ARB CASE NO. 03-060
ALJ CASE NO. 02-LCA-24
DATE: July 30, 2004
In the Matter of:
ADMINISTRATOR, WAGE AND HOUR
DIVISION, UNITED STATES DEPARTMENT
OF LABOR,
PLAINTIFF,
v.
NOVINVEST, LLC,
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For Prosecuting Party Administrator, Wage and Hour Division:
Lois R. Zuckerman, Esq., Paul L. Frieden, Esq., Steven J. Mandel, Esq., U.S. Department of Labor, Washington, D.C.
For Respondent, Novinvest, LLC:
Ed Hyken, Atlanta, Georgia
FINAL DECISION AND ORDER
This case arises under the Immigration and Nationality Act, as amended (INA), 8 U.S.C.A. §§ 1101-1537 (West 1999 & Supp. 2004), and regulations at 20 C.F.R. Part 655 (2003). Novinvest LLC (Novinvest) petitions for review of a Decision and Order (D. & O.) issued by the Administrative Law Judge (ALJ) on January 21, 2003. Novinvest is a corporation that engages in computer consulting and employs nonimmigrant alien computer programmer analysts. The ALJ found that Novinvest was liable for back wages to nonimmigrant workers, including an "investment fee" imposed against three of these workers. We modify the decision of the ALJ as explained below.
Jurisdiction and Standard of Review
The Administrative Review Board (ARB) has jurisdiction to review the ALJ's decision under 8 U.S.C.A. § 1182(n)(2), and 20 C.F.R. § 655.845. See Secretary's Order No. 1-2002, 67 Fed. Reg. 64,272 (Oct. 17, 2002) (delegating to the ARB the Secretary's authority to review cases arising under, inter alia, the INA).
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Under the Administrative Procedure Act, the Board, as the designee of the Secretary of Labor, acts with "all the powers [the Secretary] would have in making the initial decision . . . ." 5 U.S.C.A. § 557(b) (West 1996), quoted in Goldstein v. Ebasco Constructors, Inc., 1986-ERA-36, slip op. at 19 (Sec'y Apr. 7, 1992). The Board engages in de novo review of the ALJ's decision. Yano Enterprises, Inc. v. Administrator, ARB No. 01-050, ALJ No. 2001-LCA-0001, slip op. at 3 (ARB Sept. 26, 2001); Administrator v. Jackson, ARB No. 00-068, ALJ No. 1999-LCA-0004, slip op. at 3 (ARB Apr. 30, 2001). See generally Mattes v. U.S. Dep't of Agriculture, 721 F.2d 1125, 1128-1130 (7th Cir. 1983) (rejecting argument that higher level administrative official was bound by ALJ's decision); McCann v. Califano, 621 F.2d 829, 831 (6th Cir. 1980), and cases cited therein (sustaining rejection of ALJ's decision by higher level administrative review body).
Regulatory Framework
The INA permits employers to employ nonimmigrant alien workers in specialty occupations in the United States. 8 U.S.C.A. § 1101(a)(15)(H)(i)(b) (H-1B nonimmigrants). Specialty occupations are occupations that require "theoretical and practical application of a body of highly specialized knowledge, and . . . attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States." 8 U.S.C.A. § 1184(i)(1). In order to be eligible for employment in the United States, these workers must receive H-1B visas from the State Department upon approval by the Immigration and Naturalization Service. 20 C.F.R. § 655.705(b). The employer concomitantly must obtain certification from the United States Department of Labor after filing a Labor Condition Application (LCA). 8 U.S.C.A. § 1182(n). The LCA must stipulate the wage levels and working conditions for the H-1B employees. 8 U.S.C.A. § 1182(n)(1); 20 C.F.R. §§ 655.731, 655.732. Deductions from wages expressly not authorized under the regulations include "a penalty paid by the H-1B nonimmigrant for ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer." 20 C.F.R. § 655.731(c)(10)(i). See generally D. & O. at 12-15, 20-21.
Issue
Did the ALJ correctly determine that Novinvest is liable for the $5,000 deduction from the salaries of its H-1B nonimmigrant employees and must compensate each worker for judgment amounts assessed?
Background
The ALJ has set forth the facts of the case in detail (D. & O. at 2-12), and we will not revisit them in their entirety. We limit our focus to the issue upon which Novinvest petitions for review. See Novinvest LLC Petition to Review the Decision and Order dated February 18, 2003; 20 C.F.R. § 655.845(b)(3) and (4) (petition for ARB review must specify issues giving rise to petition and state specific reasons why petitioning party believes ALJ decision is in error).
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Novinvest provides computer specialists "on a project basis to client companies." Prosecuting Party's Exhibit (PX) 5 at 1. Novinvest employed H-1B nonimmigrant "specialists" after it filed an LCA with the Department of Labor and after the Department of State, upon approval of the Immigration and Naturalization Service, issued the employees H-1B visas. The employees at issue for our purposes are Philip Peshin, Alex Koloskov, and Igor Viazovoi.1
1 These H-1B nonimmigrants, in addition to another nonimmigrant, Igor Politykin, arrived in the United States between March 2000 and April 2001. They arrived prepared to work, but Novinvest "benched" them and refused to pay them in violation of the INA. See 8 U.S.C.A. § 1182(n)(1)(A); 8 U.S.C.A. § 1182(n)(2)(C)(vii); 20 C.F.R. § 655.731(c)(7)(i) (if the H-1B nonimmigrant is not performing work and is nonproductive due to a decision by the employer (e.g., due to lack of work) the employer is required to pay him at the wage listed in the LCA). After an investigation, the Administrator determined that Novinvest owed these employees back wages for benching periods during the course of employment. The ALJ upheld the Administrator's determination as well as the back wage calculations. D. & O. at 15-17. Novinvest did not appeal these findings.
2 The Administrator's determination letter did not allege specifically that the "investment fee" requirement violated the INA, stating merely that Novinvest had "failed to pay wages as required." PX 29 at 1. The Administrator subsequently moved to conform the determination letter to the evidence to include allegations pertaining to the investment fee. Hearing Transcript at 129-131. The ALJ granted the motion, finding the early termination penalty issue properly before him. D. & O. at 18-19. Novinvest did not appeal this finding.