An employer that is subject to these additional attestation
obligations (under the standards described in §655.736) is prohibited from
displacement of any U.S. worker(s) -- whether directly (in its own workforce)
or secondarily (at a worksite of a second employer) -- under the standards set
out in this section.
(a) "United States worker" ("U.S. worker") is
defined in §655.715.
(b) "Displacement," for purposes of this section, has two
components: "lay off" of U.S. worker(s), and "essentially
equivalent jobs" held by U.S. worker(s) and H-1B nonimmigrant(s).
(1) "Lay off" of a U.S. worker means that the employer has
caused the worker's loss of employment, other than through --
(i) Discharge of a U.S. worker for inadequate performance, violation of
workplace rules, or other cause related to the worker's performance or behavior
on the job;
(ii) A U.S. worker's voluntary departure or voluntary retirement (to be
assessed in light of the totality of the circumstances, under established
principles concerning "constructive discharge" of workers who are
pressured to leave employment);
(iii) Expiration of a grant or contract under which a U.S. worker is
employed, other than a temporary employment contract entered into in order to
evade the employer's non-displacement obligation. The question is whether the
loss of the contract or grant has caused the worker's loss of employment. It
would not be a layoff where the job loss results from the expiration of a grant
or contract without which there is no alternative funding or need for the U.S.
worker's position on that or any other grant or contract (e.g., the
expiration of a research grant that funded a project on which the worker was
employed at an academic or research institution; the expiration of a staffing
firm's contract with a customer where the U.S. worker was hired expressly to
work pursuant to that contract and the employer has no practice of moving
workers to other customers or projects upon the expiration of contract(s)). On
the other hand, it would be a layoff where the employer's normal practice is to
move the U.S. worker from one contract to another when a contract expires, and
work on another contract for which the worker is qualified is available
(e.g., staffing firm's contract with one customer ends and another
contract with a different customer begins); or
(iv) A U.S. worker who loses employment is offered, as an alternative to
such loss, a similar employment opportunity with the same employer (or, in the
case of secondary displacement at a worksite of a second employer, as described
in paragraph (d) of this section, a similar employment opportunity with either
employer) at equivalent or higher compensation and benefits than the position
from which the U.S. worker was discharged, regardless of whether or not the
U.S. worker accepts the offer. The validity of the offer of a similar
employment opportunity will be assessed in light of the following factors:
(A) The offer is a bona fide offer, rather than an offer designed to
induce the U.S. worker to refuse or an offer made with the expectation that the
worker will refuse;
(B) The offered job provides the U.S. worker an opportunity similar to that
provided in the job from which he/she is discharged, in terms such as a similar
level of authority, discretion, and responsibility, a similar opportunity for
advancement within the organization, and similar tenure and work scheduling;
(C) The offered job provides the U.S. worker equivalent or higher
compensation and benefits to those provided in the job from which he/she is
discharged. The comparison of compensation and benefits includes all forms of
remuneration for employment, whether or not called wages and irrespective of
the time of payment (e.g., salary or hourly wage rate; profit sharing;
retirement plan; expense account; use of company car). The comparison also
includes such matters as cost of living differentials and relocation expenses
(e.g., a New York City "opportunity" at equivalent or higher
compensation and benefits offered to a worker discharged from a job in Kansas
City would provide a wage adjustment from the Kansas City pay scale and would
include relocation costs).
(2) Essentially equivalent jobs. For purposes of the displacement
prohibition, the job from which the U.S. worker is laid off must be essentially
equivalent to the job for which an H-1B nonimmigrant is sought. To determine
whether the jobs of the laid off U.S. worker(s) and the H-1B nonimmigrant(s)
are essentially equivalent, the comparison(s) shall be on a one-to-one basis
where appropriate (i.e., one U.S. worker left employment and one H-1B
nonimmigrant joined the workforce) but shall be broader in focus where
appropriate (e.g., an employer, through reorganization, eliminates an
entire department with several U.S. workers and then staffs this department's
function(s) with H-1B nonimmigrants). The following comparisons are to be made:
(i) Job responsibilities. The job of the H-1B nonimmigrant must involve
essentially the same duties and responsibilities as the job from which the U.S.
worker was laid off. The comparison focuses on the core elements of and
competencies for the job, such as supervisory duties, or design and engineering
functions, or budget and financial accountability. >Peripheral,
non-essential duties that could be tailored to the particular abilities of the
individual workers would not be determinative in this comparison. The job
responsibilities must be similar and both workers capable of performing those
duties.
(ii) Qualifications and experience of the workers. The qualifications of the
laid off U.S. worker must be substantially equivalent to the qualifications of
the H-1B nonimmigrant. The comparison is to be confined to the experience and
qualifications (e.g., training, education, ability) of the workers which
are directly relevant to the actual performance requirements of the job,
including the experience and qualifications that would materially affect a
worker's relative ability to perform the job better or more efficiently. While
it would be appropriate to compare whether the workers in question have
"substantially equivalent" qualifications and experience, the workers
need not have identical qualifications and experience (e.g., a
bachelor's degree from one accredited university would be considered to be
substantially equivalent to a bachelor's degree from another accredited
university; 15 years experience in an occupation would be substantially
equivalent to 10 years experience in that occupation). It would not be
appropriate to compare the workers' relative ages, their sexes, or their ethnic
or religious identities.
(iii) Area of employment. The job of the H-1B nonimmigrant must be located
in the same area of employment as the job from which the U.S. worker was laid
off. The comparison of the locations of the jobs is confined to the area within
normal commuting distance of the worksite or physical location where the work
of the H-1B nonimmigrant is or will be performed. For purposes of this
comparison, if both such worksites or locations are within a Metropolitan
Statistical Area or a Primary Metropolitan Statistical Area, they will be
deemed to be within the same area of employment.
(3) The worker's rights under a collective bargaining agreement or other
employment contract are not affected by the employer's LCA obligations as to
non-displacement of such worker.
(c) Direct displacement. An H-1B-dependent or willful-violator
employer (as described in §655.736) is prohibited from displacing a U.S.
worker in its own workforce (i.e., a U.S. worker "employed by the
employer") within the period beginning 90 days before and ending 90 days
after the filing date of an H-1B petition supported by an LCA described in
§655.736(g). The following standards and guidance apply under the direct
displacement prohibition:
(1) Which U.S. workers are protected against "direct
displacement"? This prohibition covers the H-1B employer's own
workforce -- U.S. workers "employed by the employer" -- who are
employed in jobs that are essentially equivalent to the jobs for which the H-1B
nonimmigrant(s) are sought (as described in paragraph (b)(2) of this section).
The term "employed by the employer" is defined in §655.715.
(2) When does the "direct displacement" prohibition apply?
The H-1B employer is prohibited from displacing a U.S. worker during a specific
period of time before and after the date on which the employer files any H-1B
petition supported by the LCA which is subject to the non-displacement
obligation (as described in §655.736(g)). This protected period is from 90
days before until 90 days after the petition filing date.
(3) What constitutes displacement of a U.S. worker? The H-1B employer
is prohibited from laying off a U.S. worker from a job that is essentially the
equivalent of the job for which an H-1B nonimmigrant is sought (as described in
paragraph (b)(1) of this section).
(d) Secondary displacement. An H-1B-dependent or willful-violator
employer (as described in §655.736) is prohibited from placing certain
H-1B nonimmigrant(s) with another employer where there are indicia of an
employment relationship between the nonimmigrant and that other employer (thus
possibly affecting the jobs of U.S. workers employed by that other employer),
unless and until the H-1B employer makes certain inquiries and/or has certain
information concerning that other employer's displacement of similarly employed
U.S. workers in its workforce. Employers are cautioned that even if the
required inquiry of the secondary employer is made, the H-1B-dependent or
willful violator employer shall be subject to a finding of a violation of the
secondary displacement prohibition if the secondary employer, in fact,
displaces any U.S. worker(s) during the applicable time period (see
§655.810(d)). The following standards and guidance apply under the
secondary displacement prohibition:
(1) Which U.S. workers are protected against "secondary
displacement"? This provision applies to U.S. workers employed by the
other or "secondary" employer (not those employed by the H-1B
employer) in jobs that are essentially equivalent to the jobs for which certain
H-1B nonimmigrants are placed with the other/secondary employer (as described
in paragraph (b)(2) of this section). The term "employed by the
employer" is defined in §655.715.
(2) Which H-1B nonimmigrants activate the secondary displacement
prohibition? Not every placement of an H-1B nonimmigrant with another
employer will activate the prohibition and -- depending upon the particular
facts -- an H-1B employer (such as a service provider) may be able to place
H-1B nonimmigrant(s) at a client or customer's worksite without being subject
to the prohibition. The prohibition applies to the placement of an H-1B
nonimmigrant whose H-1B petition is supported by an LCA described in
§655.736(g) and whose placement with the other/secondary employer meets
both of the following criteria:
(i) The nonimmigrant performs duties in whole or in part at one or more
worksites owned, operated, or controlled by the other/secondary employer; and
(ii) There are indicia of an employment relationship between the
nonimmigrant and the other/secondary employer. The relationship between the
H-1B-nonimmigrant and the other/secondary need not constitute an
"employment" relationship (as defined in §655.715), and the
applicability of the secondary displacement provision does not establish such a
relationship. Relevant indicia of an employment relationship include:
(A) The other/secondary employer has the right to control when, where, and
how the nonimmigrant performs the job (the presence of this indicia would
suggest that the relationship between the nonimmigrant and the other/secondary
employer approaches the relationship which triggers the secondary displacement
provision);
(B) The other/secondary employer furnishes the tools, materials, and
equipment;
(C) The work is performed on the premises of the other/secondary employer
(this indicia alone would not trigger the secondary displacement provision);
(D) There is a continuing relationship between the nonimmigrant and the
other/secondary employer;
(E) The other/secondary employer has the right to assign additional projects
to the nonimmigrant;
(F) The other/secondary employer sets the hours of work and the duration of
the job;
(G) The work performed by the nonimmigrant is part of the regular business
(including governmental, educational, and non-profit operations) of the
other/secondary employer;
(H) The other/secondary employer is itself in business; and
(I) The other/secondary employer can discharge the nonimmigrant from
providing services.
(3) What other/secondary employers are included in the prohibition on
secondary displacement of U.S. workers by the H-1B employer? The
other/secondary employer who accepts the placement and/or services of the H-1B
employer's nonimmigrant employee(s) need not be an H-1B employer. The
other/secondary employer would often be (but is not limited to) the client or
customer of an H-1B employer that is a staffing firm or a service provider
which offers the services of H-1B nonimmigrants under a contract (e.g.,
a medical staffing firm under contract with a nursing home provides H-1B
nonimmigrant physical therapists; an information technology staffing firm under
contract with a bank provides H-1B nonimmigrant computer engineers). Only the
H-1B employer placing the nonimmigrant with the secondary employer is subject
to the non-displacement obligation on the LCA, and only that employer is liable
in an enforcement action pursuant to subpart I of this part if the
other/secondary employer, in fact, displaces any of its U.S. worker(s) during
the applicable time period. The other/secondary employer will not be subject to
sanctions in an enforcement action pursuant to subpart I of this part (except
in circumstances where such other/secondary employer is, in fact, an H-1B
employer and is found to have failed to comply with its own obligations). (Note
to paragraph (d)(3): Where the other/secondary employer's relationship to the
H-1B nonimmigrant constitutes "employment" for purposes of a statute
other than the H-1B provision of the INA, such as the Fair Labor Standards Act
(29 U.S.C. 201 et seq.), the other/secondary employer would be subject
to all obligations of an employer of the nonimmigrant under such other
statute.)
(4) When does the "secondary displacement" prohibition
apply? The H-1B employer's obligation of inquiry concerns the actions of
the other/secondary employer during the specific period beginning 90 days
before and ending 90 days after the date of the placement of the H-1B
nonimmigrant(s) with such other/secondary employer.
(5) What are the H-1B employer's obligations concerning inquiry and/or
information as to the other/secondary employer's displacement of U.S.
workers? The H-1B employer is prohibited from placing the H-1B nonimmigrant
with another employer, unless the H-1B employer has inquired of the
other/secondary employer as to whether, and has no knowledge that, within the
period beginning 90 days before and ending 90 days after the date of such
placement, the other/secondary employer has displaced or intends to displace a
similarly-employed U.S. worker employed by such other/secondary employer. The
following standards and guidance apply to the H-1B employer's obligation:
(i) The H-1B employer is required to exercise due diligence and to make a
reasonable effort to enquire about potential secondary displacement, through
methods which may include (but are not limited to) --
(A) Securing and retaining a written assurance from the other/secondary
employer that it has not and does not intend to displace a similarly-employed
U.S. worker within the prescribed period;
(B) Preparing and retaining a memorandum to the file, prepared at the same
time or promptly after receiving the other/secondary employer's oral statement
that it has not and does not intend to displace a similarly-employed U.S.
worker within the prescribed period (such memorandum shall include the
substance of the conversation, the date of the communication, and the names of
the individuals who participated in the conversation, including the person(s)
who made the inquiry on behalf of the H-1B employer and made the statement on
behalf of the other/secondary employer); or
(C) including a secondary displacement clause in the contract between the
H-1B employer and the other/secondary employer, whereby the other/secondary
employer would agree that it has not and will not displace similarly-employed
U.S. workers within the prescribed period.
(ii) The employer's exercise of due diligence may require further, more
particularized inquiry of the other/secondary employer in circumstances where
there is information which indicates that U.S. worker(s) have been or will be
displaced (e.g., where the H-1B nonimmigrants will be performing
functions that the other/secondary employer performed with its own workforce in
the past). The employer is not permitted to disregard information which would
provide knowledge about potential secondary displacement (e.g.,
newspaper reports of relevant lay-offs by the other/secondary employer) if such
information becomes available before the H-1B employer's placement of H-1B
nonimmigrants with such employer. Under such circumstances, the H-1B employer
would be expected to recontact the other/secondary employer and receive
credible assurances that no lay-offs of similarly-employed U.S. workers are
planned or have occurred within the prescribed period.
(e) What documentation is required of H-1B employers concerning the
non-displacement obligation? The H-1B employer is responsible for
demonstrating its compliance with the non-displacement obligation (whether
direct or indirect), if applicable.
(1) Concerning direct displacement (as described in paragraph (c) of
this section), the employer is required to retain all records the employer
creates or receives concerning the circumstances under which each U.S. worker,
in the same locality and same occupation as any H-1B nonimmigrant(s) hired,
left its employ in the period from 90 days before to 90 days after the filing
date of the employer's petition for the H-1B nonimmigrant(s), and for any such
U.S. worker(s) for whom the employer has taken any action during the period
from 90 days before to 90 days after the filing date of the H-1B petition to
cause the U.S. worker's termination (e.g., a notice of future
termination of the employee's job). For all such employees, the H-1B employer
shall retain at least the following documents: the employee's name, last-known
mailing address, occupational title and job description; any documentation
concerning the employee's experience and qualifications, and principal
assignments; all documents concerning the departure of such employees, such as
notification by the employer of termination of employment prepared by the
employer or the employee and any responses thereto, and evaluations of the
employee's job performance. Finally, the employer is required to maintain a
record of the terms of any offers of similar employment to such U.S. workers
and the employee's response thereto.
(2) Concerning secondary displacement (as described in paragraph (d)
of this section), the H-1B employer is required to maintain documentation to
show the manner in which it satisfied its obligation to make inquiries as to
the displacement of U.S. workers by the other/secondary employer with which the
H-1B employer places any H-1B nonimmigrants (as described in paragraph (d)(5)
of this section).
[65 FR 80228, Dec. 20, 2000]