Federal Register /Vol. 65, No. 245/Wednesday, December … · 80210 Federal Register/Vol. 65, No. 245/Wednesday, December 20, 2000/Rules and Regulations classification in specialty

80209Federal Register / Vol. 65, No. 245 / Wednesday, December 20, 2000 / Rules and Regulations

responsibilities of those agencies and ofemployers?

655.710 What is the procedure for filing acomplaint?

655.715 Definitions655.720 Where are labor condition

applications to be filed and processed?655.721 What are the addresses of the ETA

regional offices which handle mattersother than processing LCAs?

655.730 What is the process for filing alabor condition application?

655.731 What is the first LCA requirement,regarding wages?

655.732 What is the second LCArequirement, regarding workingconditions?

655.733 What is the third LCA requirement,regarding strikes and lockouts?

655.734 What is the fourth LCArequirement, regarding notice?

655.735 What are the special provisions forshort-term placement of H–1Bnonimmigrants at place(s) ofemployment outside the area(s) ofintended employment listed on the LCA?

655.736 What are H–1B-dependentemployers and willful violators?

655.737 What are ‘‘exempt’’ H–1Bnonimmigrants, and how does theiremployment affect the additionalattestation obligations of H–1B-dependent employers and willfulviolator employers?

655.738 What are the ‘‘non-displacement ofU.S. workers’’ obligations that apply toH–1B-dependent employers and willfulviolators, and how do they operate?

655.739 What is the ‘‘recruitment of U.S.workers’’ obligation that applies to H–1B-dependent employers and willfulviolators, and how does it operate?

655.740 What actions are taken on laborcondition applications?

655.750 What is the validity period of thelabor condition application?

655.760 What records are to be madeavailable to the public, and what recordsare to be retained?

Subpart I—Enforcement of H–1B LaborCondition Applications

655.800 Who will enforce the LCAs andhow will they be enforced?

655.801 What protection do employeeshave from retaliation?

655.805 What violations may theAdministrator investigate?

655.806 Who may file a complaint and howis it processed?

655.807 How may someone who is not an‘‘aggrieved party’’ allege violations, andhow will those allegations be processed?

655.808 Under what circumstances mayrandom investigations be conducted?

655.810 What remedies may be ordered ifviolations are found?

655.815 What are the requirements for theAdministrator’s determination?

655.820 How is a hearing requested?655.825 What rules of practice apply to the

hearing?655.830 What rules apply to service of

pleadings?655.835 How will the administrative law

judge conduct the proceeding?

655.840 What are the requirements for adecision and order of the administrativelaw judge?

655.845 What rules apply to appeal of thedecision of the administrative law judge?

655.850 Who has custody of theadministrative record?

655.855 What notice shall be given to theEmployment and TrainingAdministration and the Attorney Generalof the decision regarding violations?

2. The authority citation for Part 655is revised to read as follows:

Authority: Section 655.0 issued under 8U.S.C. 1101(a)(15)(H)(i) and (ii), 1182(m) and(n), 1184, 1188, and 1288(c) and (d); 29U.S.C. 49 et seq.; sec. 3(c)(1), Pub.L. 101–238,103 Stat. 2099, 2102 (8 U.S.C. 1182 note); sec.221(a), Pub.L. 101–649, 104 Stat. 4978, 5027(8 U.S.C. 1184 note); sec. 323, Pub.L. 103–206, 107 Stat. 2149; Title IV, Pub.L. 105–277,112 Stat. 2681; Pub.L. 106–95, 113 Stat. 1312(8 U.S.C. 1182 note); and 8 CFR213.2(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)(150(H)(ii)(b) and 1184; 29 U.S.C. 49et 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 29U.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; 29U.S.C. 49 et seq.; and sec. 3(c)(1), Pub.L. 101–238, 103 Stat. 2099, 2103 (8 U.S.C. 1182note).

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; 29U.S.C. 49 et seq.; sec 303(a)(8), Pub.L. 102–232, 105 Stat. 1733, 1748 (8 U.S.C. 1182note); and Title IV, Pub.L. 105–277, 112 Stat.2681.

Subparts J and K issued under 29 U.S.C. 49et seq.; and sec 221(a), Pub.L. 101–649, 104Stat. 4978, 5027 (8 U.S.C. 1184 note).

Subparts L and M issued under 8 U.S.C.1101(a)(15)(H)(i)(c), 1182 (m) and 1184; and29 U.S.C. 49 et seq.

3. Section 655.700 is revised to readas follows:

§ 655.700 What statutory provisionsgovern the employment of H–1Bnonimmigrants and how do employersapply for an H–1B visa?

(a) Statutory provisions. With respectto nonimmigrant workers entering theUnited States (U.S.) on H–1B visas, theImmigration and Nationality Act (INA),as amended, provides as follows:

(1) Establishes an annual ceiling(exclusive of spouses and children) onthe number of foreign workers who maybe issued H–1B visas—

(i) 195,000 in fiscal year 2001;(ii) 195,000 in fiscal year 2002;(iii) 195,000 in fiscal year 2003; and(iv) 65,000 in each succeeding fiscal

year;

(2) Defines the scope of eligibleoccupations for which nonimmigrantsmay be issued H–1B visas and specifiesthe qualifications that are required forentry as an H–1B nonimmigrant ;

(3) Requires an employer seeking toemploy H–1B nonimmigrants to file alabor condition application (LCA)agreeing to various attestationrequirements and have it certified by theDepartment of Labor (DOL) before anonimmigrant may be provided H–1Bstatus by the Immigration andNaturalization Service (INS); and

(4) Establishes an enforcement systemunder which DOL is authorized todetermine whether an employer hasengaged in misrepresentation or failedto meet a condition of the LCA, and isauthorized to impose fines andpenalties.

(b) Procedure for obtaining an H–1Bvisa classification. Before anonimmigrant may be admitted to workin a ‘‘specialty occupation’’ or as afashion model of distinguished meritand ability in the United States underthe H–1B visa classification, there arecertain steps which must be followed:

(1) First, an employer shall submit toDOL, and obtain DOL certification of, alabor condition application (LCA). Therequirements for obtaining a certifiedLCA are provided in this subpart. TheLCA (Form ETA 9035) and cover page(Form ETA 9035CP, containing the fullattestation statements that areincorporated by reference in Form ETA9035) may be obtained from http://ows.doleta.gov, from DOL regionaloffices, and from the Employment andTraining Administration (ETA) nationaloffice. Employers are encouraged toutilize the electronic filing systemdeveloped by ETA to expedite thecertification process (see § 655.720).

(2) After obtaining DOL certificationof an LCA, the employer may submit anonimmigrant visa petition (INS FormI–129), together with the certified LCA,to INS, requesting H–1B classificationfor the foreign worker. The requirementsconcerning the submission of a petitionto, and its processing by, INS are setforth in INS regulations. The INSpetition (Form I–129) may be obtainedfrom an INS district or area office.

(3) If INS approves the H–1Bclassification, the nonimmigrant thenmay apply for an H–1B visa abroad ata consular office of the Department ofState. If the nonimmigrant is already inthe United States in a status other thanH–1B, he/she may apply to the INS fora change of visa status.

(c) Applicability. (1) This subpart Hand subpart I of this part apply to allemployers seeking to employ foreignworkers under the H–1B visa

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80210 Federal Register / Vol. 65, No. 245 / Wednesday, December 20, 2000 / Rules and Regulations

classification in specialty occupationsor as fashion models of distinguishedmerit and ability.

(2) During the period that theprovisions of Appendix 1603.D.4 ofAnnex 1603 of the North American FreeTrade Agreement (NAFTA) apply, thissubpart H and subpart I of this part shallapply (except for the provisions relatingto the recruitment and displacement ofU.S. workers (see §§ 655.738 and655.739)) to the entry and employmentof a nonimmigrant who is a citizen ofMexico under and pursuant to theprovisions of section D or Annex 1603of NAFTA in the case of all professionsset out in Appendix 1603.D.1 of Annex1603 of NAFTA other than registerednurses. Therefore, the references in thispart to ‘‘H–1B nonimmigrant’’ apply toany Mexican citizen nonimmigrant whois classified by INS as ‘‘TN.’’ In the caseof a registered nurse, the followingprovisions shall apply: subparts D andE of this part or the Nursing Relief forDisadvantaged Areas Act of 1999(Public Law 106–95) and the regulationsissued thereunder, 20 CFR part 655,subparts L and M.


§ 655.705 What federal agencies areinvolved in the H–IB program, and what arethe responsibilities of those agencies andof employers?

Three federal agencies (Department ofLabor, Department of State, andDepartment of Justice) are involved inthe process relating to H–1Bnonimmigrant classification andemployment. The employer also hascontinuing responsibilities under theprocess. This section briefly describesthe responsibilities of each of theseentities.

(a) Department of Labor (DOL)responsibilities. DOL administers thelabor condition application process andenforcement provisions (exclusive ofcomplaints regarding non-selection ofU.S. workers, as described in 8 U.S.C.1182(n)(1)(G)(i)(II) and 1182(n)(5)). TwoDOL agencies have responsibilities:

(1) The Employment and TrainingAdministration (ETA) is responsible forreceiving and certifying labor conditionapplications (LCAs) in accordance withthis subpart H. ETA is also responsiblefor compiling and maintaining a list ofLCAs and makes such list available forpublic examination at the Department ofLabor, 200 Constitution Avenue, NW.,Room C–4318, Washington, DC 20210.

(2) The Wage and Hour Division ofthe Employment StandardsAdministration (ESA) is responsible, inaccordance with subpart I of this part,for investigating and determining an

employer’s misrepresentation in orfailure to comply with LCAs in theemployment of H–1B nonimmigrants.

(b) Department of Justice (DOJ) andDepartment of State (DOS)responsibilities. The Department ofState, through U.S. Embassies andConsulates, is responsible for issuing H–1B visas. The Department of Justice,through the Immigration andNaturalization Service (INS), accepts theemployer’s petition (INS Form I–129)with the DOL-certified LCA attached.INS is responsible for approving thenonimmigrant’s H–1B visaclassification. In doing so, the INSdetermines whether the petition issupported by an LCA whichcorresponds with the petition, whetherthe occupation named in the laborcondition application is a specialtyoccupation or whether the individual isa fashion model of distinguished meritand ability, and whether thequalifications of the nonimmigrant meetthe statutory requirements for H–1B visaclassification. If the petition isapproved, INS will notify the U.S.Consulate where the nonimmigrantintends to apply for the visa unless thenonimmigrant is in the U.S. and eligibleto adjust status without leaving thiscountry. See 8 U.S.C. 1255(h)(2)(B)(i).The Department of Justice administersthe system for the enforcement anddisposition of complaints regarding anH–1B-dependent employer’s or willfulviolator employer’s failure to offer aposition filled by an H–1Bnonimmigrant to an equally or betterqualified United States worker (8 U.S.C.1182(n)(1)(E), 1182(n)(5)), or suchemployer’s willful misrepresentation ofmaterial facts relating to this obligation.The Department of Justice, through theINS, is responsible for disapproving H–1B and other petitions filed by anemployer found to have engaged inmisrepresentation or failed to meetcertain conditions of the labor conditionapplication (8 U.S.C. 1182(n)(2)(C)(i)–(iii); 1182(n)(5)(E)).

(c) Employer’s responsibilities. Eachemployer seeking an H–1Bnonimmigrant in a specialty occupationor as a fashion model of distinguishedmerit and ability has severalresponsibilities, as described more fullyin this subpart and subpart I,including—

(1) The employer shall submit acompleted labor condition application(LCA) on Form ETA 9035 in the mannerprescribed in § 655.720. By completingand signing the LCA, the employeragrees to several attestations regardingan employer’s responsibilities,including the wages, workingconditions, and benefits to be provided

to the H–1B nonimmigrants (8 U.S.C.1182(n)(1)); these attestations arespecifically identified and incorporatedby reference in the LCA, as well as beingset forth in full on Form ETA 9035CP.The LCA contains additionalattestations for certain H–1B-dependentemployers and employers found to havewillfully violated the H–1B programrequirements; these attestations imposecertain obligations to recruit U.S.workers, to offer positions to U. S.workers who are equally or betterqualified than the H–1Bnonimmigrant(s), and to avoid thedisplacement of U.S. workers (either inthe employer’s workforce or in theworkforce of a second employer withwhom the H–1B nonimmigrant(s) isplaced with indicia of employment bythat employer (8 U.S.C. 1182(n)(1)(E)–(G)). These additional attestations arespecifically identified and incorporatedby reference in the LCA, as well as beingset forth in full on Form ETA 9035CP.If the LCA is certified by ETA, a copywill be returned to the employer.

(2) The employer shall make the LCAand necessary supportingdocumentation (as identified under thissubpart) available for publicexamination at the employer’s principalplace of business in the U.S. or at theplace of employment within oneworking day after the date on which theLCA is filed with ETA.

(3) The employer then may submit acopy of the certified LCA to INS with acompleted petition (INS Form I–129)requesting H–1B classification.

(4) The employer shall not allow thenonimmigrant worker to begin workuntil INS grants the workerauthorization to work in the UnitedStates for that employer or, in the caseof a nonimmigrant who is already in H–1B status and is changing employmentto another H–1B employer, until thenew employer files a petition supportedby a certified LCA.

(5) The employer shall developsufficient documentation to meet itsburden of proof with respect to thevalidity of the statements made in itsLCA and the accuracy of informationprovided, in the event that suchstatement or information is challenged.The employer shall also maintain suchdocumentation at its principal place ofbusiness in the U.S. and shall makesuch documentation available to DOLfor inspection and copying uponrequest.




§ 655.710 What is the procedure for filinga complaint?

(a) Except as provided in paragraph(b) of this section, complaintsconcerning misrepresentation in thelabor condition application or failure ofthe employer to meet a conditionspecified in the application shall befiled with the Administrator, Wage andHour Division (Administrator), ESA,according to the procedures set forth insubpart I of this part. The Administratorshall investigate where appropriate, andafter an opportunity for a hearing, assessappropriate sanctions and penalties, asdescribed in subpart I of this part.

(b) Complaints arising under section212(n)(1)(G)(i)(II) of the INA, 8 U.S.C.1182(n)(1)(G)(i)(II), alleging failure ofthe employer to offer employment to anequally or better qualified U.S. worker,or an employer’s misrepresentationregarding such offer(s) of employment,may be filed with the Department ofJustice, 10th Street & ConstitutionAvenue, NW., Washington, DC 20530.The Department of Justice shallinvestigate where appropriate and shalltake such further action as may beappropriate under that Department’sregulations and procedures.

6. Section § 655.715 is amended torevise the definition of ‘‘Area ofintended employment’’, to add thedefinition of ‘‘Employed, employed bythe employer or employmentrelationship’’, to revise the definition of‘‘Employer’’, to revise the definition of‘‘Employment and TrainingAdministration (ETA)’’, to add thedefinition of ‘‘Office of WorkforceSecurity (OWS)’’, to revise thedefinitions of ‘‘Place of employment’’and ‘‘State Employment SecurityAgency (SESA)’’, to remove thedefinition of ‘‘United StatesEmployment Service’’, and to add thedefinition of ‘‘United States worker(U.S. worker)’’, to read as follows:

§ 655.715 Definitions.Area of intended employment means

the area within normal commutingdistance of the place (address) ofemployment where the H–1Bnonimmigrant is or will be employed.There is no rigid measure of distancewhich constitutes a normal commutingdistance or normal commuting area,because there may be widely varyingfactual circumstances among differentareas (e.g., normal commuting distancesmight be 20, 30, or 50 miles). If theplace of employment is within aMetropolitan Statistical Area (MSA) or aPrimary Metropolitan Statistical Area(PMSA), any place within the MSA orPMSA is deemed to be within normalcommuting distance of the place of

employment; however, all locationswithin a Consolidated MetropolitanStatistical Area (CMSA) will notautomatically be deemed to be withinnormal commuting distance. Theborders of MSAs and PMSAs are notcontrolling with regard to theidentification of the normal commutingarea; a location outside of an MSA orPMSA (or a CMSA) may be withinnormal commuting distance of alocation that is inside (e.g., near theborder of) the MSA or PMSA (orCMSA).* * * * *

Employed, employed by the employer,or employment relationship means theemployment relationship as determinedunder the common law, under whichthe key determinant is the putativeemployer’s right to control the meansand manner in which the work isperformed. Under the common law, ‘‘noshorthand formula or magic phrase* * * can be applied to find the answer* * *. [A]ll of the incidents of therelationship must be assessed andweighed with no one factor beingdecisive.’’ NLRB v. United Ins. Co. ofAmerica, 390 U.S. 254, 258 (1968).

Employer means a person, firm,corporation, contractor, or otherassociation or organization in theUnited States which has an employmentrelationship with H–1B nonimmigrantsand/or U.S. worker(s). The person, firm,contractor, or other association ororganization in the United States whichfiles a petition on behalf of an H–1Bnonimmigrant is deemed to be theemployer of that H–1B nonimmigrant.

Employment and TrainingAdministration (ETA) means the agencywithin the Department which includesthe Office of Workforce Security (OWS).* * * * *

Office of Workforce Security (OWS)means the agency of the Departmentwhich is charged with administering thenational system of public employmentoffices.

Place of employment means theworksite or physical location where thework actually is performed.

(1) The term does not include anylocation where either of the followingcriteria—paragraph (1)(i) or (ii)—issatisfied:

(i) Employee developmental activity.An H–1B worker who is stationed andregularly works at one location maytemporarily be at another location for aparticular individual or employer-required developmental activity such asa management conference, a staffseminar, or a formal training course(other than ‘‘on-the-job-training’’ at alocation where the employee is

stationed and regularly works). For theH–1B worker participating in suchactivities, the location of the activitywould not be considered a ‘‘place ofemployment’’ or ‘‘worksite,’’ and thatworker’s presence at such location—whether owned or controlled by theemployer or by a third party—would notinvoke H–1B program requirementswith regard to that employee at thatlocation. However, if the employer usesH–1B nonimmigrants as instructors orresource or support staff whocontinuously or regularly perform theirduties at such locations, the locationswould be ‘‘places of employment’’ or‘‘worksites’’ for any such employeesand, thus, would be subject to H–1Bprogram requirements with regard tothose employees.

(ii) Particular worker’s job functions.The nature and duration of an H–1Bnonimmigrant’s job functions maynecessitate frequent changes of locationwith little time spent at any onelocation. For such a worker, a locationwould not be considered a ‘‘place ofemployment’’ or ‘‘worksite’’ if thefollowing three requirements (i.e.,paragraphs (1)(ii)(A) through (C)) are allmet—

(A) The nature and duration of the H–1B worker’s job functions mandates his/her short-time presence at the location.For this purpose, either:

(1) The H–1B nonimmigrant’s jobmust be peripatetic in nature, in that thenormal duties of the worker’soccupation (rather than the nature of theemployer’s business) requires frequenttravel (local or non-local) from locationto location; or

(2) The H–1B worker’s duties mustrequire that he/she spend most worktime at one location but occasionallytravel for short periods to work at otherlocations; and

(B) The H–1B worker’s presence at thelocations to which he/she travels fromthe ‘‘home’’ worksite is on a casual,short-term basis, which can be recurringbut not excessive (i.e., not exceedingfive consecutive workdays for any onevisit by a peripatetic worker, or 10consecutive workdays for any one visitby a worker who spends most work timeat one location and travels occasionallyto other locations); and

(C) The H–1B nonimmigrant is not atthe location as a ‘‘strikebreaker’’ (i.e.,the H–1B nonimmigrant is notperforming work in an occupation inwhich workers are on strike or lockout).

(2) Examples of ‘‘non-worksite’’locations based on worker’s jobfunctions: A computer engineer sent outto customer locations to ‘‘troubleshoot’’complaints regarding softwaremalfunctions; a sales representative



making calls on prospective customersor established customers within a‘‘home office’’ sales territory; a managermonitoring the performance of out-stationed employees; an auditorproviding advice or conducting reviewsat customer facilities; a physicaltherapist providing services to patientsin their homes within an area ofemployment; an individual making acourt appearance; an individuallunching with a customer representativeat a restaurant; or an individualconducting research at a library.

(3) Examples of ‘‘worksite’’ locationsbased on worker’s job functions: Acomputer engineer who works onprojects or accounts at differentlocations for weeks or months at a time;a sales representative assigned on acontinuing basis in an area away fromhis/her ‘‘home office;’’ an auditor whoworks for extended periods at thecustomer’s offices; a physical therapistwho ‘‘fills in’’ for full-time employees ofhealth care facilities for extendedperiods; or a physical therapist whoworks for a contractor whose business isto provide staffing on an ‘‘as needed’’basis at hospitals, nursing homes, orclinics.

(4) Whenever an H–1B workerperforms work at a location which is nota ‘‘worksite’’ (under the criterion inparagraph (1)(i) or (1)(ii) of thisdefinition), that worker’s ‘‘place ofemployment’’ or ‘‘worksite’’ forpurposes of H–1B obligations is theworker’s home station or regular worklocation. The employer’s obligationsregarding notice, prevailing wage andworking conditions are focused on thehome station ‘‘place of employment’’rather than on the above-describedlocation(s) which do not constituteworksite(s) for these purposes. However,whether or not a location is consideredto be a ‘‘worksite’’/’’place ofemployment’’ for an H–1Bnonimmigrant, the employer is requiredto provide reimbursement to the H–1Bnonimmigrant for expenses incurred intraveling to that location on theemployer’s business, since suchexpenses are considered to be ordinarybusiness expenses of employers(§§ 655.731(c)(7)(iii)(C); 655.731(c)(9)).In determining the worker’s ‘‘place ofemployment’’ or ‘‘worksite,’’ theDepartment will look carefully atsituations which appear to be contrivedor abusive; the Department wouldseriously question any situation wherethe H–1B nonimmigrant’s purported‘‘place of employment’’ is a locationother than where the worker spendsmost of his/her work time, or where thepurported ‘‘area of employment’’ doesnot include the location(s) where the

worker spends most of his/her worktime.* * * * *

State Employment Security Agency(SESA) means the State agencydesignated under section 4 of theWagner-Peyser Act to cooperate withOWS in the operation of the nationalsystem of public employment offices.* * * * *

United States worker (‘‘U.S. worker’’)means an employee who is either

(1) A citizen or national of the UnitedStates, or

(2) An alien who is lawfully admittedfor permanent residence in the UnitedStates, is admitted as a refugee undersection 207 of the INA, is grantedasylum under section 208 of the INA, oris an immigrant otherwise authorized(by the INA or by the Attorney General)to be employed in the United States.


§ 655.720 Where are labor conditionapplications to be filed and processed?

(a) Facsimile transmission (FAX). Ifthe employer submits the LCA (FormETA 9035) by FAX, the transmissionshall be made to 1–800–397–0478(regardless of the intended place ofemployment for the H–1Bnonimmigrant(s)). (Note to paragraph(a): The employer submitting an LCAvia FAX shall not use the FAX numberassigned to an ETA regional office, butshall use only the 1–800–397–0478number designated for this purpose.)The cover pages to Form ETA 9035 (i.e.,Form ETA 9035CP) should not beFAXed with the Form ETA 9035.

(b) U.S. Mail. If the employer submitsthe LCA (Form ETA 9035) by U.S. Mail,the LCA shall be sent to the ETA servicecenter at the following address: ETAApplication Processing Center, P.O. Box13640, Philadelphia PA 19101.

(c) All matters other than theprocessing of LCAs (e.g., prevailingwage challenges by employers) arewithin the jurisdiction of the RegionalCertifying Officers in the ETA regionaloffices identified in § 655.721.

8. Section 655.721 is added to read asfollows:

§ 655.721 What are the addresses of theETA regional offices which handle mattersother than processing LCAs?

(a) The Regional Certifying Officers inthe ETA regional offices are responsiblefor administrative matters under thissubpart other than the processing ofLCAs (e.g., prevailing wage challengesby employers). (Note to paragraph (a):LCAs are filed by employers andprocessed by ETA only in accordancewith § 655.720.)

(b) The ETA regional offices withresponsibility for labor certificationprograms are—

(1) Region I Boston (Connecticut,Maine, Massachusetts, New Hampshire,Rhode Island, and Vermont): J.F.K.Federal Building, Room E–350, Boston,Massachusetts 02203. Telephone: 617–565–4446.

(2) Region I New York (New York,New Jersey, Puerto Rico, and the VirginIslands): 201 Varick Street, Room 755,New York, New York 10014. Telephone:212–337–2186.

(3) Region II ( Delaware, District ofColumbia, Maryland, Pennsylvania,Virginia, and West Virginia): Suite 825East, The Curtis Center, 170 S.Independence Mall West, Philadelphia,Pennsylvania 19106–3315. Telephone:215–861–5250.

(4) Region III (Alabama, Florida,Georgia, Kentucky, Mississippi, NorthCarolina, South Carolina, andTennessee): Atlanta Federal Ctr., 100Alabama St., NW, Suite 6M–12, Atlanta,Georgia 30303. Telephone: 404–562–2115.

(5) Region IV (Arkansas, Colorado,Louisiana, Montana, New Mexico, NorthDakota, Oklahoma, South Dakota, Texas,Utah, and Wyoming): 525 Griffin Street,Room 317, Dallas, Texas 75202.Telephone: 214–767–4989.

(6) Region V (Illinois, Indiana, Iowa,Kansas, Michigan, Minnesota, Missouri,Nebraska, Ohio, and Wisconsin): 230South Dearborn Street, Room 605,Chicago, Illinois 60604. Telephone:312–353–1550.

(7) Region VI (Alaska, Arizona,California, Guam, Hawaii, Idaho,Nevada, Oregon, and Washington): P.O.Box 193767, San Francisco, California94119–3767. Telephone: 415–975–4601.

(c) The ETA website at http://ows.doleta.gov will be updated to reflectany changes in the informationcontained in this section concerning theETA regional offices.


§ 655.730 What is the process for filing alabor condition application?

(a) Who must submit labor conditionapplications? An employer, or theemployer’s authorized agent orrepresentative, which meets thedefinition of ‘‘employer’’ set forth in§ 655.715 and intends to employ an H–1B nonimmigrant in a specialtyoccupation or as a fashion model ofdistinguished merit and ability shallsubmit an LCA to the Department.

(b) Where and when is an LCA to besubmitted? An LCA shall be submittedby the employer to ETA in accordancewith the procedure prescribed in



§ 655.720 no earlier than six monthsbefore the beginning date of the periodof intended employment shown on theLCA. It is the employer’s responsibilityto ensure that a complete and accurateLCA is received by ETA. Incomplete orobviously inaccurate LCAs will not becertified by ETA. ETA shall process allLCAs sequentially upon receiptregardless of the method used by theemployer to submit the LCA (i.e., eitherFAX or U.S. Mail as prescribed in§ 655.720) and shall make adetermination to certify or not certifythe LCA within seven working days ofthe date the LCA is received and datestamped by ETA. If the LCA issubmitted by FAX, the LCA containingthe original signature shall bemaintained by the employer as set forthat § 655.760(a)(1).

(c) What is to be submitted? FormETA 9035.

(1) General. One completed and datedoriginal Form ETA 9035 bearing theemployer’s original signature (or that ofthe employer’s authorized agent orrepresentative) shall be submitted by theemployer to ETA in accordance with theprocedure prescribed in § 655.720. Thesignature of the employer or itsauthorized agent or representative onForm ETA 9035 acknowledges theemployer’s agreement to the laborcondition statements (attestations),which are specifically identified inForm ETA 9035 as well as set forth inthe cover pages (Form ETA 9035CP) andincorporated by reference in Form ETA9035. The labor condition statements(attestations) are described in detail in§§ 655.731 through 655.735, and655.736 through 655.739 (if applicable).Copies of Form ETA 9035 and coverpages Form ETA 9035CP are availablefrom ETA regional offices and on theETA website at http://ows.doleta.gov.Each Form ETA 9035 shall identify theoccupational classification for whichthe LCA is being submitted and shallstate:

(i) The occupation, by Dictionary ofOccupational Titles (DOT) Three-DigitOccupational Groups code and by theemployer’s own title for the job;

(ii) The number of H–1Bnonimmigrants sought;

(iii) The gross wage rate to be paid toeach H–1B nonimmigrant, expressed onan hourly, weekly, biweekly, monthly orannual basis;

(iv) The starting and ending dates ofthe H–1B nonimmigrants’ employment;

(v) The place(s) of intendedemployment;

(vi) The prevailing wage for theoccupation in the area of intendedemployment and the specific source(e.g., name of published survey) relied

upon by the employer to determine thewage. If the wage is obtained from aSESA, the appropriate box must bechecked and the wage must be stated;the source for a wage obtained from asource other than a SESA must beidentified along with the wage; and

(vii) The employer’s status as towhether or not the employer is H–1B-dependent and/or a willful violator,and, if the employer is H–1B-dependentand/or a willful violator, whether theemployer will use the application onlyin support of petitions for exempt H–1Bnonimmigrants.

(2) Multiple positions and/or places ofemployment. The employer shall file aseparate LCA for each occupation inwhich the employer intends to employone or more H–1B nonimmigrants, butthe LCA may cover more than oneintended position (employmentopportunity) within that occupation. Allintended places of employment shall beidentified on the LCA; the employermay file one or more additional LCAs toidentify additional places ofemployment.

(3) Full-time and part-time jobs. Theposition(s) covered by the LCA may beeither full-time or part-time; full-timeand part-time positions cannot becombined on a single LCA.

(d) What attestations does the LCAcontain? An employer’s LCA shallcontain the labor condition statementsreferenced in §§ 655.731 through655.734, and § 655.736 through 655.739(if applicable), which provide that noindividual may be admitted or providedstatus as an H–1B nonimmigrant in anoccupational classification unless theemployer has filed with the Secretary anapplication stating that:

(1) The employer is offering and willoffer during the period of authorizedemployment to H–1B nonimmigrants noless than the greater of the followingwages (such offer to include benefitsand eligibility for benefits provided ascompensation for services, which are tobe offered to the nonimmigrants on thesame basis and in accordance with thesame criteria as the employer offerssuch benefits to U.S. workers):

(i) The actual wage paid to theemployer’s other employees at theworksite with similar experience andqualifications for the specificemployment in question; or

(ii) The prevailing wage level for theoccupational classification in the area ofintended employment;

(2) The employer will provideworking conditions for suchnonimmigrants that will not adverselyaffect the working conditions of workerssimilarly employed (including benefitsin the nature of working conditions,

which are to be offered to thenonimmigrants on the same basis and inaccordance with the same criteria as theemployer offers such benefits to U.S.workers);

(3) There is not a strike or lockout inthe course of a labor dispute in theoccupational classification at the placeof employment;

(4) The employer has provided andwill provide notice of the filing of thelabor condition application to:

(i)(A) The bargaining representative ofthe employer’s employees in theoccupational classification in the area ofintended employment for which the H–1B nonimmigrants are sought, in themanner described in § 655.734(a)(1)(i);or

(B) If there is no such bargainingrepresentative, affected workers byproviding electronic notice of the filingof the LCA or by posting notice inconspicuous locations at the place(s) ofemployment, in the manner describedin § 655.734(a)(1)(ii); and

(ii) H–1B nonimmigrants by providinga copy of the LCA to each H–1Bnonimmigrant at the time that suchnonimmigrant actually reports to work,in the manner described in§ 655.734(a)(2).

(5) The employer has determined itsstatus concerning H–1B-dependencyand/or willful violator (as described in§ 655.736), has indicated such status,and if either such status is applicable tothe employer, has indicated whether theLCA will be used only for exempt H–1Bnonimmigrant(s), as described in§ 655.737.

(6) The employer has provided theinformation about the occupationrequired in paragraph (c) of this section.

(e) Change in employer’s corporatestructure or identity. (1) Where anemployer corporation changes itscorporate structure as the result of anacquisition, merger, ‘‘spin-off,’’ or othersuch action, the new employing entityis not required to file new LCAs and H–1B petitions with respect to the H–1Bnonimmigrants transferred to theemploy of the new employing entity(regardless of whether there is a changein the Employer Identification Number(EIN)), provided that the new employingentity maintains in its records a list ofthe H–1B nonimmigrants transferred tothe employ of the new employing entity,and maintains in the public accessfile(s) (see § 655.760) a documentcontaining all of the following:

(i) Each affected LCA number and itsdate of certification;

(ii) A description of the newemploying entity’s actual wage systemapplicable to H–1B nonimmigrant(s)



who become employees of the newemploying entity;

(iii) The employer identificationnumber (EIN) of the new employingentity (whether or not different fromthat of the predecessor entity); and

(iv) A sworn statement by anauthorized representative of the newemploying entity expresslyacknowledging such entity’s assumptionof all obligations, liabilities andundertakings arising from or underattestations made in each certified andstill effective LCA filed by thepredecessor entity. Unless suchstatement is executed and madeavailable in accordance with thisparagraph, the new employing entityshall not employ any of the predecessorentity’s H–1B nonimmigrants withoutfiling new LCAs and petitions for suchnonimmigrants. The new employingentity’s statement shall include suchentity’s explicit agreement to:

(A) Abide by the DOL’s H–1Bregulations applicable to the LCAs;

(B) Maintain a copy of the statementin the public access file (see § 655.760);and

(C) Make the document available toany member of the public or theDepartment upon request.

(2) Notwithstanding the provisions ofparagraph (e)(1) of this section, the newemploying entity must file new LCA(s)and H–1B petition(s) when it hires anynew H–1B nonimmigrant(s) or seeksextension(s) of H–1B status for existingH–1B nonimmigrant(s). In other words,the new employing entity may notutilize the predecessor entity’s LCA(s) tosupport the hiring or extension of anyH–1B nonimmigrant after the change incorporate structure.

(3) A change in an employer’s H–1B-dependency status which results fromthe change in the corporate structurehas no effect on the employer’sobligations with respect to its currentH–1B nonimmigrant employees.However, the new employing entityshall comply with § 655.736 concerningH–1B-dependency and/or willful-violator status and § 655.737 concerningexempt H–1B nonimmigrants, in theevent that such entity seeks to hire newH–1B nonimmigrant(s) or to extend theH–1B status of existing H–1Bnonimmigrants. (See § 655.736(d)(6).)


§ 655.731 What is the first LCArequirement, regarding wages?

An employer seeking to employ H–1Bnonimmigrants in a specialtyoccupation or as a fashion model ofdistinguished merit and ability shallstate on Form ETA 9035 that it will pay

the H–1B nonimmigrant the requiredwage rate.

(a) Establishing the wage requirement.The first LCA requirement shall besatisfied when the employer signs FormETA 9035 attesting that, for the entireperiod of authorized employment, therequired wage rate will be paid to theH–1B nonimmigrant(s); that is, that thewage shall be the greater of the actualwage rate (as specified in paragraph(a)(1) of this section) or the prevailingwage (as specified in paragraph (a)(2) ofthis section). The wage requirementincludes the employer’s obligation tooffer benefits and eligibility for benefitsprovided as compensation for servicesto H–1B nonimmigrants on the samebasis, and in accordance with the samecriteria, as the employer offers to U.S.workers.

(1) The actual wage is the wage ratepaid by the employer to all otherindividuals with similar experience andqualifications for the specificemployment in question. In determiningsuch wage level, the following factorsmay be considered: Experience,qualifications, education, jobresponsibility and function, specializedknowledge, and other legitimatebusiness factors. ‘‘Legitimate businessfactors,’’ for purposes of this section,means those that it is reasonable toconclude are necessary because theyconform to recognized principles or canbe demonstrated by accepted rules andstandards. Where there are otheremployees with substantially similarexperience and qualifications in thespecific employment in question—i.e.,they have substantially the same dutiesand responsibilities as the H–1Bnonimmigrant—the actual wage shall bethe amount paid to these otheremployees. Where no such otheremployees exist at the place ofemployment, the actual wage shall bethe wage paid to the H–1Bnonimmigrant by the employer. Wherethe employer’s pay system or scaleprovides for adjustments during theperiod of the LCA—e.g., cost of livingincreases or other periodic adjustments,or the employee moves to a moreadvanced level in the sameoccupation—such adjustments shall beprovided to similarly employed H–1Bnonimmigrants (unless the prevailingwage is higher than the actual wage).

(2) The prevailing wage for theoccupational classification in the area ofintended employment must bedetermined as of the time of filing theapplication. The employer shall base theprevailing wage on the best informationas of the time of filing the application.Except as provided in paragraph (a)(3)of this section, the employer is not

required to use any specificmethodology to determine theprevailing wage and may utilize a SESA,an independent authoritative source, orother legitimate sources of data. One ofthe following sources shall be used toestablish the prevailing wage:

(i) A wage determination for theoccupation and area issued under one ofthe following statutes (which shall beavailable through the SESA):

(A) The Davis-Bacon Act, 40 U.S.C.276a et seq. (see also 29 CFR part 1), or

(B) The McNamara-O’Hara ServiceContract Act, 41 U.S.C. 351 et seq.(SCA) (see also 29 CFR part 4). Thefollowing provisions apply to the use ofthe SCA wage rate as the prevailingwage:

(1) Where an SCA wage determinationfor an occupational classification in thecomputer industry states a rate of$27.63, that rate will not be issued bythe SESA and may not be used by theemployer as the prevailing wage; thatrate does not represent the actualprevailing wage but, instead, is reportedby the Wage and Hour Division in theSCA determination merely as anartificial ‘‘cap’’ in the SCA-requiredwage that results from an SCAexemption provision (see 41 U.S.C.357(b); 29 CFR 541.3). In suchcircumstances, the SESA and theemployer must consult another sourcefor wage information (e.g., Bureau ofLabor Statistics’ OccupationalEmployment Statistics Survey).

(2) Except as provided in paragraph(a)(2)(i)(B)(1) of this section, forpurposes of the determination of the H–1B prevailing wage for an occupationalclassification through the use of an SCAwage determination, it is irrelevantwhether a worker is employed on acontract subject to the SCA or whetherthe worker would be exempt from theSCA through application of the SCA/FLSA ‘‘professional employee’’exemption test (i.e., duties andcompensation; see 29 CFR 4.156; 541.3).Thus, in issuing the SCA wage rate asthe prevailing wage determination forthe occupational classification, theSESA will not consider questions ofemployee exemption, and in anenforcement action, the Department willconsider the SCA wage rate to be theprevailing wage without regard towhether any particular H–1Bemployee(s) could be exempt from thatwage as SCA contract workers under theSCA/FLSA exemption. An employerwho employs H–1B employee(s) toperform services under an SCA-coveredcontract may find that the H–1Bemployees are required to be paid theSCA rate as the H–1B prevailing wageeven though non-H–1B employees



performing the same services may beexempt from the SCA.

(ii) A union contract which wasnegotiated at arms-length between aunion and the employer, which containsa wage rate applicable to theoccupation; or

(iii) If the job opportunity is in anoccupation which is not covered byparagraph (a)(2)(i) or (ii) of this section,the prevailing wage shall be theweighted average rate of wages, that is,the rate of wages to be determined, tothe extent feasible, by adding the wagespaid to workers similarly employed inthe area of intended employment anddividing the total by the number of suchworkers. Since it is not always feasibleto determine such an average rate ofwages with exact precision, the wage setforth in the application shall beconsidered as meeting the prevailingwage standard if it is within five percentof the average rate of wages. Seeparagraph (c) of this section, regardingpayment of required wages. See alsoparagraph (d)(4) of this section,regarding enforcement. The prevailingwage rate under this paragraph (a)(2)(iii)shall be based on the best informationavailable. The Department believes thatthe following prevailing wage sourcesare, in order of priority, the mostaccurate and reliable:

(A) A SESA Determination. Uponreceipt of a written request for aprevailing wage determination, theSESA will determine whether theoccupation is covered by a Davis-Baconor Service Contract Act wagedetermination, and, if not, whether ithas on file current prevailing wageinformation for the occupation. Thisinformation will be provided by theSESA to the employer in writing in atimely manner. Where the prevailingwage is not immediately available, theSESA will determine the prevailingwage using the methods outlined at 20CFR 656.40 and other administrativeguidelines or regulations issued by ETA.The SESA shall specify the validityperiod of the prevailing wage, whichshall in no event be for less than 90 daysor more than one year from the date ofthe SESA’s issuance of thedetermination.

(1) An employer who chooses toutilize a SESA prevailing wagedetermination shall file the laborcondition application within thevalidity period of the prevailing wage asspecified on the determination. Once anemployer obtains a prevailing wagedetermination from the SESA and filesan LCA supported by that prevailingwage determination, the employer isdeemed to have accepted the prevailingwage determination (as to the amount of

the wage) and thereafter may not contestthe legitimacy of the prevailing wagedetermination through the EmploymentService complaint system or in aninvestigation or enforcement action.Prior to filing the LCA, the employermay challenge a SESA prevailing wagedetermination through the EmploymentService complaint system, by filing acomplaint with the SESA. See subpart Eof 20 CFR part 658. Employers whichchallenge a SESA prevailing wagedetermination must obtain a final rulingfrom the Employment Service complaintsystem prior to filing an LCA based onsuch determination. In any challenge,the SESA shall not divulge anyemployer wage data which wascollected under the promise ofconfidentiality.

(2) If the employer is unable to waitfor the SESA to produce the requestedprevailing wage determination for theoccupation in question, or for theEmployment Service complaint systemprocess to be completed, the employermay rely on other legitimate sources ofavailable wage information in filing theLCA, as set forth in paragraph(a)(2)(iii)(B) and (C) of this section. If theemployer later discovers, upon receiptof a prevailing wage determination fromthe SESA, that the information reliedupon produced a wage that was belowthe prevailing wage for the occupationin the area of intended employment andthe employer was paying below theSESA-determined wage, no wageviolation will be found if the employerretroactively compensates the H–1Bnonimmigrant(s) for the differencebetween the wage paid and theprevailing wage, within 30 days of theemployer’s receipt of the SESAdetermination.

(3) In all situations where theemployer obtains the prevailing wagedetermination from the SESA, theDepartment will accept that prevailingwage determination as correct (as to theamount of the wage) and will notquestion its validity where the employerhas maintained a copy of the SESAprevailing wage determination. Acomplaint alleging inaccuracy of a SESAprevailing wage determination, in suchcases, will not be investigated.

(B) An independent authoritativesource. The employer may use anindependent authoritative wage sourcein lieu of a SESA prevailing wagedetermination. The independentauthoritative source survey must meetall the criteria set forth in paragraph(b)(3)(iii)(B) of this section.

(C) Another legitimate source of wageinformation. The employer may rely onother legitimate sources of wage data toobtain the prevailing wage. The other

legitimate source survey must meet allthe criteria set forth in paragraph(b)(3)(iii)(C) of this section. Theemployer will be required todemonstrate the legitimacy of the wagein the event of an investigation.

(iv) For purposes of this section,‘‘similarly employed’’ means ‘‘havingsubstantially comparable jobs in theoccupational classification in the area ofintended employment,’’ except that ifno such workers are employed byemployers other than the employerapplicant in the area of intendedemployment, ‘‘similarly employed’’means:

(A) Having jobs requiring asubstantially similar level of skillswithin the area of intendedemployment; or

(B) If there are no substantiallycomparable jobs in the area of intendedemployment, having substantiallycomparable jobs with employers outsideof the area of intended employment.

(v) A prevailing wage determinationfor LCA purposes made pursuant to thissection shall not permit an employer topay a wage lower than that requiredunder any other applicable Federal,State or local law.

(vi) Where a range of wages is paid bythe employer to individuals in anoccupational classification or amongindividuals with similar experience andqualifications for the specificemployment in question, a range isconsidered to meet the prevailing wagerequirement so long as the bottom of thewage range is at least the prevailingwage rate.

(vii) The employer shall enter theprevailing wage on the LCA in the formin which the employer will pay thewage (i.e., either a salary or an hourlyrate), except that in all cases theprevailing wage must be expressed as anhourly wage if the H–1B nonimmigrantwill be employed part-time. Where anemployer obtains a prevailing wagedetermination (from any of the sourcesidentified in paragraph (a)(2)(i) through(iii) of this section) that is expressed asan hourly rate, the employer mayconvert this determination to a salary bymultiplying the hourly rate by 2080.Conversely, where an employer obtainsa prevailing wage (from any of thesesources) that is expressed as a salary,the employer may convert thisdetermination to an hourly rate bydividing the salary by 2080.

(viii) In computing the prevailingwage for a job opportunity in anoccupational classification in an area ofintended employment in the case of anemployee of an institution of highereducation or an affiliated or relatednonprofit entity , a nonprofit research



organization, or a Governmentalresearch organization as these terms aredefined in 20 CFR 656.40(c), theprevailing wage level shall only takeinto account employees at suchinstitutions and organizations in thearea of intended employment.

(ix) An employer may file more thanone LCA for the same occupationalclassification in the same area ofemployment and, in suchcircumstances, the employer could haveH–1B employees in the sameoccupational classification in the samearea of employment, brought into theU.S. (or accorded H–1B status) based onpetitions approved pursuant to differentLCAs (filed at different times) withdifferent prevailing wagedeterminations. Employers are advisedthat the prevailing wage rate as to anyparticular H–1B nonimmigrant isprescribed by the LCA which supportsthat nonimmigrant’s H–1B petition. Theemployer is required to obtain theprevailing wage at the time that the LCAis filed (see paragraph (a)(2) of thissection). The LCA is valid for the periodcertified by ETA, and the employermust satisfy all the LCA’s requirements(including the required wage whichencompasses both prevailing and actualwage rates) for as long as any H–1Bnonimmigrants are employed pursuantto that LCA (§ 655.750). Where newnonimmigrants are employed pursuantto a new LCA, that new LCA prescribesthe employer’s obligations as to thosenew nonimmigrants. The prevailingwage determination on the later/subsequent LCA does not ‘‘relate back’’to operate as an ‘‘update’’ of theprevailing wage for the previously-filedLCA for the same occupationalclassification in the same area ofemployment. However, employers arecautioned that the actual wagecomponent to the required wage may, asa practical matter, eliminate any wage-payment differentiation among H–1Bemployees based on different prevailingwage rates stated in applicable LCAs.Every H–1B nonimmigrant is to be paidin accordance with the employer’sactual wage system, and thus to receiveany pay increases which that systemprovides.

(3) Once the prevailing wage rate isestablished, the H–1B employer thenshall compare this wage with the actualwage rate for the specific employmentin question at the place of employmentand must pay the H–1B nonimmigrantat least the higher of the two wages.

(b) Documentation of the wagestatement. (1) The employer shalldevelop and maintain documentationsufficient to meet its burden of provingthe validity of the wage statement

required in paragraph (a) of this sectionand attested to on Form ETA 9035. Thedocumentation shall be made availableto DOL upon request. Documentationshall also be made available for publicexamination to the extent required by§ 655.760. The employer shall alsodocument that the wage rate(s) paid toH–1B nonimmigrant(s) is(are) no lessthan the required wage rate(s). Thedocumentation shall includeinformation about the employer’s wagerate(s) for all other employees for thespecific employment in question at theplace of employment, beginning withthe date the labor condition applicationwas submitted and continuingthroughout the period of employment.The records shall be retained for theperiod of time specified in § 655.760.The payroll records for each suchemployee 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:(A) The employee is paid on other

than a salary basis (e.g., hourly, piece-rate; commission); or

(B) With respect only to H–1Bnonimmigrants, the worker is a part-time employee (whether paid a salary oran hourly rate).

(vi) Total additions to or deductionsfrom pay each pay period, by employee;and

(vii) Total wages paid each payperiod, date of pay and pay periodcovered by the payment, by employee.

(viii) Documentation of offer ofbenefits and eligibility for benefitsprovided as compensation for serviceson the same basis, and in accordancewith the same criteria, as the employeroffers to U.S. workers (see paragraph(c)(3) of this section):

(A) A copy of any document(s)provided to employees describing thebenefits that are offered to employees,the eligibility and participation rules,how costs are shared, etc. (e.g.,summary plan descriptions, employeehandbooks, any special or employee-specific notices that might be sent);

(B) A copy of all benefit plans or otherdocumentation describing benefit plansand any rules the employer may havefor differentiating benefits amonggroups of workers;

(C) Evidence as to what benefits areactually provided to U.S. workers andH–1B nonimmigrants, includingevidence of the benefits selected ordeclined by employees whereemployees are given a choice ofbenefits;

(D) For multinational employers whochoose to provide H–1B nonimmigrantswith ‘‘home country’’ benefits, evidenceof the benefits provided to thenonimmigrant before and after he/shewent to the United States. See paragraph(c)(3)(iii)(C) of this section.

(2) Actual wage. In addition to payrolldata required by paragraph (b)(1) of thissection (and also by the Fair LaborStandards Act), the employer shallretain documentation specifying thebasis it used to establish the actualwage. The employer shall show how thewage set for the H–1B nonimmigrantrelates to the wages paid by theemployer to all other individuals withsimilar experience and qualifications forthe specific employment in question atthe place of employment. Whereadjustments are made in the employer’spay system or scale during the validityperiod of the LCA, the employer shallretain documentation explaining thechange and clearly showing that, aftersuch adjustments, the wages paid to theH–1B nonimmigrant are at least thegreater of the adjusted actual wage orthe prevailing wage for the occupationand area of intended employment.

(3) Prevailing wage. The employeralso shall retain documentationregarding its determination of theprevailing wage. This sourcedocumentation shall not be submitted toETA with the labor conditionapplication, but shall be retained at theemployer’s place of business for thelength of time required in § 655.760(c).Such documentation shall consist of thedocumentation described in paragraph(b)(3)(i), (ii), or (iii) of this section andthe documentation described inparagraph (b)(1) of this section.

(i) If the employer used a wagedetermination issued pursuant to theprovisions of the Davis-Bacon Act, 40U.S.C. 276a et seq. (see 29 CFR part 1),or the McNamara-O’Hara ServiceContract Act, 41 U.S.C. 351 et seq. (see29 CFR part 4), the documentation shallinclude a copy of the determinationshowing the wage rate for theoccupation in the area of intendedemployment.

(ii) If the employer used an applicablewage rate from a union contract whichwas negotiated at arms-length between aunion and the employer, thedocumentation shall include an excerptfrom the union contract showing thewage rate(s) for the occupation.

(iii) If the employer did not use awage covered by the provisions ofparagraph (b)(3)(i) or (b)(3)(ii) of thissection, the employer’s documentationshall consist of:

(A) A copy of the prevailing wagefinding from the SESA for the



occupation within the area of intendedemployment; or

(B) A copy of the prevailing wagesurvey for the occupation within thearea of intended employment publishedby an independent authoritative source.For purposes of this paragraph(b)(3)(iii)(B), a prevailing wage surveyfor the occupation in the area ofintended employment published by anindependent authoritative source shallmean a survey of wages published in abook, newspaper, periodical, loose-leafservice, newsletter, or other similarmedium, within the 24-month periodimmediately preceding the filing of theemployer’s application. Such surveyshall:

(1) Reflect the weighted average wagepaid to workers similarly employed inthe area of intended employment;

(2) Be based upon recently collecteddata—e.g., within the 24-month periodimmediately preceding the date ofpublication of the survey; and

(3) Represent the latest publishedprevailing wage finding by theindependent authoritative source for theoccupation in the area of intendedemployment; or

(C) A copy of the prevailing wagesurvey or other source data acquiredfrom another legitimate source of wageinformation that was used to make theprevailing wage determination. Forpurposes of this paragraph (b)(3)(iii)(C),a prevailing wage provided by anotherlegitimate source of such wageinformation shall be one which:

(1) Reflects the weighted average wagepaid to workers similarly employed inthe area of intended employment;

(2) Is based on the most recent andaccurate information available; and

(3) Is reasonable and consistent withrecognized standards and principles inproducing a prevailing wage.

(c) Satisfaction of required wageobligation. (1) The required wage mustbe paid to the employee, cash in hand,free and clear, when due, except thatdeductions made in accordance withparagraph (c)(9) of this section mayreduce the cash wage below the level ofthe required wage. Benefits andeligibility for benefits provided ascompensation for services must beoffered in accordance with paragraph(c)(3) of this section.

(2) ‘‘Cash wages paid,’’ for purposes ofsatisfying the H–1B required wage, shallconsist only of those payments thatmeet all the following criteria:

(i) Payments shown in the employer’spayroll records as earnings for theemployee, and disbursed to theemployee, cash in hand, free and clear,when due, except for deductions

authorized by paragraph (c)(9) of thissection;

(ii) Payments reported to the InternalRevenue Service (IRS) as the employee’searnings, with appropriate withholdingfor the employee’s tax paid to the IRS(in accordance with the InternalRevenue Code of 1986, 26 U.S.C. 1, etseq.);

(iii) Payments of the tax reported andpaid to the IRS as required by theFederal Insurance Contributions Act, 26U.S.C. 3101, et seq. (FICA). Theemployer must be able to document thatthe payments have been so reported tothe IRS and that both the employer’sand employee’s taxes have been paidexcept that when the H–1Bnonimmigrant is a citizen of a foreigncountry with which the President of theUnited States has entered into anagreement as authorized by section 233of the Social Security Act, 42 U.S.C. 433(i.e., an agreement establishing atotalization arrangement between thesocial security system of the UnitedStates and that of the foreign country),the employer’s documentation shallshow that all appropriate reports havebeen filed and taxes have been paid inthe employee’s home country.

(iv) Payments reported, and sodocumented by the employer, as theemployee’s earnings, with appropriateemployer and employee taxes paid to allother appropriate Federal, State, andlocal governments in accordance withany other applicable law.

(v) Future bonuses and similarcompensation (i.e., unpaid but to-be-paid) may be credited towardsatisfaction of the required wageobligation if their payment is assured(i.e., they are not conditional orcontingent on some event such as theemployer’s annual profits). Once thebonuses or similar compensation arepaid to the employee, they must meetthe requirements of paragraphs (c)(2)(i)through (iv) of this section (i.e.,recorded and reported as ‘‘earnings’’with appropriate taxes and FICAcontributions withheld and paid).

(3) Benefits and eligibility for benefitsprovided as compensation for services(e.g., cash bonuses; stock options; paidvacations and holidays; health, life,disability and other insurance plans;retirement and savings plans) shall beoffered to the H–1B nonimmigrant(s) onthe same basis, and in accordance withthe same criteria, as the employer offersto U.S. workers.

(i) For purposes of this section, theoffer of benefits ‘‘on the same basis, andin accordance with the same criteria’’means that the employer shall offer H–1B nonimmigrants the same benefitpackage as it offers to U.S. workers, and

may not provide more strict eligibilityor participation requirements for the H–1B nonimmigrant(s) than for similarlyemployed U.S. workers(s) (e.g., full-timeworkers compared to full-time workers;professional staff compared toprofessional staff). H–1B nonimmigrantsare not to be denied benefits on thebasis that they are ‘‘temporaryemployees’’ by virtue of theirnonimmigrant status. An employer mayoffer greater or additional benefits to theH–1B nonimmigrant(s) than are offeredto similarly employed U.S. worker(s),provided that such differing treatment isconsistent with the requirements of allapplicable nondiscrimination laws (e.g.,Title VII of the 1964 Civil Rights Act, 42U.S.C. 2000e–2000e17). Offers ofbenefits by employers shall be made ingood faith and shall result in the H–1Bnonimmigrant(s)’s actual receipt of thebenefits that are offered by the employerand elected by the H–1Bnonimmigrant(s).

(ii) The benefits received by the H–1Bnonimmigrant(s) need not be identicalto the benefits received by similarlyemployed U.S. workers(s), provided thatthe H–1B nonimmigrant is offered thesame benefits package as those workersbut voluntarily chooses to receivedifferent benefits (e.g., elects to receivecash payment rather than stock option,elects not to receive health insurancebecause of required employeecontributions, or elects to receivedifferent benefits among an array ofbenefits) or, in those instances wherethe employer is part of a multinationalcorporate operation, the benefitsreceived by the H–1B nonimmigrant areprovided in accordance with anemployer’s practice that satisfies therequirements of paragraph (c)(3)(iii)(B)or (C) of this section. In all cases,however, an employer’s practice mustcomply with the requirements of anyapplicable nondiscrimination laws (e.g.,Title VII of the 1964 Civil Rights Act, 42U.S.C. 2000e–2000e17).

(iii) If the employer is part of amultinational corporate operation (i.e.,operates in affiliation with businessentities in other countries, whether assubsidiaries or in some otherarrangement), the following threeoptions (i.e., (A), (B) or (C)) are availableto the employer with respect to H–1Bnonimmigrants who remain on the‘‘home country’’ payroll.

(A) The employer may offer the H–1Bnonimmigrant(s) benefits in accordancewith paragraphs (c)(3)(i) and (ii) of thissection.

(B) Where an H–1B nonimmigrant isin the U.S. for no more than 90consecutive calendar days, the employerduring that period may maintain the H–



1B nonimmigrant on the benefitsprovided to the nonimmigrant in his/herpermanent work station (ordinarily thehome country), and not offer thenonimmigrant the benefits that areoffered to similarly employed U.S.workers, provided that the employeraffords reciprocal benefits treatment forany U.S. workers (i.e., allows its U.S.employees, while working out of thecountry on a temporary basis away fromtheir permanent work stations in theUnited States, or while working in theUnited States on a temporary basis awayfrom their permanent work stations inanother country, to continue to receivethe benefits provided them at theirpermanent work stations). Employersare cautioned that this provision isavailable only if the employer’spractices do not constitute an evasion ofthe benefit requirements, such as wherethe H–1B nonimmigrant remains in theUnited States for most of the year, butbriefly returns to the ‘‘home country’’before any 90-day period would expire.

(C) Where an H–1B nonimmigrant isin the U.S. for more than 90 consecutivecalendar days (or from the point wherethe worker is transferred to the U.S. orit is anticipated that the worker willlikely remain in the U.S. more than 90consecutive days), the employer maymaintain the H–1B nonimmigrant on thebenefits provided in his/her homecountry (i.e., ‘‘home country benefits’’)(and not offer the nonimmigrant thebenefits that are offered to similarlyemployed U.S. workers) provided thatall of the following criteria are satisfied:

(1) The H–1B nonimmigrantcontinues to be employed in his/herhome country (either with the H–1Bemployer or with a corporate affiliate ofthe employer);

(2) The H–1B nonimmigrant isenrolled in benefits in his/her homecountry (in accordance with anyapplicable eligibility standards for suchbenefits);

(3) The benefits provided in his/herhome country are equivalent to, orequitably comparable to, the benefitsoffered to similarly employed U.S.workers (i.e., are no less advantageousto the nonimmigrant);

(4) The employer affords reciprocalbenefits treatment for any U.S. workerswhile they are working out of thecountry, away from their permanentwork stations (whether in the UnitedStates or abroad), on a temporary basis(i.e., maintains such U.S. workers on thebenefits they received at theirpermanent work stations);

(5) If the employer offers healthbenefits to its U.S. workers, theemployer offers the same plan on thesame basis to its H–1B nonimmigrants

in the United States where the employerdoes not provide the H–1Bnonimmigrant with health benefits inthe home country, or the employer’shome-country health plan does notprovide full coverage (i.e., coveragecomparable to what he/she wouldreceive at the home work station) formedical treatment in the United States;and

(6) the employer offers H–1Bnonimmigrants who are in the UnitedStates more than 90 continuous daysthose U.S. benefits which are paiddirectly to the worker (e.g., paidvacation, paid holidays, and bonuses).

(iv) Benefits provided ascompensation for services may becredited toward the satisfaction of theemployer’s required wage obligationonly if the requirements of paragraph(c)(2) of this section are met (e.g.,recorded and reported as ‘‘earnings’’with appropriate taxes and FICAcontributions withheld and paid).

(4) For salaried employees, wages willbe due in prorated installments (e.g.,annual salary divided into 26 bi-weeklypay periods, where employer pays bi-weekly) paid no less often than monthlyexcept that, in the event that theemployer intends to use some otherform of nondiscretionary payment tosupplement the employee’s regular/pro-rata pay in order to meet the requiredwage obligation (e.g., a quarterlyproduction bonus), the employer’sdocumentation of wage payments(including such supplementalpayments) must show the employer’scommitment to make such payment andthe method of determining the amountthereof, and must show unequivocallythat the required wage obligation wasmet for prior pay periods and, uponpayment and distribution of such otherpayments that are pending, will be metfor each current or future pay period.An employer that is a school or othereducational institution may apply anestablished salary practice under whichthe employer pays to H–1Bnonimmigrants and U.S. workers in thesame occupational classification anannual salary in disbursements overfewer than 12 months, provided that thenonimmigrant agrees to the compressedannual salary payments prior to thecommencement of the employment andthe application of the salary practice tothe nonimmigrant does not otherwisecause him/her to violate any conditionof his/her authorization under the INAto remain in the U.S.

(5) For hourly-wage employees, therequired wages will be due for all hoursworked and/or for any nonproductivetime (as specified in paragraph (c)(7) ofthis section) at the end of the

employee’s ordinary pay period (e.g.,weekly) but in no event less frequentlythan monthly.

(6) Subject to the standards specifiedin paragraph (c)(7) of this section(regarding nonproductive status), an H–1B nonimmigrant shall receive therequired pay beginning on the datewhen the nonimmigrant ‘‘enters intoemployment’’ with the employer.

(i) For purposes of this paragraph(c)(6), the H–1B nonimmigrant isconsidered to ‘‘enter into employment’’when he/she first makes him/herselfavailable for work or otherwise comesunder the control of the employer, suchas by waiting for an assignment,reporting for orientation or training,going to an interview or meeting with acustomer, or studying for a licensingexamination, and includes all activitiesthereafter.

(ii) Even if the H–1B nonimmigranthas not yet ‘‘entered into employment’’with the employer (as described inparagraph (c)(6)(i) of this section), theemployer that has had an LCA certifiedand an H–1B petition approved for theH–1B nonimmigrant shall pay thenonimmigrant the required wagebeginning 30 days after the date thenonimmigrant first is admitted into theU.S. pursuant to the petition, or, if thenonimmigrant is present in the UnitedStates on the date of the approval of thepetition, beginning 60 days after thedate the nonimmigrant becomes eligibleto work for the employer. For purposesof this latter requirement, the H–1Bnonimmigrant is considered to beeligible to work for the employer uponthe date of need set forth on theapproved H–1B petition filed by theemployer, or the date of adjustment ofthe nonimmigrant’s status by INS,whichever is later. Matters such as theworker’s obtaining a State license wouldnot be relevant to this determination.

(7) Wage obligation(s) for H–1Bnonimmigrant in nonproductive status.

(i) Circumstances where wages mustbe paid. If the H–1B nonimmigrant isnot performing work and is in anonproductive status due to a decisionby the employer (e.g., because of lack ofassigned work), lack of a permit orlicense, or any other reason except asspecified in paragraph (c)(7)(ii) of thissection, the employer is required to paythe salaried employee the full pro-rataamount due, or to pay the hourly-wageemployee for a full-time week (40 hoursor such other number of hours as theemployer can demonstrate to be full-time employment for hourly employees,or the full amount of the weekly salaryfor salaried employees) at the requiredwage for the occupation listed on theLCA. If the employer’s LCA carries a



designation of ‘‘part-time employment,’’the employer is required to pay thenonproductive employee for at least thenumber of hours indicated on the I–129petition filed by the employer with theINS and incorporated by reference onthe LCA. If the I–129 indicates a rangeof hours for part-time employment, theemployer is required to pay thenonproductive employee for at least theaverage number of hours normallyworked by the H–1B nonimmigrant,provided that such average is within therange indicated; in no event shall theemployee be paid for fewer than theminimum number of hours indicated forthe range of part-time employment. Inall cases the H–1B nonimmigrant mustbe paid the required wage for all hoursperforming work within the meaning ofthe Fair Labor Standards Act, 29 U.S.C.201 et seq.

(ii) Circumstances where wages neednot be paid. If an H–1B nonimmigrantexperiences a period of nonproductivestatus due to conditions unrelated toemployment which take thenonimmigrant away from his/her dutiesat his/her voluntary request andconvenience (e.g., touring the U.S.,caring for ill relative) or render thenonimmigrant unable to work (e.g.,maternity leave, automobile accidentwhich temporarily incapacitates thenonimmigrant), then the employer shallnot be obligated to pay the requiredwage rate during that period, providedthat such period is not subject topayment under the employer’s benefitplan or other statutes such as the Familyand Medical Leave Act (29 U.S.C. 2601et seq.) or the Americans withDisabilities Act (42 U.S.C. 12101 etseq.). Payment need not be made if therehas been a bona fide termination of theemployment relationship. INSregulations require the employer tonotify the INS that the employmentrelationship has been terminated so thatthe petition is canceled (8 CFR214.2(h)(11)), and require the employerto provide the employee with paymentfor transportation home under certaincircumstances (8 CFR214.2(h)(4)(iii)(E)).

(8) If the employee works in anoccupation other than that identified onthe employer’s LCA, the employer’srequired wage obligation is based on theoccupation identified on the LCA, andnot on whatever wage standards may beapplicable in the occupation in whichthe employee may be working.

(9) ‘‘Authorized deductions,’’ forpurposes of the employer’s satisfactionof the H–1B required wage obligation,means a deduction from wages incomplete compliance with one of the

following three sets of criteria (i.e.,paragraph (c)(9)(i), (ii), or (iii))—

(i) Deduction which is required bylaw (e.g., income tax; FICA); or

(ii) Deduction which is authorized bya collective bargaining agreement, or isreasonable and customary in theoccupation and/or area of employment(e.g., union dues; contribution topremium for health insurance policycovering all employees; savings orretirement fund contribution for plan(s)in compliance with the EmployeeRetirement Income Security Act, 29U.S.C. 1001, et seq.), except that thededuction may not recoup a businessexpense(s) of the employer (includingattorney fees and other costs connectedto the performance of H–1B programfunctions which are required to beperformed by the employer, e.g.,preparation and filing of LCA and H–1Bpetition); the deduction must have beenrevealed to the worker prior to thecommencement of employment and, ifthe deduction was a condition ofemployment, had been clearly identifiedas such; and the deduction must bemade against wages of U.S. workers aswell as H–1B nonimmigrants (wherethere are U.S. workers); or

(iii) Deduction which meets thefollowing requirements:

(A) Is made in accordance with avoluntary, written authorization by theemployee (Note to paragraph(c)(9)(iii)(A): an employee’s mereacceptance of a job which carries adeduction as a condition of employmentdoes not constitute voluntaryauthorization, even if such conditionwere stated in writing);

(B) Is for a matter principally for thebenefit of the employee (Note toparagraph (c)(9)(iii)(B): housing andfood allowances would be considered tomeet this ‘‘benefit of employee’’standard, unless the employee is intravel status, or unless thecircumstances indicate that thearrangements for the employee’shousing or food are principally for theconvenience or benefit of the employer(e.g., employee living at worksite in ‘‘oncall’’ status));

(C) Is not a recoupment of theemployer’s business expense (e.g., toolsand equipment; transportation costswhere such transportation is an incidentof, and necessary to, the employment;living expenses when the employee istraveling on the employer’s business;attorney fees and other costs connectedto the performance of H–1B programfunctions which are required to beperformed by the employer (e.g.,preparation and filing of LCA and H–1Bpetition)). (For purposes of this section,initial transportation from, and end-of-

employment travel, to the worker’shome country shall not be considered abusiness expense.);

(D) Is an amount that does not exceedthe fair market value or the actual cost(whichever is lower) of the mattercovered (Note to paragraph (c)(9)(iii)(D):The employer must document the costand value); and

(E) Is an amount that does not exceedthe limits set for garnishment of wagesin the Consumer Credit Protection Act,15 U.S.C. 1673, and the regulations ofthe Secretary pursuant to that Act, 29CFR part 870, under whichgarnishment(s) may not exceed 25percent of an employee’s disposableearnings for a workweek.

(10) A deduction from or reduction inthe payment of the required wage is notauthorized (and is therefore prohibited)for the following purposes (i.e.,paragraphs (c)(10) (i) and (ii)):

(i) A penalty paid by the H–1Bnonimmigrant for ceasing employmentwith the employer prior to a date agreedto by the nonimmigrant and theemployer.

(A) The employer is not permitted torequire (directly or indirectly) that thenonimmigrant pay a penalty for ceasingemployment with the employer prior toan agreed date. Therefore, the employershall not make any deduction from orreduction in the payment of therequired wage to collect such a penalty.

(B) The employer is permitted toreceive bona fide liquidated damagesfrom the H–1B nonimmigrant whoceases employment with the employerprior to an agreed date. However, therequirements of paragraph (c)(9)(iii) ofthis section must be fully satisfied, ifsuch damages are to be received by theemployer via deduction from orreduction in the payment of therequired wage.

(C) The distinction betweenliquidated damages (which arepermissible) and a penalty (which isprohibited) is to be made on the basisof the applicable State law. In general,the laws of the various States recognizethat liquidated damages are amountswhich are fixed or stipulated by theparties at the inception of the contract,and which are reasonableapproximations or estimates of theanticipated or actual damage caused toone party by the other party’s breach ofthe contract. On the other hand, thelaws of the various States, in general,consider that penalties are amountswhich (although fixed or stipulated inthe contract by the parties) are notreasonable approximations or estimatesof such damage. The laws of the variousStates, in general, require that therelation or circumstances of the parties,



and the purpose(s) of the agreement, areto be taken into account, so that, forexample, an agreement to a paymentwould be considered to be a prohibitedpenalty where it is the result of fraud orwhere it cloaks oppression.Furthermore, as a general matter, thesum stipulated must take into accountwhether the contract breach is total orpartial (i.e., the percentage of theemployment contract completed). (See,e.g., Vanderbilt University v. DiNardo,174 F.3d 751 (6th Cir. 1999) (applyingTennessee law); Overholt CropInsurance Service Co. v. Travis, 941F.2d 1361 (8th Cir. 1991) (applyingMinnesota and South Dakota law); BDOSeidman v. Hirshberg, 712 N.E.2d 1220(N.Y. 1999); Guiliano v. Cleo, Inc., 995S.W.2d 88 (Tenn. 1999); Wojtowicz v.Greeley Anesthesia Services, P.C., 961P.2d 520 (Colo.Ct.App. 1998); seegenerally, Restatement (Second)Contracts § 356 (comment b); 22Am.Jur.2d Damages §§ 683, 686, 690,693, 703). In an enforcement proceedingunder subpart I of this part, theAdministrator shall determine, applyingrelevant State law (includingconsideration where appropriate toactions by the employer, if any,contributing to the early cessation, suchas the employer’s constructive dischargeof the nonimmigrant or non-compliancewith its obligations under the INA andits regulations) whether the payment inquestion constitutes liquidated damagesor a penalty. (Note to paragraph(c)(10)(i)(C): The $500/$1,000 filing feeunder section 214(c)(1) of the INA cannever be included in any liquidateddamages received by the employer. Seeparagraph (c)(10)(ii), which follows.)

(ii) A rebate of the $500/$1,000 filingfee paid by the employer under Section214(c)(1) of the INA. The employer maynot receive, and the H–1Bnonimmigrant may not pay, any part ofthe $500 additional filing fee (for apetition filed prior to December 18,2000) or $1,000 additional filing fee (fora petition filed on or subsequent toDecember 18, 2000), whether directly orindirectly, voluntarily or involuntarily.Thus, no deduction from or reduction inwages for purposes of a rebate of anypart of this fee is permitted. Further, ifliquidated damages are received by theemployer from the H–1B nonimmigrantupon the nonimmigrant’s ceasingemployment with the employer prior toa date agreed to by the nonimmigrantand the employer, such liquidateddamages shall not include any part ofthe $500/$1,000 filing fee (see paragraph(c)(10)(i) of this section). If the filing feeis paid by a third party and the H–1Bnonimmigrant reimburses all or part of

the fee to such third party, the employershall be considered to be in violation ofthis prohibition since the employerwould in such circumstances have beenspared the expense of the fee which theH–1B nonimmigrant paid.

(11) Any unauthorized deductiontaken from wages is considered by theDepartment to be non-payment of thatamount of wages, and in the event of aninvestigation, will result in back wageassessment (plus civil money penaltiesand/or disqualification from H–1B andother immigration programs, if willful).

(12) Where the employer depressesthe employee’s wages below therequired wage by imposing on theemployee any of the employer’sbusiness expenses(s), the Departmentwill consider the amount to be anunauthorized deduction from wageseven if the matter is not shown in theemployer’s payroll records as adeduction.

(13) Where the employer makesdeduction(s) for repayment of loan(s) orwage advance(s) made to the employee,the Department, in the event of aninvestigation, will require the employerto establish the legitimacy andpurpose(s) of the loan(s) or wageadvance(s), with reference to thestandards set out in paragraph (c)(9)(iii)of this section.

(d) Enforcement actions. (1) In theevent of an investigation pursuant tosubpart I of this part, concerning afailure to meet the ‘‘prevailing wage’’condition or a materialmisrepresentation by the employerregarding the payment of the requiredwage, the Administrator shall determinewhether the employer has thedocumentation required in paragraph(b)(3) of this section, and whether thedocumentation supports the employer’swage attestation. Where thedocumentation is either nonexistent orinsufficient to determine the prevailingwage (e.g., does not meet the criteriaspecified in this section, in which casethe Administrator may find a violationof paragraph (b)(1), (2), or (3), of thissection); or where, based on significantevidence regarding wages paid for theoccupation in the area of intendedemployment, the Administrator hasreason to believe that the prevailingwage finding obtained from anindependent authoritative source oranother legitimate source variessubstantially from the wage prevailingfor the occupation in the area ofintended employment; or where theemployer has been unable todemonstrate that the prevailing wagedetermined by another legitimate sourceis in accordance with the regulatorycriteria, the Administrator may contact

ETA, which shall provide theAdministrator with a prevailing wagedetermination, which the Administratorshall use as the basis for determiningviolations and for computing backwages, if such wages are found to beowed. The 30-day investigatory periodshall be suspended while ETA makesthe prevailing wage determination and,in the event that the employer timelychallenges the determination throughthe Employment Service complaintsystem (see paragraph (d)(2), whichfollows), shall be suspended until theEmployment Service complaint systemprocess is completed and theAdministrator’s investigation can beresumed.

(2) In the event the Administratorobtains a prevailing wage from ETApursuant to paragraph (d)(1) of thissection, the employer may challenge theETA prevailing wage only through theEmployment Service complaint system.(See 20 CFR part 658, subpart E.)Notwithstanding the provisions of 20CFR 658.421 and 658.426, the appealshall be initiated at the ETA regionaloffice which services the State in whichthe place of employment is located (see§ 655.721 for the ETA regional officesand their jurisdictions). Such challengeshall be initiated within 10 days afterthe employer receives ETA’s prevailingwage determination from theAdministrator. In any challenge to thewage determination, neither ETA northe SESA shall divulge any employerwage data which was collected underthe promise of confidentiality.

(i) Where the employer timelychallenges an ETA prevailing wagedetermination obtained by theAdministrator, the 30-day investigativeperiod shall be suspended until theemployer obtains a final ruling from theEmployment Service complaint system.Upon such final ruling, the investigationand any subsequent enforcementproceeding shall continue, with ETA’sprevailing wage determination servingas the conclusive determination for allpurposes.

(ii) Where the employer does notchallenge ETA’s prevailing wagedetermination obtained by theAdministrator, such determination shallbe deemed to have been accepted by theemployer as accurate and appropriate(as to the amount of the wage) andthereafter shall not be subject tochallenge in a hearing pursuant to§ 655.835.

(3) For purposes of this paragraph (d),ETA may consult with the appropriateSESA to ascertain the prevailing wageapplicable under the circumstances ofthe particular complaint.



(4) No prevailing wage violation willbe found if the employer paid a wagethat is equal to, or more than 95 percentof, the prevailing wage as required byparagraph (a)(2)(iii) of this section. If theemployer paid a wage that is less than95 percent of the prevailing wage, theemployer will be required to pay 100percent of the prevailing wage.


§ 655.732 What is the second LCArequirement, regarding working conditions?

An employer seeking to employ H–1Bnonimmigrants in specialty occupationsor as fashion models of distinguishedmerit and ability shall state on FormETA 9035 that the employment of H–1Bnonimmigrants will not adversely affectthe working conditions of workerssimilarly employed in the area ofintended employment.

(a) Establishing the workingconditions requirement. The secondLCA requirement shall be satisfiedwhen the employer affords workingconditions to its H–1B nonimmigrantemployees on the same basis and inaccordance with the same criteria as itaffords to its U.S. worker employeeswho are similarly employed, andwithout adverse effect upon the workingconditions of such U.S. workeremployees. Working conditions includematters such as hours, shifts, vacationperiods, and benefits such as seniority-based preferences for training programsand work schedules. The employer’sobligation regarding working conditionsshall extend for the longer of twoperiods: the validity period of thecertified LCA, or the period duringwhich the H–1B nonimmigrant(s) is(are)employed by the employer.

(b) Documentation of the workingcondition statement. In the event of anenforcement action pursuant to subpartI of this part, the employer shallproduce documentation to show that ithas afforded its H–1B nonimmigrantemployees working conditions on thesame basis and in accordance with thesame criteria as it affords its U.S. workeremployees who are similarly employed.

12. The title to § 655.733 is revised toread as follows:

§ 655.733 What is the third LCArequirement, regarding strikes andlockouts?

13. Section 655.734 is amended byrevising the title and by revisingparagraphs (a) (l) (ii) and (a) (2) and byadding paragraph (a)(3), to read asfollows:

§ 655.734 What is the fourth LCArequirement, regarding notice?

* * * * *(a) * * *(1) * * *(i) * * *(ii) Where there is no collective

bargaining representative, the employershall, on or within 30 days before thedate the LCA is filed with ETA, providea notice of the filing of the LCA. Thenotice shall indicate that H–1Bnonimmigrants are sought; the numberof such nonimmigrants the employer isseeking; the occupational classification;the wages offered; the period ofemployment; the location(s) at whichthe H–1B nonimmigrants will beemployed; and that the LCA is availablefor public inspection at the H–1Bemployer’s principal place of businessin the U.S. or at the worksite. The noticeshall also include the statement:‘‘Complaints alleging misrepresentationof material facts in the labor conditionapplication and/or failure to complywith the terms of the labor conditionapplication may be filed with any officeof the Wage and Hour Division of theUnited States Department of Labor.’’ Ifthe employer is an H–1B-dependentemployer or a willful violator, and theLCA is not being used only for exemptH–1B nonimmigrants, the notice shallalso set forth the nondisplacement andrecruitment obligations to which theemployer has attested, and shall includethe following additional statement:‘‘Complaints alleging failure to offeremployment to an equally or betterqualified U.S. worker, or an employer’smisrepresentation regarding suchoffer(s) of employment, may be filedwith the Department of Justice, 10thStreet & Constitution Avenue, NW.,Washington, DC 20530.’’ The noticeshall be provided in one of the twofollowing manners:

(A) Hard copy notice, by posting anotice in at least two conspicuouslocations at each place of employmentwhere any H–1B nonimmigrant will beemployed (whether such place ofemployment is owned or operated bythe employer or by some other personor entity).

(1) The notice shall be of sufficientsize and visibility, and shall be postedin two or more conspicuous places sothat workers in the occupationalclassification at the place(s) ofemployment can easily see and read theposted notice(s).

(2) Appropriate locations for postingthe notices include, but are not limitedto, locations in the immediate proximityof wage and hour notices required by 29CFR 516.4 or occupational safety and

health notices required by 29 CFR1903.2(a).

(3) The notices shall be posted on orwithin 30 days before the date the laborcondition application is filed and shallremain posted for a total of 10 days.

(B) Electronic notice, by providingelectronic notification to employees inthe occupational classification(including both employees of the H–1Bemployer and employees of anotherperson or entity which owns or operatesthe place of employment) for which H–1B nonimmigrants are sought, at eachplace of employment where any H–1Bnonimmigrant will be employed. Suchnotification shall be given on or within30 days before the date the laborcondition application is filed, and shallbe available to the affected employeesfor a total of 10 days, except that ifemployees are provided individual,direct notice (as by e-mail), notificationonly need be given once during therequired time period. Notification shallbe readily available to the affectedemployees. An employer mayaccomplish this by any means itordinarily uses to communicate with itsworkers about job vacancies orpromotion opportunities, includingthrough its ‘‘home page’’ or ‘‘electronicbulletin board’’ to employees who have,as a practical matter, direct access tothese resources; or through e-mail or anactively circulated electronic messagesuch as the employer’s newsletter.Where affected employees at the placeof employment are not on the ‘‘intranet’’which provides direct access to thehome page or other electronic site butdo have computer access readilyavailable, the employer may providenotice to such workers by directelectronic communication such as e-mail (i.e., a single, personal e-mailmessage to each such employee) or byarranging to have the notice appear for10 days on an intranet which includesthe affected employees (e.g., contractorarranges to have notice on customer’sintranet accessible to affectedemployees). Where employees lackpractical computer access, a hard copymust be posted in accordance withparagraph (a)(1)(ii)(A) of this section, orthe employer may provide employeesindividual copies of the notice.

(2) Where the employer places any H–1B nonimmigrant(s) at one or moreworksites not contemplated at the timeof filing the application, but which arewithin the area of intended employmentlisted on the LCA, the employer isrequired to post electronic or hard-copynotice(s) at such worksite(s), in themanner described in paragraph (a)(1) ofthis section, on or before the date anyH–1B nonimmigrant begins work.



(3) The employer shall, no later thanthe date the H–1B nonimmigrant reportsto work at the place of employment,provide the H–1B nonimmigrant with acopy of the LCA (Form ETA 9035)certified by the Department. Uponrequest, the employer shall provide theH–1B nonimmigrant with a copy of thecover pages, Form ETA 9035CP.* * * * *


§ 655.735 What are the special provisionsfor short-term placement of H–1Bnonimmigrants at place(s) of employmentoutside the area(s) of intended employmentlisted on the LCA?

(a) Subject to the conditions specifiedin this section, an employer may makeshort-term placements or assignments ofH–1B nonimmigrant(s) at worksite(s)(place(s) of employment) in areas notlisted on the employer’s approvedLCA(s) without filing new laborcondition application(s) for such area(s).

(b) The following conditions must befully satisfied by an employer during allshort-term placement(s) orassignment(s) of H–1B nonimmigrant(s)at worksite(s) (place(s) of employment)in areas not listed on the employer’sapproved LCA(s):

(1) The employer has fully satisfiedthe requirements of §§ 655.730 through655.734 with regard to worksite(s)located within the area(s) of intendedemployment listed on the employer’sLCA(s).

(2) The employer shall not place,assign, lease, or otherwise contract outany H–1B nonimmigrant(s) to anyworksite where there is a strike orlockout in the course of a labor disputein the same occupationalclassification(s) as that of the H–1Bnonimmigrant(s).

(3) For every day the H–1Bnonimmigrant(s) is placed or assignedoutside the area(s) of employment listedon the approved LCA(s) for suchworker(s), the employer shall:

(i) Continue to pay such worker(s) therequired wage (based on the prevailingwage at such worker’s(s’) permanentworksite, or the employer’s actual wage,whichever is higher);

(ii) Pay such worker(s) the actual costof lodging (for both workdays and non-workdays); and

(iii) Pay such worker(s) the actual costof travel, meals and incidental ormiscellaneous expenses (for bothworkdays and non-workdays).

(c) An employer’s short-termplacement(s) or assignment(s) of H–1Bnonimmigrant(s) at any worksite(s) in anarea of employment not listed on theemployer’s approved LCA(s) shall not

exceed a total of 30 workdays in a one-year period for any H–1B nonimmigrantat any worksite or combination ofworksites in the area, except that suchplacement or assignment of an H–1Bnonimmigrant may be for longer than 30workdays but for no more than a totalof 60 workdays in a one-year periodwhere the employer is able to show thefollowing:

(1) The H–1B nonimmigrantcontinues to maintain an office or workstation at his/her permanent worksite(e.g., the worker has a dedicatedworkstation and telephone line(s) at thepermanent worksite);

(2) The H–1B nonimmigrant spends asubstantial amount of time at thepermanent worksite in a one-yearperiod; and

(3) The H–1B nonimmigrant’s U.S.residence or place of abode is located inthe area of the permanent worksite andnot in the area of the short-termworksite(s) (e.g., the worker’s personalmailing address; the worker’s lease foran apartment or other home; theworker’s bank accounts; the worker’sautomobile driver’s license; theresidence of the worker’s dependents).

(d) For purposes of this section, theterm workday shall mean any day onwhich an H–1B nonimmigrant performsany work at any worksite(s) within thearea of short-term placement orassignment. For example, threeworkdays would be counted where anonimmigrant works three non-consecutive days at three differentworksites (whether or not the employerowns or controls such worksite(s)),within the same area of employment.Further, for purposes of this section, theterm one-year period shall mean thecalendar year (i.e., January 1 throughDecember 31) or the employer’s fiscalyear, whichever the employer chooses.

(e) The employer may not make short-term placement(s) or assignment(s) ofH–1B nonimmigrant(s) under thissection at worksite(s) in any area ofemployment for which the employer hasa certified LCA for the occupationalclassification. Further, an H–1Bnonimmigrant entering the U.S. isrequired to be placed at a worksite inaccordance with the approved petitionand supporting LCA; thus, thenonimmigrant’s initial placement orassignment cannot be a short-termplacement under this section. Inaddition, the employer may notcontinuously rotate H–1Bnonimmigrants on short-term placementor assignment to an area of employmentin a manner that would defeat thepurpose of the short-term placementoption, which is to provide theemployer with flexibility in assignments

to afford enough time to obtain anapproved LCA for an area where itintends to have a continuing presence(e.g., an employer may not rotate H–1Bnonimmigrants to an area ofemployment for 20-day periods, withthe result that nonimmigrants arecontinuously or virtually continuouslyemployed in the area of employment, inorder to avoid filing an LCA; such anemployer would violate the short-termplacement provisions).

(f) Once any H–1B nonimmigrant’sshort-term placement or assignment hasreached the workday limit specified inparagraph (c) of this section in an areaof employment, the employer shall takeone of the following actions:

(1) File an LCA and obtain ETAcertification, and thereafter place anyH–1B nonimmigrant(s) in thatoccupational classification atworksite(s) in that area pursuant to theLCA (i.e., the employer shall perform allactions required in connection withsuch LCA, including determination ofthe prevailing wage and notice toworkers); or

(2) Immediately terminate theplacement of any H–1B nonimmigrant(s)who reaches the workday limit in anarea of employment. No worker mayexceed the workday limit within theone-year period specified in paragraph(d) of this section, unless the employerfirst files an LCA for the occupationalclassification for the area ofemployment. Employers are cautionedthat if any worker exceeds the workdaylimit within the one-year period, thenthe employer has violated the terms ofits LCA(s) and the regulations in thesubpart, and thereafter the short-termplacement option cannot be used by theemployer for H–1B nonimmigrants inthat occupational classification in thatarea of employment.

(g) An employer is not required to usethe short-term placement optionprovided by this section, but maychoose to make each placement orassignment of an H–1B nonimmigrant atworksite(s) in a new area of employmentpursuant to a new LCA for such area.Further, an employer which uses theshort-term placement option is notrequired to continue to use the option.Such an employer may, at any timeduring the period identified inparagraphs (c) and (d) of this section,file an LCA for the new area ofemployment (performing all actionsrequired in connection with such LCA);upon certification of such LCA, theemployer’s obligation to comply withthis section concerning short-termplacement shall terminate. (However,see § 655.731(c)(9)(iii)(C) regardingpayment of business expenses for



employee’s travel on employer’sbusiness.)

15. Section 655.736 is added to readas follows:

§ 655.736 What are H–1B-dependentemployers and willful violators?

Two attestation obligations apply onlyto two types of employers: H–1B-dependent employers (as described inparagraphs (a) through (e) of thissection) and employers found to havewillfully violated their H–1B obligationswithin a certain five-year period (asdescribed in paragraph (f) of thissection). These obligations apply only tocertain labor condition applicationsfiled by such employers (as described inparagraph (g) of this section), and do notapply to LCAs filed by such employerssolely for the employment of ‘‘exempt’’H–1B nonimmigrants (as described inparagraph (g) of this section and§ 655.737). These obligations requirethat such employers not displace U.S.workers from jobs (as described in§ 655.738) and that such employersrecruit U.S. workers before hiring H–1Bnonimmigrants (as described in§ 655.739).

(a) What constitutes an ‘‘H–1B-dependent’’ employer?

(1) ‘‘H–1B-dependent employer,’’ forpurposes of THIS subpart H and subpartI of this part, means an employer thatmeets one of the three followingstandards, which are based on the ratiobetween the employer’s total work forceemployed in the U.S. (including bothU.S. workers and H–1B nonimmigrants,and measured according to full-timeequivalent employees) and theemployer’s H–1B nonimmigrantemployees (a ‘‘head count’’ includingboth full-time and part-time H–1Bemployees) —

(i)(A) The employer has 25 or fewerfull-time equivalent employees who areemployed in the U.S.; and

(B) Employs more than seven H–1Bnonimmigrants;

(ii)(A) The employer has at least 26but not more than 50 full-timeequivalent employees who areemployed in the U.S.; and

(B) Employs more than 12 H–1Bnonimmigrant; or

(iii)(A) The employer has at least 51full-time equivalent employees who areemployed in the U.S.; and

(B) Employs H–1B nonimmigrants ina number that is equal to at least 15percent of the number of such full-timeequivalent employees.

(2) ‘‘Full-time equivalent employees’’(FTEs), for purposes of paragraph (a) ofthis section are to be determinedaccording to the following standards:

(i) The determination of FTEs is toinclude only persons employed by theemployer (as defined in § 655.715), anddoes not include bona fide consultantsand independent contractors. Forpurposes of this section, the Departmentwill accept the employer’s designationof persons as ‘‘employees,’’ providedthat such persons are consistentlytreated as ‘‘employees’’ for all purposesincluding FICA, FLSA, etc.

(ii) The determination of FTEs is to bebased on the following records:

(A) To determine the number ofemployees, the employer’s quarterly taxstatement (or similar document) is to beused (assuming there is no issue as towhether all employees are listed on thetax statement); and

(B) To determine the number of hoursof work by part-time employees, forpurposes of aggregating such employeesto FTEs, the last payroll (or the payrollsover the previous quarter, if the lastpayroll is not representative) is to beused, or where hours of work recordsare not maintained, other availableinformation is to be used to make areasonable approximation of hours ofwork (such as a standard workschedule). (But see paragraph(a)(2)(iii)(B)(1) of this section regardingthe determination of FTEs for part-timeemployees without a computation of thehours worked by such employees.)

(iii) The FTEs employed by theemployer means the total of the twonumbers yielded by paragraphs(a)(2)(iii)(A) and (B), which follow:

(A) The number of full-timeemployees. A full-time employee is onewho works 40 or more hours per week,unless the employer can show that lessthan 40 hours per week is full-timeemployment in its regular course ofbusiness (however, in no event wouldless than 35 hours per week beconsidered to be full-time employment).Each full-time employee equals one FTE(e.g., 50 full-time employees wouldyield 50 FTEs). (Note to paragraph(a)(2)(iii)(A): An employee whocommonly works more than the numberof hours constituting full-timeemployment cannot be counted as morethan one FTE.); plus

(B) The part-time employeesaggregated to a number of full-timeequivalents, if the employer has part-time employees. For purposes of thisdetermination, a part-time employee isone who regularly works fewer than thenumber of hours per week whichconstitutes full-time employment (e.g.,employee regularly works 20 hours,where full-time employment is 35 hoursper week). The aggregation of part-timeemployees to FTEs may be performed by

either of the following methods (i.e.,paragraphs (a)(2)(iii)(B)(1) or (2)):

(1) Each employee working fewer thanfull-time hours counted as one-half ofan FTE, with the total rounded to thenext higher whole number (e.g., threeemployees working fewer than 35 hoursper week, where full-time employmentis 35 hours, would yield two FTEs (i.e.,1.5 rounded to 2)); or

(2) The total number of hours workedby all part-time employees in therepresentative pay period, divided bythe number of hours per week thatconstitute full-time employment, withthe quotient rounded to the nearestwhole number (e.g., 72 total hours ofwork by three part-time employees,divided by 40 (hours per weekconstituting full-time employment),would yield two FTEs (i.e., 1.8 roundedto 2)).

(iv) Examples of determinations ofFTEs: Employer A has 100 employees,70 of whom are full-time (with full-timeemployment shown to be 44 hours ofwork per week) and 30 of whom arepart-time (with a total of 1004 hours ofwork by all 30 part-time employeesduring the representative pay period).Utilizing the method in paragraph(a)(2)(iii)(B)(1) of this section, thisemployer would have 85 FTEs: 70 FTEsfor full-time employees, plus 15 FTEsfor part-time employees (i.e., each of the30 part-time employees counted as one-half of a full-time employee, asdescribed in paragraph (a)(2)(iii)(B)(1) ofthis section). (This employer wouldhave 23 FTEs for part-time employees,if these FTEs were computed asdescribed in paragraph (a)(2)(iii)(B)(2) ofthis section: 1004 total hours of work bypart-time employees, divided by 44(full-time employment), yielding 22.8,rounded to 23)). Employer B has 100employees, 80 of whom are full-time(with full-time employment shown to be40 hours of work per week) and 20 ofwhom are part-time (with a total of 630hours of work by all 30 part-timeemployees during the representative payperiod). This employer would have 90FTEs: 80 FTEs for full-time employees,plus 10 FTEs for part-time employees(i.e., each of the 20 part-time employeescounted as one-half of a full-timeemployee, as described in paragraph(a)(2)(iii)(B)(1) of this section) (Thisemployer would have 16 FTEs for part-time employees, if these FTEs werecomputed as described in paragraph(a)(2)(iii)(B)(2) of this section: 630 totalhours of work by part-time employees,divided by 40 (full-time employment),yielding 15.7, rounded to 16)).

(b) What constitutes an ‘‘employer’’for purposes of determining H–1B-dependency status? Any group treated



as a single employer under the InternalRevenue Code (IRC) at 26 U.S.C. 414(b),(c), (m) or (o) shall be treated as a singleemployer for purposes of thedetermination of H–1B-dependency.Therefore, if an employer satisfies therequirements of the IRC and relevantregulations with respect to the followinggroups of employees, those employeeswill be treated as employees of a singleemployer for purposes of determiningwhether that employer is an H–1B-dependent employer.

(1) Pursuant to section 414(b) of theIRC and related regulations, allemployees ‘‘within a controlled group ofcorporations’’ (within the meaning ofsection 1563(a) of the IRC, determinedwithout regard to section 1563(a)(4) and(e)(3)(C)), will be treated as employeesof a single employer. A controlled groupof corporations is a parent-subsidiary-controlled group, a brother-sister-controlled group, or a combined group.26 U.S.C. 1563(a), 26 CFR 1.414(b)–1(a).

(i) A parent-subsidiary-controlledgroup is one or more chains ofcorporations connected through stockownership with a common parentcorporation where at least 80 percent ofthe stock (by voting rights or value) ofeach subsidiary corporation is owned byone or more of the other corporations(either another subsidiary or the parentcorporation), and the common parentcorporation owns at least 80 percent ofthe stock of at least one subsidiary.

(ii) A brother-sister-controlled groupis a group of corporations in which fiveor fewer persons (individuals, estates, ortrusts) own 80 percent or more of thestock of the corporations and certainother ownership criteria are satisfied.

(iii) A combined group is a group ofthree or more corporations, each ofwhich is a member of a parent-subsidiary controlled group or a brother-sister-controlled group and one ofwhich is a common parent corporationof a parent-subsidiary-controlled groupand is also included in a brother-sister-controlled group.

(2) Pursuant to section 414(c) of theIRC and related regulations, allemployees of trades or businesses(whether or not incorporated) that areunder common control are treated asemployees of a single employer. 26U.S.C. 414(c), 26 CFR 1.414(c)–2.

(i) Trades or businesses are undercommon control if they are included in:

(A) A parent-subsidiary group oftrades or businesses;

(B) A brother-sister group of trades orbusinesses; or

(C) A combined group of trades orbusinesses.

(ii) Trades or businesses include soleproprietorships, partnerships, estates,trusts or corporations.

(ii) The standards for determiningwhether trades or businesses are undercommon control are similar to standardsthat apply to controlled groups ofcorporations. However, pursuant to 26CFR 1.414(c)–2(b)(2), ownership of atleast an 80 percent interest in the profitsor capital interest of a partnership or theactuarial value of a trust or estateconstitutes a controlling interest in atrade or business.

(3) Pursuant to section 414(m) of theIRC and related regulations, allemployees of the members of anaffiliated service group are treated asemployees of a single employer. 26U.S.C. 414(m).

(i) An affiliated service group is,generally, a group consisting of a serviceorganization (the ‘‘first organization’’),such as a health care organization, a lawfirm or an accounting firm, and one ormore of the following:

(A) A second service organization thatis a shareholder or partner in the firstorganization and that regularly performsservices for the first organization (or isregularly associated with the firstorganization in performing services forthird persons); or

(B) Any other organization if :(1) A significant portion of the second

organization’s business is theperformance of services for the firstorganization (or an organizationdescribed in paragraph (b)(3)(i) of thissection or for both) of a type historicallyperformed in such service field byemployees, and

(2) Ten percent or more of the interestin the second organization is held bypersons who are highly compensatedemployees of the first organization (oran organization described in paragraph(b)(3)(i) of this section).

(ii) [Reserved](4) Section 414(o) of the IRC provides

that the Department of the Treasury mayissue regulations addressing otherbusiness arrangements, includingemployee leasing, in which a group ofemployees are treated as employed bythe same employer. However, theDepartment of the Treasury has notissued any regulations under thisprovision. Therefore, that section of theIRC will not be taken into account indetermining what groups of employeesare considered employees of a singleemployer for purposes of H–1Bdependency determinations, unlessregulations are issued by the TreasuryDepartment during the period thedependency provisions of the ACWIAare effective.

(5) The definitions of ‘‘singleemployer’’ set forth in paragraphs (b)(1)through (b)(3) of this section areestablished by the Internal RevenueService (IRS) in regulations located at 26CFR 1.414(b)–1(a), (c)–2 and (m)–5.Guidance on these definitions should besought from those regulations or fromthe IRS.

(c) Which employers are required tomake determinations of H–1B-dependency status? Every employer thatintends to file an LCA or to file H–1Bpetition(s) or request(s) for extension(s)of H–1B status between January 19,2001 and October 1, 2003 is required todetermine whether it is an H–1B-dependent employer or a willfulviolator which, except as provided in§ 655.737, will be subject to theadditional obligations for H–1B-dependent employers (see paragraph (g)of this section). During this time period,no H–1B-dependent employer or willfulviolator may use an LCA filed beforeJanuary 19, 2001 to support a new H–1B petition or request for an extensionof status. Furthermore, on all LCAs filedduring this period an employer will berequired to attest as to whether it is anH–1B-dependent employer or willfulviolator. An employer that attests that itis non-H–1B-dependent but does notmeet the ‘‘snap shot’’ test set forth inparagraph (c)(2) of this section shallmake and document a full calculation ofits status. However, as explained inparagraphs (c)(1) and (2), which follow,most employers would not be requiredto make any calculations or to createany documentation as to thedetermination of H–1B status.

(1) Employers with readily apparentstatus concerning H–1B-dependencyneed not calculate that status. For mostemployers, regardless of their size, H–1B-dependency status (i.e., H–1B-dependent or non-H–1B-dependent) isreadily apparent and would require nocalculations, in that the ratio of H–1Bemployees to the total workforce isobvious and can easily be compared tothe definition of ‘‘H–1B-dependency’’(see definition set out in paragraph(a)(1) of this section).

For example: Employer A with 20employees, only one of whom is an H–1B non-immigrant, would obviously notbe H–1B-dependent and would not needto make calculations to confirm thatstatus. Employer B with 45 employees,30 of whom are H–1B nonimmigrants,would obviously be H–1B-dependentand would not need to makecalculations. Employer C with 500employees, only 30 of whom are H–1Bnonimmigrants, would obviously not beH–1B-dependent and would not need tomake calculations. Employer D with



1,000 employees, 850 of whom are H–1B nonimmigrants, would obviously beH–1B-dependent and would not have tomake calculations.

(2) Employers with borderline H–1B-dependency status may use a ‘‘snap-shot’’ test to determine whethercalculation of that status is necessary.Where an employer’s H–1B-dependencystatus (i.e., H–1B-dependent or non-H–1B-dependent) is not readily apparent,the employer may use one of thefollowing tests to determine whether afull calculation of the status is needed:

(i) Small employer (50 or feweremployees). If the employer has 50 orfewer employees (both full-time andpart-time, including H–1Bnonimmigrants and U.S. workers), thenthe employer may compare the numberof its H–1B nonimmigrant employees(both full-time and part-time) to thenumbers specified in the definition setout in paragraph (a)(1) of this section,and shall fully calculate its H–1B-dependency status (i.e., calculate FTEs)where the number of its H–1Bnonimmigrant employees is above thenumber specified in the definition. Inother words, if the employer has 25 orfewer employees, and more than sevenof them are H–1B nonimmigrants, thenthe employer shall fully calculate itsstatus; if the employer has at least 26but no more than 50 employees, andmore than 12 of them are H–1Bnonimmigrants, then the employer shallfully calculate its status.

(ii) Large employer (51 or moreemployees). If the number of H–1Bnonimmigrant employees (both full-timeand part-time), divided by the numberof full-time employees (including H–1Bnonimmigrants and U.S. workers), is0.15 or more, then an employer whichbelieves itself to be non-H–1B-dependent shall fully calculate its H–1B-dependency status (including thecalculation of FTEs). In other words, ifthe number of full-time employees(including H–1B nonimmigrants andU.S. workers) multiplied by 0.15 yieldsa number that is equal to or less than thenumber of H–1B nonimmigrantemployees (both full-time and part-time), then the employer shall attest thatit is H–1B-dependent or shall fullycalculate its H–1B dependency status(including the calculation of FTEs).

(d) What documentation is theemployer required to make or maintain,concerning its determination of H–1B-dependency status? All employers arerequired to retain copies of H–1Bpetitions and requests for extensions ofH–1B status filed with the INS, as wellas the payroll records described in§ 655.731(b)(1). The nature of anyadditional documentation woulddepend upon the general characteristics

of the employer’s workforce, asdescribed in paragraphs (d)(1) through(4), which follow.

(1) Employer with readily apparentstatus concerning H–1B-dependency. Ifan employer’s H–1B-dependency status(i.e., H–1B-dependent or non-H–1B-dependent) is readily apparent (asdescribed in paragraph (c)(1) of thissection), then that status must bereflected on the employer’s LCA but theemployer is not required to make ormaintain any particular documentation.The public access file maintained inaccordance with § 655.760 would showthe H–1B-dependency status, by meansof copy(ies) of the LCA(s). In the eventof an enforcement action pursuant tosubpart I of this part, the employer’sreadily apparent status could be verifiedthrough records to be made available tothe Administrator (e.g., copies of H–1Bpetitions; payroll records described in§ 655.731(b)(1)).

(2) Employer with borderline H–1B-dependency status. An employer whichuses a ‘‘snap-shot’’ test to determinewhether it should undertake acalculation of its H–1B-dependencystatus (as described in paragraph (c)(2)of this section) is not required to makeor maintain any documentation of that‘‘snap-shot’’ test. The employer’s statusmust be reflected on the LCA(s), whichwould be available in the public accessfile. In the event of an enforcementaction pursuant to subpart I of this part,the employer’s records to be madeavailable to the Administrator wouldenable the employer to show and theAdministrator to verify the ‘‘snap-shot’’test (e.g., copies of H–1B petitions;payroll records described in§ 655.731(b)(1)) .

(3) Employer with H–1B-dependentstatus. An employer which attests thatit is H–1B-dependent—whether thatstatus is readily apparent or isdetermined through calculations—is notrequired to make or maintain anydocumentation of the calculation. Theemployer’s status must be reflected onthe LCA(s), which would be available inthe public access file. In the event of anenforcement action pursuant to subpartI of this part, the employer’s designationof H–1B-dependent status on the LCA(s)would be conclusive and sufficientdocumentation of that status (exceptwhere the employer’s status had alteredto non-H–1B-dependent and had beenappropriately documented, as describedin paragraph (d)(5)(ii) of this section).

(4) Employer with non-H–1B-dependent status who is required toperform full calculation. An employerwhich attests that it is non-H–1B-dependent and does not meet the ‘‘snapshot’’ test set forth in paragraph (c)(2) ofthis section shall retain in its records a

dated copy of its calculation that it isnot H–1B-dependent. In the event of anenforcement action pursuant to subpartI of this part, the employer’s records tobe made available to the Administratorwould enable the employer to show andthe Administrator to verify theemployer’s determination (e.g., copies ofH–1B petitions; payroll recordsdescribed in § 655.731(b)(1)).

(5) Employer which changes its H–1B-dependency status due to changes inworkforce. An employer may experiencea change in its H–1B-dependency status,due to changes in the ratio of H–1Bnonimmigrant to U.S. workers in itsworkforce. Thus it is important thatemployers who wish to file a new LCAor a new H–1B petition or request forextension of status remain cognizant oftheir dependency status and do arecheck of such status if the make-up oftheir workforce changes sufficiently thattheir dependency status might possiblychange. In the event of such a change ofstatus, the following standards willapply:

(i) Change from non-H–1B-dependentto H–1B-dependent. An employer whichexperiences this change in its workforceis not required to make or maintain anyrecord of its determination of the changeof its H–1B-dependency status. Theemployer is not required to file newLCA(s) (which would accurately state itsH–1B-dependent status), unless it seeksto hire new H–1B nonimmigrants orextend the status of existing H–1Bnonimmigrants (see paragraph (g) of thissection).

(ii) Change from H–1B-dependent tonon-H–1B-dependent. An employerwhich experiences this change in itsworkforce is required to perform a fullcalculation of its status (as described inparagraph (c) of this section) and toretain a copy of such calculation in itsrecords. If the employer seeks to hirenew H–1B nonimmigrants or extend thestatus of existing H–1B nonimmigrants(see paragraph (g) of this section), theemployer shall either file new LCAsreflecting its non-H–1B-dependentstatus or use its existing certified LCAsreflecting an H–1B-dependency status,in which case it shall continue to bebound by the dependent-employerattestations on such LCAs. In the eventof an enforcement action pursuant tosubpart I of this part, the employer’srecords to be made available to theAdministrator would enable theemployer to show and theAdministrator to verify the employer’sdetermination (e.g., copies of H–1Bpetitions; payroll records described in§ 655.731(b)(1)).



(6) Change in corporate structure oridentity of employer. If an employerwhich experiences a change in itscorporate structure as the result of anacquisition, merger, ‘‘spin-off,’’ or othersuch action wishes to file a new LCA ora new H–1B petition or request forextension of status, the new employingentity shall redetermine its H–1B-dependency status in accordance withparagraphs (a) and (c) of this section(see paragraph (g) of this section). (See§ 655.730(e), regarding change incorporate structure or identity ofemployer.) In the event of anenforcement action pursuant to subpartI of this part, the employer’scalculations where required underparagraph (c) of this section and itsrecords to be made available to theAdministrator would enable theemployer to show and theAdministrator to verify the employer’sdetermination (e.g., copies of H–1Bpetitions; payroll records described in§ 655.731(b)(1)).

(7) ‘‘Single employer’’ under IRC test.If an employer utilizes the IRC single-employer definition and concludes thatit is non-H–1B-dependent, the employershall perform the ‘‘snap-shot’’ test setforth in paragraph (c)(2) of this section,and if it fails to meet that test, shallattest that it is H–1B-dependent or shallperform the full calculation ofdependency status in accordance withparagraph (a) of this section. Theemployer shall place a list of the entitiesincluded as a ‘‘single employer’’ in thepublic access file maintained inaccordance with § 766.760. In addition,the employer shall retain in its recordsthe ‘‘snap-shot’’ or full calculation of itsstatus, as appropriate (showing thenumber of employees of each entity whoare included in the numerator anddenominator of the equation, whetherthe employer utilizes the ‘‘snap shot’’test or a complete calculation asdescribed in paragraph (c) of thissection). In the event of an enforcementaction pursuant to subpart I of this part,the employer’s records to be madeavailable to the Administrator wouldenable the employer to show and theAdministrator to verify the employer’sdetermination (e.g., copies of H–1Bpetitions; payroll records described in§ 655.731(b)(1)).

(e) How is an employer’s H–1B-dependency status to be shown on theLCA? The employer is required todesignate its status by marking theappropriate box on the Form ETA–9035(i.e., either H–1B-dependent or non-H–1B-dependent). An employer whichmarks the designation of ‘‘H–1B-dependent’’ may also mark thedesignation of its intention to seek only

‘‘exempt’’ H–1B nonimmigrants on theLCA (see paragraph (g) of this section,and § 655.737). In the event that anemployer has filed an LCA designatingits H–1B-dependency status (either H–1B-dependent or non-H–1B-dependent)and thereafter experiences a change ofstatus, the employer cannot use thatLCA to support H–1B petitions for newnonimmigrants or requests for extensionof H–1B status for existingnonimmigrants. Similarly, an employerthat is or becomes H–1B-dependentcannot continue to use an LCA filedbefore January 19, 2001 to support newH–1B petitions or requests for extensionof status. In such circumstances, theemployer shall file a new LCAaccurately designating its status andshall use that new LCA to support newpetitions or requests for extensions ofstatus.

(f) What constitutes a ‘‘willfulviolator’’ employer and what are itsspecial obligations?

(1) ‘‘Willful violator’’ or ‘‘willfulviolator employer,’’ for purposes of thissubpart H and subpart I of this partmeans an employer that meets all of thefollowing standards (i.e., paragraphs(f)(1)(i) through (iii))—

(i) A finding of violation by theemployer (as described in paragraph(f)(1) (ii)) is entered in either of thefollowing two types of enforcementproceeding:

(A) A Department of Labor proceedingunder section 212(n)(2) of the Act (8U.S.C. 1182(n)(2)(C) and subpart I ofthis part; or

(B) A Department of Justiceproceeding under section 212(n)(5) ofthe Act (8 U.S.C. 1182(n)(5).

(ii) The agency finds that theemployer has committed either a willfulfailure or a misrepresentation of amaterial fact during the five-year periodpreceding the filing of the LCA; and

(iii) The agency’s finding is enteredon or after October 21, 1998.

(2) For purposes of this paragraph,‘‘willful failure’’ means a violationwhich is a ‘‘willful failure’’ as definedin § 655.805(c).

(g) What LCAs are subject to theadditional attestation obligations?

(1) An employer that is ‘‘H–1B-dependent’’ (under the standardsdescribed in paragraphs (a) through (e)of this section) or is a ‘‘willful violator’’(under the standards described inparagraph (f) of this section) is subjectto the attestation obligations regardingdisplacement of U.S. workers andrecruitment of U.S. workers (under thestandards described in §§ 655.738 and655.739, respectively) for all LCAs thatare filed during the time periodspecified in paragraph (2)(g) of this

section, to be used to support anypetitions for new H–1B nonimmigrantsor any requests for extensions of statusfor existing H–1B nonimmigrants. AnLCA which does not accurately indicatethe employer’s H–1B-dependency statusor willful violator status shall not beused to support H–1B petitions orrequests for extensions. Further, anemployer which falsely attests to non-H–1B-dependency status, or whichexperiences a change of status to H–1B-dependency but continues to use theLCA to support new H–1B petitions orrequests for extension of status shall—despite the LCA designation of non-H–1B-dependency—be held to itsobligations to comply with theattestation requirements concerningnondisplacement of U.S. workers andrecruitment of U.S. workers (asdescribed in §§ 655.738 and 655.739,respectively), as explicitlyacknowledged and agreed on the LCA.

(2) During the period between January19, 2001 and October 1, 2003, anyemployer that is ‘‘H–1B-dependent’’(under the standards described inparagraphs (a) through (e) of thissection) or is a ‘‘willful violator’’ (underthe standards described in paragraph (f)of this section) shall file a new LCAaccurately indicating that status in orderto be able to file petition(s) for new H–1B nonimmigrant(s) or request(s) forextension(s) of status for existing H–1Bnonimmigrant(s). An LCA filed prior toJanuary 19, 2001 may not be used tosupport petition(s) for new H–1Bnonimmigrant(s) or request(s) forextension(s) of status for existing H–1Bnonimmigrants.

(3) An employer that files an LCAindicating ‘‘H–1B-dependent’’ and/or‘‘willful violator’’ status may alsoindicate on the LCA that all the H–1Bnonimmigrants to be employedpursuant to that LCA will be ‘‘exemptH–1B nonimmigrants’’ as described in§ 655.737. Such an LCA is not subject tothe additional LCA attestationobligations, provided that all H–1Bnonimmigrants employed under it are,in fact, exempt. An LCA whichindicates that it will be used only forexempt H–1B nonimmigrants shall notbe used to support H–1B petitions orrequests for extensions of status for H–1B nonimmigrants who are not, in fact,exempt. Further, an employer whichattests that the LCA will be used onlyfor exempt H–1B nonimmigrants butuses the LCA to employ non-exempt H–1B nonimmigrants (through petitionsand/or extensions of status) shall—despite the LCA designation of exemptH–1B nonimmigrants—be held to itsobligations to comply with theattestation requirements concerning



nondisplacement of U.S. workers andrecruitment of U.S. workers (asdescribed in §§ 655.738 and 655.739,respectively), as explicitlyacknowledged and agreed on the LCA.

(4) The special provisions for H–1B-dependent employers and willfulviolator employers do not apply to LCAsfiled after October 1, 2003 (see 8 U.S.C.1182(n)(1)(E)(ii)). However, all LCAsfiled prior to that date, and containingthe additional attestation obligationsdescribed in this section and §§ 655.737through 655.739, will remain in effectwith regard to those obligations, for solong as any H–1B nonimmigrant(s)employed pursuant to the LCA(s)remain employed by the employer.


§ 655.737 What are ‘‘exempt’’ H–1Bnonimmigrants, and how does theiremployment affect the additional attestationobligations of H–1B-dependent employersand willful violator employers?

(a) An employer that is H–1B-dependent or a willful violator of the H-1B program requirements (as describedin § 655.736) is subject to the attestationobligations regarding displacement ofU.S. workers and recruitment of U.S.workers (as described in §§ 655.738 and655.739, respectively) for all LCAs thatare filed during the time periodspecified in § 655.736(g). However,these additional obligations do notapply to an LCA filed by such anemployer if the LCA is used only for theemployment of ‘‘exempt’’ H–1Bnonimmigrants (through petitions and/or extensions of status) as described inthis section.

(b) What is the test or standard fordetermining an H–1B nonimmigrant’s‘‘exempt’’ status? An H–1Bnonimmigrant is ‘‘exempt’’ for purposesof this section if the nonimmigrantmeets either of the two followingcriteria:

(1) Receives wages (including cashbonuses and similar compensation) atan annual rate equal to at least $60,000;or

(2) Has attained a master’s or higherdegree (or its equivalent) in a specialtyrelated to the intended employment.

(c) How is the $60,000 annual wage tobe determined? The H–1Bnonimmigrant can be considered to bean ‘‘exempt’’ worker, for purposes ofthis section, if the nonimmigrantactually receives hourly wages orannual salary totaling at least $60,000 inthe calendar year. The standardsapplicable to the employer’s satisfactionof the required wage obligation areapplicable to the determination ofwhether the $60,000 wages or salary are

received (see § 655.731(c)(2) and (3)).Thus, employer contributions or costsfor benefits such as health insurance,life insurance, and pension plans cannotbe counted toward this $60,000. Thecompensation to be counted or creditedfor these purposes could include cashbonuses and similar payments, providedthat such compensation is paid to theworker ‘‘cash in hand, free and clear,when due’’ (§ 655.731(c)(1)), meaningthat the compensation has readilydeterminable market value, is readilyconvertible to cash tender, and isactually received by the employee whendue (which must be within the year forwhich the employer seeks to count orcredit the compensation toward theemployee’s $60,000 earnings to qualifyfor exempt status). Cash bonuses andsimilar compensation can be counted orcredited toward the $60,000 for‘‘exempt’’ status only if payment isassured (i.e., if the payment iscontingent or conditional on some eventsuch as the employer’s annual profits,the employer must guarantee paymenteven if the contingency is not met). Thefull $60,000 annual wages or salarymust be received by the employee inorder for the employee to have‘‘exempt’’ status. The wages or salaryrequired for ‘‘exempt’’ status cannot bedecreased or pro rated based on theemployee’s part-time work schedule; anH–1B nonimmigrant working part-time,whose actual annual compensation isless than $60,000, would not qualify asexempt on the basis of wages, even ifthe worker’s earnings, if projected to afull-time work schedule, wouldtheoretically exceed $60,000 in a year.Where an employee works for less thana full year, the employee must receiveat least the appropriate pro rata share ofthe $60,000 in order to be ‘‘exempt’’ (e.g.,an employee who resigns after threemonths must be paid at least $15,000).In the event of an investigation pursuantto subpart I of this part, theAdministrator will determine whetherthe employee has received the required$60,000 per year, using the employee’sanniversary date to determine the one-year period; for an employee who hadworked for less than a full year (eitherat the beginning of employment, or afterhis/her last anniversary date), thedetermination as to the $60,000 annualwages will be on a pro rata basis (i.e.,whether the employee had been paid ata rate of $60,000 per year (or $5,000 permonth) including any unpaid,guaranteed bonuses or similarcompensation).

(d) How is the ‘‘master’s or higherdegree (or its equivalent) in a specialty

related to the intended employment’’ tobe determined?

(1) ‘‘Master’s or higher degree (or itsequivalent),’’ for purposes of thissection means a foreign academic degreefrom an institution which is accreditedor recognized under the law of thecountry where the degree was obtained,and which is equivalent to a master’s orhigher degree issued by a U.S. academicinstitution. The equivalence to a U.S.academic degree cannot be establishedthrough experience or throughdemonstration of expertise in theacademic specialty (i.e., no ‘‘timeequivalency’’ or ‘‘performanceequivalency’’ will be recognized assubstituting for a degree issued by anacademic institution). The INS and theDepartment will consult appropriatesources of expertise in making thedetermination of equivalency betweenforeign and U.S. academic degrees.Upon the request of the INS or theDepartment, the employer shall provideevidence to establish that the H–1Bnonimmigrant has received the degree,that the degree was earned in theasserted field of study, including anacademic transcript of courses, and thatthe institution from which the degreewas obtained was accredited orrecognized.

(2) ‘‘Specialty related to the intendedemployment,’’ for purposes of thissection, means that the academic degreeis in a specialty which is generallyaccepted in the industry or occupationas an appropriate or necessarycredential or skill for the person whoundertakes the employment in question.A ‘‘specialty’’ which is not generallyaccepted as appropriate or necessary tothe employment would not beconsidered to be sufficiently ‘‘related’ toafford the H–1B nonimmigrant status asan ‘‘exempt H–1B nonimmigrant.’’

(e) When and how is thedetermination of the H–1Bnonimmigrant’s ‘‘exempt’’ status to bemade? An employer that is H–1B-dependent or a willful violator (asdescribed in § 655.736) may designateon the LCA that the LCA will be usedonly to support H–1B petition(s) and/orrequest(s) for extension of status for‘‘exempt’’ H–1B nonimmigrants.

(1) If the employer makes thedesignation of ‘‘exempt’’ H–1Bnonimmigrant(s) on the LCA, then theINS—as part of the adjudication of theH–1B petition or request for extensionof status—will determine the worker’s‘‘exempt’’ status, since an H–1B petitionmust be supported by an LCA consistentwith the petition (i.e., occupation, areaof intended employment, exemptstatus). The employer shall maintain, inthe public access file maintained in



accordance with § 755.760, a list of theH–1B nonimmigrant(s) whosepetition(s) and/or request(s) aresupported by LCA(s) which theemployer has attested will be used onlyfor exempt H–1B nonimmigrants. In theevent of an investigation under subpartI of this part, the Administrator will giveconclusive effect to an INSdetermination of ‘‘exempt’’ status basedon the nonimmigrant’s educationalattainments (i.e., master’s or higherdegree (or its equivalent) in a specialtyrelated to the intended employment)unless the determination was based onfalse information. If the INSdetermination of ‘‘exempt’’ status wasbased on the assertion that thenonimmigrant would receive wages(including cash bonuses and similarcompensation) at an annual rate equal toat least $60,000, the employer shallprovide evidence to show that suchwages actually were received by thenonimmigrant (consistent withparagraph (c) of this section and theregulatory standards for satisfaction orpayment of the required wages asdescribed in § 655.731(c)(3)).

(2) If the employer makes thedesignation of ‘‘exempt’’ H–1Bnonimmigrants on the LCA, but is foundin an enforcement action under subpartI of this part to have used the LCA toemploy nonimmigrants who are, in fact,not exempt, then the employer will besubject to a finding that it failed tocomply with the nondisplacement andrecruitment obligations (as described in§§ 655.738 and 655.739, respectively)and may be assessed appropriatepenalties and remedies.

(3) If the employer does not make thedesignation of ‘‘exempt’’ H–1Bnonimmigrants on the LCA, then theemployer has waived the option of notbeing subject to the additional LCAattestation obligations on the basis ofemploying only exempt H–1Bnonimmigrants under the LCA. In theevent of an investigation under subpartI of this part, the Administrator will notconsider the question of thenonimmigrant(s)’s ‘‘exempt’’ status indetermining whether an H–1B-dependent employer or willful violatoremployer has complied with suchadditional LCA attestation obligations.


§ 655.738 What are the ‘‘non-displacementof U.S. workers’’ obligations that apply toH–1B-dependent employers and willfulviolators, and how do they operate?

An employer that is subject to theseadditional attestation obligations (underthe standards described in § 655.736) isprohibited from displacement of any

U.S. worker(s)—whether directly (in itsown workforce) or secondarily (at aworksite of a second employer)—underthe standards set out in this section.

(a) ‘‘United States worker’’ (‘‘U.S.worker’’) is defined in § 655.715.

(b) ‘‘Displacement,’’ for purposes ofthis section, has two components: ‘‘layoff’’ of U.S. worker(s), and ‘‘essentiallyequivalent jobs’’ held by U.S. worker(s)and H–1B nonimmigrant(s).

(1) ‘‘Lay off’’ of a U.S. worker meansthat the employer has caused theworker’s loss of employment, other thanthrough—

(i) Discharge of a U.S. worker forinadequate performance, violation ofworkplace rules, or other cause relatedto the worker’s performance or behavioron the job;

(ii) A U.S. worker’s voluntarydeparture or voluntary retirement (to beassessed in light of the totality of thecircumstances, under establishedprinciples concerning ‘‘constructivedischarge’’ of workers who arepressured to leave employment);

(iii) Expiration of a grant or contractunder which a U.S. worker is employed,other than a temporary employmentcontract entered into in order to evadethe employer’s non-displacementobligation. The question is whether theloss of the contract or grant has causedthe worker’s loss of employment. Itwould not be a layoff where the job lossresults from the expiration of a grant orcontract without which there is noalternative funding or need for the U.S.worker’s position on that or any othergrant or contract (e.g., the expiration ofa research grant that funded a project onwhich the worker was employed at anacademic or research institution; theexpiration of a staffing firm’s contractwith a customer where the U.S. workerwas hired expressly to work pursuant tothat contract and the employer has nopractice of moving workers to othercustomers or projects upon theexpiration of contract(s)). On the otherhand, it would be a layoff where theemployer’s normal practice is to movethe U.S. worker from one contract toanother when a contract expires, andwork on another contract for which theworker is qualified is available (e.g.,staffing firm’s contract with onecustomer ends and another contractwith a different customer begins); or

(iv) A U.S. worker who losesemployment is offered, as an alternativeto such loss, a similar employmentopportunity with the same employer (or,in the case of secondary displacement ata worksite of a second employer, asdescribed in paragraph (d) of thissection, a similar employmentopportunity with either employer) at

equivalent or higher compensation andbenefits than the position from whichthe U.S. worker was discharged,regardless of whether or not the U.S.worker accepts the offer. The validity ofthe offer of a similar employmentopportunity will be assessed in light ofthe following factors:

(A) The offer is a bona fide offer,rather than an offer designed to inducethe U.S. worker to refuse or an offermade with the expectation that theworker will refuse;

(B) The offered job provides the U.S.worker an opportunity similar to thatprovided in the job from which he/sheis discharged, in terms such as a similarlevel of authority, discretion, andresponsibility, a similar opportunity foradvancement within the organization,and similar tenure and work scheduling;

(C) The offered job provides the U.S.worker equivalent or highercompensation and benefits to thoseprovided in the job from which he/sheis discharged. The comparison ofcompensation and benefits includes allforms of remuneration for employment,whether or not called wages andirrespective of the time of payment (e.g.,salary or hourly wage rate; profitsharing; retirement plan; expenseaccount; use of company car). Thecomparison also includes such mattersas cost of living differentials andrelocation expenses (e.g., a New YorkCity ‘‘opportunity’’ at equivalent orhigher compensation and benefitsoffered to a worker discharged from ajob in Kansas City would provide awage adjustment from the Kansas Citypay scale and would include relocationcosts).

(2) Essentially equivalent jobs. Forpurposes of the displacementprohibition, the job from which the U.S.worker is laid off must be essentiallyequivalent to the job for which an H–1Bnonimmigrant is sought. To determinewhether the jobs of the laid off U.S.worker(s) and the H–1Bnonimmigrant(s) are essentiallyequivalent, the comparison(s) shall beon a one-to-one basis where appropriate(i.e., one U.S. worker left employmentand one H–1B nonimmigrant joined theworkforce) but shall be broader in focuswhere appropriate (e.g., an employer,through reorganization, eliminates anentire department with several U.S.workers and then staffs thisdepartment’s function(s) with H–1Bnonimmigrants). The followingcomparisons are to be made:

(i) Job responsibilities. The job of theH–1B nonimmigrant must involveessentially the same duties andresponsibilities as the job from whichthe U.S. worker was laid off. The



comparison focuses on the coreelements of and competencies for thejob, such as supervisory duties, ordesign and engineering functions, orbudget and financial accountability. Peripheral, non-essential duties thatcould be tailored to the particularabilities of the individual workerswould not be determinative in thiscomparison. The job responsibilitiesmust be similar and both workerscapable of performing those duties.

(ii) Qualifications and experience ofthe workers. The qualifications of thelaid off U.S. worker must besubstantially equivalent to thequalifications of the H–1Bnonimmigrant. The comparison is to beconfined to the experience andqualifications (e.g., training, education,ability) of the workers which aredirectly relevant to the actualperformance requirements of the job,including the experience andqualifications that would materiallyaffect a worker’s relative ability toperform the job better or moreefficiently. While it would beappropriate to compare whether theworkers in question have ‘‘substantiallyequivalent’’ qualifications andexperience, the workers need not haveidentical qualifications and experience (e.g.,a bachelor’s degree from one accrediteduniversity would be considered to besubstantially equivalent to a bachelor’sdegree from another accrediteduniversity; 15 years experience in anoccupation would be substantiallyequivalent to 10 years experience in thatoccupation). It would not be appropriateto compare the workers’ relative ages,their sexes, or their ethnic or religiousidentities.

(iii) Area of employment. The job ofthe H–1B nonimmigrant must be locatedin the same area of employment as thejob from which the U.S. worker was laidoff. The comparison of the locations ofthe jobs is confined to the area withinnormal commuting distance of theworksite or physical location where thework of the H–1B nonimmigrant is orwill be performed. For purposes of thiscomparison, if both such worksites orlocations are within a MetropolitanStatistical Area or a PrimaryMetropolitan Statistical Area, they willbe deemed to be within the same areaof employment.

(3) The worker’s rights under acollective bargaining agreement or otheremployment contract are not affected bythe employer’s LCA obligations as tonon-displacement of such worker.

(c) Direct displacement. An H–1B-dependent or willful-violator employer(as described in § 655.736) is prohibitedfrom displacing a U.S. worker in its own

workforce (i.e., a U.S. worker‘‘employed by the employer’’) withinthe period beginning 90 days before andending 90 days after the filing date of anH–1B petition supported by an LCAdescribed in § 655.736(g). The followingstandards and guidance apply under thedirect displacement prohibition:

(1) Which U.S. workers are protectedagainst ‘‘direct displacement’’? Thisprohibition covers the H–1B employer’sown workforce—U.S. workers‘‘employed by the employer’’—who areemployed in jobs that are essentiallyequivalent to the jobs for which the H–1B nonimmigrant(s) are sought (asdescribed in paragraph (b)(2) of thissection). The term ‘‘employed by theemployer’’ is defined in § 655.715.

(2) When does the ‘‘directdisplacement’’ prohibition apply? TheH–1B employer is prohibited fromdisplacing a U.S. worker during aspecific period of time before and afterthe date on which the employer filesany H-1B petition supported by the LCAwhich is subject to the non-displacement obligation (as described in§ 655.736(g)). This protected period isfrom 90 days before until 90 days afterthe petition filing date.

(3) What constitutes displacement ofa U.S. worker? The H–1B employer isprohibited from laying off a U.S. workerfrom a job that is essentially theequivalent of the job for which an H–1Bnonimmigrant is sought (as described inparagraph (b)(1) of this section).

(d) Secondary displacement. An H–1B-dependent or willful-violatoremployer (as described in § 655.736) isprohibited from placing certain H–1Bnonimmigrant(s) with another employerwhere there are indicia of anemployment relationship between thenonimmigrant and that other employer(thus possibly affecting the jobs of U.S.workers employed by that otheremployer), unless and until the H–1Bemployer makes certain inquiries and/orhas certain information concerning thatother employer’s displacement ofsimilarly employed U.S. workers in itsworkforce. Employers are cautioned thateven if the required inquiry of thesecondary employer is made, the H–1B-dependent or willful violator employershall be subject to a finding of aviolation of the secondary displacementprohibition if the secondary employer,in fact, displaces any U.S. worker(s)during the applicable time period (see§ 655.810(d)). The following standardsand guidance apply under thesecondary displacement prohibition:

(1) Which U.S. workers are protectedagainst ‘‘secondary displacement’’? Thisprovision applies to U.S. workersemployed by the other or ‘‘secondary’’

employer (not those employed by theH–1B employer) in jobs that areessentially equivalent to the jobs forwhich certain H–1B nonimmigrants areplaced with the other/secondaryemployer (as described in paragraph(b)(2) of this section). The term‘‘employed by the employer’’ is definedin § 655.715.

(2) Which H–1B nonimmigrantsactivate the secondary displacementprohibition? Not every placement of anH–1B nonimmigrant with anotheremployer will activate the prohibitionand—depending upon the particularfacts—an H–1B employer (such as aservice provider) may be able to placeH–1B nonimmigrant(s) at a client orcustomer’s worksite without beingsubject to the prohibition. Theprohibition applies to the placement ofan H–1B nonimmigrant whose H–1Bpetition is supported by an LCAdescribed in § 655.736(g) and whoseplacement with the other/secondaryemployer meets both of the followingcriteria:

(i) The nonimmigrant performs dutiesin whole or in part at one or moreworksites owned, operated, orcontrolled by the other/secondaryemployer; and

(ii) There are indicia of anemployment relationship between thenonimmigrant and the other/secondaryemployer. The relationship between theH–1B-nonimmigrant and the other/secondary need not constitute an‘‘employment’’ relationship (as definedin § 655.715), and the applicability ofthe secondary displacement provisiondoes not establish such a relationship.Relevant indicia of an employmentrelationship include:

(A) The other/secondary employer hasthe right to control when, where, andhow the nonimmigrant performs the job(the presence of this indicia wouldsuggest that the relationship betweenthe nonimmigrant and the other/secondary employer approaches therelationship which triggers thesecondary displacement provision);

(B) The other/secondary employerfurnishes the tools, materials, andequipment;

(C) The work is performed on thepremises of the other/secondaryemployer (this indicia alone would nottrigger the secondary displacementprovision);

(D) There is a continuing relationshipbetween the nonimmigrant and theother/secondary employer;

(E) The other/secondary employer hasthe right to assign additional projects tothe nonimmigrant;



(F) The other/secondary employer setsthe hours of work and the duration ofthe job;

(G) The work performed by thenonimmigrant is part of the regularbusiness (including governmental,educational, and non-profit operations)of the other/secondary employer;

(H) The other/secondary employer isitself in business; and

(I) The other/secondary employer candischarge the nonimmigrant fromproviding services.

(3) What other/secondary employersare included in the prohibition onsecondary displacement of U.S. workersby the H–1B employer? The other/secondary employer who accepts theplacement and/or services of the H–1Bemployer’s nonimmigrant employee(s)need not be an H–1B employer. Theother/secondary employer would oftenbe (but is not limited to) the client orcustomer of an H–1B employer that is astaffing firm or a service provider whichoffers the services of H–1Bnonimmigrants under a contract (e.g., amedical staffing firm under contractwith a nursing home provides H–1Bnonimmigrant physical therapists; aninformation technology staffing firmunder contract with a bank provides H–1B nonimmigrant computer engineers).Only the H–1B employer placing thenonimmigrant with the secondaryemployer is subject to the non-displacement obligation on the LCA,and only that employer is liable in anenforcement action pursuant to subpartI of this part if the other/secondaryemployer, in fact, displaces any of itsU.S. worker(s) during the applicabletime period. The other/secondaryemployer will not be subject tosanctions in an enforcement actionpursuant to subpart I of this part (exceptin circumstances where such other/secondary employer is, in fact, an H–1Bemployer and is found to have failed tocomply with its own obligations). (Noteto paragraph (d)(3): Where the other/secondary employer’s relationship tothe H–1B nonimmigrant constitutes‘‘employment’’ for purposes of a statuteother than the H–1B provision of theINA, such as the Fair Labor StandardsAct (29 U.S.C. 201 et seq.), the other/secondary employer would be subject toall obligations of an employer of thenonimmigrant under such other statute.)

(4) When does the ‘‘secondarydisplacement’’ prohibition apply? TheH–1B employer’s obligation of inquiryconcerns the actions of the other/secondary employer during the specificperiod beginning 90 days before andending 90 days after the date of theplacement of the H–1B nonimmigrant(s)with such other/secondary employer.

(5) What are the H–1B employer’sobligations concerning inquiry and/orinformation as to the other/secondaryemployer’s displacement of U.S.workers? The H–1B employer isprohibited from placing the H–1Bnonimmigrant with another employer,unless the H–1B employer has inquiredof the other/secondary employer as towhether, and has no knowledge that,within the period beginning 90 daysbefore and ending 90 days after the dateof such placement, the other/secondaryemployer has displaced or intends todisplace a similarly-employed U.S.worker employed by such other/secondary employer. The followingstandards and guidance apply to the H–1B employer’s obligation:

(i) The H–1B employer is required toexercise due diligence and to make areasonable effort to enquire aboutpotential secondary displacement,through methods which may include(but are not limited to)—

(A) Securing and retaining a writtenassurance from the other/secondaryemployer that it has not and does notintend to displace a similarly-employedU.S. worker within the prescribedperiod;

(B) Preparing and retaining amemorandum to the file, prepared at thesame time or promptly after receivingthe other/secondary employer’s oralstatement that it has not and does notintend to displace a similarly-employedU.S. worker within the prescribedperiod (such memorandum shallinclude the substance of theconversation, the date of thecommunication, and the names of theindividuals who participated in theconversation, including the person(s)who made the inquiry on behalf of theH–1B employer and made the statementon behalf of the other/secondaryemployer); or

(C) including a secondarydisplacement clause in the contractbetween the H–1B employer and theother/secondary employer, whereby theother/secondary employer would agreethat it has not and will not displacesimilarly-employed U.S. workers withinthe prescribed period.

(ii) The employer’s exercise of duediligence may require further, moreparticularized inquiry of the other/secondary employer in circumstanceswhere there is information whichindicates that U.S. worker(s) have beenor will be displaced (e.g., where the H–1B nonimmigrants will be performingfunctions that the other/secondaryemployer performed with its ownworkforce in the past). The employer isnot permitted to disregard informationwhich would provide knowledge about

potential secondary displacement (e.g.,newspaper reports of relevant lay-offsby the other/secondary employer) ifsuch information becomes availablebefore the H–1B employer’s placementof H–1B nonimmigrants with suchemployer. Under such circumstances,the H–1B employer would be expectedto recontact the other/secondaryemployer and receive credibleassurances that no lay-offs of similarly-employed U.S. workers are planned orhave occurred within the prescribedperiod.

(e) What documentation is required ofH–1B employers concerning the non-displacement obligation? The H–1Bemployer is responsible fordemonstrating its compliance with thenon-displacement obligation (whetherdirect or indirect), if applicable.

(1) Concerning direct displacement(as described in paragraph (c) of thissection), the employer is required toretain all records the employer createsor receives concerning thecircumstances under which each U.S.worker, in the same locality and sameoccupation as any H–1Bnonimmigrant(s) hired, left its employin the period from 90 days before to 90days after the filing date of theemployer’s petition for the H–1Bnonimmigrant(s), and for any such U.S.worker(s) for whom the employer hastaken any action during the period from90 days before to 90 days after the filingdate of the H–1B petition to cause theU.S. worker’s termination (e.g., a noticeof future termination of the employee’sjob). For all such employees, the H–1Bemployer shall retain at least thefollowing documents: the employee’sname, last-known mailing address,occupational title and job description;any documentation concerning theemployee’s experience andqualifications, and principalassignments; all documents concerningthe departure of such employees, suchas notification by the employer oftermination of employment prepared bythe employer or the employee and anyresponses thereto, and evaluations ofthe employee’s job performance.Finally, the employer is required tomaintain a record of the terms of anyoffers of similar employment to suchU.S. workers and the employee’sresponse thereto.

(2) Concerning secondarydisplacement (as described in paragraph(d) of this section), the H–1B employeris required to maintain documentationto show the manner in which it satisfiedits obligation to make inquiries as to thedisplacement of U.S. workers by theother/secondary employer with whichthe H–1B employer places any H–1B



nonimmigrants (as described inparagraph (d)(5) of this section).


§ 655.739 What is the ‘‘recruitment of U.S.workers’’ obligation that applies to H–1B-dependent employers and willful violators,and how does it operate?

An employer that is subject to thisadditional attestation obligation (underthe standards described in § 655.736) isrequired—prior to filing the LCA or anypetition or request for extension ofstatus supported by the LCA—to takegood faith steps to recruit U. S. workersin the United States for the job(s) in theUnited States for which the H–1Bnonimmigrant(s) is/are sought. Therecruitment shall use procedures thatmeet industry-wide standards and offercompensation that is at least as great asthe required wage to be paid to H–1Bnonimmigrants pursuant to § 655.731(a)(i.e., the higher of the local prevailingwage or the employer’s actual wage).The employer may use legitimateselection criteria relevant to the job thatare normal or customary to the type ofjob involved, so long as such criteria arenot applied in a discriminatory manner.This section provides guidance for theemployer’s compliance with therecruitment obligation.

(a) ‘‘United States worker’’ (‘‘U.S.worker’’) is defined in § 655.715.

(b) ‘‘Industry,’’ for purposes of thissection, means the set of employerswhich primarily compete for the sametypes of workers as those who are thesubjects of the H–1B petitions to be filedpursuant to the LCA. Thus, a hospital,university, or computer softwaredevelopment firm is to use therecruitment standards utilized by thehealth care, academic, or informationtechnology industries, respectively, inhiring workers in the occupations inquestion. Similarly, a staffing firm,which places its workers at job sites ofother employers, is to use therecruitment standards of the industrywhich primarily employs such workers(e.g., the health care industry, if thestaffing firm is placing physicaltherapists (whether in hospitals, nursinghomes, or private homes); theinformation technology industry, if thestaffing firm is placing computerprogrammers, software engineers, orother such workers).

(c) ‘‘Recruitment,’’ for purposes of thissection, means the process by which anemployer seeks to contact or to attractthe attention of person(s) who mayapply for employment, solicitsapplications from person(s) foremployment, receives applications, andreviews and considers applications so as

to present the appropriate candidates tothe official(s) who make(s) the hiringdecision(s) (i.e., pre-selection treatmentof applications and applicants).

(d) ‘‘Solicitation methods,’’ forpurposes of this section, means thetechniques by which an employer seeksto contact or to attract the attention ofpotential applicants for employment,and to solicit applications fromperson(s) for employment.

(1) Solicitation methods may be eitherexternal or internal to the employer’sworkforce (with internal solicitation toinclude current and former employees).

(2) Solicitation methods may be eitheractive (where an employer takespositive, proactive steps to identifypotential applicants and to getinformation about its job openings intothe hands of such person(s)) or passive(where potential applicants find theirway to an employer’s jobannouncements).

(i) Active solicitation methodsinclude direct communication toincumbent workers in the employer’soperation and to workers previouslyemployed in the employer’s operationand elsewhere in the industry;providing training to incumbentworkers in the employer’s organization;contact and outreach through collectivebargaining organizations, tradeassociations and professionalassociations; participation in job fairs(including at minority-servinginstitutions, community/junior colleges,and vocational/technical colleges); useof placement services of colleges,universities, community/junior colleges,and business/trade schools; use ofpublic and/or private employmentagencies, referral agencies, orrecruitment agencies (‘‘headhunters’’).

(ii) Passive solicitation methodsinclude advertising in generaldistribution publications, trade orprofessional journals, or special interestpublications (e.g., student-oriented;targeted to underrepresented groups,including minorities, persons withdisabilities, and residents of rural areas);America’s Job Bank or other Internetsites advertising job vacancies; noticesat the employer’s worksite(s) and/or onthe employer’s Internet ‘‘home page.’’

(e) How are ‘‘industry-wide standardsfor recruitment’’ to be identified? Anemployer is not required to utilize anyparticular number or type of recruitmentmethods, and may make adetermination of the standards for theindustry through methods such as tradeorganization surveys, studies byconsultative groups, or reports/statements from trade organizations. Anemployer which makes such adetermination should be prepared to

demonstrate the industry-widestandards in the event of anenforcement action pursuant to subpartI of this part. An employer’s recruitmentshall be at a level and through methodsand media which are normal, commonor prevailing in the industry, includingthose strategies that have been shown tobe successfully used by employers inthe industry to recruit U.S. workers. Anemployer may not utilize only thelowest common denominator ofrecruitment methods used in theindustry, or only methods which couldreasonably be expected to be likely toyield few or no U.S. worker applicants,even if such unsuccessful recruitmentmethods are commonly used byemployers in the industry. Anemployer’s recruitment methods shallinclude, at a minimum, the following:

(1) Both internal and externalrecruitment (i.e., both within theemployer’s workforce (former as well ascurrent workers) and among U.S.workers elsewhere in the economy); and

(2) At least some active recruitment,whether internal (e.g., training theemployer’s U.S. worker(s) for theposition(s)) or external (e.g., use ofrecruitment agencies or collegeplacement services).

(f) How are ‘‘legitimate selectioncriteria relevant to the job that arenormal or customary to the type of jobinvolved’’ to be identified? Inconducting recruitment of U.S. workers(i.e., in soliciting applications and inpre-selection screening or considering ofapplicants), an employer shall applyselection criteria which satisfy all of thefollowing three standards (i.e.,paragraph (b) (1) through (3)). Underthese standards, an employer would notapply spurious criteria that discriminateagainst U.S. worker applicants in favorof H–1B nonimmigrants. An employerthat uses criteria which fail to meetthese standards would be considered tohave failed to conduct its recruitment ofU.S. workers in good faith.

(1) Legitimate criteria, meaningcriteria which are legally cognizable andnot violative of any applicable laws(e.g., employer may not use age, sex,race or national origin as selectioncriteria);.

(2) Relevant to the job, meaningcriteria which have a nexus to the job’sduties and responsibilities; and

(3) Normal and customary to the typeof job involved, meaning criteria whichwould be necessary or appropriatebased on the practices and expectationsof the industry, rather than on thepreferences of the particular employer.

(g) What actions would constitute aprohibited ‘‘discriminatory manner’’ ofrecruitment? The employer shall not



apply otherwise-legitimate screeningcriteria in a manner which would skewthe recruitment process in favor of H–1B nonimmigrants. In other words, theemployer’s application of its screeningcriteria shall provide full and fairsolicitation and consideration of U.S.applicants. The recruitment would beconsidered to be conducted in adiscriminatory manner if the employerapplied its screening criteria in adisparate manner (whether between H–1B and U.S. workers, or between jobswhere H–1B nonimmigrants areinvolved and jobs where such workersare not involved). The employer wouldalso be considered to be recruiting in adiscriminatory manner if it usedscreening criteria that are prohibited byany applicable discrimination law (e.g.,sex, race, age, national origin). Theemployer that conducts recruitment in adiscriminatory manner would beconsidered to have failed to conduct itsrecruitment of U.S. workers in goodfaith.

(h) What constitute ‘‘good faith steps’’in recruitment of U.S. workers? Theemployer shall perform its recruitment,as described in paragraphs (d) through(g) of this section, so as to offer fairopportunities for employment to U.S.workers, without skewing therecruitment process against U.S.workers or in favor of H–1Bnonimmigrants. No specific regimen isrequired for solicitation methodsseeking applicants or for pre-selectiontreatment screening applicants. Theemployer’s recruitment process,including pre-selection treatment, mustassure that U.S. workers are given a fairchance for consideration for a job, ratherthan being ignored or rejected througha process that serves the employer’spreferences with respect to the make upof its workforce (e.g., the Departmentwould look with disfavor on a practiceof interviewing H–1B applicants but notU.S. applicants, or a practice ofscreening the applications of H–1Bnonimmigrants differently from theapplications of U.S. workers). Theemployer shall not exercise a preferencefor its incumbent nonimmigrant workerswho do not yet have H–1B status (e.g.,workers on student visas). The employershall recruit in the United States,seeking U.S. worker(s), for the job(s) inthe United States for which H–1Bnonimmigrant(s) are or will be sought.

(i) What documentation is theemployer required to make or maintain,concerning its recruitment of U.S.workers?

(1) The employer shall maintaindocumentation of the recruitingmethods used, including the places anddates of the advertisements and postings

or other recruitment methods used, thecontent of the advertisements andpostings, and the compensation terms (ifsuch are not included in the content ofthe advertisements and postings). Thedocumentation may be in any form,including copies of advertisements orproofs from the publisher, the order orconfirmation from the publisher, anelectronic or printed copy of theInternet posting, or a memorandum tothe file.

(2) The employer shall retain anydocumentation it has received orprepared concerning the treatment ofapplicants, such as copies ofapplications and/or related documents,test papers, rating forms, recordsregarding interviews, and records of joboffers and applicants’ responses. Tocomply with this requirement, theemployer is not required to create anydocumentation it would not otherwisecreate.

(3) The documentation maintained bythe employer shall be made available tothe Administrator in the event of anenforcement action pursuant to subpartI of this part. The documentation shallbe maintained for the period of timespecified in § 655.760.

(4) The employer’s public access filemaintained in accordance with§ 655.760 shall contain informationsummarizing the principal recruitmentmethods used and the time frame(s) inwhich such recruitment methods wereused. This may be accomplished eitherthrough a memorandum or throughcopies of pertinent documents.

(j) In addition to conducting goodfaith recruitment of U.S. workers (asdescribed in paragraphs (a) through (h)of this section), the employer is requiredto have offered the job to any U.S.worker who applies and is equally orbetter qualified for the job than the H–1B nonimmigrant (see 8 U.S.C.1182(n)(1)(G)(i)(II)); this requirement isenforced by the Department of Justice(see 8 U.S.C. 1182(n)(5); 20 CFR655.705(c)).

19. Section 655.740 is amended byrevising the title and paragraph (a)(2)(ii)to read as follows:

§ 655.740 What actions are taken on laborcondition applications?

(a) * * *(2) * * *(ii) When the Form ETA 9035

contains obvious inaccuracies. Anobvious inaccuracy will be found if theemployer files an application in error—e.g., where the Administrator, Wage andHour Division, after notice andopportunity for a hearing pursuant tosubpart I of this part, has notified ETAin writing that the employer has been

disqualified from employing H–1Bnonimmigrants under section 212(n)(2)of the INA. Examples of other obviousinaccuracies include stating a wage ratebelow the FLSA minimum wage,submitting an LCA earlier than sixmonths before the beginning date of theperiod of intended employment,identifying multiple occupations on asingle LCA, identifying a wage which isbelow the prevailing wage listed on theLCA, or identifying a wage range wherethe bottom of such wage range is lowerthan the prevailing wage listed on theLCA.* * * * *

20. Section 655.750 is amended byrevising the title and paragraph (b)(2) toread as follows:

§ 655.750 What is the validity period of thelabor condition application?

* * * * *(b) * * *(2) Requests for withdrawals shall be

in writing and shall be directed to theETA service center at the followingaddress: ETA Application ProcessingCenter, P.O. Box 13640, PhiladelphiaPA 19101.* * * * *

21. Section 655.760 is amended byrevising the title and paragraph (a)(1),adding paragraphs (a)(6), (a)(7), (a)(8),(a)(9) and (a)(10), and revising the firstsentence of paragraph (c), to read asfollows:

§ 655.760 What records are to be madeavailable to the public, and what recordsare to be retained?

(a) * * *(1) A copy of the completed labor

condition application, Form ETA 9035,and cover pages, Form ETA 9035CP. Ifthe application is submitted byfacsimile transmission, the applicationcontaining the original signature shallbe maintained by the employer.* * * * *

(6) A summary of the benefits offeredto U.S. workers in the sameoccupational classifications as H–1Bnonimmigrants, a statement as to howany differentiation in benefits is madewhere not all employees are offered orreceive the same benefits (suchsummary need not include proprietaryinformation such as the costs of thebenefits to the employer, or the detailsof stock options or incentivedistributions), and/or, where applicable,a statement that some/all H–1Bnonimmigrants are receiving ‘‘homecountry’’ benefits (see § 655.731(c)(3));

(7) Where the employer undergoes achange in corporate structure, a swornstatement by a responsible official of the



new employing entity that it accepts allobligations, liabilities and undertakingsunder the LCAs filed by the predecessoremploying entity, together with a list ofeach affected LCA and its date ofcertification, and a description of theactual wage system and EIN of the newemploying entity (see § 655.730(e)(1)).

(8) Where the employer utilizes thedefinition of ‘‘single employer’’in theIRC, a list of any entities included aspart of the single employer in makingthe determination as to its H–1B-dependency status (see § 655.736(d)(7));

(9) Where the employer is H–1B-dependent and/or a willful violator, andindicates on the LCA(s) that only‘‘exempt’’ H–1B nonimmigrants will beemployed, a list of such ‘‘exempt’’ H–1Bnonimmigrants (see § 655.737(e)(1));

(10) Where the employer is H–1B-dependent or a willful violator, asummary of the recruitment methodsused and the time frames of recruitmentof U.S. workers (or copies of pertinentdocuments showing this information)(see § 655.739(i)(4).* * * * *

(c) Retention of records. Either at theemployer’s principal place of businessin the U.S. or at the place ofemployment, the employer shall retaincopies of the records required by thissubpart for a period of one year beyondthe last date on which any H–1Bnonimmigrant is employed under thelabor condition application or, if nononimmigrants were employed underthe labor condition application, oneyear from the date the labor conditionapplication expired or waswithdrawn.* * ** * * * *

Subpart I—Enforcement of H–1B LaborCondition Applications


§ 655.800 Who will enforce the LCAs andhow will they be enforced?

(a) Authority of Administrator. Exceptas provided in § 655.807, theAdministrator shall perform all theSecretary’s investigative andenforcement functions under section212(n) of the INA (8 U.S.C. 1182(n)) andthis subpart I and subpart H of this part.

(b) Conduct of investigations. TheAdministrator, either pursuant to acomplaint or otherwise, shall conductsuch investigations as may beappropriate and, in connectiontherewith, enter and inspect such placesand such records (and maketranscriptions or copies thereof),question such persons and gather suchinformation as deemed necessary by the

Administrator to determine complianceregarding the matters which are thesubject of the investigation.

(c) Employer cooperation/availabilityof records. An employer shall at alltimes cooperate in administrative andenforcement proceedings. An employerbeing investigated shall make availableto the Administrator such records,information, persons, and places as theAdministrator deems appropriate tocopy, transcribe, question, or inspect.No employer subject to the provisions ofsection 212(n) of the INA and/or thissubpart I or subpart H of this part shallinterfere with any official of theDepartment of Labor performing aninvestigation, inspection or lawenforcement function pursuant to 8U.S.C. 1182(n) or this subpart I orsubpart H of this part. Any suchinterference shall be a violation of thelabor condition application and thissubpart I and subpart H of this part, andthe Administrator may take such furtheractions as the Administrator considersappropriate. (Federal criminal statutesprohibit certain interference with aFederal officer in the performance ofofficial duties. 18 U.S.C. 111 and 18U.S.C. 1114.)

(d) Confidentiality. The Administratorshall, to the extent possible underexisting law, protect the confidentialityof any person who provides informationto the Department in confidence in thecourse of an investigation or otherwiseunder this subpart I or subpart H of thispart.


§ 655.801 What protection do employeeshave from retaliation?

(a) No employer subject to thissubpart I or subpart H of this part shallintimidate, threaten, restrain, coerce,blacklist, discharge or in any othermanner discriminate against anemployee (which term includes a formeremployee or an applicant foremployment) because the employeehas—

(1) Disclosed information to theemployer, or to any other person, thatthe employee reasonably believesevidences a violation of section 212(n)of the INA or any regulation relating tosection 212(n), including this subpart Iand subpart H of this part and anypertinent regulations of INS or theDepartment of Justice; or

(2) Cooperated or sought to cooperatein an investigation or other proceedingconcerning the employer’s compliancewith the requirements of section 212(n)of the INA or any regulation relating tosection 212(n).

(b) It shall be a violation of thissection for any employer to engage inthe conduct described in paragraph (a)of this section. Such conduct shall besubject to the penalties prescribed bysection 212(n)(2)(C)(ii) of the INA and§ 655.810(b)(2), i.e., a fine of up to$5,000, disqualification from filingpetitions under section 204 or section214(c) of the INA for at least two years,and such further administrativeremedies as the Administrator considersappropriate.

(c) Pursuant to section 212(n)(2)(v) ofthe INA, an H–1B nonimmigrant whohas filed a complaint alleging that anemployer has discriminated against theemployee in violation of paragraph(d)(1) of this section (or § 655.501(a))may be allowed to seek otherappropriate employment in the UnitedStates, provided the employee isotherwise eligible to remain and work inthe United States. Such employmentmay not exceed the maximum period ofstay authorized for a nonimmigrantclassified under section 212(n) of theINA. Further information concerningthis provision should be sought from theImmigration and Naturalization Service.


§ 655.805 What violations may theAdministrator investigate?

(a) The Administrator, throughinvestigation, shall determine whetheran H–1B employer has—

(1) Filed a labor condition applicationwith ETA which misrepresents amaterial fact (Note to paragraph (a)(1):Federal criminal statutes providepenalties of up to $10,000 and/orimprisonment of up to five years forknowing and willful submission of falsestatements to the Federal Government.18 U.S.C. 1001; see also 18 U.S.C. 1546);

(2) Failed to pay wages (includingbenefits provided as compensation forservices), as required under § 655.731(including payment of wages for certainnonproductive time);

(3) Failed to provide workingconditions as required under § 655.732;

(4) Filed a labor condition applicationfor H–1B nonimmigrants during a strikeor lockout in the course of a labordispute in the occupationalclassification at the place ofemployment, as prohibited by § 655.733;

(5) Failed to provide notice of thefiling of the labor condition application,as required in § 655.734;

(6) Failed to specify accurately on thelabor condition application the numberof workers sought, the occupationalclassification in which the H–1Bnonimmigrant(s) will be employed, orthe wage rate and conditions under



which the H–1B nonimmigrant(s) willbe employed;

(7) Displaced a U.S. worker (includingdisplacement of a U.S. worker employedby a secondary employer at the worksitewhere an H–1B worker is placed), asprohibited by § 655.738 (if applicable);

(8) Failed to make the requireddisplacement inquiry of anotheremployer at a worksite where H–1Bnonimmigrant(s) were placed, as setforth in § 655.738 (if applicable);

(9) Failed to recruit in good faith, asrequired by § 655.739 (if applicable);

(10) Displaced a U.S. worker in thecourse of committing a willful violationof any of the conditions in paragraphs(a)(2) through (9) of this section, orwillful misrepresentation of a materialfact on a labor condition application;

(11) Required or accepted from an H–1B nonimmigrant payment orremittance of the additional $500/$1,000 fee incurred in filing an H–1Bpetition with the INS, as prohibited by§ 655.731(c)(10)(ii);

(12) Required or attempted to requirean H–1B nonimmigrant to pay a penaltyfor ceasing employment prior to anagreed upon date, as prohibited by§ 655.731(c)(10)(i);

(13) Discriminated against anemployee for protected conduct, asprohibited by § 655.801;

(14) Failed to make available forpublic examination the application andnecessary document(s) at the employer’sprincipal place of business or worksite,as required by § 655.760(a);

(15) Failed to maintaindocumentation, as required by this part;and

(16) Failed otherwise to comply inany other manner with the provisions ofthis subpart I or subpart H of this part.

(b) The determination letter settingforth the investigation findings (see§ 655.815) shall specify if the violationswere found to be substantial or willful.Penalties may be assessed anddisqualification ordered for violation ofthe provisions in paragraphs (a)(5), (6),or (9) of this section only if the violationwas found to be substantial or willful.The penalties may be assessed anddisqualification ordered for violation ofthe provisions in paragraphs (a)(2) or (3)of this section only if the violation wasfound to be willful, but the Secretarymay order payment of back wages(including benefits) due for suchviolation whether or not the violationwas willful.

(c) For purposes of this part, ‘‘willfulfailure’’ means a knowing failure or areckless disregard with respect towhether the conduct was contrary tosection 212(n)(1)(A)(i) or (ii) of the INA,or §§ 655.731 or 655.732. See

McLaughlin v. Richland Shoe Co., 486U.S. 128 (1988); see also Trans WorldAirlines v. Thurston, 469 U.S. 111(1985).

(d) The provisions of this part becomeapplicable upon the date that theemployer’s LCA is certified, pursuant to§§ 655.740(a)(1) and 655.750, whetheror not the employer hires any H–1Bnonimmigrants in the occupation for theperiod of employment covered in thelabor condition application. If theperiod of employment specified in thelabor condition application expires orthe employer withdraws the applicationin accordance with § 655.750(b), theprovisions of this part will no longerapply with respect to such application,except as provided in § 655.750(b)(3)and (4).


§ 655.806 Who may file a complaint andhow is it processed?

(a) Any aggrieved party, as defined in§ 655.715, may file a complaint alleginga violation described in § 655.805(a).The procedures for filing a complaint byan aggrieved party and its processing bythe Administrator are set forth in thissection. The procedures for filing andprocessing information allegingviolations from persons or organizationsthat are not aggrieved parties are setforth in § 655.807. With regard tocomplaints filed by any aggrievedperson or organization—

(1) No particular form of complaint isrequired, except that the complaint shallbe written or, if oral, shall be reducedto writing by the Wage and HourDivision official who receives thecomplaint.

(2) The complaint shall set forthsufficient facts for the Administrator todetermine whether there is reasonablecause to believe that a violation asdescribed in § 655.805 has beencommitted, and therefore that aninvestigation is warranted. Thisdetermination shall be made within 10days of the date that the complaint isreceived by a Wage and Hour Divisionofficial. If the Administrator determinesthat the complaint fails to presentreasonable cause for an investigation,the Administrator shall so notify thecomplainant, who may submit a newcomplaint, with such additionalinformation as may be necessary. Nohearing or appeal pursuant to thissubpart shall be available where theAdministrator determines that aninvestigation on a complaint is notwarranted.

(3) If the Administrator determinesthat an investigation on a complaint iswarranted, the complaint shall be

accepted for filing; an investigationshall be conducted and a determinationissued within 30 calendar days of thedate of filing. The time for theinvestigation may be increased with theconsent of the employer and thecomplainant, or if, for reasons outside ofthe control of the Administrator, theAdministrator needs additional time toobtain information needed from theemployer or other sources to determinewhether a violation has occurred. Nohearing or appeal pursuant to thissubpart shall be available regarding theAdministrator’s determination that aninvestigation on a complaint iswarranted.

(4) In the event that the Administratorseeks a prevailing wage determinationfrom ETA pursuant to § 655.731(d), oradvice as to prevailing workingconditions from ETA pursuant to§ 655.732(c)(2), the 30-day investigationperiod shall be suspended from the dateof the Administrator’s request to thedate of the Administrator’s receipt of thewage determination (or, in the eventthat the employer challenges the wagedetermination through the EmploymentService complaint system, to the date ofthe completion of such complaintprocess).

(5) A complaint must be filed not laterthan 12 months after the latest date onwhich the alleged violation(s) werecommitted, which would be the date onwhich the employer allegedly failed toperform an action or fulfill a conditionspecified in the LCA, or the date onwhich the employer, through its actionor inaction, allegedly demonstrated amisrepresentation of a material fact inthe LCA. This jurisdictional bar doesnot affect the scope of the remedieswhich may be assessed by theAdministrator. Where, for example, acomplaint is timely filed, back wagesmay be assessed for a period prior toone year before the filing of a complaint.

(6) A complaint may be submitted toany local Wage and Hour Divisionoffice. The addresses of such offices arefound in local telephone directories,and on the Department’s informationalsite on the Internet at http://www.dol.gov/dol/esa/public/contacts/whd/america2.htm. The office or personreceiving such a complaint shall refer itto the office of the Wage and HourDivision administering the area inwhich the reported violation is allegedto have occurred.

(b) When an investigation has beenconducted, the Administrator shall,pursuant to § 655.815, issue a writtendetermination as described in§ 655.805(a).




§ 655.807 How may someone who is notan ‘‘aggrieved party’’ allege violations, andhow will those allegations be processed?

(a) Persons who are not aggrievedparties may submit informationconcerning possible violations of theprovisions described in § 655.805(a)(1)through (4) and (a)(7) through (9). Noparticular form is required to submit theinformation, except that the informationshall be submitted in writing or, if oral,shall be reduced to writing by the Wageand Hour Division official who receivesthe information. An optional form shallbe available to be used in setting forththe information. The informationprovided shall include:

(1) The identity of the personsubmitting the information and theperson’s relationship, if any, to theemployer or other informationconcerning the person’s basis for havingknowledge of the employer’semployment practices or its compliancewith the requirements of this subpart Iand subpart H of this part; and

(2) A description of the possibleviolation, including a description of thefacts known to the person submittingthe information, in sufficient detail forthe Secretary to determine if there isreasonable cause to believe that theemployer has committed a willfulviolation of the provisions described in§ 655.805(a)(1), (2), (3), (4), (7), (8), or(9).

(b) The Administrator may interviewthe person submitting the informationas appropriate to obtain furtherinformation to determine whether therequirements of this section are met. Inaddition, the person submittinginformation under this section shall beinformed that his or her identity willnot be disclosed to the employerwithout his or her permission.

(c) Information concerning possibleviolations must be submitted not laterthan 12 months after the latest date onwhich the alleged violation(s) werecommitted. The 12-month period shallbe applied in the manner described in§ 655.806(a)(5).

(d) Upon receipt of the information,the Administrator shall promptly reviewthe information submitted anddetermine:

(1) Does the source likely possessknowledge of the employer’s practicesor employment conditions or theemployer’s compliance with therequirements of subpart H of this part?

(2) Has the source provided specificcredible information alleging a violationof the requirements of the conditionsdescribed in § 655.805(a)(1), (2), (3), (4),(7), (8), or (9)?

(3) Does the information in support ofthe allegations appear to provide

reasonable cause to believe that theemployer has committed a violation ofthe provisions described in§ 655.805(a)(1), (2), (3), (4), (7), (8), or(9), and that

(i) The alleged violation is willful?(ii) The employer has engaged in a

pattern or practice of violations? or(iii) The employer has committed

substantial violations, affecting multipleemployees?

(e) ‘‘Information’’ within the meaningof this section does not includeinformation from an officer or employeeof the Department of Labor unless it wasobtained in the course of a lawfulinvestigation, and does not includeinformation submitted by the employerto the Attorney General or the Secretaryin securing the employment of an H–1Bnonimmigrant.

(f)(1) Except as provided in paragraph(f)(2) of this section, where theAdministrator has received informationfrom a source other than an aggrievedparty which satisfies all of therequirements of paragraphs (a) through(d) of this section, or where theAdministrator or another agency of theDepartment obtains such information ina lawful investigation under this or anyother section of the INA or any otherAct, the Administrator (by mail orfacsimile transmission) shall promptlynotify the employer that the informationhas been received, describe the nature ofthe allegation in sufficient detail topermit the employer to respond, andrequest that the employer respond to theallegation within 10 days of its receiptof the notification. The Administratorshall not identify the source orinformation which would reveal theidentity of the source without his or herpermission.

(2) The Administrator may dispensewith notification to the employer of thealleged violations if the Administratordetermines that such notification mightinterfere with an effort to secure theemployer’s compliance. Thisdetermination shall not be subject toreview in any administrative proceedingand shall not be subject to judicialreview.

(g) After receipt of any response to theallegations provided by the employer,the Administrator will promptly reviewall of the information received anddetermine whether the allegationsshould be referred to the Secretary fora determination whether aninvestigation should be commenced bythe Administrator.

(h) If the Administrator refers theallegations to the Secretary, theSecretary shall make a determination asto whether to authorize an investigationunder this section.

(1) No investigation shall becommenced unless the Secretary (or theDeputy Secretary or other ActingSecretary in the absence or disability)personally authorizes the investigationand certifies—

(i) That the information providedunder paragraph (a) of this section orobtained pursuant to a lawfulinvestigation by the Department ofLabor provides reasonable cause tobelieve that the employer hascommitted a violation of the provisionsdescribed in § 655.805(a)(1), (2), (3), (4),(7), (8), or (9);

(ii) That there is reasonable cause tobelieve the alleged violations arewillful, that the employer has engagedin a pattern or practice of suchviolations, or that the employer hascommitted substantial violations,affecting multiple employees; and

(iii) That the other requirements ofparagraphs (a) through (d) of this sectionhave been met.

(2) No hearing shall be available froma decision by the Administratordeclining to refer allegations addressedby this section to the Secretary, andnone shall be available from a decisionby the Secretary certifying or decliningto certify that an investigation iswarranted.

(i) If the Secretary issues acertification, an investigation shall beconducted and a determination issuedwithin 30 days after the certification isreceived by the local Wage and Houroffice undertaking the investigation. Thetime for the investigation may beincreased upon the agreement of theemployer and the Administrator or, iffor reasons outside of the control of theAdministrator, additional time isnecessary to obtain information neededfrom the employer or other sources todetermine whether a violation hasoccurred.

(j) In the event that the Administratorseeks a prevailing wage determinationfrom ETA pursuant to § 655.731(d), oradvice as to prevailing workingconditions from ETA pursuant to§ 655.732(c)(2), the 30-day investigationperiod shall be suspended from the dateof the Administrator’s request to thedate of the Administrator’s receipt of thewage determination (or, in the eventthat the employer challenges the wagedetermination through the EmploymentService complaint system, to the date ofthe completion of such complaintprocess).

(k) Following the investigation, theAdministrator shall issue adetermination in accordance with to§ 655.815.

(l) This section shall expire onSeptember 30, 2003 unless section



212(n)(2)(G) of the INA is extended byfuture legislative action. Absent suchextension, no investigation shall becertified by the Secretary under thissection after that date; however, anyinvestigation certified on or beforeSeptember 30, 2003 may be completed.


§ 655.808 Under what circumstances mayrandom investigations be conducted?

(a) The Administrator may conductrandom investigations of an employerduring a five-year period beginning withthe date of any of the following findings,provided such date is on or afterOctober 21, 1998:

(1) A finding by the Secretary that theemployer willfully violated

any of the provisions described in§ 655.805(a)(1) through (9);

(2) A finding by the Secretary that theemployer willfully misrepresentedmaterial fact(s) in a labor conditionapplication filed pursuant to § 655.730;or

(3) A finding by the Attorney Generalthat the employer willfully failed tomeet the condition of section212(n)(1)(G)(i)(II) of the INA (pertainingto an offer of employment to an equallyor better qualified U.S. worker).

(b) A finding within the meaning ofthis section is a final, unappealeddecision of the agency. See§§ 655.520(a), 655.845(c), and655.855(b).

(c) An investigation pursuant to thissection may be made at any time theAdministrator, in the exercise ofdiscretion, considers appropriate,without regard to whether theAdministrator has reason to believe aviolation of the provisions of thissubpart I and subpart H of this part hasbeen committed. Following aninvestigation, the Administrator shallissue a determination in accordancewith § 655.815.


§ 655.810 What remedies may be orderedif violations are found?

(a) Upon determining that anemployer has failed to pay wages orprovide fringe benefits as required by§ 655.731 and § 655.732, theAdministrator shall assess and overseethe payment of back wages or fringebenefits to any H–1B nonimmigrant whohas not been paid or provided fringebenefits as required. The back wages orfringe benefits shall be equal to thedifference between the amount thatshould have been paid and the amountthat actually was paid to (or withrespect to) such nonimmigrant(s).

(b) Civil money penalties. TheAdministrator may assess civil moneypenalties for violations as follows:

(1) An amount not to exceed $1,000per violation for:

(i) A violation pertaining to strike/lockout (§ 655.733) or displacement ofU.S. workers (§ 655.738);

(ii) A substantial violation pertainingto notification (§ 655.734), laborcondition application specificity(§ 655.730), or recruitment of U.S.workers (§ 655.739);

(iii) A misrepresentation of materialfact on the labor condition application;

(iv) An early-termination penalty paidby the employee (§ 655.731(c)(10)(i));

(v) Payment by the employee of theadditional $500/$1,000 filing fee(§ 655.731(c)(10)(ii)); or

(vi) Violation of the requirements ofthe regulations in this subpart I andsubpart H of this part or the provisionsregarding public access (§ 655.760)where the violation impedes the abilityof the Administrator to determinewhether a violation of section 212(n) ofthe INA has occurred or the ability ofmembers of the public to haveinformation needed to file a complaintor information regarding allegedviolations of section 212(n) of the INA;

(2) An amount not to exceed $5,000per violation for:

(i) A willful failure pertaining towages/working conditions (§§ 655.731,655.732), strike/lockout, notification,labor condition application specificity,displacement (including placement ofan H–1B nonimmigrant at a worksitewhere the other/secondary employerdisplaces a U.S. worker), or recruitment;

(ii) A willful misrepresentation of amaterial fact on the labor conditionapplication; or

(iii) Discrimination against anemployee (§ 655.801(a)); or

(3) An amount not to exceed $35,000per violation where an employer(whether or not the employer is an H–1B-dependent employer or willfulviolator) displaced a U.S. workeremployed by the employer in the periodbeginning 90 days before and ending 90days after the filing of an H–1B petitionin conjunction with any of the followingviolations:

(i) A willful violation of any of theprovisions described in § 655.805(a)(2)through (9) pertaining to wages/workingcondition, strike/lockout, notification,labor condition application specificity,displacement, or recruitment; or

(ii) A willful misrepresentation of amaterial fact on the labor conditionapplication (§ 655.805(a)(1)).

(c) In determining the amount of thecivil money penalty to be assessed, theAdministrator shall consider the type of

violation committed and other relevantfactors. The factors which may beconsidered include, but are not limitedto, the following:

(1) Previous history of violation, orviolations, by the employer under theINA and this subpart I or subpart H ofthis part;

(2) The number of workers affected bythe violation or violations;

(3) The gravity of the violation orviolations;

(4) Efforts made by the employer ingood faith to comply with theprovisions of 8 U.S.C. 1182(n) and thissubparts H and I of this part;

(5) The employer’s explanation of theviolation or violations;

(6) The employer’s commitment tofuture compliance; and

(7) The extent to which the employerachieved a financial gain due to theviolation, or the potential financial loss,potential injury or adverse effect withrespect to other parties.

(d) Disqualification from approval ofpetitions. The Administrator shall notifythe Attorney General pursuant to§ 655.855 that the employer shall bedisqualified from approval of anypetitions filed by, or on behalf of, theemployer pursuant to section 204 orsection 214(c) of the INA for thefollowing periods:

(1) At least one year for violation(s) ofany of the provisions specified inparagraph (b)(1)(i) through (iii) of thissection;

(2) At least two years for violation(s)of any of the provisions specified inparagraph (b)(2) of this section; or

(3) At least three years, for violation(s)specified in paragraph (b)(3) of thissection.

(e) Other administrative remedies. (1)If the Administrator finds a violation ofthe provisions specified in paragraph(b)(1)(iv) or (v) of this section, theAdministrator may issue an orderrequiring the employer to return to theemployee (or pay to the U.S. Treasuryif the employee cannot be located) anymoney paid by the employee inviolation of those provisions.

(2) If the Administrator finds aviolation of the provisions specified inparagraph (b)(1)(i) through (iii), (b)(2), or(b)(3) of this section, the Administratormay impose such other administrativeremedies as the Administratordetermines to be appropriate, includingbut not limited to reinstatement ofworkers who were discriminated againstin violation of § 655.805(a),reinstatement of displaced U.S. workers,back wages to workers who have beendisplaced or whose employment hasbeen terminated in violation of these



provisions, or other appropriate legal orequitable remedies.

(f) The civil money penalties, backwages, and/or any other remedy(ies)determined by the Administrator to beappropriate are immediately due forpayment or performance upon theassessment by the Administrator, orupon the decision by an administrativelaw judge where a hearing is timelyrequested, or upon the decision by theSecretary where review is granted. Theemployer shall remit the amount of thecivil money penalty by certified checkor money order made payable to theorder of ‘‘Wage and Hour Division,Labor.’’ The remittance shall bedelivered or mailed to the Wage andHour Division office in the mannerdirected in the Administrator’s notice ofdetermination. The payment orperformance of any other remedyprescribed by the Administrator shallfollow procedures established by theAdministrator. Distribution of backwages shall be administered inaccordance with existing proceduresestablished by the Administrator.

(g) The Federal Civil PenaltiesInflation Adjustment Act of 1990, asamended (28 U.S.C. 2461 note), requiresthat inflationary adjustments to civilmoney penalties in accordance with aspecified cost-of-living formula bemade, by regulation, at least every fouryears. The adjustments are to be basedon changes in the Consumer Price Indexfor all Urban Consumers (CPI–U) for theU.S. City Average for All Items. Theadjusted amounts will be published inthe Federal Register. The amount of thepenalty in a particular case will bebased on the amount of the penalty ineffect at the time the violation occurs.

29. Section 655.815 is amended byrevising the title and paragraphs (a) and(c)(5) to read as follows:

§ 655.815 What are the requirements forthe Administrator’s determination?

(a) The Administrator’sdetermination, issued pursuant to§ 655.806, 655.807, or 655.808, shall beserved on the complainant, theemployer, and other known interestedparties by personal service or bycertified mail at the parties’ last knownaddresses. Where service by certifiedmail is not accepted by the party, theAdministrator may exercise discretionto serve the determination by regularmail.* * * * *

(c) * * *(5) Where appropriate, inform the

parties that, pursuant to § 655.855, theAdministrator shall notify ETA and the

Attorney General of the occurrence of aviolation by the employer.

30. Section 655.820 is amended byrevising the title and paragraph (a) toread as follows:

§ 655.820 How is a hearing requested?(a) Any interested party desiring

review of a determination issued under§§ 655.805 and 655.815, includingjudicial review, shall make a request forsuch an administrative hearing inwriting to the Chief Administrative LawJudge at the address stated in the noticeof determination. If such a request for anadministrative hearing is timely filed,the Administrator’s determination shallbe inoperative unless and until the caseis dismissed or the Administrative LawJudge issues an order affirming thedecision.* * * * *

31. The title of § 655.825 is revised toread as follows:

§ 655.825 What rules of practice apply tothe hearing?* * * * *


§ 655.830 What rules apply to service ofpleadings?* * * * *


§ 655.835 How will the administrative lawjudge conduct the proceeding?* * * * *

34. Section 655.840 is amended byrevising the title and paragraph (c) toread as follows:

§ 655.840 What are the requirements for adecision and order of the administrative lawjudge?* * * * *

(c) In the event that theAdministrator’s determination of wageviolation(s) and computation of backwages are based upon a wagedetermination obtained by theAdministrator from ETA during theinvestigation (pursuant to § 655.731(d))and the administrative law judgedetermines that the Administrator’srequest was not warranted (under thestandards in § 655.731(d)), theadministrative law judge shall remandthe matter to the Administrator forfurther proceedings on the existence ofwage violations and/or the amount(s) ofback wages owed. If there is no suchdetermination and remand by theadministrative law judge, theadministrative law judge shall accept asfinal and accurate the wagedetermination obtained from ETA or, in

the event either the employer or anotherinterested party filed a timely complaintthrough the Employment Servicecomplaint system, the final wagedetermination resulting from thatprocess. See § 655.731; see also 20 CFR658.420 through 658.426. Under nocircumstances shall the administrativelaw judge determine the validity of thewage determination or requiresubmission into evidence or disclosureof source data or the names ofestablishments contacted in developingthe survey which is the basis for theprevailing wage determination.* * * * *


§ 655.845 What rules apply to appeal of thedecision of the administrative law judge?

(a) The Administrator or anyinterested party desiring review of thedecision and order of an administrativelaw judge, including judicial review,shall petition the Department’sAdministrative Review Board (Board) toreview the decision and order. To beeffective, such petition shall be receivedby the Board within 30 calendar days ofthe date of the decision and order.Copies of the petition shall be served onall parties and on the administrative lawjudge.

(b) No particular form is prescribedfor any petition for the Board’s reviewpermitted by this subpart. However, anysuch petition shall:

(1) Be dated;(2) Be typewritten or legibly written;(3) Specify the issue or issues stated

in the administrative law judge decisionand order giving rise to such petition;

(4) State the specific reason or reasonswhy the party petitioning for reviewbelieves such decision and order are inerror;

(5) Be signed by the party filing thepetition or by an authorizedrepresentative of such party;

(6) Include the address at which suchparty or authorized representativedesires to receive furthercommunications relating thereto; and

(7) Attach copies of the administrativelaw judge’s’s decision and order, andany other record documents whichwould assist the Board in determiningwhether review is warranted.

(c) Whenever the Board determines toreview the decision and order of anadministrative law judge, a notice of theBoard’s determination shall be servedupon the administrative law judge,upon the Office of Administrative LawJudges, and upon all parties to theproceeding within 30 calendar daysafter the Board’s receipt of the petitionfor review. If the Board determines that



it will review the decision and order,the order shall be inoperative unlessand until the Board issues an orderaffirming the decision and order.

(d) Upon receipt of the Board’s notice,the Office of Administrative Law Judgesshall within 15 calendar days forwardthe complete hearing record to theBoard.

(e) The Board’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 suchsubmissions shall be made.

(f) All documents submitted to theBoard shall be filed with theAdministrative Review Board, Room S–4309, U.S. Department of Labor,Washington, DC 20210. An original andtwo copies of all documents shall befiled. Documents are not deemed filedwith the Board until actually receivedby the Board. All documents, includingdocuments filed by mail, shall bereceived by the Board either on orbefore the due date.

(g) Copies of all documents filed withthe Board shall be served upon all otherparties involved in the proceeding.Service upon the Administrator shall bein accordance with § 655.830(b).

(h) The Board’s final decision shall beissued within 180 calendar days fromthe date of the notice of intent to review.The Board’s decision shall be servedupon all parties and the administrativelaw judge.

(i) Upon issuance of the Board’sdecision, the Board shall transmit theentire record to the ChiefAdministrative Law Judge for custodypursuant to § 655.850.


§ 655.850 Who has custody of theadministrative record?

* * * * *37. Section 655.855 is revised to read

as follows:

§ 655.855 What notice shall be given to theEmployment and Training Administrationand the Attorney General of the decisionregarding violations?

(a) The Administrator shall notify theAttorney General and ETA of the finaldetermination of any violation requiringthat the Attorney General not approvepetitions filed by an employer. TheAdministrator’s notification willaddress the type of violation committedby the employer and the appropriatestatutory period for disqualification ofthe employer from approval of petitions.Violations requiring notification to the

Attorney General are identified in§ 655.810(f).

(b) The Administrator shall notify theAttorney General and ETA upon theearliest of the following events:

(1) Where the Administratordetermines that there is a basis for afinding of violation by an employer, andno timely request for hearing is madepursuant to § 655.820; or

(2) Where, after a hearing, theadministrative law judge issues adecision and order finding a violationby an employer, and no timely petitionfor review is filed with the Department’sAdministrative Review Board (Board)pursuant to § 655.845; or

(3) Where a timely petition for reviewis filed from an administrative lawjudge’s decision finding a violation andthe Board either declines within 30 daysto entertain the appeal, pursuant to§ 655.845(c), or the Board reviews andaffirms the administrative law judge’sdetermination; or

(4) Where the administrative lawjudge finds that there was no violationby an employer, and the Board, uponreview, issues a decision pursuant to§ 655.845, holding that a violation wascommitted by an employer.

(c) The Attorney General, uponreceipt of notification from theAdministrator pursuant to paragraph (a)of this section, shall not approvepetitions filed with respect to thatemployer under sections 204 or 214(c)of the INA (8 U.S.C. 1154 and 1184(c))for nonimmigrants to be employed bythe employer, for the period of timeprovided by the Act and described in§ 655.810(f).

(d) ETA, upon receipt of theAdministrator’s notice pursuant toparagraph (a) of this section, shallinvalidate the employer’s laborcondition application(s) under thissubpart I and subpart H of this part, andshall not accept for filing anyapplication or attestation submitted bythe employer under 20 CFR part 656 orsubparts A, B, C, D, E, H, or I of thispart, for the same calendar period asspecified by the Attorney General.

PART 656—LABOR CERTIFICATIONPROCESS FOR PERMANENTEMPLOYMENT OF ALIENS IN THEUNITED STATES

1. The authority citation for Part 656is revised to read as follows:

Authority: 8 U.S.C. 1182(a)(5)(A),1182(p)(1); 29 U.S.C. 49 et seq.; section 122,Pub.L. 101–649, 109 Stat. 4978.

2. Section 656.3 is amended byremoving the definition of Federalresearch agency.

3. Section 656.40 is amended byrevising paragraphs (a)(1) and (c), andthe introductory text to paragraph (b),by redesignating paragraph (d) as (e),and by adding a new paragraph (d) asfollows:

§ 656.40 Determination of prevailing wagefor labor certification purposes.

(a) * * *(1) Except as provided in paragraphs

(c) and (d) of this section, if the jobopportunity is in an occupation whichis subject to a wage determination in thearea under the Davis-Bacon Act, 40U.S.C. 276a et seq., 29 CFR part 1, or theMcNamara-O’Hara Service Contract Act,41 U.S.C. 351 et seq., 29 CFR part 4, theprevailing wage shall be at the raterequired under the statutorydetermination. Certifying Officers shallrequest the assistance of the DOLEmployment Standards Administrationwage specialists if they need assistancein making this determination.* * * * *

(b) For purposes of this section,except as provided in paragraphs (c) and(d), ‘‘similarly employed’’ shall mean‘‘having substantially comparable jobsin the occupational category in the areaof intended employment,’’ except that,if no such workers are employed byemployers other than the employerapplicant in the area of intendedemployment, ‘‘similarly employed’’shall mean:* * * * *

(c) In computing the prevailing wagefor a job opportunity in an occupationalclassification in an area of intendedemployment in the case of an employeeof an institution of higher education, ora related or affiliated nonprofit entity; anonprofit research organization; or aGovernmental research organization, theprevailing wage level shall only takeinto account employees at suchinstitutions and organizations in thearea of intended employment.

(1) The organizations listed in thisparagraph (c) are defined as follows:

(i) Institution of higher education isdefined in section 101(a) of the HigherEducation Act of 1965. Section 101(a),20 U.S.C. 1001(a) (1999), provides thatan ‘‘institution of higher education’’ isan educational institution in any Statethat—

(A) Admits as regular students onlypersons having a certificate ofgraduation from a school providingsecondary education, or the recognizedequivalent of such a certificate;

(B) Is legally authorized within suchState to provide a program of educationbeyond secondary education;

(C) Provides an educational programfor which the institution awards a



bachelor’s degree or provides not lessthan a 2-year program that is acceptablefor full credit toward such a degree;

(D) Is a public or other nonprofitinstitution; and

(E) Is accredited by a nationallyrecognized accrediting agency orassociation, or if not so accredited, is aninstitution that has been grantedpreaccreditation status by such anagency or association that has beenrecognized by the Secretary for thegranting of preaccreditation status, andthe Secretary has determined that thereis satisfactory assurance that theinstitution will meet the accreditationstandards of such an agency orassociation within a reasonable time.

(ii) Affiliated or related nonprofitentity. A nonprofit entity (including butnot limited to hospitals and medical orresearch institutions) that is connectedor associated with an institution ofhigher education, through sharedownership or control by the same boardor federation, operated by an institutionof higher education, or attached to aninstitution of higher education as amember, branch, cooperative, orsubsidiary;

(iii) Nonprofit research organizationor Governmental research organization.A research organization that is either anonprofit organization or entity that isprimarily engaged in basic research and/or applied research, or a U.S.Government entity whose primarymission is the performance or

promotion of basic and/or appliedresearch. Basic research is generalresearch to gain more comprehensiveknowledge or understanding of thesubject under study, without specificapplications in mind. Basic research isalso research that advances scientificknowledge, but does not have specificimmediate commercial objectivesalthough it may be in fields of presentor potential commercial interest. It mayinclude research and investigation inthe sciences, social sciences, orhumanities. Applied research isresearch to gain knowledge orunderstanding to determine the meansby which a specific, recognized needmay be met. Applied research includesinvestigations oriented to discoveringnew scientific knowledge that hasspecific commercial objectives withrespect to products, processes, orservices. It may include research andinvestigation in the sciences, socialsciences, or humanities.

(2) A nonprofit organization or entitywithin the meaning of this paragraph isone that is qualified as a tax exemptorganization under Section 501(c)(3),(c)(4) or (c)(6) of the Internal RevenueCode of 1986, 26 U.S.C. 510(c)(3), (c)(4)or (c)(6), and has received approval asa tax exempt organization from theInternal Revenue Service, as it relates toresearch or educational purposes.

(d) With respect to a professionalathlete as defined in section212(a)(5)(A)(iii)(II) of the Immigration

and Nationality Act, when the jobopportunity is covered by professionalsports league rules or regulations, thewage set forth in those rules orregulations shall be considered theprevailing wage. Section212(a)(5)(A)(iii)(II), 8 U.S.C.1182(a)(5)(A)(iii)(II) (1999), defines aprofessional athlete as an individualwho is employed as an athlete by—

(1) A team that is a member of anassociation of six or more professionalsports teams whose total combinedrevenues exceed $10,000,000 per year, ifthe association governs the conduct ofits members and regulates the contestsand exhibitions in which its memberteams regularly engage; or

(2) Any minor league team that isaffiliated with such an association.* * * * *

Signed at Washington, DC, this 11th day ofDecember, 2000.

Raymond Bramucci,

Assistant Secretary, Employment andTraining Administration.

T. Michael Kerr,

Administrator, Wage and Hour Division,Employment Standards Administration.

[The following three forms will notappear in the Code of FederalRegulations.]

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