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Edited on Sat Sep-25-10 02:15 PM by leveymg
Frankly, this is the single worst single abuse of the program that I've ever seen, and this is the first I've heard of this case. I'm surprised ICE, USCIS, and USDOL didn't shut this down years ago, as it appears to violate several federal laws.
Thanks for bringing this to our attention.
In January 2010, USCIS effectively banned labor contractors as petitioners for H-1B workers unless they can document that they fully control the work of workers at job sites. That policy is referred to as the "Neufeld memo."
That follows a long line of other restrictions on fees that can be charged to H-1B workers to pay lawyers and staffing agencies.
In 2000, the DOL put in place anti-fraud regulations that made it illegal for H-1B workers to be charged fees associated with visa processing if this brought the actual wage paid below the prevailing wage for the position.
The 1998 Law, the American Competitiveness in the 21st Century Act (AC-21)and American Competitiveness and Workforce Training Act (ACWTA) imposed the following rules:
Attorney’s Fees, Other Salary Deductions and Termination Penalties
- The new rules contain guidelines on what types of payroll deductions are authorized without affecting the prevailing wage. “Authorized deductions” include a) deductions required by law (income tax, FICA, etc.) or b) deductions authorized by a collective bargaining agreement with a union, or is customary in the occupation and/or area of employment (e.g. union dues, contributions to premium for health insurance policies covering all employees, savings or retirement funds). Deductions can also include voluntary deductions for items that principally benefit the employee such as housing and food allowances (other than those relating to travel)
- Deductions that include business expenses of the employer will be subtracted from the prevailing wage determination. The DOL considers this to include attorneys’ fees and costs connected to the performance of H-1B program functions which are required to be performed by the employer, e.g. preparation and filing of the LCA and H-1B petition. Business expenses would also include items like tools and equipment, transportation costs when such costs are necessary for the job, living expenses while an employee is traveling, etc. NOTE, however, that if a deduction falls into this category, it merely will mean that the deduction is subtracted from the wage offered. If the wage is still higher than the actual or prevailing wage after the deduction is subtracted, then an employee can still these expenses deducted from their paycheck. If the offered wage is below the prevailing wage after these business expenses are deducted, the DOL will consider the amount to be an unauthorized deduction from wages.
- Deductions that would normally be permissible must be disclosed to the worker prior to starting work for the employer and if the deduction is a condition of employment, the employer must also disclose this.
- The deduction must also be made against the wages of US workers.
- The amount deducted may not exceed the fair market value or the actual cost (whichever is lower) o the matter covered. The employer must document the cost and value in a public access file.
- One of the biggest complaints by H-1B employees, particularly those in the high tech sectors, is the inclusion of onerous contract provisions that severely penalize an employee for leaving an employer prior to the end of the contract. The DOL has addressed this issue in the regulations. A penalty paid by the H-1B worker for quitting prior to an agreed date is prohibited under the rules. An employer is, however, allowed to receive “bona fide” liquidated damages from the worker if they quit early. Applicable state law determines whether a deduction is a penalty or liquidated damages. However, in general, penalties are amounts that are not reasonable approximations or estimates of damage. A payment typically will not be permitted if the payment is a result of fraud or “where it cloaks oppression.” The percentage of the employment contract completed will also be considered.
- The 0 or 00 filing fee established under ACWIA can never be included in any liquidated damages received by an employer. This is consistent with ACWIA since an employer may never pass on these expenses to an employee.
- Deductions made by an employer for the repayment of a loan or a salary advance to an employee will be scrutinized if the DOL is investigating the employer. The employer will have to establish the legitimacy and purpose of the loan or advance.
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