Administrator v. Native Technologies, Inc., 1996-LCA-2 (ARB May 28,
1999)
U.S. Department of Labor
Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ARB CASE NO. 98-034
ALJ CASE NO. 96-LCA-2
DATE: May 28, 1999
In the Matter of:
ADMINISTRATOR, WAGE AND
HOUR DIVISION, UNITED STATES
DEPARTMENT OF LABOR,
COMPLAINANT,
v.
NATIVE TECHNOLOGIES, INC.,
RESPONDENT.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For the Complainant:
Mario Fernandez, Esq., William J. Stone, Esq., Steven J. Mandel,
Esq.,
U. S. Department of Labor, Washington, D. C.
For the Respondent:
Pernell W. McGuire, Esq.
Aspey, Watkins & Diesel, P.L.L.C., Flagstaff, Arizona
DECISION AND ORDER REVERSING IN PART AND
REMANDING FOR FURTHER PROCEEDINGS
This case concerns the obligations of an employer to a nonimmigrant
employee working in the United States under the H-1B visa program authorized by the Immigration
and Nationality Act of 1952, as amended ("INA"). 8 U.S.C. §§1101, 1182,
[Page 2]
and 1184 (1994). The Administrator of the Wage and Hour Division ("Administrator")
alleged that Native Technologies, Inc. ("Native Technologies" or
"Company"), misrepresented material facts in the H-1B Labor Condition Application
("LCA") and willfully failed to pay the required wages to the Complainant, Iouri
Mordovskoi ("Mordovskoi" or "Complainant").
In his Decision and Order ("D. & O."), the Administrative Law
Judge ("ALJ") granted partial summary judgment to the Administrator and ordered
Native Technologies to pay money penalties and back wages for work performed by Mordovskoi
in 1995. The ALJ also granted partial summary judgment to Native Technologies by determining
that Mordovskoi was not employed by the Company in 1994 and thus was owed no wages for work
performed during that period. 2
1 Mordovskoi indicates that in toto he
worked 39 weeks for Native Technologies beginning August 29, 1994, through May 28, 1995.
There were 18 weeks in 1994 and 21 in 1995.
2 In granting partial summary
judgment to the Administrator, the ALJ also held that Native Technologies: (1) failed to record
properly the appropriate wages on the LCA, in violation of 20 C.F.R. §655.805(a)(1); (2)
willfully failed to pay the recorded LCA wage rate, in violation of 20 C.F.R.
§655.805(a)(2)(i); (3) impermissibly deducted living expenses from Mordovskoi's pay, which
expenses had previously been advanced by the Company; and (4) was responsible for the payment
of monetary penalties for failing to accurately specify the rate of pay or for otherwise
misrepresenting a material fact on the LCA, and for willfully failing to pay the required wage rate.
D. & O. at 6. Because neither party petitioned for review on these points, the ALJ's rulings
constitute the agency's final decision on these issues. 20 C.F.R. §§655.840, 655.845.
3 Immigration Act of 1990, Pub.
Law 101-649, 104 Stat. 4978; Miscellaneous and Technical Immigration and Naturalization
Amendments of 1991, Pub. Law 102-232, 105 Stat. 1733.
4 The Department of Labor's H-1B
regulations were originally published in identical format in two different places in the Code of
Federal Regulations, Title 20 and Title 29. In 1996, the regulations at Title 29 were deleted, and the
H-1B regulations are now published only at Part 655 of Title 20. 61 Fed. Reg. 51013, September
30, 1996.
5 "Wage rate" means
the remuneration (exclusive of fringe benefits) to be paid, stated in terms of amount per hour, day,
month or year. 20 C.F.R. §655.715. The "required wage rate" means the rate of
pay which is the higher of the "actual wage" or the "prevailing wage" for
the occupation in which the alien is to be employed. Id. The "actual wage" is
the wage paid by the employer to all other individuals with similar experience and qualifications for
the specific employment in question. Id. The "prevailing wage" for the
occupational classification in the area of intended employment must be determined as of the time
of filing the LCA. Id. The employer must base the prevailing wage on the best information
available at the time, but is not required to use any specific methodology to determine it.
Information from a state employment security agency ("SESA"), an independent
authoritative source, or other legitimate sources may be used. 20 C.F.R. §655.731(a)(2).
6 Congress directed the Secretary
of Labor to "establish a process for the receipt, investigation and disposition of
complaints," to complete an investigation within 30 days, to issue a determination as to
whether a violation was committed, to provide a hearing opportunity to interested parties, and to
issue a finding. 8 U.S.C. §1182(n)(2).
6 No NASA contract was awarded
to Native Technologies during the period relevant to this action. D. & O. at 9.
7 The information provided on the
I-129 was consistent with that provided on the LCA. Like the I-129, the LCA stated that
Mordovskoi was to work as a Senior Engineer, to be paid at an hourly rate of $25/hr. ($1000 per
week), with an employment period from 1/1/94 to 1/1/97. Jarrett Dec. at Ex. 2.
8 The parties disagree about the
date the working relationship ended. In his May 21, 1995, complaint, Mordovskoi implies that he
is still working for Native Technologies. Jarrett Dec. at Ex. 1. Counsel for Native Technologies
represents that Mordovskoi did no work for the Company after April 22, 1995, and the Company's
pay records indicate that Mordovskoi's last check was for the period ending April 16, 1995. Resp.
Opening Br. at 5; Jarrett Dec. at Ex. 8.
9 As to compensating Mordovskoi
for his 1994 work, Ryan declared variously that Mordovskoi agreed that he would "work for
the company on other projects for no pay until the NASA project was funded," that
Mordovskoi understood that "he would receive a portion of the profits received on [the]
projects" on which he worked, and that the Company "agreed to pay [Mordovskoi's]
living expenses . . . [and] to allow [Mordovskoi] to become a partial shareholder in the company in
exchange for his efforts." Ryan Dec. at ¶ 16, 17. No profits were
realized on the projects on which Mordovskoi worked. Id. at ¶ 17.
10 Ryan and Mordovskoi
first met in1992 and they were familiar with each other's work before the LCA was filed in late
1993. Mordovskoi Dec. at 1-2; Marsh Dec. at Ex. 1.
11 The regulations
establishing standards for H-1B petitions suggest the possibility that some H-1B workers could work
in the United States under an arrangement other than a traditional employer-employee relationship.
8 C.F.R. §214.2(h)(2)(i)(F). In addition to visa petitions that are submitted directly by
intended employers, the INA implementing regulations also allow agents to submit H-1B
petitions "in cases involving workers who traditionally are self-employed or use agents to
arrange short term employment in their behalf with numerous employers." Id. This
arrangement is not found in the statute, but has developed administratively to accommodate the
needs of H-1B employers and workers in specialized situations. See "Petitions for H-
1a, H-1b, O and P Temporary Workers Filed by Agents and Contractors," Memorandum of
Jacquelyn Bednarz, DOJ Office of Adjudications, 70 Interpreter Releases 1129, 1148-50 (August
30, 1993).
Even when the petitioner is an agent (rather than a direct employer), however,
the same regulations mandate that "an agent performing the function of an employer
must guarantee the wage offered and the other terms and conditions of employment by
contractual agreement with the beneficiary(ies) [i.e., visa recipients]." 8 C.F.R.
§214.2(h)(2)(i)(F)(2) (emphasis added). Thus, whether the petitioner is an employer or an
agent, the regulations insure that the entity that submits the application to import the nonimmigrant
alien (i.e., the H-1B employer) is obligated to fulfill the wage payment requirements of the
LCA.