DOL Proposes Revisions to Form 9035 – Labor Condition Application (LCA)

The Department of Labor (DOL) has proposed substantial revisions to Form 9035 (and its instructions), Labor Condition Application, which is used to support a number of employment-based visas, including H-1B, H-1B1 and E-3.    The proposed changes to the form are significant in many respects — the government now requires all LCA beneficiaries (up to 10 per form) to be named on the form, together with information about any PERM filings and immigration status.  The form also starts collecting additional information about each job site, about the employer’s workforce and with respect to a possible H-1B dependent employer status.

Background of Form 9035

Form 9035 is most commonly used in conjunction with the H-1B work visa program, although it applies to H-1B1 and E-3 visas.  Before an H-1B visa petition can be filed with U.S. Citizenship and Immigration Service, the prospective employer has to submit the Form 9035 electronically to the Department of Labor (DOL), to provide certain information about the proposed employment, to attest to the conditions of employment and to request certification by DOL that these terms of employment meet certain requirements (with respect to prevailing wages, etc.).

DOL is tasked with enforcing violations of the H-1B/LCA program and DOL relies on the attestations provided by the employer on the LCA form when conducting audits, investigations for possible violations or penalty proceedings against employers.  As a result,  even though the LCA form is often seen as a procedural “rubberstamp” step in the H-1B application process, it has considerable significance for the overall H-1B program.

What are the Proposed Changes?

The proposed changes on the Form 9035 LCA are significant in many respects.

Up to 10 Workers per LCA; Each Worker Must be Named.  First, DOL now limits the number of workers who may be using the same LCA to 10.   In addition, DOL requires that each worker who would be covered by the LCA to be identified by name, date of birth, country of birth, visa status, PERM case number (if applicable), and a new “H” number which is presumably going to be assigned by DOL to each H-1B worker and which number must be reused during subsequent LCA filings.

More Information about the Employer.   The employer now must provide additional information during each LCA:  year business established, number of employees, gross and net annual incomes, country of headquarters.

Specifics about the Job Site.   Previously, the LCA requested information about the address of the job site.  The revised version of the LCA form seeks more detail to establish whether the job site is the employer’s office, the employee’s home office (for telecommuting), or a third-party client site.   For third-party client worksites, the LCA asks for the end client’s business name.

Prevailing Wage.   The proposed LCA form asks for more information about the prevailing wage determination — to distinguish whether the prevailing wage was obtained via the National Prevailing Wage Center or via the OES database.

Dependent H-1B Employer.   The proposed LCA also asks more questions about the sponsoring employer’s H-1B reliance and whether the employer is “dependent employer” or willful violator.    Additional questions are added to determine whether a dependent or willful violator employer is exempt from the additional requirements.

Attestations.   The proposed LCA also makes certain attestations more prominent by making the employer specifically attest to certain requirements as part of the form.  Previously, these requirements were included in the Form 9035 instructions, but they were rarely paid considered given the lengthy instructions.   Now these attestations are made as part of the actual form.

Why is DOL Revising the LCA Form?

According to DOL, the changes are required in order for DOL to be able to provide better compliance and integrity review of the H-1B/LCA program.   In the past, there were some reports which identified poor ability of DOL to monitor compliance and now DOL seeks to revise the form to have more data which would (presumably) allow it to assure better compliance with the program and prevent abuse.   DOL’s rationale for the revisions (from DOL’s Supporting Statement):

As a result of recommendations from both the Government Accountability Office (GAO) and the Department’s Office of the Inspector General (OIG), the Department seeks to revise the scope of information collected in the context of H-1B, H-1B1 and E-3 applications in order to enhance its integrity review for obvious errors, omissions and inaccuracies under 20 CFR 655.730(b). The revised collection will allow the Department to improve its integrity review and ensure the accuracy and completeness of the information.

..

DOL has amended the form to include more specific information about the workers that will be employed pursuant to a particular LCA. Linking a particular LCA to a set of foreign workers may create more burden hours; however, the collection of this information appears to be necessary to prevent the abuse of that LCA.

We expect that DOL would start using the information which employers will have to start providing to identify and target certain cases (employers) where there is fraud or abuse.   For example, by asking for the names of LCA beneficiaries, DOL seeks the ability, in case of violation with respect to one worker, to identify and investigate other similarly-located workers who may be part of the same LCA.

When Would the Changes Become Effective?

It is important to note that these changes to Form 9035 as of today are only a proposal.   The proposed revisions to Form 9035 are under review process.   The Federal Register notice was published on July 9, 2012 and there is a comment period until September 7, 2012.    Our office will participate in this comment period and we urge all affected parties to submit comments, as described in the Federal Register notice.    We will certainly provide news and updates on this topic as soon as the public comment period closes and DOL provides further guidance on the revisions of Form 9035.

Conclusion

The proposed revisions for Form 9035 are likely to impact all H-1B employers, although in different ways.   At the very least, employers will need to provide additional (and sometimes, sensitive) information on the Form 9035.    For example, some employers do not wish to provide gross or net income figures and while USCIS asks for this field on Form I-129 filings, USCIS often allows employers to omit or justify omitting this information.    We do not know what would be DOL’s approach to LCA filings omitting the employer’s gross and/or net income figures.

On the other hand, higher volume employers or employers who routinely place H-1B workers at third-party client sites will face greater burdens in gathering and providing the newly requested information for each of its employees.   The requirement to name all LCA beneficiaries will also create a disadvantage (a delay of 7+ days) to H-1B employers who seek to hire and place employees on a quick basis.

Our office will continue to monitor developments surrounding the Form 9035 LCA revisions and provide updates to our clients and readers.   Please feel free to subscribe to our free weekly newsletter to obtain developments on this and related topics.   If our office can be of any help, please feel free to contact us.