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November 5, 2008 DOL Home > SOL |
In re: Ken Technologies, Inc. Brief ADMINISTRATIVE REVIEW
BOARD * * * * * * * * * * * * * * * * * * * *
* * STATEMENT OF THE WAGE
AND HOUR ADMINISTRATOR HOWARD M. RADZELY
STEVEN J. MANDEL
WILLIAM C. LESSER
PAUL L. FRIEDEN
JOAN BRENNER
United States
Department of Labor
TABLE OF CONTENTS ISSUE PRESENTED A. Course Of Proceedings And Statement Of Facts
B. ALJ's Decision And Order THE ALJ CORRECTLY
DETERMINED THAT KEN TECHNOLOGIES IS
RESPONSIBLE FOR PAYMENT OF BACK WAGES TO
PRASAD FOR THE PERIOD BETWEEN MARCH 18
AND A. Standard Of Review B. Statutory And Regulatory Framework C. Ken Technologies Failed To Effect A Bona Fide Termination Of Prasad's Employment, And Therefore Must Pay Prasad The Wages Due Under The LCA CONCLUSION TABLE OF AUTHORITIES Cases Administrator v. Alden Mgmt. Serv., Inc., ARB Case
Nos. 00-020; 00-021 (Aug. 30, 2002)
Statutes Administrative Procedure Act, 5 U.S.C. 551 et seq. 5 U.S.C. 557(b) American Competitiveness and Workforce Improvement Act of 1998, Pub. L. 105-277, 112 Stat. 2681, et seq. American Competitiveness in the Twenty-First Century Act of 2000, Pub. L. 106-313, 114 Stat. 1251 Homeland Security Act of 2002,
Pub. L. No. 107-296,
116 Stat 2135,
2194-96 ( Immigration Act of 1990, Pub. L. No. 101-649, 104 Stat. 4978 Immigration and Nationality Act of 1990, as amended, 8 U.S.C. 1101 et seq. 8 U.S.C.
1101(a)(15)(H)(i)(B) Immigration Reform and Control Act of 1986, 8 U.S.C. 1301 et
seq. Miscellaneous and Technical Immigration and Naturalization Amendments of 1991, Pub. L. No. 102-232, 105 Stat. 1733 National Labor Relations Act 29 U.S.C. 151 et seq. Code of Federal Regulations 8 C.F.R.
214.2(h)(11)
Miscellaneous 65 Fed. H.R. Rep. No. 106-692, 106th Cong., 2d Sess. (2000); 2000 WL 825659 West Interpreter Releases, 80 Interrel 1244 (No. 34, ADMINISTRATIVE REVIEW
BOARD * * * * * * * * * * * * * * * * * * * *
STATEMENT OF THE
WAGE AND HOUR ADMINISTRATOR Pursuant
to the Notice of Intent to Review issued by the Administrative Review Board
("Board") on Whether the ALJ properly determined that Ken Technologies is liable for $15,233.81 in unpaid wages because it failed to pay its employee, Jorige Chandrasekhar Prasad, the wages due under the terms of a Labor Condition Application ("LCA"), as provided in 20 C.F.R. 655.731(c)(7), during a period when Ken Technologies did not assign Prasad any work and did not effect a bona fide termination of his employment. A.
Course Of
Proceedings And Statement Of Facts Ken
Technologies, a Prasad
arrived in the A
hearing, requested by Ken Technologies, was held on A
number of e-mails were entered into evidence, including one from Prasad stating
that he had completed the requisite QA training before entering this country
(D&O 4; RX 1) and another, sent by a third party named "Shibu,"
which disputed this claim (Id.; RX 2).[4] The record also includes a
"termination" letter addressed to Prasad, dated Also
on Wage
and Hour investigator John Warner testified about his investigative findings[6]
and explained the H-1B regulatory requirement of payment for idle (i.e.,
nonproductive) periods, because H-1B workers are "not supposed to be in
the After
the ALJ, by decision dated B. ALJ's Decision And Order In determining that Ken Technologies owes $15,233.81 in unpaid wages to Prasad, the ALJ cited to the regulation concerning "benching" (i.e., a period of time after an H-1B worker enters into employment with an employer during which he is in a nonproductive status due to a decision by the employer) at 20 C.F.R. 655.731(c)(7)(i) (D&O 9). The ALJ further cited to the regulatory provision at 20 C.F.R. 655.731(c)(7)(ii), which provides that payment is not required "if there has been a bona fide termination of the employment relationship" (D&O 9). She stated that the regulations require that the employer notify the INS that the employment relationship has been terminated so that the petition applicable to that individual may be canceled (D&O 9). See 20 C.F.R. 655.731(c)(7)(ii); 8 C.F.R. 214.2(h)(11). The
ALJ concluded that Ken Technologies had not effected a bona fide termination of
Prasad's employment on February 26, 2001, the date that Ken Technologies stated
it provided a termination letter to Prasad, that would relieve it of the
obligation to pay Prasad from March 18 to July 16, 2001, the period of his
nonproductive status as an H-1B worker (D&O 9). Specifically, the ALJ stated that there was
no bona fide termination because the INS was not notified of the termination by
the employer ( As to Ken Technologies' argument that it would be unfair to require payment to Prasad because he deliberately misrepresented his qualifications, the ALJ determined that the evidence did not establish that Ken Technologies relied upon Prasad's assertions regarding his training before the company employed him (D&O 9). Rather, the ALJ concluded that Prasad's hiring was based on a January 22, 2000 employment contract (AX 10), and that, according to a February 10, 2001 e-mail, Jain had arranged for Prasad to travel to the United States before confirming that the training was, in fact, completed (D&O 9-10; RX 1). When Ken Technologies discovered that Prasad had not completed the QA training, it e-mailed Jain (through Shibu) to remind him of the importance of ensuring that future hires would have such training before they arrived in this country (D&O 10; RX 2). The ALJ, citing 20 C.F.R. 731(c)(7)(ii); 8 C.F.R. 214.2(h)(11); 8 C.F.R. 214.2(h)(4)(iii)(E) (applicable to payment for return transportation), concluded that even if Prasad had deliberately misrepresented his qualifications, Ken Technologies was obligated to pay for the nonproductive time because it failed to notify the INS of any termination of Prasad, who was in the country pursuant to an LCA filed with the Department of Labor (D&O 10). The ALJ also rejected the argument that misrepresentations by an H-1B worker would make the alien an "illegal nonimmigrant worker" (D&O 10). The ALJ distinguished Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), upon which Ken Technologies had relied, because in that case the Supreme Court held that the National Labor Relations Board could not award back pay to an undocumented alien who had never been legally authorized to work in the United States, whereas in this case Prasad was legally admitted into the country pursuant to an LCA certified by the Department of Labor (D&O 10).[7] The
ALJ thus awarded back pay of $15,233.81 to Prasad for the period between March
18[8]
and THE ALJ CORRECTLY DETERMINED THAT
KEN TECHNOLOGIES IS RESPONSIBLE FOR PAYMENT OF BACK WAGES TO PRASAD FOR THE
PERIOD BETWEEN MARCH 18 AND A. Standard Of Review The
Board reviews the ALJ's findings of fact and legal conclusions de novo. See Administrator v. Alden Mgmt.
Serv., Inc., ARB Case Nos. 00-020; 00-021 ( B. Statutory And Regulatory Framework The
H-1B visa program is a voluntary program that permits employers to secure and
employ nonimmigrants on a temporary basis to fill specialized jobs in the In its LCA application to the Labor Department, an employer attests that: (A) The employer -- (i) is offering and will offer [the H-1B worker] during the period of authorized employment . . . wages that are at least -- (I) the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question, or (II) the prevailing wage level for the occupational classification in the area of employment, whichever is greater, based on the best information available as of the time of filing the application, and (ii) will provide working conditions for such a nonimmigrant that will not adversely affect the working conditions of workers similarly employed. 8 U.S.C. 1182(n)(1)(A) (emphases added). The Department of Labor is required to certify the LCA within seven days unless it is incomplete or contains "obvious inaccuracies." 8 U.S.C. 1182(n)(1). Only after the employer receives the Labor Department's certification, may the INS approve an H-1B petition seeking authorization to employ a specific nonimmigrant worker. See 8 U.S.C. 1101(a)(15)(H)(i)(b); 20 C.F.R. 655.700(a)(3). The statute also prescribes a framework for enforcement proceedings and sanctions, directing the Department of Labor to establish a process for the receipt, investigation, and disposition of complaints respecting a petitioner's failure to meet a condition specified in an application submitted under [this Act] or a petitioner's misrepresentation of material facts in such an application. Complaints may be filed by any aggrieved person or organization (including bargaining representatives). . . . The Secretary shall conduct an investigation under this paragraph if there is reasonable cause to believe that such a failure or misrepresentation has occurred. 8 U.S.C. 1182(n)(2)(A). The Department of Labor has promulgated regulations which provide detailed guidance regarding the determination, payment, and documentation of the required wages. See 20 C.F.R. 655.700 et seq. The remedies for violations of the statute or regulations include payment of back wages to H-1B workers who were underpaid. See 8 U.S.C. 1182(n)(2)(D); 20 C.F.R. 655.810. Under these regulations, an H-1B worker must receive the required pay beginning on the date that the nonimmigrant "'enters into employment' with the employer," or 30 days after the nonimmigrant is admitted into the country (or 60 days after he becomes eligible to work if he is already in the country when the petition is approved). 20 C.F.R. 655.731(c)(6). The nonimmigrant is considered to have "enter[ed] into employment" when he first "makes himself available for work or otherwise comes under the control of the employer, . . . and includes all activities thereafter." 20 C.F.R. 655.731(c)(6)(i).
Once an H-1B nonimmigrant enters into employment, periods of nonproductive
activity, or "benching," must be compensated at a rate no less than the
prevailing wage. See 20 C.F.R.
655.731(c)(7)(i). This regulation
requires payment to an H-1B worker in circumstances where the "H-1B is not
performing work and is in a nonproductive status due to a decision by the
employer (e.g., because of lack of assigned work) . . . ." Where there has been a bona fide termination of the H-1B worker's employment, however, the employer's obligation to continue paying wages to that individual ceases. The applicable regulation provides in pertinent part: Payment [of the required wage] need not be made if there has been a bona fide termination of the employment relationship. INS regulations require the employer to notify the INS that the employment relationship has been terminated so that the petition is canceled (8 C.F.R. 214.2(h)(11)), and require the employer to provide the employee with payment for transportation home under certain circumstances (8 C.F.R. 214.2(h)(4)(iii)(E)). 20 C.F.R. 655.731(c)(7)(ii).
C. Ken Technologies Failed To Effect A Bona
Fide Termination Of Prasad's Employment, And Therefore Must Pay Prasad The Wages Due Under The LCA.
1. The ALJ correctly determined that there was no
bona fide termination prior to Even in its brief to this Board, Ken Technologies has failed to cite any probative evidence demonstrating that the February 26 notification of termination was actually sent to and received by Prasad in February, or later. In addition, Ken Technologies does not dispute that it never notified the INS of the termination of Prasad's employment. As
the ALJ recognized, notification to the INS is probably the best indication that
a bona fide termination has taken place, in that it evidences an employer's
decision to no longer sponsor the H-1B worker. See 65 Fed. For example, termination would be bona fide if the employee ceased working for the employer and became employed by another employer which had filed a petition on his behalf. Termination would also be bona fide where an employee has returned to his home country with no plans to come back to the job (see, e.g., D&O 9 n.9).[14] Furthermore, there may be situations in which the evidence is clear that an employer has officially notified an employee of his termination, and there is no dispute that such notice was received; in such cases, the Administrator takes the position that the notice may constitute a bona fide termination ending the obligation on the part of the employer to pay wages to the H-1B worker. Nevertheless, in any of these situations, notification to the INS should promptly follow the action of termination, as the INS regulations provide.
In the present
case, however, there was neither notification to the INS nor, prior to Prasad's
return to
2. Ken Technologies argues that none of its
actions defeated the "intent" behind the requirement of paying H-1B
employees for nonproductive periods -- to protect domestic workers by
preventing the "stockpiling" of H-1B workers ( an H-1B
nonimmigrant is not permitted to be employed by another employer while "benched"
(unless another employer files a petition on behalf of the worker or the worker
adjusts his or her status under the INA), and is without any legal means of
support in the country. In contrast, a 65 Fed. 3. Ken Technologies further claims that Prasad's own actions in misrepresenting his qualifications rendered him "unable" to work, and that, therefore, an exception to the requirement of paying for "bench" time is applicable here (Br. at 5-6). This argument is without merit. It was entirely Ken Technologies' decision to decline to assign work to Prasad, thereby placing him in "nonproductive status" and requiring the payment of wages. See 20 C.F.R. 655.731(c)(7)(i). The regulation makes clear the kinds of conditions that place an H-1B employee in a nonproductive status for reasons that are not the responsibility of the employer, and thus do not require payment -- voluntary vacations, medical incapacity, caring for a sick relative, and the like. See 20 C.F.R. 655.731(c)(7)(ii). Employees, however, who are legally authorized to work, and who make themselves available for work or otherwise come under the control of the employer, are improperly "benched" if the employer fails to pay the required wages for nonproductive time resulting from its decision (e.g., a lack of assigned work), or a lack of a permit or license. See 20 C.F.R. 655.731(c)(6)(i) and (c)(7)(i). That Prasad's qualifications might not be what Ken Technologies sought does not relieve Ken Technologies of its obligations regarding the payment of wages for nonproductive time under the statute and regulations.
4. Ken Technologies also mistakenly relies on Hoffman
Plastic, supra, to argue that Prasad was in this country illegally
and therefore is not entitled to back wages (
5. Finally, Ken Technologies objects to the
Administrator's refusal to agree that its principal, Jain, could testify by
telephone from For the reasons stated, the Board should affirm the Decision and Order of the ALJ and deny Ken Technologies' Petition for Review in this case. Respectfully submitted,
HOWARD M. RADZELY
STEVEN J. MANDEL
WILLIAM C. LESSER PAUL L. FRIEDEN ___________________________
JOAN BRENNER
Office of the Solicitor, Room N2716
(202) 693-5555 This is to certify that on this _______ day of December, 2003, copies of the foregoing Statement of the Wage and Hour Administrator were sent to: Paul Mandal, Esq.
________________________ Joan Brenner
Footnotes
[1]
Pursuant to the Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat.
2135, 2194-96 (Nov. 25, 2002), adjudication of immigrant visa petitions was
transferred from the INS to the Bureau of Citizenship and Immigration Services
of the Department of Homeland Security. The Bureau's name has since been changed to
"U.S. Citizenship and Immigration Services," or
"USCIS." See West
Interpreter Releases, 80 Interrel 1244 (No. 34,
[2]
The violation of a notice "posting" requirement, 20 C.F.R. 655.734,
is not under review here, as the ALJ concluded that there was no violation and
the Administrator did not request review.
Additionally, the Administrator had earlier determined not to pursue
prosecution of an alleged violation of 20 C.F.R. 655.730(c)(1)(vi) (failure to
specify the prevailing wage for the area of employment or the source relied
upon by the employer to determine the wage) (See D&O 2 n.1). [3] The computer-related training was called "QA" but, as the ALJ noted, no explanation was ever provided of what that entailed (D&O 4 n.4).
[4]
The ALJ believed that Shibu had been an employee of Ken Technologies at the
time Prasad was there (D&O 4 n.6).
[5]
Although the ALJ, in addition to referring to the Administrator's exhibit 7 (an
unsigned termination letter dated
[6]
A former Wage and Hour compliance specialist, Bruce A. Waltuck, who had been
assigned to investigate this case prior to his retirement, had interviewed
another H-1B nonimmigrant, Girish Kalra, who was familiar with Prasad's
situation (D&O 6). Kalra told
Waltuck that Prasad complained about not being paid by Ken Technologies during
his stay in the [7] The ALJ also addressed Ken Technologies' "constitutional" argument that the requirement to pay for "bench" time imposes an unfair burden on employers of H-1B nonimmigrants because employers who do not hire H-1B workers are not required to pay for such time (D&O 10). Although the ALJ stated that Ken Technologies "has totally failed to meet the requisite burden" in this matter, she concluded that she lacked the authority to rule on constitutional questions, citing 20 C.F.R. 655.840 (D&O 10).
[8]
As alluded to above, the regulations provide that, where an H-1B nonimmigrant
has not yet entered into employment, the employer must begin to pay the
required wage 30 days after the nonimmigrant is first admitted into the [9] Section 212(n) of the INA, 8 U.S.C. 1182(n), was amended by the Immigration Act of 1990, Pub. L. No. 101-649, 104 Stat. 4978; the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991, Pub. L. No. 102-232, 105 Stat. 1733; the American Competitiveness and Workforce Improvement Act of 1998, Pub. L. 105-277, 112 Stat. 2681 et seq.; and the American Competitiveness in the Twenty-First Century Act of 2000, Pub. L. 106-313, 114 Stat. 1251. [10] The INA defines a "specialty occupation" as an occupation requiring the application of highly specialized knowledge and the attainment of a bachelor's degree or higher. See 8 U.S.C. 1184(i)(1). [11] The ALJ stated in this regard that "[a]lthough no direct evidence has been presented on this issue, Prasad's email of July 5, 2001, implies that he became aware that he was terminated: 'How can you terminate without intimation? Why didn't you tell me? Without my degree certificate I don't leave this guest house'" (D&O 6). This lack of "direct evidence," when taken together with the failure to notify the INS and Prasad's remaining in Ken Technologies' guest house, is insufficient for a bona fide termination.
[12]
As alluded to above, the e-mails also indicate that, as late as
[13]
Similarly, the preamble to the H-1B interim final rule, while recognizing the
importance of notifying the INS, does not explicitly make a bona fide
termination, and the consequent relief from the obligation to pay wages,
dependent on such notification. See
65 Fed.
[14]
By stating that there was a bona fide termination of Prasad when he returned to
[15]
This explanation also refutes Ken Technologies' "due process"
argument (
[16]
In Hoffman Plastic, which involved the Immigration Reform and Control
Act of 1986, the Supreme Court held that the National Labor Relations Board
could not award back pay to an undocumented worker who was in this country illegally,
and thus was not authorized to work in the United States, and who was discharged
in violation of the National Labor Relations Act. 535
[17]
There are, however, salient reasons for the Administrator's refusal to
countenance such an arrangement. When
parties are not confronting each other face-to-face, the ALJ cannot fairly
assess witness credibility. Moreover,
the Administrator had no authority to secure the presence of Prasad (either in
person or by telephone) to be questioned and cross-examined once he returned to
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