H-1B Prevailing Wage Enforcement On The Rise – Millions In Back Wages And Fines Ordered

May 24, 2005

In a March 4, 2005 determination the U.S. Department of Labor (DOL) ordered Computech to pay $4.5 million in back wages to 232 nonimmigrant computer professionals who had worked for the company with H-1B visas. The DOL also assessed over $1.2 million in fines for H-1B visa program violations. The DOL held that Computech failed to pay its H-1B workers the required prevailing wage rate for the areas where they were physically employed. It also found that Computech frequently violated the “no-benching” rule, which requires wage payments to the H-1B worker whenever the worker is in the U.S., even when no work is performed, with the exception of employee requested time off. Additionally, the fines were based on alleged inaccuracies in the H-1B Petition materials submitted by the company. The affected workers held assignments throughout Michigan, Illinois, California, New Jersey, New York, Pennsylvania, Texas, and Minnesota. Computech has requested a hearing before a DOL Administrative Law Judge, challenging the accuracy of the back-wage calculations.
The H-1B visa program can be used to gain work authorization for skilled professional level foreign nationals working in a wide variety of jobs. It’s widely used for engineering and computer professional positions, but many other jobs – requiring at least a B.A. – are suitable for the H-1B visa. In order to obtain the visa, the U.S. employer must take the prerequisite step of filing a Labor Condition Application (LCA) with the DOL. The LCA lists the wage rate that will be paid, which cannot be below the prevailing wage rate for the area of intended employment, and lists the source of information for the employer’s determination of the prevailing wage rate. Additional recordkeeping requirements, including a public access file, must be maintained to encourage compliance and reporting of wage rate violations.
Last September, DOL officials in Michigan also concluded the investigation of another technology industry firm, Agilon Consulting, a nationwide firm based in Towson, Maryland, which resulted in a back pay award exceeding $450,000. The back-pay award covered 202 H-1B workers employed as computer specialists. This sum was ordered to remedy prevailing wage rate violations and to recover the H-1B visa petition expenses and fees the employer improperly required employees to pay. The employer must pay the majority of all expenses, filing fees, and attorney fees.
These investigations and others that have targeted West Michigan companies have revealed the DOL’s intent to aggressively enforce the H-1B visa prevailing wage rules, even where the investigation involves a smaller employer with 10 or fewer H-1B workers. Far too often, smaller employers are vulnerable to the imposition of significant back pay awards if such an investigation occurs. In many instances, the employer relies on the H-1B worker to secure immigration counsel for assistance with the necessary documentation to obtain the visa. In such situations, when the employer does not have a relationship with counsel, little if any attention is given to the employer’s obligations to make a prevailing wage determination and to identify an acceptable prevailing wage source. The employer may also fail to create and maintain a public access file and fail to observe posting requirements. Many H-1B workers know the rules far better than the employer, and when they are laid off or passed over for a promotion, they are becoming more and more willing to seek redress through the DOL.
Employers with questions or concerns about immigration law compliance should contact the firm’s immigration law practice group.