Tag Archives: U.S. Department of Labor

U.S. Citizenship and Immigration Services and Department of Labor Announce Further Measures to Detect H-1B Visa Fraud and Tighten Rules

Contributed by Jacqueline Lentini McCullough, April 18, 2017

While the H-1B petitions submitted for the lottery this cap season were still in transit to the U.S. Citizenship and Immigration Services (USCIS), both the USCIS and the Department of Labor (DOL) announced several measures aimed at detecting H-1B visa fraud and abuses.

  1. 43431121 - book with words immigration law and glasses.

    Book with words Immigration Law and glasses 

    Beginning April 3, 2017, USCIS is taking a more targeted approach when making site visits across the country to H-1B petitioners and the worksites of H-1B employees. The focus will be on the following: (1) cases where USCIS cannot validate an employer’s basic business information through commercially available data; (2) H-1B dependent employers; and (3) employers petitioning for H-1B workers who are off-site at another company or organization’s location. Employers should be prepared to implement internal policies to mitigate risk exposure.

  2. On March 31, 2017, USCIS issued a memorandum making it harder for companies to bring foreign workers to the U.S. using the H-1B visa. The new guidelines require additional information for computer programmers applying for the work visa to show that the position is a specialty occupation requiring advanced knowledge and experience. The new policy is effective immediately, so it will impact the visas currently in the pipeline for the annual lottery process.
  3. On April 5, 2017, the DOL announced that it plans to protect American workers from discrimination efforts by abusing or misusing H-1B visas through the following measures:
    • Rigorously using all its authority to begin investigations of H-1B program violators by using further investigation and if necessary, prosecution.
    • Considering changes to LCA for future application cycles (application may be updated to provide greater transparency to all).
    • Continue to engage stakeholders on how the program may be improved to provide better protections for U.S. workers under existing authorities or through legislative changes.

To help detect or prevent abuse, the DOL has also set up an email address which allows anyone to contact them if they feel they or someone they know have been a victim of H-1B fraud.  (REPORTH1BABUSE@USCIS.DHS.GOV).

As more information becomes available regarding how these announcements will be implemented, we will keep you abreast of any changes. Under political pressure, the policy direction is for increased scrutiny of the H-1B visa category by both USCIS and the DOL. Internal compliance practices may need to be reviewed to ensure your company is following the most recent guidelines moving forward.

URGENT UPDATE RE DOL’S PERSUADER RULE

Contributed by Jeff Risch, June 24, 2016

On July 1 (one week from today), the U.S. Department of Labor’s Persuader Rule goes into effect.  The rule requires employers and labor consultants (including attorneys) to publicly report all actions, conduct, or communications that have a direct or indirect objective to persuade employees regarding their rights to collective bargaining, to obtain certain information concerning employee activities, or to persuade employees as to their rights to join or not join a union – which can include mere advice and counsel from attorneys (e.g., supervisor training, handbook drafting, work rules, etc.). The USDOL has recently indicated that indirect persuader and consulting service agreements entered into before July 1, 2016 will be exempt from the new rule – even if the services are rendered at a later time. Accordingly, we strongly encourage employers who currently receive indirect persuasion or labor advice (or who may need it in the future), to contact their outside attorneys before June 30th.

Although we cannot predict future enforcement initiatives by the DOL, at this time, we believe that this type of pre-July 1, 2016 Agreement can only help.

If you have any questions or concerns regarding this rule, please do not hesitate to contact‎ your primary SmithAmundsen attorney.

Use Independent Contractors? DOL Says Almost Everyone Is An Employee Under the FLSA

Contributed by Steven Jados

On July 15, 2015, the U.S. Department of Labor (DOL) issued an Administrator’s Interpretation addressing the distinction between employees and independent contractors in the Fair Labor Standards Act (FLSA).

The DOL has aggressively pursued potential misclassifications of employees as independent contractors in recent years. Indicative of that aggressive approach, the interpretation states that most workers are employees under the FLSA. While that statement is walked-back somewhat in other parts of the interpretation, businesses that rely heavily on independent contractors should take this message to heart and reassess whether their independent contractor relationships will truly survive scrutiny by the DOL and other government agencies. The consequences of independent contractor misclassification may be severe and include liability for unpaid taxes, wages, and other damages and costs.

Much of the interpretation covers old ground, but nevertheless there are several interesting insights. Among them is the interpretation’s discussion on workers who are able to choose how many hours they work in a day or week, or when and where they perform their work. In short, the interpretation states that such freedom should not weigh heavily in favor of an independent contractor relationship if the workers are not exercising managerial skills in a way that affects the workers’ opportunities to realize profits or losses. However, if a worker negotiates the rate at which customers paid for the worker’s services, then that would indicate independent contractor status.Independent contract

The interpretation reiterates that an independent contractor relationship cannot be established by a contract between a business and worker declaring the worker an independent contractor. Instead, the DOL uses a six-factor “economic realities” test in conjunction with the FLSA’s “suffer or permit” standard (which is intended to make the FLSA’s coverage as broad as possible) to analyze whether a worker is an employee or independent contractor. The interpretation phrases those six factors as:

(A) the extent to which the work performed is an integral part of the employer’s business; (B) the worker’s opportunity for profit or loss depending on his or her managerial skill; (C) the extent of the relative investments of the employer and the worker; (D) whether the work performed requires special skills and initiative; (E) the permanency of the relationship; and (F) the degree of control exercised or retained by the employer.

In the end, the question of whether a worker is an employee or independent contractor will generally boil down to whether a worker is truly “in business for him or herself”—and therefore an independent contractor—or whether the worker is “economically dependent on the employer” and an employee. That said, if your business treats workers who are economically dependent on your business as independent contractors, we strongly recommend seeing advice of counsel to determine if changes can be made to ensure a strong defense against litigation or other enforcement actions by the DOL or the independent contractors themselves.

New “Place of Celebration” DOL Final Rule Increases the Availability of FMLA Leave for Same-Sex Spouses

Contributed by Steven Jados

On February 25, 2015, the U.S. Department of Labor issued a final rule modifying the definition of “spouse” under the federal Family and Medical Leave Act.

This final rule, which will take effect on March 27, 2015, is a shift from the current language of 29 C.F.R. §§ 825.102 and 825.122(b), which defines “spouse” to mean “a husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized.”

As of March 27, the definition of “spouse” under the FMLA regulations will no longer depend on an employee’s state of residence.  Instead, whether someone is an according-to-the-FMLA spouse will be determined by the law of the state where the employee’s marriage occurred—the “place of celebration.”  Specifically, the new definition will be:

Spouse, as defined in the statute, means a husband or wife.  For purposes of this definition, husband or wife refers to the other person with whom an individual entered into marriage as defined or recognized under state law for purposes of marriage in the State in which the marriage was entered into or, in the case of a marriage entered into outside of any State, if the marriage is valid in the place where entered into and could have been entered into in at least one State. This definition includes an individual in a same-sex or common law marriage that either:

(1) Was entered into in a State that recognizes such marriages; or

(2) If entered into outside of any State, is valid in the place where entered into and could have been entered into in at least one State.

Employers will note that this change still does not put parties to a civil union or domestic partnership on equal footing with married couples.

In light of the fact that not all states currently recognize same-sex marriage (or common-law marriage for that matter), this rule change may require employers may to take extra steps to determine where an employee’s marriage occurred.

As employers must now make such an inquiry, it is critically important that employers request documentation to establish the existence of a FMLA-defined marriage in a non-discriminatory matter.  Additionally, FMLA forms will need to be reviewed and updated, and those employees who administer FMLA programs or otherwise receive FMLA requests (which could mean virtually any supervisory or managerial employee), must be trained to understand that determining a spouse’s FMLA eligibility may be more complex than it has been in the past.

DOL Reports Mixed Results for 2014: Union Membership Declines in Private Sector but Public Sector Rises

Contributed by Sara Zorich

On January 23, 2015, the U.S. Department of Labor (DOL) released its 2014 Union Membership Annual Report.  Most notably was a decrease in union membership overall by .2%.  The private sector union rates fell from 7.5% to 7.4% between 2013 and 2014 while the public sector rose from 38.7% to 39.2%.

The DOL report indicated that in 2014, 7.2 million employees in the public sector were members of a union compared to 7.4 million workers in the private sector.  However, public sector workers have a much higher percentage of union membership – 35.7% for the public sector vs. 6.6% for the private sector.  In the private sector, industries with the highest rate of unionized workforces continue to include utilities (22.3%), transportation and warehousing (19.6%), telecommunication (14.8%) and construction (13.9%).

In Illinois, union membership rates fell by .7% in 2014.  In 2013, 15.8% of the workforce in Illinois were members of a union compared to 15.1% in 2014.

The report also noted that men had a higher union membership rate at 11.7% vs. women at 10.5%.  Though it was reported that the gap between union membership for men and women has narrowed significantly in the past 30 years when the gap was approximately 10.1%.  Additionally, the union membership rates for older workers were the highest with workers age 55 to 64 representing 14.1% of the union membership however this was a decrease from 14.3% in 2013.  The union membership rates for younger employees (age 16 – 24 years) grew from 4.2% to 4.5% showing that even though the youngest age group has maintained the smallest union rate percentage, it is on the rise.

A copy of the Labor Department report may be found here.

Despite the DOL’s report, organized labor is ramping up efforts to organize non-union workers across all industries and across socio-economic lines (including clerical and white-collar).

Employers Can Expect Stricter Wage & Hour Enforcement: Senate Confirms David Weil as the New Wage and Hour Administrator

Contributed by Jonathon Hoag

On April 28, 2014, the Senate voted to confirm Dr. David Weil as administrator of the U.S. Department of Labor’s Wage and Hour Division (WHD).  It has been over a decade since the Senate has confirmed a WHD administrator.  President Obama’s nomination of Dr. Weil has been controversial and his confirmation was approved on narrow margins with a vote of 51-42 in favor of the nomination.

Dr. Weil’s nomination drew scrutiny because of a report he submitted to the Department of Labor in May 2010 entitled Improving Workplace Conditions through Strategic Enforcement:  Report to the Wage and Hour Division Strategic Enforcement.  The report illustrates that Dr. Weil supports implementing a penalty policy “as a central element of deterrence.”  The report further outlines that he wants WHD to increase civil and criminal litigation efforts to deter noncompliance, and to consistently impose civil penalties and liquidated damages.  Dr. Weil recommends that WHD move to a strategic and proactive method of investigating rather than reacting to worker complaints.  He identifies the following as targeted industries:  construction, health care, landscaping, hospitality, restaurants, grocery stores, agricultural products, moving companies, logistics companies, janitorial services, and home health care services.

Dr. Weil, who has spent his career in academia, is now poised to regulate the business community through increased investigations and strict enforcement of wage and hour laws with an eye towards penalizing companies.  In addition, there are numerous comments in the report that suggest Dr. Weil attributes the need for stricter enforcement to the decline in private-sector unionization and that he would support efforts to increase unionization.

Dr. Weil’s confirmation is a further sign that employers can expect broad review and increased scrutiny of their wage and hour practices.  Employers should conduct frequent reviews and internal audits of wage and hour practices, as the DOL appears ready to hammer employers for noncompliance issues, including those that are minor and technical in nature.

Contractors Beware: Strict Amendments to the Illinois Employee Classification Act

Contributed by Jonathon Hoag

House Bills 923 and 2649 were signed into law amending the Illinois Employee Classification Act (IECA), effective January 1, 2014.  The IECA sets forth strict requirements in order to lawfully classify individuals as independent contractors within the construction industry (defined very broadly by the act).  The IECA has been amended to give the Illinois Department of Labor more oversight and authority to enforce this act.  The recent amendments mandate that (1) contractors follow annual reporting requirements when contracting with an individual, sole proprietor, or partnership to perform construction services; (2) add individual liability; and (3) change the department’s method for enforcing the act (i.e. easing enforcement).

Beginning January 1, 2014, contractors that make payments to an individual, sole proprietor, or partnership for construction services must report contact and payment information to the Illinois Department of Labor by January 31 following the taxable year in which payment was made.  The department intends to closely monitor the use of (non-employee) sole proprietors and partnerships in the construction industry.  Contractors that fail to submit required reports are subject to penalties and debarment.

In addition, officers and agents of contractors who knowingly permit the contractor to violate the IECA, or are otherwise considered an employer under the act, are subject to individual liability.  This provision does not apply to contractors primarily engaged in the sale of tangible personal property or doing work for a business primarily engaged in the sale of tangible personal property.

Lastly, the enforcement procedure was drastically amended so that now alleged violations will be prosecuted by the Illinois Department of Labor through an administrative hearing, subject to administrative review in the courts.  Currently, the Illinois Department of Labor’s administrative findings have no significant weight and violations must be proved by the Attorney General in the circuit court.  This change to the enforcement procedure will give the Illinois Department of Labor substantial control and power in how this act is enforced. 

Interestingly, contractors in compliance with the responsible bidder requirements set forth in the Illinois Procurement Code are exempt from these statutory amendments.  There are a number of requirements under the responsible bidder provision of the Illinois Procurement Code, but the one of most significance is the requirement that contractors have an apprenticeship program approved by the U.S. Department of Labor to cover each craft of work performed on the job.  There has been a concerted effort to broaden the application of the responsible bidder requirements to contractors throughout Illinois, and it appears the strategy will be to give contractors who satisfy the responsible bidder requirements special treatment under other Illinois laws.