, and relative to strikes, lockouts or other work stoppages in the occupational classification of a potential H-1B nonimmigrant at a given worksite. See also pages 31-32 regarding the provision for placement of H-1B nonimmigrants in an area of employment for which the employer does not have a valid LCA on file. f. ``Interested Party'' and ``Aggrieved Party'' definitions (See Sec. ________.715.) In section 212(n)(2) of the INA, Congress directed the Department to establish a process to respond to complaints from ``aggrieved'' parties and to provide opportunities for administrative hearings for ``interested'' parties following investigative determinations. 8 U.S.C. 1182(n)(2). The legislative history reflects Congress' intention that the Department's enforcement process would be the means for protecting both U.S. and foreign workers; no comprehensive pre-admission screening or review process was established. The Department concluded, in order to comply with the Congressional mandate for effective enforcement, that the terms ``aggrieved'' and ``interested'' party should be defined broadly in a manner consistent with their common meaning. In the NPRM, the Department proposed that ``aggrieved party or organization'' would be defined as one whose operations or interests are adversely affected by the alleged violation(s). Based on the Department's experience regarding the scope and nature of adverse effects of violations, as well as the sources for reliable, actionable allegations of violations, the Department proposed that the definition of the term ``aggrieved party or organization'' would encompass not only private-sector persons and organizations (e.g., workers, their representatives, competitors of the allegedly violating employer), but also government agencies and officials (e.g., Department of State consular officers, State Employment Security Agency Officials). The Department also proposed that ``interested party'' would be defined to include persons and entities who are affected by the employer's action or the investigative determination at issue. The Department did not propose that such an individual need be adversely affected. By using the term ``interested'' (rather than ``aggrieved'') to identify the parties for whom hearing opportunities would be offered, Congress clearly mandated a broader class of persons for these rights than for investigations in response to complaints. The Department's broad definition, based on the Department's experience, would encompass both private and public entities. Twenty-three NPRM commenters addressed these proposed definitions-- 18 opposed and 5 in support. All 10 business commenters and half of the trade association commenters were opposed to the proposal. Almost all commenters expressed the view that there was a connection between the Department's proposed definition of an aggrieved party and the Department's proposal regarding directed investigations; commenters viewed complaints from government agencies as an alternative avenue to achieving the opportunity to conduct directed investigations. See 1.g. (Directed Investigations) below. Two commenters to the Interim Final Rule proposed that the term ``aggrieved party'' should not include someone who provides frivolous or harassment complaints against an employer; these commenters also suggested that if the complainant's allegation is not sustained in a DOL proceeding, the complainant should be liable for any administrative costs incurred for the proceeding(s). The statute at 8 U.S.C. 1182(n)(2)(A) provides that the Secretary of Labor shall conduct an investigation if there is reasonable cause to believe that an LCA-filing employer failed to meet a condition specified in the labor condition application or misrepresented a material fact in the application. A complainant providing such information has a right to provide it to the Secretary of Labor regardless of the complaint's resolution. Consequently, the Department cannot accept the proposal that the complainant should be liable for any administrative costs incurred from the proceeding(s). After reviewing the comments, legislative intent, and programmatic experience, the Department is promulgating these proposals to add these definitions as they appeared in the NPRM, in order to achieve the Congressional intent of protection for workers and other affected parties through fair and effective post-admission investigations and administrative hearings. g. Directed Investigations (See Sec. ________.710.) As a result of its experience in operating the H-1B program and after consideration of the comments on the proposed rule, the Department has determined that it is neither necessary nor appropriate to limit its post-admission investigation of possible LCA violations to those where complaints have been filed by aggrieved parties. Thus the Final Rule allows post- admission investigations which the Department may conduct on its own initiative. This has no impact on the pre-admission LCA approval process. The change in no way contravenes the Congressional intent. Labor condition applications, as required under the INA, continue to be accepted and certified unless incomplete or obviously inaccurate. No extensive weighing of evidence or investigation is added to the pre- admission LCA process, and the entry of the H-1B workers to the United States and to the employment is in no way slowed. The change, however, facilitates enforcement by removing a regulatorily-imposed impediment from the Department's post-approval investigative authority, so that the program's purposes can be better served and covered workers better protected. The authority to conduct non-complaint investigations is not viewed nor intended by the Department as a mandate to conduct sweeping enforcement actions. Rather, in light of resource constraints and compelling enforcement priorities, the Department anticipates that its discretion for self-initiated investigations will be exercised sparingly, in circumstances where the Wage and Hour Administrator has reason to believe that H-1B violations may be occurring or have occurred. An investigation of an H-1B employer could be undertaken, for example, where the Administrator becomes aware of a possible violation of an employer's LCA as the result of information obtained in the course of an investigation of another employer, in the course of an investigation of the employer under another statute or another LCA, or as the result of the receipt of public information. The Final Rule brings the H-1B program in line with regulations and practice under the H-1A nonimmigrant nurses' program. See, e.g., 20 CFR 655.400(b) and 655.405(a). Under the H-1A program, which has statutory enforcement language similar to the H-1B program, investigations have been conducted since the initiation of that program as a result of a complaint or otherwise, and there has been no sweeping directed enforcement program as a result. Id.; see also 8 U.S.C. 1182 (m) and (n). Originally, the Department questioned its authority to conduct post-admission directed investigations under the H-1B program, because discussion of the enforcement aspects of the H-1B program in the legislative history spoke of it as being ``complaint-driven.'' However, re-examination of those statements--in context--shows that they consistently were made for the purpose of limiting DOL pre-acceptance review and investigation of the labor condition application; the statements were not directed to the scope of the Department's authority to investigate the LCA after it has been certified and the H-1B workers begin their employment. See, e.g., 137 Cong. Rec. S18242, S18244 (November 26, 1992). In addition to being consistent with the Department's regulations and practice under the similar H-1A program, post-admission directed enforcement in the H-1B program clearly is not prohibited by and can be supported under an analysis of the language of the statute. Section 212(n)(2)(A) of the INA directs the Secretary to establish a process for the receipt, investigation, and disposition of complaints. 8 U.S.C. 1182(n)(2)(A). Section 212(n)(2)(B) states that, ``[u]nder such process [established pursuant to subparagraph (A)], the Secretary shall provide, within 30 days after such a complaint is filed, for a determination as to whether or not a reasonable basis exists to make a finding described in subparagraph (C).'' 8 U.S.C. 1182(n)(2)(B). Unlike subparagraph (B), subparagraphs (C) and (D) of section 212(n)(2), which provide for notice and opportunity for a hearing for failure to meet a condition, for sanctions, and for back pay orders, do not refer back to ``such process'' as must be established pursuant to subparagraph (A). 8 U.S.C. 1182(n)(2) (C) and (D). Thus, subparagraphs (C) and (D) stand on their own as processes for sanctioning employers which violate the terms of certified labor condition applications. Such employers may be placed in the subparagraphs (C) and/or (D) notice and hearing processes either as a result of a complaint and investigation under subparagraphs (A) and (B) or as a result of some other action, such as a post-admission investigation undertaken by the Department on its own accord. As indicated above, this is essentially the same statutory framework under which the Department investigates and sanctions H-1A program violations in the absence of a complaint. See 8 U.S.C. 1182(m)(2)(E) (ii), (iii), (iv), and (v). In addition to making enforcement more consistent across these programs, the Department's directed investigations of possible violations of certified H-1B labor condition applications would enhance compliance under the program and better assure protection of U.S. and foreign workers. Such protection is consistent with a general Congressional principle in enacting immigration laws--to provide for the admission of foreign workers under terms and conditions of employment that do not adversely affect the wages and working conditions of similarly employed U.S. workers. See, e.g., 8 U.S.C. 1182(a)(5)(A), 1182(m)(2)(A)(ii), 1182(n)(1)(A), and 1188(a)(1)(B); see also 20 CFR 655.0(a)(3). It is not consistent with that principle for the Department to be required to ignore--after approval of an LCA-- information or evidence on possible H-1B violations received other than through a complaint. Fifty-three commenters addressed this proposal--43 opposing and 10 advocating. Those opposing suggest that the statute does not allow this proposal and that to permit directed investigations would be too disruptive, intrusive, and problematic. The Department is keenly aware of the regulated community's concern and has carefully considered the views expressed by commenters. However, in light of the statutory language and purpose, the legislative history, the Department's experience in the program, and the Department's intentions as to the limited use of directed investigations, the Department has determined to promulgate the directed investigation proposal in this Final Rule. 2. Proposed Provisions Adopted With Modification a. Short-term placement of H-1B nonimmigrants at worksites outside the location(s) listed on the LCA (See Sec. ________.735.) Until the NPRM, the Department had indicated that job contractors would be treated like any other employer under the H-1B program. After obtaining considerable programmatic experience regarding the operations and effects of job contractors using H-1B nonimmigrants, the Department proposed to clarify how LCA's should be completed by job contractors, and proposed to amend the regulations to create certain additional standards for such employers. In the NPRM, as part of the proposal to develop special procedures for job contractors, the Department defined the term ``job contractor'' and the proposed requirements to be met, including the general requirement to assure that the information to be provided on the LCA in Item 7 (occupational information) must pertain to the location(s) (city and State) of any and all worksite entities. The Department further proposed that a job contractor filing an LCA must indicate thereon the place of employment at which the H-1B nonimmigrant will actually work (and for which the prevailing wage must be determined) as opposed to the employer's headquarters or office location if such location is different from the place of employment. The Department also proposed that, if the contractor wishes to relocate the H-1B nonimmigrant to work at any location not listed on a certified LCA, an appropriate LCA shall be filed and certified (and the appropriate prevailing wage determined) before any H-1B nonimmigrant may be employed at that location. The NPRM addressed other job contractor matters, such as the contractor's actual wage obligation. Of the 264 comments received in response to the NPRM, 171 commented on the job contractor proposal and 153 (nearly 90%) opposed it--128 of those 153 coming from business commenters. The negative comments related to the concept as a whole or related to a part of it such as the nationwide actual wage, worksite posting, and place of employment designation on the labor condition application. Senator Alan K. Simpson expressed concern for the employer's ability to find workers to fill real health care needs, especially in the physical therapist occupation. Other commenters expressed concern that the proposed rule would impose special hardships on job contractors, would be onerous, and would be discriminatory. Several commenters suggested that the Department consider a time test methodology, rather than a ``job contractor'' concept, in identifying the responsibilities of an employer who places H-1B nonimmigrants at worksites owned or controlled by entities other than the employer. Suggestions for the duration of temporary placement ranged from 30 days to 180 days. Of the comments received in response to the January 13, 1992 Interim Final Rule, concerning the worksite movement of H-1B nonimmigrants, 13 commenters (11 of which were businesses) expressed the view that the initial LCA filing should be sufficient when an H-1B nonimmigrant is transferred between temporary worksites such as branch offices or customer offices. These comments advanced the position that an employer should be able to move H-1B nonimmigrants to worksites where it is anticipated that the tour of duty will be of a short or temporary nature. The Department has considered carefully the comments concerning the job contractor concept as proposed and has decided--at this time--not to establish special procedures applicable only to those businesses operating as job contractors. At present, based on the overwhelming weight of the comments and the Department's experience in the program, the Final Rule contains a modification of the proposed rule, to implement a ``time test'' for short-term assignments of H-1B nonimmigrants to worksite(s) outside the area(s) of employment covered by already-certified LCA's whether the new worksite is another establishment of the employer or is the worksite of another entity (e.g., customer of a job contractor providing H-1B nonimmigrants or services provided by H-1B nonimmigrants at the customer's location). The Final Rule is both less burdensome for employers and more protective of workers than was the provision as proposed in the NPRM. The Department recognizes that it is common practice for employers--not only job contractors, but also other employers which operate in more than one place of employment within the United States-- to move H-1B nonimmigrants from one place of employment (worksite) to another for short periods of time in response to demands of business. The Final Rule takes into consideration the practical and real world experience of short-term placement of employees. The Final Rule applying to all LCA-filing employers includes a 90- workday placement option within a three-year period, beginning with the first work day at any worksite in a new area of intended employment, for an employer who shifts H-1B nonimmigrants to any worksite(s) outside the location listed on the employer's already-certified LCA. The 90-day option would apply separately for each area of intended employment (e.g., 90 cumulative days for Los Angeles, 90 cumulative days for San Francisco). Under this option, an employer may place H-1B nonimmigrant(s) at such worksite(s)--without filing a new LCA (and thus without meeting the notice, prevailing wage, and actual wage requirements for such area of intended employment)--provided that: 1. No H-1B nonimmigrant continues to work at a worksite in such area beyond 90 cumulative workdays Pby H-1B nonimmigrants at all worksites within the area (starting with the first day on which any H- 1B nonimmigrant worked at any worksite in the area) and makes no further placement of such worker(s) in such area within the three-year period which began with the first day of placement, and 2. The H-1B nonimmigrant(s) working in the area is (are) compensated at the required wage rate applicable under the employer's already-certified LCA plus expenses for the placement area of employment at no less than the per diem rate for such area and transportation reimbursement for Federal Government employees as published in the Code of Federal Regulations at 41 CFR part 301 (the Department has used the regulations promulgated by the General Services Administration for Federal employees, as we are unaware of any other universally available source of this information for employers), and 3. Does not place an H-1B nonimmigrant at a worksite where there is a strike or lockout in the same occupational classification as the H-1B nonimmigrant. Of course at any time an employer may file a new LCA covering the new area of intended employment (complying with all LCA requirements, including determination of actual and prevailing wage rates as well as notice to employees). This can be done in advance of the placement or, if such new LCA is filed and certified after placement, the employer can cease payment of per diem and transportation rates. If, at the accumulation of 90 workdays, the employer has H-1B nonimmigrants at any worksite(s) in the new area of intended employment, the employer must have filed and received approval of a new LCA and complied with all requirements for such filing. This 90-workday placement option does not apply to the placement of H-1B nonimmigrants at any worksite(s) within an area covered by an already-certified LCA filed by the employer. Such worksite(s) would be encompassed within and fully subject to the requirements of that LCA, including prevailing wage and worksite notice(s) (see Sec. c.1.b Notification, above, regarding notification at new worksites). The only additional action required of the employer in this circumstance is to post the notice for a period of 10 days at the new worksite. b. Payment of wages; deductions from wages (See Sec. ________.731 (c).) At several stages in the rulemaking process, the Department has addressed the issue of what constitutes the payment of wages for purposes of an employer satisfying the required wage obligation under the H-1B program. This matter was discussed in some detail in the Preambles to the January 13, 1992, Interim Final Rule (57 FR 1316, 1322) and the October 6, 1993, Proposed Rule (58 FR 52152, 52154). The rulemaking has also dealt with the related issue of guidelines or standards for allowable deductions from employee wages under the program. Based on careful consideration of the comments, the legislative intent, and extensive program experience, the Department in the Final Rule is adopting a ``bright line'' test for ``payment of wages,'' coupled with a three-part standard for authorized deductions. Taken together, these standards enable employers to determine, with certainty, their obligations and options, assure employees will be afforded their rights under the law, and better enable the Department, in its enforcement proceedings, to identify violations, while leaving bona fide, valid pay practices unhampered. The principal focal point in the rulemaking, with regard to payment of wages, has been the matter of whether ``in-kind'' perquisites or direct or indirect payments other than cash constitute wages. On this point, the Department has taken the position in the interim final and the Proposed Rule, as well as in the administration and enforcement of the program, that such wage credit is not permitted. However, in the Preamble to the Interim Final Rule, the Department set out possible standards for wage credit, and invited comments as to the appropriateness of these, or some other, tests. A total of 39 commenters on the interim final and the Proposed Rule responded to this point. Six of these submitted comments to both Rules, with two of the six modifying their views in their second comments. Eight of the 39 commenters (including the AFL-CIO) suggested that the Department should not permit any in-kind wage credit. The other 31 commenters urged the Department to permit such wage credit. While none of these commenters endorsed the tests set out in the Interim Final Rule's Preamble, several of them suggested that the regulatory standard should be a flexible test that would take into account the peculiarities of the employment of H-1B nonimmigrants (e.g., family relocation expenses). Several others (including Senators Alan K. Simpson and David Durenberger) suggested that the regulatory standard should focus on the employer's actual costs in employing the H-1B nonimmigrant, as well as on the comparative costs of employing such a worker and a U.S. worker. Seven of the 39 commenters (including a multinational computer software company, a multinational pharmaceutical company, a national association of computer businesses, and a national association on international personnel concerns) suggested that, as a regulatory standard, the Department should permit the employer to credit as wages any payment or perquisite which is reported to the Internal Revenue Service as the employee's wages. The Department has considered carefully all the comments, and has found many of them persuasive and helpful with regard to appropriate regulatory standards. In addition, the Department has reviewed thoroughly the information obtained through administration and enforcement of the program regarding various pay practices and expenditures in the employment of nonimmigrants in the U.S. Based on these considerations and review, the Department has concluded that, in determining the ``wages paid'' for purposes of the employer's satisfaction of the H-1B required wage, it is not necessary or appropriate to focus on the issue of in-kind wages. Instead, the Department has concluded the regulatory standard should consider the broader picture of compensation to employees and costs to employers in the employment of H-1B nonimmigrants. Further, in the Department's view, the regulation should provide a practical, predictable, and somewhat flexible standard, so that the regulated community, as well as the Department, can act with confidence in assuring compliance with the Act's requirements. Thus, the Department is promulgating a Final Rule which modifies the NPRM provision to create a less burdensome, more effective, ``bright line'' test for ``wages paid.'' Under this test, any compensation which is treated as the H-1B nonimmigrant employee's earnings for income tax and FICA (Federal Insurance Contributions Act-- social security tax) proposes will be considered to be wages paid for purposes of the H-1B program. Amounts to be treated as ``wages paid'' shall be paid to the employee free and clear when due, except that certain deductions from wages may be made by the employer in accordance with the restrictions set forth in the regulation and discussed below. In order to claim such ``wages paid,'' the employer shall document that all required earnings reports have been filed and withholdings (including the employer's FICA tax) have been paid to appropriate governmental entities, in accordance with applicable laws (including any payments in the employee's home country pursuant to any totalization arrangement between the social security systems of the U.S. and such home country, as authorized by section 233 of the Social Security Act, 42 U.S.C. 433). The wages of salaried employees are due in pro-rata installments, except that some limited flexibility with regard to pro rata installments is provided for the employer which clearly documents the use of supplemental payments (such as quarterly bonuses) as described in the regulation. On the closely related matter of deductions from wages, in the Proposed Rule the Department set out a multi-part test, and requested public comment as to the appropriateness of that or some other standard and as to whether the H-1B nonimmigrant's international travel expenses to initially come and finally return from employment should be considered a business expense not susceptible to recoupment by the employer through wage deductions. Ten commenters responded on the deductions issue. Seven of the 10 opposed the proposed test, for a variety of reasons. On the transportation expense sub-issue, five commenters asserted that the costs should be considered a business expense, and two commenters took the opposite position (with one arguing that the Department lacked statutory authority to impose such costs on an employer). Based on a careful review of these comments and the information which the Department has obtained through the administration and enforcement of the program, the Department has concluded that a flexible, three-part test on allowable deductions will be promulgated, so as to be less burdensome for employers but fair and protective for workers. Under this test, three categories of deductions are authorized: those required by law; those that are reasonable and customary in the occupation and area of intended employment; and those that are voluntary on the part of the H-1B nonimmigrant. While each of these categories has regulatory restrictions, the test, taken as a whole, affords significant latitude for employers and H-1B nonimmigrants to achieve any bona fide arrangement to facilitate the employment situation. The flexible test does not permit the employer situation. The flexible test does not permit the employer to impose the burden of business expense(s) on the worker. Based upon the comments and the Department's reading of the statute, for purposes of this regulation, the Department has determined that for this final rule, international travel costs to the job initially and from the job at the conclusion of employment will not be considered to be employer's business expense. Section 212(n) of the INA (8 U.S.C. 1182(n)), which contains the LCA requirements, is silent regarding international travel. In Sec. 214(c)(5)(A) of the INA (8 U.S.C. 1184(c)(5)(A)), however, Congress specifically addressed international travel by providing that ``in the case of an [H-1B] alien * * * who is dismissed from employment by the employer before the end of the period of authorized admission, the employer shall be liable for the reasonable costs of return transportation of the alien abroad.'' The Department has concluded that by making the employer liable for international travel costs under specific circumstances, and not addressing any other circumstances, Congress intended that the employer be liable for international travel costs only under the specified circumstances. Of course, this does not preclude an employer from paying the H-1B nonimmigrant's international travel expenses. Further, if the employer and employee enter into a bona fide, voluntary agreement whereby the employer advances monies to cover the employee's cost of international travel subject to recoupment through wage deductions, such deductions would be allowable provided that the deductions do not exceed the amount of money advanced by the employer-- i.e., not subject to interest or any other form of surcharge. Such deductions must comply with all other applicable Federal/State laws. c. Prevailing Wage 5% Provision (See Sec. ______.731(d)(4).) In the Preamble to the Proposed Rule, the Department described its program experience and its concern regarding apparent confusion as to the Interim Final's provision dealing with what has been called a 5% variable on the payment of the prevailing wage. The provision in question was incorporated into the H-1B regulation from the permanent program regulations at 20 CFR 656.40(a)(2)(i). As explained in the Preamble and set out in the proposed regulatory language, it is and has been the Department's position, in the H-1B program, that although an employer will not be considered to be in violation if found to have paid 95% or more of the prevailing wage, the employer found to have paid less than 95% will not only be cited for violation but also be assessed back wages based on 100% of the prevailing wage. Seven commenters expressed views regarding the proposed clarification of the regulation. A labor organization expressed opposition to the Department's toleration of any variable, and suggested that an employer found to have paid less than 100% should be required ``to pay in full once the error is detected.'' A law firm, stating the concerns of employers, advocated that no change should be made in this provision. Two government officials (one State, one Federal) favored the continued application of a 5% variable, although one of these commenters (Federal official) suggested that no variable should be allowed for users of published wage surveys that are statistically valid. Two business commenters (computer software corporations) recognized the proposal as a clarification of the Department's position, and one described the new provision as ``very helpful.'' A member of the general public described the proposed regulatory language as ``a fair compromise.'' 3. Provisions Proposed But Not Adopted a. Prevailing wage update. A number of commenters to the proposed rule published in the Federal Register on August 5, 1991, and the Interim Final Rule published October 22, 1991, and January 13, 1992, respectively, objected to the requirement that an employer must obtain prevailing wage information at any time other than when the application is first filed. These commenters pointed to Sec. 212(n)(1)(A)(i) of the INA (as amended by MTINA) which states that the employer is offering wages that are at least ``* * * the prevailing wage level * * * based on the best information available as of the time of filing the application * * * .'' The Department indicated that it recognized that the language could be construed to mean that the prevailing wage should be determined only once, at the time of filing the application. Further, the Department seriously considered requiring that the employer determine the prevailing wage only at the time of filing the application, but concluded that in the case of an application with a 6- year validity period, such procedure would render the prevailing wage requirement virtually meaningless. The Department also considered, alternatively, requiring that the validity period of the labor condition application be shortened to 1 or 2 years, with an attendant prevailing wage determination every time the application was filed. The Department decided, in the October 22, 1991, Interim Final Rule, that this approach would be unnecessarily burdensome and opted instead for what it considered a less burdensome and more sensible approach, i.e., one application for up to six years but with a prevailing wage determination every two years starting from the date the labor condition application is certified. In the NPRM of October 6, 1993, the Department indicated that, in the context of the proposed reduction in the validity period from six to three years, the 24-month update would be unduly burdensome on an employer. With a three year application validity and a 24-month prevailing wage update requirement, an employer could be required to obtain current prevailing wage information twice in a short time frame: once, 24 months from the filing of the initial application and again upon the filing of the new application prior to the 3-year deadline. Consequently, in the NPRM the Department proposed to adopt an 18-month prevailing wage update requirement. In response to the NPRM, the Department received 60 comments on this issue of which all but five were opposed to the proposal. Commenters' major objections to the NPRM's approach were as follows: the Department does not have the statutory authority to require any prevailing wage update; the 18-month update proposal is burdensome on employers and will not substantively increase protections for U.S. workers; the proposal is inconsistent with normal hiring and compensation cycles which operate on an annual basis; the proposal will place an undue burden on the SESA's; and wages change very little in an 18-month period (especially in today's economy). Five commenters expressed concern that requiring infrequent prevailing wage updates will allow an employer to use ``stale'' data and will undermine wage protections for U.S. workers. The Department is cognizant of these concerns. However, the ``actual wage rate'' has been and will continue to be a ``safety net'' for the H-1B nonimmigrant. Assuming the actual wage is higher than the prevailing wage and thus is the required wage rate, if an employer normally gives its employees a raise at year's end, or the employer's system provides for other adjustments, H-1B nonimmigrants must also be given the raise (consistent with employer-established criteria such as level of performance, attendance, etc.) After careful consideration of all the comments received on this issue, the Department has determined that the proposal suggested by the majority of commenters is the most prudent approach. Under the Final Rule, employers are required to obtain current prevailing wage information every time a new labor condition application is filed (i.e., every three years or sooner, if specified). As noted by commenters, this requirement will ensure maximum consistency. Unless a lesser period is specified by the employer, a new labor condition application, prevailing wage update, and I-129 petition will all be required at the end of a 3-year period. b. Documentation of the wage statement. After careful review the Department believes that it is essential to require the employer to maintain documentation regarding wage rates for all that employer's employees in the specific employment in question at the place of employment. This information is ordinarily maintained by the employer for purposes of showing compliance with other applicable statutes (e.g., the Fair Labor Standards Act) and will permit the Department to determine whether in fact the required wage has been paid. Consequently, the language limiting the documentation to individuals with experience and qualifications similar to the H-1B nonimmigrant has been deleted. 4. Other Matters a. Regulation re-numbering (See Secs. ________.731 through .734.) Based on experience in administering and enforcing the H-1B program, the Department recognized that Sec. ________.730 of the Interim Final Rule, which contains general information on filing LCA's as well as the four elements of the LCA, is too lengthy and unwieldy. Therefore, for the sake of clarity, the Department, in this Final Rule, is redesignating Sec. ________.730 into five sections. The new Sec. ________.730 will retain the general information contained in paragraphs (a) through (d) of the Interim Final's Sec. ________.730, regarding the filing of LCA's. However, paragraphs (e) through (h) of the Interim Final's Sec. ________.730, which correspond to requirements relative to wages, working conditions, notice, and strike/lockout, respectively, have each been redesignated as a new section: former paragraph (e), The first labor condition statement: wages. is now Sec. ________.731; former paragraph (f), The second labor condition statement: working conditions. is now Sec. ________.732; former paragraph (g), The third labor condition statement: no strike or lockout. is now Sec. ________.733; and former paragraph (h), The fourth labor condition statement; notice. is now Sec. ________.734. Citations throughout the rule to paragraphs (e) through (h) have been amended to reflect the redesignation. In addition, the Department has also corrected various technical and typographical errors throughout the rule. An example of a technical error is the replacement in Sec. ________.855(c), of the word ``suspend'' with the word ``invalidate'' to conform with Sec. ________.750(c); an example of a typographical error is the replacement of the word ``proceding'' with the word ``preceding'' in former Sec. ________.730(e)(2)(iii)(C)(2), now Sec. ________.731(b)(3)(iii)(B). b. Clarification of the definition of ``area of intended employment'' (See Sec. ________.715.) As a clarification, the Department is deleting the last sentence in the definition of ``area of intended employment'' which was published in the Interim Final Rule. That sentence which states that ``(i)f there is no MSA then the area of intended employment is the area with normal commuting distance of the place of employment,'' does not appear in the definition of ``area of intended employment'' at 20 CFR 656.3 quoted above. Since this concept is already included in the first sentence of the definition, the sentence in question is being deleted to avoid confusion. c. Validity period of a SESA prevailing wage (See Sec. ________.731(a)(2)(iii)(A)(1).) Through administration and enforcement of the program, the Department has become aware of confusion and potential adverse effects on wages in situations in which employers, in filing their LCA's, rely on SESA prevailing wage determinations which were obtained on dates considerably in advance of the time of the filing (e.g., six months prior to LCA date). Data used in prevailing wage rate determinations may be up to four years old. Employers were obtaining prevailing wage rates and holding them indefinitely before using them in conjunction with filing an LCA. The Department concluded that a practicable limit should be set on the use of prevailing wage rates. The Department concludes that 90 days is a reasonable practicable limit. In order to alleviate confusion and to better assure the achievement of the Congressional purposes of protecting the wages of U.S. workers, the Department is clarifying the regulation to set a deadline for an employer's reliance on a SESA prevailing wage determination. An employer that obtains a SESA prevailing wage determination must file the labor condition application under which that rate will be paid within 90 days from the date of the SESA's determination. d. Labor condition application filing dates (See Sec. ________.730(b).) Through administration and enforcement of the program, the Department has become aware that some employers are filing labor condition applications for periods of anticipated employment which are well in the future (e.g., one year after the application filing date). This practice poses dangers of abuse and may frustrate Congressional intent for the protection of the jobs and wages of U.S. workers. The prevailing wage, strike/lockout, and notice obligations are based, in large part, upon actions taken and conditions which exist at the time the labor condition application is filed. Therefore, the Department is clarifying the amount of time in advance of the beginning date of the period of employment that an employer may file a labor condition application. This Final Rule requires that a labor condition application can be filed no earlier than 6 months before the beginning date of the period of employment. Labor condition applications which are received by an ETA regional office more than 6 months prior to the beginning date of the period of employment will be returned to the employer as unacceptable for filing. This procedural change will impose few, if any, additional burdens on employers and will facilitate the achievement of the statutory purposes. e. Actual wage (See Sec. ________.731(a)(1) & Appendix.) As the program has evolved, the Department is aware that inconsistent and perhaps confusing interpretations have, on occasion, been provided to public inquiries concerning the Department's enforcement position on the employer's responsibilities under the ``actual wage'' provisions of the statute and regulation. To rectify any misunderstanding with the regulated community, the Department is providing the following guidance regarding its enforcement policy concerning the determination of the actual wage under the Final Rule. In determining the required wage rate, the employer must not only obtain the prevailing wage, but also establish the actual wage for the occupation in which the H-1B nonimmigrant is employed by the employer. For purposes of establishing its compensation system for workers in an occupational category, of course, an employer may take into consideration objective standards relating to experience, qualifications, education, specific job responsibility and function, specialized knowledge, and other legitimate business factors. The use of any or all these factors is at the discretion of the employer. The employer must have and document an objective system used to determine the wages of non-H-1B workers, and apply that system to H-1B nonimmigrants as well. It is not sufficient for the employer simply to calculate an average wage of all non-H-1B employees in an occupation; the ``actual wage'' is not an ``average wage.'' The documents explaining the system must be maintained in the public disclosure file. The explanation of the compensation system must be sufficiently detailed to enable a third party to apply the system to arrive at the actual wage rate computed by the employer for any H-1B nonimmigrant. The computation of the H-1B nonimmigrant's individual actual wage rate shall be documented in the H-1B nonimmigrant's personnel file. In the event the employer has not developed and documented an objective system and/or has not calculated the actual wage rate for an H-1B nonimmigrant, the Administrator--in determining the actual wage rate for enforcement and back wage computation purposes--Wage and Hour may need to average the wages of all non-H-1B workers who are employed in the same occupation, rather than make determinations for each individual H-1B nonimmigrant; the employer in such circumstances would be cited for failure to comply with the requirements for determination of the actual wage. Assuming the actual wage is higher than the prevailing wage and thus is the required wage rate, if an employer gives its employees a raise at year's end, or if the system provides for other adjustments in wages, H-1B nonimmigrants must also be given the raise (consistent with legitimate employer-established criteria such as level of performance, attendance, etc.). This is consistent with Congressional intent that H- 1B nonimmigrants and similarly employed U.S. workers be provided the same wages. Where the employer's pay system or scale provides adjustments during the validity period of the labor condition application--e.g., cost-of-living increase or other annual adjustment, increase in the entry-level rate for the occupation due to market forces, or the employee moves into a more advanced level in the same occupation--the employer shall retain documentation explaining the changes and clearly showing that, after such adjustments, the wages paid to the H-1B nonimmigrant are at least the greater of the adjusted actual wage or the prevailing wage for the occupation in the area of intended employment. In the Final Rule, guidance for employers regarding the essential aspects of the foregoing discussion, along with several examples which are substantially the same as appeared in the preamble to the Interim Final Rule are being promulgated as Appendix A to Subpart H. f. Prevailing working condition standard (See Sec. ________.732.) The Act requires employers to attest in their LCA's that the employment of H-1B nonimmigrants will not adversely affect the working conditions of U.S. workers similarly employed. The regulation provides that ``working conditions'' include such matters as working hours, shifts, vacation periods, and fringe benefits. The employer's obligation in this regard extends for the longer of two periods: The validity period of the certified labor condition application or the period during which the H-1B nonimmigrant(s) is (are) employed by the employer. In previous stages of H-1B rulemaking, the Department stated its position that Congress intended prevailing working condition determinations to be made in the same manner as the current regulations for the permanent alien labor certification (immigrant worker) program. See, e.g., 57 FR 1316 (January 13, 1992); 56 FR 54720 (October 22, 1991); 56 FR 37175 (August 5, 1991); and 56 FR 11705 (March 10, 1991); see also 20 CFR part 656. There has been some confusion expressed, however, regarding the Department's interpretation of this LCA element. While the regulation itself is clear and is not being amended, the Department is providing the following additional guidance. The H-1B regulation permits the employer to file an LCA without making any pre-filing determination or documentation of working conditions; the regulation requires that a prevailing working condition determination be made only in the event of an investigation. See Sec. ________.732 of the final Rule; see also 20 CFR 656.24(b)(3). The public should be aware that the Department is carefully reviewing its program experience, as well as information received from members of the public and other sources, regarding the impact of the employment of H-1B nonimmigrants on the working conditions of U.S. workers. g. Challenges of prevailing wage determinations only through employment service complaint system. Former Sec. ________.730(e)(1)(ii)(C)(1), new Sec. ________.731(a)(1)(iii)(A), lists the State Employment Security Agency (SESA) as one source for obtaining a prevailing wage determination. Although DOL regulations provide an avenue for an employer to challenge a SESA determination through the Employment Service (ES) complaint process (under 20 CFR part 658, subpart E), the Interim Final Rule did not make it sufficiently clear that challenges to prevailing wage determinations were to be made only through that process. In designing the program, the Department had envisioned that the ES complaint process would be used for all prevailing wage challenges. However, after substantial enforcement litigation experience, the Department has found that some employers are instead attempting to contest such determinations through the hearing provided under Sec. ________.835. Such enforcement was not intended to handle such challenges. The Final Rule provides needed clarification by directing the employer to the ES complaint process and alerting the employer that a challenge of a SESA prevailing wage determination may be made only prior to filing an LCA in which that SESA determination is used. Implicit and essential in this process is the requirement that once an employer obtains a prevailing wage determination from the SESA and files the LCA without challenging the SESA's determination through the ES complaint process, the employer, in effect, has accepted the determination and waived its right to challenge the determination. Permitting an employer to operate under a SESA prevailing wage determination and later contest it in the course of an investigation or enforcement action is contrary to sound public policy; such a delayed, disruptive challenge would have a harmful effect on U.S. and H-1B employees, competing employers, and other parties who may have received notice of and/or relied on the prevailing wage at issue. Section ________.731(a)(2)(iii)(A) of the Final Rule explicitly states the Department's clarification of the use and consequences of the ES complaint process. Challenges to SESA prevailing wage determinations are made only through the State agency's ES process. See 20 CFR 658.410 et seq. Where the prevailing wage determination is made by the SESA prior to the filing of the LCA, the employer's avenue of appeal is through the ES complaint system, entering the system at the State level. See 20 CFR 658.410 et seq. However, where the prevailing wage determination is made by ETA (with or without consultation with the SESA) during the course of a Wage and Hour Division enforcement action, the employer's avenue of appeal also is through the ES complaint system, but the employer enters the system at the ETA regional office level. The employer will be notified where to file any appeal. For purposes of the H-1B program only, this is a collateral change to the ES complaint system regulations, which generally require all complaints to be filed at the SESA level (see 20 CFR 658.420 et seq.) and is notwithstanding the provisions of 20 CFR 658.421(a) and 658.426. Similarly, Sec. ________.731(d) provides that, where the employer does not have a valid prevailing wage determination, the Administrator, during the course of an investigation, may obtain a prevailing wage determination from ETA, which, in turn, may consult with the SESA and then determine the appropriate prevailing wage. Some employers also are contesting these ETA prevailing wage determinations at the Wage and Hour enforcement hearing provided under Sec. ________.835. The Department believes that the proper forum for all prevailing wage determination challenges--whether the wage determination was obtained by the employer or by the Administrator (where the employer does not have a valid prevailing wage determination)--is the ES complaint process. Once the prevailing wage determination is final, either through the lack of a timely challenge or through the completion of the ES process, the determination shall be conclusive for purpose of enforcement. In such cases where the prevailing wage determination is made by ETA at the Administrator's request, any challenge must be initiated at the ETA regional office level within 10 days after the employer receives the ETA prevailing wage determination. Section ________.731(d) has been amended to reflect this clarification. Finally, Sec. ________.840(c) provides that where the Administrator has found a wage violation based on a prevailing wage determination obtained by the Administrator from ETA, the Administrative Law Judge (ALJ) in the enforcement proceeding ``shall not determine the prevailing wage de novo, but shall * * * either accept the wage determination or vacate the wage determination.'' This provision has been interpreted by some employers as permitting the challenge of prevailing wage determinations obtained by the Administrator from ETA. Section ________.840(c) was not intended to function as a forum for such challenges. Accordingly, Sec. ________.840(c) has been clarified to reflect that once the Administrator obtains a prevailing wage determination from ETA and the employer either fails to challenge such determination through the ES complaint process within the specified time of 10 days, or, after such a challenge, the determination is found to be accurate by the ES complaint process, the ALJ must accept the determination as accurate and cannot vacate it. As with other final decisions of the Department, the employer continues to have access to the Federal district court if the issues are not satisfactorily resolved. h. Enforcement of wage obligation (See Sec. ________.731(c)(5).) The Act requires employers to state that the employer is offering and will offer the H-1B nonimmigrant, during the period of authorized employment, wages that are at least the required wage rate--the actual wage rate or the prevailing wage rate, whichever is greater. Furthermore, the employer is required to indicate on the LCA whether and H-1B nonimmigrant will work full-time or part-time. Under the Secretary's statutory authority to implement the Act, the regulations do not authorize an employer to decrease the payment of the required wage rate. In enforcement proceedings, however, the Department has encountered confusion over the employer's obligations where the H-1B nonimmigrant is in a nonproductive status or circumstance. To alleviate such confusion, the following guidance is provided. There is no statutory or regulatory authorization for a reduction in the prescribed wage rate for any H-1B nonimmigrant who is not engaged in productive work for the LCA-filing employer due to employment related conditions such as training, lack of work, or other such reasons. The H-1B program was not intended to provide an avenue for nonimmigrants to enter the U.S. and await work at the employer's choice or convenience. Compare 8 U.S.C. 1101(a)(15)(H)(iii). Instead, the H-1B program's purpose is to enable employers to employ fully- qualified workers for whom employment opportunities currently exist. The employer, having attested to the duration and scope of the intended employment (i.e., beginning and ending dates; full or part-time), has total control of the nonimmigrant's employment status. The Immigration and Nationality Act (8 U.S.C. 1182(n)(1)) requirements are such that once the H-1B status has been approved for the period specified by the employer, the employer controls the status and work of the H-1B nonimmigrant, who is unable to accept employment elsewhere without a certified labor condition application and approved I-129 petition filed on the worker's behalf by another employer. For the purpose of DOL administration and enforcement of the H-1B program pursuant to these regulations, and H-1B nonimmigrant is considered to be under the control or employ of the LCA-filing employer from the time of arrival in the United States and throughout the period of his or her employment--regardless of whether the nonimmigrant is in training or other nonproductive status, except that if during the period of employment an H-1B nonimmigrant experiences a period of nonproductive status due to conditions which are unrelated to the employment and render the nonimmigrant unable to work--e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant, caring for an ill relative--then the employer shall not be obligated to pay the required wage rate during that period, provided that the INS permits the employee to remain in the U.S. without being paid and provided further that such period is not subject to payment under other statutes such as the Family and Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.). As clarification, it is the Department's position that the LCA- filing employer has no prerogative--other than in circumstances described above--but to pay the required wage beginning no later than the day the H-1B nonimmigrant is in the United States under the control and employ of that LCA-filing employer, and continuing throughout the nonimmigrant's period of employment. Any H-1B nonimmigrant employed under an LCA in a full-time capacity (the part-time block not having been checked on Item 7(b) of the LCA) shall be guaranteed full-time pay (ordinarily 40 hours' pay) each week, or the weekly equivalent if paid a monthly or annual salary. If the employer's LCA shows ``part-time employment,'' the employer will be required to pay the nonproductive employee for at least the number of hours to be worked per week indicated on the I-129 petition filed by the employer with the INS. If the employer indicates on the LCA that an employee is to work only part-time and subsequent investigation discloses that in fact the employee was working full-time in a majority of the weeks during the period covered by the investigation, the employer will be held responsible for full-time pay including during nonproductive periods for which the worker received either no pay or less than the required wage. i. Time bar on investigation of complaints and on imposition of remedies (See Sec. ________.805(d)(5).) Through enforcement experience, the Department has become aware that the Interim Final Rule's provision regarding timeliness of complaints, Sec. ________.805(c)(5) (now Sec. ________.805(d)(5)), does not give sufficient guidance concerning the implementation of the statutory directive that ``[n]o investigation or hearing shall be conducted on a complaint concerning * * * a failure [to meet a condition specified in an LCA] or misrepresentation [of material facts in such an application] unless the complaint was filed not later than 12 months after the date of the failure or misrepresentation, respectively.'' 8 U.S.C. 1182(n)(2)(A). The Interim Final Rule states that ``[t]he complaint must be filed no later than 12 months after the date of the alleged violation(s).'' In enforcement proceedings some employers have argued that this time bar falls on all alleged violations 12 months from the date of the filing of the LCA, which embodies all the employer's obligations and against which any failure or misrepresentation would be determined. It is the Department's continuing position that the statutory language, taken in its plain meaning, ties the 12-month time bar to the date of the employer's wrongful action (e.g., failure to pay the required wage) and not to the date of the LCA. If Congress had intended the LCA date to be controlling, the statute easily could have been written to so specify. Thus, the Interim Final Rule speaks of ``the date of the alleged violation(s).'' In order to resolve any possible confusion, the regulation is being clarified. The Final Rule specifies that ``[t]he complaint must be filed not later than 12 months after the latest date on which the alleged violation(s) were committed, which would be the date on which the employer allegedly failed to perform an action or fulfill a condition specified in the LCA, or allegedly took an action or failed to take an action which, through such action or inaction, demonstrates a misrepresentation of a material fact in the LCA regarding such action or inaction.'' The Department does not consider this statutory provision to be applicable to the scope of available remedies (particularly, the back wage remedy); Congress dealth with remedies in a separate provision (8 U.S.C. 1182(n)(2)(C)) which neither contains nor references the 12- month time bar. Thus, neither the Interim Final Rule nor the Final Rule contains a 12-month limitation regarding the scope of remedies, and the rule has been clarified to expressly so provide. j. Debarment timing (notice to Attorney General) (See Sec. ________.855(a).) The statute requires that the Secretary notify the Attorney General of an employer's violation(s). Pursuant to Sec. ________.855(a) of the Interim Final Rule, the Administrator is required to notify the Attorney General (AG) and ETA of the final determination of a violation by an employer upon the earliest of the following events: (1) Where the Administrator determines that there is a basis for a finding of violation by an employer, and no timely request for hearing is made pursuant to Sec. ________.820 of this part; or (2) Where, after a hearing, the administrative law judge issues a decision and order finding a violation by an employer; or (3) Where the administrative law judge finds that there was no violation by an employer, and the Secretary, upon review, issues a decision pursuant to Sec. ________.845 of this part, holding that a violation was committed by an employer. This regulatory construct creates a situation where the Administrator notifies the AG of a violation upon a finding of a violation by an ALJ, even though such finding subsequently may be appealed to the Secretary and eventually overturned. An employer thus could be debarred after a finding of violation by an ALJ, serve part or all of the debarment period, and subsequently be found by the Secretary not to have committed a violation. To correct this anomaly, Sec. ________.855(a) has been amended to require notification to the AG after a finding of a violation by an ALJ only under the following circumstances: (a) where there is no appeal from the ALJ's finding to the Secretary; (b) where, upon such appeal, the Secretary declines to review the ALJ's finding; and (c) where, upon review, the Secretary affirms the ALJ's finding. k. Prevailing wage computation (See Sec. ________.731(a)(2)(iii).) As clarification, the first sentence in Sec. ________.731(a)(2)(iii) is amended to conform to the wording at 20 CFR 656.40(a)(2)(i). As stated in the Preamble to the Interim Final Rule published on October 22, 1991, the regulation ``incorporates the language of 20 CFR 656.40, as required by the Conference Report (see 56 FR 54723).'' The change in this Final Rule is not substantive in nature, but provides more detailed guidance in the correct procedure to compute a valid average or arithmetic mean. l. Conforming regulatory language on violations to the statutory language regarding levels of employer culpability (See Sec. ________.805(a).) In the MTINA amendments to the INA, Congress created different culpability standards for the imposition of civil money penalties and debarment for the different violations of the statute; e.g., a violation of the working condition and wage elements of the LCA requires ``willfulness,'' while a violation of the notice element must be ``substantial.'' In the January 13, 1992, Interim Final Rule, which modified the earlier Interim Final Rule to implement the MTINA amendments, the Department inadvertently erred with regard to the culpability standards for two types of violations. In Sec. ________.805(a), which lists the various violations with their particular culpability standards, the Department omitted the ``substantial'' failure to specify the number of workers sought, the occupational classification in which the workers will be employed, and the wage rate and conditions under which they will be employed. This violation has been added at Sec. ________.805(a)(5). Similarly, in the Interim Final Rule at Sec. ________.805(a)(5), which specifies a ``substantial'' failure to make available for public examination the application and necessary documents at the employer's place of business or worksite, the Department identified an incorrect standard of culpability; this provision should have carried a simple failure standard, i.e., a failure to make available the required documents for public examination need not be substantial. Section Sec. ________.805(a) has been amended to conform with the statute. m. Labor condition application (LCA) withdrawal and subsequent Attorney General notification (See Sec. ________.750(b).) The Interim Final Rule contains a provision at Sec. ________.750(b)(3) (57 FR 1332) whereby ETA will promptly notify the Attorney General (AG) of the withdrawal of an employer's certified labor condition application, unless reasonable cause had been found to commence an investigation. The purpose of this provision is to alert the AG and the Immigration and Naturalization Service (INS) that the employer's certified LCA is no longer valid and can not be used to petition for an H-1B nonimmigrant. Based on interagency discussions between the Department and INS, it has been determined that such notification does not provide a practical means for INS to adjudicate (and disapprove) any petitions an employer might file based on a certified but subsequently withdrawn LCA. While such action by an employer (i.e., filing a petition based on a withdrawn LCA) may be subject to civil or criminal sanction initiated by the INS, the Department considers it to be essential that the labor protections afforded by the H-1B LCA provisions not be frustrated by such action. Therefore, only for the purpose of assuring the labor standards protections afforded under the H-1B program, this Final Rule establishes that where an employer files a petition with INS under the H-1B classification pursuant to a certified LCA that had been withdrawn by the employer, such petition filing will bind the employer to all the obligations under the withdrawn LCA effective immediately upon receipt of such petition by INS. This revised procedure will reduce the paperwork burden on the Department and INS and the Department believes this change will maintain the worker protections afforded under the H- 1B program. Of course, the employer may always file a new LCA. n. Regularizing the hearing process (See Sec. ________.820(d) and Sec. ________.840(a).) The statute requires that the Secretary provide interested parties an opportunity for a hearing on investigative determinations regarding alleged violations. Such proceedings are provided in Sec. ________.820 through Sec. ________.840. Through program experience, the Department has recognized the need for greater specificity in the regulation regarding the participation of interested parties who did not file the initial request for hearing but, nonetheless, desire to participate. While remaining consistent with Congressional intent regarding timely hearings for interested parties, the Department seeks to better assure orderly and fair proceedings by providing in the Final Rule that, once the deadline for requesting a hearing has expired, an interested party may participate in an administrative law judge proceeding only with the approval of the judge. In addition, to ensure that the regulation comports with the Administrative Procedures Act and the most recent decision of the Supreme Court in Darby v. Cisneros, 113 S.Ct. 2539, 2547 (1993), Sec. ________.840 of the rule has been amended to provide that a party may not seek judicial review of an administrative law judge's decision until such party has exhausted all administrative remedies, and that the decision of the ALJ is inoperative while such remedies are being pursued. o. Retaliation (See Sec. ________.800(d).) In enforcement proceedings the Department has encountered some confusion as to whether an employer's retaliation against an H-1B nonimmigrant (for accepting back wages, for example) is prohibited activity under the anti- discrimination provision of the regulation (Sec. ________.800(d) Employer Cooperation), which was promulgated as an inherent and essential part of the enforcement process mandated by Congress. The regulatory restriction assures that employers will not take actions against workers to frustrate the Department's enforcement. This provision of the Interim Final Rule puts employers on notice that the employer cannot intimidate, threaten, restrain, coerce, blacklist, discharge, or in any manner discriminate against any person because such person filed a complaint, etc.; however, the specific word ``retaliate'' does not appear in the regulation. To alleviate any confusion the Final Rule is clarified by inserting the word ``retaliation.'' p. TN nonimmigrant classification (See Sec. ________.700(c)(2).) The Interim Final Rule at 58 FR 69226 implemented the provisions of the North American Free Trade Agreement (NAFTA) pertaining to the employment of Mexican citizens as professionals. NAFTA established that the employment of these Mexican citizens is currently subject to the provisions of the H-1B regulations. Currently Mexican professionals entering under this classification are limited to 5,500 annually. This limit can be increased by mutual agreement between the U.S. and Mexico and the numerical limitation will be lifted in 10 years, unless the two countries decide to eliminate it earlier. The regulations are clarified to show that the nonimmigrant classification for these individuals (subject to all of the LCA requirements and enforcement) is ``TN.'' As in the case of nonimmigrants granted the H-1B classification, the INS makes all determinations about the occupational sufficiency for the classification. IV. Executive Order 12866 The Department believes that this Final Rule is not an ``economically significant regulatory action'' within the meaning of Executive Order 12866, in that it will not have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. However, the Department has treated this action as ``significant'' under the President's priorities within the meaning of the principles set forth in E.O. 12866. This rule follows six previous rulemaking initiatives published in the Federal Register on the matter (an Advance Notice of Proposed Rulemaking on March 20, 1991; a Proposed Rule on August 5, 1991; an Interim Final Rule on October 22, 1991; an Interim Final Rule on January 13, 1992; a Proposed Rule published on October 6, 1993; and an Interim Final Rule on December 30, 1993). V. Regulatory Flexibility Act The Department of Labor previously notified the Chief Counsel for Advocacy, Small Business Administration, and made the certification pursuant to the Regulatory Flexibility Act at 5 U.S.C. 605(b), that the rule does not have a significant economic impact on a substantial number of small entities. Catalog of Federal Domestic Assistance Number This program is not listed in the Catalog of Federal Domestic Assistance. List of Subjects 20 CFR Part 655 Administrative practice and procedure, Agriculture, Aliens, Crewmembers, Employment, Enforcement, Fashion models, Forest and forest products, Guam, Health professions, Immigration, Labor, Longshore work, Migrant labor, Nurse, Penalties, Registered nurse, Reporting and recordkeeping requirements, Specialty occupation, Students, Wages. 29 CFR Part 507 Administrative practice and procedures, Aliens, Employment, Enforcement, Fashion models, Immigration, Labor, Penalties, Reporting and recordkeeping requirements, Specialty occupation, Wages, Working conditions. Text of the Joint Rule The text of the interim final joint rule as adopted by ETA and the Wage-Hour Division, ESA, in this document appears below: Subpart H--Labor Condition Applications and Requirements for Employers Using Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion Models Sec. ________.700 Purpose, procedure and applicability of subparts H and I. ________.705 Overview of responsibilities. ________.710 Complaints. ________.715 Definitions. ________.720 Addresses of Department of Labor regional offices. ________.730 Labor condition application. ________.731 The first labor condition statement: wages. ________.732 The second labor condition statement: working conditions. ________.733 The third labor condition statement: no strike or lockout. ________.734 The fourth labor condition statement: notice. ________.735 Special provisions for short-term placement of H-1B nonimmigrants at place(s) of employment outside the area(s) of intended employment listed on labor condition application. ________.740 Labor condition application determinations. ________.750 Validity period of the labor condition application. ________.760 Public access; retention of records. Appendix A to Subpart H: Guidance for Determination of the ``Actual Wage'' Subpart I--Enforcement of H-1B Labor Condition Applications Sec. ________.800 Enforcement authority of Administrator, Wage and Hour Division. ________.805 Complaints and investigative procedures. ________.810 Remedies. ________.815 Written notice and service of Administrator's determination. ________.820 Request for hearing. ________.825 Rules of practice for administrative law judge proceedings. ________.830 Service and computation of time. ________.835 Administrative law judge proceedings. ________.840 Decision and order of administrative law judge. ________.845 Secretary's review of administrative law judge's decision. ________.850 Administrative record. ________.855 Notice to the Employment and Training Administration and the Attorney General. Subpart H--Labor Condition Applications and Requirements for Employers Using Nonimmigrants on H-1B Visas In Specialty Occupations and as Fashion Models Sec. ________.700 Purpose, procedure and applicability of subparts H and I. (a) Purpose. With respect to nonimmigrant workers entering the United States (U.S.) on H-1B visas pursuant to the Immigration and Nationality Act (INA): (1) Establishes an annual ceiling of 65,000 (exclusive of spouses and children) on the number of foreign workers who may be issued H-1B visas; (2) Defines the scope of eligible occupations for which nonimmigrants may be issued H-1B visas and specifies the qualifications that are required for entry as an H-1B nonimmigrant; (3) Requires an employer seeking to employ H-1B nonimmigrants to file a labor condition application (LCA) with and have it certified by the Department of Labor (DOL) before a nonimmigrant may be provided H- 1B status by the Immigration and Naturalization Service (INS); and (4) Establishes a system for the receipt and investigation of complaints, as well as for the imposition of fines and penalties for misrepresentation or for failure to fulfill a condition of the labor condition application. 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), 1184(g)(1)(A), and 1184(i). (b) Procedure for obtaining an H-1B visa classification. Before a nonimmigrant may be admitted to work in a ``specialty occupation'' or as a fashion model of distinguished merit and ability in the United States under the H-1B visa classification, there are certain steps which must be followed: (1) First, an employer shall submit to DOL, and obtain DOL certification of, a labor condition application. The requirements for obtaining a certified labor condition application are provided in this subpart. The labor condition application (Form ETA 9035) and instructions may be obtained from DOL Regional Offices listed in Sec. ________.720 of this part. (2) After obtaining DOL certification of a labor condition application, the employer may submit a nonimmigrant visa petition (INS Form I-129), together with the certified labor condition application, to INS, requesting H-1B classification for the foreign worker. The requirements concerning the submission of a petition to, and its processing by, INS are set forth in INS regulations. The INS petition (Form I-129) may be obtained from an INS district or area office. (3) If INS approves the H-1B classification, the nonimmigrant then may apply for an H-1B visa abroad at a consular office of the Department of State, or apply to the INS for a change of visa status if already in the United States. (c) Applicability. (1) Subparts H and I of this part apply to all employers seeking to employ foreign workers under the H-1B visa classification in specialty occupations or as fashion models of distinguished merit and ability. (2) During the period that the provisions of Appendix 1603.D.4 of Annex 1603 of the North American Free Trade Agreement (NAFTA) apply, subparts H and I of this part shall apply to the entry and employment of a nonimmigrant who is a citizen of Mexico under and pursuant to the provisions of section D or Annex 1603 of NAFTA in the case of all professions set out in Appendix 1603.D.1 of Annex 1603 of NAFTA other than registered nurses. Therefore, the references in this part to ``H- 1B nonimmigrant'' apply to such nonimmigrants, who are classified by INS as ``TN.'' In the case of a registered nurse, the provisions of 20 CFR part 655, subparts D and E, and 29 CFR part 504, subparts D and E, shall apply. Sec. ________.705 Overview of responsibilities. Three federal agencies are involved in the process which leads to H-1B nonimmigrant classification. The employer also has continuing responsibilities under the process. This section briefly describes the responsibilities of each of these entities. (a) Department of Labor responsibilities. DOL administers the labor condition application process and enforcement provisions. (1) The Employment and Training Administration (ETA), DOL, is responsible for receiving and certifying labor condition applications in accordance with subpart H of this part. ETA is also responsible for compiling and maintaining a list of labor condition applications and makes such list available for public examination at the Department of Labor, 200 Constitution Avenue, NW., room N4456, Washington, DC 20210. (2) The Employment Standards Administration (ESA), DOL, is responsible, in accordance with subpart I of this part, for investigating and determining, pursuant to a complaint or otherwise, an employer's misrepresentation in or failure to comply with labor condition applications or the employment of H-1B nonimmigrants. (b) Immigration and Naturalization Service (INS) and Department of State (DOS) responsibilities. The Immigration and Naturalization Service (INS) accepts the employer's petition (INS Form I-129) with the DOL-certified labor condition application attached. INS is responsible for approving the nonimmigrant's H-1B visa classification. In doing so, the INS determines whether the occupation named in the labor condition application is a specialty occupation or whether the individual is a fashion model of distinguished merit and ability, and whether the qualifications of the nonimmigrant meet the statutory requirements for H-1B visa classification. If the petition is approved, INS will notify the U.S. Consulate where the nonimmigrant intends to apply for the visa unless the nonimmigrant is in the U.S. and eligible to adjust status without leaving this country. See 8 U.S.C. 1184(i). The Department of State, through U.S. Embassies and Consulates, is responsible for issuing H-1B visas. (c) Employer's responsibilities. Each employer seeking an H-1B nonimmigrant in a specialty occupation or as a fashion model of distinguished merit and ability has several responsibilities. (1) The employer shall submit a completed labor condition application on Form ETA 9035 and one copy to the regional office of ETA serving the area where the nonimmigrant will be employed. If the labor condition application is certified by ETA, a copy will be returned to the employer. (2) The employer shall make a filed labor condition application and necessary supporting documentation (as identified under this subpart) 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 ETA. (3) The employer then may submit a copy of the certified labor condition application to INS with a completed petition (INS Form I-129) requesting H-1B classification. (4) The employer should not allow the nonimmigrant worker to begin work, even though a labor condition application has been certified by DOL, until INS grants the worker authorization to work in the United States for that employer. (5) The employer shall develop sufficient documentation to meet its burden of proof with respect to the validity of the statements made in its labor condition application and the accuracy of information provided in the event that such statement or information is challenged. The employer shall also maintain such documentation at its principal place of business in the U.S. and shall make such documentation available to DOL for inspection and copying upon request. Sec. ________.710 Complaints. Complaints concerning misrepresentation in the labor condition application or failure of the employer to meet a condition specified in the application shall be filed with the Administrator, Wage and Hour Division (Administrator), ESA, according to the procedures set forth in subpart I of this part. The Administrator, either pursuant to a complaint or otherwise, shall investigate where appropriate, and after an opportunity for a hearing, assess appropriate sanctions and penalties. Sec. ________.715 Definitions. For the purposes of subparts H and I of this part: Actual wage means the wage rate paid by the employer to all individuals with experience and qualifications similar to the H-1B nonimmigant's experience and qualifications for the specific employment in question at the place of employment. The actual wage established by the employer is not an average of the wage rates paid to all workers employed in the occupation. Administrative Law Judge (ALJ) means an official appointed pursuant to 5 U.S.C. 3105. Administrator means the Administrator of the Wage and Hour Division, Employment Standards Administration, Department of Labor, and such authorized representatives as may be designated to perform any of the functions of the Administrator under subpart H or I of this part. Aggrieved party means a person or entity whose operations or interests are adversely affected by the employer's alleged non- compliance with the labor condition application and includes, but is not limited to: (1) A worker whose job, wages, or working conditions are adversely affected by the employer's alleged non-compliance with the labor condition application; (2) A bargaining representative for workers whose jobs, wages, or working conditions are adversely affected by the employer's alleged non-compliance with the labor condition application; (3) A competitor adversely affected by the employer's alleged non- compliance with the labor condition application; and (4) A government agency which has a program that is impacted by the employer's alleged non-compliance with the labor condition application. Area of intended employment means the area within normal commuting distance of the place (address) of employment where the H-1B nonimmigrant is or will be employed. If the place of employment is within a Metropolitan Statistical Area (MSA), any place within the MSA is deemed to be within normal commuting distance of the place of employment. (See definition of ``place of employment.'') Attorney General means the chief official of the U.S. Department of Justice or the Attorney General's designee. Authorized agent and authorized representative mean an official of the employer who has the legal authority to commit the employer to the statements in the labor condition application. Certification means the determination by a certifying officer that a labor condition application is not incomplete and does not contain obvious inaccuracies. Certify means the act of making a certification. Certifying Officer and Regional Certifying Officer mean a Department of Labor official, or such official's designee, who makes determinations about whether or not to certify labor condition applications. Chief Administrative Law Judge (Chief ALJ) means the chief official of the Office of the Administrative Law Judges of the Department of Labor or the Chief Administrative Law Judge's designee. Department and DOL mean the United States Department of Labor. Division means the Wage and Hour Division of the Employment Standards Administration, DOL. Employer means a person, firm, corporation, contractor, or other association or organization in the United States: (1) Which suffers or permits a person to work within the United States; (2) Which has an employer-employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise or otherwise control the work of any such employee; and (3) Which has an Internal Revenue Service tax identification number. Employment and Training Administration (ETA) means the agency within the Department which includes the United States Employment Service (USES). Employment Standards Administration (ESA) means the agency within the Department which includes the Wage and Hour Division. Immigration and Naturalization Service (INS) means the component of the Department of Justice which makes the determination under the INA on whether to grant visa petitions of employers seeking the admission of nonimmigrants under H-1B visas for the purpose of employment. INA means the Immigration and Nationality Act, as amended, 8 U.S.C. 1101 et seq. Independent authoritative source means a professional, business, trade, educational or governmental association, organization, or other similar entity, not owned or controlled by the employer, which has recognized expertise in an occupational field. Independent authoritative source survey means a survey of wages conducted by an independent authoritative source and published in a book, newspaper, periodical, loose-leaf service, newsletter, or other similar medium, within the 24-month period immediately preceding the filing of the employer's application. Such survey shall: (1) Reflect the average wage paid to workers similarly employed in the area of intended employment; (2) Be based upon recently collected data--e.g., within the 24- month period immediately preceding the date of publication of the survey; and (3) Represent the latest published prevailing wage finding by the authoritative source for the occupation in the area of intended employment. Interested party means a person or entity who or which may be affected by the actions of an H-1B employer or by the outcome of a particular investigation and includes any person, organization, or entity who or which has notified the Department of his/her/its interest or concern in the Administrator's determination. Lockout means a labor dispute involving a work stoppage, wherein an employer withholds work from its employees in order to gain a concession from them. Occupation means the occupational or job classification in which the H-1B nonimmigrant is to be employed. Period of intended employment means the time period between the starting and ending dates inclusive of the H-1B nonimmigrant's intended period of employment in the occupational classification at the place of employment as set forth in the labor condition application. Place of employment means the worksite or physical location where the work actually is performed. (See definition of ``Area of Intended Employment.'') Required wage rate means the rate of pay which is the higher of: (1) The actual wage for the specific employment in question; or (2) The prevailing wage rate (determined as of the time of filing the application) for the occupation in which the H-1B nonimmigrant is to be employed in the geographic area of intended employment. The prevailing wage rate must be no less than the minimum wage required by Federal, State, or local law. Secretary means the Secretary of Labor or the Secretary's designee. Specialty occupation means an occupation that requires theoretical and practical application of a body of highly specialized knowledge, and attainment of a bachelor's or higher degree (or its equivalent) in the specific specialty as a minimum for entry into the occupation in the United States. The nonimmigrant in a specialty occupation shall possess the following qualifications: (1) Full state licensure to practice in the occupation, if licensure is required for the occupation; (2) completion of the required degree; or (3) experience in the specialty equivalent to the completion of such degree and recognition of expertise in the specialty through progressively responsible positions relating to the specialty. 8 U.S.C. 1184(i). Determinations of specialty occupation and of nonimmigrant qualifications are made by INS. Specific employment in question means the set of duties and responsibilities performed or to be performed by the H-1B nonimmigrant at the place of employment. State means one of the 50 States, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. State Employment Security Agency (SESA) means the State agency designated under section 4 of the Wagner-Peyser Act to cooperate with USES in the operation of the national system of public employment offices. Strike means a labor dispute wherein employees engage in a concerted stoppage of work (including stoppage by reason of the expiration of a collective-bargaining agreement) or engage in any concerted slowdown or other concerted interruption of operation. United States Employment Service (USES) means the agency of the Department of Labor, established under the Wagner-Peyser Act, which is charged with administering the national system of public employment offices. Wage rate means the remuneration (exclusive of fringe benefits) to be paid, stated in terms of amount per hour, day, month or year (see definition of ``Required Wage Rate''). Sec. ________.720 Addresses of Department of Labor regional offices. Region I (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont): One Congress Street 10th Floor, Boston, Massachusetts 02114-2023. Telephone: 617-565-4446. Region II (New York, New Jersey, Puerto Rico, and the Virgin Islands): 201 Varick Street, Room 755, New York, New York 10014. Telephone: 212-337-2186. Region III (Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia): 3535 Market St., Post Office Box 8796, Philadelphia, Pennsylvania 19101. Telephone: 215-596-6363. Region IV (Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee): 1371 Peachtree Street, NE., Atlanta, Georgia 30309. Telephone: 404-347-3938. Region V (Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin): 230 South Dearborn Street, Room 605, Chicago, Illinois 60604. Telephone: 312-353-1550. Region VI (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas): 525 Griffin Street, Room 311, Dallas, Texas 75202. Telephone: 214-767- 4989. Region VII (Iowa, Kansas, Missouri, and Nebraska): 1100 Main, Rm. 1050, Kansas City, Missouri 64105. Telephone: 816-426-3796. Region VIII (Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming): 1999 Broadway, Rm. 1780, Denver, Colorado 80202. Telephone: 303-391-5742. Region IX (Arizona, California, Guam, Hawaii, and Nevada): 71 Stevenson Street, Room 805, San Francisco, California 94105. Telephone: 415-744-7618. Region X (Alaska, Idaho, Oregon, and Washington): 1111 Third Avenue, Suite 900, Seattle, Washington 98101-3212. Telephone: 206-553- 7700. Sec. ______.730 Labor condition application. (a) Who must submit labor condition applications? An employer, or the employer's authorized agent or representative, which meets the definition of employer set forth in Sec. ________.715 of this part and intends to employ an H-1B nonimmigrant in a specialty occupation or as a fashion model of distinguished merit and ability shall submit a labor condition application to DOL. Attorneys and agents submitting applications on an employer's behalf shall submit, also, a completed INS Form G-28. (b) Where and when should a labor condition application be submitted? A labor condition application shall be submitted, by U.S. mail, private carrier, or facsimile transmission, to the ETA regional office shown in Sec. ________.720 of this part in whose geographic area of jurisdiction the H-1B nonimmigrant will be employed no earlier than six months before the beginning date of the period of intended employment shown on the LCA. It is the employer's responsibility to ensure that a complete and accurate application is received by the appropriate regional office of ETA. Incomplete or obviously inaccurate applications will not be certified. The regional office shall process all applications sequentially upon receipt regardless of the method used by the employer to submit the application and shall make a determination to certify or not certify the labor condition application within 7 working days of the date the application is received and date- stamped by the Department. If the application is submitted by facsimile transmission, the application containing the original signature shall be maintained by the employer as set forth at Sec. ________.760(a)(1) of this part. (c) What should be submitted? Form ETA 9035. (1) General. One completed and dated original Form ETA 9035 containing the labor condition statements referenced in Secs. ________.731 through ________.734 of this part, bearing the employer's original signature (or that of the employer's authorized agent or representative) and one copy of the completed and dated original Form ETA 9035 shall be submitted to ETA (see paragraph (b) of this section and Sec. ________.760(a)(1) of this part with respect to applications filed by facsimile transmission). Copies of Form ETA 9035 are available at the addresses listed in Sec. ________.720 of this part; photocopies of the form (obtained from any source) also are permitted. Each application shall identify the occupational classification for which the labor condition application is being submitted and shall state: (i) The occupation, by Dictionary of Occupational Titles (DOT) Three-Digit Occupational Groups code and by the employer's own title for the job; (ii) The number of H-1B nonimmigrants sought; (iii) The gross wage rate to be paid to each H-1B nonimmigrant, expressed on an hourly, weekly, biweekly, monthly or annual basis; (iv) The starting and ending dates of the H-1B nonimmigrants' employment; (v) The place(s) of intended employment; and (vi) The prevailing wage for the occupation in the area of intended employment and the specific source (e.g., name of published survey) relied upon by the employer to determine the wage. If the wage is obtained from a SESA, the appropriate box must be checked and the wage provided; wages obtained from a source other than a SESA must be identified along with the wage; (2) Mutiple positions or places of employment. The employer shall file a separate LCA for each occupation in which the employer intends to employ one or more H-1B nonimmigrants. All places of employment covered by the application must be located within the jurisdiction of a single ETA regional office, or, if the nonimmigrant(s) is(are) to be employed sequentially in various places of employment, the application is to be submitted to the regional office having jurisdiction over the initial place of employment; and (3) Full-time and part-time jobs. The position(s) covered by the LCA may be full-time or part-time or a mix of both. (d) Content of the labor condition application. An employer's labor condition application shall contain the labor condition statements referenced in Secs. ________.731 through ________.734 of this part, which provide that no individual may be admitted or provided status as an H-1B nonimmigrant in an occupational classification unless the employer has filed with the Secretary an application stating that: (1) The employer is offering and will offer during the period of authorized employment to H-1B nonimmigrants no less than the greater of the following: (i) The actual wage paid to the employer's other employees at the worksite with similar experience and qualifications for the specific employment in question; or (ii) The prevailing wage level for the occupational classification in the area or intended employment; (2) The employer will provide working conditions for such nonimmigrants that will not adversely affect the working conditions of workers similarly employed; (3) There is not a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment; (4) The employer has provided and will provide notice of the filing of the labor condition application to: (i)(A) The bargaining representative of the employer's employees in the occupational classification in the area of intended employment for which the H-1B nonimmigrants are sought, in the manner described in Sec. ________.734(a)(1)(i); or (B) If there is no such bargaining representative, posts notice of the filing of the labor condition application in conspicuous locations in the employer's establishment(s) in the area of intended employment, in the manner described in Sec. ________.734(a)(1)(ii) of this subpart and, in the manner described in Sec. ________.734(a)(2) of this subpart; and (ii) H-1B nonimmigrants at the time that such nonimmigrants actually report to work; and (5) The employer has provided the information about the occupation required in paragraph (c) of this section. Sec. ________.731 The first labor condition statement: wages. An employer seeking to employ H-1B nonimmigrants in a specialty occupation or as a fashion model of distinguished merit and ability shall state on Form ETA 9035 that it will pay the H-1B nonimmigrants the required wage rate. (a) Establishing the wage requirement. The first labor condition application requirement shall be satisfied when the employer signs Form ETA 9035 attesting that, for the entire period of authorized employment, the required wage rate will be paid to the H-1B nonimmigrant's; that is, that the wage shall be the greater of: the actual wage rate (as specified in paragraph (a)(1) of this section) or the prevailing wage (as specified in paragraph (a)(2) of this section). (1) The actual wage is the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question. In determining such wage level, the following factors may be considered: experience, qualifications, education, job responsibility and function, specialized knowledge, and other legitimate business factors. ``Legitimate business factors,'' for purposes of this paragraph (a), means those that it is reasonable to conclude are necessary because they conform to recognized principles or can be demonstrated by accepted rules and standards. Where there are other employees with substantially similar experience and qualifications in the specific employment in question--i.e., they have substantially the same duties and responsibilities as the H-1B nonimmigrant--the actual wage shall be the amount paid to these other employees. Where no such other employees exist at the place of employment, the actual wage shall be the wage paid to the H-1B nonimmigrant by the employer. Where the employer's pay system or scale provides for adjustments during the period of the LCA--e.g., cost of living increases or other periodic adjustments, higher entry rate due to market conditions, or the employee moves into a more advanced level in the same occupation--such adjustments shall be provided to similarly employed H-1B nonimmigrants (unless the prevailing wage is higher than the actual wage). Examples illustrating these principles may be found in appendix A to this subpart H. (2) The prevailing wage for the occupational classification in the area of intended employment must be determined as of the time of filing the application. The employer shall base the prevailing wage on the best information available as of the time of filing the application. The employer is not required to use any specific methodology to determine the prevailing wage and may utilize a SESA, an independent authoritative source, or other legitimate sources of wage data. One of the following sources shall be used to establish the prevailing wage: (i) A wage determination for the occupation and area issued under the Davis-Bacon Act, 40 U.S.C. 276a et seq. (see also 29 CFR part 1), or the McNamara-O'Hara Service Contract Act, 41 U.S.C. 351 et seq. (see also 29 CFR part 4) (which shall be available through the SESA); (ii) A union contract which was negotiated at arms-length between a union and the employer, which contains a wage rate applicable to the occupation; or (iii) If the job opportunity is in an occupation which is not covered by paragraph (a)(2) (i) or (ii) of this section, the prevailing wage shall be the average rate of wages, that is, the rate of wages to be determined, to the extent feasible, by adding the wages paid to workers similarly employed in the area of intended employment and dividing the total by the number of such workers. Since it is not always feasible to determine such an average rate of wages with exact precision, the wage set forth in the application shall be considered as meeting the prevailing wage standard if it is within 5 percent of the average rate of wages. See paragraph (c) of this section, regarding payment of required wages. See also paragraph (d)(4) of this section, regarding enforcement. The prevailing wage rate under this paragraph (a)(2)(iii) shall be based on the best information available. The Department believes that the following prevailing wage sources are, in order of priority, the most accurate and reliable: (A) A SESA Determination. Upon receipt of a written request for a prevailing wage determination, the SESA will determine whether the occupation is covered by a Davis-Bacon or Service Contract Act wage determination, and, if not, whether it has on file current prevailing wage information for the occupation.This information will be provided by the SESA to the employer in writing in a timely manner. Where the prevailing wage is not immediately available, the SESA will conduct a prevailing wage survey using the methods outlined at 20 CFR 656.40 and other administrative guidelines or regulations issued by ETA. (1) An employer who chooses to utilize a SESA prevailing wage determination shall file the labor condition application not more than 90 days after the date of issuance of such SESA wage determination. Once an employer obtains a prevailing wage determination from the SESA and files an LCA supported by that prevailing wage determination, the employer is deemed to have accepted the prevailing wage determination (both as to the occupational classification and wage) and thereafter may not contest the legitimacy of the prevailing wage determination through the Employment Service complaint system or in an investigation or enforcement action. Prior to filing the LCA, the employer may challenge a SESA prevailing wage determination through the Employment Service complaint system, by filing a complaint with the SESA. See 20 CFR 658.410 through 658.426. Employers which challenge a SESA prevailing wage determination must obtain a final ruling from the Employment Service complaint system prior to filing an LCA based on such determination. In any challenge, the SESA shall not divulge any employer wage data which was collected under the promise of confidentiality. (2) If the employer is unable to wait for the SESA to produce the requested prevailing wage determination for the occupation in question, or for the Employment Service complaint system process to be completed, the employer may rely on other legitimate sources of available wage information in filing the LCA, as set forth in paragraph (a)(2)(iii) (B) and (C) of this section. If the employer later discovers, upon receipt of a prevailing wage determination from the SESA, that the information relied upon produced a wage that was below the prevailing wage for the occupation in the area of intended employment and the employer was paying below the SESA-determined wage, no wage violation will be found if the employer retroactively compensates the H-1B nonimmigrant(s) for the difference between the wage paid and the prevailing wage, within 30 days of the employer's receipt of the SESA determination. (3) In all situations where the employer obtains the prevailing wage determination from the SESA, the Department will accept that prevailing wage determination as correct and will not question its validity where the employer has maintained a copy of the SESA prevailing wage determination. A complaint alleging inaccuracy of a SESA prevailing wage determination, in such cases, will not be investigated. (B) An independent authoritative source. The employer may use an independent authoritative wage source in lieu of a SESA prevailing wage determination. The independent authoritative source survey must meet all the criteria set forth in paragraph (b)(3)(iii)(B) of this section. (C) Another legitimate source of wage information. The employer may rely on other legitimate sources of wage data to obtain the prevailing wage. The other legitimate source survey must meet all the criteria set forth in paragraph (b)(3)(iii) of this section. The employer will be required to demonstrate the legitimacy of the wage in the event of an investigation. (iv) For purposes of this section, ``similarly employed'' means ``having substantially comparable jobs in the occupational classification in the area of intended employment,'' except that if no such workers are employed by employers other than the employer applicant in the area of intended employment, ``similarly employed'' means: (A) Having jobs requiring a substantially similar level of skills within the area of intended employment; or (B) If there are no substantially comparable jobs in the area of intended employment, having substantially comparable jobs with employers outside of the area of intended employment. (v) A prevailing wage determination for labor condition application purposes made pursuant to this section shall not permit an employer to pay a wage lower than that required under any other applicable Federal, State or local law. (vi) Where a range of wages is paid by the employer to individuals in an occupational classification or among individuals with similar experience and qualifications for the specific employment in question, a range is considered to meet the prevailing wage requirement so long as the bottom of the wage range is at least the prevailing wage rate. (3) Once the prevailing wage rate is established, the H-1B employer than shall compare this wage with the actual wage rate for the specific employment in question at the place of employment and must pay the H-1B nonimmigrant at least the higher of the two wages. (b) Documentation of the wage statement. (1) The employer shall develop and maintain documentation sufficient to meet its burden of proving the validity of the wage statement required in paragraph (a) of this section and attested to on Form ETA 9035. The documentation shall be made available to DOL upon request. Documentation shall also be made available for public examination to the extent required by Sec. ________.760(a) of this part. The employer shall also 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 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 records shall be retained for the period of time specified in Sec. ________.760 of this part. The payroll records for each such employee shall include: (i) Employee's full name; (ii) Employee's home address; (iii) Employee's occupation; (iv) Employee's rate of pay; (v) Hours worked each day and each week by the employee if paid on other than a salary basis, or the prevailing or actual wage is expressed as an hourly wage; (vi) Total additions to or deductions from pay each pay period by employee; and (vii) Total wages paid each pay period, date of pay and pay period covered by the payment by employee. (2) Actual wage. In addition to payroll data required by paragraph (b)(1) of this section (and also by the Fair Labor Standards Act), the employer shall retain documentation specifying the basis it used to establish the actual wage. The employer shall show how the wage set for the H-1B nonimmigrant relates to the wages paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question at the place of employment. Where adjustments are made in the employer's pay system or scale during the validity period of the LCA, the employer shall retain documentation explaining the changes and clearly showing that, after such adjustments, the wages paid to the H-1B nonimmigrant are at least the greater of the adjusted actual wage or the prevailing wage for the occupation and area of intended employment. See appendix A to subpart H. (3) Prevailing wage. The employer also shall retain documentation regarding its determination of the prevailing wage. This source documentation shall not be submitted to ETA with the labor condition application, but shall be retained at the employer's place of business for the length of time required in Sec. ________.760(c) of this part. Such documentation shall consist of the documentation described in paragraph (b)(3) (i), (ii), or (iii) of this section and the documentation described in paragraph (b)(1) of this section. (i) If the employer used a wage determination issued pursuant to the provisions of the Davis-Bacon Act, 40 U.S.C. 276a et seq. (see 29 CFR part 1), or the McNamara-O'Hara Service Contract Act, 41 U.S.C. 351 et seq. (see 29 CFR part 4), the documentation shall include a copy of the determination showing the wage rate for the occupation in the area of intended employment. (ii) 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. (iii) If the employer did not use a wage covered by the provisions of paragraph (b)(3) (i) or (ii) of this section, the employer's documentation shall consist of: (A) A copy of the prevailing wage finding from the SESA for the occupation within the area of intended employment; or (B) A copy of the prevailing wage survey for the occupation within the area of intended employment published by an independent authoritative source. For purposes of this paragraph (b)(3)(iii)(B), a prevailing wage survey for the occupation in the area of intended employment published by an authoritative independent source shall mean a survey of wages published in a book, newspaper, periodical, loose- leaf service, newsletter, or other similar medium, within the 24-month period immediately preceding the filing of the employer's application. Such survey shall: (1) Reflect the average wage paid to workers similarly employed in the area of intended employment; (2) Be based upon recently collected data--e.g., within the 24- month period immediately preceding the date of publication of the survey; and (3) Represent the latest published prevailing wage finding by the independent authoritative source for the occupation in the area of intended employment; or (C) A copy of the prevailing wage survey or other source data acquired from a legitimate source of wage information that was used to make the prevailing wage determination. For purposes of paragraph (b)(3)(iii)(C) of this section, a prevailing wage provided by another legitimate source of such wage information shall be one which: (1) Reflects the weighted average wage paid to workers similarly employed in the area of intended employment; (2) Is based on the most recent and accurate information available; and (3) Is reasonable and consistent with recognized standards and principles in producing a prevailing wage. (c) Satisfaction of required wage obligation. (1) The required wage must be paid to the employee, cash in hand, free and clear, when due, except that deductions made in accordance with paragraph (c)(7) of this section may reduce the cash wage below the level of the required wage. (2) ``Wages paid,'' for purposes of satisfying the H-1B required wage, shall consist only of those payments that meet all the following criteria: (i) Payments shown in the employer's payroll records as earnings for the employee, and disbursed to the employee, cash in hand, free and clear, when due, except for deductions authorized by paragraph (c)(7) of this section; (ii) Payments reported to the Internal Revenue Service (IRS) as the employee's earnings, with appropriate withholding for the employee's tax paid to the IRS (in accordance with the Internal Revenue Code of 1986, 26 U.S.C. 1, et seq.); (iii) Payments of the tax reported and paid to the IRS as required by the Federal Insurance Contributions Act, 26 U.S.C. 3101, et seq. (FICA). The employer must be able to document that the payments have been so reported to IRS and that both the employer's and employee's taxes have been paid except that when the H-1B nonimmigrant is a citizen of a foreign country with which the President of the United States has entered into an agreement as authorized by section 233 of the Social Security Act, 42 U.S.C. 433 (i.e., an agreement establishing a totalization arrangement between the social security system of the United States and that of the foreign country), the employer's documentation shall show that all appropriate reports have been filed and taxes have been paid in the employee's home country. (iv) Payments reported, and so documented by the employer, as the employee's earnings, with appropriate employer and employee taxes paid to all other appropriate Federal, State, and local governments in accordance with any other applicable law. (3) For salaried employees, wages will be due in pro-rated installments (e.g., annual salary divided into 26 bi-weekly pay periods, where employer pays bi-weekly) paid no less often than monthly except that, in the event that the employer intends to use some other form of nondiscretionary payment to supplement the employee's regular/ pro-rata pay in order to meet the required wage obligation (e.g., a quarterly production bonus), the employer's documentation of wage payments (including such supplemental payments) must show the employer's commitment to make such payment and the method of determining the amount thereof, and must show unequivocally that the required wage obligation was met for prior pay periods and, upon payment and distribution of such other payments that are pending, will be met for each current or future pay period. (4) For hourly-wage employees, the required wages will be due for all hours worked and/or for any nonproductive time (as specified in paragraph (c)(5) of this section) at the end of the employer's ordinary pay period (e.g., weekly) but in no event less frequently than monthly. (5)(i) For the purpose of DOL administration and enforcement of the H-1B program, an H-1B nonimmigrant is considered to be under the control or employ of the LCA-filing employer, and therefore shall receive the full wage which the LCA-filing employer is required to pay, beginning no later than the first day the H-1B nonimmigrant is in the United States and continuing throughout the nonimmigrant's period of employment. Therefore if the H-1B nonimmigrant is in a nonproductive status for reasons such as training, lack of license, lack of assigned work or any other reason, the employer will be required to pay the salaried employee the full pro-rata amount due, or to pay the hourly- wage employee for a full-time week (40 hours or such other number of hours as the employer can demonstrate to be full-time employment for the occupation and area involved) at the required wage for the occupation listed on the LCA. If the employer's LCA carries a designation of ``part-time employment,'' the employer will be required to pay the nonproductive employee for at least the number of hours indicated on the I-129 petition filed by the employer with the INS. If during a subsequent enforcement action by the Administrator it is determined that an employee designated in the LCA as part-time was in fact working full-time or regularly working more hours than reflected on the I-129 petition, the employer will be held to the factual standard disclosed by the enforcement action. (ii) If, however, during the period of employment, an H-1B nonimmigrant experiences a period of nonproductive status due to conditions unrelated to employment which render the nonimmigrant unable to work--e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant, caring for an ill relative--then the employer shall not be obligated to pay the required wage rate during that period provided that the INS permits the employee to remain in the U.S. without being paid and provided further that such period is not subject to payment under other statutes such as the Family and Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.). (6) If the employee works in an occupation other than that identified on the employer's LCA, the employer's required wage obligation is based on the occupation identified on the LCA, and not on whatever wage standards may be applicable in the occupation in which the employee may be working. (7) ``Authorized deduction,'' for purposes of the H-1B required wage obligation, means a deduction from wages in complete compliance with one of the following sets of criteria-- (i) Deduction which is required by law (e.g., income tax; FICA); or (ii) Deduction which is authorized by a collective bargaining agreement, or is reasonable and customary in the occupation and/or area of employment (e.g., union dues; contribution to premium for health insurance policy covering all employees; savings or retirement fund contribution for plan(s) in compliance with the Employee Retirement Income Security Act, 29 U.S.C. 1001, et seq.), except that the deduction may not recoup a business expense(s) of the employer; the deduction must have been revealed to the worker prior to the commencement of employment and, if the deduction was a condition of employment, had been clearly identified as such; and the deduction must be made against wages of U.S. workers as well as H-1B nonimmigrants (where there are U.S. workers); or (iii) Deduction which meets the following requirements: (A) Is made in accordance with a voluntary, written authorization by the employee (Note: an employee's mere acceptance of a job which carries a deduction as a condition of employment does not constitute voluntary authorization, even if such condition were stated in writing); (B) Is for a matter principally for the benefit of the employee (Note: housing and food allowances would be considered to meet this ``benefit of employee'' standard, unless the employee is in travel/per diem status, or unless the circumstances indicate that the arrangements for the employee's housing or food are principally for the convenience or benefit of the employer (e.g., employee living at worksite in ``on call'' status)); (C) Is not a recoupment of the employer's business expense (e.g., tools and equipment; transportation costs where such transportation is an incident of and necessary to the employment; living expenses when the employee is traveling on the employer's business) (for purposes of this section, initial transportation from and end-of-employment travel to the worker's home country shall not be considered a business expense); (D) Is an amount that does not exceed the fair market value or the actual cost (whichever is lower) of the matter covered (Note: the employer must document the cost and value); and (E) Is an amount that does not exceed the limits set for garnishment of wages in the Consumer Credit Protection Act, 15 U.S.C. 1673, and the regulations of the Secretary pursuant to that Act, 29 CFR part 870, under which garnishment(s) may not exceed 25% of an employee's disposable earnings for a workweek. (8) Any unauthorized deduction taken from wages is considered by the Department to be non-payment of that amount of wages, and, in the event of an investigation, will result in back wage assessment (plus civil money penalties and/or disqualification from H-1B and other immigration programs (pursuant to Sec. ________.810(b)), if willful). (9) Where the employer depresses the employee's wages below the required wage by imposing on the employee any of the employer's business expense(s), the Department will consider the amount to be an unauthorized deduction from wages even if the matter is not shown in the employer's payroll records as a deduction. (10) Where the employer makes deduction(s) for repayment of loan(s) or wage advance(s) made to the employee, the Department, in the event of an investigation, will require the employer to establish the legitimacy and purpose(s) of the loan(s) or wage advance(s), with reference to the standards set out in paragraph (c)(7) of this section. (d) Enforcement actions. (1) In the event that a complaint is filed pursuant to subpart I of this part, alleging a failure to meet the ``prevailing wage'' condition or a material misrepresentation by the employer regarding the payment of the required wage, or pursuant to such other basis for investigation as the Administrator may find, the Administrator shall determine whether the employer has the documentation required in paragraph (b)(3) of this section, and whether the documentation supports the employer's wage attestation. Where the documentation is either nonexistent or is insufficient to determine the prevailing wage (e.g., does not meet the criteria specified in this section, in which case the Administrator may find a violation of paragraph (b)(1), (2), or (3), of this section); or where, based on significant evidence regarding wages paid for the occupation in the area of intended employment, the Administrator has reason to believe that the prevailing wage finding obtained from an independent authoritative source or another legitimate source varies substantially from the wage prevailing for the occupation in the area of intended employment; or where the employer has been unable to demonstrate that the prevailing wage determined by another legitimate source is in accordance with the regulatory criteria, the Administrator may contact ETA, which shall provide the Administrator with a prevailing wage determination, which the Administrator shall use as the basis for determining violations and for computing back wages, if such wages are found to be owed. The 30-day investigatory period shall be suspended while ETA makes the prevailing wage determination and, in the event that the employer timely challenges the determination through the Employment service complaint system (see Sec. ________.731(d)(2) of this part), shall be suspended until the Employment Service complaint system process is completed and the Administrator's investigation can be resumed. (2) In the event the Administrator obtains a prevailing wage from ETA pursuant to paragraph (d)(1) of this section, the employer may challenge the ETA prevailing wage only through the Employment Service complaint system. See 20 CFR part 658, subpart E. Notwithstanding the provisions of 20 CFR 658.421 and 658.426, the appeal shall be initiated at the ETA regional office level. Such challenge shall be initiated within 10 days after the employer receives ETA's prevailing wage determination from the Administrator. In any challenge to the wage determination, neither ETA nor the SESA shall divulge any employer wage data which was collected under the promise of confidentiality. (i) Where the employer timely challenges an ETA prevailing wage determination obtained by the Administrator, the 30-day investigative period shall be suspended until the employer obtains a final ruling from the Employment Service complaint system. Upon such final ruling, the investigation and any subsequent enforcement proceeding shall continue, with ETA's prevailing wage determination serving as the conclusive determination for all purposes. (ii) Where the employer does not challenge ETA's prevailing wage determination obtained by the Administrator, such determination shall be deemed to have been accepted by the employer as accurate and appropriate (both as to the occupational classification and wage) and thereafter shall not be subject to challenge in a hearing pursuant to Sec. ________.835 of this part. (3) For purposes of this paragraph (d), ETA may consult with the appropriate SESA to ascertain the prevailing wage applicable under the circumstances of the particular complaint. (4) No prevailing wage violation will be found if the employer paid a wage that is equal to or more than 95 percent of the prevailing wage as required by paragraph (a)(2)(iii) of this section. If the employer paid a wage that is less than 95 percent of the prevailing wage, the employer will be required to pay 100 percent of the prevailing wage. Sec. ________.732 The second labor condition statement: working conditions. An employer seeking to employ H-1B nonimmigrants in specialty occupations or as fashion models of distinguished merit and ability shall state on Form ETA 9035 that the employment of H-1B nonimmigrants will not adversely affect the working conditions of workers similarly employed in the area of intended employment. (a) For purposes of this section, ``similarly employed'' shall mean ``having substantially comparable jobs in the occupational classification at the worksite and in the area of intended employment.'' If no such workers are employed at the worksite or by employers other than the employer applicant in the area of intended employment ``similarly employed'' shall mean: (1) Having jobs requiring a substantially similar level of skills at the worksite or within the area of intended employment; or (2) If there are no substantially comparable jobs at the worksite or in the area of intended employment, having substantially comparable jobs with employers outside of the area of intended employment. (b) Establishing the working conditions requirement. The second labor condition application requirement shall be satisfied when the employer signs the labor condition application attesting that for the period of intended employment its employment of H-1B nonimmigrants will not adversely affect the working conditions of workers similarly employed. Working conditions encompass matters including hours, shifts, vacation periods, and fringe benefits. The employer's obligation regarding working conditions shall extend for the longer of two periods: the validity period of the certified LCA or the period during which the H-1B nonimmigrant(s) is(are) employed by the employer. (c) Documentation of the working condition statement. (1) In the event an enforcement action is initiated pursuant to subpart I of this part, the employer shall document the validity of its prevailing working conditions statement referenced in paragraph (b) of this section and attested to on Form ETA 9035. The employer must be able to show that the working conditions of similarly employed workers were not adversely affected by the employment of an H-1B nonimmigrant-- e.g., that the working conditions are similar to working conditions which preceded the employment of the H-1B nonimmigrant, or, if there are no similarly employed workers working for the employer, are similar to those existing in like business establishments to the employer's in the area of employment. (2) In the event that an investigation is conducted pursuant to subpart I of this part concerning whether the employer failed to satisfy the prevailing working conditions statement referenced in paragraph (b) of this section and attested to on Form ETA 9035, the Administrator shall determine whether the employer has produced the documentation required in paragraph (c)(1) of this section, and whether the documentation is sufficient to support the employer's prevailing working conditions statement. If the employer fails to produce any documentation to support its burden of proof demonstrating that there is no adverse effect on the working conditions of workers similarly employed, the Administrator shall find a violation of paragraph (c)(1) of this section. Examples of documentation which employers should either maintain or produce 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. If the documentation is insufficient to determine whether the employment of H-1B nonimmigrants has or has not adversely affected the working conditions of workers similarly employed in the area of employment, the Administrator may contact ETA, which shall provide the Administrator with advice regarding the working conditions of similarly employed workers in the area of employment. Sec. ________.733 The third labor condition statement: no strike or lockout. An employer seeking to employ H-1B nonimmigrants shall state on Form ETA 9035 that there is not at that time a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment. A strike or lockout which occurs after the labor condition application is filed by the employer with DOL is covered by INS regulations at 8 CFR 214.2(h)(17). (a) Establishing the no strike or lockout requirement. The third labor condition application requirement shall be satisfied when the employer signs the labor condition application attesting that, as of the date the application is filed, the employer is not involved in a strike, lockout, or work stoppage in the course of a labor dispute in the occupational classification in the area of intended employment. Labor disputes for the purpose of this section relate only to those disputes involving employees of the employer working at the place of employment in the occupational classification named in the labor condition application. See also INS regulations at 8 CFR 214.2(h)(17) for effects of strikes or lockouts in general on the H-1B nonimmigrant's employment. (1) Strike or lockout subsequent to certification of labor condition application. In order to remain in compliance with the no strike or lockout labor condition statement, if a strike or lockout of workers in the same occupational classification as the H-1B nonimmigrant occurs at the place of employment during the validity of the labor condition application, the employer, within three days of the occurrence of the strike or lockout, shall submit to ETA, by U.S. mail, facsimile (FAX), or private carrier, written notice of the strike or lockout. Further, the employer shall not place, assign, lease, or otherwise contract out an H-1B nonimmigrant, during the entire period of the labor condition application's validity, to any place of employment where there is a strike or lockout in the course of a labor dispute in the same occupational classification as the H-1B nonimmigrant. Finally, the employer shall not use the labor condition application in support of any petition filings for H-1B nonimmigrants to work in such occupational classification at such place of employment until ETA determines that the strike or lockout has ended. (2) ETA notice to INS. Upon receiving from an employer a notice described in paragraph (a)(1) of this section, ETA shall examine the documentation, and may consult with the union at the employer's place of business or other appropriate entities. If ETA determines that the strike or lockout is covered under INS's ``Effect of strike'' regulation for ``H'' visa holders, ETA shall certify to INS, in the manner set forth in that regulation, that a strike or other labor dispute involving a work stoppage of workers in the same occupational classification as the H-1B nonimmigrant is in progress at the place of employment. See 8 CFR 214.2(h)(17). (b) Documentation of the third labor condition statement. The employer need not develop nor maintain documentation to substantiate the statement referenced in paragraph (a) of this section. In the case of an investigation, however, the employer has the burden of proof to show that there was no strike or lockout in the course of a labor dispute for the occupational classification in which an H-1B nonimmigrant is employed, either at the time the application was filed or during the validity period of the LCA. Sec. ______.734 The fourth labor condition statement: notice. An employer seeking to employ H-1B nonimmigrants shall state on Form ETA 9035 that the employer has provided notice of the filing of the labor condition application to the bargaining representative of the employer's employees in the occupational classification in which the H- 1B nonimmigrants will be employed or are intended to be employed in the area of intended employment, or, if there is no such bargaining representative, has posted notice of filing in conspicuous locations in the employer's establishment(s) in the area of intended employment, in the manner described in this section. (a) Establishing the notice requirement. The fourth labor condition application requirement shall be established when the conditions of paragraphs (a)(1) and (a)(2) of this section are met. (1)(i) Where there is a collective bargaining representative for the occupational classification in which the H-1B nonimmigrants will be employed, on or within 30 days before the date the labor condition application is filed with ETA, the employer shall provide notice to the bargaining representative that a labor condition application is being, or will be, filed with ETA. The notice shall identify the number of H- 1B nonimmigrants the employer is seeking to employ; the occupational classification in which the H-1B nonimmigrants will be employed; the wages offered; the period of employment; and the location(s) at which the H-1B nonimmigrants will be employed. Notice under this paragraph (a)(1)(i) shall include the following statement: ``Complaints alleging misrepresentation of material facts in the labor condition application and/or failure to comply with the terms of the labor condition application may be filed with any office of the Wage and Hour Division of the United States Department of Labor.'' (ii) Where there is no collective bargaining representative, the employer shall, on or within 30 days before the date the labor condition application is filed with ETA, provide a notice of the filing of the labor condition application to its employees by posting a notice in at least two conspicuous locations at each place of employment where any H-1B nonimmigrant will be employed. The notice shall indicate that H-1B nonimmigrants are sought; the number of such nonimmigrants the employer is seeking; the occupational classification; the wages offered; the period of employment; the location(s) at which the H-1B nonimmigrants will be employed; and that the labor condition application is available for public inspection at the employer's principal place of business in the U.S. or at the worksite. The notice shall also include the statement: ``Complaints alleging misrepresentation of material facts in the labor condition application and/or failure to comply with the terms of the labor condition application may be filed with any office of the Wage and Hour Division of the United States Department of Labor.'' The posting of exact copies of the labor condition application shall be sufficient to meet the requirements of this paragraph (a)(1)(ii). (A) The notice shall be of sufficient size and visibility, and shall be posted in two or more conspicuous places so that the employer's workers at the place(s) of employment can easily see and read the posted notice(s). (B) Appropriate locations for posting the notices include, but are not limited to, locations in the immediate proximity of wage and hour notices required by 29 CFR 516.4 or occupational safety and health notices required by 29 CFR 1903.2(a). (C) The notices shall be posted on or within 30 days before the date the labor condition application is filed and shall remain posted for a total of 10 days. (D) Where the employer places any H-1B nonimmigrant(s) at one or more worksites not contemplated at the time of filing the application, but which are within the area of intended employment listed on the LCA, the employer is required to post notice(s) at such worksite(s) on or before the date any H-1B nonimmigrant begins work, which notice shall remain posted for a total of ten days. (2) The employer shall, no later than the date the H-1B nonimmigrant reports to work at the place of employment, provide the H- 1B nonimmigrant with a copy of the labor condition application certified by the Department. (b) Documentation of the fourth labor condition statement. The employer shall develop and maintain documentation sufficient to meet its burden of proving the validity of the statement referenced in paragraph (a) of this section and attested to on form ETA 9035. Such documentation shall include a copy of the dated notice and the name and address of the collective bargaining representative to whom the notice was provided. Where there is no collective bargaining representative, the employer shall note and retain the dates when, and locations where, the notice was posted and shall retain a copy of the posted notice. (c) Records retention; records availability. The employer's documentation shall not be submitted to ETA with the labor condition application, but shall be retained for the period of time specified in Sec. ______.760(c) of this part. The documentation shall be made available for public examination as required in Sec. ______.760(a) of this part, and shall be made available to DOL upon request. Sec. ______.735 Special provisions for short-term placement of H-1B nonimmigrants at place(s) of employment outside the area(s) of intended employment listed on labor condition application. (a) Subject to the conditions specified in paragraph (b) of this section, an employer may place H-1B nonimmigrant(s) at worksite(s) (place(s) of employment) within areas of employment not listed on the employer's labor condition application(s)--whether or not the employer owns or controls such worksite(s)--without filing new labor condition application(s) for the area(s) of intended employment which would encompass such worksite(s). (b) The following restrictions shall be fully satisfied by an employer which places H-1B nonimmigrant(s) at worksite(s) (place(s) of employment) within areas of employment not listed on the employer's labor condition application(s): (1) The employer has fully satisfied the requirements of Secs. ______.730 through ______.734 of this part with regard to worksite(s) located within the area(s) of intended employment listed on the employer's labor condition application(s). (2) The employer shall not place, assign, lease, or otherwise contract out any H-1B nonimmigrant(s) to any worksite where there is a strike or lockout in the course of a labor dispute in the same occupational classification(s) as the H-1B nonimmigrant(s). (3) For every day of the H-1B nonimmigrant's(s') placement outside the LCA-listed area of employment, the employer shall pay such worker(s) the required wage (based on the prevailing wage at such worker's(s) permanent work site, or the employer's actual wage, whichever is higher) plus per diem and transportation expenses (for both workdays and non-workdays) at rate(s) no lower than the rate(s) prescribed for Federal Government employees on travel or temporary assignment, as set out in 41 CFR Part 301-7 and Ch. 301, App. A. (4) The employer's placement(s) of H-1B nonimmigrant(s) at any worksite(s) in an area of employment not listed on the employer's labor condition application(s) shall be limited to a cumulative total of ninety workdays within a three-year period, beginning on the first day on which the employer placed an H-1B nonimmigrant at any worksite within such area of employment. For purposes of this section, ``workday'' shall mean any day on which one or more H-1B nonimmigrants perform any work at any worksite(s) within the area of employment. For example, one ``workday'' would be counted for a day on which seven H-1B nonimmigrants worked at three worksites within one city, and one ``workday'' would be counted for a day on which one H-1B nonimmigrant worked at one worksite within a city. The employer may rotate such workers into worksites within such area of employment or may maintain a constant work force. However, on the first day after the accumulation of 90 workdays, the employer shall not have any such H-1B nonimmigrant(s) at any worksite(s) within such area of employment not included on a certified LCA. (c) At the accumulation of the 90 workdays described in paragraph (b)(4) of this section, the employer shall have ended its placement of all H-1B nonimmigrant(s) at any worksite(s) within the area of employment not listed on the labor condition application, or shall have filed and received a certified labor condition application for the area(s) of intended employment encompassing such worksite(s) and performed all actions required in connection with such filing(s) (e.g., determination of the prevailing wage; notice to collective bargaining representative or on-site notice to workers). (d) At any time during the 90-day period described in paragraph (b)(4) of this section, the employer may file a labor condition application for the area of intended employment encompassing such worksite(s), performing all actions required in connection with such labor condition application. Upon certification of such LCA, the employer's obligation to pay Federal per diem rates to the H-1B nonimmigrant(s) shall terminate. (However, see Sec. ______.731(c)(7)(iii)(C) regarding payment of business expenses for employee's travel on employer's business.) Sec. ______.740 Labor condition application determinations. (a) Actions on labor condition applications submitted for filing. Once a labor condition application has been received from an employer, a determination shall be made by the ETA regional Certifying Officer whether to certify the labor condition application or return it to the employer not certified. (1) Certification of labor condition application. Where all items on Form ETA 9035 have been completed, the form is not obviously inaccurate, and it contains the signature of the employer or its authorized agent or representative, the regional Certifying Officer shall certify the labor condition application unless it falls within one of the categories set forth in paragraph (a)(2) of this section. The Certifying Officer shall make a determination to certify or not certify the labor condition application within 7 working days of the date the application is received and date-stamped by the Department. If the labor condition application is certified, the regional Certifying Officer shall return a certified copy of the labor condition application to the employer or the employer's authorized agent or representative. The employer shall file the certified labor condition application with the appropriate INS office in the manner prescribed by INS. The INS shall determine whether each occupational classification named in the certified labor condition application is a specialty occupation or is a fashion model of distinguished merit and ability. (2) Determinations not to certify labor condition applications. ETA shall not certify a labor condition application and shall return such application to the employer or the employer's authorized agent or representative, when either or both of the following two conditions exists: (i) When the Form ETA 9035 is not properly completed. Examples of a Form ETA 9035 which is not properly completed include instances where the employer has failed to check all the necessary boxes; or where the employer has failed to state the occupational classification, number of nonimmigrants sought, wage rate, period of intended employment, place of intended employment, or prevailing wage and its source; or where the application does not contain the signature of the employer or the employer's authorized agent or representative. (ii) When the Form ETA ETA 9035 contains obvious inaccuracies. An obvious inaccuracy will be found if the employer files an application in error--e.g., where the Administrator, Wage and Hour Division, after notice and opportunity for a hearing pursuant to subpart I of this part, has notified ETA in writing that the employer has been disqualified from employing H-1B nonimmigrants under section 212(n)(2) of the INA. Examples of other obvious inaccuracies include stating a wage rate below the FLSA minimum wage, submitting a labor condition application earlier than six months before the beginning date of the period of intended employment, identifying multiple occupations on a single labor condition application, identifying places of employment within the jurisdiction of more than one ETA regional office on a single labor condition application, identifying a wage which is below the prevailing wage listed on the LCA, or identifying a wage range where the bottom of such wage range is lower than the prevailing wage listed on the LCA. (3) Correction and resubmission of labor condition application. If the labor condition application is not certified pursuant to paragraph (a)(2) (i) or (ii) of this section, ETA shall return it to the employer, or the employer's authorized agent or representative, explaining the reasons for such return without certification. The employer may immediately submit a corrected application to ETA. A ``resubmitted'' or ``corrected'' labor condition application shall be treated as a new application by the regional office (i.e., on a ``first come, first served'' basis) except that if the labor condition application is not certified pursuant to paragraph (a)(2)(ii) of this section because of notification by the Administrator of the employer's disqualification, such action shall be the final decision of the Secretary and no application shall be resubmitted by the employer. (b) Challenges to labor condition applications. ETA shall not consider information contesting a labor condition application received by ETA prior to the determination on the application. Such information shall not be made part of ETA's administrative record on the application, but shall be referred to ESA to be processed as a complaint pursuant to subpart I of this part, and, if such application is certified by ETA, the complaint will be handled by ESA under subpart I of this part. (c) Truthfulness and adequacy of information. DOL is not the guarantor of the accuracy, truthfulness or adequacy of a certified labor condition application. The burden of proof is on the employer to establish the truthfulness of the information contained on the labor condition application. Sec. ______.750 Validity period of the labor condition application. (a) Validity of certified labor condition applications. A labor condition application which has been certified pursuant to the provisions of Sec. ______.740 of this part shall be valid for the period of employment indicated on Form ETA 9035 by the authorized DOL official; however, in no event shall the validity period of a labor condition application begin before the application is certified or exceed three years. Where the labor condition application contains multiple periods of intended employment, the validity period shall extend to the latest date indicated or three years, whichever comes first. (b) Withdrawal of certified labor condition applications. (1) An employer who has filed a labor condition application which has been certified pursuant to Sec. ______.740 of this part may withdraw such labor condition application at any time before the expiration of the validity period of the application, provided that: (i) H-1B nonimmigrants are not employed at the place of employment pursuant to the labor condition application; and (ii) The Administrator has not commenced an investigation of the particular application. Any such request for withdrawal shall be null and void; and the employer shall remain bound by the labor condition application until the enforcement proceeding is completed, at which time the application may be withdrawn. (2) Requests for withdrawals shall be in writing and shall be directed to the regional ETA Certifying Officer. (3) An employer shall comply with the ``required wage rate'' and ``prevailing working conditions'' statements of its labor condition application required under Secs. ______.731 and ______.732 of this part, respectively, even if such application is withdrawn, at any time H-1B nonimmigrants are employed pursuant to the application, unless the application is superseded by a subsequent application which is certified by ETA. (4) An employer's obligation to comply with the ``no strike or lockout'' and ``notice'' statements of its labor condition application (required under Secs. ______.733 and ______.734 of this part, respectively), shall remain in effect and the employer shall remain subject to investigation and sanctions for misrepresentation on these statements even if such application is withdrawn, regardless of whether H-1B nonimmigrants are actually employed, unless the application is superseded by a subsequent application which is certified by ETA. (5) Only for the purpose of assuring the labor standards protections afforded under the H-1B program, where an employer files a petition with INS under the H-1B classification pursuant to a certified LCA that had been withdrawn by the employer, such petition filing binds the employer to all obligations under the withdrawn LCA immediately upon receipt of such petition by INS. (c) Invalidation or suspension of a labor condition application. (1) Invalidation of a labor condition application shall result from enforcement action(s) by the Administrator, Wage and Hour Division, under subpart I of this part--e.g., a final determination finding the employer's failure to meet the application's condition regarding strike or lockout; or the employer's willful failure to meet the wage and working conditions provisions of the application; or the employer's substantial failure to meet the notice of specification requirements of the application; see Secs. ______.734 and ______.760 of this part; or the misrepresentation of a material fact in an application. Upon notice by the Administrator of the employer's disqualification, ETA shall invalidate the application and notify the employer, or the employer's authorized agent or representative. ETA shall notify the employer in writing of the reason(s) that the application is invalidated. When a labor condition application is invalidated, such action shall be the final decision of the Secretary. (2) Suspension of a labor condition application may result from a discovery by ETA that it made an error in certifying the application because such application is incomplete, contains one or more obvious inaccuracies, or has not been signed. In such event, ETA shall immediately notify INS and the employer. When an application is suspended, the employer may immediately submit to the certifying officer a corrected or completed application. If ETA does not receive a corrected application within 30 days of the suspension, or if the employer was disqualified by the Administrator, the application shall be immediately invalidated as described in paragraph (c) of this section. (3) An employer shall comply with the ``required wages rate'' and ``prevailing working conditions'' statements of its labor condition application required under Secs. ______.731 and ______.732 of this part, respectively, even if such application is suspended or invalidated, at any time H-1B nonimmigrants are employed pursuant to the application, unless the application is superseded by a subsequent application which is certified by ETA. (4) An employer's obligation to comply with the ``no strike or lockout'' and ``notice'' statements of its labor condition application (required under Secs. ______.733 and ______.734 of this part, respectively), shall remain in effect and the employer shall remain subject to investigation and sanctions for misrepresentation on these statements even if such application is suspended or invalidated, regardless of whether H-1B nonimmigrants are actually employed, unless the application is superseded by a subsequent application which is certified by ETA. (d) Employers subject to disqualification. No labor condition application shall be certified for an employer which has been found to be disqualified from participation, in the H-1B program as determined in a final agency action following an investigation by the Wage and Hour Division pursuant to subpart I of this part. Sec. ______.760 Public access; retention of records. (a) Public examination. 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. The following documentation shall be necessary: (1) A copy of the completed labor condition application, Form ETA 9035. If the application is submitted by facsimile transmission, the application containing the original signature shall be maintained by the employer; (2) Documentation which provides the wage rate to be paid 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 H-1B nonimmigrant is sought, including any periodic increases which the system may provide--e.g., memorandum summarizing the system 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 Sec. ______.734 of this part. (b) National list of applications. ETA shall compile and maintain on a current basis a list of the labor condition applications. Such list shall be by employer, showing the occupational classification, wage rate(s), number of nonimmigrants sought, period(s) of intended employment, and date(s) of need for each employer's application. The list shall be available for public examination at the Department of Labor, 200 Constitution Avenue, NW., Room N-4456, Washington, DC 20210. (c) Retention of records. Either at the employer's principal place of business in the U.S. or at the place of employment, the employer shall retain copies of the labor condition application, required wage information, and documentation showing provision of notice to bargaining representatives or employees at the place of employment for a period of one year beyond the end of the period of employment specified on the labor condition application or one year from the date the labor condition application was withdrawn, except that if an enforcement action is commenced, the documentation shall be retained until the enforcement proceeding is completed through the procedures set forth in subpart I of this part. Required payroll records for the H-1B employees and other employees in the occupational classification shall be retained at the employer's principal place of business in the U.S. or at the place of employment 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 payroll records shall be retained until the enforcement proceeding is completed through the procedures set forth in subpart I of this part. Appendix A to Subpart H--Guidance for Determination of the ``Actual Wage'' In determining the required wage rate, in addition to obtaining the prevailing wage, the employer must establish the actual wage for the occupation in which the H-1B nonimmigrant is employed by the employer. For purposes of establishing its compensation system for workers in an occupational category, an employer may take into consideration objective standards relating to experience, qualifications, education, specific job responsibility and function, specialized knowledge, and other legitimate business factors. The use of any or all these factors is at the discretion of the employer. The employer must have and document an objective system used to determine the wages of non-H-1B workers, and apply that system to H-1B nonimmigrants as well. It is not sufficient for the employer simply to calculate an average wage of all non-H-1B employees in an occupation; the actual wage is not an ``average wage''. The documents explaining the system must be maintained in the public disclosure file. The explanation of the compensation system must be sufficiently detailed to enable a third party to apply the system to arrive at the actual wage rate computed by the employer for any H-1B nonimmigrant. The computation of the H-1B nonimmigrant's individual actual wage rate must be documented in the H-1B nonimmigrant's personnel file. Assuming the actual wage is higher than the prevailing wage and thus is the required wage rate, if an employer gives its employees a raise at year's end or if the system provides for other adjustments in wages, H-1B nonimmigrants must also be given the raise (consistent with legitimate employer-established criteria such as level of performance, attendance, etc.). This is consistent with Congressional intent that H-1B nonimmigrants and similarly employed U.S. workers be provided the same wages. Where the employer's pay system or scale provides adjustments during the validity period of the LCA--e.g., cost-of-living increase or other annual adjustments, increase in the entry-level rate for the occupation due to market forces, or the employee moves into a more advanced level in the same occupation--the employer shall retain documentation explaining the changes and clearly showing that, after such adjustments, the wages paid to the H-1B nonimmigrant are at least the greater of the adjusted actual wage or the prevailing wage for the occupation in the area of intended employment. The following examples illustrate these principles: (1) Worker A is paid $10.00 per hour and supervises two employees. Worker B, who is similarly qualified and performs substantially the same job duties except for supervising other employees, is paid $8.00 per hour because he/she has no supervisory responsibility. The compensation differential is acceptable because it is based upon a relevant distinction in job duties, responsibilities, and functions: The difference in the supervisory responsibilities of the two employees. The actual wage in this occupation at the worksite for workers with supervisory responsibility is $10.00 per hour; the actual wage in this occupation at the worksite for workers without supervisory responsibility is $8.00 per hour. (2) Systems Analyst A has experience with a particular software which the employer is interested in purchasing, of which none of the employer's current employees have knowledge. The employer buys the software and hires Systems Analyst A on an H-1B visa to train the other employees in its application. The employer pays Systems Analyst A more than its other Systems Analysts who are otherwise similarly qualified. The compensation differential is acceptable because of the distinction in the specialized knowledge and the job duties of the employees. Systems Analyst A, in addition to the qualifications and duties normally associated with this occupation at the employer's worksite, is also specially knowledgeable and responsible for training the employer's other Systems Analysts in a new software package. As a result, Systems Analyst A commands a higher actual wage. However, if the employer employs other similarly qualified systems analysts who also have unique knowledge and perform similar duties in training other analysts in their area of expertise, the actual wage for Systems Analyst A would have to be at least equivalent to the actual wage paid to such similarly employed analysts. (3) An employer seeks a scientist to conduct AIDS research in the employer's laboratory. Research Assistants A (a U.S. worker) and B (an H-1B nonimmigrant) both hold Ph.D's in the requisite field(s) of study and have the same number of years of experience in AIDS research. However, Research Assistant A's experience is on the cutting edge of a breakthrough in the field and his/her work history is distinguished by frequent praise and recognition in writing and through awards. Research Assistant B (the nonimmigrant) has a respectable work history but has not conducted research which has been internationally recognized. Employer pays Research Assistant A $10,000 per year more than Research Assistant B in recognition of his/her unparalleled expertise and accomplishments. The employer now wants to hire a third Research Assistant on an H-1B visa to participate in the work. The differential between the salary paid Research Assistant A (the U.S. worker) and Research Assistant B (an H-1B nonimmigrant) is acceptable because it is based upon the specialized knowledge, expertise and experience of Research Assistant A, demonstrated in writing. The employer is not required to pay Research Assistant B the same wage rate as that paid Research Assistant A, even though they may have the same job titles. The actual wage required for the third Research Assistant, to be hired on an H-1B visa, would be the wage paid to Research Assistant B unless he/she has internationally recognized expertise similar to that of Research Assistant A. As set out in Sec. ______.731(1)(A) the employer must have and document the system used in determining the actual wage of H-1B nonimmigrants. The explanation of the system must be such that a third party may use the system to arrive at the actual wage paid the H-1B nonimmigrant. (4) Employer located in City X seeks experienced mechanical engineers. In City X, the prevailing wage for such engineers is $49,500 annually. In setting the salaries of U.S. workers, employer pays its nonsupervisory mechanical engineers with 5 to 10 years of experience between $50,000 and $75,000 per year, using defined pay scale ``steps'' tied to experience. Employer hires engineers A, B, and C, who each have five years of experience and similar qualifications and will perform substantially the same nonsupervisory job duties. Engineer A is from Japan, where he/she earns the equivalent of $80,000 per year. Engineer B is from France and had been earning the equivalent of $50,000 per year. Engineer C is from India and had been earning the equivalent of $20,000 per year. Employer pays Engineer A $80,000 per year, Engineer B $50,000, and Engineer C $20,000 as the employer has had a long-established system of maintaining the home-country pay levels of temporary foreign workers. The INA requires that the employer pay the H-1B nonimmigrant at least the actual wage or the prevailing wage, whichever is greater, but there is no prohibition against paying an H-1B nonimmigrant a greater wage. Therefore, Engineer A may lawfully be paid the $80,000 per year. Engineer B's salary of $50,000 is acceptable, since this is the employer's actual wage for an engineer with Engineer B's experience and duties. Engineer C's salary, however, at a rate of $20,000 per year, is unacceptable under the law, even given the employer's ``long-established `home country' system,'' since $20,000 would be below both the actual wage and the prevailing wage. The latter situation is an example of an illegitimate business factor, i.e., a system to maintain salary parity with peers in the country of origin, which yields a wage below the required wage levels. Subpart I--Enforcement of H-1B Labor Condition Applications Sec. ______.800 Enforcement authority of Administrator, Wage and Hour Division. (a) Authority of Administrator. The Administrator shall perform all the Secretary's investigative and enforcement functions under section 212(n) of the INA (8 U.S.C. 1182(n)) and subparts H and I of this part. (b) Conduct of investigations. The Administrator, either pursuant to a complaint or otherwise, shall conduct such investigations as may be appropriate and, in connection therewith, enter and inspect such places and such records (and make transcriptions or copies thereof), question such persons and gather such information as deemed necessary by the Administrator to determine compliance regarding the matters which are the subject of the investigation. (c) Availability of records. An employer being investigated shall make available to the Administrator such records, information, persons, and places as the Administrator deems appropriate to copy, transcribe, question, or inspect. No employer subject to the provisions of section 212(n) of the INA (8 U.S.C. 1182(n)) and/or subpart H or I of this part shall interfere with any official of the Department of Labor performing an investigation, inspection or law enforcement function pursuant to 8 U.S.C. 1182(n) or subpart H or I of this part. Any such interference shall be a violation of the labor condition application and the regulations in subparts H and I of this part, and the Administrator may take such further actions as the Administrator considers appropriate. (Note: Federal criminal statutes prohibit certain interference with a Federal officer in the performance of official duties. 18 U.S.C. 111 and 18 U.S.C. 1114.) (d) Employer cooperation. (1) An employer subject to subpart H or I of this part shall at all times cooperate in administrative and enforcement proceedings. No employer shall intimidate, threaten, restrain, coerce, blacklist, discharge, retaliate, or in any manner discriminate against any person because such person has: (i) Filed a complaint or appeal under or related to section 212(n) of the INA (8 U.S.C. 1182(n)) or subpart H or I of this part; (ii) Testified or is about to testify in any proceeding under or related to section 212(n) of the INA (8 U.S.C. 1182(n)) or subpart H or I of this part; (iii) Exercised or asserted on behalf of himself or herself or others any right or protection afforded by section 212(n) of the INA (8 U.S.C. 1182(n)) or subpart H or I of this part; (iv) Consulted with an employee of a legal assistance program or an attorney on matters related to section 212(n) of the INA (8 U.S.C. 1182(n)) or to subpart H or I of this part or any other DOL regulation promulgated pursuant to 8 U.S.C. 1182(n). (2) In the event of such intimidation or restraint as are described in this paragraph (d), the conduct shall be a violation of the labor condition application and subparts H and I of this part, and the Administrator may take such further actions as the Administrator considers appropriate. (e) Confidentiality. The Administrator shall, to the extent possible under existing law, protect the confidentiality of any person who provides information to the Department in confidence in the course of an investigation or otherwise under subpart H or I of this part. Sec. ______.805 Complaints and investigative procedures. (a) The Administrator, through an investigation either pursuant to a complaint or otherwise, shall determine whether an H-1B employer has: (1) Filed a labor condition application with ETA which misrepresents a material fact. (Note: Federal criminal statutes provide penalties of up to $10,000 and/or imprisonment of up to 5 years for knowing and willful submission of false statements to the Federal Government. 18 U.S.C. 1001; see also 18 U.S.C. 1546); (2) (i) Willfully failed to pay wages as required under Sec. ______.731 of this part; (ii) Willfully failed to provide the working conditions required under Sec. ______.732 of this part; (3) Filed a labor condition application for H-1B nonimmigrants during a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment (see Sec. ______.733 of this part); or (4) Substantially failed to provide notice of the filing of the labor condition application as required in Sec. ______.734 of this part; (5) Substantially failed to be specific on the labor condition application as to the number of workers sought, the occupational classification in which the H-1B nonimmigrants will be employed, or the wage rate and conditions under which the H-1B nonimmigrants will be employed; (6) Failed to pay wages as required under Sec. ______.731 of this part, for purposes of the assessment of back wages (pursuant to Sec. ______.810(a) of this part); (7) Failed to make available for public examination the application and necessary document(s) at the employer's principal place of business or worksite as required in Sec. ______.760(a); (8) Failed to retain documentation as required by Sec. ______.760(c) of this part; or (9) Failed otherwise to comply in any other manner with the provisions of subpart H or I of this part. (b) For purposes of this part, ``willful failure'' means a knowing failure or a reckless disregard with respect to whether the conduct was contrary to Section 212(n)(1)(A) (i) or (ii) of the INA, or Sec. ______.731 or ______.732 of this part. See McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988); see also Trans World Airlines v. Thurston, 469 U.S. 111 (1985). (c) Pursuant to Secs. ______.740(a)(1) and ______.750 of this part, the provisions of this part become applicable upon the date of ETA's notification that the employer's labor condition application is certified, whether or not the employer hires any H-1B nonimmigrants in the occupation for the period of employment covered in the labor condition application. Should the period of employment specified in the labor condition application expire or should the employer withdraw the application in accordance with Sec. ______.750(b) of this part, the provisions of this part will no longer apply with respect to such application, except as provided in Sec. ______.750(b) (3) and (4) of this part. (d) Any aggrieved person or organization (including bargaining representatives and governmental officials) may file a complaint alleging a violation described in paragraph (a) of this section. (1) No particular form of complaint is required, except that the complaint shall be written or, if oral, shall be reduced to writing by the Wage and Hour Division official who receives the complaint. (2) The complaint shall set forth sufficient facts for the Administrator to determine whether an investigation is warranted, in that there is reasonable cause to believe that a violation as described in paragraph (a) of this section has been committed. This determination shall be made within 10 days of the date that the complaint is received by a Wage and Hour Division official. If the Administrator determines that the complaint fails to present reasonable cause for an investigation, the Administrator shall so notify the complainant, who may submit a new complaint, with such additional information as may be necessary. No hearing pursuant to this subpart shall be available where the Administrator determines that an investigation on a complaint is not warranted. (3) If the Administrator determines that an investigation on a complaint is warranted, the complaint shall be accepted for filing; an investigation shall be conducted and a determination issued within 30 calendar days of the date of filing. (4) In the event that the Administrator seeks a prevailing wage determination from ETA pursuant to Sec. ______.731(d) of this part, or advice as to prevailing working conditions from ETA pursuant to Sec. ______.732(c)(2) of this part, the 30-day investigation period shall be suspended from the date of the Administrator's request to the date of the Administrator's receipt of the wage determination (or, in the event that the employer challenges the wage determination through the Employment Service complaint system, to the date of the completion of such complaint process) or advice as to prevailing working conditions. (5) A complaint must be filed not later than 12 months after the latest date on which the alleged violation(s) were committed, which would be the date on which the employer allegedly failed to perform an action or fulfill a condition specified in the LCA, or allegedly took an action which, through such action or inaction, demonstrates a misrepresentation of a material fact in the LCA regarding such action or inaction. This jurisdictional bar does not affect the scope of the remedies which may be assessed by the Administrator. Where, for example, a complaint is timely filed, back wages may be assessed for a period prior to one year before the filing of a complaint. (6) A complaint may be submitted to any local Wage and Hour Division office. The addresses of such offices are found in local telephone directories. The office or person receiving such a complaint shall refer it to the office of the Wage and Hour Division administering the area in which the reported violation is alleged to have occurred. (e) When an investigation has been conducted, the Administrator shall, pursuant to Sec. ______.815 of this part, issue a written determination as to whether or not any violation(s) as described in paragraph (a) of this section has been committed. Sec. ______.810 Remedies. (a) Upon determining that the employer has failed to pay wages as required by Sec. ______.731 of this part, the Administrator shall assess and oversee the payment of back wages to any H-1B nonimmigrant employed by the employer in the specific employment in question. The back wages shall be equal to the difference between the amount that should have been paid and the amount that actually was paid to such nonimmigrant(s); (b) Upon determining that the employer has committed any violation(s) described in Sec. ______.805(a) of this part (other than a violation of Sec. ______.805(a)(6)), the Administrator may assess a civil money penalty not to exceed $1,000 per violation. In determining the amount of civil money penalty to be assessed, the Administrator shall consider the type of violation committed and other relevant factors. The factors which may be considered include, but are not limited to, the following: (1) Previous history of violation, or violations, by the employer under the INA and subpart H or I of this part; (2) The number of workers affected by the violation or violations; (3) The gravity of the violation or violations; (4) Efforts made by the violator in good faith to comply with the provisions of 8 U.S.C. 1182(n) and subparts H and I of this part; (5) The violator's explanation of the violation or violations; (6) The violator's commitment to future compliance; and (7) The extent to which the violator achieved a financial gain due to the violation, or the potential financial loss, potential injury or adverse effect with respect to other parties. (c) In addition to back wages and civil money penalties, the Administrator may impose such other administrative remedy(ies) under this subpart as the Administrator deems appropriate. (d) The civil money penalties, back wages, and/or any other remedy(ies) determined by the Administrator to be appropriate are immediately due for payment or performance upon the assessment by the Administrator, or upon the decision by an administrative law judge where a hearing is timely requested, or the decision by the Secretary where review is granted. The employer shall remit the amount of the civil money penalty by certified check or money order made payable to the order of ``Wage and Hour Division, Labor.'' The remittance shall be delivered or mailed to the Wage and Hour Division office in the manner directed in the Administrator's notice of determination. The performance of any other remedy prescribed by the Administrator shall follow procedures established by the Administrator. Distribution of back wages shall be administered in accordance with existing procedures established by the Administrator. Sec. ______.815 Written notice and service of Administrator's determination. (a) The Administrator's determination, issued pursuant to Sec. ______.805 of this part, shall be served on the complainant, the employer, and other known interested parties by personal service or by certified mail at the parties' last known addresses. Where service by certified mail is not accepted by the party, the Administrator may exercise discretion to serve the determination by regular mail. (b) The Administrator shall file with the Chief Administrative Law Judge, U.S. Department of Labor, a copy of the complaint and the Administrator's determination. (c) The Administrator's written determination required by Sec. ______.805 of this part shall: (1) Set forth the determination of the Administrator and the reason or reasons therefor, and in the case of a finding of violation(s) by an employer, prescribe any remedies, including the amount of any back wages assessed, the amount of any civil money penalties assessed and the reason therefor, and/or any other remedies assessed. (2) Inform the interested parties that they may request a hearing pursuant to Sec. ______.820 of this part. (3) Inform the interested parties that in the absence of a timely request for a hearing, received by the Chief Administrative Law Judge within 15 calendar days of the date of the determination, the determination of the Administrator shall become final and not appealable. (4) Set forth the procedure for requesting a hearing, give the addresses of the Chief Administrative Law Judge (with whom the request must be filed) and the representative(s) of the Solicitor of labor (upon whom copies of the request must be served). (5) Inform the parties that, pursuant to Sec. ______.855 of this part, the Administrator shall notify ETA and the Attorney General of the occurrence of a violation by the employer. Sec. ______.820 Request for hearing. (a) Any interested party desiring to request an administrative hearing in accordance with section 556 of title 5, United States Code, on a determination issued pursuant to Secs. ______.805 and ______.815 of this part shall make such request in writing to the Chief Administrative Law Judge at the address stated in the notice of determination. (b) Interested parties may request a hearing in the following circumstances: (1) The complainant or any other interested party may request a hearing where the Administrator determines, after investigation, that there is no basis for a finding that an employer has committed violation(s). In such a proceeding, the party requesting the hearing shall be the prosecuting party and the employer shall be the respondent; the Administrator may intervene as a party or appear as amicus curiae at any time in the proceeding, at the Administrator's discretion. (2) The employer or any other interested party may request a hearing where the Administrator determines, after investigation, that the employer has committed violation(s). In such a proceeding, the Administrator shall be the prosecuting party and the employer shall be the respondent. (c) No particular form is prescribed for any request for hearing permitted by this section. However, any such request shall: (1) Be dated; (2) Be typewritten or legibly written; (3) Specify the issue or issues stated in the notice of determination giving rise to such request; (4) State the specific reason or reasons why the party requesting the hearing believes such determination is in error; (5) Be signed by the party making the request or by an authorized representative of such party; and (6) Include the address at which such party or authorized representative desires to receive further communications relating thereto. (d) The request for such hearing shall be received by the Chief Administrative Law Judge, at the address stated in the Administrator's notice of determination, no later than 15 calendar days after the date of the determination. An interested party which fails to meet this 15- day deadline for requesting a hearing may thereafter participate in the proceedings only by consent of the administrative law judge, either through intervention as a party pursuant to 29 CFR 18.10 (b) through (d) or through participation as an amicus curiae pursuant to 29 CFR 18.12. (e) The request may be filed in person, by facsimile transmission, by certified or regular mail, or by courier service. For the requesting party's protection, if the request is by mail, it should be by certified mail. If the request is by facsimile transmission, the original of the request, signed by the requestor or authorized representative, shall be filed within ten days. (f) Copies of the request for a hearing shall be sent by the requestor to the Wage and Hour Division official who issued the Administrator's notice of determination, to the representative(s) of the Solicitor of Labor identified in the notice of determination, and to all known interested parties. Sec. ______.825 Rules of practice for administrative law judge proceedings. (a) Except as specifically provided in this subpart, and to the extent they do not conflict with the provisions of this subpart, the ``Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law Judges'' established by the Secretary at 29 CFR part 18 shall apply to administrative proceedings under this subpart. (b) As provided in the Administrative Procedure Act, 5 U.S.C. 556, any oral or documentary evidence may be received in proceedings under this part. The Federal Rules of Evidence and subpart B of the Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law Judges (29 CFR part 18, subpart B) shall not apply, but principles designed to ensure production of relevant and probative evidence shall guide the admission of evidence. The administrative law judge may exclude evidence which is immaterial, irrelevant, or unduly repetitive. Sec. ______.830 Service and computation of time. (a) Under this subpart, a party may serve any pleading or document by regular mail. Service on a party is complete upon mailing to the last known address. No additional time for filing or response is authorized where service is by mail. In the interest of expeditious proceedings, the administrative law judge may direct the parties to serve pleadings or documents by a method other than regular mail. (b) Two (2) copies of all pleadings and other documents in any administrative law judge proceeding shall be served on the attorneys for the Administrator. One copy shall be served on the Associate Solicitor, Division of Fair Labor Standards, Office of the Solicitor, U.S. Department of Labor, 200 Constitution Avenue NW., Room N-2716, Washington, DC 20210, and one copy shall be served on the attorney representing the Administrator in the proceeding. (c) Time will be computed beginning with the day following the action and includes the last day of the period unless it is a Saturday, Sunday, or federally-observed holiday, in which case the time period includes the next business day. Sec. ______.835 Administrative law judge proceedings. (a) Upon receipt of a timely request for a hearing filed pursuant to and in accordance with Sec. ______.820 of this part, the Chief Administrative Law Judge shall promptly appoint an administrative law judge to hear the case. (b) Within 7 calendar days following the assignment of the case, the administrative law judge shall notify all interested parties of the date, time and place of the hearing. All parties shall be given at least fourteen calendar days notice of such hearing. (c) The date of the hearing shall be not more than 60 calendar days from the date of the Administrator's determination. Because of the time constraints imposed by the INA, no request for postponement shall be granted except for compelling reasons. Even where such reasons are shown, no request for postponement of the hearing beyond the 60-day deadline shall be granted except by consent of all the parties to the proceeding. (d) The administrative law judge may prescribe a schedule by which the parties are permitted to file a prehearing brief or other written statement of fact or law. Any such brief or statement shall be served upon each other party in accordance with Sec. ______.830 of this part. Posthearing briefs will not be permitted except at the request of the administrative law judge. When permitted, any such brief shall be limited to the issue or issues specified by the administrative law judge, shall be due within the time prescribed by the administrative law judge, and shall be served on each other party in accordance with Sec. ______.830 of this part. Sec. ______.840 Decision and order of administrative law judge. (a) Within 60 calendar days after the date of the hearing, the administrative law judge shall issue a decision. If any party desires review of the decision, including judicial review, a petition for Secretary's review thereof shall be filed as provided in Sec. ______.845 of this subpart. If a petition for review is filed, the decision of the administrative law judge shall be inoperative unless and until the Secretary issues an order affirming the decision, or, unless and until 30 calendar days have passed after the Secretary's receipt of the petition for review and the Secretary has not issued notice to the parties that the Secretary will review the administrative law judge's decision. (b) The decision of the administrative law judge shall include a statement of findings and conclusions, with reasons and basis therefor, upon each material issue presented on the record. The decision shall also include an appropriate order which may affirm, deny, reverse, or modify, in whole or in part, the determination of the Administrator; the reason or reasons for such order shall be stated in the decision. (c) In the event that the Administrator's determination(s) of wage violation(s) and computation of back wages are based upon a wage determination obtained by the Administrator from ETA during the investigation (pursuant to Sec. ______.731(d) of this part), and the administrative law judge determines that the Administrator's request was not warranted (under the standards in Sec. ______.731(d) of this part), the administrative law judge shall remand the matter to the Administrator for further proceedings on the issue(s) of the existence of wage violation(s) and/or the amount(s) of back wages owed. If there is no such determination and remand by the administrative law judge, the administrative law judge shall accept such wage determination as accurate. Such wage determination is one made by ETA, from which the employer did not file a timely complaint through the Employment Service complaint system or from which the employer has appealed through the ES complaint system and a final decision therein has been issued. See Sec. ______.731 of this part; see also 20 CFR 658.420 through 658.426. Under no circumstances shall the administrative law judge determine the validity of the wage determination or require source data obtained in confidence by ETA or the SESA, or the names of establishments contacted by ETA or the SESA, to be submitted into evidence or otherwise disclosed. (d) The administrative law judge shall not render determinations as to the legality of a regulatory provision or the constitutionality of a statutory provision. (e) The decision shall be served on all parties in person or by certified or regular mail. Sec. ______.845 Secretary's review of administrative law judge's decision. (a) The Administrator or any interested party desiring review of the decision and order of an administrative law judge shall petition the Secretary to review the decision and order. To be effective, such petition shall be received by the Secretary within 30 calendar days of the date of the decision and order. Copies of the petition shall be served on all parties and on the administrative law judge. (b) No particular form is prescribed for any petition for Secretary's review permitted by this subpart. However, any such petition shall: (1) Be dated; (2) Be typewritten or legibly written; (3) Specify the issue or issues stated in the administrative law judge decision and order giving rise to such petition; (4) State the specific reason or reasons why the party petitioning for review believes such decision and order are in error; (5) Be signed by the party filing the petition or by an authorized representative of such party; (6) Include the address at which such party or authorized representative desires to receive further communications relating thereto; and (7) Attach copies of the administrative law judge's decision and order, and any other record documents which would assist the Secretary in determining whether review is warranted. (c) Whenever the Secretary determines to review the decision and order of an administrative law judge, a notice of the Secretary's determination shall be served upon the administrative law judge and upon all parties to the proceeding within 30 calendar days after the Secretary's receipt of the petition for review. (d) Upon receipt of the Secretary's notice, the Office of Administrative Law Judges shall within fifteen calendar days forward the complete hearing record to the Secretary. (e) The Secretary's notice shall specify: (1) The issue or issues to be reviewed; (2) The form in which submissions shall be made by the parties (e.g., briefs); (3) The time within which such submissions shall be made. (f) All documents submitted to the Secretary shall be filed with the Secretary of Labor, U.S. Department of Labor, Washington, DC 20210, Attention: Executive Director, Office of Administrative Appeals, Room S-4309. An original and two copies of all documents shall be filed. Documents are not deemed filed with the Secretary until actually received by the Secretary. All documents, including documents filed by mail, shall be received by the Secretary either on or before the due date. (g) Copies of all documents filed with the Secretary shall be served upon all other parties involved in the proceeding. Service upon the Administrator shall be in accordance with Sec. ______.830(b) of this part. (h) The Secretary's final decision shall be issued within 180 calendar days from the date of the notice of intent to review. The Secretary's decision shall be served upon all parties and the administrative law judge. (i) Upon issuance of the Secretary's decision, the Secretary shall transmit the entire record to the Chief Administrative Law Judge for custody pursuant to Sec. ______.850 of this part. Sec. ______.850 Administrative record. The official record of every completed administrative hearing procedure provided by subparts H and I of this part shall be maintained and filed under the custody and control of the Chief Administrative Law Judge. Upon receipt of a complaint seeking review of the final agency action in a United States District Court, the Chief Administrative Law Judge shall certify the official record and shall transmit such record to the clerk of the court. Sec. ______.855 Notice to the Employment and Training Administration and the Attorney General. (a) The Administrator shall notify the Attorney General and ETA of the final determination of a violation listed under Sec. ______.805(a) (1) through (5) by an employer upon the earliest of the following events: (1) Where the Administrator determines that there is a basis for a finding of violation by an employer, and no timely request for hearing is made pursuant to Sec. ______.820 of this part; or (2) Where, after a hearing, the administrative law judge issues a decision and order finding a violation by an employer, and no timely petition for review to the Secretary is made pursuant to Sec. ______.845 of this part; or (3) Where a petition for review is taken from an administrative law judge's decision finding a violation and the Secretary either declines within thirty days to entertain the appeal, pursuant to Sec. ______.845(c) of this part, or the Secretary affirms the administrative law judge's determination; or (4) Where the administrative law judge finds that there was no violation by an employer, and the Secretary, upon review, issues a decision pursuant to Sec. ______.845 of this part, holding that a violation was committed by an employer. (b) The Attorney General, upon receipt of notification from the Administrator pursuant to paragraph (a) of this section, shall not approve petitions filed with respect to that employer under sections 204 or 214(c) of the INA (8 U.S.C. 1154 and 1184(c)) during a period of at least one year for nonimmigrants to be employed by the employer. (c) ETA, upon receipt of the Administrator's notice pursuant to paragraph (a) of this section, shall invalidate the employer's labor condition application(s) under subparts H and I of this part, and shall not accept for filing any application or attestation submitted by the employer under 20 CFR part 656 or subparts A, B, C, D, E, H, or I of this part, for a period of 12 months or for a longer period if such is specified by the Attorney General for visa petitions filed by that employer under sections 204 and 214(c) of the INA. Adoption of the Joint Rule The agency-specific adoption of the joint rule, which appears at the end of the common preamble, appears below: TITLE 20--EMPLOYEES' BENEFITS Accordingly, part 655 of chapter V of title 20, Code of Federal Regulations, is amended as follows: PART 655--TEMPORARY EMPLOYMENT OF NONIMMIGRANTS IN THE UNITED STATES 1. The authority citation for Part 655 is revised to read as follows: Authority: Section 655.0 issued under 8 U.S.C. 1101(a)(15)(H) (i) and (ii), 1182 (m) and (n), 1184, 1188, and 1288(c); 29 U.S.C. 49 et seq.; sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2103 (8 U.S.C. 1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat. 4978, 5027 (8 U.S.C. 1184 note); and 8 CFR 214.2(h)(4)(i). Section 655.00 issued under 8 U.S.C. 1101(a)(15)(H)(ii), 1184, and 1188; 29 U.S.C. 49 et seq.; and 8 CFR 214.2(h)(4)(i). Subparts A and C issued under 8 U.S.C. 1101(a)(15)(H)(ii)(b) and 1184; 29 U.S.C. 49 et seq., and 8 CFR 214.2(h)(4)(i). Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184, and 1188; and 29 U.S.C. 49 et seq. Subparts D and E issued under 8 U.S.C. 1101(a)(15)(H)(i)(a), 1182(m), and 1184; 29 U.S.C. 49 et seq.; and sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2103 (8 U.S.C. 1182 note). Subparts F and G issued under 8 U.S.C. 1184 and 1288(c); and 29 U.S.C. 49 et seq. Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184; 29 U.S.C. 49 et seq.; and sec. 303(a)(8), Pub. L. 102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1182 note). Subparts J and K issued under 29 U.S.C. 49 et seq.; and sec. 221(a), Pub. L. 101-649, 104 Stat. 4978, 5027 (8 U.S.C. 1184 note). Subparts H and I [Revised] 2. Part 655 is amended by revising subparts H and I to read as set forth at the end of the common preamble. Subpart H--Labor Condition Applications and Requirements for Employers Using Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion Models Sec. 655.700 Purpose, procedure and applicability of subparts H and I of this part. 655.705 Overview of responsibilities. 655.710 Complaints. 655.715 Definitions. 655.720 Addresses of Department of Labor regional offices. 655.730 Labor condition application. 655.731 The first labor condition statement: wages. 655.732 The second labor condition statement: working conditions. 655.733 The third labor condition statement: no strike or lockout. 655.734 The fourth labor condition statement: notice. 655.735 Special provisions for short-term placement of H-1B nonimmigrants at place(s) of employment outside the area(s) of intended employment listed on labor condition application. 655.740 Labor condition application determinations. 655.750 Validity period of the labor condition application. 655.760 Public access; retention of records. Subpart I--Enforcement of H-1B Labor Condition Applications 655.800 Enforcement authority of Administrator, Wage and Hour Division. 655.805 Complaints and investigative procedures. 655.810 Remedies. 655.815 Written notice and service of Administrator's determination. 655.820 Request for hearing. 655.825 Rules of practice for administrative law judge proceedings. 655.830 Service and computation of time. 655.835 Administrative law judge proceedings. 655.840 Decision and order of administrative law judge. 655.845 Secretary's review of administrative law judge's decision. 655.850 Administrative record. 655.855 Notice to the Employment and Training Administration and the Attorney General. Signed at Washington, DC, this 14th day of December, 1994. Doug Ross, Assistant Secretary for Employment and Training. Bernard E. Anderson, Assistant Secretary for Employment Standards. Robert B. Reich, Secretary of Labor. TITLE 29--LABOR CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR Accordingly, title 29, Code of Federal Regulations is amended as follows: PART 507--ENFORCEMENT OF H-1B LABOR CONDITION APPLICATIONS Subparts A, B, C, D, E, F, and G (Reserved) 1. The authority citation for part 507 continues to read as follows: Authority: 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184, and 29 U.S.C. 49 et seq.; and Pub. L. 102-232, 105 stat. 1733, 1748 (8 U.S.C. 1182 note). Subparts H and I [Revised] 2. Part 507 is amended by revising subparts H and I to read as set forth at the end of the common preamble. Subpart H--Labor Condition Applications and Requirements for Employers Using Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion Models Sec. 507.700 Purpose, procedure and applicability of subparts H and I of this part. 507.705 Overview of responsibilities. 507.710 Complaints. 507.715 Definitions. 507.720 Addresses of Department of Labor regional offices. 507.730 Labor condition application. 507.731 The first labor condition statement: wages. 507.732 The second labor condition statement: working conditions. 507.733 The third labor condition statement: no strike or lockout. 507.734 The fourth labor condition statement: notice. 507.735 Special provisions for short-term placement of H-1B nonimmigrants at place(s) of employment outside the area(s) of intended employment listed on labor condition application. 507.740 Labor condition application determinations. 507.750 Validity period of the labor condition application. 507.760 Public access; retention of records. Appendix A to Subpart H: Guidance for Determination of the ``Actual Wage'' Subpart I--Enforcement of H-1B Labor Condition Applications Sec. 507.800 Enforcement authority of Administrator, Wage and Hour Division. 507.805 Complaints and investigative procedures. 507.810 Remedies. 507.815 Written notice and service of Administrator's determination. 507.820 Request for hearing. 507.825 Rules of practice for administrative law judge proceedings. 507.830 Service and computation of time. 507.835 Administrative law judge proceedings. 507.840 Decision and order of administrative law judge. 507.845 Secretary's review of administrative law judge's decision. 507.850 Administrative record. 507.855 Notice to the Employment and Training Administration and the Attorney General. Signed at Washington, D.C., this 14th day of December, 1994. Doug Ross, Assistant Secretary for Employment and Training. Bernard E. Anderson, Assistant Secretary for Employment Standards. Robert B. Reich, Secretary of Labor. Appendix 1 (Not To Be Codified in the CFR): Form ETA 9035 Printed below is a copy of Form ETA 9035. Appendix 2 (Not To Be Codified in the CFR): DOT Three-Digit Occupational Groups Codes for Professional, Technical and Managerial Occupations and Fashion Models Printed below is a copy of DOT Three-Digit Occupational Groups Codes for Professional, Technical and Managerial Occupations and Fashion Models. BILLING CODE 4510-30-M and 4510-27-M![]()
TR20DE94.000 ![]()
TR20DE94.001 ![]()
TR20DE94.002 [FR Doc. 94-31114 Filed 12-19-94; 8:45 am] BILLING CODE 4510-30-C and 4510-27-C _______________________________________________________________________