The Department of Labor (DOL) has nationalized the process for issuance of prevailing wage determinations used in a variety of immigration applications including PERM, H-1B, H-1B1 (Chile/Singapore), E-3 (Australia), and H-2B.  Beginning January 1, 2010, employers must now apply for prevailing wage determinations to the DOL rather than the state workforce agencies (SWAs).  DOL has indicated that from January 1, 2010 through January 20, 2010 prevailing wage requests must be submitted by mail.  After January 20, 2010 DOL expects that submissions will be able to be made through the iCERT portal.   
 
DOL issued prevailing wage determinations are a mandatory requirement for PERM applications.  The agency has advised employers to submit prevailing wage requests at least 60 days before beginning recruitment or filing an application for labor certification.  Likewise, DOL has indicated that prevailing wage requests using independent wage sources could have lengthier processing times.  As we have reported, the introduction of the iCERT system for preparation of LCAs has significantly lengthened preparation time due to technical glitches in the system. It is therefore critical for employers to be aware of these delays, especially if they are filing PERM applications for H-1B nonimmigrant workers who are reaching the end of their fifth year of status and who wish to extend that status beyond the six-year maximum under the provisions of AC21. 

In addition to processing delays, it remains to be seen if the validity periods for prevailing wage determinations issued by the DOL will be shorter than those that were issued by local SWAs.

Although prevailing wage determinations from the DOL are not required for H-1B cases, they are preferred by some employers as they provide important safe harbors.  Given the expected delays in DOL processing times for issuance of prevailing wage determinations it is critical that employers identify and begin preparing cap-subject cases for the Fiscal Year 2011 as soon as possible.

While DOL policy guidance states that there will be no changes in the way prevailing wages are determined, employers should note that the national office may take a different approach from local SWAs in determining how occupational categories and wage levels are assigned.   DOL has indicated that the national office will entertain requests for redetermination.  Redeterminations will be handled by the Office of Foreign Labor Certification.  Requests to reconsider redeterminations can be submitted to the Board of Alien Labor Certification Appeals (BALCA).  It remains to be seen how receptive the national office will be to requests to reconsider prevailing wage determinations, including the assignment of occupational categories and wage levels.

The iCert system became effective on June 30, 2009, replacing the previous web-based system. While it was known that iCert would eliminate same day LCA approvals, the DOL originally anticipated that it could take up to seven business days to certify the LCA. However, since its implementation the iCert system has experienced a number of technical glitches that have resulted in delays in obtaining certified LCAs beyond the seven day period.

Part of the reason for these glitches is that employer data from the old LCA system did not transfer to the new iCert system. As a result, the most prevalent problem of the new system is the denial of LCAs when the DOL cannot verify the employer’s Federal Employment Identification Number (FEIN). This occurs even on LCAs filed by employers who regularly submitted applications on the old system with no issues. Moreover, these denials occur even when the correct FEIN was entered on the LCA. Because the iCert database is not integrated with the IRS database or the old LCA system, there is no way for the DOL to verify the FEIN.

Upon the receipt of an LCA denial notification from the DOL employers are instructed to provide the DOL with proof of the FEIN number through a specified email address. Acceptable proof of the FEIN can include IRS documentation assigning the FEIN, preprinted tax coupons or tax returns with a preprinted label listing the FEIN, bank documents listing the FEIN, and any other government documents indicating the FEIN. Once the employer locates this documentation and sends it to the DOL it is taking up to ten additional business days to resolve the FEIN problem.

The FEIN resolution does not result in an LCA approval. Once the employer receives confirmation from the DOL that the FEIN issue has been resolved they can then resubmit the LCA through the iCert system. This resubmission is, once again, subject to the seven day processing time.

The DOL is attempting to resolve these issues. They have recently issued guidance to employers noting that they are integrating iCert with the PERM database. It is hoped that the FEINs submitted by employers in connection with PERM applications will be transferred to the iCert system, thereby reducing the number of FEIN non-confirmations. However, until the issues are fully resolved these delays can have very serious implications for employers and employees alike. Employers are urged to locate acceptable tax documents that verify your company’s FEIN and have them available if and when they are requested by the DOL. Another effective way of avoiding delays is to implement a tickler system to identify expiring H-1Bs within the company’s workforce. As H-1B extensions can be filed as much as six months in advance of the requested start date, employers can avoid last minute delays and possible breaks in the employee’s work authorized status by identifying the applications that need to be filed in advance.

In a recent meeting of the American Immigration Lawyer’s Association (AILA), a top-level DOL official indicated that, if non-obvious errors or other problems with the LCA are detected, the decision on the LCA could extend beyond the seven days. At this meeting, Klasko Partner, Bill Stock urged the DOL to adhere to their own regulations and either deny or certify LCAs within the seven day period allotted by the regulations. However, DOL officials insisted that they could not currently provide processing times for LCAs that require further review.

What does this mean for employers? Well, this system change means that it will no longer be possible to prepare and file H-1B applications on short notice. Every employer filing an H-1B petition with the United States Citizenship and Immigration Service (“USCIS”) must first obtain an approved LCA from the DOL. In the LCA the employer is required to attest to paying the higher of the actual or prevailing wage, to providing working conditions that will not adversely affect the working conditions of workers similarly employed, that there is no strike or lockout in the course of a labor dispute in the occupational classification at the place of employment, that the employer has provided appropriate notice to bargaining representatives or employees and that the employer has completed and made available a file for public examination. A DOL approved LCA is a precondition to filing an H-1B petition with the USCIS, and as such is integral to obtaining H-1B status for employees.

In the era of iCert, advance planning will be a must. Employers should monitor the expiration dates of H-1B employees and allow sufficient time for the preparation and filing of H-1B extensions and amendments. This delay in filing will also impact the usefulness of H-1B portability, since an individual in H-1B status can only be authorized to work for the new employer upon the filing of the new petition, which requires a certified LCA. Under the new system, certification will add at least a week to ten days to that process. Unfortunately, employees who fall victim to the economy will also feel the impact of the delayed LCA certification timing, as it will delay their ability to file a new H-1B petition once they have obtained new employment.

Employers and employees can also expect that in the first weeks of use, there will continue to be technical glitches in the software. The delay in implementation of the iCert program reflects this fact.

If you have further questions on how iCert impacts your workforce, please schedule a consultation or contact one of the attorneys for more information.