Employers seeking to obtain or extend H-1B, H-1B1 or E-3 status for a foreign national employee (‘subject worker’) are required to file a Labor Condition Application (LCA) with the Department of Labor prior to submission of the petition with the USCIS (or submission of the visa application in the case of H-1B1 or E-3 applicants applying abroad). The LCA requirement was conceived by Congress as part of the Immigration Act of 1990 to help to protect the wages and working conditions of U.S. workers from the perceived threat of employingforeign workers, who might be willing to work for less money and under less favorable working conditions.
Thus, the LCA has a number of attestations, public notice requirements, and records maintenance obligations for employers. Employers who fail to comply with the LCArequirements may face significant civil money penalties. These penalties may be accompanied by an order for back pay, salary, and fringe benefits to the subject worker, as well as debarment from participation in the H-1B program for one to three years. A brief discussion of the key elements surrounding LCA compliance follows below. For a more comprehensive reading, please see our LCA handbook.
LCA Attestation Requirements
For most employers¹, completing and filing an LCA with the DOL involves making four separate attestations pursuant to the relevant provisions of the Immigration and Nationality Act. By signing the LCA, the employer agrees to:
1. Pay covered workers the “required wage.”
The “required wage” is the “actual” or the “prevailing” wage, whichever is the higher, for workers in comparable positions in the area of intended employment. The actual wage refers to the wage paid to similarly situated local employees of a company. The prevailing wage refers to the weighted average of wages offered for the occupational classification for the area of intended employment.
2. Provide Proper Working Conditions
Provide covered workers with the working conditions enjoyed by other workers in that position.
3. Do not Employ During Strikes or Lockout
Not employ covered workers when there is a strike or lockout of U.S. employees in the same occupation and same geographical area.
4. Post or Provide Filing Notices
Provide notice by posting copies or notifications in conspicuous locations at the place of employment, or by providing union representative a copy of the filing (where applicable).
Notice Requirements
An employer must provide copies of the LCA to the H-1B worker no later than the first day the H-1B employee reports for work and to the union’s bargaining representative. In cases where there is no bargaining representative, notice of the filing may be made either by providing electronic notice to employees at the worksite or by posting the LCA or a notice that contains specified information in two conspicuous locations at the place(s) of employment for ten business days. Employers are advised to obtain signed acknowledgements of receipt from the H-1B worker and bargaining representative, or retain copies of the publicly posted notices.
Maintaining Public Access Files
Employers of H-1B workers must make available for public examination certain records related to the filing of the LCA. These records must be made available to any interested party and must be available within one day of the filing of the LCA. Therefore, it is best to create the public access file at the same time the LCA filing takes place. The documents in the file contain sensitive salary information, however, the identity of the individual to whom the LCA relates need not be shown anywhere in the file. The file may be identified by number or other confidential marking system with a cross-reference set up by the employer to identify the actual employee to whom the LCA relates.
Supporting documentation for the LCA must also be made available for inspection. Therefore, employers are advised to create public access files for each LCA filed, with each file containing the following¹:
The certified LCA;
An actual wage memorandum setting forth a full and clear explanation of the system used by the employer to set actual wages for workers in the same occupation;
A copy of the salary survey or Department of Labor prevailing wage determination;
A memorandum indicating that notice of filing has been given to other workers ; and
A summary of the benefits offered to U.S. workers in the same occupation with any explanation for differentiations between benefits received by U.S. workers and whether home country benefits were received by the H-1B worker.
H-1B Dependent and Willful Violators
Employers who are ‘H-1B-dependent’ or have been found to be ‘willful violators’ of the H-1B LCA requirements by the Department of Labor must comply with additional attestation and record-keeping requirements when filing a new LCA for an H-1B worker. are held to additional requirements and must make several additional attestations.² H-1B dependency is determined determined by the size of the employer, and percentage of workers in H-1B status, as outlined below: as follows:
If an employer has 25 or fewer full-time equivalent employees, the employer is considered H-1B dependent if 8 or more employees hold H-1B status;
If an employer has between 26 and 50 full-time equivalent employees, the employer is considered H-1B dependent if 13 or more employees hold H-1B status;
If any employer has over 50 full-time equivalent employees, the employer is considered H-1B dependent if 15% or more of the employees hold H-1B status.
The term “full-time equivalent employees” refers to the total number of employees at the company, including an aggregate of part-time employees. Each part-time H-1B worker is considered as one H-1B worker for purposes of determining dependency.
If an employer is H-1B-dependent or found to be a willful violator, the employer must identify itself as such on the LCA form. Unless the employer meets one of the exemption requirements (see below), the employer must also comply with the following attestation and record-keeping requirements:
The employer must attest that it has not, and will not, displace a U.S. worker (in an equivalent job), either directly at the employer’s worksite or indirectly at the worksite of another employer where H-1B workers are assigned, for the period covering 90 days before the filing of the H-1B petition and ninety days after the filing of the petition;
The employer must also attest that it has recruited U.S. workers for the position in question at the same or higher salary and working conditions. Recruitment efforts must be documented and made available in the Public Access File.
Employers must retain records concerning the circumstances surrounding the departure of any U.S. worker in the same occupation during the 90-day before-and-after period. These records must be made available to the Department of Labor upon its request in an enforcement action. If an H-1B-dependent or willful violator employer plans to place its H-1B worker at the worksite of another employer, it should determine whether the other employer has displaced, or intends to displace, similarly-employed U.S. workers. Attempts to determine this information should be retained and made available to the Department of Labor for enforcement actions.
Exempt H-1B-Dependent Employers
An H-1B dependent employer is exempt from the additional LCA attestation and record-keeping requirements described above if the LCA is filed for an H-1B worker who has a master’s or higher degree, or who is being offered a salary of at least $60,000. However, the employer must still indicate its dependent status when filing the LCA for that worker. The exemption does not apply to H-1B employers found to be ‘willful violators.’
'Note that additional record keeping requirements may apply to H-1B-dependent and willful violator employers, or in situations where there is a merger or acquisition. Please see our LCA handbook for complete requirements
² Note that this requirement only applies to H-1Bs, and not H-1B1s or E-3s).