[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
IS THE LABOR DEPARTMENT DOING ENOUGH TO PROTECT U.S. WORKERS?
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HEARING
BEFORE THE
SUBCOMMITTEE ON IMMIGRATION,
BORDER SECURITY, AND CLAIMS
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
JUNE 22, 2006
__________
Serial No. 109-149
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
______
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COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, General Counsel-Chief of Staff
Perry H. Apelbaum, Minority Chief Counsel
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Subcommittee on Immigration, Border Security, and Claims
JOHN N. HOSTETTLER, Indiana, Chairman
STEVE KING, Iowa SHEILA JACKSON LEE, Texas
LOUIE GOHMERT, Texas HOWARD L. BERMAN, California
LAMAR SMITH, Texas ZOE LOFGREN, California
ELTON GALLEGLY, California LINDA T. SANCHEZ, California
BOB GOODLATTE, Virginia MAXINE WATERS, California
DANIEL E. LUNGREN, California MARTIN T. MEEHAN, Massachusetts
JEFF FLAKE, Arizona
BOB INGLIS, South Carolina
DARRELL ISSA, California
George Fishman, Chief Counsel
Art Arthur, Counsel
Allison Beach, Counsel
Cindy Blackston, Professional Staff
Nolan Rappaport, Minority Counsel
C O N T E N T S
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JUNE 22, 2006
OPENING STATEMENT
Page
The Honorable John N. Hostettler, a Representative in Congress
from the State of Indiana, and Chairman, Subcommittee on
Immigration, Border Security, and Claims....................... 1
The Honorable Sheila Jackson Lee, a Representative in Congress
from the State of Texas, and Ranking Member, Subcommittee on
Immigration, Border Security, and Claims....................... 4
The Honorable Louie Gohmert, a Representative in Congress from
the State of Texas, and Member, Subcommittee on Immigration,
Border Security, and Claims.................................... 5
The Honorable Darrell Issa, a Representative in Congress from the
State of California, and Member, Subcommittee on Immigration,
Border Security, and Claims.................................... 6
WITNESSES
Mr. Sigurd L. Nilsen, Ph.D., Director for Education, Workforce,
and Income Security Issues, United States Government
Accountability Office
Oral Testimony................................................. 7
Prepared Statement............................................. 9
Mr. Alfred B. Robinson, Jr., Acting Director, Wage and Hour
Administration, Employment Standards Administration, United
States Department of Labor, accompanied by Bill Carlson,
Administrator, Office of Foreign Labor Certification,
Employment Training Administration
Oral Testimony................................................. 29
Prepared Statement............................................. 30
Mr. John M. Miano, Director, Programmers Guild
Oral Testimony................................................. 36
Prepared Statement............................................. 39
Ms. Ana Avendano, Associate General Counsel and Director,
Immigrant Worker Program, American Federation of Labor-Congress
of Industrial Organizations
Oral Testimony................................................. 54
Prepared Statement............................................. 55
Material Submitted for the Hearing Record
United States Government Accountability Office Report on ``H-1B
Visa Program: Labor Could Improve Its Oversight and Increase
Information Sharing with Homeland Security,'' submitted by the
Honorable Sheila Jackson Lee, a Representative in Congress from
the State of Texas, and Ranking Member, Subcommittee on
Immigration, Border Security, and Claims....................... 68
Response to Post-Hearing Questions from Alfred B. Robinson, Jr.,
Acting Director, Wage and Hour Administration, Employment
Standards Administration, United States Department of Labor.... 125
``H-1B Violations Report'' submitted by the U.S. Department of
Labor in response to request from the Honorable Lamar S. Smith,
a Representative in Congress from the State of Texas........... 127
IS THE LABOR DEPARTMENT DOING ENOUGH TO PROTECT U.S. WORKERS?
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THURSDAY, JUNE 22, 2006
House of Representatives,
Subcommittee on Immigration,
Border Security, and Claims,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:05 p.m., in
Room 2141, Rayburn House Office Building, the Honorable John
Hostettler (Chairman of the Subcommittee) presiding.
Mr. Hostettler. The Subcommittee will come to order.
Good afternoon.
Today we have the opportunity to examine issues raised in a
new report issued by the Government Accountability Office
entitled,''H-1B Visa Program: Labor Could Improve Its Oversight
and Increase Information Sharing.'' This report raises serious
questions about whether the Department of Labor is adequately
protecting U.S. workers from being harmed by foreign workers on
H-1B visas.
The H-1B visa program exists to allow employers to bring a
limited number of highly skilled workers to the United States
each year. The law requires employers who petition for an H-1B
worker to first file a labor condition application, or LCA,
with the Department of Labor. In the LCA, the employer attests
that it will pay the worker the prevailing wage in the area, or
the same wage it pays other workers for a similar job; whatever
is greater. The employer also attests that it will offer the
same working conditions to H-1B workers as it offers to
citizens, that no strike or lockout is ongoing, and that the
employer has notified its other employees that it intends to
hire an H-1B worker.
When an employer files such an application with the
Department of Labor, it is now reviewed electronically. While
the process is quick, the Department only checks for omissions
and obvious inaccuracies on the LCA. Even then, the GAO found
that some inaccuracies are not caught by the system. For
example, over 3,000 LCAs were approved despite the fact that
the actual wages to be paid the H-1B employee were below the
prevailing wage. This is concerning, because it means that
potentially 3,000 jobs were given to foreigners who are paid
less than Americans for the same job.
The H-1B program is based on employers making promises,
promises to pay the prevailing wage and so on. It is up to the
Labor Department to ensure that the employers are making good
on their promises. The Department has the authority to
investigate in situations where an employer is believed to have
violated the terms of the H-1B program.
Most complaints are filed by aggrieved parties, such as the
H-1B worker himself, or others with knowledge of a violation.
The Department of Labor may also conduct random investigations
of employers who have previously violated the program's
requirements. According to the GAO, such random investigations
were just begun several months ago, and were not conducted
sooner because of a lack of resources due to high caseloads.
There have been allegations that Labor does not vigorously
enforce the H-1B program, that H-1B workers are routinely
mistreated, and that this lack of enforcement has resounded to
the detriment of American high-tech workers. We will address
the truths of these allegations at today's hearing.
I find it disturbing that the Department of Labor has
recently asked appropriators to divert money for an H-1B
antifraud account recently created by this Committee
specifically for the purpose of funding H-1B enforcement. The
account is funded through a new $500 antifraud fee which is
split between the Labor, State, and the Department of Homeland
Security. The Department of Labor has asked for a redesignation
of these funds away from immigration enforcement when it
appears they don't have the resources or motivation to do an
adequate job as it is.
I am interested in learning more from the Department of
Labor on how they are currently using H-1B anti fraud funds.
Furthermore, if the Department has difficulty effectively
expending all available funds on H-1B fraud due to some
roadblock in the law. I would hope that we can work together to
examine those barriers and determine if a change in the law is
warranted.
Finally, the GAO report notes that information sharing
between the Department of Labor and the Department of Homeland
Security is a problem. Barriers in current law might prevent
commonsense information sharing for the purpose of combating H-
1B fraud. For example, in processing H-1B renewals, Citizenship
and Immigration Services occasionally runs across situations in
which an employee is not being paid the prevailing wage;
however, the Department of Labor has concluded it cannot use
this information in an investigation. I hope that we can take a
close look at such barriers today and evaluate whether changes
to the law are needed in order to facilitate information
sharing.
I am hopeful that today's hearing will provide a forum to
examine both the current law and the current enforcement
structure at the Department of Labor. The reason the Department
of Labor has a role in H-1B visa approvals is to protect
American workers and their livelihoods. We must ensure that the
Department is fulfilling its obligations in this regard. If
Congress needs to tweak the current law to facilitate
aggressive enforcement of the H-1B program, then I hope we can
examine such changes as well.
At this time the Chair recognizes the gentleman from Texas
for the purposes of an opening--to make an introduction.
Mr. Smith. Thank you, Mr. Chairman. I do not have an
opening statement other than to thank you for having this
hearing today.
What I would like to do, however, is to recognize some
friends and constituents who traveled all the way to
Washington, DC from Dripping Springs, Texas, and one of the
primary reasons they came to Washington, DC, Mr. Chairman, is
because of a specific interest in the subject of immigration.
We just had a nice discussion in my office, and they are
knowledgeable, interested and informed.
I would like to ask them to stand just so we can express
our appreciation for their interest in the subject at hand
today. If there are more Members here, Mr. Chairman, I would
ask our colleagues to be on good behavior because of their
presence, but since it's just you and me right now, I hope we
are in good company.
Let me ask them to stand and just be recognized. Wonderful.
Thank you all for being here.
Thank you, Mr. Chairman.
Mr. Hostettler. The gentleman yields back his time, and
welcome as well from the Chair.
At this point I would like to introduce our distinguished
panel of witnesses.
Dr. Sigurd Nilsen is the Director for Education, Workforce
and Income Security Issues at the United States Government
Accountability Office, where he has served since 1984. He is a
national expert on workforce development issues and performance
management, who frequently participates in forums where policy
alternatives are developed in advance.
Working for Congress, Dr. Nilsen has been responsible for
research on a range of issues related to Federal workforce
programs and labor policy areas. He is regularly asked to
testify before Congress and has appeared before numerous
national associations and on National Public Radio to discuss
these issues.
Alfred B. Robinson, Jr., was named the Acting Director,
Wage and Hour Administration, effective June 14, 2004. The Wage
and Hour Division of the Employment Standards Administration
administers and enforces a variety of labor standard statutes
that are national in scope and enhance the welfare and protects
the rights of our Nation's workers.
Before joining the Department of Labor, Mr. Robinson served
in the South Carolina House of Representatives and on the board
of the South Carolina Jobs-Economic, where he focused on job
creation and economic development.
John Miano is the founding chairman of the Programmers
Guild and currently serves as a director of that organization.
He is an expert in computer science, having 18 years in
computer software development. Mr. Miano currently operates his
own computer consulting firm, Colosseum Builders, Inc., in
Summit, New Jersey.
In December of last year, the Center for Immigration
Studies published a study authored by Mr. Miano on the wages of
H-1B workers in the computer programming profession. He has
testified on the H-1B program before this panel in March of
this year.
Ana Avendano, in her capacity as Associate General Counsel
and Director of the Immigrant Worker Program at the AFL-CIO,
provides legal and technical assistance on matters related to
immigration and workers' rights to labor unions and their
members in all sectors of the economy, from farm workers to
high-tech workers. Ms. Avendano served as the United States
Worker Representative to the International Labor Organization
Committee on Migration in 2004 and on the ILO's Panel of
Experts on Migration in 2005. She has also served as a
consultant to the National Immigration Law Center and in the
appellate court branch of the National Labor Relations Board.
I would now ask the witnesses to please stand and raise
your right hand.
[Witnesses sworn.]
Mr. Hostettler. Let the record show that the witnesses
have responded in the affirmative.
At this time, before we turn to our witnesses for opening
statements, the Chair recognizes the Ranking Member of the
Subcommittee, the gentlewoman from Texas, for purposes of an
opening statement.
Ms. Jackson Lee. Mr. Chairman, thank you, and I will ask
unanimous consent that my opening statement in its entirety be
submitted into the record.
Mr. Hostettler. Without objection.
Ms. Jackson Lee. I will just make a few points. First of
all, I would like to thank our witnesses for their presence
here today, and I will acknowledge on the record that the
Department of Labor is not performing the functions dealing
with enforcing labor condition applications under H-1B visas as
well as we would like it to do so.
In fact, the GAO study on the H-1B program, which is
entitled ``Labor Could Improve Its Oversight and Increase
Information Sharing with Homeland Security,'' speaks to that
issue, and I hope that this hearing will be enlightened.
What I will say is that we are in the throes of a dilemma
as relates to immigration reform. I would have much preferred
that we were in the process of a conference to really address
the concerns of the American people, and that is comprehensive
immigration reform that might, in fact, even answer some of
these concerns inasmuch as we would have the opportunity to
provide legislative teeth to enforcement, employer sanctions
and enforcement of their responsibilities.
We would also be able to, if you will, ensure that
attestations work. We would have the potential of a pathway to
citizenship, and, yes, of course, we would have another vital
aspect of comprehensive immigration reform, and that would be
border security. But we are here today discussing H-1Bs, which
is a limited aspect of immigration reform.
In fact, as I have met with a number of immigrant groups,
including, Mr. Chairman, a 60-plus group of stakeholders in
Houston, Texas, coming from the medical profession, coming from
the pros and the cons, meaning those against and those for,
some sort of immigration reform, advocates, nonadvocates,
religious leaders, all wanting to get at least a voice on this
issue.
We are here with the H-1B, which certainly has its elements
of fractures, but it is certainly a legal program, as the J1
visa is, with some need for reform. At the same time, if we are
going to look at the H-1B, and we are not going to have
comprehensive immigration reform, then we should also be
looking at 245(i), the ability to reunite families.
Then I would say that one of the issues that I would hope
would come to our attention, and probably additional failures
that may not be spoken about at this particular hearing with
the H-1B visas, is that it was supposed to create a pool of
dollars to assist in training Americans. We thought that the
fees utilized by H-1B applicants could then be a partner to
Americans who were desirous of vital new job training that met
the market of today.
Frankly, I think that we have failed in the utilization of
those funds. The Department of Labor has failed in educating
Americans, nonprofits and others about those funds. As we move
toward comprehensive immigration reform, I think it is
imperative that besides border security and the requisite
responsibility and the insight about undocumented individuals
who are here in this country working and paying taxes, what are
we doing for Americans?
I think it would be very important that as we make our way
through this process, that we reinstitute the dollars that
would be used for any pathway to citizenship, any new visas,
any new temporary workers that should be invested in job-
training dollars for Americans. We should say to Americans,
when I say that, to citizens who are here--who might be prone
to accept the divisive debate that this immigrant system is
taking something away from them we have an obligation, even in
this Committee, Mr. Chairman, to look to utilizing those funds
that we might garner from any sort of legalization process to
invest in our underserved, underutilized urban and rural areas
that need investment of job-training and job-creation dollars.
So I will look forward to listening to all of the, if you
will, menders of this system, because this is all that I assume
these particular witnesses can talk about is mending a system,
because the overall system of immigration is broken. For that
reason I would hope that we would expand our reach and begin to
look at a comprehensive system.
By the way, Mr. Chairman, since we worked on a number of
issues dealing with legal immigration, I think it's important
to note that the legal immigration system has its failures. Why
does it have its failures? Because staff is overworked,
underpaid; we are losing both documentation and fingerprints.
We have people aging out, who have been on the list who happen
to have been children. And so I hope that our voices will be
raised for a comprehensive response to all of the ills we are
looking at before us and will not subject ourselves to
piecemeal mending, which I believe these witnesses will offer
us today.
With that, I yield back.
Mr. Hostettler. I thank the gentlewoman.
The Chair recognizes the gentleman from Texas for purposes
of an opening statement.
Mr. Gohmert. I want to thank the Chairman. I appreciate the
hearing. These are critical things we are talking about, and I
don't want the gentlewoman from Texas to fall out of her chair,
but I agree with her on so many things she had to say.
Immigration is broken. It needs some fixing, and these
kinds of hearings are a step toward doing that. I personally
think not only should we be looking at H-1B visas and how we
need to fix those and make them more available as needed, we
are hearing from the industry more and more, it seems, about
the importance of that, then we hear from the Administration,
gee, we need a guest worker permit or something of that nature.
We have things called worker visas, temporary worker visas,
and it may be that it's manual labor. We ought to be looking at
that instead of some additional program, I believe.
We appreciate your being here, the witnesses today. We
appreciate the input that you have given in writing and that
you will give orally. I would just urge us to keep moving on in
this direction, Mr. Chairman, with H-1B visas and also other
visas, because those of us who believe that the real cure will
be securing the borders, and I do say borders, avenues of
entry, so we know who is coming in, and that we can manage it
effectively--because until we can secure our borders, we can
have all the temporary visas, guest worker visas, all those
things, it won't make a hill of beans difference because people
are already coming and going, working, leaving. The first step
is to get the border secure, and then these will mean a whole
lot more than they do right now.
Thank you, Mr. Chairman.
Mr. Hostettler. I thank the gentleman.
The Chair recognizes the gentleman from California for
purposes of an opening statement.
Mr. Issa. Thank you, Mr. Chairman. I want to thank you for
holding this important hearing. The H-1B and perhaps the H-2A
are perhaps the best examples of what we should be doing in
theory and what we are not doing in reality.
I hope today we go a long way toward taking the H-1B and
getting it to where it meets our real needs, getting rid of an
artificially low cap, but, at the same time, finding ways to
get rid of the exportation that is going on, the jury-rigging,
the very question of whether or not an employee is needed,
because without reforming farm workers, high-tech and other
legitimate, needed worker programs to where they function, all
the security in the world is still going to leave us with no
legitimate way to bring in the workers that will be an addition
to our economy.
I would like to associate myself with the gentleman from
Texas, because, in fact, we do have to secure the border, but
we also have to make these work. Every potential guest worker
program that we would ever go into would be modeled
substantially on these failed programs. If we can't get the
high-tech workers that we need, we can't make sure that we
actually need them, then where are we to go when we say that we
want to explore potentially millions of needed jobs in this
country, needed slots in this country, presently occupied by
undocumented workers? In fact, there's no hope if we can't
manage these programs that we will be able to manage a much
broader program.
With that, I yield back.
Mr. Hostettler. I thank the gentleman.
I would now turn to the witnesses for your testimony. Dr.
Nilsen, we will begin with you. You will see a series of
lights. The lights essentially will let you know when the
testimony time is up with the red light, calling for
termination in about 5 minutes. If you could sum up your
remarks, without objection, your full written testimony is made
a part of the record. If you can summarize that as close to 5
minutes as you could, it would be very helpful. Thank you very
much.
Dr. Nilsen.
TESTIMONY OF SIGURD L. NILSEN, Ph.D., DIRECTOR FOR EDUCATION,
WORKFORCE, AND INCOME SECURITY ISSUES, UNITED STATES GOVERNMENT
ACCOUNTABILITY OFFICE
Mr. Nilsen. Thank you, Mr. Chairman.
Mr. Chairman and Members of the Subcommittee, I am pleased
to be here today to assist you in your oversight of the H-1B
immigrant visa program. I will discuss the results of a study
being issued today that you, along with Ranking Member Jackson
Lee and Representative Smith, requested to first describe how
the Department of Labor carries out its H-1B responsibilities
and, second, to assess how well labor works with other agencies
involved in enforcing H-1B program requirements.
The administrative structure of the program is complex,
involving parts of four different agencies. Labor takes the
initial application and is also responsible for enforcing the
rights of H-1B workers. Homeland Security approves the petition
for which the State Department then issues a visa, and the
Justice Department handles complaints from displaced U.S.
workers.
First, with regard to Labor's role, we found that Labor's
oversight of the H-1B program is limited, even within the scope
of its existing authority. By law, Labor's review of employers'
H-1B applications is limited to identifying omissions and
obvious inaccuracies. Labor reviews almost all applications
electronically by subjecting them to data checks and certifies
or denies them within minutes.
Of the more than 960,000 applications that Labor reviewed
from January of 2002 through September of 2005, 99.5 percent
were certified. The Labor system does not consistently identify
all obvious inaccuracies. For example, as the Chairman noted,
we found 3,229 applications that were certified even though the
wage rate on the application was lower than the prevailing wage
rate listed on that application.
Additionally, Labor only looks at the application's
employer identification number to make sure that it has the
correct number of digits and the number does not appear on the
list of employers who are ineligible to participate in the
program. However, we found nearly 1,000 certified applications
with invalid employer identification prefixes. Such errors can
be indicative of a fraudulent application.
Labor enforces H-1B program requirements primarily by
investigating complaints filed against employers. H-1B workers
or others who believe an employer has violated program
requirements can file a complaint with Labor's Wage and Hour
Division, which received over 1,000 complaints from fiscal year
2000 through 2005. Over this period H-1B complaints and
violations and corresponding employer penalties increased. In
2000, employers paid $1.2 million in back wages to 226 workers.
By 2005, back-wage penalties quadrupled to $5.2 million to over
600 workers.
Next, I want to discuss the coordination between Labor and
Homeland Security. Homeland Security reviews Labor's certified
application as part of the adjudication process. However, it
lacks the ability to easily verify whether employers have
submitted petitions for more workers than it originally
requested on the application because its data system does not
include Labor's application number. As a result, employers can
potentially use the application for more workers than they were
certified to hire.
In addition, during the process of reviewing employers'
petitions, Homeland Security may find evidence the employer is
not meeting the requirements of the H-1B program. But even if
Homeland Security forwarded the information to the Department
of Labor, current law precludes the Wage and Hour Division from
using this information to initiate an investigation of the
employer.
The Department of Justice is responsible for pursuing
charges filed by U.S. workers who allege that an H-1B worker
was hired in their place. Most of the 101 investigations
started by Justice from 2,000 through 2005 were found to be
incomplete, withdrawn, untimely, dismissed or investigated
without finding a violation. Of the 97 investigations closed,
Justice found discriminatory conduct in six cases and assessed
$7,200 penalties in three of the six cases, all in 2003. In the
other three cases, the actions appeared to be inadvertent, and
no penalties were assessed.
In conclusion, we think that Congress should consider
eliminating the restriction on using application and petition
information submitted by employers to initiate an investigation
and direct Homeland Security and Labor to share information to
investigate whether an employer is fulfilling its H-1B
responsibilities.
Further, we recommend that Homeland Security include
Labor's application case number in its new information system.
Homeland Security, incidentally, agreed with that
recommendation.
Finally, we recommend that Labor strengthen its oversight
of employers' applications by improving its procedures for
checking obvious inaccuracies, including better procedures for
checking for wage inaccuracies and invalid employer
identification numbers. Labor took issue with this
recommendation in our report, saying the benefit of using more
stringent measures was unclear. However, we are concerned that
the errors we uncovered by our cursory review may be indicative
of additional problems.
Mr. Chairman, this concludes my prepared statement. I would
be happy to respond to questions you or other Members of the
Subcommittee may have at this time.
Mr. Hostettler. Thank you, Dr. Nilsen.
[The prepared statement of Mr. Nilsen follows:]
Prepared Statement of Sigurd R. Nilsen
Mr. Hostettler. Mr. Robinson.
TESTIMONY OF ALFRED B. ROBINSON, JR., ACTING DIRECTOR, WAGE AND
HOUR ADMINISTRATION, EMPLOYMENT STANDARDS ADMINISTRATION,
UNITED STATES DEPARTMENT OF LABOR, ACCOMPANIED BY BILL CARLSON,
ADMINISTRATOR, OFFICE OF FOREIGN LABOR CERTIFICATION,
EMPLOYMENT TRAINING ADMINISTRATION
Mr. Robinson. Thank you, Mr. Chairman and Members of the
Subcommittee. I am pleased to appear before you today to
discuss the H-1B provisions of the Immigration and Nationality
Act. The Labor Department is responsible for H-1B--the
responsibilities of the Labor Department for H-1B is divided
between two agencies, the Employment Training Administration
and the Wage and Hour Division of the Employment Standards
Administration. Today I am joined by Bill Carlson, the
Administrator of the Office of Foreign Labor Certification
within ETA.
The mission of Wage/Hour is to promote and achieve
compliance with labor standards to protect and enhance the
welfare of the Nation's workforce. Wage and Hour is responsible
for administering and enforcing some of our Nation's most
comprehensive labor laws, including the H-1B worker
protections.
As noted earlier, the focus of today's hearing is a
recently issued report from GAO on the H-1B visa program. In
this report, GAO highlights the effective work that Labor
performs in this program and outlines the respective
responsibilities of the Departments of Labor, Homeland Security
and State. While GAO made no formal recommendations for Wage
and Hour, it raised two issues for Congress to consider that
would affect Wage and Hour.
If Congress implements GAO's recommendations, the result
would be an increase in H-1B enforcement by Wage and Hour. We
fully support this outcome and agree with GAO's
recommendations. Moreover, we believe consideration should be
given to additional changes to the program to further enhance
Wage and Hour's ability to ensure the integrity of the H-1B
program, enforce employers' obligations and to protect U.S.
workers and H-1B workers.
As noted by the Chairman, Wage and Hour currently initiates
an H-1B investigation under four different authorities,
aggrieved party, specific credible source, willful violator and
secretarial certification. As you are aware, our written
statement provides more details on each one of these limited
authorities enabling Wage and Hour to initiate an
investigation.
As part of the application process, an H-1B employer is
assessed a $500 fraud fee that is divided equally between the
Departments of Labor, Homeland Security and State. Wage and
Hour's portion of this fee totals approximately $30 million
annually. However, the statute limits DOL's use of this money
only to the enforcement of the H-1B program.
Given the statutory restrictions on its investigative
authority, the Department of Labor estimates that it will
continue to spend approximately $4 to $5 million annually for
H-1B enforcement and education. If Congress were to change the
statute to include broader H-1B investigative authority, Wage
and Hour could significantly increase its enforcement
activities.
Wage and Hour has taken additional steps to improve
enforcement of the H-1B program and its ability to detect
fraud. For example, we have updated the H-1B chapter of our
investigators' manual to encompass recent changes to the
statute and to the regulations. Also, Wage and Hour is
conducting nationwide training for its investigators and
managers as well as attorneys from the Office of the Solicitor.
As part of its compliance assistance and educational
efforts, we have implemented a number of activities including
releasing 26 H-1B fact sheets that are available on our Website
and distributing H-1B worker rights cards. The updated
procedures, investigator training and new educational tools
will protect domestic and foreign workers against fraud and
enhance the integrity of the program.
Finally, assuming Congress were to expand H-1B enforcement
authority of Wage and Hour, as the GAO recommends, we would
still expect there to be a surplus of H-1B fraud fee funds
because of the current statutory language that limits its use
solely to H-1B enforcement.
The Department believes a modification to the statute would
provide greater flexibility to fully utilize the antifraud
money. Such a change in the statutory language would supplement
overall enforcement activity to further combat fraud and
protect American workers.
The effect of a change in the statutory language would
permit Wage and Hour to maintain a strong and viable H-1B
enforcement and compliance assistance program, and
simultaneously to strengthen enforcement programs and
activities that focus on low-wage industries likely to employ
foreign workers.
Mr. Chairman, this concludes my statement, and I, along
with Mr. Carlson, would be pleased to respond to any questions
from Members of the Subcommittee. Thank you.
Mr. Hostettler. Thank you, Mr. Robinson.
[The prepared statement of Mr. Robinson follows:]
Prepared Statement of Alfred B. Robinson, Jr.
I. INTRODUCTION
Mr. Chairman and Members of the Subcommittee:
I am pleased to appear before you today to discuss the H-1B labor
provisions of the Immigration and Nationality Act (INA).
Responsibilities for H-1B within the Department of Labor are divided
between two agencies, the Employment Training Administration (ETA) and
the Wage and Hour Division (WHD) of the Employment Standards
Administration (ESA). I am joined today at this hearing by Mr. Bill
Carlson, who is Administrator of the Office of Foreign Labor
Certification within ETA.
The mission of the WHD is to promote and achieve compliance with
labor standards to protect and enhance the welfare of the Nation's
workforce. WHD is responsible for administering and enforcing some of
our nation's most comprehensive labor laws, including the minimum wage,
overtime, and child labor provisions of the Fair Labor Standards Act
(FLSA); the Family and Medical Leave Act; the Migrant and Seasonal
Agricultural Worker Protection Act; the prevailing wage requirements of
the Davis-Bacon Act and the Service Contract Act; and the worker
protections provided in several temporary visa programs.
The Government Accountability Office (GAO) recently issued a report
outlining WHD's responsibilities under the H-1B statute. GAO made no
formal recommendations for WHD, however, GAO raised two issues for
Congress to consider that would have a direct effect on WHD. GAO
recommended that Congress consider (1) eliminating the restriction on
using application and petition information submitted by employers as
the basis for initiating an investigation, and (2) directing Homeland
Security to provide Labor with information received during its
adjudication process that may indicate an employer is not fulfilling
its H-1B responsibilities. If Congress implements GAO's
recommendations, the result will be an increase in H-1B enforcement for
WHD. We fully support this outcome and therefore agree with GAO's
recommendations. Moreover, we believe consideration should be given to
additional changes to the program to further enhance WHD's ability to
reduce fraud, enforce employer's obligations, and protect H-1B and U.S.
workers.
The H-1B statutory provision that we will discuss today appears in
Section 212(n) of the INA (8 U.S.C. 1182(n)). This section outlines the
H-1B Labor Condition Application process and the related labor
enforcement requirements. The program was initiated in 1990 and the
statute has been amended a number of times. The first major revision
was pursuant to the American Competitiveness and Workforce Improvement
Act of 1998 (ACWIA) and the most recent was pursuant to the H-1B Reform
Act of 2004, which re-enacted a number of provisions that had sunset
and made other changes to the law.
II. OVERVIEW
The H-1B statute establishes an annual ceiling on the number of
workers issued H-1B visas. This ceiling is currently set at 65,000. As
you know, the FY 2007 cap has already been reached. The INA defines the
scope of eligible occupations, specifies the qualifications for H-1B
status, requires an employer to file a Labor Condition Application
(LCA), which establishes conditions of employment, and establishes an
enforcement system to determine compliance with the LCA requirement.
The H-1B program requires the coordination of multiple federal
agencies. The Department of Labor's ETA approves the LCA, the
Department of Homeland Security (DHS) approves the H-1B visa
classification, and the Department of State (DOS) issues the visa. WHD
enforces the worker protection provisions. In addition, the
Department's Office of the Inspector General (OIG), has investigative
authority with respect to certain types of fraud within the H-1B
program, such as false statements. The OIG issued audit reports on H-1B
in 1996 and 2003.
WHD recognizes that its enforcement of the H-1B program is
important to not only protect the integrity of the program, but also to
ensure that similarly employed U.S. workers are not adversely affected
by the H-1B workers' presence.
A filing fee, in addition to the base fee for a petition to
classify an alien as an H1-B, is charged to most employers. Qualifying
educational establishments and research organizations are excluded.
This fee is $750 for employers with 25 or fewer full time equivalent
workers and $1,500 for employers with more than 25 workers. An
additional $500 anti-fraud fee is assessed on most H-1B employers.
Restrictions on the use of the proceeds from the anti-fraud fee will be
discussed later in this testimony.
III. THE APPLICATION PROCESS
Every employer is required to submit a completed LCA to ETA. The
LCA outlines the wages, duties, and working conditions of the job. The
employer must sign the LCA. By signing the LCA the employer attests
that the ``facts'' specified on the LCA are true and accurate. The
employer must accurately specify the following information:
Employer Information (firm name, employer
identification number (EIN), address, phone);
Rate of Pay (amount, salary/hourly, full/part time);
Period of employment;
Occupation information (number of H-1Bs sought, their
occupation code, and job titles);
Work locations (including additional or subsequent
locations); and
Prevailing Wage (amount, source, date of rate) for
all work locations listed.
The statutory language mandates that ETA limit its review of LCAs
to ensure that they are complete, not obviously inaccurate, and that
the employer has not been debarred. In accordance with those
requirements, ETA does not determine the validity of the information
submitted on the LCA. ETA is mandated by the statute to complete the
processing of an LCA within seven (7) days.
The WHD enforces the provisions of the LCA. Some of the provisions,
such as the employer information, wages, period of employment, job
classification, work locations, and prevailing wage data, represent
``material facts.'' An employer that knowingly provides incorrect
information on the LCA or shows reckless disregard for the truth of the
information has committed a willful misrepresentation. For purposes of
H-1B enforcement, WHD considers a willful misrepresentation as fraud
and will cite a violation and will assess penalties.
On the LCA the employer must agree to abide by (or ``comply with'')
the following Labor Condition Statements:
Wages: The employer will pay the higher of the actual
or prevailing rate, which includes offering benefits on the
same basis as offered to U.S. workers. The actual wage is based
on the employer's own pay scale or system. The prevailing wage
rate must be no less than the minimum wage required by Federal,
State, or local law. The prevailing wage is typically the
weighted average of wages paid to similarly employed
individuals in the area of intended employment.
Working Conditions: The employer will provide working
conditions (including hours, shifts, vacations, and seniority
based benefits) which will not adversely affect similarly
employed U.S. workers.
Strike, Lockout or Work Stoppage: There is no strike
or lockout in the same occupational classification on the LCA
at the place of employment. These provisions also require that:
ETA will be notified if a strike/lockout occurs;
and
No H-1B will be placed at a site with a strike/
lockout.
Notification of the LCA filing to the union or
workers by:
Posting a copy of the LCA for 10 days at 2
conspicuous locations at the place of employment; or
Posting a copy of the LCA electronically.
In addition to the above Labor Condition Statements, an H-1B
Dependent Employer or Willful Violator must agree to the following
recruitment and non-displacement of U.S. workers provisions:
An employer will make good faith efforts to recruit
U.S. workers;
An employer will offer the job to an equally or
better qualified U.S. applicant (enforced by Department of
Justice);
An employer will not displace a similarly employed
U.S. worker within 90 days before or after an H-1B visa
petition is filed; and
An employer must inquire of a secondary employer
whether an H-1B worker placed with the secondary employer will
displace a similarly employed U.S. worker.
An H-1B Dependent Employer is defined under the statute by a
specific formula. As a general matter, an employer that has 15% or more
of its workforce employed as H-1B workers is an H-1B Dependent
Employer.
An H-1B Willful Violator is defined as an employer who, in a final
agency action, was determined to have committed a willful failure or a
willful misrepresentation of a material fact after October 21, 1998,
and within 5 years of the filing of the LCA.
IV. Compliance
Compliance with the H-1B provisions requires an employer to abide
by the provisions of the LCA. One of the most basic provisions is an
employer's responsibility to pay the H-1B worker properly.
An employer's obligation to pay an H-1B worker commences on the
earliest of the following events:
The H-1B worker ``enters into employment'' with the
sponsoring employer, which occurs when the worker first makes
him/herself available for work or otherwise comes under the
control of the employer, such as reporting for orientation or
studying for a licensing exam;
No later than thirty (30) days after the H-1B worker
is first admitted into the U.S. pursuant to the H-1B petition,
whether or not the H-1B worker has ``entered into employment'';
No later than sixty (60) days after the date the H-1B
worker becomes eligible to work for the employer (the approval
date found on the United States Citizenship and Immigration
Service (USCIS) Notice of Action, Form I-797), whether or not
the H-1B worker has ``entered into employment''; or
For an H-1B worker already in the United States, on
the date of the filing of the Petition for a Nonimmigrant
Worker (including the Forms I-129, the H Classification
Supplement, and the H1-B Data Collection and Filing Fee
Exemption Supplement) by the sponsoring employer under the H-1B
portability provisions.
The employer is obligated to pay the required wage rate for all
non-productive time caused by:
conditions related to employment;
lack of work;
lack of permit;
studying for licensing exam; or
employer-required training.
If the non-productive time is the result of a decision by the
employer, the full required wage rate must be paid. A worker cannot be
``benched'' by the employer without receiving the required wage rate.
If the H-1B worker is not available to work for reasons unrelated
to employment, such as voluntary absence for pleasure or an absence due
to illness, then the employer is not required to pay. If the non-
productive time is the result of a decision, made freely by the worker
and without coercion by the employer, the required wage rate need not
be paid unless it is payment under a required benefit plan--for
example, paid vacation or sick leave.
Full-time workers must be paid the full amount of the required wage
rate and part-time workers must be paid for at least the number of
hours indicated on the petition for a nonimmigrant worker filed with
USCIS (I-129) and referenced on the LCA. If the I-129 indicates a range
of hours, the worker must be paid for the average number of hours
normally worked.
The employer's wage obligation ceases only after a bona fide
termination of employment. Once such termination takes place, the
employer is required to notify USCIS that the employment relationship
is canceled. A worker may not be terminated and then re-hired under the
same petition. The employer is liable for the reasonable costs of the
return transportation for the H-1B worker if the employer prematurely
terminates the employment.
``Wages'' are specifically defined in the regulations. The required
wage must be paid to the worker, cash in hand, free and clear, when
due, and no less often than monthly. Deductions which reduce the
worker's wage to below the required wage rate may be taken only if they
are required by law (i.e. taxes), are reasonable/customary (i.e.
insurance, savings, or retirement) or are authorized by a collective
bargaining agreement. The deductions must be voluntarily authorized in
writing by the worker, and be principally for the benefit of the
worker. They may not exceed the fair market value or actual cost of a
provided benefit (lodging, transportation, goods, for example) or the
garnishment limits. Deductions may not be taken to recoup an employer's
business expense, as a penalty for early cessation of employment, to
recover the USCIS petition filing fees, to cover any additional costs
incurred in the petition process or to recover the $500 Anti-Fraud Fee.
An H-1B worker may not be assessed a penalty if he or she ceases
employment with the employer before the contract period ends. The
employer may, however, seek liquidated damages from the H-1B worker to
recoup damages caused by the worker's early departure. The employer may
not withhold the last paycheck of the H-1B worker to recover the
liquidated damages.
H-1B Dependent or Willful Violator employers are prohibited from
terminating a U.S. worker in an equivalent position 90 days before and
after the filing of the H-1B petition. In addition, if an H-1B
Dependent or Willful Violator employer intends to place the H-1B worker
with a secondary employer, then the H-1B employer must inquire from the
secondary employer whether the secondary employer has terminated, or
intends to terminate, a U.S. worker from an essentially equivalent job
90 days before or after the placement of the H-1B worker.
As I have noted, an H-1B Dependent or Willful Violator employer has
additional responsibilities dealing with recruitment and hiring. The H-
1B Dependent or Willful Violator employer must take good faith steps to
recruit U.S. workers before an LCA or petition is filed. The
recruitment must be done using ``industry wide'' standards; i.e.
recruitment standards common or prevailing in the industry. An
employer's recruitment methods must include, at a minimum, internal and
external recruitment and at least some active recruitment. If a better
or equally qualified U.S. worker applies for the job, then the employer
must offer the job to the U.S. worker.
The additional provisions for H-1B Dependent or Willful Violator
employers do not apply to ``exempt'' H-1B workers. An H-1B worker may
be considered an ``exempt'' worker if he or she makes at least $60,000
a year; or has the equivalent of a master's degree or higher in a
specialty related to the H-1B employment.
Finally, no employer may retaliate against any current, former, or
prospective worker for asserting H-1B rights or cooperating in H-1B
enforcement. This anti-discrimination requirement includes
intimidation, threats, restraint, coercion, blacklisting, discharge or
any other form of discrimination.
V. RECORDS
The employer must make the LCA and supporting documentation
available to the public within one working day of the filing. A public
access file must be available to anyone who requests it. It must be
maintained at the employer's principal place of business in the U.S.,
or at the place of employment. The access file must include, for
example, the LCA, wage rate documentation, actual wage system, and the
summary of employee benefits.
In addition to the information which must be available in the
public access file, during a WHD investigation the agency may require
for inspection a complete petition package, payroll and basic records,
such as name, address, social security number, occupation of workers,
benefit plans, and a record of dependency determination.
VI. ENFORCEMENT
WHD has the following four types of H-1B enforcement authority (the
latter two were added to the INA in 2005 and were similar to authority
that had sunset in 2003):
Aggrieved Party
The WHD may conduct an investigation pursuant to a complaint
received from an aggrieved party, if there is reasonable cause to
believe a violation occurred. An aggrieved party is a person or entity
whose operations or interests are adversely affected by the employer's
alleged non-compliance with the LCA. Also, the WHD has consistently
defined an aggrieved party to include the State Department. In order
for WHD to accept the complaint, the aggrieved party must allege a
violation of the H-1B program that occurred within 12 months of the
complaint. When WHD receives a complaint from an aggrieved party
indicating a violation of the H-1B program, which occurred within 12
months of the alleged violation, an investigation must be conducted and
a determination issued. All investigations prior to April 2006 were
conducted pursuant to this enforcement authority.
Willful Violator
The WHD may reinvestigate an employer that previously has been
determined by the Labor Department to have committed a willful failure
to meet a condition specified on the LCA or willfully misrepresented a
material fact in the LCA within the last five years. WHD maintains a
list of these willful violators, available on the WHD Web page located
at http://www.dol.gov/esa/regs/compliance/whd/FactSheet62/whdfs62S.htm.
In FY2006, WHD will conduct investigations under this authority for the
first time. It is important to note that most employers that have
committed a willful violation were subject to a civil monetary penalty
(CMP) and debarment. It has been WHD's experience that in many
instances these employers are no longer in business, making it
difficult to utilize this authority.
Credible Source
The WHD may conduct an investigation based on credible information
from a known source, if the information provides reasonable cause to
believe that the employer has willfully failed to meet certain LCA
conditions, has engaged in a pattern or practice of failures to meet
such conditions, or has committed a substantial failure to meet such
conditions that affects multiple workers. This information must be
received within 12 months after the date of the alleged violation. This
use of this authority, however, has two explicit statutory limitations;
specifically the information:
(1) Must originate from a source other than an employee of the
Department of Labor or be ``lawfully obtained by the Secretary
of Labor in the course of lawfully conducting another
Department of Labor investigation under this Act (INA) or any
other Act;'' and
(2) May not include information submitted by the employer to
DOL or DHS as part of the H-1B process.
Secretary's Certification
The WHD may initiate an investigation if the Secretary of Labor
personally certifies that there is reasonable cause to believe that a
violation has occurred and personally approves commencement of an
investigation. This authority may be exercised only for reasons other
than completeness of the LCA and obvious inaccuracies by the employer.
VII. DETERMINATION OF FINDINGS
When the investigation is complete, WHD issues a determination
letter offering the employer and interested parties an opportunity to
appeal the findings. The employer or interested party has 15 days from
the date of the letter to appeal the determination and request an
administrative hearing. The violations cited may include a
misrepresentation of a material fact, a failure to meet an LCA
condition, or a failure to comply with the regulations. There are 16
separate violations listed in the regulations at 20 CFR 655.805(a),
which are classified by the WHD as a simple failure, a substantial
failure, or a willful failure. The level of gravity of the violation
affects whether CMPs will be assessed and their amount, and whether the
employer may be debarred and for how long.
The H-1B Visa Reform Act of 2004 amended the law to preclude the
WHD from finding a violation for a ``technical'' or ``procedural''
failure, if there was a good faith attempt to comply, the employer
corrects the failure within 10 business days after DOL or another
enforcement agency has explained the failure, and there is no pattern
or practice of willful violations. WHD will carefully evaluate the
employer's intent to comply when making decisions concerning this
defense. It is important that an employer realize that immediate
correction of the violation is the most important factor to this
defense.
The H-1B Visa Reform Act of 2004 also provided that an employer
found to have violated the prevailing wage requirements during the
course of an investigation will not be assessed fines or penalties if
the employer can establish that the manner in which the wage was
calculated was consistent with industry standards and practices.
If a violation is found by WHD, then the employer will be required
to remedy the violation. Remedies may include the payment of back wages
or fringe benefits, the assessment of CMPs, a recommendation to USCIS
that the employer be debarred, and other actions deemed appropriate to
achieve compliance with the H-1B program requirements.
The determination letter issued by WHD will list both the specific
violations and the remedies for those violations. Employers must abide
by the determined remedy and comply with H-1B provisions in the future.
VIII. DIRECTED ENFORCEMENT AUTHORITY
As mentioned above, WHD has four distinct and limited enforcement
authorities: aggrieved party, willful violator, credible source, and
the Secretary's certification. This is the only program WHD administers
and enforces that has such restrictions on its enforcement authority.
Prior to April 2006, WHD's H-1B enforcement was essentially a
complaint-based program. Previously, WHD did not have a specific
program to reinvestigate past willful violators. Our experience showed
that, of the few employers that were found to be willful violators,
many chose to go out of business subsequent to their debarment
(approximately 50% in FY 2006), and thus, could not be reinvestigated.
The current list of willful violators is approximately 50 employers
nationwide. In April 2006, as acknowledged by the GAO report, WHD began
the process of randomly reinvestigating willful violators.
As noted above, the credible information source investigation
(added to the INA in 2005) relies on someone other than a DOL/ETA or
DHS employee coming forward with information suggesting that an
employer has committed a willful failure, a pattern or practice of
failures, or has substantially failed to meet a condition of the LCA
which affects multiple workers. To date, no person has been able to
present enough information to warrant opening an investigation under
this authority.
Finally, the Secretary's authority (added to the INA in 2005)
requires the Secretary to personally certify that she believes
reasonable cause exists for an investigation. Again, the authority is
limited to cases that involve violations other than incompleteness or
obvious inaccuracies by the employer. This authority has never been
exercised.
GAO suggests that Congress consider (1) eliminating the restriction
on using application and petition information submitted by employers as
the basis for initiating an investigation, and (2) directing Homeland
Security to provide Labor with information received during its
adjudication process that may indicate an employer is not fulfilling
its H-1B responsibilities. We believe that these changes would increase
WHD's enforcement ability, but we defer to DHS as to whether it is
necessary or appropriate statutorily to direct DHS to provide this
information to DOL. Although we support GAO's recommendations, it
should be recognized that GAO's suggestions would maintain the current
four distinct, yet limited, enforcement authority provisions. Congress
may want to consider instead, replacing this complex mixture of
enforcement authorities with a broad grant of authority similar to that
found in the FLSA. The FLSA authorizes the WHD to ``investigate such
facts, conditions, practices or matters as . . . necessary or
appropriate to determine whether'' a violation has occurred.
IX. ANTI-FRAUD FEE
As previously mentioned, the anti-fraud fee is $500 per petition.
The $500 is divided equally between DOL, DHS, and DOS. WHD's portion of
this fee totals approximately $30 million annually. However, the
statute limits DOL use of this money only to enforcement of INA Section
212(n) (describing H-1B). Without unrestricted investigative authority,
the Department estimates that it will continue to spend approximately
$4.0 million annually for H-1B enforcement. If Congress changes the
statute to include broader H-1B investigative authority, it would be
reasonable to expect WHD to significantly increase current H-1B
enforcement activities.
WHD takes very seriously its responsibility to enforce the H-1B
program's requirements. Over the last three years, WHD averaged between
130 and 170 completed H-1B cases per year. Approximately 75 percent of
all complaints resulted in a violation. In FY 2005 alone, WHD collected
over $3.3 million for more than 500 workers. Among the violations found
in FY2005, there were 20 in which the agency determined that an
employer misrepresented a material fact.
As for how WHD spends these funds, WHD determines the amount to
offset with H-1B funds each quarter based on the percentage of H-1B
enforcement time compared to total enforcement time. For example, if 2
percent of enforcement time is H-1B related during the first quarter,
then WHD offsets 2 percent of our obligations from the first quarter
with H-1B funds.
Recently, WHD increased its H-1B compliance assistance and
educational activities. It currently is conducting a nationwide H-1B
training program for WHD investigators and managers, as well as
attorneys in the Office of the Solicitor. The training will result in
greater enforcement, heightened awareness of fraud and an increase in
H-1B compliance assistance activity, all of which should result in
additional complaints for WHD to investigate and incidences of fraud to
report to other authorities. In preparation for this training, WHD
recently released on its Website 26 H-1B Fact Sheets, which are part of
the larger compliance assistance program. The program includes the
recently issued H-1B chapter for WHD's Field Operations Handbook, H-1B
worker rights cards, a PowerPoint presentation, seminars to the public,
and a series of H-1B press releases. In addition, WHD is an active
member of the Immigration Benefit Fraud Working Group, which includes
other Federal departments, such as the DOS and DHS.
Even if Congress were to expand WHD's H-1B enforcement authority as
GAO recommends, given current statutory language limiting the use of
the funds solely to H-1B enforcement, we would expect a surplus of H-1B
fee money. The Department believes a modification in INA Section
286(v)(2)(C) would provide greater flexibility to fully utilize the
anti-fraud money. Such a change in the statutory language would help to
supplement overall enforcement activity to further combat fraud and
protect American workers. The effect of the language that the
Department proposes, along with similar improvements to the fraud fee
provision proposed by DOS and DHS with respect to their shares of the
fraud fee, would maintain a strong and viable H-1B enforcement and
compliance assistance program while, at the same time, strengthening
enforcement programs and activities that focus on low-wage industries
likely to employ foreign workers.
Mr. Chairman, that concludes my statement and I will be pleased to
respond to questions from the Members of the Subcommittee.
Mr. Hostettler. Mr. Miano, am I pronouncing that correctly?
Mr. Miano. Yes, you are.
TESTIMONY OF JOHN M. MIANO, DIRECTOR,
PROGRAMMERS GUILD
Mr. Miano. Thank you, Mr. Chairman and Members of the
Committee.
I have been following the H-1B visa program closely for 12
years now, and what has struck me the most over these years is
how little protection is given to U.S. workers and how little
has been done to fix the problems.
The only real protection for U.S. workers in the H-1B
program is the annual quota. The quota serves the important
function of limiting the amount of damage the H-1B program can
cause U.S. workers.
These are some of the problems that I see with the H-1B
visa program. The most odious of these is the use of H-1B
workers to directly replace U.S. workers, often with employers
requiring U.S. workers to train their foreign replacements to
collect severance. This Committee passed a bill in 1978 to ban
this practice. Unfortunately, the provision appeared before it
came to the floor for a vote.
Employers replacing third parties have no liability
whatsoever under the law, so the practice continues. The
prevailing wage requirements in the H-1B program is simply
ineffective. There is no way the prevailing wage requirements
can protect U.S. workers when employers are allowed to use wage
claims that do not reflect the actual prevailing wage in the
industry.
There is poor data collection, sharing and reporting. We
have no idea how many H-1B workers are in the country, what
they are doing or even how many H-1B visas are being approved
each year.
There is no active monitoring of the H-1B program. There is
no mechanism of auditing or following up on suspicious
activity, and there is no limit to the number of H-1B visas a
single employer may have. In the computer industry the majority
of H-1B visas are going to contract labor companies or body
shops. Instead of filling jobs where Americans cannot be found,
these workers are in direct competition with U.S. workers for
actual employment.
However, the biggest problem with the H-1B program is that
it has been designed to inhibit enforcement the bizarre
restrictions imposed upon the Department of Labor that I have
noted in my written statement, ensure the law cannot be
enforced. Quite simply, the Department of Labor has an
impossible task.
However, even where the Department of Labor has the power
to investigate, they do not seem to be eager to do so. Recently
I submitted a complaint against one of the largest users of H-
1B visas, alleging that it was not complying with a requirement
to recruit U.S. workers in good faith. As evidence of this, I
submitted 130 job postings from the company that stated only H-
1B workers could apply or that they preferred H-1B workers.
Department of Labor's response to this complaint was that
they could not investigate, because this was insufficient
evidence of a violation. If 130 job postings telling U.S.
workers not to apply is insufficient evidence to investigate
whether a company is not meeting the good faith recruitment
requirement, what is?
For a number of the largest H-1B-dependent employers, I can
find no evidence of them recruiting in the U.S. whatever. I
cannot even imagine what kind of evidence the Department of
Labor would require in order to investigate one of these
companies.
Over the past year, I have seen a dramatic change in the
way employers approach the H-1B program. Abuse that used to go
on behind the scenes now takes place out in the open.
Apparently word has gotten out that there is no H-1B
enforcement.
For example, people in the computer industry have always
known that there are companies that simply do not hire
Americans for technical positions, and that these companies
rely entirely on visa programs for staffing. However, this
practice used to take place mainly under the table.
In previous years I never found more than a small number of
ads asking only for H-1B workers where the employers slipped up
and documented their illicit recruiting practices. In the past
6 weeks, I have found over 1,500 ads requesting H-1B workers
only from 350 employers.
There are now Web sites that are virtually visa bazaars;
companies don't advertise jobs, they advertise visas. The H-1B
program allows people to start a company in their basement and
import H-1B workers. The 2003 LCA data contains a few of these
cottage industry H-1B operations, while the 2005 data shows
many of them up and running.
In addition, this year I have found a large number of H-1B
employers that have never filed an LCA before, so the practice
clearly is growing. I suspect that many of these basement visa
operations are simply selling visas, and that the H-1B workers
disappear once they arrive in the U.S.
Having examined the available data on the H-1B visa program
very closely, and seeing the absurdities that it contains, I am
not surprised at all that the annual quota is being consumed
before the start of the fiscal year. With the current state of
enforcement, the quota is all that stands between the H-1B
program and total chaos.
I have included a number of recommendations in my written
statement, and I would be happy to answer any questions. Thank
you.
Mr. Hostettler. Thank you, Mr. Miano.
[The prepared statement of Mr. Miano follows:]
Prepared Statement of John Miano
Mr. Hostettler. Ms. Avendano.
TESTIMONY OF ANA AVENDANO, ASSOCIATE GENERAL COUNSEL AND
DIRECTOR, IMMIGRANT WORKER PROGRAM, AMERICAN FEDERATION OF
LABOR-CONGRESS OF INDUSTRIAL ORGANIZATIONS
Ms. Avendano. Thank you, Mr. Chairman, Members of the
Committee. On behalf of the 9 million working men and women who
are members of AFL-CIO-affiliated unions, I would like to thank
you for the opportunity to speak with you about this critically
important question: Is the Labor Department doing enough to
protect U.S. workers?
As is set out in more detail in my statement, the answer
is, unfortunately, a resounding no. We are deeply concerned
about the DOL's failure to adequately enforce workplace laws.
That failure harms all workers in the Nation, and continues to
cause downward pressure on workplace standards across the
country and across the economy.
It is very telling that we heard this morning that the
Department of Labor's failure to enforce the H-1B protections
have allowed employers to pay less than otherwise required by
law in at least 3,200 jobs in the high-tech industry.
The Federal Government's ruling and enforcement of worker
protections is particularly important in the context of guest
worker programs; that is, programs that allow employers to
import foreign workers in temporary status into certain jobs
into the economy, like the H-1B program and its unskilled
worker counterpart, the H-2B program. Workers who are imported
into our economy under those programs are at a great
disadvantage, because, by the very nature of the programs,
those workers rely on their employers not only for their jobs,
but also for their own immigration status. Exploitation of
workers in temporary worker programs like the H-1B and H-2B and
L visa programs is thus made that much more easier because if
workers complain that they are not being paid what the law
requires, or they are not being paid at all, as is the case in
many H-1B instances, they not only risk losing their jobs, but
they also risk either having to leave the country or remain
here unlawfully.
Now, that kind of exploitation harms all workers in our
Nation, because workers in the industry, H-1, that are covered
by the H-1B program and the other guest worker programs don't
labor in isolation. Temporary foreign workers work alongside
their U.S.-born counterparts in high-tech industries, and as
teachers and engineers and nurses under H-1B visas, and
alongside U.S.-born hotel workers, landscapers, service workers
under H-2B visas.
When employers have a system, a legitimatized system, to
import workers, exploitable workers, and thus lower working
conditions for those workers, they are essentially lowering
standards for all workers in those very important and critical
sectors of our economy.
It seems clear that the Federal Government is moving in
exactly the wrong direction in protecting U.S. workers in this
context. Instead of reinforcing mechanisms that would ensure
employers don't import foreign workers in order to depress
wages and other labor standards, the Government is moving
toward a simple attestation program, essentially that DOL wants
to abandon the small, or at least the way it's exercising it,
insignificant role that it has today.
The labor certification process, flawed as it is, is the
last remaining protection that U.S. workers have for two
important reasons. One, it's designed to make sure that the
Government agencies that most understand local labor markets
actually are the ones that are doing the application, so there
is technical expertise that again provides protection for U.S.
workers.
Most importantly, labor certification, the process acts as
a gatekeeper to make sure that there are no violations of the
system before the workers are even imported. That is critical,
because there are very few remedies after the fact both for the
U.S. workers that are potentially displaced by the employers
who are importing foreign workers to replace those workers and
for the foreign workers themselves.
Now, the issue of guarding against abuses in guest worker
programs is particularly important right now, given that the
Senate has adopted an immigration reform proposal that
significantly increases the number of foreign visas available
to employers and abandons the long-standing national policy of
only allowing workers to fulfill seasonal or temporary labor
shortages. Indeed the Senate bill creates a whole new class of
temporary workers, the H-2C workers, and significantly
increases the number of H-1B visas to employers.
Whatever concerns we now have about the lack of enforcement
of labor standards in temporary worker programs are sure to be
magnified when the new hundreds of thousands of temporary
workers are imported into our economy.
In conclusion, Mr. Chairman, in response to the Ranking
Member's question of what should we do, what are we to do for
American workers, the best thing we can do is to protect U.S.
working standards so that workers can earn a decent wage, work
in dignity and under decent conditions, and not continue to
foster systems like the H-1B program that simply provide
employers with a steady supply of exploitable workers. Thank
you.
Mr. Hostettler. Thank you, Ms. Avendano.
[The prepared statement of Ms. Avendano follows:]
Prepared Statement of Ana Avendano
Chairman Hostettler, Ranking Member Jackson Lee and Members of the
Committee, thank you for the opportunity to address the critically
important question: is the Labor Department Doing Enough to Protect U.S
Workers? As I will explain in more detail shortly, the answer is a
resounding, NO.
The AFL-CIO is a voluntary federation of 53 national and
international labor unions. Our affiliates represent more than nine
million working men and women of every race and ethnicity and from
every walk of life. We are teachers and truck drivers, musicians and
miners, engineers, landscapers, nurses, electricians, and more.
We are deeply concerned about the Department of Labor's (DOL)
failures to adequately enforce workplace laws, including the
protections afforded under the H1-B and other temporary foreign worker
programs. I understand that the focus of this hearing is on the way
that the DOL reviews and enforces Labor Condition Applications for H1-B
visas, and I will address that issue specifically later in my
testimony. The DOL's failures go well beyond that specific issue. In
fact, the failures are systematic, to the detriment of all workers in
our nation, and have caused--and continue to cause--downward pressure
on workplace standards across the country and across the economy.
When the DOL fails to enforce any of the statutes under its
jurisdiction, all workers suffer. Nowhere is that more evident today
than in the Gulf region, where workers involved in the post Katrina
reconstruction--both foreign born and US--are being cheated out of
their wages by major US companies and forced to work in substandard,
unhealthy and unsafe conditions.
In February, a group of worker advocates, including the AFL-CIO met
with DOL representatives here in Washington, DC to raise concerns about
the ongoing labor and employment violations occurring in the Gulf
region. The worker advocates painted a clear picture of unscrupulous
contractors, rampant labor violations and sheer lawlessness in the Gulf
region. Prior to the meeting, the advocates provided DOL a list of very
basic questions including how many wage claims arising from the post-
Katrina reconstruction effort had been filed, the processing time for
claims, and various questions concerning DOL outreach efforts to
workers. The DOL was unable to respond to any of those questions. The
DOL's lack of concern for working conditions in the Gulf was, frankly,
appalling.
The DOL's failure to take seriously its law enforcement function in
the Gulf region has left workers with no alternative but to rely on
private enforcement that is through lawsuits. The Southern Poverty Law
Center has filed two class action suits on behalf of thousands of
workers in the Gulf who have not been paid at all, or not paid the
minimum wage or overtime. But as the Center itself recognizes,
``lawsuits alone will not stop the widespread exploitation of workers
that is going on in New Orleans. . . . The people working in New
Orleans to rebuild its schools, hospitals and university buildings need
and deserve the protection of the federal government.''
The federal government's involvement is particularly important in
the enforcement of protections in the context of foreign temporary
worker programs, like the H1B program and its unskilled worker
counterpart, the H2B program. Workers who are imported into our economy
under those programs are at a great disadvantage because, by the very
nature of the programs, those workers rely on their employers not only
for their jobs, but also for their immigration status. Exploitation of
workers in the H1B and H2B programs is thus easier, because if workers
complain that they are not being paid what the law requires, or expose
other employer violations of law, they not only risk losing their job,
but also risk either having to leave the country or remain here
unlawfully.
That kind of exploitation harms all workers, including US workers.
The temporary foreign workers who are being cheated of their wages do
not labor in isolation. They work along side their US-born counterparts
in the high technology industry and as teachers and engineers (under
H1B visas), and along-side US-born hotel workers, landscapers and
service workers (under H2B visas). When employers are able to exploit
one class of workers, that exploitation lowers the floor for all
workers.
The poultry industry provides a perfect example. Roughly half of
poultry workers today are African American, and the others Latino,
mostly immigrant. In 2000, the DOL conducted an industry-wide survey of
compliance with wage and hour laws. That survey concluded that the
industry as a whole was one hundred percent out of compliance with wage
and hour laws. Clearly, the African American poultry workers suffered
as much as their immigrant counterparts.
That type of government compliance effort--that is, industry-wide
investigations that do not rely on individual worker complaints--is a
key part of a robust and meaningful monitoring system. And it is one
that is of particular importance in the context of foreign temporary
worker programs. Unfortunately, it is not one from which US workers can
currently benefit because the DOL has essentially abandoned that key
tool. We have been unable to locate any industry-wide targeted
compliance efforts under the current Administration.
It seems clear that the federal government is moving in exactly the
wrong direction. Instead of reinforcing mechanisms that would ensure
that employers do not import foreign workers in order to depress wages
and other labor standards, the government is moving toward simple
attestation programs, where the DOL has no significant role, if any at
all.
The labor certification process--as flawed as is it--is the last
remaining protection that US workers have. That process is designed to
ensure that the government agencies with the most expertise on local
labor markets and with the greatest ability to find available US
workers and determine how employers could recruit job applicants--the
State Workforce Agencies--act as the gatekeepers for the temporary
foreign worker programs. The certification process is also designed to
prevent various harms before the fact, rather than after-the-fact,
since there are few, if any adequate remedies available after the fact
for those who bear the harm caused by abuses of temporary foreign
worker programs. In addition, the inadequacy of after-the-fact
enforcement mechanisms mean that there are few disincentives for
employers to violate their labor law obligations. An attestation
process completely removes the DOL or the SWAs as the independent
gatekeeper, thus opening up the foreign temporary workers programs for
further employer abuse, subjecting the foreign temporary workers to
further exploitation, depriving US workers of gainful employment, and
degrading wages and working conditions within the domestic labor
market.
We fully agree with Congresswoman Sheila Jackson Lee's concerns
that the current requirements may not be enough to protect US workers,
even if enforced adequately. We believe that more attestations are not
the answer. The attestation structure--in and of itself--fails to meet
the essential gatekeeper function.
The DOL has the statutory responsibility for ensuring that
employers do not abuse guestworker programs. Because of the
exploitative nature of those programs, the DOL should be using every
tool available and seeking to make current tools--like the labor
certification process--stronger, not weakening it by abandoning its
role to an employer attestation process.
The issue of guarding against abuses in guestworker programs is of
particular importance now, given that the Senate has adopted an
immigration reform proposal that significantly increases the number of
foreign visas available to employers, and abandons the long standing
national policy of only allowing employers to import workers to fill
seasonal or temporary labor shortages. Indeed, the Senate bill creates
a whole new class of temporary foreign workers, the H2C workers, in
addition to increasing the number of H1B workers that employers are
able to import. Whatever concerns we have now about the lack of
enforcement of labor standards in temporary worker programs are sure to
be magnified when the new hundreds of thousands of temporary workers
are imported into our economy.
These concerns are real and long-standing. The United States has
spent years studying and experimenting with guestworker programs, and
the resounding conclusion is that guestworker programs are bad public
policy. The ``Jordan Commission,'' for example, which was created by
the 1986 Immigration Reform and Control Act to study the nation's
immigration system squarely rejected the notion that guestworker
programs should be expanded. In its 1997 final report, that Commission
specifically warned that such an expansion would be a ``grievous
mistake,'' because such programs have depressed wages, because the
guestworkers ``often are more exploitable than a lawful U.S. worker,
particularly when an employer threatens deportation if workers complain
about wages or working conditions,'' and because ``guestworker programs
also fail to reduce unauthorized migration'' [in that] ``they tend to
encourage and exacerbate illegal movements that persist long after the
guest programs end.'' \1\
---------------------------------------------------------------------------
\1\ See U.S. Commission on Immigration Reform, Becoming an
American: Immigration and Immigration Policy, U.S. Commission on
Immigration Reform, 1997. An earlier well known Commission--the Select
Commission on Immigration and Refugee Policy (SCIRP)--chaired by Rev.
Theodore Hesburgh had reached the same conclusions. See, National
Commission on Immigration and Refugee Policy, U.S. Immigration Policy
and the National Interest: Final Report. National Commission on
Immigration and Refugee Policy, 1981.
---------------------------------------------------------------------------
In conclusion, we fully agree that we must significantly increase
the mechanism for ensuring compliance with labor standards. Increased
attestations alone are not the answer. We must also ensure that the DOL
does not abandon its traditional oversight role and the gatekeeper role
that it has exercised through the labor certification process.
Targeted wage and hour investigations in the high technology
industry, which is known to hire the most H1B workers, are essential
and should be conducted immediately. The data from these investigations
will allow Congress to meaningfully assess whether the H1B labor
inspection mechanism is adequate to protect both US workers and the
foreign workers who labor in those programs.
Thank you and I look forward to your questions.
Mr. Hostettler. At this time we will turn to questions from
Members of the Subcommittee. First of all, Dr. Nilsen, you note
in your testimony that the Labor Department probably certified
even more LCAs erroneously, but because your review was
narrow--I think you refer to it as cursory in your oral
statement--only a small portion were uncovered.
Can you elaborate on the scope and nature of the other
potential problems and errors in the LCA process?
Mr. Nilsen. In particular, I was referring to the review of
the employer identification number where an error in that field
is not seen by Labor as an obvious inaccuracy. So they just
make sure all the fields are filled in with the number. We just
took a look, there's a two-number prefix, and we know there are
only certain numbers that are valid. So many of those were, in
fact, valid.
There are many other checks that could be done, and while I
don't know the extent to which they would reveal erroneous
numbers, but certainly they are in the permanent Labor
certification program. Labor takes the employer's
identification number and checks it against a database to make
sure it's a valid employer.
There's a relatively low-cost exercise that they can do,
but because they see this as a verification process, they feel
it goes beyond the scope of their current authority. So there
are many other checks like this that they can do, likewise
looking at the programming and finding out why the prevailing
wage information on those 3,200 applications got through their
data checks.
Mr. Hostettler. Can you just elaborate quickly on the
difference between the verification, why the verification
process is not necessarily a grounds for investigation?
Mr. Nilsen. Labor, in its view of what it has the authority
to do, is just to make sure that the information is completely
filled in, but that it's beyond the scope of their
responsibility to actually make sure that the information is
accurate.
Mr. Hostettler. Would there be----
Mr. Nilsen. I believe that would be a legislative change
that would have to occur.
Mr. Hostettler. Is there a reason why that is--is there a
statute as to why they cannot use that? Or is it just their
regulation, that they don't need to do that, they don't have to
do that?
Mr. Nilsen. As I understand it, it's a legislative
requirement. But perhaps Labor could elaborate on that.
Mr. Hostettler. How about that? Is there specific
preclusion from using that?
Mr. Robinson. Yes, Mr. Chairman, there is. The statute, as
we talked about four mechanisms to initiate an investigation,
we refer to one of those as a credible source rule, but the
statute explicitly prohibits us from getting information from
ETA, in this instance, or the Homeland Security. So we cannot
use that information as the basis to initiate an investigation.
Mr. Hostettler. Very good, that is helpful. Go ahead.
Mr. Robinson. Excuse me, Mr. Chairman. As to your earlier
point, and Mr. Carlson could give you some more information,
and we would be glad to put that in writing if you would like,
or if you wanted to hear from him, but as far as ETA's
responsibility under the certifying or checking the accuracy,
they do not have, under the statute, the authority to go
beyond, as Dr. Nilsen mentioned, go beyond what is presented on
the information to actually do some verification. So they don't
have that statutory authority to do that. The statute is,
again, sort of very explicit in that area.
We would be glad to, if you wish, get you some additional
information in writing.
Mr. Hostettler. Thank you, sir. That is very helpful.
Mr. Robinson, when a complaint is filed, how is it
investigated, and has the Labor Department done outreach to H-
1B and American high-tech workers to let them know how to file
complaints?
Mr. Robinson. Yes, sir. The complaint process is just like
any other process. We would take a complaint. We have a
procedure where we investigate, do fact-finding, do interviews.
So we do have a process take we would go through.
We follow that, and I think it's table 4 in the GAO report
shows we have an increasing track record of increasing
complaints and processing and recovery of back wages, as well
as helping employees.
We do educational events, if you will, outreach, with
employers and employee groups, so we do try to educate the H-1B
community as to the requirements as well as follow up with our
enforcement activities, yes, sir.
Mr. Hostettler. One more thing. What about Americans,
high-tech--American citizens, high-tech workers that are
American citizens?
Mr. Robinson. I can--I can't give you any examples. If you
like, I could maybe try to do that and perhaps put something in
writing for you to give you some information there.
Mr. Hostettler. That would be helpful.
Mr. Robinson. The type of outreach that we have done in
that area.
Thank you. My time at this point has expired.
The Chair now recognizes the gentleman from Texas Mr. Smith
for questions.
Mr. Smith. Thank you, Mr. Chairman.
Dr. Nilsen, as I recall reading in some of your materials,
the proportion of H-1B visas that go to individuals who we
might call high-tech workers, those connected to the computer
industry, really is only about a third of the total number. Is
that roughly accurate?
Mr. Nilsen. Yes, I believe that's correct. It certainly is
the largest component. It's probably closer to 40 percent.
Mr. Smith. Let's assume that it is 40 percent of the H-1B
visas go to the high-tech workers. I just have to say, and I
know this is outside the purview of our hearing today, but I am
looking at some of the other occupations and individuals who
receive the H-1B visas, and they include accountants, chefs,
dieticians, hotel management and interior designers.
I am not sure I am convinced, nor am I convinced that the
other individuals in America who might be working in those
occupations are convinced, that we need more people in those
particular areas. That is something I realize is a policy
question for Congress to decide. But, at the same time, I am
not convinced that a case has been made in those areas.
Mr. Robinson, I wanted to direct a couple of questions to
you, particularly in regard to H-1B-dependent companies.
Mr. Robinson. Yes.
Mr. Smith. When the original legislation was written, I was
involved in a compromise that ended up focusing on those H-1B-
dependent companies. I am just wondering how many
investigations the Department of Labor has conducted in regard
to the H-1B-dependent organizations.
Mr. Robinson. Congressman, I can't answer that question. I
can check our database and see how many of our investigations
have focused on H-1B-dependent----
Mr. Smith. Do you know whether it's a significant number or
not? Can you just give me an idea?
Mr. Robinson. I am afraid I am unable to do that. I just
don't know, but I can get you that information. Sorry.
Mr. Smith. In that case let me ask you if H-1B companies
were advertising for H-1B-only job applicants, would that be a
possible violation of the two attestations that the employers
have to make? The two attestations, of course, being that you
have to advertise for an American worker first, and that if you
can't find an American worker, that you can replace that worker
with a foreign worker.
So my question is if someone were advertising for an H-1B-
only applicant, wouldn't that imply it had to be a foreign
worker as opposed to being an American worker?
Mr. Robinson. Congressman, you are correct about the two
additional attestations that the H-1B-dependent employer must
satisfy.
There is an exception, and I think this might go a little
bit toward testimony as well. For an H-1B employee who is
earning $60,000 or more in annual wages or has a master's
degree or higher, that attestation of recruiting and hiring
does not apply. So it is quite possible in the instance that
was mentioned earlier in checking the LCAs, we found that these
people were exempt H-1B workers from that recruit and hire.
Mr. Smith. That's correct. So we are talking about
individuals who earn less than that. Do you still feel if you
were advertising----
Mr. Robinson. Oh, if they were earning less than that? That
would probably be something we want to pursue and do some fact-
finding.
Mr. Smith. If you would, within a week, if you could get
back to me on the number of H-1B investigations you have
conducted and what the results of those investigations were;
and also whether any of the attestations were violated, and, if
so, which ones. That would be good.
Mr. Robinson. Yes, sir.
Mr. Smith. Dr. Nilsen, do you have anything else to add to
my concern about those attestations being violated by H-1B-
dependent companies?
Mr. Nilsen. No, I don't have anything to add on that
question at that point.
Mr. Smith. One other thing for you, Dr. Nilsen. Did you
notice in your investigation that there was any particular
occupation that seemed to--in which you found more fraud than
another occupation?
Mr. Nilsen. No. We didn't do that kind of analysis that
broke it down by occupation.
Mr. Smith. So it was across the board.
Mr. Nilsen. Yes. We didn't actually look at specific
occupations and find which ones were more likely.
Mr. Smith. You have no knowledge of that either, then?
Mr. Nilsen. No.
Mr. Smith. Thank you.
Thank you, Mr. Chairman.
Mr. Hostettler. Thank you.
The Chair recognizes the gentlewoman from Texas, the
Ranking Member, for 5 minutes.
The gentlewoman yields to the gentleman from Texas Mr.
Gohmert.
Mr. Gohmert. Thank you, Mr. Chairman. I don't know, the
gentlewoman from Texas may still be shocked that I agreed with
her earlier. But anyway, pardon my ignorance, but that's the
way I learned. And some people thought I was a decent judge,
but that is because I didn't mind asking questions and exposing
my ignorance.
But I was just wondering, and it may be, Dr. Nilsen, we
will start with you, but if somebody could take me step by step
through the process that the U.S. Government goes through, you
know, from what you know, from whether its immigration, DOL,
whoever, once you get an application from someone wanting an H-
1B visa, what do we do?
Mr. Nilsen. I am happy to take you through that. It was
complex to us, too.
In our report on page 10, we just have a little graphic
takes you through that, where the application is filed
electronically with Labor.
Mr. Gohmert. That is great. I am just seeing this report.
Mr. Nilsen. It was just issued today.
Mr. Gohmert. Okay. Maybe that is why I hadn't seen it.
Mr. Nilsen. Yes. In the back on page 32, in fact, is a copy
of the Labor condition application that they file with Labor.
This identifies the company, the kinds of workers, and each
application is for a particular occupational series. It lists
the wages they are going to be paying, what the prevailing wage
is, et cetera.
Then once that gets approved by Labor, and, as I indicated,
that is a matter of minutes, it's an electronic process, make
sure all the data is there, it gets forwarded then to the
Department of Homeland Security.
Mr. Gohmert. The deep abyss. Okay.
Mr. Nilsen. Along with--and we also have the next appendix,
shows the petition that goes along with the application that
gets filed with the LCA.
That gets investigated, adjudicated by Department of
Homeland Security. Once that has been approved, then they check
against the caps, et cetera. Then it would be forwarded to the
State Department for a visa to be issued for an individual.
Mr. Gohmert. Just looking at figure 1 of page 10, in the
review of the H-1B visa process, it explains, submit the
application electronically. ETA approves the application within
7 days if complete. You say that's the process that takes
minutes.
Normally then the employer submits a H-1B petition, okay,
and the CIS--and the CIS adjudicate and approve the petition. I
guess it's kind of like when Steve Martin says, I am going to
write a book and tell people how to have $1 million and not pay
taxes. Okay, first get $1 million and then just don't pay
taxes. I mean, it's like, okay, but I am curious about what the
process is by the Government. You got Labor, maybe approved
within minutes. You said that can be done on line.
Mr. Nilsen. Yes.
Mr. Gohmert. We may need to get you all to help Homeland
Security with their computers so that they can do those kinds
of things. But what is it that CIS does between those last
three, four and five boxes?
Mr. Nilsen. They look at the application.
Mr. Gohmert. Okay. That takes several days to read that
probably.
Mr. Nilsen. Verify that is an occupation that qualifies.
Mr. Gohmert. But how do they do that, just by looking at
it, and their training and knowledge?
Mr. Nilsen. This is actually a hands-on process by Homeland
Security, CIS, where they go through and they actually do
checking of the information. Anything that comes----
Mr. Gohmert. But how do they check that information? That
is what I am trying to get to, and I realize my time has
expired. If I could just finish this line.
Mr. Hostettler. Without objection, the gentleman is
recognized for another minute.
Mr. Gohmert. Thank you, Mr. Chairman.
Mr. Nilsen. If they see anything that raises a question,
they will talk to the employer to get additional information.
They make sure it's a specialty occupation, and they verify the
worker qualifications, for example, if they need a higher level
of degree, bachelor's or master's in engineering, making sure
that the documentation is there that verifies that this is, in
fact,correct, that this person qualifies under those
conditions.
Mr. Gohmert. Okay. So they review, though, what's there.
Mr. Nilsen. What's there, and they will contact the
employer who filed the petition if there are any questions.
Mr. Gohmert. I guess that's what I was getting to. They
look at the documentation, and if somebody has got somebody
else to say, this is what's needed, whether it's true or not--
and I don't want to shock your conscience, but I found as a
judge, chief justice, and now it's been absolutely confirmed
here in Congress, people will lie to you. It just happens. So I
guess I'm wondering what kind of outside verification there is.
Mr. Nilsen. They're supposed to provide certified
transcripts from universities;, not just a copy but a certified
transcript, for example, that documents that they have the
training that they purport that they have in a particular
field.
Mr. Gohmert. But how about for the certification that this
is exactly what's needed for this position?
Mr. Nilsen. They look at the occupational series that's
listed, and look at the--you know, if it's in the computer
field that it's a relevant occupation for a relevant degree for
that occupational series.
Mr. Gohmert. And so I was surprised to see the list my
colleague had here that lists things like chiropractor, and I
frankly didn't realize there was such a huge shortage of
chiropractors here that we were having to bring them in from
other places. I know some chiropractors that are struggling
that didn't realize that either. Anyway, I guess you have a
list of what's required in order to be a legitimate
chiropractor in the U.S., correct?
Mr. Nilsen. I would presume they do.
Mr. Gohmert. Okay. That's where we get in trouble.
Mr. Nilsen. And it is basically a paper review of the
documentation provided.
Mr. Gohmert. All right. I realize I have vastly exceeded my
time, and I appreciate the Chairman's indulgence. Thank you.
Mr. Hostettler. Thank the gentleman. The Chair recognizes
the gentlelady from Texas, the Ranking Member, for 5 minutes.
Mr. Jackson Lee. Thank you. Dr. Nilsen, thank you for your
report. My question to you, in your assessment, do you believe
this program can be reformed?
Mr. Nilsen. I guess I would have to say yes. Anything can
be reformed. I think if you're going to ask can additional work
be done to improve the verification process of the application,
certainly much more can be done. But Labor, or whoever, would
have to be given the authority to do verification and share the
information and do a relevant investigation process in order to
improve it. Right now, as we've been saying, the LCA process is
very cursory, the review process that Labor does. The fact that
Homeland Security and Labor cannot share information for
purposes----
Ms. Jackson Lee. Is that in the legislative framework--are
you suggesting they can do it in a regulatory framework or they
need legislative framework?
Mr. Nilsen. They need legislative authority.
Ms. Jackson Lee. What can they do presently? One of the
concerns is how energetic the Department of Labor is in terms
of the attestation. You make the point that between January
2002 to September 2005, 9,563 applications and 99.5 percent
were certified. Is there not an administrative fix or sort of
an in-depth review that might be given?
Mr. Nilsen. Certainly. But under current legislative
authority, there's only a little bit more I think that Labor
can do. Certainly the work that we did defined the 3,200
erroneous wage levels and the erroneous employer identification
numbers; Labor can do that now. There's something broken in
their software that doesn't do that match properly, and they
don't look at the employer identification numbers to actually
verify that they're in a relevant series. They then could get
some additional information to match and make sure that
information is relevant. But beyond that, they are limited
statutorily.
Ms. Jackson Lee. Well, I always like to be a problem-solver
and I think that Labor owes us at least a performance of
excellence under the present legislative structure, and they
can do what you just said.
Mr. Nilsen. Yes.
Ms. Jackson Lee. And one of the reasons, of course, is that
we see the conflicting voices here. There is a great need for
H-1B visas in a number of our professions, particularly our
software, high-tech, Internet highway, if you will,
constituencies; and it matches up or clashes, if you will,
against those who argue that we need to increase the number of
engineers and software specialists and others here in the
United States, which I hope we can do by using our training
dollars in the right way. But I don't think we should leave
this hearing without Labor acknowledging present failures under
the present legislative process or system, and they should do
something about it. Can they do something about it at least as
what you have just indicated?
Mr. Nilsen. In our opinion, yes, they can. In our report,
they did take issue with even the modest steps we've proposed,
however.
Ms. Jackson Lee. I thank you for that.
Ms. Avendano, let me thank you for your presence here
today. You mentioned in your statement that the attestation
structure in and of itself fails to meet the essential
gatekeeper function. Can you give us some options that we can
utilize?
Ms. Avendano. Certainly. Thank you, Congresswoman. I think
it is clear the role, the independent oversight role that the
Department of Labor should play should be strengthened and not
weakened through an attestation program. That role is important
for two reasons. One, because the importance of relying on the
State recourse agencies who have the knowledge of, who have the
technical expertise, who understand local labor markets, to be
able to determine whether employers are gaming the system from
the git-go is essential. And also it is the Department of Labor
who plays that gatekeeper role to, ensure again on the national
level, that employers aren't using this program for the intent
of undermining working standards. If that role is abandoned,
then all we are left with is after-the-fact mechanisms and
remedies, which don't provide adequate protections for the U.S.
workers.
Ms. Jackson Lee. So you want the Labor Department to do
what?
Ms. Avendano. One thing that the Labor Department can do
right now is to conduct targeted wage-and-hour investigations
into the high-tech industry and particularly in the occupations
that are highlighted in the GAO report: computer systems
analyst and programming occupations. Many of these programmers
who will laboring under H-1B visas are not being paid at all,
and those employers are not just violating labor certification
conditions but also the Fair Labor Standards Act. There is no
reason why the Department of Labor cannot conduct a targeted
investigation into an entire industry, granted this
Administration hasn't done that. The last targeted industry
that we've seen was of the poultry industry in the year 2000.
When that survey concluded, that industry as a whole was 100
percent----
Ms. Jackson Lee. So you don't want to extinguish H-1B. You
want to make it true to what it is supposed to do, which is to
provide the staffing for industries or positions which we
cannot find or have no source of an American worker. Is that
the sense of it?
Ms. Avendano. I respectfully--the question really--there's
two separate questions. One is that the H-1B program, as a
guest worker program, as a mechanism that has provided
employers with a constant supply of exploitable workers, is a
bad thing and should be limited in scope, and it should have
much more regulatory authority. To mitigate the damage of this
program, much more needs to be done to protect both U.S.
workers and the foreign workers who labor in these programs.
Ms. Jackson Lee. I got you. Mr. Robinson can you do better?
Mr. Robinson. Thank you Congresswoman. Yes. Let me just say
two quick things. First of all, ETA is very concerned about the
incorrect approval of applications with low prevailing wages.
They don't exactly know today why this occurred. ETA is
checking its system as to why it occurred. We're investigating
it. We'll be running simulations to determine the cause, and
fully intend to correct any problems that are found. ETA joins
you in wanting to have this corrected and will be shooting for
the goal of being 100 percent accurate all the time. And so ETA
does want this to occur.
As far as the other comment about targeted investigations,
we've talked a little bit here today about our authority, and
under the H-1B statutory framework, Department of Labor does
not have the authority to conduct targeted investigations.
Ms. Jackson Lee. I do understand that. As I close, let me
just say we have these conflicting interests that I think are
important interests. The supplementing of a profession that
needs H-1B visas and the protecting of both the H-1B visa
worker and the American worker and providing opportunities for
American workers. What we want--at least what I'm saying to you
now within this framework as we leave you to go vote--that DOL
needs to do better than it has done. GAO has laid out a number
of recommendations, two of which--two important ones are
legislative. I want you to do what you can do in the course of
your present framework.
Mr. Robinson. Understood. And we'll do that.
Ms. Jackson Lee. With that, Mr. Chairman, I yield back.
Thank you very much. I thank the witnesses.
Mr. Hostettler. I thank the gentlelady.
At this time the Chair will ask one question before we
part--before we go to vote. The title of the hearing today is,
``Is The Labor Department Doing Enough to Protect U.S.
Workers?'' and we've heard very good testimony today as to
that.
But Mr. Miano, you have done a fairly significant study on
the impact of the H-1B program on especially the IT industry.
And let me just end the hearing by asking a question not so
much about the Labor Department, but as the program is
currently constituted, does the program--even if the Department
of Labor did everything right and used all of its authority
that it is granted today to execute the law and enforce the
law--does the H-1B program even give them that adequately to
protect American high-tech workers?
Mr. Miano. No, Mr. Chairman, not at all. The restrictions
on the Department of Labor are so extreme that the types of
complaints that they can handle are just at the fringes. I
mean, they just can kind of pick at little things. They cannot
address the heart--the big issues in this system.
Mr. Hostettler. Very good. Very good. And we yield time to
Mr. Gohmert from Texas.
Mr. Gohmert. Just a very quick question. I know we have to
go vote. But I continue to want to know more about what's done
before these visas are granted. And when I see that
accountants, chefs, chiropractors, dieticians, fashion
designers, hotel managers, interior designers, journalists--
journalists?--medical records librarians, ministers, show room
managers, social workers--we don't have enough social workers
to be hired in this country?
Anyway, I'm just curious, when you see an application--when
people at CIS or Labor see an application like this--and I was
going there before--but what assurance is there that there
really aren't enough people in America that don't want to be
social workers or don't want to be librarians or don't want to
be hotel managers? I get the impression that they don't call
the AFL-CIO to see if they have any workers available to see if
they'd like to fill these positions and meet the requirements.
I'm just curious, rather than looking at, you know, a
document on its face, seeing our list--yes, it meets the
requirements--is there any investigation at all to see if there
are workers available that would fill this position? That's my
question.
Mr. Miano. I would like to answer. You know, the lawyer's
best friend is an ambiguous law, and the problem that you have
in this program is that the eligibility requirement is so
vague, specialty occupation, that it's basically a packaging by
lawyers, whoever you can fit into that, and so you get that.
You can add into that restaurant hostesses. My favorite from
this one this year was called--specialty occupation was the job
title, and the employer in the contacts job title listed as
retired.
Mr. Robinson. Mr. Chairman, could I also interject? We
talked a little earlier about the H-1B-dependent employer which
does have that hire--recruit and hire attestation, but there is
no corresponding attestation for the normal H-1B employer,
someone who's not a willful violator or an H-1B-dependent
employer. So that--it only applies to a small segment, if you
will, of the H-1B employer.
Mr. Gohmert. So as long as you haven't been caught being a
problem before, you can keep going.
Mr. Robinson. And you don't meet the definition of H-1B
dependent as to the occupations, I believe, but the Department
of Homeland Security is the agency that actually sets what
those specialty occupations are.
Mr. Gohmert. You've been most enlightening. Thank you very
much.
Mr. Hostettler. I thank the gentleman. And it was the
reason for my last question that we will--this Subcommittee
will continue to investigate the H-1B program on some more
fundamental grounds as to how the program can better be crafted
and the Department of Labor and others can be given better
tools to ultimately provide for, first of all, the protection
of American workers and, to the extent that there may be a
demand for further workers, then to provide those for the
various industries. But our obligation here first of all in the
Congress is to protect American citizens and their ability to
work.
I want to thank the panel for your very helpful input
today. It has been enlightening, as my colleague has suggested,
and you have added greatly to the record. All Members will have
5 legislative days to make additions to the record. The
business before the Subcommittee being complete, without
objection, we are adjourned.
[Whereupon, at 3:18 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record
United States Government Accountability Office Report on ``H-1B Visa
Program: Labor Could Improve Its Oversight and Increase Information
Sharing with Homeland Security,'' submitted by the Honorable Sheila
Jackson Lee, a Representative in Congress from the State of Texas, and
Ranking Member, Subcommittee on Immigration, Border Security, and
Claims
Response to Post-Hearing Questions from Alfred B. Robinson, Jr., Acting
Director, Wage and Hour Administration, Employment Standards
Administration, United States Department of Labor
``H-1B Violations Report'' submitted by the U.S. Department of Labor in
response to request from the Honorable Lamar S. Smith, a Representative
in Congress from the State of Texas