August 17, 2010.  In a second major action against H-1B employers in the past 30 days, DOL announced that Smartsoft International Inc., a computer consulting company based in Suwanee, Ga., has agreed to pay the Department of Labor nearly $1 million in back wages and interest for alleged violations of H-1B rules involving 135  workers. 

DOL’s  Wage and Hour Division investigator determined that some employees were not paid any wages at the beginning of their employment, some were paid on a part-time basis despite being hired under a full-time employment agreement, and some were paid less than the prevailing wage for the geographic area where they performed their work. Smartsoft contested the Wage and Hour Division's conclusions and requested a formal hearing with the Labor Department before an Administrative Law Judge.  As part of the resulting settlement, the company agreed to drop any further challenges. For more details, see Administrator, Wage and Hour Division v. Smartsoft International Inc., Case No. 2009-LCA-00021.

This is the second case involving major punishment  of an employer for H-1B violations in the past 30 days.   The first case was Administrator, Wage and Hour Division v. Asian Journal Publications, where the employer had to pay DOL half a million dollars for H-1B non-compliance.

Mira Mdivani’s Comment: As a prerequisite to filing an H-1B petition, employers must file a Labor Condition Application (LCA) with the Department of Labor.  The LCA describes the occupation, location, wage, hours, and other conditions pertaining to the employment of the H-1B worker.  Once approved, the employer must give a copy of the approved LCA to the worker, and must abide by the labor conditions outlined in the LCA.   If the employer does not pay the worker's full wage, benches the worker, or transfers the worker to a different worksite without first obtaining an approved LCA for that location, the employer is in violation of the LCA requirements and DOL may punish the employer by making the employer pay back wages and interest, like they did in this case.   To comply with the law, before modifying the the terms and conditions of an H-1B worker's employment, employers should analyze whether filing a new LCA reflecting changed conditions is necessary.   In some cases, an amended or new H-1B petition should also be filed with USCIS.

DOL’s audits and aggressive prosecution of H-1B employers are clearly on the rise.  Employers are advised to audit their LCAs to make sure they are in compliance, and to file new LCA/H-1B petitions, where necessary.

Posted by Mira Mdivani
Corporate Immigration Lawyer
THE MDIVANI LAW FIRM, LLC

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