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lists of all the criteria which theDepartment would find meet thestatutory test in the event of aninvestigation.

The Department also wishes tospecifically caution against recruitmentpractices and selection criteria orpractices which have the effect of discriminating against U.S. workers orother groups of workers, as the comment by Miano recognizes. In this connection,workers are advised that the threefederal agencies ordinarily recognizedas responsible for enforcement of anti-discrimination laws are the EqualEmployment Opportunity Commission(EEOC), the Department of JusticesOffice of Special Counsel (OSC), and theDepartment of Labors Office of FederalContract Compliance Programs(OFCCP). The EEOC administers severalstatutes prohibiting discrimination inemployment based on factors such asage, race, color, religion, sex, or national

origin. OFCCP administers severalstatutes and an executive orderprohibiting discrimination by Federalgovernment contractors andsubcontractors based on factors such asrace, color, religion, sex, national origin,disability, and veteran status. EEOC andOFCCP offices are located throughoutthe United States and can be located inthe blue pages of the telephonedirectory. Complaints can be made tothe EEOC by telephone at: (202) 2757377; see also their website atwww.eeoc.gov. Complaints can be madeto OFCCP by telephone at: (202) 6930102, 0106, or by contacting the localoffices, which can be located at itswebsite, www.dol.gov/dol/esa/public/ contacts/ofccp/ofcpkeyp.htm.

OSC administers several statutesconcerning employment discrimination

based on national origin, citizenshipstatus, and immigration documentabuse. OSC can be contacted at P.O. Box27728, Washington, DC 200387728;telephone: 18002557688 (workers)or 18002558155 (employers); and e-mail address: [email protected]; see alsoOSCs website at www.USDOJ.gov/crt/ osc.

TCS described its own hiring

practices, which it contended should beallowed as legitimate under theDepartments regulations. Specifically,TCS recruits its employees fromuniversity campuses (apparently inIndia) and places them in a 12-to 18-month training program in India. At thesame time requiring a three-yearcommitment from its employees, whomit sends on assignments in India andthroughout the world. TCS suggestedthat the Departments proposal could beread to require TCS instead to recruitU.S. workers for assignments in the

United States without regard to theemployment terms and conditions itapplies to its other employeesarequirement which it suggested couldpotentially subject it to anti-discrimination claims. TCS argued thatthe Departments proposal incorrectlyfocused on the recruitment/employmentfor the particular job listed on an LCArather than the dependent employershiring criteria for a position with thedependent employera position thatencompasses duties and responsibilities

beyond those required for theperformance of the particular jobcovered by an LCA. TCS explained thatits employees, including those it placesin H1B positions, serve as teammembers of consulting groups that willmove from job to job in the UnitedStates and elsewhere. It stated that ithires employees with this enduringemployment relationship in mind, notfor the employees particular assignment

to a job in the United States.Similar practices are described bySimmons, which asked whether aforeign-based employer may givepreference to its own (foreign) workers,who are familiar with the specifictechnologies and protocols of anongoing project, and whether it would

be required to offer permanent asdistinguished from temporary positionsto employees in the U.S., since itotherwise would only temporarilytransfer its permanent, foreign workersto perform the job in the U.S. Simmonsalso commented that it providesextensive training to its employees inIndia, and asked if it could require thatU.S. workers have such skills, or wouldit be required to use the hiring criteriait utilized to hire the workers in India.Finally, Simmons asked if it couldrequire U.S. workers to have the precise,specialized skills to meet a specificcustomer need.

In the Departments view, anemployers recruitment obligationattaches to the position for which an H1B worker is sought in the United States(the employer is obliged to take, in thewords of the statute, good faith stepsto recruit . . . United States workers for

the job for which the [H-1B worker(s)]is or are sought). Additionally, theemployer is required to offer the job tothe U.S. worker if the worker is at leastas qualified as the H1B worker.Accordingly, the focus must be on theparticular job(s) in the United Stateswhich is/are covered by the LCA, notthe position an H1B applicant alreadyoccupies or will occupy with thedependent employer. An employer willfail to meet its recruitment obligation if it utilizes recruitment/selection criteriathat have the effect of precluding an

equally or better qualified U.S. workerfrom being hired for the position. TheDepartment also notes that L visas,where the criteria are met, may beavailable as an alternative method toaccommodate intra-company transfers.5. What Documentation Would BeRequired of Employers? (655.739(i))

Concerning documentation to showthat good faith recruitment wasconducted in accordance with industry-wide standards, the NPRM stated thatan employer would not need to retainactual copies of advertisements,provided it kept a record of thepertinent details. The Departmentproposed that an employers publicaccess file need only containinformation summarizing the principalrecruitment methods used in solicitingpotential applicants and the time framein which such recruitment wasconducted. The NPRM also requestedcomments on how employers can andshould determine industry-widestandards and how to make theemployers determination available forpublic disclosure.

With regard to documentationconcerning pre-selection treatment of applicants for employment, theDepartment proposed in the NPRM thatemployers should retain anydocumentation they receive or prepareconcerning the consideration of applications by U.S. workers, such ascopies of applications and/or relateddocuments, test papers, rating forms,records regarding interview and joboffers. The Department stated its viewthat the EEOC already requiresemployers to retain such records andtherefore this requirement imposes nonew obligations on employers.

With regard to the proposeddocumentation requirement, SenatorAbraham stated: The intent is not torequire employers to retain extensivedocumentation in order to be ableretroactively to justify recruitment andhiring decisions, provided that theemployer can give an articulable reasonfor the decisions that it actually made.144 Cong. Rec. S12751 (Oct. 21, 1998).

AILA and ACIP cited SenatorAbrahams statement in theCongressional Record for the principlethat the ACWIA did not impose anyextensive documentation requirements.ACIP, however, stated its belief thatprudent employers of their own volitionmay want to retain documentation andthat it is appropriate for the Departmentto provide guidance on how longemployers should retain suchdocumentation.

The Department disagrees with theview that the ACWIA denies the

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Department the usual regulatoryauthority to require recordkeeping as ameans of ensuring compliance with anemployers statutory obligationseithergenerally or with specific reference tothe recruitment obligation. The fact thatthe H1B program is primarilycomplaint-driven with only attestationsof compliance filed initially with theDepartment makes it all the moreimportant that documentation beretained so that the Department candetermine compliance in the event of aninvestigation. In response to AILAscomment about the length of time whichdocuments must be retained, theDepartment notes that its standardrecord retention requirements are setforth in 655.760(c) of the regulation,which has been clarified as discussed inIV.B.3, above.

With regard to documents concerningrecruitment practices, the AFLCIO andMiano urged that employers be required

to retain copies of all job advertisementsor other recruiting efforts. AILA assertedthat the Departments statement that anemployer need not keep copies of advertisements is an illusory saving

because as a practical matter savingthese documents is the only way todocument the information theDepartment proposed to require. AILArecommended that employers only berequired to keep a summary of theirrecruitment for the past six months,similar to the requirements of the RIRprocedures in the permanent laborcertification programespecially whenan employer is still recruiting for openpositions and it is its practice to hireU.S. as well as H1B workers. However,AILA stated that employers should not

be required to keep recruitmentinformation in public access files

because it invites competitor intrusioninto an employers recruitmentpractices.

The Interim Final Rule, like theproposal, requires employers to retaindocumentation of the recruitingmethods used, including the places anddates of the recruitment,advertisements, or postings; the contentof the advertisements and postings; and

the compensation terms (if not includedin the content). The Departmentcontinues to believe that copies of printadvertisements are not necessary sincepublication can be verified if necessary.Rather, the documentation may be inany form, such as a copy of an order orresponse from the publisher, anelectronic or print record of an Internetnotice, or a memorandum to the file.Similarly, the documentation of recruitment of positions filled by H1Bnonimmigrants need not be segregatedfrom other records provided it is

available to the Department uponrequest in the event of an investigation.

In addition, as proposed, theemployer will be required to maintain asummary of the recruitment methodsused and time frames of recruitment inits public access file. The Departmentdoes not believe that information in thissummary nature will unduly discloseproprietary information sinceadvertisements and attendance at jobfairs are public in any event.

ACIP was the only commenterresponding to the Departments requestfor comments on how employers shoulddetermine industry-wide recruitmentstandards, stating only that it is unawareof any source that catalogues standardrecruiting practices within an industry.The Department repeats its request forfurther information on this point. TheDepartment has determined thatemployers will not be required tomaintain evidence of industry practice.However, in the event of aninvestigation, the employer will berequired to substantiate its assertion asto industry practice through credibleevidence, such as through tradeorganization surveys, studies byconsultative groups, or a statement froma trade organization regarding theindustry norm(s). The Department willlook behind such evidence as it deemsappropriate in the context of theparticular recruitment performed by anemployer.

With regard to documentationconcerning pre-selection treatment of applicants, AILA disagreed with theDepartments characterization of EEOCguidelines, stating that EEOC onlyrequires that if documentation is createdor retained, it must be doneconsistently. It also stated that it isimpractical to expect an employer toretain what may be thousands of resumes submitted to it at a job fair,especially since many resumes do noteven relate to positions offered.

As discussed in detail in IV.D.8,above, in connection with the retentionof records relating to displacement of U.S. workers, the Department disagreeswith AILAs characterization of the

EEOC requirements. The Departmentcontinues to believe that mostemployers are already required topreserve copies of the records listed andthat retention of the documents isnecessary to demonstrate fair treatmentof U.S. applicants. ADEA regulations,for example, require an employer topreserve all records it makes, obtains oruses relating to [j]ob applications,resumes, or any other form of employment inquiry wheneversubmitted to the employer in responseto his advertisement or other notice of

existing or anticipated job openings,including records pertaining to thefailure or refusal to hire any individual,* * * [j]ob orders submitted by theemployer to an employment agency orlabor organization for recruitment of personnel for job openings, * * * [a]nyadvertisements or notices to the publicor to employees relating to job openings,promotions, training programs, oropportunities for overtime work. 29CFR 1627.3(b)(i).

The Department emphasizes that it isnot requiring employers to create anydocuments regarding treatment of applicants for employment, but rather topreserve those documents which arecreated or received. With regard to thecomment regarding job fairs, this rulewould not require employers to retainany resumes which do not relate to thepositions to be filled by H1Bnonimmigrants. Nor does the InterimFinal Rule require that any information

relating to treatment of applications bemaintained in the public access file.F. What Are the Requirements for Posting of Notice? (Combined WithSection O.5 of the Preamble to theNPRM) ( 655.734(a)(1)(ii)(A) and (B))

Section 212(n)(1)(C) of the INA, 8U.S.C. 1182(n)(1)(C), requires that, at thetime of filing the LCA, an employerseeking to hire an H1B nonimmigrantshall notify the bargainingrepresentative of its employees of thefiling or, if there is no bargainingrepresentative, post notice of filing inconspicuous locations at the place of employment. As amended by theACWIA, Section 212(n)(1)(C) furtherprovides (where there is no bargainingrepresentative) that the notice may beaccomplished by electronicnotification to employees in theoccupational classification for whichthe H1B nonimmigrants are sought.1. What Are the Requirements forPosting of Hard Copy Notices atWorksite(s) Where H1B Workers ArePlaced? (NPRM Section O.5)( 655.734(a)(1)(ii)(A))

Regulations with respect to this

notification requirement were published by the Department as a Final Rule onDecember 20, 1994 (59 FR 65646,65647). That Final Rule (set forth in thecurrent Code of Federal Regulations)required, among other things, that anemployer, who sends an H1B worker toa worksite within the area of intendedemployment listed on the LCA whichwas not contemplated at the time of filing the LCA, post a notice at theworksite on or before the date the H1Bnonimmigrant begins work. 20 CFR655.734(a)(1)(ii)(D). The purpose of the



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provision was to enable employers toplace H1B workers at worksites whereposting had not occurred without filinga new LCA. This provision was amongthose enjoined for lack of notice andcomment by the court in National Association of Manufacturers v. Reich(NAM), 1996 WL 420868 (D.D.C. 1996).On October 31, 1995, during thependency of the NAM litigation, theDepartment republished the regulationfor comment (60 FR 55339).

In the 1999 NPRM, the Departmentproposed for comment 655.734(a)(1)(ii)(A) (previouslypublished for notice and comment inthe October 31, 1995 proposed rule as 655.734(a)(1)(ii)(C) and (D)). Theprovisions regarding hard copy noticerequirements remained essentiallyunchanged from the 1995 proposed rule.Subclause (A)(3) requires employers topost notice at worksites on or within 30days before the date the LCA is filed.

Subclause (A)(4) requires that where theemployer places an H1B nonimmigrantat a worksite which is not contemplatedat the time of filing the LCA, but iswithin the area of intended employmentlisted on the LCA, the employer is topost notice at the worksite (either byhard copy or electronically) on or beforethe date any H1B nonimmigrant beginswork there. The preamble explainedthat posting is not required if thelocation is not a worksite, asdiscussed in proposed Appendix B of the NPRM.

Fourteen commenters responded tothe 1995 proposed rule on notification.Eight of those commenters (AILA, ACIP,Intel, Microsoft, Motorola, NAM,Complete Business Solutions, Inc.(CBSI), and Moon, Moss, McGill &Bachelder (Moon)) objected to posting atworksites not controlled by the LCA-filing employer. These commentersasserted that many employerscustomers would not allow posting attheir worksites. In addition, because theregulations define place of employment as the worksite orphysical location at which the H1Bnonimmigrants work is actuallyperformed, some commenters expressed

a concern that strict application of thisdefinition of place of employment couldlead to absurd and/or unduly

burdensome notice requirements suchas posting notice at a restaurant whenan H1B nonimmigrant has a businesslunch, at a courthouse when thenonimmigrant makes a courtappearance, or at an out-of-town hotelwhen the nonimmigrant attends atraining seminar. One commenter(Microsoft), expressed concern about the

burden of notification and suggestedthat the notice provision should not

apply to employers who do not makegreat use of the H1B nonimmigrantworker visa program.

The Department received sixcomments on these provisions inresponse to the 1999 NPRM.

The AFLCIO emphasized theimportance of giving notice to allaffected employees, including

employees of the secondary employerand employees of other staffing firms.The AFLCIO stated that the purpose of the notice is to provide information toaffected workers that they may havecertain rights and that the employer hascertain duties regarding placement of the H1B worker which are notdiminished because the worksite isshort-term or transitory.

Four employer organizations (ACIP,AILA, ITAA, NACCB) commented onthe issue of notification (whether hard-copy or electronic) to affected workersat third-party worksites. These groupscontended that the statute requires anemployer to notify only its ownemployees and that it is unreasonable tohold a primary employer responsible fornotifying employees at worksites overwhich it lacks control. AILA gave as anexample, workers such as serviceengineers who travel to a number of worksites during the course of a day ora week. AILA stated that if a clientrefuses to post notice, an H1B workercannot be sent to the site, resulting ina potential loss of business.

One commenter (Latour) requestedthat the regulation specify that worksiteposting requirements do not apply torehabilitation professionals providinghome health care.

The Department has carefullyconsidered the comments submitted inresponse to the 1995 proposed rule andthe 1999 NPRM. The Department notesfirst that the statute requires that notice

be posted at the place of employment.See Section 212(n)(1)(C)(ii). TheDepartments regulations haveconsistently defined place of employment as the worksite orphysical location where the work isperformed. 20 CFR 655.715 (1992).

This definition was modified slightly

in the 1994 Final Rule (currently ineffect) to provide where the workactually is performed.

Furthermore, the purposes of notification can only be satisfied bynotice to all of the affected workersi.e., all of the workers in the occupationin which the H1B worker is employedat the place of employment, includingemployees of a third-party employer.This is critical because of the realpossibility of displacement by the H1Bemployees. Although this would only bea violation if the employer is an H1B-

dependent employer or willful violator,there remains a real possibility that U.S.workers of other employers could beharmed by the placement of the H1Bworker. Thus the notice alerts affectedemployees to the fact that an LCA has

been filed and that H1B workers will be placed at the worksite. Without suchnotice affected workers would not beable to file complaints regarding H1Bviolations either with regard tothemselves (if they are displaced

because of a placement by an H1B-dependent employer or willful violator),or with regard to the H1B workers(which might indirectly affectthemselves).

The Department observes that anumber of employers concerns withrespect to notification of affectedemployees, either by hard copy postingor electronically, at third-party worksites, have been addressed by theinterpretation of place of

employment/worksite discussed indetail in IV.P.1 and .2 of the preambleand 655.715 of the Interim Final Rule(see Appendix B of the NPRM). Asstated in 655.715, the Departmentinterprets place of employment asexcluding locations where the H1Bworkers presence either is due to thedevelopmental nature of his/her activity(e.g., management seminar; formaltraining seminar), or is short-term (notexceeding five consecutive workdays forany one visit) and transitory due to thenature of his/her job ( e.g., computertroubleshooter, sales representative,trial witness). Under this interpretation,employers would not be required to givenotice in many of the situations aboutwhich concerns have been expressed,

but would be required to give notice inthose instances where the Act and itspurposes require. If a location does notconstitute a worksite, the employer isnot required to post notice.

Although the Department recognizesthat in some instances it may beinconvenient for an employer to postnotice at a worksite controlled byanother business (such as the customerof an employer), the Department notesthat its experience in enforcement is

that no employer has been unable topost notices at a customers worksitewhen the operator, owner, or controllerof the worksite was informed thatposting was required by the statute andthe regulations.

The Department agrees with thecomment that notice need not beprovided where a rehabilitationprofessional is providing services in theclients home. The Interim Final Ruleprovides in paragraph (2) of thedefinition of place of employment in 655.715, that a physical therapist



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providing services to patients in theirhomes within an area of employmentis an example of a non-worksitelocation; in these situations notice must

be posted at the workers home stationor regular work location.2. What is Required for ElectronicPosting of Notice to Employees of the

Employers Intention to Employ H1BNonimmigrants? ( 655.734(a)(1)(ii)(B))The Department also proposed a

regulation, 655.734(a)(1)(ii)(B), whichwould implement the ACWIA provisionallowing electronic notification of employees. The ACWIA modified thestatutory requirement for worksiteposting of notices (where there is nocollective bargaining representative), topermit an H1B employer to useelectronic communication as analternative to posting hard copynotices in conspicuous locations at theplace of employment.

Senator Abraham explained: Anemployer may either post a physicalnotice in the traditional manner, or maypost or transmit the identicalinformation electronically in the samemanner as it posts or transmits othercompany notices to employees.Therefore, use of electronic posting byemployers should not be restricted byregulation. 144 Cong. Rec. S12751(Oct. 21, 1998).

Congressman Smith elaborated: Byproviding this flexibility, Congressintended to improve the effectiveness of posting in the protection of Americanworkers. Therefore, the electronic

notification must actually betransmitted to the employees, notmerely be made available throughelectronic means such as inclusion onan electronic bulletin board. 144 Cong.Rec. E2325 (Nov. 12, 1998).

As the NPRM explained, in providingthis alternative method for notificationto affected workers, Congress indicatedno intention of reducing theeffectiveness of the notice requirementwhich has been an element of the H1Bprogram from its inception. Theproposed regulation therefore providedthat electronic notice may be

accomplished by any means theemployer ordinarily uses tocommunicate with is workers about jobvacancies or promotion opportunities.Thus the NPRM stated that noticewould be permitted through theemployers home page or electronic

bulletin board where employees as apractical matter have direct access; orthrough e-mail or other activelycirculated electronic message such asthe employers newsletter, provided theemployees have computer access readilyavailable. Where such computer access

is not readily available, the NPRMexplained that notice may beaccomplished by posting a hard copyat the worksite.

The preamble further explained atSection O.5 that where the H1Bnonimmigrant(s) will be employed atthe worksite of another employer, theH1B employer is required to providenotice to the affected workers at thatworksite. Thus, the H1B employer maymake arrangements with the otheremployer to accomplish the notice ( e.g.,the other employer may post theelectronic notice on its Intranet oremployee newsletter, or may posthard copy notice in conspicuouslocations at the place of employment).

The Department received 30comments, including 22 fromindividuals, on the 1999 NPRMprovisions regarding electronic notice.

The individuals generally objected tothe statutory provision allowingelectronic posting as an alternative tohard copy posting, asserting thatInternet posting alone allows companiesto hide replacement of Americanworkers with foreign workers. The AEAessentially expressed a similar view onelectronic posting, noting that theInternet/Intranet method of notificationis unworkable.

The AFLCIO commented thatelectronic posting should only beallowed if employers can show that allworkers have access to e-mail or theInternet site, and that all notices areflagged to them. Another employeeorganization, IEEE, emphasized that to

be an effective notice, electroniccommunications must be readilyavailable and accessible to all affectedU.S. and foreign workers.

ACE, ACIP and SHRM commendedthe Department for its flexibility onmethods of electronic posting. ACIPrecommended that the Departmentdistinguish between indirect anddirect electronic notices, suggestingthat where indirect notice is given,such as on a bulletin board, theemployer should have to make thenotice available for 10 days. If, however,the employer provides direct notice,

such as e-mail to each employee, ACIPsuggested that notice should only haveto be sent to each affected employeeonce. SHRM urged the Department toallow an employer to document thatnotice has been given by permitting theemployer to place a signed notice in thepublic access file regarding how noticewas provided. AILA recommendedamending the regulations to clarify thatan employer may satisfy its electronicposting obligation by providing thenotification on its internal network orwebsite. AILA also recommended that

with respect to employers which sendthe notice by e-mail, the regulationshould specify that notification sent toa distribution group of affectedworkers satisfies the electronic postingrequirement. Another commenter(Cooley Godward) sought clarificationon the issue of how electronic postingcan comply with the requirement of 655.734(a)(1)(ii)(A) that the LCA beposted in two or more conspicuousplaces, and on whether or not all fourpages of the LCA must be posted.

With regard to posting at third-partyworksites, AILA suggested that aprimary employer should be able tosatisfy its obligation to document thatan electronic posting was made at thework site of a third-party employer inany one of the following three ways: (1)A statement in the contract between theparties requiring the notification to bemade; (2) a written statement by aresponsible party at the third-party

location; or (3) a printout of theelectronic communication with acertification about when, how, and towhom it was sent.

The statute does not give theDepartment the discretion to disallowelectronic posting, as suggested by theindividual commenters. TheDepartment agrees with the AFLCIOand the IEEE, however, that the criticalconsideration is that the notice isreadily available and accessible to theaffected workers. The Department

believes that the proposed regulation, asdrafted, meets these concerns. Postingmust be by the means the employerordinarily uses to communicate with itsworkers about job vacancies orpromotion opportunities. Posting on theemployers home page or electronic

bulletin board is allowed whereemployees as a practical matter havedirect access to these resources. Whereemployees lack computer access, a hardcopy must be posted or the employermay provide employees individualcopies of the notice.

The Interim Final Rule clarifies theoperational requirements for electronicposting. Like the physical posting, theelectronic notice need not incorporate a

copy of the LCA, although it would bepermissible since a copy of the LCAwould satisfy the substantiverequirements (see 655.734(a)(1)(ii)).(Employers are reminded that all H1Bnonimmigrants must be given a copy of the LCA. See 655.734(a)(2).) Likehard copy posting, electronic postingon a home page or electronic bulletin

board must be posted for 10 days. If direct notice is given to each affectedemployee, as through e-mail or hardcopy notices, the notice need only begiven once during the regulatory time



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American workers based in the U.S., lieswith the American (United States) employerwho brings nonimmigrant workers into thecountry. Ultimately, it is the Americanemployer, not the foreign subsidiary,pledging a benefit package similar to that of its American workers. Congress would expectthe Secretary to look with particular care atcircumstances involving a foreign subsidiarywhere there is an appearance of contrivance

to avoid the obligation to provide equalwages and benefits to H1B and Americanworkers.

144 Cong. Rec. E2326 (Nov. 12, 1998).1. What Does Same Basis and SameCriteria Mean With Respect to anEmployers Treatment of U.S. Workersand H1B Workers With Regard toBenefits? ( 655.731(c)(3), 655.732)

In the NPRM, the Departmentproposed that: (a) An employer isrequired to offer H1B workers the same

benefit package it offers to U.S. workers;(b) the package must be offered on thesame basis as it is offered to U.S.workers, i.e., the employer may notimpose more stringent eligibility orparticipation requirements on the H1Bworkers than those applied to U.S.workers; (c) the comparison between the

benefits offered U.S. and H1B workersshould be between similarly employedworkers, i.e., those in the sameemployment categories, such as full-time compared to full-time, professionalto professional; and (d) the benefitsactually provided to the H1B workers,as distinguished from the benefitsoffered, might be different than thoseprovided to U.S. workers because of anindividuals choice among options. TheDepartment also sought commentsregarding whether the ACWIA wouldallow an employer to provide adifferent, but equivalent package tosatisfy its benefits obligation, noting thedifficulty of making an evaluation of the

benefitsparticularly a qualitativeevaluation of the benefits, asdistinguished from one based on therelative costs to the employer of providing such benefits.

The Department further proposed thatan employer, consistent with itsattestation to adhere to minimum

standards for H1B workers, mayprovide greater benefits to H1Bworkers than to U.S. workers. TheDepartment acknowledged, however,that the phrases same basis andsame criteria, applied literally, couldrequire that U.S. and H1B workers beoffered the same (or possibly equivalent)

benefits.The Department noted the possible

complications that might arise withrespect to benefits afforded employeesof a multinational corporate operation,particularly where the H1B worker

works in the U.S. for only a short periodof time. In this situation, the NPRMnoted, it might not be practical for theU.S. employer to provide the H1Bworker with benefits identical to thoseprovided its U.S. workers. TheDepartment proposed that while theU.S. employer may cooperate with itscorporate affiliate in the workers homecountry with regard to the payment of wages to the worker and themaintenance of his or her homecountry benefits (such as that countrysretirement system), the U.S. employerremains ultimately responsible forensuring that the H1B worker isprovided benefits at least equal to thoseoffered U.S. workers. The Departmentstated that it would look closely intosituations involving a foreign affiliatewhere there was the appearance of acontrived arrangement to avoid the U.S.employers obligation to provide to itsH1B workers wages and benefits at

least equal to those provided its U.S.workers. At the same time, theDepartment proposed that it wouldcarefully examine the circumstances toconsider non-equivalent but nonethelessequitable benefits, including the H1Bworkers actual length of stay in theUnited States.

The Department also proposed tomodify 655.732 of the currentregulations to clarify that an employermust provide the HB worker withfringe benefits and working conditionsat least equal to those provided U.S.workers. The NPRM noted that such amodification would make it clear thatthe requirement that the H1B employerprovide working conditions, including

benefits, that will not adversely affectthose provided similarly employed U.S.workers, requires consideration of similarly employed workers in theemployers own workforce and, in somecircumstances, the prevailing conditionsin the area of employment.

Finally, the Department soughtcomment on whether it would be

beneficial to develop a regulatorydefinition of benefits within themeaning of the ACWIA or merely toprovide a list of examples. The NPRM

noted that the ACWIA contemplates theinclusion of various forms of cash andnon-cash compensation, such as

bonuses and stock options, whichordinarily are considered wages.

Several commenters, includingAOTA, APTA, IEEE, and an attorney(Latour), generally endorsed theDepartments NPRM approach in thisarea. IEEE stated that the Departmentsproposal will help implement the letterand the spirit of the law that the wagesand working conditions of U.S. workersnot be adversely affected and, at the

same time, help to reduce thelikelihood that employers willdiscriminate against H1B workers byoffering them less generous benefits.

Senators Abraham and Graham andAILA noted that the NPRM createdsome confusion by failing to make itclear that an employer must offerbenefits and eligibility for benefits onthe same basis as offered to U.S.workers. Citing to Senator Abrahamsstatement in the Congressional Record,these commenters stated that thisphraseology was important becauseworkers must be or make themselveseligible to obtain benefits e.g., byselecting a plan, providing partialpayment, working for a period of time,or performing at a high level. Similarly,ACE requested the Department to makeclear that a comparison should be made

between the benefits offered to workers,not the benefits actually selected by theworkers. ACE mentioned, as one

example, cafeteria plans offered bymany employers. Under these plans, itexplained, employees choose certain

benefits and not others for a variety of reasons.

The Department agrees that theACWIA requires an employer to offerH1B workers benefits and eligibility for

benefits on the same basis and inaccordance with the same criteria asU.S. workers. Because employers oftenoffer workers a choice of benefits, theACWIA does not require that U.S.workers and H1B workers actuallyreceive the same benefits. Similarly,some employees may opt for familycoverage of certain benefits, whileothers opt for individual coverage.Furthermore, as the commenters noted,workers may be required to meet certaincriteria or take certain action to availthemselves of the benefits. However, anemployer cannot satisfy its statutoryrequirement by offering benefitswhich it never actually provides toselecting workers. Thus, as discussed

below, employers are required to retaindocumentation showing that employeesactually receive the benefits that theyhave selected. While the Department

believes that the NPRM comported with

the statutory language, the Interim FinalRule clarifies these requirements inorder to eliminate any ambiguity.

AILA and ACIP agreed with theDepartments proposal that an employerlawfully may offer and provide greater

benefits to H1B workers than thoseoffered to U.S. workers. The AFLCIOasserted the contrary position. In theAFLCIOs view, an employer should berequired to provide identical benefits toH1B and U.S. workers, a result itargues is consistent with the ACWIAssame basis requirement. Senators



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Abraham and Graham suggested that thestatute would allow employers to offer

benefit incentives above and beyondnormal benefits to lure foreign-basedemployees with critical skills to work inthe United States. The Senatorssuggested that so long as the packagesare offered on the same basis to U.S. andforeign nationals based abroad, thepractice should be permitted.In the Departments view, the statutedoes not require that H1B workers andU.S. workers be offered the same

benefits. While perhaps Section212(n)(2)(C)(viii), read in isolation,could be read to require this result, thisprovision must be read in the context of the entire statute. Section212(n)(2)(C)(viii) provides that it is afailure to meet paragraph (1)(A)thewage requirements of the Actto fail toprovide the required benefits. Section212(n)(1)(A)(i) in turn provides that theemployer must offer wages that are at

least those paid to similar workers. TheDepartment notes, however, that an H1B-dependent employer or willfulviolator, when it conducts good faithrecruitment pursuant to section212(n)(1)(G)(i), must offer U.S. workersthe same compensation (including

benefits) as it will offer the H1Bworkers in the recruited positions.Furthermore, providing greater benefitsto H1B workers may violaterequirements of the variousdiscrimination laws. The agencies thatenforce discrimination requirementsand their telephone numbers andwebsite addresses are set forth above inIV.E.4, above.

Senators Abraham and Grahamasserted that the Department shouldlook at the employers entire benefitsstructure as it concerns benefitseligibility for its workforce generally tomake sure that the comparison is madeto the right employees. These Senatorsand AILA suggested that comparisonscould appropriately be made on such

bases as part-time vs. full-time workers,positions requiring extensive travel vs.those that do not, relative seniority, theparticular organizational component towhich the workers are assigned, and

whether the individual occupies aposition for which special incentivesshould apply. Similarly, ACIP suggestedthat the Department look beyond asimple full-time/part-time distinction.

The Department agrees that it shouldlook at an employers benefits structure.Employers commonly provide different

benefits, for example, based on part-time vs. full-time status, seniority,union vs. non-union, organizationalcomponent, etc. The Department agreesthat H1B workers should be provided

benefits based on their position in the

organizational structure, provided theemployer utilizes the same distinctionson an organization-wide basis. However,the Department will not accept artificialdistinctions which are not generallyaccepted in the industry and whichhave the result of denying benefits to H1B workers on the basis that there areno comparable workers in theorganization or which otherwise havethe effect of discriminating betweenworkers on the basis of citizenship,nationality, or other prohibited grounds.

The Interim Final Rule incorporatesthese principles. The Interim Final Rulealso prohibits employers from denying

benefits based on the H1B workerstemporary status since all H1Bworkers, by virtue of their visarestrictions, are temporary workers.Thus, an employer by utilizingtemporary as a basis for comparisoncould evade offering to these workersthe benefits that typically would be paid

to workers hired on a permanent basis, even though the tenure of workers in each group might be of comparable duration, thereby effectivelynullifying the statutory provision. Anemployer would, however, be allowedto require that an H1B workers meeteligibility and vesting requirements.

Sun Microsystems suggested that tothe extent there was a perceived needfor greater scrutiny over fringe benefits,the Departments efforts should berestricted to dependent employers. TheDepartment disagrees. Unlike someother provisions of the ACWIA, thesame basis/same criteria provisionapplies to all H1B employers.TCS asserted that the Departmentshould clarify that, where length of service is applicable to the amount of the benefit, only the H1B non-immigrants length of service in theUnited States, and not the H1Bs entirelength of service with the employershould be included in the calculation.

It is the Departments view that anemployer is required to offer benefits onthe same basis as it offers benefits to itsU.S. employees. If an employer offers

benefits based on length of service forthe employer, it must offer benefits to its

H1B workers on that basis as well. (Seethe discussion below regardingtreatment of multinationalorganizations.)

APTA suggested that the INS informall H1B workers of their right to beoffered the same benefits as U.S.workers, to better ensure that theyreceive the benefits due them. TheDepartment notes that every H1Bworker is required to receive a copy of the LCA, which contains a brief reference to this requirement. SectionIII.B of the Preamble, above, discusses

in greater detail the Departments plansto disseminate information regardingthe programs requirements.

In response to the Departmentsquery, BRI and AILA contended(without citing support for theirposition) that the ACWIA contemplatesthat an employer may satisfy the

benefits attestation by offering H1Bworkers different but equivalent benefit packages relative to the benefitsoffered to U.S. workers. BRI furtherstated that such benefits should becompared according to their monetaryvalue.

The Department has concluded, as ageneral matter, that the statutes same

basis provision does not permit anemployer to offer its H1B workers

benefits equivalent to but differentfrom those offered its U.S. workers. TheDepartment notes that thesecommenters, like other commenters,appeared to be concerned with benefitsprovided by multinational corporations,which are discussed separately below.

Intel and ACIP stated that a fewcountries prohibit their citizens fromowning stock in foreign corporations.Cooley Godward also raised thequestion of benefits such as stockoptions whose accrual will terminateafter an H1B employees period of status ends.

Although there is nothing whichrequires an employee to take advantageof a stock option, it is the Departmentsview that if an employer is aware thatits H1B worker(s) is prohibited fromtaking advantage of a stock option

because of laws of the workers homecountry, the employer should offer suchworker(s) an alternative benefit of comparable value. With regard to thequestion of stock options or benefitswhich will accrue after termination of an H1B workers period of status, such

benefits should be provided on the same basis as they would otherwise beprovided to workers who are no longerin the firms employ (or who havetransferred back to the home office). If other workers have a right to exercisethe option or receive the benefit even if they are no longer in the firms employ,

the same would be true with regard toH1B workers.Turning to the question of treatment

of employees of multinational firms,Senators Abraham and Graham assertedthat the Departments proposalappear[s to provide no] considerationof the question of who the rightsimilarly situated worker to compare[the transferee] is, and whether thereactually is one. They, instead,suggested that the Department shouldfocus on the transferees status as apermanent employee with the



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employers foreign affiliate, rather thanhis or her status as an H1B worker.

TCS stated that it appreciated theDepartments sensitivity to the issue of the application of the benefitsrequirement to employees who receive arange of benefits from their foreignemployer and are only in the UnitedStates on short-term assignments inconnection with their long-termemployment with the foreign employer.TCS contended, however, that therequirement that H1B workers beprovided benefits equivalent to thosereceived by U.S. workers is contingentupon the existence of similarlyemployed workers in the UnitedStates. TCS argued that because it is anIndian company and its employeesreceive India-based benefits, they arenot similarly employed to any computerengineers it might hire in the UnitedStates, and that TCS would therefore berelieved from any obligation to offer

new benefits to its workers during theperiod of their temporary employmentin the United States.

ACIP commented that a length of status test wrongly assumes that thepractice of maintaining a foreign

benefits program is a matter of convenience, when, in fact, the practiceis maintained because the disruptionoften causes the employee to lose vestedinterest in a benefit plan. Instead, theysuggested, [t]he Department shouldadopt a rule that allows for a transfereeto maintain his or her foreign benefits aslong as such benefits plan isadministered abroad continuouslywithout interruption and as long as thecompany typically offers this option toall international transferees. Similarcomments were made by AILA andIntel, which stated that it is in theemployees best interest to stay onhome country pay and benefits. SIAalso stated that if it is an employerspractice to have its workers continue toreceive home country benefits whenthey are on a short-period assignment inthe United States, it should be allowedto continue to do so.

Some commenters (ACIP, Intel,Latour) indicated that multinational

corporations typically offer similar benefit packages to all their employees.Thus, ACIP stated that most employersalready provide the same benefits to allworkers and do not distinguish betweenU.S. and foreign nationals. At the sametime, it noted that in dealing with aglobal workforce, it is sometimesnecessary to provide different benefitpackages to workers from differentcountries, depending upon the laws andsocial services of that country. Intelsimilarly stated that the vast majority of its regular full-time H1B workers are

on U.S. benefits; it noted that a smallpercentage of these workers are on theirhome country pay and benefits. Intelfurther stated that all its H1B workersare put on U.S. medical benefits,

because of out of country coverageproblems. ACIP explained that currentlyemployers may provide certain benefitsto workers depending upon standards inthe workers home countries and theemployers international relocationpolicies. As stated by ACIP: Benefitsmay include relocation expenses,schooling for children, housingallowance, travel expenses, additionalvacation time and assistance with healthcare or other items the worker isaccustomed to receiving.

ACIP applauded the Departmentseffort to deal with this issue andsupported the Departments statementthat should the U.S. worker remain onthe foreign plan, the U.S. employer will

be held responsible for compliance with

all H1B regulations.AILAs comment, that flexibility isneeded to preserve the ability of the H1B workers to preserve their existinghome country benefits (which if interrupted could have significant andperhaps long-term negative impact onthe worker and the workers family),was representative of several commentson this point.

The Department has carefullyconsidered the question of applicationof the benefits requirements of theACWIA to multinational firms. TheDepartment cannot agree with theconstruction of the statute that woulddeprive foreign-based employees of the benefit protections enacted by theACWIA on the basis that they are notsimilarly employed. On the otherhand, the Department believes it isappropriate to provide someaccommodation for multinationalcorporate operations where homecountry benefits are equitablyequivalent to the benefits provided toemployees.

The Department has crafted a two-partInterim Final Rule, distinguishing

between workers who are in the UnitedStates for a short period of time (90 days

or less) and workers who are in theUnited States for a longer period. WhereH1B workers permanently employed intheir home country (or some othercountry) are not transferred to theUnited States but remain on the payrollof their permanent employer in theirhome country and continue to receive

benefits from the home countrywithout interruption, the Departmentwill require nothing further, providedthe worker is in the United States for nomore than 90 continuous days in anyone visit to the United States. Moreover,

the employer must also providereciprocity to its U.S. workers i.e., U.S.workers based abroad and U.S. workers

based in the United States must receivethe benefits of their home work station(the station abroad or in the UnitedStates, respectively) when traveling ontemporary business. It should be notedthat this provision would allow H1Bworkers who are not in the UnitedStates more than 90 continuous days inone trip to go back and forth betweencountries without any consideration tocumulative days of employment in theUnited States, provided there is noreason to believe the employer is tryingto evade the Acts benefit requirements,such as where a worker remains in theUnited States most of the year butreturns to the home country on brief visits.

Once the H1B worker has worked inthe U.S. for more than 90 continuousdays (or from the point where the

worker is transferred or it is anticipatedthat the worker will likely remain in theUnited States for more than 90continuous days), the H1B employer isrequired to offer that worker the same

benefits on the same basis as providedto its U.S. workers unless: (1) Theworker continues to be employed on thehome country payroll; (2) the workercontinues to receive home-country

benefits without interruption; (3) thehome-country benefits are equitablerelative to the U.S. benefit package; and(4) the employer provides reciprocity(i.e., similar treatment as discussedabove) to its U.S. workers (if any) onassignment away from their home workstation. In the Departments view, thisstrikes an appropriate balance betweenmeeting the statutory requirement(thereby protecting the benefits of U.S.workers employed in the U.S. againsterosion), and protecting the H1Bworkers interest in preserving long-term home country benefits whichmay be threatened by the disruption of these benefits.

Furthermore, as Intel noted in itscomments, many health care plans failto provide coverage, or fail to providefull coverage, outside their countrys

boundaries. Therefore any employerthat offers health coverage to its U.S.workers must offer similar coverage(same plan and same basis) to its H1Bworkers in the United States for morethan 90 continuous days unless the H1B workers home-country planprovides full coverage ( i.e., coveragecomparable to what they would receiveat their home work station) for medicaltreatment in the United States.

In addition, employers will berequired to provide H1B workers whoare in the United States more than 90



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continuous days those U.S. benefitswhich are paid directly to the workernamely paid vacation, paid holidays,and bonuses. H1B workers must also

be provided working conditions andeligibility for working conditions(hours, shifts, vacation periods, etc.) onthe same basis and criteria provided toU.S. workers.

TCS argued that if the Departmentrequires the same or even equivalent benefits for its workers, they willreceive double benefitsthe U.S.

benefits plus their home country benefits. In the Departments view, TCSis mistaken. The Departments proposaltracks the ACWIA. Neither the proposalnor the statute requires the employer tocontinue to maintain home country

benefits in such situations. While anemployer in such situations, either bycontract or otherwise, might be requiredto maintain such benefits (or it maydecide to do so as a matter of company

policy), the ACWIA does not imposesuch an obligation, nor does this rule.The Department received a number of

comments regarding whether amultinational employer continuinghome country benefits to H1Bworkers need establish that the benefitsprovided are equivalent or equitable inrelation to benefits provided U.S.workers. ACIP expressed the view thatit [would be] extremely burdensome toput a dollar value on benefits received.Similarly, AILA stated thatmultinational employers should be ableto provide equitable but non-equivalent

benefits to H1B workers. BRI, on theother hand, took the position that

benefits should be equivalent,comparing their monetary value. TheAFL-CIO, as discussed above,contended that employers should berequired to provide identical benefits toH1B and U.S. workers.

The Department agrees that amultinational firm, under thecircumstances described, should not berequired to make a valuation of the

benefits it offers and provides to U.S.and H1B workers, but rather should berequired, in the event of aninvestigation, to establish only that it

provides benefits which are equitable inrelation to U.S. workers benefits. TheDepartment finds very persuasive thearguments that it is in the workersinterest to allow employers to continuetheir permanent employees on homecountry benefits when workingtemporarily in the United States. At thesame time, the Department believes thatestablishing benefits in terms of cost isunduly burdensome, and would notfurther the objective of establishingcomparable benefits since there is noreason to believe even identical benefits

abroad would cost the same as benefitsin the United States.

Only ACIP provided comments on themeaning of the phrase equitable

benefits. ACIP suggested that [t]heemphasis should be on whether the

benefits package is equitable in light of basic human needs, similarity intreatment of all workers, how U.S.workers transferred abroad are treated,and the facts and circumstances of eachH1B worker. ACIP further stated:While we agree that the Departmentshould look closely at contrived cases,we stress that the Department shouldlook closely at the facts of each case todetermine whether equitable benefitshave been provided. * * * [T]heDepartment should not place undueemphasis on any one factor such as theemployees length of stay in the U.S.

The Department agrees thatequitability between home countryand U.S. benefits does not reduce to a

bright-line test. In the event of anenforcement action, the Department willlook into all the circumstances bearingupon the benefits to ensure that the H1B workers continued receipt of these

benefits is not less advantageous to himthan the benefits offered U.S. workers.This examination entails a qualitativerather than a quantitative review. Inother words, an employer in thesecircumstances must be able todemonstrate that the workers home-country benefits are equitable inrelation to the benefits provided its U.S.workers based in the United States,similarity in treatment of all workers,how U.S. workers temporarily stationedabroad are treated, and the facts andcircumstances of each H1B worker.Where the employer makes thisdemonstration, and there is noappearance of contrivance to avoidpayment of U.S. benefits, theDepartment will not second-guess theemployer.

Several commenters responded to theDepartments request for comments onwhether it should define benefits asthat term is used in Section212(n)(2)(C)(viii), which provides thatthe requirement to offer benefits and

eligibility for benefits includes: theopportunity to participate in health, life,disability, and other insurance plans;the opportunity to participate inretirement and savings plans; and cash

bonuses and noncash compensationsuch as stock options (whether or not

based on performance). * * *.Senators Abraham and Graham andAILA stated that they did not see theneed for further defining benefits,noting that the statute contains severalexamples of benefits. ACIP also statedthat a regulatory definition was

unnecessary, suggesting that instead theDepartment should examine the factsand circumstances of each case. TCScontended that the statutory list of

benefits is exclusive; alternatively, itargued that the Department shouldspecify the benefits so that employersdo not have to guess about what iscovered e.g., is a separate office a

benefit? ACIP asserted that [c]ertaincash and non-cash bonuses considered

benefits under ACWIA are consideredwages under other laws. Adoptingdefinitions from other laws furtherconfuses immigration law, does notaddress practices abroad, and may haveunintended tax consequences.Similarly, ACIP, SHRM and Cowan &Miller commented that furtherdefinition of benefits is unnecessary.Rapidigm asked for clarification of theDepartments statement.

The Department agrees with theposition of most commenters that the

existing statutory definition is sufficientto administer effectively this aspect of the statute. The language of section212(n)(2)(C)(viii) provides a fairlycomprehensive list of the benefits thatmay be offered to workers in the U.S.While the use of including evinces anintention that the list is not exhaustive,the list, in the Departments view, isrepresentative of the types of benefitsthat must be considered. Thus, anemployer, by analogy, may determinewhether other particular benefits should

be taken into account. In this regard, theDepartment notes that the regulatoryschemes under other employment-related statutes such as FMLA, theEqual Pay Act, the ADEA, and ERISAalso provide guidance in this area. TheInterim Final Rule takes this approachin lieu of an attempt to more fullydefine benefits. Under the Departmentsapproach, it would appear clear thatoffice accoutermentsthe example used

by TCSordinarily would notconstitute a benefit within the meaningof the statute. At the same time, it bearsnoting that the ACWIA does not relieveemployers from any obligations theymay have incurred through collective

bargaining or otherwise with regard to

particular working conditions, or of itsobligation not to discriminate based oncitizenship or national origin.

With regard to the Departmentsstated intention to modify the currentregulatory provision concerning theworking condition attestation, ACIP,AILA, and TCS expressed the concernthat the Department was seeking toimpose a new requirement, i.e., that anemployer was required to offer benefitsto H1B workers at least equivalent tothe higher of those offered to their ownU.S. employees or those prevailing in



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the area. ACIP asserted that theDepartment lacks authority to requireemployers to consider conditionsoutside their own workforces. Rapidigmrequested clarification on the meaningof the provision.

After review of the ACWIA and theprovisions of the H1B program as a

whole, the Department concurs withcommenters that Congress intended thatthe requirement for offering benefits andeligibility for benefits to H1B workerson the same basis and same criteria asthey are offered to U.S. workersemployed by the employer includes

both benefits paid as compensation forservices rendered and workingconditions. The Department hastherefore concluded that it isinappropriate to continue the provisionin 655.732 which provides forconsideration under somecircumstances of prevailing conditionsin the area of employment. Section655.732 therefore is revised in theInterim Final Rule to clearly require thatworking conditions be provided to H1B workers on the same basis and samecriteria as they are offered to U.S.workers.

The Department also believes thatcertain benefits appropriately are in thenature of compensation for servicerendered, and have a monetary value toworkers and monetary cost toemployers. Such benefits include cash

bonuses, paid vacations and holidays,

and termination pay, which are paiddirectly to workers and are taxablewhen earned. Also included are benefitssuch as health, life and disabilityinsurance, and deferred compensationsuch as retirement plans and stockoptions which are funded by employers,either directly as costs are incurred orthrough contributions to fringe benefitplans or insurance companies. TheDepartment has concluded that such

benefits are more in the nature of wagesthan working conditions, although theDepartment cautions that only benefitswhich meet the criteria of

655.731(c)(2) count toward satisfactionof the required wage since such benefitsare not included in surveys used todetermine the prevailing wage. On theother hand, benefits which do not havea direct monetary value to workers orcost to employers, are in the nature of working conditions, including matterssuch as seniority, hours, shifts, andvacation periods, and preferencesrelating thereto. Sections 655.731 and655.732 are amended to reflect thisdistinction.

2. What Documentation Will BeRequired? ( 655.731(b))

The Department proposed to requireH1B employers to retain copies of fringe benefit plans and summary plandescriptions provided to workers,including all rules relative to eligibilityand benefits, and documents showingthe benefits actually provided and howthe costs are shared between theworkers and the employer. TheDepartment sought suggestions as toexactly what records would demonstratethe value of benefits and satisfy theother retention requirements. TheDepartment expressed the view thatsuch records already are required forIRS and ERISA purposes (althoughnoting in the paperwork analysis, at 64FR 630, that a small percentage of employers might be required to keeprecords that otherwise would not bekept). In connection with theDepartments query whether it might bepossible to provide different homecountry benefits to employees of amultinational corporate operation inlieu of those provided to U.S. workers,the Department sought comment onwhat records would be necessary todemonstrate the relative value of thehome-country benefits and the

benefits provided to U.S. workers.Many of the commenters opposed the

notion of maintaining particulardocumentation in order to demonstratecompliance with the benefits attestation.ACIP and AILA asserted that the statutedoes not authorize the Department to

require employers to retaindocumentation, suggesting that it is upto an employer to decide whatdocumentation, if any, it should retainin order to demonstrate its complianceif it is investigated. Similarly, SenatorsAbraham and Graham stated: DOL isnot authorized to require employers tomaintain any particulardocumentation. The Departmentcannot, they asserted, include as part of the proposed LCA a new attestationthat [the employer] will develop andmaintain documentation of workingconditions and benefits.

ACIP addressed particular burdens itperceived in retaining suchdocumentation, noting, for example,that they already maintain suchdocumentation in a location or in aformat different than that contemplated

by the Department. While ACIPrecognized that the Departmentcorrectly stated that employers nowkeep documents related to their fringe

benefit plans, ACIP stated that thesedocuments may be housed in variousdepartments and urged the Departmentto let the employer decide where

documentation must be kept. ACIPfurther explained that much informationis sensitive and confidential ( e.g., stockoption and incentive pay plans),requiring the Department, in its view, toallow an employer flexibility indocumenting these benefits.

Intel stated that summary plandescriptions are a U.S. requirement. Itnoted that no other countries requiredthe same depth and detail regarding thedocumentation of benefits, thoughstating that about one-half of its foreignsubsidiaries have some benefitsdocumentation. Intel explained that allits employees at orientation receiveinformation regarding the companys

benefits; in the U.S., it stated thatemployees receive a book that describes

benefits, and that each year employeesreceive a particularized benefit portrait.Intel asserted that furtherdocumentation should not be required;it contends that a memorandum to the

public access file that its employees areadvised of the companys benefits attime of their hire should suffice.

Satyam questioned whether currentrequirements under other statutes andregulations relating to the retention of

benefits documents would suffice for H1B purposes; it suggested that theDepartment should not require puttingspecific information in the public accessfile. It also inquired whether it would benecessary to retain information relevantto the comparison group. ITAA said thatthe Interim Final Rule should reciterather than refer to IRS and PWBA

requirements. AILA expressed theconcern that the Department will makeit a violation to fail to keep copies of

benefits documents in a public accessfile and that requiring documentation to

be kept up front would impose a huge burden. AILA recommended insteadthat an employer, for example, besimply required to bear the burden of proving the equivalency of foreign

benefits in the event of an investigation.None of the commenters took issue

with the Departments statement thatthe documents sought are requiredalready by IRS or ERISA.

Based on our review of the commentsreceived on the proposal, it is apparentthat the documentation requirementsproposed in the NPRM have beenmisunderstood. With the exception of documentation specifically required to

be retained in the public access file,there is no requirement that information

be kept in any particular format orplace, or that information be segregated

by LCA, by locality, by H1B versusU.S. workers, or in any other way fromthe employers records for the entirecompany.



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Nothing in the ACWIA suggests thatdocumentation requirements areunauthorized or otherwise improper. Tothe contrary, section 212(n)(1)specifically requires employers to makethe LCA and such accompanyingdocuments as are necessary availablefor public examination. The Department

believes that this provision clearlypermits the Department to determinewhat documents must be created orretained by employers to support theLCA. The documentation that isrequired by the Interim Final Rulesimply effectuates the more specificrequirements imposed by the ACWIA.Furthermore, as the NPRM stated, thedocuments sought for the most part arealready required by the IRS or ERISA,and would be kept by an ordinaryprudent businessman in any event.Thus, the Departments ERISAregulations require at 29 CFR part 2520that summary plan descriptions be

provided to participants, and requireemployers to submit lengthy forms(Form 5500) to IRS with detailedinformation regarding their fringe

benefits plans, which must besubstantiated by records. In addition,EEOC rules under the ADEA, 29 CFR1627.3(b)(2), require that everyemployer retain copies of all employee

benefit plans, as well as copies of anyseniority systems and merit systemswhich are in writing. Where the plan isnot in writing, a memorandum fullyoutlining its terms and how it has beencommunicated to employees is required.

The Department believes that it isessential that employers, in order toestablish that H1B workers have in fact

been offered the same benefits as U.S.workers (or that the special benefitrequirements for certain employees of multinational firms are met), retain acopy of any document provided toemployees describing the benefitsoffered to employees, the eligibility andparticipation rules, how costs areshared, etc. ( e.g., summary plandescriptions, employee handbooks, anyspecial or employee-specific notices thatmight be sent). It is also important thatemployers keep a copy of all benefit

plans or other documentation describing benefit plans and any rules theemployer may have for differentiatingamong groups of workers. In addition,the employer will be required to retainevidence as to what benefits are actuallyprovided to U.S. and H1B workers.Where employees are given a choice of

benefits, employers will be required toretain evidence of the benefits selectedor declined by employees.

For multinational employers whochoose to keep H1B workers on homecountry benefit plans, the employer

will be required to maintain evidence of the benefits provided to the worker

before and after the employee went tothe United States. In the event of aninvestigation, the employer will also berequired to demonstrate that the otherrequirements for multinational firms aremet, as appropriate e.g., that theemployer maintains reciprocity bytreating U.S. workers coming to theUnited States temporarily from abroadthe same as H1B workers, and likewisecontinues U.S. workers temporarilyoverseas on U.S. benefits, that theworker was not in the United States formore than 90 continuous days, thathome country benefits are equitablein relation to U.S. benefits, etc.

With regard to the public access file,the employer need only maintain asummary of the benefits offered to U.S.workers in the same occupation as H1B workers, including a statementexplaining how employees are

differentiated where not all employeesin the occupation are offered the same benefits. If an employer has workersreceiving home country benefits, theemployer may place a simple notationto that effect in the file. The publicaccess file need not show theproprietary details of a plan (such as astock option or incentive distributionplan), the costs of providing the

benefits, or the choices made byindividual workers.

Since the regulations do not allow anemployer to provide equivalent benefitsas a general matter, and provide anequitable rather than an equivalenttest for multinational benefits, nospecial documents regarding the cost of

benefits are required.H. What Does the ACWIA Require of Employers Regarding Payment of Wagesto H1B Nonimmigrants for Nonproductive Time? (655.731(c)(7))

On October 31, 1995, the Departmentrepublished for comment a provision of the December 20, 1994 Final Rule whicharticulated the Departments positionregarding payment of the required wagefor nonproductive time. This provision, 655.731(c)(5), required payment of the

required wage beginning no later thanthe first day the H1B nonimmigrant isin the United States and continuingthroughout the nonimmigrants periodof employment, including periods whenthe nonimmigrant is in nonproductivestatus due to employment-relatedreasons such as training or lack of assigned work. The provision did notrequire payment of such wages wherethe nonproductive status is due toreasons unrelated to employment ( e.g.,caring for an ill relative), provided thenonimmigrants unpaid status is

acceptable to the INS and is not subjectto a wage payment obligation undersome other statute ( e.g., Family andMedical Leave Act). The provisiondistinguished between full-time andpart-time workers as provided on the I129 petition filed with INS, but statedthat in the event a part-time employeeregularly worked a greater number of hours than stated on the I129, theemployer would be held to the actualhours disclosed in the enforcementaction. Section 655.731(c)(5) was amongthe provisions of the December 20, 1994Final Rule which had been enjoinedfrom enforcement, due to lack of noticeand comment, by the court in National Association of Manufacturers v. United States Department of Labor.

Subsequently, the ACWIA, amendingsection 212(n)(2) of the INA, enacted anexplicit requirement, consistent withthe Departments regulation, providingthat it is a violation of the wage

attestation in section 212(n)(1)(A) for anemployer to fail to pay an H1B workerthe required wage for certainnonproductive time. Like theDepartments regulation, an exceptionwas created for nonproductive statuswhich is due to non-work-related factorssuch as the workers own, fullyvoluntary request, or circumstancesrendering the worker unable to work.Under this provision, workersdesignated as full-time on the petitionfiled with INS must be paid full-timewages, and employees designated aspart-time on the petition must be paidthe hours designated in the petition.This obligation is effective after the H1B worker has entered into employmentwith the employer, but in any event,not later than 30 days after the workersdate of admission to the United States(if entering the country pursuant to thepetition) or 60 days after the date theworker becomes eligible to work forthe employer (if already in the countrywhen the petition is approved). Thestatute also contains a special provisionregarding academic salaries which isdiscussed in IV.I, below.

Congressman Smith and SenatorAbraham, in their remarks after

enactment of the ACWIA, noted that themost extreme examples of benchingoccur when workers are brought to theUnited States on the promise of acertain wage, but only receive a fractionof that wage because the employer doesnot have enough work for the H1Bworker. 144 Cong. Rec. E2326 (Nov. 12,1998); 144 Cong. Rec. S1275354 (Oct.21, 1998). They also both agreed thatemployers must pay full wages and

benefits during an H1B workers non-productive status when that status isdue to the employers decisionbased



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on factors such as lack of work for theworkeror due to the workers lack of a license or permit. Congressman Smithalso remarked that Congress anticipatedthe Secretarys close scrutiny of voluntariness in circumstances thatappear to be contrived to take advantageof unpaid time. Senator Abraham listedthe following examples of H1Bemployees taking unpaid leave whichhe stated would not be consideredbenching: leave under FMLA or othercorporate policies, annual plantshutdowns for holidays or retooling,summer recess or semester breaks, orpersonal days or vacations. SenatorAbraham also stated that this provisiondoes not prohibit an employer fromterminating an H1B workersemployment on account of lack of workor for any other reason. CongressmanSmith stated that an attempt by anemployer to avoid compliance with thebenching provision by laying off an

American worker would trigger theenforcement and penalty provisions of the Act.

Congressman Smith and SenatorAbraham agreed that the benchingprovision is not intended to precludepart-time H1B employment, agreed to

between the employer and the H1Bworker when the worker was hired. 144Cong. Rec. E2326 (Nov. 12, 1998); 144Cong. Rec. S12754 (Oct. 21, 1998).Congressman Smith stated that theemployers misrepresentation of thismaterial fact should be scrutinized bythe Secretary in determining whether a

benching violation or misrepresentationhas been made, with particular attentionto whether U.S. workers would receivepaid leave for nonproductive time.Senator Abraham stated that the Act isnot intended to give the Secretary theauthority to reclassify an employeedesignated as part-time based on theworkers actual workload after theemployee begins employment.

In the NPRM, the Departmentproposed regulatory text which, exceptfor the different statutory languagetriggering the beginning of the period inwhich the benched worker must bepaid, is very similar to its current

regulation. In the preamble, theDepartment stated that it wasconsidering whether the H1B workerenters into employment when he firstmakes himself available for work, suchas by reporting for orientation ortraining, or when the worker actually

begins receiving orientation or trainingor otherwise performs work or comesunder the control of his employer. Incommenting on the purpose of thebenching provision, the Departmentobserved that an H1B nonimmigrant isnot permitted to be employed by

another employer while benched(unless another employer files a petitionon behalf of the worker or the workeradjusts his or her status under the INA),and is without any legal means of support in the country. In contrast, aU.S. worker can seek other employmentand would be eligible for Federalprograms such as food stamps. TheDepartment also observed that theemployer, at any time, may terminatethe employment of the worker, notifyINS, and pay the workers returntransportation, thereby ceasing itsobligations to pay for non-productivetime under the H1B program. TheDepartment proposed that payment of wages would not be required where thenonproductive status is due to reasonsunrelated to employment, unless suchpayment is required by INS as acondition of the worker maintaininglawful status, or is required by someother Act such as FMLA. On the other

hand, the employer would not berelieved from the wage obligation forany required leave of absence, even if itincludes U.S. workers.

The Department received threecomments on the 1995 proposed rule onthis issue. Regarding the requirement inthe 1995 NPRM that the employer paythe required wage for nonproductivetime beginning no later than the firstday the H1B nonimmigrant is in theUnited States and continuingthroughout the nonimmigrants periodof employment, AILA suggested that itwould be more reasonable to require theemployer to begin paying on the daythat the nonimmigrant actually reportsto work, provided that the date is nolater than 30 days after the date thenonimmigrant enters the U.S. orotherwise becomes eligible to work forthe employer. AILA also suggested thatan exception be made where thenonimmigrant is given an unpaid leaveof absence pursuant to a uniformly-enforced company policy. Similarly,another commenter, an electronicsmanufacturer (Motorola), complainedthat in the case of a temporary reductionin force, the employer would have toretain the H1B nonimmigrant at full

salary, while U.S. workers are off thepayroll.The Department received 33

comments on the 1999 NPRM proposalsaddressing the ACWIAs benchingprovisions. APTA stressed theimportance of the Department ensuringthat H1B nonimmigrants are aware of their wage rights for nonproductivetime. Miano commented that companiesshould not be allowed to use the H1Bprogram to create stables of availableemployees in anticipation of openingsthat do not yet exist, but should be

required to demonstrate that an unfilledposition actually exists.

The Department agrees that it isimportant that H1B nonimmigrants beaware of their rights. For this reason, 655.734(a)(3) requires that all H1Bnonimmigrants be provided a copy of the LCA which supports their petition.In addition, the Department is planninga comprehensive educational program,as discussed in III.B, above.

AILA suggested that the Departmentadd to its list of exceptions situationswhere objective economic reasons arepresent, such as annual retooling in theautomobile industry for productionmodel changes. ACIP and SIA urged theDepartment to adopt Senator AbrahamsOctober 21, 1998 comments as examplesof what is not benching, i.e. leave underthe Family and Medical Leave Act; orother corporate policies for no paymentsuch as annual plant shutdowns forholidays or retooling, summer recess orsemester breaks, or personal days orvacations. ACIP also urged that similarsituations be included in the list of examples which do not constitute

benching, such as disciplinary action,mandatory unpaid pre-employmenttraining or orientation, mandatoryvacation leave, and periods of downturnwhere all workers are treated the same.ACIP suggested that the facts andcircumstances of each case beconsidered, including whethersimilarly-situated U.S. workers areplaced on leave and whether H1Bworkers knew before acceptingemployment of the possibility of suchleave. ACIP and SIA encouraged theDepartment to exercise flexibility toavoid the potential effect of companieslaying off U.S. workers to avoid the

benching of H1B workers by allowingfor periods attributable to regular,objective business occurrences such ascyclical business downturns, holidayplant shutdowns, and plant retooling.They observed that when these eventsoccur all workers are treated equally,according to the same standards.

The AFLCIO and other commentersobserved that the provisionsprohibition against benching may

lead employers to treat H1B employees better than U.S. workers, and may createthe situation where an employer retainsan H1B worker over an Americanworker during a lay-off to avoid payingfull wages to the H1B worker. TheAFLCIO stated its belief that U.S.workers who are laid off to avoid the

benching provision may have groundsfor a discrimination complaint based onnationality and immigration status andthat the regulation should so indicate.

The Department believes that thestatutory language is clear. The statute



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requires payment, after a nonimmigranthas entered into employment with anemployer, whenever nonproductivestatus is due to a decision by theemployer or to the nonimmigrants lackof a permit or license. In contrast,payment is not due when thenonproductive time is due to non-work-related factors, such as the voluntaryrequest of the nonimmigrant for anabsence or circumstances rendering thenonimmigrant unable to work.Therefore the Department cannotinterpret the Act to allow employers to

be relieved from payment for periodswhere the employers business isshutdown, regardless of whether itaffects U.S. workers as well, whether foreconomic downturn, annual retooling,or holiday shutdown; nor can theemployer be relieved from liability formandatory vacation, pre-employmenttraining, or disciplinary action. All of these situations are caused by the

employer, rather than at the voluntaryrequest of the nonimmigrant. TheDepartment notes that training ororientation required of an employee

before productive work starts hasalways been considered compensabletime under the Fair Labor StandardsAct, and that the Department hasrequired payment for such time in itsenforcement of the H1B attestationrequirements since the injunctionentered in the NAM litigation. If anemployer finds need to discipline an H1B nonimmigrant, it must find a methodother than loss of pay, or it may

terminate the employment relationship.The Department understands theconcern expressed regarding thepossibility of an employer laying off U.S. workers while continuing to payH1B workers because of its obligationto continue paying H1B workersduring periods of nonproductive status.Congressman Smith suggested that anemployers action in laying off U.S.workers to avoid placing H1B workersin nonproductive status for which theymust be paid would be a violation of theACWIA. We agree, with respect to H1B-dependent employers and willful

violators, where the required showingfor a prohibited displacement undersection 212(n)(1)(E) or (F) is made. Inaddition, we note that a displacement inconnection with a willful violation of the attestation requirements or a willfulmisrepresentation can bring enhancedpenalties pursuant to section212(n)(2)(C)(iii). Additionally, otherlaws provide U.S. workers with rightsand remedies for an employersdiscriminatory practices. The names,telephone numbers, and websites of thethree federal agencies responsible for

enforcement of anti-discrimination lawsare set forth in IV.E.4, above.

The Department notes thatindetermining whether the statutorycriteria have been met, including theexception for nonpayment based onthe voluntary request of thenonimmigrant for an absenceit willlook closely at any situation where thereis any question about whether theperiod of nonproductive time is trulyvoluntary. The Department will notunder any circumstances consider theemployer to be relieved of wage liabilitywhere there is a plant shutdown. Norwill the Department relieve an employerfrom liability simply because theemployee agreed to periods without payin the employment contract.

ACIP and AILA questioned the basisfor the Departments proposedrequirement that workers be paid whererequired by other statutes such as FMLAor the ADA, and that the workersperiod of unpaid leave be consistentwith maintenance of status under INSregulations.

The Department intended to saynothing more than that an employermust comply with other laws. TheDepartment notes that FMLA onlyrequires paid leave where the employerhas a paid leave plan and either theemployer or the employee wishes tosubstitute the paid leave for unpaidFMLA leave. Since the employer isrequired to offer H1B workers the same

benefits as U.S. workers, an employerwould be required to provide H1Bworkers with paid leave under anycircumstances in which it is provided toU.S. workers. Enforcement of thisrequirement during periods where theemployee voluntarily takes leave or isunable to work, is in accordance withthe benefit obligations at section212(n)(2)(C)(viii). The Department alsowishes to point out, as stated by bothSenator Abraham and CongressmanSmith, that during periods of nonproductive time, employers arerequired to provide fringe benefits aswell as wages.

ACIP and AILA agree with theproposal that an employer may choose

to terminate an H1B worker withoutviolating the benching provision. ACIPalso suggests that employers should not

be held liable for the nonimmigrantsfailure to leave the country.

The Department agrees that anemployer is no longer liable forpayments for nonproductive status if there has been a bona fide terminationof the employment relationship. TheDepartm

department of labor: 65 fed reg 80109 2

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