[Federal Register Volume 59, Number 243 (Tuesday, December 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31114]


[[Page Unknown]]

[Federal Register: December 20, 1994]


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Part V





Department of Labor





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Employment and Training Administration



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20 CFR Part 655



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Wage and Hour Division



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29 CFR Part 507




Labor Condition Applications and Requirements for Employers Using 
Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion 
Models; Final Rule
DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 655

RIN 1205-AA89
Wage and Hour Division

29 CFR Part 507

RIN 1215-AA69

 
Labor Condition Applications and Requirements for Employers Using 
Nonimmigrants on H-1B Visas in Specialty Occupations and as Fashion 
Models

AGENCIES: Employment and Training Administration, Labor; and Wage and 
Hour Division, Employment Standards Administration, Labor.

ACTION: Final rule.

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SUMMARY: The Employment and Training Administration (ETA) and the 
Employment Standards Administration (ESA) of the Department of Labor 
(DOL or Department) are promulgating regulations governing the filing 
and enforcement of labor condition applications filed by employers 
seeking to employ foreign workers in specialty occupations and as 
fashion models of distinguished merit and ability under the H-1B 
nonimmigrant classification. Under the Immigration and Nationality Act 
(INA), as amended by the Immigration Act of 1990 (IMMACT), an employer 
seeking to employ a nonimmigrant in a specialty occupation or as a 
fashion model of distinguished merit and ability is required to file a 
labor condition application with DOL before the Immigration and 
Naturalization Service (INS) may approve an H-1B visa petition. The 
labor condition application process is administered by ETA; complaints 
and investigations regarding labor condition applications are the 
responsibility of ESA.
    The Miscellaneous and Technical Immigration and Naturalization 
Amendments of 1991 (MTINA) amended the INA and the IMMACT to change 
substantially the H-1B labor condition application program, retroactive 
to October 1, 1991.

EFFECTIVE DATE: January 19, 1995.

FOR FURTHER INFORMATION CONTACT:
On 20 CFR part 655, subpart H, and 29 CFR part 507, subpart H, contact 
Flora T. Richardson, Chief, Division of Foreign Labor Certifications, 
U.S. Employment Service, Employment and Training Administration, 
Department of Labor, Room N-4456, 200 Constitution Avenue, NW., 
Washington, DC 20210. Telephone: (202) 219-5263 (this is not a toll-
free number).
    On 20 CFR part 655, subpart I, and 29 CFR part 507, subpart I, 
contact Solomon Sugarman, Wage and Hour Division, Employment Standards 
Administration, Department of Labor, Room S-3502, 200 Constitution 
Avenue, NW., Washington, DC 20210. Telephone: (202) 219-7605 (this is 
not a toll-free number).

SUPPLEMENTARY INFORMATION: 

I. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.), the information collection requirements included in this rule 
have been submitted to the Office of Management and Budget (OMB). A 
technical amendment will be issued following OMB PRA approval.

II. Background

    On November 29, 1990, the Immigration and Nationality Act (8 U.S.C. 
1101 et seq.) (INA or Act) was amended by the Immigration Act of 1990 
(IMMACT), Public Law 101-649, 104 Stat. 4978. On December 12, 1991, the 
INA was further amended by the Miscellaneous and Technical Immigration 
and Naturalization Amendments of 1991 (MTINA), Public Law 102-232, 105 
Stat. 1733. These amendments assign responsibility to the Department of 
Labor (Department or DOL) for the implementation of several provisions 
of the Act relating to the entry of certain categories of employment-
based immigrants, and to the entry and temporary employment of certain 
categories of nonimmigrants. One of the major provisions of the Act 
governs the entry temporarily of foreign ``professionals'' to work in 
``specialty occupations'' in the U.S. under H-1B nonimmigrant status. 8 
U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184(c).
    Before the Immigration and Naturalization Service (INS) will 
approve H-1B status for a foreign worker, the employer which intends to 
employ the alien, must have on file with the Department's Employment 
and Training Administration a Labor Condition Application for H-1B 
Nonimmigrants (LCA), Form ETA 9035. Pursuant to the Interim Final Rule, 
in filling out the LCA, an employer must specifically indicate, among 
other things, the H-1B nonimmigrant's job title, the number of H-1B 
nonimmigrant(s) sought, the rate of pay to be paid the nonimmigrant(s), 
the nonimmigrant's anticipated period of employment, and the location 
where the H-1B nonimmigrant(s) will work. Additionally, the employer 
attests to four statements:
    1. H-1b nonimmigrants will be paid at least the actual wage level 
paid by the employer to all other individuals with similar experience 
and qualifications for the specific employment in question or the 
prevailing wage level for the occupation in the area of employment, 
whichever is higher;
    2. The employment of H-1B nonimmigrants will not adversely affect 
the working conditions of workers similarly employed in the area of 
employment;
    3. On the date the application is signed or submitted, there is not 
a strike, lockout, or work stoppage in the course of a labor dispute in 
the occupation in which H-1B nonimmigrants will be employed at the 
place of employment.
    4. As of this date, notice of this application has been provided to 
workers employed in the occupations in which H-1B nonimmigrants will be 
employed.
    The H-1B category of specialty occupations consists of those 
occupations which require the theoretical and practical application of 
a body of highly specialized knowledge and the attainment of a 
bachelor's or higher degree (or its equivalent) in the specific 
specialty as a minimum for entry into the occupation in the U.S. 8 
U.S.C. 1184(i)(1). In addition, a nonimmigrant in a specialty 
occupation must possess full State licensure to practice in the 
occupation (if required), completion of the required degree, or 
experience equivalent to the degree and recognition of expertise in the 
specialty. 8 U.S.C. 1184(i)(2). The category of ``fashion model'' 
requires that the nonimmigrant be of distinguished merit and ability. 8 
U.S.C. 1101(a)(15)(H)(i)(b). INS identifies and defines the occupations 
covered by the H-1B category and determines an alien's qualifications 
for such occupations. DOL only administers and enforces the labor 
condition applications relating to the employment.
    The rulemaking history, as published in the Federal Register, is as 
follows:
    March 20, 1991, Advance Notice of Proposed Rulemaking, 56 FR 11705.
    August 5, 1991, Proposed Rule, 56 FR 37175.
    October 22, 1991, Interim Final Rule, 56 FR 54720.
    January 13, 1992, Interim Final Rule, 57 FR 1316.
    October 6, 1993, Proposed Rule, 58 FR 52152.
    December 30, 1993, Interim Final Rule, 58 FR 69226.

III. Analysis of Comments

A. Comments to the Proposed Rule

    Comments regarding the October 6, 1993, Notice of Proposed 
Rulemaking (NPRM) were received from 264 entities. Over half (157) were 
submitted by businesses; 33 by educational facilities; 23 by attorneys; 
and 21 by the general public. The rest of the commenters were 
distributed among members of Congress (3), the AFL-CIO (1), the Embassy 
of India (1), Federal Government employees (5), State governments (6), 
and trade associations (15).
    The proposals eliciting the most comments were those regarding the 
job contractor concept and the related requirement of posting notice at 
the place of employment or worksite(s). Of the 157 business comments, 
128 concerned the job contractor proposal. In total, there were 171 
comments concerning the job contractor proposal, of which 153 (nearly 
90%) opposed the proposal.
    Educational institutions commented primarily on the proposal to 
require the employer to identify the prevailing wage source on the 
labor condition application. These commenters uniformly advocated a 
check-off system, whereby the LCA-filing employer would check a block 
on the form to indicate whether the prevailing wage source was a State 
Employment Service Agency (SESA) determination, an authoritative 
source, or another legitimate source.
    The majority of the general public commenters were critical of the 
H-1B program in general, and suggested that businesses utilizing H-1B 
nonimmigrants should pay user fees and should be assessed substantial 
fines if found in violation. In further opposition to the H-1B program, 
several commenters (in addition to the general public) advocated that 
the proposed regulations did not go far enough and that LCA employers 
should be required to report the H-1B nonimmigrant's wage earnings to 
the Internal Revenue Service and to trade associations in order to 
facilitate better monitoring of the LCA employer's activities.

B. Comments to the Interim Final Rule Dated January 13, 1992

    There were 45 comments to this rule. Three issues commented on are 
germane to this Final Rule: The movement among worksites of H-1B 
nonimmigrants, in-kind perquisites, and the definition of ``aggrieved 
party.'' Worksite movement of H-1B nonimmigrants is discussed in item 
2.a below; in-kind perquisites in item 2.b; and definition of aggrieved 
party in item 1.f.

C. Additional Discussions and Comments

    On December 8, 1994, a meeting was held at OMB pursuant to E.O. 
12866. Other than representatives from the Department and OMB the 
organizations represented were the American Immigration Lawyers 
Association, the American Council on International Personnel, the 
Information Technology Association of America, the National Association 
of Foreign Student Advisors, and the American Council on International 
Priorities. Written comments were subsequently received by the 
Department from the American Council on International Personnel, the 
Information Technology Association of America and the American 
Immigration Lawyers Association.

D. Matters Addressed in the Final Rule

    While the Department maintains its discretion to engage in 
additional rulemaking, and such proposed rulemaking is presently under 
consideration, this final rule culminates this series of rulemaking 
activities.
1. Provisions Adopted as Proposed
    a. Geographic/Occupational Scope of the LCA (See 
Sec. ________.730(c)(2).) The Department and the public presently are 
not receiving a true indication of the valid job openings for which 
employers anticipate the need for H-1B nonimmigrants. EPA's operating 
experience indicates that some employers have been filing LCA's 
containing ``laundry lists'' of occupations and areas where an H-1B 
nonimmigrant might be needed, in many cases on a single labor condition 
application. When this practice is coupled with the potential 6-year 
validity period of the applications, the information disclosed to the 
Department and to the public can be substantially misleading with 
respect to the amount of hiring activity actually occurring pursuant to 
this program.
    The Department proposed to limit an individual labor condition 
application to a single occupation and to geographic areas only within 
the jurisdiction of a single ETA regional office. The Department 
expressed its view that, under such a rule, employers would be more 
likely to file LCA's for the actual number of job openings for which H-
1B workers are sought, ETA would be able to better manage and collect 
data on the H-1B program, INS could exercise more control over the 
petitions filed pursuant to a labor condition application, and the 
Department would be better positioned to carry out enforcement 
activities under this program. Additionally, the Department requested 
comments on this proposal with specific reference to whether and to 
what extent this change should promote the objective of receiving 
applications which more accurately represent actual job openings for 
which H-1B nonimmigrants are being sought, and whether the change might 
occasion any unintended operational consequences.
    Nearly all of the 39 commenters on this issue indicated that if the 
Department wanted to get a truer picture of actual practice, instead of 
limiting the LCA to one occupation and ETA regional area, the 
Department should limit the number of workers who could be ``procured'' 
on one LCA.
    Of the 39 commenters, there were 23 against the proposal and 16 for 
it. One commenter recommended that the LCA be limited to one 
occupation, but with a nationwide filing. Several commenters from the 
general public advocated that each user of this program should have to 
pay fees in order to participate.
    Concerning user fees, the Department has taken no action in the 
Final Rule. Concerning the ``single occupation'' LCA filing 
requirement, the Department has carefully considered the comments and 
its own program experience and has concluded that--without any 
significant additional burden for employers--the proposed provision, 
combined with other clarifications in this Final Rule, such as changing 
the LCA validity period (item 1.d below) and LCA filing dates (item 4.d 
below), will promote the Department's desired result: a truer 
indication of valid job openings. Therefore, the proposal is adopted as 
it appeared in the NPRM. However, concerning the ``single region'' LCA 
filing requirement, the Department has concluded, based on program 
experience and the comments on the NPRM, that it is possible to achieve 
the Department's goals (under statutory obligations) without modifying 
the Interim Final Rule's provisions permitting the employer to file the 
LCA with the ETA regional office having jurisdiction over the initial 
place of employment if the H-1B nonimmigrant is to be employed 
sequentially in various places in more than one ETA regional 
jurisdiction.
    b. Notification (See Sec. ________.734(a)(2).)  Section 
212(n)(1)(C) of the INA requires that an employer seeking to hire an H-
1B nonimmigrant shall notify, at the time of filing the application, 
the bargaining representative of its employees of the filing of the 
labor condition application or, if there is no bargaining 
representative, post notice of filing in conspicuous locations at the 
place of employment. 8 U.S.C. 1182(n)(1)(C). The interim final 
regulations at Sec. ________.730(h)(1) implement this statutory 
requirement.
    In the course of investigations under this program, the Wage and 
Hour Division has found that some employers have made false statements 
regarding wages and worksite locations and have failed to fulfill the 
obligations attested on the applications (for example, by not paying 
the H-1B nonimmigrants the rate specified). As a means of curbing such 
abuses, the Department proposed that employers also be required to 
provide to each H-1B nonimmigrant a copy of the labor condition 
application, no later than the date the H-1B nonimmigrant reports to 
the place of employment.
    Of the 29 commenters on this issue, 26 supported the proposal. 
Several suggestions as to the appropriate timing of the notice to the 
H-1B workers were made by commenters: the employer should be allowed 10 
days to meet this requirement; the employer could fulfill the 
requirement by providing the H-1B nonimmigrant a copy of the certified 
LCA; the employer should comply with this requirement at the time the 
visa petition is filed, before the H-1B nonimmigrant reports for work; 
and the employer should have the H-1B nonimmigrant sign the 
notification. One commenter opposing the proposal said that the notice 
should be provided only if the nonimmigrant requests it.
    After careful consideration of the comments and the Department's 
program experience, the Department is promulgating this proposal as it 
appeared in the NPRM, in order to better assure the protections 
intended by Congress and to better safeguard workers (both foreign and 
domestic) against abuses by employers. The Department is of the view 
that notification at the time the H-1B worker begins work and receives 
other employment related documents, such as tax withholding and I-9 
information, is the most appropriate time to provide the copy of the 
LCA.
    A further clarification of the regulation, based on program 
experience, is being made in recognition of abuses and to better assure 
the protections of workers which Congress intended the notice 
requirement to achieve. The Department has become aware that some 
employers which place H-1B nonimmigrants at new worksites within areas 
covered by existing LCA's have failed to fulfill their LCA obligations, 
but, because no notices were posted at the new worksites, the adversely 
affected workers were not informed of the LCA standards or of their own 
rights to examine certain documents and to file complaints. The 
Department recognizes that it could take the position that an employer 
may employ H-1B nonimmigrants only at worksites where notice had been 
given, and therefore could require an employer to take two steps before 
placing H-1B nonimmigrants at a new worksite within the same area of 
intended employment: post a notice and file a new LCA. However, such a 
dual requirement appears to the Department to be burdensome. The 
protections intended by Congress can be afforded by having a notice 
posted by the employer at each new worksite within the same area of 
intended employment at the time the H-1B nonimmigrants are sent there 
to work, without the employer being required to file new LCA's. The 
Final Rule, therefore, imposes a less burdensome but equally worker-
protective standard, by providing that the employer shall provide such 
worksite notices on the first day of work by an H-1B nonimmigrant at 
that worksite which will remain posted for at least ten days.
    A clarification of the regulation, based upon program experience, 
is also being made in recognition of potential abuses with regard to 
the timing of an employer's provision of notice of filing an LCA. The 
Department has become aware of confusion and potential adverse effects 
in situations in which employers provide the required notice of filing 
the application to the bargaining representative, or to its employees 
by posting at the place of employment, considerably in advance of the 
date the application is filed (e.g., six months prior to filing). In 
order to alleviate confusion and to better assure the achievement of 
Congressional intent that U.S. workers who will be working side-by-side 
with H-1B nonimmigrants be notified of the employer's intent and their 
ability to file complaints if they believe violations have occurred, 
the Final Regulation requires that notice, provided by the employer 
under the fourth labor condition statement, must be provided on or 
within 30 days prior to the date the labor condition application is 
filed.
    c. Prevailing Wage Identification on the LCA (See 
Sec. ______.730(c)(1)(vi).)  Pursuant to the H-1B interim final 
regulations, employers must file with ETA a completed and dated 
original labor condition application and one copy. No documentation of 
the attestation elements must be submitted to ETA.
    The Department proposed that employers be required to identify (on 
the LCA) the prevailing wage rate and the source utilized to obtain the 
wage information. This would impose no additional burden on an employer 
acting in compliance with the program's requirements and would provide 
additional impetus for compliance by those employers who might not 
properly determine the prevailing wage prior to filing the LCA. ETA 
would continue to certify an LCA where all items on the LCA have been 
completed and information submitted on the form is not obviously 
inaccurate. However, an LCA which fails to contain this additional 
information or which indicates a prevailing wage date source not 
consistent with regulatory requirements would be rejected.
    Forty-four commenters specifically addressed this issue: 31 
opposing the proposal and 13 supporting it. Generally, opposition was 
based on the commenters' concern that ETA would reject LCA's more 
frequently and/or would refer the LCA to ESA which would initiate an 
investigation. Eighteen representatives of educational institutions, 
the most frequent commenters on this issue, advocated a check-off 
system whereby the employer merely would check whether its prevailing 
wage source was a SESA determination, independent authoritative source, 
or another legitimate source of information.
    The Department has considered fully the views of the commenters and 
has reviewed the experience and information obtained through the 
program. The Department is modifying the proposed form to incorporate 
the suggestions of commenters to some extent. The form will provide 
that if the employer obtains a prevailing wage rate from a SESA, the 
employer may check the box for SESA and enter the prevailing wage rate 
obtained. When the prevailing wage rate is obtained from any other 
source, the employer must enter the identity of the source and the wage 
rate.
    Some commenters have expressed concern regarding this change in 
apprehension that there will be a greater rejection rate of LCAs on the 
part of ETA. ETA will continue to follow the guidance of the statute 
and the regulation and will not reject an LCA unless there are obvious 
omissions or errors. Of course if the employer fails to enter the 
identity of the source of a prevailing wage rate, or enters a source 
that is obviously not an acceptable source, ETA will reject the LCA.
    d. LCA Validity Period (See Sec. ________.750(a).) Pursuant to 
section 214(g)(4) of the Act, the period of authorized admission as an 
H-1B nonimmigrant may not exceed 6 years. Section ________.750 of the 
interim final H-1B regulations published at 57 FR 1316 (January 13, 
1992) provides that a certified labor condition application shall be 
valid for the period of employment indicated on Form ETA 9035; in no 
event can the validity period of a labor condition application (LCA) 
exceed 6 years. However, the INS's regulations, at 8 CFR 
214.2(h)(9)(iii)(B) (1) and (3), limit the validity of a certified 
petition to 3 years or the expiration of the validity period of the 
labor condition application, whichever comes sooner. The Department 
proposed to bring the validity period of LCA's into conformity with 
INS's regulations by reducing the validity period of a labor condition 
application from 6 years to 3 years. The validity period would begin 
with the starting date entered by the employer in the ``Period of 
Employment'' section of Item 7 on the LCA or the date ETA certifies the 
LCA, whichever is later. Any LCA previously filed with and certified by 
ETA, however, would remain valid for up to six years or the ending date 
of employment as certified.
    Thirty commenters addressed this issue--16 opposing the proposal 
(primarily businesses and attorneys) and 14 advocating the proposal 
(primarily educational institutions and State governments). Trade 
associations were divided--4 pro and 4 con. Those opposing the proposal 
generally expressed concerns that there would be too much paperwork, 
that the proposal was burdensome, and that the proposal would hamper 
valid users. Several of those supporting the proposal expressed the 
view that the LCA should not be valid for more than 1 year.
    While the Department is mindful of the concerns expressed by 
commenters opposed to the proposal, the need for uniformity in the DOL 
and INS administration of the program and avoidance of confusion among 
H-1B employers and nonimmigrants outweigh any potential burdens. 
Therefore, the Department is promulgating this proposal as it appeared 
in the NPRM. This proposal, in conjunction with the deletion of the 
prevailing wage update provision, should reduce the burden on employers 
by providing a consistent timetable for DOL and INS filing 
requirements.
    e. Strike-Lockout (See Sec. ________.733(a)(1).) Section 
212(n)(1)(B) of the INA requires that an employer seeking to hire H-1B 
nonimmigrants shall file an application with the Secretary stating that 
``[t]here is not a strike or lockout in the course of a labor dispute 
in the occupational classification at the place of employment.'' The 
Department's interim final H-1B regulations at Sec. ________ .730(g) 
provide that:

    [A]n employer seeking to employ H-1B nonimmigrants shall state 
on Form ETA 9035 that there is not at that time a strike or lockout 
in the course of a labor dispute in the occupational classification 
at the place of employment. A strike or lockout which occurs after 
the labor condition application is filed by the employer with DOL is 
covered by INS regulations at new 8 CFR 214.2(h)(17).

    The Department became aware that this regulatory provision did not 
address the potentially abusive situation in which an employer with a 
certified labor condition application could petition for additional H-
1B nonimmigrants in the event of a labor dispute subsequent to the 
filing and certification of the application, and thus use H-1B 
nonimmigrants to break a strike or to weaken the bargaining position of 
U.S. workers. Such use of H-1B nonimmigrants to weaken U.S. workers' 
bargaining position contrary to the clear intent of the law could be 
achieved by employers hiring H-1B nonimmigrants directly or obtaining 
such workers from job contractors. Therefore, to prevent this potential 
abuse, the Department proposed to amend the regulations to prohibit an 
employer from using a certified labor condition application to file 
visa petitions with INS for an occupation in which a strike, lockout, 
or work stoppage in the course of a labor dispute occurs at the H-1B 
nonimmigrant's worksite.
    Further, to prevent employers from obtaining H-1B nonimmigrants in 
the event of a labor dispute, the Department proposed, through the 
proposed new Sec. ________.733, to prohibit employers from placing H-1B 
nonimmigrants in employment at worksites in occupations that are 
involved in a strike, lockout, or work stoppage in the course of a 
labor dispute. Modification of Form ETA 9035 was proposed so that 
employers would be required to attest that they would not use the labor 
condition application in support of any petition filed with INS for H-
1B nonimmigrants if a strike, lockout, or work stoppage in the course 
of a labor dispute involves the occupation covered by the LCA at the 
place of employment at any time during its validity period after the 
labor condition application is certified.
    The Department also proposed to amend the regulations to require 
employers to notify DOL within 3 days of the start of a strike, 
lockout, or other work stoppage in the course of a labor dispute in the 
occupation of the H-1B nonimmigrant(s) at any worksite. Upon receiving 
such a notification, the Department would undertake the necessary 
factfinding to determine whether the Secretary shall issue a strike 
determination to the INS pursuant to the INS's regulations at 8 CFR 
214.2(h)(17).
    Comments from 18 parties addressed this issue specifically, with 
over half against the proposal. However, all those comments opposing 
this proposal were conditional, suggesting that the restriction would 
be acceptable if it is limited to the occupation in which the H-1B 
nonimmigrant is employed (i.e., nonimmigrant's employment would be 
permitted in an occupation other than one(s) subject to strike/
lockout). Since the proposal was, in fact, so limited, these 
commenters' concerns would be alleviated by careful attention to the 
regulatory language.
    After careful consideration of the comments, the Department is 
promulgating this proposal as it appeared in the NPRM, applicable not 
only to job contractors but to all employees, and relative to strikes, 
lockouts or other work stoppages in the occupational classification of 
a potential H-1B nonimmigrant at a given worksite. See also pages 31-32 
regarding the provision for placement of H-1B nonimmigrants in an area 
of employment for which the employer does not have a valid LCA on file.
    f. ``Interested Party'' and ``Aggrieved Party'' definitions (See 
Sec. ________.715.) In section 212(n)(2) of the INA, Congress directed 
the Department to establish a process to respond to complaints from 
``aggrieved'' parties and to provide opportunities for administrative 
hearings for ``interested'' parties following investigative 
determinations. 8 U.S.C. 1182(n)(2). The legislative history reflects 
Congress' intention that the Department's enforcement process would be 
the means for protecting both U.S. and foreign workers; no 
comprehensive pre-admission screening or review process was 
established. The Department concluded, in order to comply with the 
Congressional mandate for effective enforcement, that the terms 
``aggrieved'' and ``interested'' party should be defined broadly in a 
manner consistent with their common meaning.
    In the NPRM, the Department proposed that ``aggrieved party or 
organization'' would be defined as one whose operations or interests 
are adversely affected by the alleged violation(s). Based on the 
Department's experience regarding the scope and nature of adverse 
effects of violations, as well as the sources for reliable, actionable 
allegations of violations, the Department proposed that the definition 
of the term ``aggrieved party or organization'' would encompass not 
only private-sector persons and organizations (e.g., workers, their 
representatives, competitors of the allegedly violating employer), but 
also government agencies and officials (e.g., Department of State 
consular officers, State Employment Security Agency Officials).
    The Department also proposed that ``interested party'' would be 
defined to include persons and entities who are affected by the 
employer's action or the investigative determination at issue. The 
Department did not propose that such an individual need be adversely 
affected. By using the term ``interested'' (rather than ``aggrieved'') 
to identify the parties for whom hearing opportunities would be 
offered, Congress clearly mandated a broader class of persons for these 
rights than for investigations in response to complaints. The 
Department's broad definition, based on the Department's experience, 
would encompass both private and public entities.
    Twenty-three NPRM commenters addressed these proposed definitions--
18 opposed and 5 in support. All 10 business commenters and half of the 
trade association commenters were opposed to the proposal. Almost all 
commenters expressed the view that there was a connection between the 
Department's proposed definition of an aggrieved party and the 
Department's proposal regarding directed investigations; commenters 
viewed complaints from government agencies as an alternative avenue to 
achieving the opportunity to conduct directed investigations. See 1.g. 
(Directed Investigations) below. Two commenters to the Interim Final 
Rule proposed that the term ``aggrieved party'' should not include 
someone who provides frivolous or harassment complaints against an 
employer; these commenters also suggested that if the complainant's 
allegation is not sustained in a DOL proceeding, the complainant should 
be liable for any administrative costs incurred for the proceeding(s).
    The statute at 8 U.S.C. 1182(n)(2)(A) provides that the Secretary 
of Labor shall conduct an investigation if there is reasonable cause to 
believe that an LCA-filing employer failed to meet a condition 
specified in the labor condition application or misrepresented a 
material fact in the application. A complainant providing such 
information has a right to provide it to the Secretary of Labor 
regardless of the complaint's resolution. Consequently, the Department 
cannot accept the proposal that the complainant should be liable for 
any administrative costs incurred from the proceeding(s).
    After reviewing the comments, legislative intent, and programmatic 
experience, the Department is promulgating these proposals to add these 
definitions as they appeared in the NPRM, in order to achieve the 
Congressional intent of protection for workers and other affected 
parties through fair and effective post-admission investigations and 
administrative hearings.
    g. Directed Investigations (See Sec. ________.710.) As a result of 
its experience in operating the H-1B program and after consideration of 
the comments on the proposed rule, the Department has determined that 
it is neither necessary nor appropriate to limit its post-admission 
investigation of possible LCA violations to those where complaints have 
been filed by aggrieved parties. Thus the Final Rule allows post-
admission investigations which the Department may conduct on its own 
initiative. This has no impact on the pre-admission LCA approval 
process.
    The change in no way contravenes the Congressional intent. Labor 
condition applications, as required under the INA, continue to be 
accepted and certified unless incomplete or obviously inaccurate. No 
extensive weighing of evidence or investigation is added to the pre-
admission LCA process, and the entry of the H-1B workers to the United 
States and to the employment is in no way slowed. The change, however, 
facilitates enforcement by removing a regulatorily-imposed impediment 
from the Department's post-approval investigative authority, so that 
the program's purposes can be better served and covered workers better 
protected.
    The authority to conduct non-complaint investigations is not viewed 
nor intended by the Department as a mandate to conduct sweeping 
enforcement actions. Rather, in light of resource constraints and 
compelling enforcement priorities, the Department anticipates that its 
discretion for self-initiated investigations will be exercised 
sparingly, in circumstances where the Wage and Hour Administrator has 
reason to believe that H-1B violations may be occurring or have 
occurred. An investigation of an H-1B employer could be undertaken, for 
example, where the Administrator becomes aware of a possible violation 
of an employer's LCA as the result of information obtained in the 
course of an investigation of another employer, in the course of an 
investigation of the employer under another statute or another LCA, or 
as the result of the receipt of public information.
    The Final Rule brings the H-1B program in line with regulations and 
practice under the H-1A nonimmigrant nurses' program. See, e.g., 20 CFR 
655.400(b) and 655.405(a). Under the H-1A program, which has statutory 
enforcement language similar to the H-1B program, investigations have 
been conducted since the initiation of that program as a result of a 
complaint or otherwise, and there has been no sweeping directed 
enforcement program as a result. Id.; see also 8 U.S.C. 1182 (m) and 
(n).
    Originally, the Department questioned its authority to conduct 
post-admission directed investigations under the H-1B program, because 
discussion of the enforcement aspects of the H-1B program in the 
legislative history spoke of it as being ``complaint-driven.'' However, 
re-examination of those statements--in context--shows that they 
consistently were made for the purpose of limiting DOL pre-acceptance 
review and investigation of the labor condition application; the 
statements were not directed to the scope of the Department's authority 
to investigate the LCA after it has been certified and the H-1B workers 
begin their employment. See, e.g., 137 Cong. Rec. S18242, S18244 
(November 26, 1992).
    In addition to being consistent with the Department's regulations 
and practice under the similar H-1A program, post-admission directed 
enforcement in the H-1B program clearly is not prohibited by and can be 
supported under an analysis of the language of the statute.
    Section 212(n)(2)(A) of the INA directs the Secretary to establish 
a process for the receipt, investigation, and disposition of 
complaints. 8 U.S.C. 1182(n)(2)(A).
    Section 212(n)(2)(B) states that, ``[u]nder such process 
[established pursuant to subparagraph (A)], the Secretary shall 
provide, within 30 days after such a complaint is filed, for a 
determination as to whether or not a reasonable basis exists to make a 
finding described in subparagraph (C).'' 8 U.S.C. 1182(n)(2)(B).
    Unlike subparagraph (B), subparagraphs (C) and (D) of section 
212(n)(2), which provide for notice and opportunity for a hearing for 
failure to meet a condition, for sanctions, and for back pay orders, do 
not refer back to ``such process'' as must be established pursuant to 
subparagraph (A). 8 U.S.C. 1182(n)(2) (C) and (D). Thus, subparagraphs 
(C) and (D) stand on their own as processes for sanctioning employers 
which violate the terms of certified labor condition applications. Such 
employers may be placed in the subparagraphs (C) and/or (D) notice and 
hearing processes either as a result of a complaint and investigation 
under subparagraphs (A) and (B) or as a result of some other action, 
such as a post-admission investigation undertaken by the Department on 
its own accord.
    As indicated above, this is essentially the same statutory 
framework under which the Department investigates and sanctions H-1A 
program violations in the absence of a complaint. See 8 U.S.C. 
1182(m)(2)(E) (ii), (iii), (iv), and (v).
    In addition to making enforcement more consistent across these 
programs, the Department's directed investigations of possible 
violations of certified H-1B labor condition applications would enhance 
compliance under the program and better assure protection of U.S. and 
foreign workers. Such protection is consistent with a general 
Congressional principle in enacting immigration laws--to provide for 
the admission of foreign workers under terms and conditions of 
employment that do not adversely affect the wages and working 
conditions of similarly employed U.S. workers. See, e.g., 8 U.S.C. 
1182(a)(5)(A), 1182(m)(2)(A)(ii), 1182(n)(1)(A), and 1188(a)(1)(B); see 
also 20 CFR 655.0(a)(3). It is not consistent with that principle for 
the Department to be required to ignore--after approval of an LCA--
information or evidence on possible H-1B violations received other than 
through a complaint.
    Fifty-three commenters addressed this proposal--43 opposing and 10 
advocating. Those opposing suggest that the statute does not allow this 
proposal and that to permit directed investigations would be too 
disruptive, intrusive, and problematic.
    The Department is keenly aware of the regulated community's concern 
and has carefully considered the views expressed by commenters. 
However, in light of the statutory language and purpose, the 
legislative history, the Department's experience in the program, and 
the Department's intentions as to the limited use of directed 
investigations, the Department has determined to promulgate the 
directed investigation proposal in this Final Rule.
2. Proposed Provisions Adopted With Modification
    a. Short-term placement of H-1B nonimmigrants at worksites outside 
the location(s) listed on the LCA (See Sec. ________.735.) Until the 
NPRM, the Department had indicated that job contractors would be 
treated like any other employer under the H-1B program. After obtaining 
considerable programmatic experience regarding the operations and 
effects of job contractors using H-1B nonimmigrants, the Department 
proposed to clarify how LCA's should be completed by job contractors, 
and proposed to amend the regulations to create certain additional 
standards for such employers.
    In the NPRM, as part of the proposal to develop special procedures 
for job contractors, the Department defined the term ``job contractor'' 
and the proposed requirements to be met, including the general 
requirement to assure that the information to be provided on the LCA in 
Item 7 (occupational information) must pertain to the location(s) (city 
and State) of any and all worksite entities. The Department further 
proposed that a job contractor filing an LCA must indicate thereon the 
place of employment at which the H-1B nonimmigrant will actually work 
(and for which the prevailing wage must be determined) as opposed to 
the employer's headquarters or office location if such location is 
different from the place of employment. The Department also proposed 
that, if the contractor wishes to relocate the H-1B nonimmigrant to 
work at any location not listed on a certified LCA, an appropriate LCA 
shall be filed and certified (and the appropriate prevailing wage 
determined) before any H-1B nonimmigrant may be employed at that 
location. The NPRM addressed other job contractor matters, such as the 
contractor's actual wage obligation.
    Of the 264 comments received in response to the NPRM, 171 commented 
on the job contractor proposal and 153 (nearly 90%) opposed it--128 of 
those 153 coming from business commenters. The negative comments 
related to the concept as a whole or related to a part of it such as 
the nationwide actual wage, worksite posting, and place of employment 
designation on the labor condition application.
    Senator Alan K. Simpson expressed concern for the employer's 
ability to find workers to fill real health care needs, especially in 
the physical therapist occupation. Other commenters expressed concern 
that the proposed rule would impose special hardships on job 
contractors, would be onerous, and would be discriminatory. Several 
commenters suggested that the Department consider a time test 
methodology, rather than a ``job contractor'' concept, in identifying 
the responsibilities of an employer who places H-1B nonimmigrants at 
worksites owned or controlled by entities other than the employer. 
Suggestions for the duration of temporary placement ranged from 30 days 
to 180 days.
    Of the comments received in response to the January 13, 1992 
Interim Final Rule, concerning the worksite movement of H-1B 
nonimmigrants, 13 commenters (11 of which were businesses) expressed 
the view that the initial LCA filing should be sufficient when an H-1B 
nonimmigrant is transferred between temporary worksites such as branch 
offices or customer offices. These comments advanced the position that 
an employer should be able to move H-1B nonimmigrants to worksites 
where it is anticipated that the tour of duty will be of a short or 
temporary nature.
    The Department has considered carefully the comments concerning the 
job contractor concept as proposed and has decided--at this time--not 
to establish special procedures applicable only to those businesses 
operating as job contractors. At present, based on the overwhelming 
weight of the comments and the Department's experience in the program, 
the Final Rule contains a modification of the proposed rule, to 
implement a ``time test'' for short-term assignments of H-1B 
nonimmigrants to worksite(s) outside the area(s) of employment covered 
by already-certified LCA's whether the new worksite is another 
establishment of the employer or is the worksite of another entity 
(e.g., customer of a job contractor providing H-1B nonimmigrants or 
services provided by H-1B nonimmigrants at the customer's location). 
The Final Rule is both less burdensome for employers and more 
protective of workers than was the provision as proposed in the NPRM.
    The Department recognizes that it is common practice for 
employers--not only job contractors, but also other employers which 
operate in more than one place of employment within the United States--
to move H-1B nonimmigrants from one place of employment (worksite) to 
another for short periods of time in response to demands of business. 
The Final Rule takes into consideration the practical and real world 
experience of short-term placement of employees.
    The Final Rule applying to all LCA-filing employers includes a 90-
workday placement option within a three-year period, beginning with the 
first work day at any worksite in a new area of intended employment, 
for an employer who shifts H-1B nonimmigrants to any worksite(s) 
outside the location listed on the employer's already-certified LCA. 
The 90-day option would apply separately for each area of intended 
employment (e.g., 90 cumulative days for Los Angeles, 90 cumulative 
days for San Francisco). Under this option, an employer may place H-1B 
nonimmigrant(s) at such worksite(s)--without filing a new LCA (and thus 
without meeting the notice, prevailing wage, and actual wage 
requirements for such area of intended employment)--provided that:
    1. No H-1B nonimmigrant continues to work at a worksite in such 
area beyond 90 cumulative workdays Pby H-1B nonimmigrants at all 
worksites within the area (starting with the first day on which any H-
1B nonimmigrant worked at any worksite in the area) and makes no 
further placement of such worker(s) in such area within the three-year 
period which began with the first day of placement, and
    2. The H-1B nonimmigrant(s) working in the area is (are) 
compensated at the required wage rate applicable under the employer's 
already-certified LCA plus expenses for the placement area of 
employment at no less than the per diem rate for such area and 
transportation reimbursement for Federal Government employees as 
published in the Code of Federal Regulations at 41 CFR part 301 (the 
Department has used the regulations promulgated by the General Services 
Administration for Federal employees, as we are unaware of any other 
universally available source of this information for employers), and
    3. Does not place an H-1B nonimmigrant at a worksite where there is 
a strike or lockout in the same occupational classification as the H-1B 
nonimmigrant.
    Of course at any time an employer may file a new LCA covering the 
new area of intended employment (complying with all LCA requirements, 
including determination of actual and prevailing wage rates as well as 
notice to employees). This can be done in advance of the placement or, 
if such new LCA is filed and certified after placement, the employer 
can cease payment of per diem and transportation rates. If, at the 
accumulation of 90 workdays, the employer has H-1B nonimmigrants at any 
worksite(s) in the new area of intended employment, the employer must 
have filed and received approval of a new LCA and complied with all 
requirements for such filing.
    This 90-workday placement option does not apply to the placement of 
H-1B nonimmigrants at any worksite(s) within an area covered by an 
already-certified LCA filed by the employer. Such worksite(s) would be 
encompassed within and fully subject to the requirements of that LCA, 
including prevailing wage and worksite notice(s) (see Sec. c.1.b 
Notification, above, regarding notification at new worksites). The only 
additional action required of the employer in this circumstance is to 
post the notice for a period of 10 days at the new worksite.
    b. Payment of wages; deductions from wages (See Sec. ________.731 
(c).) At several stages in the rulemaking process, the Department has 
addressed the issue of what constitutes the payment of wages for 
purposes of an employer satisfying the required wage obligation under 
the H-1B program. This matter was discussed in some detail in the 
Preambles to the January 13, 1992, Interim Final Rule (57 FR 1316, 
1322) and the October 6, 1993, Proposed Rule (58 FR 52152, 52154). The 
rulemaking has also dealt with the related issue of guidelines or 
standards for allowable deductions from employee wages under the 
program. Based on careful consideration of the comments, the 
legislative intent, and extensive program experience, the Department in 
the Final Rule is adopting a ``bright line'' test for ``payment of 
wages,'' coupled with a three-part standard for authorized deductions. 
Taken together, these standards enable employers to determine, with 
certainty, their obligations and options, assure employees will be 
afforded their rights under the law, and better enable the Department, 
in its enforcement proceedings, to identify violations, while leaving 
bona fide, valid pay practices unhampered.
    The principal focal point in the rulemaking, with regard to payment 
of wages, has been the matter of whether ``in-kind'' perquisites or 
direct or indirect payments other than cash constitute wages. On this 
point, the Department has taken the position in the interim final and 
the Proposed Rule, as well as in the administration and enforcement of 
the program, that such wage credit is not permitted. However, in the 
Preamble to the Interim Final Rule, the Department set out possible 
standards for wage credit, and invited comments as to the 
appropriateness of these, or some other, tests. A total of 39 
commenters on the interim final and the Proposed Rule responded to this 
point. Six of these submitted comments to both Rules, with two of the 
six modifying their views in their second comments. Eight of the 39 
commenters (including the AFL-CIO) suggested that the Department should 
not permit any in-kind wage credit. The other 31 commenters urged the 
Department to permit such wage credit. While none of these commenters 
endorsed the tests set out in the Interim Final Rule's Preamble, 
several of them suggested that the regulatory standard should be a 
flexible test that would take into account the peculiarities of the 
employment of H-1B nonimmigrants (e.g., family relocation expenses). 
Several others (including Senators Alan K. Simpson and David 
Durenberger) suggested that the regulatory standard should focus on the 
employer's actual costs in employing the H-1B nonimmigrant, as well as 
on the comparative costs of employing such a worker and a U.S. worker. 
Seven of the 39 commenters (including a multinational computer software 
company, a multinational pharmaceutical company, a national association 
of computer businesses, and a national association on international 
personnel concerns) suggested that, as a regulatory standard, the 
Department should permit the employer to credit as wages any payment or 
perquisite which is reported to the Internal Revenue Service as the 
employee's wages.
    The Department has considered carefully all the comments, and has 
found many of them persuasive and helpful with regard to appropriate 
regulatory standards. In addition, the Department has reviewed 
thoroughly the information obtained through administration and 
enforcement of the program regarding various pay practices and 
expenditures in the employment of nonimmigrants in the U.S. Based on 
these considerations and review, the Department has concluded that, in 
determining the ``wages paid'' for purposes of the employer's 
satisfaction of the H-1B required wage, it is not necessary or 
appropriate to focus on the issue of in-kind wages. Instead, the 
Department has concluded the regulatory standard should consider the 
broader picture of compensation to employees and costs to employers in 
the employment of H-1B nonimmigrants. Further, in the Department's 
view, the regulation should provide a practical, predictable, and 
somewhat flexible standard, so that the regulated community, as well as 
the Department, can act with confidence in assuring compliance with the 
Act's requirements.
    Thus, the Department is promulgating a Final Rule which modifies 
the NPRM provision to create a less burdensome, more effective, 
``bright line'' test for ``wages paid.'' Under this test, any 
compensation which is treated as the H-1B nonimmigrant employee's 
earnings for income tax and FICA (Federal Insurance Contributions Act--
social security tax) proposes will be considered to be wages paid for 
purposes of the H-1B program. Amounts to be treated as ``wages paid'' 
shall be paid to the employee free and clear when due, except that 
certain deductions from wages may be made by the employer in accordance 
with the restrictions set forth in the regulation and discussed below. 
In order to claim such ``wages paid,'' the employer shall document that 
all required earnings reports have been filed and withholdings 
(including the employer's FICA tax) have been paid to appropriate 
governmental entities, in accordance with applicable laws (including 
any payments in the employee's home country pursuant to any 
totalization arrangement between the social security systems of the 
U.S. and such home country, as authorized by section 233 of the Social 
Security Act, 42 U.S.C. 433). The wages of salaried employees are due 
in pro-rata installments, except that some limited flexibility with 
regard to pro rata installments is provided for the employer which 
clearly documents the use of supplemental payments (such as quarterly 
bonuses) as described in the regulation.
    On the closely related matter of deductions from wages, in the 
Proposed Rule the Department set out a multi-part test, and requested 
public comment as to the appropriateness of that or some other standard 
and as to whether the H-1B nonimmigrant's international travel expenses 
to initially come and finally return from employment should be 
considered a business expense not susceptible to recoupment by the 
employer through wage deductions. Ten commenters responded on the 
deductions issue. Seven of the 10 opposed the proposed test, for a 
variety of reasons. On the transportation expense sub-issue, five 
commenters asserted that the costs should be considered a business 
expense, and two commenters took the opposite position (with one 
arguing that the Department lacked statutory authority to impose such 
costs on an employer).
    Based on a careful review of these comments and the information 
which the Department has obtained through the administration and 
enforcement of the program, the Department has concluded that a 
flexible, three-part test on allowable deductions will be promulgated, 
so as to be less burdensome for employers but fair and protective for 
workers. Under this test, three categories of deductions are 
authorized: those required by law; those that are reasonable and 
customary in the occupation and area of intended employment; and those 
that are voluntary on the part of the H-1B nonimmigrant. While each of 
these categories has regulatory restrictions, the test, taken as a 
whole, affords significant latitude for employers and H-1B 
nonimmigrants to achieve any bona fide arrangement to facilitate the 
employment situation. The flexible test does not permit the employer 
situation. The flexible test does not permit the employer to impose the 
burden of business expense(s) on the worker.
    Based upon the comments and the Department's reading of the 
statute, for purposes of this regulation, the Department has determined 
that for this final rule, international travel costs to the job 
initially and from the job at the conclusion of employment will not be 
considered to be employer's business expense. Section 212(n) of the INA 
(8 U.S.C. 1182(n)), which contains the LCA requirements, is silent 
regarding international travel. In Sec. 214(c)(5)(A) of the INA (8 
U.S.C. 1184(c)(5)(A)), however, Congress specifically addressed 
international travel by providing that ``in the case of an [H-1B] alien 
* * * who is dismissed from employment by the employer before the end 
of the period of authorized admission, the employer shall be liable for 
the reasonable costs of return transportation of the alien abroad.'' 
The Department has concluded that by making the employer liable for 
international travel costs under specific circumstances, and not 
addressing any other circumstances, Congress intended that the employer 
be liable for international travel costs only under the specified 
circumstances. Of course, this does not preclude an employer from 
paying the H-1B nonimmigrant's international travel expenses. Further, 
if the employer and employee enter into a bona fide, voluntary 
agreement whereby the employer advances monies to cover the employee's 
cost of international travel subject to recoupment through wage 
deductions, such deductions would be allowable provided that the 
deductions do not exceed the amount of money advanced by the employer--
i.e., not subject to interest or any other form of surcharge. Such 
deductions must comply with all other applicable Federal/State laws.
    c. Prevailing Wage 5% Provision (See Sec. ______.731(d)(4).) In the 
Preamble to the Proposed Rule, the Department described its program 
experience and its concern regarding apparent confusion as to the 
Interim Final's provision dealing with what has been called a 5% 
variable on the payment of the prevailing wage. The provision in 
question was incorporated into the H-1B regulation from the permanent 
program regulations at 20 CFR 656.40(a)(2)(i). As explained in the 
Preamble and set out in the proposed regulatory language, it is and has 
been the Department's position, in the H-1B program, that although an 
employer will not be considered to be in violation if found to have 
paid 95% or more of the prevailing wage, the employer found to have 
paid less than 95% will not only be cited for violation but also be 
assessed back wages based on 100% of the prevailing wage.
    Seven commenters expressed views regarding the proposed 
clarification of the regulation. A labor organization expressed 
opposition to the Department's toleration of any variable, and 
suggested that an employer found to have paid less than 100% should be 
required ``to pay in full once the error is detected.'' A law firm, 
stating the concerns of employers, advocated that no change should be 
made in this provision. Two government officials (one State, one 
Federal) favored the continued application of a 5% variable, although 
one of these commenters (Federal official) suggested that no variable 
should be allowed for users of published wage surveys that are 
statistically valid. Two business commenters (computer software 
corporations) recognized the proposal as a clarification of the 
Department's position, and one described the new provision as ``very 
helpful.'' A member of the general public described the proposed 
regulatory language as ``a fair compromise.''
3. Provisions Proposed But Not Adopted
    a. Prevailing wage update. A number of commenters to the proposed 
rule published in the Federal Register on August 5, 1991, and the 
Interim Final Rule published October 22, 1991, and January 13, 1992, 
respectively, objected to the requirement that an employer must obtain 
prevailing wage information at any time other than when the application 
is first filed. These commenters pointed to Sec. 212(n)(1)(A)(i) of the 
INA (as amended by MTINA) which states that the employer is offering 
wages that are at least ``* * * the prevailing wage level * * * based 
on the best information available as of the time of filing the 
application * * * .'' The Department indicated that it recognized that 
the language could be construed to mean that the prevailing wage should 
be determined only once, at the time of filing the application. 
Further, the Department seriously considered requiring that the 
employer determine the prevailing wage only at the time of filing the 
application, but concluded that in the case of an application with a 6-
year validity period, such procedure would render the prevailing wage 
requirement virtually meaningless.
    The Department also considered, alternatively, requiring that the 
validity period of the labor condition application be shortened to 1 or 
2 years, with an attendant prevailing wage determination every time the 
application was filed. The Department decided, in the October 22, 1991, 
Interim Final Rule, that this approach would be unnecessarily 
burdensome and opted instead for what it considered a less burdensome 
and more sensible approach, i.e., one application for up to six years 
but with a prevailing wage determination every two years starting from 
the date the labor condition application is certified.
    In the NPRM of October 6, 1993, the Department indicated that, in 
the context of the proposed reduction in the validity period from six 
to three years, the 24-month update would be unduly burdensome on an 
employer. With a three year application validity and a 24-month 
prevailing wage update requirement, an employer could be required to 
obtain current prevailing wage information twice in a short time frame: 
once, 24 months from the filing of the initial application and again 
upon the filing of the new application prior to the 3-year deadline. 
Consequently, in the NPRM the Department proposed to adopt an 18-month 
prevailing wage update requirement. In response to the NPRM, the 
Department received 60 comments on this issue of which all but five 
were opposed to the proposal.
    Commenters' major objections to the NPRM's approach were as 
follows: the Department does not have the statutory authority to 
require any prevailing wage update; the 18-month update proposal is 
burdensome on employers and will not substantively increase protections 
for U.S. workers; the proposal is inconsistent with normal hiring and 
compensation cycles which operate on an annual basis; the proposal will 
place an undue burden on the SESA's; and wages change very little in an 
18-month period (especially in today's economy).
    Five commenters expressed concern that requiring infrequent 
prevailing wage updates will allow an employer to use ``stale'' data 
and will undermine wage protections for U.S. workers. The Department is 
cognizant of these concerns. However, the ``actual wage rate'' has been 
and will continue to be a ``safety net'' for the H-1B nonimmigrant. 
Assuming the actual wage is higher than the prevailing wage and thus is 
the required wage rate, if an employer normally gives its employees a 
raise at year's end, or the employer's system provides for other 
adjustments, H-1B nonimmigrants must also be given the raise 
(consistent with employer-established criteria such as level of 
performance, attendance, etc.)
    After careful consideration of all the comments received on this 
issue, the Department has determined that the proposal suggested by the 
majority of commenters is the most prudent approach. Under the Final 
Rule, employers are required to obtain current prevailing wage 
information every time a new labor condition application is filed 
(i.e., every three years or sooner, if specified).
    As noted by commenters, this requirement will ensure maximum 
consistency. Unless a lesser period is specified by the employer, a new 
labor condition application, prevailing wage update, and I-129 petition 
will all be required at the end of a 3-year period.
    b. Documentation of the wage statement. After careful review the 
Department believes that it is essential to require the employer to 
maintain documentation regarding wage rates for all that employer's 
employees in the specific employment in question at the place of 
employment. This information is ordinarily maintained by the employer 
for purposes of showing compliance with other applicable statutes 
(e.g., the Fair Labor Standards Act) and will permit the Department to 
determine whether in fact the required wage has been paid. 
Consequently, the language limiting the documentation to individuals 
with experience and qualifications similar to the H-1B nonimmigrant has 
been deleted.
4. Other Matters
    a. Regulation re-numbering (See Secs. ________.731 through .734.) 
Based on experience in administering and enforcing the H-1B program, 
the Department recognized that Sec. ________.730 of the Interim Final 
Rule, which contains general information on filing LCA's as well as the 
four elements of the LCA, is too lengthy and unwieldy. Therefore, for 
the sake of clarity, the Department, in this Final Rule, is 
redesignating Sec. ________.730 into five sections. The new 
Sec. ________.730 will retain the general information contained in 
paragraphs (a) through (d) of the Interim Final's Sec. ________.730, 
regarding the filing of LCA's. However, paragraphs (e) through (h) of 
the Interim Final's Sec. ________.730, which correspond to requirements 
relative to wages, working conditions, notice, and strike/lockout, 
respectively, have each been redesignated as a new section: former 
paragraph (e), The first labor condition statement: wages. is now 
Sec. ________.731; former paragraph (f), The second labor condition 
statement: working conditions. is now Sec. ________.732; former 
paragraph (g), The third labor condition statement: no strike or 
lockout. is now Sec. ________.733; and former paragraph (h), The fourth 
labor condition statement; notice. is now Sec. ________.734. Citations 
throughout the rule to paragraphs (e) through (h) have been amended to 
reflect the redesignation.
    In addition, the Department has also corrected various technical 
and typographical errors throughout the rule. An example of a technical 
error is the replacement in Sec. ________.855(c), of the word 
``suspend'' with the word ``invalidate'' to conform with 
Sec. ________.750(c); an example of a typographical error is the 
replacement of the word ``proceding'' with the word ``preceding'' in 
former Sec. ________.730(e)(2)(iii)(C)(2), now 
Sec. ________.731(b)(3)(iii)(B).
    b. Clarification of the definition of ``area of intended 
employment'' (See Sec. ________.715.) As a clarification, the 
Department is deleting the last sentence in the definition of ``area of 
intended employment'' which was published in the Interim Final Rule. 
That sentence which states that ``(i)f there is no MSA then the area of 
intended employment is the area with normal commuting distance of the 
place of employment,'' does not appear in the definition of ``area of 
intended employment'' at 20 CFR 656.3 quoted above. Since this concept 
is already included in the first sentence of the definition, the 
sentence in question is being deleted to avoid confusion.
    c. Validity period of a SESA prevailing wage (See 
Sec. ________.731(a)(2)(iii)(A)(1).) Through administration and 
enforcement of the program, the Department has become aware of 
confusion and potential adverse effects on wages in situations in which 
employers, in filing their LCA's, rely on SESA prevailing wage 
determinations which were obtained on dates considerably in advance of 
the time of the filing (e.g., six months prior to LCA date). Data used 
in prevailing wage rate determinations may be up to four years old. 
Employers were obtaining prevailing wage rates and holding them 
indefinitely before using them in conjunction with filing an LCA. The 
Department concluded that a practicable limit should be set on the use 
of prevailing wage rates. The Department concludes that 90 days is a 
reasonable practicable limit.
    In order to alleviate confusion and to better assure the 
achievement of the Congressional purposes of protecting the wages of 
U.S. workers, the Department is clarifying the regulation to set a 
deadline for an employer's reliance on a SESA prevailing wage 
determination. An employer that obtains a SESA prevailing wage 
determination must file the labor condition application under which 
that rate will be paid within 90 days from the date of the SESA's 
determination.
    d. Labor condition application filing dates (See 
Sec. ________.730(b).) Through administration and enforcement of the 
program, the Department has become aware that some employers are filing 
labor condition applications for periods of anticipated employment 
which are well in the future (e.g., one year after the application 
filing date). This practice poses dangers of abuse and may frustrate 
Congressional intent for the protection of the jobs and wages of U.S. 
workers. The prevailing wage, strike/lockout, and notice obligations 
are based, in large part, upon actions taken and conditions which exist 
at the time the labor condition application is filed. Therefore, the 
Department is clarifying the amount of time in advance of the beginning 
date of the period of employment that an employer may file a labor 
condition application. This Final Rule requires that a labor condition 
application can be filed no earlier than 6 months before the beginning 
date of the period of employment. Labor condition applications which 
are received by an ETA regional office more than 6 months prior to the 
beginning date of the period of employment will be returned to the 
employer as unacceptable for filing. This procedural change will impose 
few, if any, additional burdens on employers and will facilitate the 
achievement of the statutory purposes.
    e. Actual wage (See Sec. ________.731(a)(1) & Appendix.) As the 
program has evolved, the Department is aware that inconsistent and 
perhaps confusing interpretations have, on occasion, been provided to 
public inquiries concerning the Department's enforcement position on 
the employer's responsibilities under the ``actual wage'' provisions of 
the statute and regulation. To rectify any misunderstanding with the 
regulated community, the Department is providing the following guidance 
regarding its enforcement policy concerning the determination of the 
actual wage under the Final Rule.
    In determining the required wage rate, the employer must not only 
obtain the prevailing wage, but also establish the actual wage for the 
occupation in which the H-1B nonimmigrant is employed by the employer. 
For purposes of establishing its compensation system for workers in an 
occupational category, of course, an employer may take into 
consideration objective standards relating to experience, 
qualifications, education, specific job responsibility and function, 
specialized knowledge, and other legitimate business factors. The use 
of any or all these factors is at the discretion of the employer. The 
employer must have and document an objective system used to determine 
the wages of non-H-1B workers, and apply that system to H-1B 
nonimmigrants as well. It is not sufficient for the employer simply to 
calculate an average wage of all non-H-1B employees in an occupation; 
the ``actual wage'' is not an ``average wage.''
    The documents explaining the system must be maintained in the 
public disclosure file. The explanation of the compensation system must 
be sufficiently detailed to enable a third party to apply the system to 
arrive at the actual wage rate computed by the employer for any H-1B 
nonimmigrant. The computation of the H-1B nonimmigrant's individual 
actual wage rate shall be documented in the H-1B nonimmigrant's 
personnel file.
    In the event the employer has not developed and documented an 
objective system and/or has not calculated the actual wage rate for an 
H-1B nonimmigrant, the Administrator--in determining the actual wage 
rate for enforcement and back wage computation purposes--Wage and Hour 
may need to average the wages of all non-H-1B workers who are employed 
in the same occupation, rather than make determinations for each 
individual H-1B nonimmigrant; the employer in such circumstances would 
be cited for failure to comply with the requirements for determination 
of the actual wage.
    Assuming the actual wage is higher than the prevailing wage and 
thus is the required wage rate, if an employer gives its employees a 
raise at year's end, or if the system provides for other adjustments in 
wages, H-1B nonimmigrants must also be given the raise (consistent with 
legitimate employer-established criteria such as level of performance, 
attendance, etc.). This is consistent with Congressional intent that H-
1B nonimmigrants and similarly employed U.S. workers be provided the 
same wages.
    Where the employer's pay system or scale provides adjustments 
during the validity period of the labor condition application--e.g., 
cost-of-living increase or other annual adjustment, increase in the 
entry-level rate for the occupation due to market forces, or the 
employee moves into a more advanced level in the same occupation--the 
employer shall retain documentation explaining the changes and clearly 
showing that, after such adjustments, the wages paid to the H-1B 
nonimmigrant are at least the greater of the adjusted actual wage or 
the prevailing wage for the occupation in the area of intended 
employment.
    In the Final Rule, guidance for employers regarding the essential 
aspects of the foregoing discussion, along with several examples which 
are substantially the same as appeared in the preamble to the Interim 
Final Rule are being promulgated as Appendix A to Subpart H.
    f. Prevailing working condition standard (See Sec. ________.732.) 
The Act requires employers to attest in their LCA's that the employment 
of H-1B nonimmigrants will not adversely affect the working conditions 
of U.S. workers similarly employed. The regulation provides that 
``working conditions'' include such matters as working hours, shifts, 
vacation periods, and fringe benefits. The employer's obligation in 
this regard extends for the longer of two periods: The validity period 
of the certified labor condition application or the period during which 
the H-1B nonimmigrant(s) is (are) employed by the employer.
    In previous stages of H-1B rulemaking, the Department stated its 
position that Congress intended prevailing working condition 
determinations to be made in the same manner as the current regulations 
for the permanent alien labor certification (immigrant worker) program. 
See, e.g., 57 FR 1316 (January 13, 1992); 56 FR 54720 (October 22, 
1991); 56 FR 37175 (August 5, 1991); and 56 FR 11705 (March 10, 1991); 
see also 20 CFR part 656. There has been some confusion expressed, 
however, regarding the Department's interpretation of this LCA element. 
While the regulation itself is clear and is not being amended, the 
Department is providing the following additional guidance.
    The H-1B regulation permits the employer to file an LCA without 
making any pre-filing determination or documentation of working 
conditions; the regulation requires that a prevailing working condition 
determination be made only in the event of an investigation. See 
Sec. ________.732 of the final Rule; see also 20 CFR 656.24(b)(3).
    The public should be aware that the Department is carefully 
reviewing its program experience, as well as information received from 
members of the public and other sources, regarding the impact of the 
employment of H-1B nonimmigrants on the working conditions of U.S. 
workers.
    g. Challenges of prevailing wage determinations only through 
employment service complaint system. Former 
Sec. ________.730(e)(1)(ii)(C)(1), new Sec. ________.731(a)(1)(iii)(A), 
lists the State Employment Security Agency (SESA) as one source for 
obtaining a prevailing wage determination. Although DOL regulations 
provide an avenue for an employer to challenge a SESA determination 
through the Employment Service (ES) complaint process (under 20 CFR 
part 658, subpart E), the Interim Final Rule did not make it 
sufficiently clear that challenges to prevailing wage determinations 
were to be made only through that process. In designing the program, 
the Department had envisioned that the ES complaint process would be 
used for all prevailing wage challenges. However, after substantial 
enforcement litigation experience, the Department has found that some 
employers are instead attempting to contest such determinations through 
the hearing provided under Sec. ________.835. Such enforcement was not 
intended to handle such challenges.
    The Final Rule provides needed clarification by directing the 
employer to the ES complaint process and alerting the employer that a 
challenge of a SESA prevailing wage determination may be made only 
prior to filing an LCA in which that SESA determination is used. 
Implicit and essential in this process is the requirement that once an 
employer obtains a prevailing wage determination from the SESA and 
files the LCA without challenging the SESA's determination through the 
ES complaint process, the employer, in effect, has accepted the 
determination and waived its right to challenge the determination. 
Permitting an employer to operate under a SESA prevailing wage 
determination and later contest it in the course of an investigation or 
enforcement action is contrary to sound public policy; such a delayed, 
disruptive challenge would have a harmful effect on U.S. and H-1B 
employees, competing employers, and other parties who may have received 
notice of and/or relied on the prevailing wage at issue. Section 
________.731(a)(2)(iii)(A) of the Final Rule explicitly states the 
Department's clarification of the use and consequences of the ES 
complaint process. Challenges to SESA prevailing wage determinations 
are made only through the State agency's ES process. See 20 CFR 658.410 
et seq.
    Where the prevailing wage determination is made by the SESA prior 
to the filing of the LCA, the employer's avenue of appeal is through 
the ES complaint system, entering the system at the State level. See 20 
CFR 658.410 et seq. However, where the prevailing wage determination is 
made by ETA (with or without consultation with the SESA) during the 
course of a Wage and Hour Division enforcement action, the employer's 
avenue of appeal also is through the ES complaint system, but the 
employer enters the system at the ETA regional office level. The 
employer will be notified where to file any appeal. For purposes of the 
H-1B program only, this is a collateral change to the ES complaint 
system regulations, which generally require all complaints to be filed 
at the SESA level (see 20 CFR 658.420 et seq.) and is notwithstanding 
the provisions of 20 CFR 658.421(a) and 658.426. Similarly, 
Sec. ________.731(d) provides that, where the employer does not have a 
valid prevailing wage determination, the Administrator, during the 
course of an investigation, may obtain a prevailing wage determination 
from ETA, which, in turn, may consult with the SESA and then determine 
the appropriate prevailing wage. Some employers also are contesting 
these ETA prevailing wage determinations at the Wage and Hour 
enforcement hearing provided under Sec. ________.835. The Department 
believes that the proper forum for all prevailing wage determination 
challenges--whether the wage determination was obtained by the employer 
or by the Administrator (where the employer does not have a valid 
prevailing wage determination)--is the ES complaint process. Once the 
prevailing wage determination is final, either through the lack of a 
timely challenge or through the completion of the ES process, the 
determination shall be conclusive for purpose of enforcement. In such 
cases where the prevailing wage determination is made by ETA at the 
Administrator's request, any challenge must be initiated at the ETA 
regional office level within 10 days after the employer receives the 
ETA prevailing wage determination. Section ________.731(d) has been 
amended to reflect this clarification.
    Finally, Sec. ________.840(c) provides that where the Administrator 
has found a wage violation based on a prevailing wage determination 
obtained by the Administrator from ETA, the Administrative Law Judge 
(ALJ) in the enforcement proceeding ``shall not determine the 
prevailing wage de novo, but shall * * * either accept the wage 
determination or vacate the wage determination.'' This provision has 
been interpreted by some employers as permitting the challenge of 
prevailing wage determinations obtained by the Administrator from ETA. 
Section ________.840(c) was not intended to function as a forum for 
such challenges. Accordingly, Sec. ________.840(c) has been clarified 
to reflect that once the Administrator obtains a prevailing wage 
determination from ETA and the employer either fails to challenge such 
determination through the ES complaint process within the specified 
time of 10 days, or, after such a challenge, the determination is found 
to be accurate by the ES complaint process, the ALJ must accept the 
determination as accurate and cannot vacate it. As with other final 
decisions of the Department, the employer continues to have access to 
the Federal district court if the issues are not satisfactorily 
resolved.
    h. Enforcement of wage obligation (See Sec. ________.731(c)(5).) 
The Act requires employers to state that the employer is offering and 
will offer the H-1B nonimmigrant, during the period of authorized 
employment, wages that are at least the required wage rate--the actual 
wage rate or the prevailing wage rate, whichever is greater. 
Furthermore, the employer is required to indicate on the LCA whether 
and H-1B nonimmigrant will work full-time or part-time. Under the 
Secretary's statutory authority to implement the Act, the regulations 
do not authorize an employer to decrease the payment of the required 
wage rate. In enforcement proceedings, however, the Department has 
encountered confusion over the employer's obligations where the H-1B 
nonimmigrant is in a nonproductive status or circumstance. To alleviate 
such confusion, the following guidance is provided.
    There is no statutory or regulatory authorization for a reduction 
in the prescribed wage rate for any H-1B nonimmigrant who is not 
engaged in productive work for the LCA-filing employer due to 
employment related conditions such as training, lack of work, or other 
such reasons. The H-1B program was not intended to provide an avenue 
for nonimmigrants to enter the U.S. and await work at the employer's 
choice or convenience. Compare 8 U.S.C. 1101(a)(15)(H)(iii). Instead, 
the H-1B program's purpose is to enable employers to employ fully-
qualified workers for whom employment opportunities currently exist. 
The employer, having attested to the duration and scope of the intended 
employment (i.e., beginning and ending dates; full or part-time), has 
total control of the nonimmigrant's employment status. The Immigration 
and Nationality Act (8 U.S.C. 1182(n)(1)) requirements are such that 
once the H-1B status has been approved for the period specified by the 
employer, the employer controls the status and work of the H-1B 
nonimmigrant, who is unable to accept employment elsewhere without a 
certified labor condition application and approved I-129 petition filed 
on the worker's behalf by another employer. For the purpose of DOL 
administration and enforcement of the H-1B program pursuant to these 
regulations, and H-1B nonimmigrant is considered to be under the 
control or employ of the LCA-filing employer from the time of arrival 
in the United States and throughout the period of his or her 
employment--regardless of whether the nonimmigrant is in training or 
other nonproductive status, except that if during the period of 
employment an H-1B nonimmigrant experiences a period of nonproductive 
status due to conditions which are unrelated to the employment and 
render the nonimmigrant unable to work--e.g., maternity leave, 
automobile accident which temporarily incapacitates the nonimmigrant, 
caring for an ill relative--then the employer shall not be obligated to 
pay the required wage rate during that period, provided that the INS 
permits the employee to remain in the U.S. without being paid and 
provided further that such period is not subject to payment under other 
statutes such as the Family and Medical Leave Act (29 U.S.C. 2601 et 
seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
    As clarification, it is the Department's position that the LCA-
filing employer has no prerogative--other than in circumstances 
described above--but to pay the required wage beginning no later than 
the day the H-1B nonimmigrant is in the United States under the control 
and employ of that LCA-filing employer, and continuing throughout the 
nonimmigrant's period of employment. Any H-1B nonimmigrant employed 
under an LCA in a full-time capacity (the part-time block not having 
been checked on Item 7(b) of the LCA) shall be guaranteed full-time pay 
(ordinarily 40 hours' pay) each week, or the weekly equivalent if paid 
a monthly or annual salary. If the employer's LCA shows ``part-time 
employment,'' the employer will be required to pay the nonproductive 
employee for at least the number of hours to be worked per week 
indicated on the I-129 petition filed by the employer with the INS. If 
the employer indicates on the LCA that an employee is to work only 
part-time and subsequent investigation discloses that in fact the 
employee was working full-time in a majority of the weeks during the 
period covered by the investigation, the employer will be held 
responsible for full-time pay including during nonproductive periods 
for which the worker received either no pay or less than the required 
wage.
    i. Time bar on investigation of complaints and on imposition of 
remedies (See Sec. ________.805(d)(5).)
    Through enforcement experience, the Department has become aware 
that the Interim Final Rule's provision regarding timeliness of 
complaints, Sec. ________.805(c)(5) (now Sec. ________.805(d)(5)), does 
not give sufficient guidance concerning the implementation of the 
statutory directive that ``[n]o investigation or hearing shall be 
conducted on a complaint concerning * * * a failure [to meet a 
condition specified in an LCA] or misrepresentation [of material facts 
in such an application] unless the complaint was filed not later than 
12 months after the date of the failure or misrepresentation, 
respectively.'' 8 U.S.C. 1182(n)(2)(A). The Interim Final Rule states 
that ``[t]he complaint must be filed no later than 12 months after the 
date of the alleged violation(s).'' In enforcement proceedings some 
employers have argued that this time bar falls on all alleged 
violations 12 months from the date of the filing of the LCA, which 
embodies all the employer's obligations and against which any failure 
or misrepresentation would be determined. It is the Department's 
continuing position that the statutory language, taken in its plain 
meaning, ties the 12-month time bar to the date of the employer's 
wrongful action (e.g., failure to pay the required wage) and not to the 
date of the LCA. If Congress had intended the LCA date to be 
controlling, the statute easily could have been written to so specify. 
Thus, the Interim Final Rule speaks of ``the date of the alleged 
violation(s).'' In order to resolve any possible confusion, the 
regulation is being clarified. The Final Rule specifies that ``[t]he 
complaint must be filed not later than 12 months after the latest date 
on which the alleged violation(s) were committed, which would be the 
date on which the employer allegedly failed to perform an action or 
fulfill a condition specified in the LCA, or allegedly took an action 
or failed to take an action which, through such action or inaction, 
demonstrates a misrepresentation of a material fact in the LCA 
regarding such action or inaction.''
    The Department does not consider this statutory provision to be 
applicable to the scope of available remedies (particularly, the back 
wage remedy); Congress dealth with remedies in a separate provision (8 
U.S.C. 1182(n)(2)(C)) which neither contains nor references the 12-
month time bar. Thus, neither the Interim Final Rule nor the Final Rule 
contains a 12-month limitation regarding the scope of remedies, and the 
rule has been clarified to expressly so provide.
    j. Debarment timing (notice to Attorney General) (See 
Sec. ________.855(a).) The statute requires that the Secretary notify 
the Attorney General of an employer's violation(s). Pursuant to 
Sec. ________.855(a) of the Interim Final Rule, the Administrator is 
required to notify the Attorney General (AG) and ETA of the final 
determination of a violation by an employer upon the earliest of the 
following events:

    (1) Where the Administrator determines that there is a basis for 
a finding of violation by an employer, and no timely request for 
hearing is made pursuant to Sec. ________.820 of this part; or
    (2) Where, after a hearing, the administrative law judge issues 
a decision and order finding a violation by an employer; or
    (3) Where the administrative law judge finds that there was no 
violation by an employer, and the Secretary, upon review, issues a 
decision pursuant to Sec. ________.845 of this part, holding that a 
violation was committed by an employer.

This regulatory construct creates a situation where the Administrator 
notifies the AG of a violation upon a finding of a violation by an ALJ, 
even though such finding subsequently may be appealed to the Secretary 
and eventually overturned. An employer thus could be debarred after a 
finding of violation by an ALJ, serve part or all of the debarment 
period, and subsequently be found by the Secretary not to have 
committed a violation. To correct this anomaly, Sec. ________.855(a) 
has been amended to require notification to the AG after a finding of a 
violation by an ALJ only under the following circumstances: (a) where 
there is no appeal from the ALJ's finding to the Secretary; (b) where, 
upon such appeal, the Secretary declines to review the ALJ's finding; 
and (c) where, upon review, the Secretary affirms the ALJ's finding.
    k. Prevailing wage computation (See Sec. ________.731(a)(2)(iii).) 
As clarification, the first sentence in Sec. ________.731(a)(2)(iii) is 
amended to conform to the wording at 20 CFR 656.40(a)(2)(i). As stated 
in the Preamble to the Interim Final Rule published on October 22, 
1991, the regulation ``incorporates the language of 20 CFR 656.40, as 
required by the Conference Report (see 56 FR 54723).'' The change in 
this Final Rule is not substantive in nature, but provides more 
detailed guidance in the correct procedure to compute a valid average 
or arithmetic mean.
    l. Conforming regulatory language on violations to the statutory 
language regarding levels of employer culpability (See 
Sec. ________.805(a).) In the MTINA amendments to the INA, Congress 
created different culpability standards for the imposition of civil 
money penalties and debarment for the different violations of the 
statute; e.g., a violation of the working condition and wage elements 
of the LCA requires ``willfulness,'' while a violation of the notice 
element must be ``substantial.'' In the January 13, 1992, Interim Final 
Rule, which modified the earlier Interim Final Rule to implement the 
MTINA amendments, the Department inadvertently erred with regard to the 
culpability standards for two types of violations. In 
Sec. ________.805(a), which lists the various violations with their 
particular culpability standards, the Department omitted the 
``substantial'' failure to specify the number of workers sought, the 
occupational classification in which the workers will be employed, and 
the wage rate and conditions under which they will be employed. This 
violation has been added at Sec. ________.805(a)(5).
    Similarly, in the Interim Final Rule at Sec. ________.805(a)(5), 
which specifies a ``substantial'' failure to make available for public 
examination the application and necessary documents at the employer's 
place of business or worksite, the Department identified an incorrect 
standard of culpability; this provision should have carried a simple 
failure standard, i.e., a failure to make available the required 
documents for public examination need not be substantial. Section 
Sec. ________.805(a) has been amended to conform with the statute.
    m. Labor condition application (LCA) withdrawal and subsequent 
Attorney General notification (See Sec. ________.750(b).) The Interim 
Final Rule contains a provision at Sec. ________.750(b)(3) (57 FR 1332) 
whereby ETA will promptly notify the Attorney General (AG) of the 
withdrawal of an employer's certified labor condition application, 
unless reasonable cause had been found to commence an investigation. 
The purpose of this provision is to alert the AG and the Immigration 
and Naturalization Service (INS) that the employer's certified LCA is 
no longer valid and can not be used to petition for an H-1B 
nonimmigrant. Based on interagency discussions between the Department 
and INS, it has been determined that such notification does not provide 
a practical means for INS to adjudicate (and disapprove) any petitions 
an employer might file based on a certified but subsequently withdrawn 
LCA. While such action by an employer (i.e., filing a petition based on 
a withdrawn LCA) may be subject to civil or criminal sanction initiated 
by the INS, the Department considers it to be essential that the labor 
protections afforded by the H-1B LCA provisions not be frustrated by 
such action. Therefore, only for the purpose of assuring the labor 
standards protections afforded under the H-1B program, this Final Rule 
establishes that where an employer files a petition with INS under the 
H-1B classification pursuant to a certified LCA that had been withdrawn 
by the employer, such petition filing will bind the employer to all the 
obligations under the withdrawn LCA effective immediately upon receipt 
of such petition by INS. This revised procedure will reduce the 
paperwork burden on the Department and INS and the Department believes 
this change will maintain the worker protections afforded under the H-
1B program. Of course, the employer may always file a new LCA.
    n. Regularizing the hearing process (See Sec. ________.820(d) and 
Sec. ________.840(a).) The statute requires that the Secretary provide 
interested parties an opportunity for a hearing on investigative 
determinations regarding alleged violations. Such proceedings are 
provided in Sec. ________.820 through Sec. ________.840. Through 
program experience, the Department has recognized the need for greater 
specificity in the regulation regarding the participation of interested 
parties who did not file the initial request for hearing but, 
nonetheless, desire to participate.
    While remaining consistent with Congressional intent regarding 
timely hearings for interested parties, the Department seeks to better 
assure orderly and fair proceedings by providing in the Final Rule 
that, once the deadline for requesting a hearing has expired, an 
interested party may participate in an administrative law judge 
proceeding only with the approval of the judge.
    In addition, to ensure that the regulation comports with the 
Administrative Procedures Act and the most recent decision of the 
Supreme Court in Darby v. Cisneros, 113 S.Ct. 2539, 2547 (1993), 
Sec. ________.840 of the rule has been amended to provide that a party 
may not seek judicial review of an administrative law judge's decision 
until such party has exhausted all administrative remedies, and that 
the decision of the ALJ is inoperative while such remedies are being 
pursued.
    o. Retaliation (See Sec. ________.800(d).) In enforcement 
proceedings the Department has encountered some confusion as to whether 
an employer's retaliation against an H-1B nonimmigrant (for accepting 
back wages, for example) is prohibited activity under the anti-
discrimination provision of the regulation (Sec. ________.800(d) 
Employer Cooperation), which was promulgated as an inherent and 
essential part of the enforcement process mandated by Congress. The 
regulatory restriction assures that employers will not take actions 
against workers to frustrate the Department's enforcement. This 
provision of the Interim Final Rule puts employers on notice that the 
employer cannot intimidate, threaten, restrain, coerce, blacklist, 
discharge, or in any manner discriminate against any person because 
such person filed a complaint, etc.; however, the specific word 
``retaliate'' does not appear in the regulation.
    To alleviate any confusion the Final Rule is clarified by inserting 
the word ``retaliation.''
    p. TN nonimmigrant classification (See Sec. ________.700(c)(2).) 
The Interim Final Rule at 58 FR 69226 implemented the provisions of the 
North American Free Trade Agreement (NAFTA) pertaining to the 
employment of Mexican citizens as professionals. NAFTA established that 
the employment of these Mexican citizens is currently subject to the 
provisions of the H-1B regulations. Currently Mexican professionals 
entering under this classification are limited to 5,500 annually. This 
limit can be increased by mutual agreement between the U.S. and Mexico 
and the numerical limitation will be lifted in 10 years, unless the two 
countries decide to eliminate it earlier.
    The regulations are clarified to show that the nonimmigrant 
classification for these individuals (subject to all of the LCA 
requirements and enforcement) is ``TN.'' As in the case of 
nonimmigrants granted the H-1B classification, the INS makes all 
determinations about the occupational sufficiency for the 
classification.

IV. Executive Order 12866

    The Department believes that this Final Rule is not an 
``economically significant regulatory action'' within the meaning of 
Executive Order 12866, in that it will not have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities. However, the Department has treated this 
action as ``significant'' under the President's priorities within the 
meaning of the principles set forth in E.O. 12866. This rule follows 
six previous rulemaking initiatives published in the Federal Register 
on the matter (an Advance Notice of Proposed Rulemaking on March 20, 
1991; a Proposed Rule on August 5, 1991; an Interim Final Rule on 
October 22, 1991; an Interim Final Rule on January 13, 1992; a Proposed 
Rule published on October 6, 1993; and an Interim Final Rule on 
December 30, 1993).

V. Regulatory Flexibility Act

    The Department of Labor previously notified the Chief Counsel for 
Advocacy, Small Business Administration, and made the certification 
pursuant to the Regulatory Flexibility Act at 5 U.S.C. 605(b), that the 
rule does not have a significant economic impact on a substantial 
number of small entities.

Catalog of Federal Domestic Assistance Number

    This program is not listed in the Catalog of Federal Domestic 
Assistance.

List of Subjects

20 CFR Part 655

    Administrative practice and procedure, Agriculture, Aliens, 
Crewmembers, Employment, Enforcement, Fashion models, Forest and forest 
products, Guam, Health professions, Immigration, Labor, Longshore work, 
Migrant labor, Nurse, Penalties, Registered nurse, Reporting and 
recordkeeping requirements, Specialty occupation, Students, Wages.

29 CFR Part 507

    Administrative practice and procedures, Aliens, Employment, 
Enforcement, Fashion models, Immigration, Labor, Penalties, Reporting 
and recordkeeping requirements, Specialty occupation, Wages, Working 
conditions.

Text of the Joint Rule

    The text of the interim final joint rule as adopted by ETA and the 
Wage-Hour Division, ESA, in this document appears below:
Subpart H--Labor Condition Applications and Requirements for Employers 
Using Nonimmigrants on H-1B Visas in Specialty Occupations and as 
Fashion Models
Sec.
________.700   Purpose, procedure and applicability of subparts H 
and I.
________.705  Overview of responsibilities.
________.710  Complaints.
________.715  Definitions.
________.720  Addresses of Department of Labor regional offices.
________.730  Labor condition application.
________.731  The first labor condition statement: wages.
________.732  The second labor condition statement: working 
conditions.
________.733  The third labor condition statement: no strike or 
lockout.
________.734  The fourth labor condition statement: notice.
________.735  Special provisions for short-term placement of H-1B 
nonimmigrants at place(s) of employment outside the area(s) of 
intended employment listed on labor condition application.
________.740  Labor condition application determinations.
________.750  Validity period of the labor condition application.
________.760  Public access; retention of records.

Appendix A to Subpart H: Guidance for Determination of the ``Actual 
Wage''

Subpart I--Enforcement of H-1B Labor Condition Applications

Sec.
________.800  Enforcement authority of Administrator, Wage and Hour 
Division.
________.805  Complaints and investigative procedures.
________.810  Remedies.
________.815  Written notice and service of Administrator's 
determination.
________.820  Request for hearing.
________.825  Rules of practice for administrative law judge 
proceedings.
________.830  Service and computation of time.
________.835  Administrative law judge proceedings.
________.840  Decision and order of administrative law judge.
________.845  Secretary's review of administrative law judge's 
decision.
________.850  Administrative record.
________.855  Notice to the Employment and Training Administration 
and the Attorney General.

Subpart H--Labor Condition Applications and Requirements for 
Employers Using Nonimmigrants on H-1B Visas In Specialty 
Occupations and as Fashion Models


Sec. ________.700  Purpose, procedure and applicability of subparts H 
and I.

    (a) Purpose. With respect to nonimmigrant workers entering the 
United States (U.S.) on H-1B visas pursuant to the Immigration and 
Nationality Act (INA):
    (1) Establishes an annual ceiling of 65,000 (exclusive of spouses 
and children) on the number of foreign workers who may be issued H-1B 
visas;
    (2) Defines the scope of eligible occupations for which 
nonimmigrants may be issued H-1B visas and specifies the qualifications 
that are required for entry as an H-1B nonimmigrant;
    (3) Requires an employer seeking to employ H-1B nonimmigrants to 
file a labor condition application (LCA) with and have it certified by 
the Department of Labor (DOL) before a nonimmigrant may be provided H-
1B status by the Immigration and Naturalization Service (INS); and
    (4) Establishes a system for the receipt and investigation of 
complaints, as well as for the imposition of fines and penalties for 
misrepresentation or for failure to fulfill a condition of the labor 
condition application. 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), 
1184(g)(1)(A), and 1184(i).
    (b) Procedure for obtaining an H-1B visa classification. Before a 
nonimmigrant may be admitted to work in a ``specialty occupation'' or 
as a fashion model of distinguished merit and ability in the United 
States under the H-1B visa classification, there are certain steps 
which must be followed:
    (1) First, an employer shall submit to DOL, and obtain DOL 
certification of, a labor condition application. The requirements for 
obtaining a certified labor condition application are provided in this 
subpart. The labor condition application (Form ETA 9035) and 
instructions may be obtained from DOL Regional Offices listed in 
Sec. ________.720 of this part.
    (2) After obtaining DOL certification of a labor condition 
application, the employer may submit a nonimmigrant visa petition (INS 
Form I-129), together with the certified labor condition application, 
to INS, requesting H-1B classification for the foreign worker. The 
requirements concerning the submission of a petition to, and its 
processing by, INS are set forth in INS regulations. The INS petition 
(Form I-129) may be obtained from an INS district or area office.
    (3) If INS approves the H-1B classification, the nonimmigrant then 
may apply for an H-1B visa abroad at a consular office of the 
Department of State, or apply to the INS for a change of visa status if 
already in the United States.
    (c) Applicability. (1) Subparts H and I of this part apply to all 
employers seeking to employ foreign workers under the H-1B visa 
classification in specialty occupations or as fashion models of 
distinguished merit and ability.
    (2) During the period that the provisions of Appendix 1603.D.4 of 
Annex 1603 of the North American Free Trade Agreement (NAFTA) apply, 
subparts H and I of this part shall apply to the entry and employment 
of a nonimmigrant who is a citizen of Mexico under and pursuant to the 
provisions of section D or Annex 1603 of NAFTA in the case of all 
professions set out in Appendix 1603.D.1 of Annex 1603 of NAFTA other 
than registered nurses. Therefore, the references in this part to ``H-
1B nonimmigrant'' apply to such nonimmigrants, who are classified by 
INS as ``TN.'' In the case of a registered nurse, the provisions of 20 
CFR part 655, subparts D and E, and 29 CFR part 504, subparts D and E, 
shall apply.


Sec. ________.705  Overview of responsibilities.

    Three federal agencies are involved in the process which leads to 
H-1B nonimmigrant classification. The employer also has continuing 
responsibilities under the process. This section briefly describes the 
responsibilities of each of these entities.
    (a) Department of Labor responsibilities. DOL administers the labor 
condition application process and enforcement provisions.
    (1) The Employment and Training Administration (ETA), DOL, is 
responsible for receiving and certifying labor condition applications 
in accordance with subpart H of this part. ETA is also responsible for 
compiling and maintaining a list of labor condition applications and 
makes such list available for public examination at the Department of 
Labor, 200 Constitution Avenue, NW., room N4456, Washington, DC 20210.
    (2) The Employment Standards Administration (ESA), DOL, is 
responsible, in accordance with subpart I of this part, for 
investigating and determining, pursuant to a complaint or otherwise, an 
employer's misrepresentation in or failure to comply with labor 
condition applications or the employment of H-1B nonimmigrants.
    (b) Immigration and Naturalization Service (INS) and Department of 
State (DOS) responsibilities.  The Immigration and Naturalization 
Service (INS) accepts the employer's petition (INS Form I-129) with the 
DOL-certified labor condition application attached. INS is responsible 
for approving the nonimmigrant's H-1B visa classification. In doing so, 
the INS determines whether the occupation named in the labor condition 
application is a specialty occupation or whether the individual is a 
fashion model of distinguished merit and ability, and whether the 
qualifications of the nonimmigrant meet the statutory requirements for 
H-1B visa classification. If the petition is approved, INS will notify 
the U.S. Consulate where the nonimmigrant intends to apply for the visa 
unless the nonimmigrant is in the U.S. and eligible to adjust status 
without leaving this country. See 8 U.S.C. 1184(i). The Department of 
State, through U.S. Embassies and Consulates, is responsible for 
issuing H-1B visas.
    (c) Employer's responsibilities. Each employer seeking an H-1B 
nonimmigrant in a specialty occupation or as a fashion model of 
distinguished merit and ability has several responsibilities.
    (1) The employer shall submit a completed labor condition 
application on Form ETA 9035 and one copy to the regional office of ETA 
serving the area where the nonimmigrant will be employed. If the labor 
condition application is certified by ETA, a copy will be returned to 
the employer.
    (2) The employer shall make a filed labor condition application and 
necessary supporting documentation (as identified under this subpart) 
available for public examination at the employer's principal place of 
business in the U.S. or at the place of employment within one working 
day after the date on which the labor condition application is filed 
with ETA.
    (3) The employer then may submit a copy of the certified labor 
condition application to INS with a completed petition (INS Form I-129) 
requesting H-1B classification.
    (4) The employer should not allow the nonimmigrant worker to begin 
work, even though a labor condition application has been certified by 
DOL, until INS grants the worker authorization to work in the United 
States for that employer.
    (5) The employer shall develop sufficient documentation to meet its 
burden of proof with respect to the validity of the statements made in 
its labor condition application and the accuracy of information 
provided in the event that such statement or information is challenged. 
The employer shall also maintain such documentation at its principal 
place of business in the U.S. and shall make such documentation 
available to DOL for inspection and copying upon request.


Sec. ________.710  Complaints.

    Complaints concerning misrepresentation in the labor condition 
application or failure of the employer to meet a condition specified in 
the application shall be filed with the Administrator, Wage and Hour 
Division (Administrator), ESA, according to the procedures set forth in 
subpart I of this part. The Administrator, either pursuant to a 
complaint or otherwise, shall investigate where appropriate, and after 
an opportunity for a hearing, assess appropriate sanctions and 
penalties.


Sec. ________.715  Definitions.

    For the purposes of subparts H and I of this part:
    Actual wage means the wage rate paid by the employer to all 
individuals with experience and qualifications similar to the H-1B 
nonimmigant's experience and qualifications for the specific employment 
in question at the place of employment. The actual wage established by 
the employer is not an average of the wage rates paid to all workers 
employed in the occupation.
    Administrative Law Judge (ALJ) means an official appointed pursuant 
to 5 U.S.C. 3105.
    Administrator means the Administrator of the Wage and Hour 
Division, Employment Standards Administration, Department of Labor, and 
such authorized representatives as may be designated to perform any of 
the functions of the Administrator under subpart H or I of this part.
    Aggrieved party means a person or entity whose operations or 
interests are adversely affected by the employer's alleged non-
compliance with the labor condition application and includes, but is 
not limited to:
    (1) A worker whose job, wages, or working conditions are adversely 
affected by the employer's alleged non-compliance with the labor 
condition application;
    (2) A bargaining representative for workers whose jobs, wages, or 
working conditions are adversely affected by the employer's alleged 
non-compliance with the labor condition application;
    (3) A competitor adversely affected by the employer's alleged non-
compliance with the labor condition application; and
    (4) A government agency which has a program that is impacted by the 
employer's alleged non-compliance with the labor condition application.
    Area of intended employment means the area within normal commuting 
distance of the place (address) of employment where the H-1B 
nonimmigrant is or will be employed. If the place of employment is 
within a Metropolitan Statistical Area (MSA), any place within the MSA 
is deemed to be within normal commuting distance of the place of 
employment. (See definition of ``place of employment.'')
    Attorney General means the chief official of the U.S. Department of 
Justice or the Attorney General's designee.
    Authorized agent and authorized representative mean an official of 
the employer who has the legal authority to commit the employer to the 
statements in the labor condition application.
    Certification means the determination by a certifying officer that 
a labor condition application is not incomplete and does not contain 
obvious inaccuracies.
    Certify means the act of making a certification.
    Certifying Officer and Regional Certifying Officer mean a 
Department of Labor official, or such official's designee, who makes 
determinations about whether or not to certify labor condition 
applications.
    Chief Administrative Law Judge (Chief ALJ) means the chief official 
of the Office of the Administrative Law Judges of the Department of 
Labor or the Chief Administrative Law Judge's designee.
    Department and DOL mean the United States Department of Labor.
    Division means the Wage and Hour Division of the Employment 
Standards Administration, DOL.
    Employer means a person, firm, corporation, contractor, or other 
association or organization in the United States:
    (1) Which suffers or permits a person to work within the United 
States;
    (2) Which has an employer-employee relationship with respect to 
employees under this part, as indicated by the fact that it may hire, 
pay, fire, supervise or otherwise control the work of any such 
employee; and
    (3) Which has an Internal Revenue Service tax identification 
number.
    Employment and Training Administration (ETA) means the agency 
within the Department which includes the United States Employment 
Service (USES).
    Employment Standards Administration (ESA) means the agency within 
the Department which includes the Wage and Hour Division.
    Immigration and Naturalization Service (INS) means the component of 
the Department of Justice which makes the determination under the INA 
on whether to grant visa petitions of employers seeking the admission 
of nonimmigrants under H-1B visas for the purpose of employment.
    INA means the Immigration and Nationality Act, as amended, 8 U.S.C. 
1101 et seq.
    Independent authoritative source means a professional, business, 
trade, educational or governmental association, organization, or other 
similar entity, not owned or controlled by the employer, which has 
recognized expertise in an occupational field.
    Independent authoritative source survey means a survey of wages 
conducted by an independent authoritative source and published in a 
book, newspaper, periodical, loose-leaf service, newsletter, or other 
similar medium, within the 24-month period immediately preceding the 
filing of the employer's application. Such survey shall:
    (1) Reflect the average wage paid to workers similarly employed in 
the area of intended employment;
    (2) Be based upon recently collected data--e.g., within the 24-
month period immediately preceding the date of publication of the 
survey; and
    (3) Represent the latest published prevailing wage finding by the 
authoritative source for the occupation in the area of intended 
employment.
    Interested party means a person or entity who or which may be 
affected by the actions of an H-1B employer or by the outcome of a 
particular investigation and includes any person, organization, or 
entity who or which has notified the Department of his/her/its interest 
or concern in the Administrator's determination.
    Lockout means a labor dispute involving a work stoppage, wherein an 
employer withholds work from its employees in order to gain a 
concession from them.
    Occupation means the occupational or job classification in which 
the H-1B nonimmigrant is to be employed.
    Period of intended employment means the time period between the 
starting and ending dates inclusive of the H-1B nonimmigrant's intended 
period of employment in the occupational classification at the place of 
employment as set forth in the labor condition application.
    Place of employment means the worksite or physical location where 
the work actually is performed. (See definition of ``Area of Intended 
Employment.'')
    Required wage rate means the rate of pay which is the higher of:
    (1) The actual wage for the specific employment in question; or
    (2) The prevailing wage rate (determined as of the time of filing 
the application) for the occupation in which the H-1B nonimmigrant is 
to be employed in the geographic area of intended employment. The 
prevailing wage rate must be no less than the minimum wage required by 
Federal, State, or local law.
    Secretary means the Secretary of Labor or the Secretary's designee.
    Specialty occupation means an occupation that requires theoretical 
and practical application of a body of highly specialized knowledge, 
and attainment of a bachelor's or higher degree (or its equivalent) in 
the specific specialty as a minimum for entry into the occupation in 
the United States. The nonimmigrant in a specialty occupation shall 
possess the following qualifications: (1) Full state licensure to 
practice in the occupation, if licensure is required for the 
occupation; (2) completion of the required degree; or (3) experience in 
the specialty equivalent to the completion of such degree and 
recognition of expertise in the specialty through progressively 
responsible positions relating to the specialty. 8 U.S.C. 1184(i). 
Determinations of specialty occupation and of nonimmigrant 
qualifications are made by INS.
    Specific employment in question means the set of duties and 
responsibilities performed or to be performed by the H-1B nonimmigrant 
at the place of employment.
    State means one of the 50 States, the District of Columbia, Guam, 
Puerto Rico, and the U.S. Virgin Islands.
    State Employment Security Agency (SESA) means the State agency 
designated under section 4 of the Wagner-Peyser Act to cooperate with 
USES in the operation of the national system of public employment 
offices.
    Strike means a labor dispute wherein employees engage in a 
concerted stoppage of work (including stoppage by reason of the 
expiration of a collective-bargaining agreement) or engage in any 
concerted slowdown or other concerted interruption of operation.
    United States Employment Service (USES) means the agency of the 
Department of Labor, established under the Wagner-Peyser Act, which is 
charged with administering the national system of public employment 
offices.
    Wage rate means the remuneration (exclusive of fringe benefits) to 
be paid, stated in terms of amount per hour, day, month or year (see 
definition of ``Required Wage Rate'').


Sec. ________.720  Addresses of Department of Labor regional offices.

    Region I (Connecticut, Maine, Massachusetts, New Hampshire, Rhode 
Island, and Vermont): One Congress Street 10th Floor, Boston, 
Massachusetts 02114-2023. Telephone: 617-565-4446.
    Region II (New York, New Jersey, Puerto Rico, and the Virgin 
Islands): 201 Varick Street, Room 755, New York, New York 10014. 
Telephone: 212-337-2186.
    Region III (Delaware, District of Columbia, Maryland, Pennsylvania, 
Virginia, and West Virginia): 3535 Market St., Post Office Box 8796, 
Philadelphia, Pennsylvania 19101. Telephone: 215-596-6363.
    Region IV (Alabama, Florida, Georgia, Kentucky, Mississippi, North 
Carolina, South Carolina, and Tennessee): 1371 Peachtree Street, NE., 
Atlanta, Georgia 30309. Telephone: 404-347-3938.
    Region V (Illinois, Indiana, Michigan, Minnesota, Ohio, and 
Wisconsin): 230 South Dearborn Street, Room 605, Chicago, Illinois 
60604. Telephone: 312-353-1550.
    Region VI (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas): 
525 Griffin Street, Room 311, Dallas, Texas 75202. Telephone: 214-767-
4989.
    Region VII (Iowa, Kansas, Missouri, and Nebraska): 1100 Main, Rm. 
1050, Kansas City, Missouri 64105. Telephone: 816-426-3796.
    Region VIII (Colorado, Montana, North Dakota, South Dakota, Utah, 
and Wyoming): 1999 Broadway, Rm. 1780, Denver, Colorado 80202. 
Telephone: 303-391-5742.
    Region IX (Arizona, California, Guam, Hawaii, and Nevada): 71 
Stevenson Street, Room 805, San Francisco, California 94105. Telephone: 
415-744-7618.
    Region X (Alaska, Idaho, Oregon, and Washington): 1111 Third 
Avenue, Suite 900, Seattle, Washington 98101-3212. Telephone: 206-553-
7700.


Sec. ______.730  Labor condition application.

    (a) Who must submit labor condition applications? An employer, or 
the employer's authorized agent or representative, which meets the 
definition of employer set forth in Sec. ________.715 of this part and 
intends to employ an H-1B nonimmigrant in a specialty occupation or as 
a fashion model of distinguished merit and ability shall submit a labor 
condition application to DOL. Attorneys and agents submitting 
applications on an employer's behalf shall submit, also, a completed 
INS Form G-28.
    (b) Where and when should a labor condition application be 
submitted? A labor condition application shall be submitted, by U.S. 
mail, private carrier, or facsimile transmission, to the ETA regional 
office shown in Sec. ________.720 of this part in whose geographic area 
of jurisdiction the H-1B nonimmigrant will be employed no earlier than 
six months before the beginning date of the period of intended 
employment shown on the LCA. It is the employer's responsibility to 
ensure that a complete and accurate application is received by the 
appropriate regional office of ETA. Incomplete or obviously inaccurate 
applications will not be certified. The regional office shall process 
all applications sequentially upon receipt regardless of the method 
used by the employer to submit the application and shall make a 
determination to certify or not certify the labor condition application 
within 7 working days of the date the application is received and date-
stamped by the Department. If the application is submitted by facsimile 
transmission, the application containing the original signature shall 
be maintained by the employer as set forth at Sec. ________.760(a)(1) 
of this part.
    (c) What should be submitted? Form ETA 9035.
    (1) General. One completed and dated original Form ETA 9035 
containing the labor condition statements referenced in 
Secs. ________.731 through ________.734 of this part, bearing the 
employer's original signature (or that of the employer's authorized 
agent or representative) and one copy of the completed and dated 
original Form ETA 9035 shall be submitted to ETA (see paragraph (b) of 
this section and Sec. ________.760(a)(1) of this part with respect to 
applications filed by facsimile transmission). Copies of Form ETA 9035 
are available at the addresses listed in Sec. ________.720 of this 
part; photocopies of the form (obtained from any source) also are 
permitted. Each application shall identify the occupational 
classification for which the labor condition application is being 
submitted and shall state:
    (i) The occupation, by Dictionary of Occupational Titles (DOT) 
Three-Digit Occupational Groups code and by the employer's own title 
for the job;
    (ii) The number of H-1B nonimmigrants sought;
    (iii) The gross wage rate to be paid to each H-1B nonimmigrant, 
expressed on an hourly, weekly, biweekly, monthly or annual basis;
    (iv) The starting and ending dates of the H-1B nonimmigrants' 
employment;
    (v) The place(s) of intended employment; and
    (vi) The prevailing wage for the occupation in the area of intended 
employment and the specific source (e.g., name of published survey) 
relied upon by the employer to determine the wage. If the wage is 
obtained from a SESA, the appropriate box must be checked and the wage 
provided; wages obtained from a source other than a SESA must be 
identified along with the wage;
    (2) Mutiple positions or places of employment. The employer shall 
file a separate LCA for each occupation in which the employer intends 
to employ one or more H-1B nonimmigrants. All places of employment 
covered by the application must be located within the jurisdiction of a 
single ETA regional office, or, if the nonimmigrant(s) is(are) to be 
employed sequentially in various places of employment, the application 
is to be submitted to the regional office having jurisdiction over the 
initial place of employment; and
    (3) Full-time and part-time jobs. The position(s) covered by the 
LCA may be full-time or part-time or a mix of both.
    (d) Content of the labor condition application. An employer's labor 
condition application shall contain the labor condition statements 
referenced in Secs. ________.731 through ________.734 of this part, 
which provide that no individual may be admitted or provided status as 
an H-1B nonimmigrant in an occupational classification unless the 
employer has filed with the Secretary an application stating that:
    (1) The employer is offering and will offer during the period of 
authorized employment to H-1B nonimmigrants no less than the greater of 
the following:
    (i) The actual wage paid to the employer's other employees at the 
worksite with similar experience and qualifications for the specific 
employment in question; or
    (ii) The prevailing wage level for the occupational classification 
in the area or intended employment;
    (2) The employer will provide working conditions for such 
nonimmigrants that will not adversely affect the working conditions of 
workers similarly employed;
    (3) There is not a strike or lockout in the course of a labor 
dispute in the occupational classification at the place of employment;
    (4) The employer has provided and will provide notice of the filing 
of the labor condition application to:
    (i)(A) The bargaining representative of the employer's employees in 
the occupational classification in the area of intended employment for 
which the H-1B nonimmigrants are sought, in the manner described in 
Sec. ________.734(a)(1)(i); or
    (B) If there is no such bargaining representative, posts notice of 
the filing of the labor condition application in conspicuous locations 
in the employer's establishment(s) in the area of intended employment, 
in the manner described in Sec. ________.734(a)(1)(ii) of this subpart 
and, in the manner described in Sec. ________.734(a)(2) of this 
subpart; and
    (ii) H-1B nonimmigrants at the time that such nonimmigrants 
actually report to work; and
    (5) The employer has provided the information about the occupation 
required in paragraph (c) of this section.


Sec. ________.731  The first labor condition statement: wages.

    An employer seeking to employ H-1B nonimmigrants in a specialty 
occupation or as a fashion model of distinguished merit and ability 
shall state on Form ETA 9035 that it will pay the H-1B nonimmigrants 
the required wage rate.
    (a) Establishing the wage requirement. The first labor condition 
application requirement shall be satisfied when the employer signs Form 
ETA 9035 attesting that, for the entire period of authorized 
employment, the required wage rate will be paid to the H-1B 
nonimmigrant's; that is, that the wage shall be the greater of: the 
actual wage rate (as specified in paragraph (a)(1) of this section) or 
the prevailing wage (as specified in paragraph (a)(2) of this section).
    (1) The actual wage is the wage rate paid by the employer to all 
other individuals with similar experience and qualifications for the 
specific employment in question. In determining such wage level, the 
following factors may be considered: experience, qualifications, 
education, job responsibility and function, specialized knowledge, and 
other legitimate business factors. ``Legitimate business factors,'' for 
purposes of this paragraph (a), means those that it is reasonable to 
conclude are necessary because they conform to recognized principles or 
can be demonstrated by accepted rules and standards. Where there are 
other employees with substantially similar experience and 
qualifications in the specific employment in question--i.e., they have 
substantially the same duties and responsibilities as the H-1B 
nonimmigrant--the actual wage shall be the amount paid to these other 
employees. Where no such other employees exist at the place of 
employment, the actual wage shall be the wage paid to the H-1B 
nonimmigrant by the employer. Where the employer's pay system or scale 
provides for adjustments during the period of the LCA--e.g., cost of 
living increases or other periodic adjustments, higher entry rate due 
to market conditions, or the employee moves into a more advanced level 
in the same occupation--such adjustments shall be provided to similarly 
employed H-1B nonimmigrants (unless the prevailing wage is higher than 
the actual wage). Examples illustrating these principles may be found 
in appendix A to this subpart H.
    (2) The prevailing wage for the occupational classification in the 
area of intended employment must be determined as of the time of filing 
the application. The employer shall base the prevailing wage on the 
best information available as of the time of filing the application. 
The employer is not required to use any specific methodology to 
determine the prevailing wage and may utilize a SESA, an independent 
authoritative source, or other legitimate sources of wage data. One of 
the following sources shall be used to establish the prevailing wage:
    (i) A wage determination for the occupation and area issued under 
the Davis-Bacon Act, 40 U.S.C. 276a et seq. (see also 29 CFR part 1), 
or the McNamara-O'Hara Service Contract Act, 41 U.S.C. 351 et seq. (see 
also 29 CFR part 4) (which shall be available through the SESA);
    (ii) A union contract which was negotiated at arms-length between a 
union and the employer, which contains a wage rate applicable to the 
occupation; or
    (iii) If the job opportunity is in an occupation which is not 
covered by paragraph (a)(2) (i) or (ii) of this section, the prevailing 
wage shall be the average rate of wages, that is, the rate of wages to 
be determined, to the extent feasible, by adding the wages paid to 
workers similarly employed in the area of intended employment and 
dividing the total by the number of such workers. Since it is not 
always feasible to determine such an average rate of wages with exact 
precision, the wage set forth in the application shall be considered as 
meeting the prevailing wage standard if it is within 5 percent of the 
average rate of wages. See paragraph (c) of this section, regarding 
payment of required wages. See also paragraph (d)(4) of this section, 
regarding enforcement. The prevailing wage rate under this paragraph 
(a)(2)(iii) shall be based on the best information available. The 
Department believes that the following prevailing wage sources are, in 
order of priority, the most accurate and reliable:
    (A) A SESA Determination. Upon receipt of a written request for a 
prevailing wage determination, the SESA will determine whether the 
occupation is covered by a Davis-Bacon or Service Contract Act wage 
determination, and, if not, whether it has on file current prevailing 
wage information for the occupation.This information will be provided 
by the SESA to the employer in writing in a timely manner. Where the 
prevailing wage is not immediately available, the SESA will conduct a 
prevailing wage survey using the methods outlined at 20 CFR 656.40 and 
other administrative guidelines or regulations issued by ETA.
    (1) An employer who chooses to utilize a SESA prevailing wage 
determination shall file the labor condition application not more than 
90 days after the date of issuance of such SESA wage determination. 
Once an employer obtains a prevailing wage determination from the SESA 
and files an LCA supported by that prevailing wage determination, the 
employer is deemed to have accepted the prevailing wage determination 
(both as to the occupational classification and wage) and thereafter 
may not contest the legitimacy of the prevailing wage determination 
through the Employment Service complaint system or in an investigation 
or enforcement action. Prior to filing the LCA, the employer may 
challenge a SESA prevailing wage determination through the Employment 
Service complaint system, by filing a complaint with the SESA. See 20 
CFR 658.410 through 658.426. Employers which challenge a SESA 
prevailing wage determination must obtain a final ruling from the 
Employment Service complaint system prior to filing an LCA based on 
such determination. In any challenge, the SESA shall not divulge any 
employer wage data which was collected under the promise of 
confidentiality.
    (2) If the employer is unable to wait for the SESA to produce the 
requested prevailing wage determination for the occupation in question, 
or for the Employment Service complaint system process to be completed, 
the employer may rely on other legitimate sources of available wage 
information in filing the LCA, as set forth in paragraph (a)(2)(iii) 
(B) and (C) of this section. If the employer later discovers, upon 
receipt of a prevailing wage determination from the SESA, that the 
information relied upon produced a wage that was below the prevailing 
wage for the occupation in the area of intended employment and the 
employer was paying below the SESA-determined wage, no wage violation 
will be found if the employer retroactively compensates the H-1B 
nonimmigrant(s) for the difference between the wage paid and the 
prevailing wage, within 30 days of the employer's receipt of the SESA 
determination.
    (3) In all situations where the employer obtains the prevailing 
wage determination from the SESA, the Department will accept that 
prevailing wage determination as correct and will not question its 
validity where the employer has maintained a copy of the SESA 
prevailing wage determination. A complaint alleging inaccuracy of a 
SESA prevailing wage determination, in such cases, will not be 
investigated.
    (B) An independent authoritative source. The employer may use an 
independent authoritative wage source in lieu of a SESA prevailing wage 
determination. The independent authoritative source survey must meet 
all the criteria set forth in paragraph (b)(3)(iii)(B) of this section.
    (C) Another legitimate source of wage information. The employer may 
rely on other legitimate sources of wage data to obtain the prevailing 
wage. The other legitimate source survey must meet all the criteria set 
forth in paragraph (b)(3)(iii) of this section. The employer will be 
required to demonstrate the legitimacy of the wage in the event of an 
investigation.
    (iv) For purposes of this section, ``similarly employed'' means 
``having substantially comparable jobs in the occupational 
classification in the area of intended employment,'' except that if no 
such workers are employed by employers other than the employer 
applicant in the area of intended employment, ``similarly employed'' 
means:
    (A) Having jobs requiring a substantially similar level of skills 
within the area of intended employment; or
    (B) If there are no substantially comparable jobs in the area of 
intended employment, having substantially comparable jobs with 
employers outside of the area of intended employment.
    (v) A prevailing wage determination for labor condition application 
purposes made pursuant to this section shall not permit an employer to 
pay a wage lower than that required under any other applicable Federal, 
State or local law.
    (vi) Where a range of wages is paid by the employer to individuals 
in an occupational classification or among individuals with similar 
experience and qualifications for the specific employment in question, 
a range is considered to meet the prevailing wage requirement so long 
as the bottom of the wage range is at least the prevailing wage rate.
    (3) Once the prevailing wage rate is established, the H-1B employer 
than shall compare this wage with the actual wage rate for the specific 
employment in question at the place of employment and must pay the H-1B 
nonimmigrant at least the higher of the two wages.
    (b) Documentation of the wage statement. (1) The employer shall 
develop and maintain documentation sufficient to meet its burden of 
proving the validity of the wage statement required in paragraph (a) of 
this section and attested to on Form ETA 9035. The documentation shall 
be made available to DOL upon request. Documentation shall also be made 
available for public examination to the extent required by 
Sec. ________.760(a) of this part. The employer shall also document 
that the wage rate(s) paid to H-1B nonimmigrant(s) is(are) no less than 
the required wage rate(s). The documentation shall include information 
about the employer's wage rate for all other employees for the specific 
employment in question at the place of employment, beginning with the 
date the labor condition application was submitted and continuing 
throughout the period of employment. The records shall be retained for 
the period of time specified in Sec. ________.760 of this part. The 
payroll records for each such employee shall include:
    (i) Employee's full name;
    (ii) Employee's home address;
    (iii) Employee's occupation;
    (iv) Employee's rate of pay;
    (v) Hours worked each day and each week by the employee if paid on 
other than a salary basis, or the prevailing or actual wage is 
expressed as an hourly wage;
    (vi) Total additions to or deductions from pay each pay period by 
employee; and
    (vii) Total wages paid each pay period, date of pay and pay period 
covered by the payment by employee.
    (2) Actual wage. In addition to payroll data required by paragraph 
(b)(1) of this section (and also by the Fair Labor Standards Act), the 
employer shall retain documentation specifying the basis it used to 
establish the actual wage. The employer shall show how the wage set for 
the H-1B nonimmigrant relates to the wages paid by the employer to all 
other individuals with similar experience and qualifications for the 
specific employment in question at the place of employment. Where 
adjustments are made in the employer's pay system or scale during the 
validity period of the LCA, the employer shall retain documentation 
explaining the changes and clearly showing that, after such 
adjustments, the wages paid to the H-1B nonimmigrant are at least the 
greater of the adjusted actual wage or the prevailing wage for the 
occupation and area of intended employment. See appendix A to subpart 
H.
    (3) Prevailing wage. The employer also shall retain documentation 
regarding its determination of the prevailing wage. This source 
documentation shall not be submitted to ETA with the labor condition 
application, but shall be retained at the employer's place of business 
for the length of time required in Sec. ________.760(c) of this part. 
Such documentation shall consist of the documentation described in 
paragraph (b)(3) (i), (ii), or (iii) of this section and the 
documentation described in paragraph (b)(1) of this section. (i) If the 
employer used a wage determination issued pursuant to the provisions of 
the Davis-Bacon Act, 40 U.S.C. 276a et seq. (see 29 CFR part 1), or the 
McNamara-O'Hara Service Contract Act, 41 U.S.C. 351 et seq. (see 29 CFR 
part 4), the documentation shall include a copy of the determination 
showing the wage rate for the occupation in the area of intended 
employment.
    (ii) If the employer used an applicable wage rate from a union 
contract which was negotiated at arms-length between a union and the 
employer, the documentation shall include an excerpt from the union 
contract showing the wage rate(s) for the occupation.
    (iii) If the employer did not use a wage covered by the provisions 
of paragraph (b)(3) (i) or (ii) of this section, the employer's 
documentation shall consist of:
    (A) A copy of the prevailing wage finding from the SESA for the 
occupation within the area of intended employment; or
    (B) A copy of the prevailing wage survey for the occupation within 
the area of intended employment published by an independent 
authoritative source. For purposes of this paragraph (b)(3)(iii)(B), a 
prevailing wage survey for the occupation in the area of intended 
employment published by an authoritative independent source shall mean 
a survey of wages published in a book, newspaper, periodical, loose-
leaf service, newsletter, or other similar medium, within the 24-month 
period immediately preceding the filing of the employer's application. 
Such survey shall:
    (1) Reflect the average wage paid to workers similarly employed in 
the area of intended employment;
    (2) Be based upon recently collected data--e.g., within the 24-
month period immediately preceding the date of publication of the 
survey; and
    (3) Represent the latest published prevailing wage finding by the 
independent authoritative source for the occupation in the area of 
intended employment; or
    (C) A copy of the prevailing wage survey or other source data 
acquired from a legitimate source of wage information that was used to 
make the prevailing wage determination. For purposes of paragraph 
(b)(3)(iii)(C) of this section, a prevailing wage provided by another 
legitimate source of such wage information shall be one which:
    (1) Reflects the weighted average wage paid to workers similarly 
employed in the area of intended employment;
    (2) Is based on the most recent and accurate information available; 
and
    (3) Is reasonable and consistent with recognized standards and 
principles in producing a prevailing wage.
    (c) Satisfaction of required wage obligation. (1) The required wage 
must be paid to the employee, cash in hand, free and clear, when due, 
except that deductions made in accordance with paragraph (c)(7) of this 
section may reduce the cash wage below the level of the required wage.
    (2) ``Wages paid,'' for purposes of satisfying the H-1B required 
wage, shall consist only of those payments that meet all the following 
criteria:
    (i) Payments shown in the employer's payroll records as earnings 
for the employee, and disbursed to the employee, cash in hand, free and 
clear, when due, except for deductions authorized by paragraph (c)(7) 
of this section;
    (ii) Payments reported to the Internal Revenue Service (IRS) as the 
employee's earnings, with appropriate withholding for the employee's 
tax paid to the IRS (in accordance with the Internal Revenue Code of 
1986, 26 U.S.C. 1, et seq.);
    (iii) Payments of the tax reported and paid to the IRS as required 
by the Federal Insurance Contributions Act, 26 U.S.C. 3101, et seq. 
(FICA). The employer must be able to document that the payments have 
been so reported to IRS and that both the employer's and employee's 
taxes have been paid except that when the H-1B nonimmigrant is a 
citizen of a foreign country with which the President of the United 
States has entered into an agreement as authorized by section 233 of 
the Social Security Act, 42 U.S.C. 433 (i.e., an agreement establishing 
a totalization arrangement between the social security system of the 
United States and that of the foreign country), the employer's 
documentation shall show that all appropriate reports have been filed 
and taxes have been paid in the employee's home country.
    (iv) Payments reported, and so documented by the employer, as the 
employee's earnings, with appropriate employer and employee taxes paid 
to all other appropriate Federal, State, and local governments in 
accordance with any other applicable law.
    (3) For salaried employees, wages will be due in pro-rated 
installments (e.g., annual salary divided into 26 bi-weekly pay 
periods, where employer pays bi-weekly) paid no less often than monthly 
except that, in the event that the employer intends to use some other 
form of nondiscretionary payment to supplement the employee's regular/
pro-rata pay in order to meet the required wage obligation (e.g., a 
quarterly production bonus), the employer's documentation of wage 
payments (including such supplemental payments) must show the 
employer's commitment to make such payment and the method of 
determining the amount thereof, and must show unequivocally that the 
required wage obligation was met for prior pay periods and, upon 
payment and distribution of such other payments that are pending, will 
be met for each current or future pay period.
    (4) For hourly-wage employees, the required wages will be due for 
all hours worked and/or for any nonproductive time (as specified in 
paragraph (c)(5) of this section) at the end of the employer's ordinary 
pay period (e.g., weekly) but in no event less frequently than monthly.
    (5)(i) For the purpose of DOL administration and enforcement of the 
H-1B program, an H-1B nonimmigrant is considered to be under the 
control or employ of the LCA-filing employer, and therefore shall 
receive the full wage which the LCA-filing employer is required to pay, 
beginning no later than the first day the H-1B nonimmigrant is in the 
United States and continuing throughout the nonimmigrant's period of 
employment. Therefore if the H-1B nonimmigrant is in a nonproductive 
status for reasons such as training, lack of license, lack of assigned 
work or any other reason, the employer will be required to pay the 
salaried employee the full pro-rata amount due, or to pay the hourly-
wage employee for a full-time week (40 hours or such other number of 
hours as the employer can demonstrate to be full-time employment for 
the occupation and area involved) at the required wage for the 
occupation listed on the LCA. If the employer's LCA carries a 
designation of ``part-time employment,'' the employer will be required 
to pay the nonproductive employee for at least the number of hours 
indicated on the I-129 petition filed by the employer with the INS. If 
during a subsequent enforcement action by the Administrator it is 
determined that an employee designated in the LCA as part-time was in 
fact working full-time or regularly working more hours than reflected 
on the I-129 petition, the employer will be held to the factual 
standard disclosed by the enforcement action.
    (ii) If, however, during the period of employment, an H-1B 
nonimmigrant experiences a period of nonproductive status due to 
conditions unrelated to employment which render the nonimmigrant unable 
to work--e.g., maternity leave, automobile accident which temporarily 
incapacitates the nonimmigrant, caring for an ill relative--then the 
employer shall not be obligated to pay the required wage rate during 
that period provided that the INS permits the employee to remain in the 
U.S. without being paid and provided further that such period is not 
subject to payment under other statutes such as the Family and Medical 
Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities 
Act (42 U.S.C. 12101 et seq.).
    (6) If the employee works in an occupation other than that 
identified on the employer's LCA, the employer's required wage 
obligation is based on the occupation identified on the LCA, and not on 
whatever wage standards may be applicable in the occupation in which 
the employee may be working.
    (7) ``Authorized deduction,'' for purposes of the H-1B required 
wage obligation, means a deduction from wages in complete compliance 
with one of the following sets of criteria--
    (i) Deduction which is required by law (e.g., income tax; FICA); or
    (ii) Deduction which is authorized by a collective bargaining 
agreement, or is reasonable and customary in the occupation and/or area 
of employment (e.g., union dues; contribution to premium for health 
insurance policy covering all employees; savings or retirement fund 
contribution for plan(s) in compliance with the Employee Retirement 
Income Security Act, 29 U.S.C. 1001, et seq.), except that the 
deduction may not recoup a business expense(s) of the employer; the 
deduction must have been revealed to the worker prior to the 
commencement of employment and, if the deduction was a condition of 
employment, had been clearly identified as such; and the deduction must 
be made against wages of U.S. workers as well as H-1B nonimmigrants 
(where there are U.S. workers); or
    (iii) Deduction which meets the following requirements:
    (A) Is made in accordance with a voluntary, written authorization 
by the employee (Note: an employee's mere acceptance of a job which 
carries a deduction as a condition of employment does not constitute 
voluntary authorization, even if such condition were stated in 
writing);
    (B) Is for a matter principally for the benefit of the employee 
(Note: housing and food allowances would be considered to meet this 
``benefit of employee'' standard, unless the employee is in travel/per 
diem status, or unless the circumstances indicate that the arrangements 
for the employee's housing or food are principally for the convenience 
or benefit of the employer (e.g., employee living at worksite in ``on 
call'' status));
    (C) Is not a recoupment of the employer's business expense (e.g., 
tools and equipment; transportation costs where such transportation is 
an incident of and necessary to the employment; living expenses when 
the employee is traveling on the employer's business) (for purposes of 
this section, initial transportation from and end-of-employment travel 
to the worker's home country shall not be considered a business 
expense);
    (D) Is an amount that does not exceed the fair market value or the 
actual cost (whichever is lower) of the matter covered (Note: the 
employer must document the cost and value); and
    (E) Is an amount that does not exceed the limits set for 
garnishment of wages in the Consumer Credit Protection Act, 15 U.S.C. 
1673, and the regulations of the Secretary pursuant to that Act, 29 CFR 
part 870, under which garnishment(s) may not exceed 25% of an 
employee's disposable earnings for a workweek.
    (8) Any unauthorized deduction taken from wages is considered by 
the Department to be non-payment of that amount of wages, and, in the 
event of an investigation, will result in back wage assessment (plus 
civil money penalties and/or disqualification from H-1B and other 
immigration programs (pursuant to Sec. ________.810(b)), if willful).
    (9) Where the employer depresses the employee's wages below the 
required wage by imposing on the employee any of the employer's 
business expense(s), the Department will consider the amount to be an 
unauthorized deduction from wages even if the matter is not shown in 
the employer's payroll records as a deduction.
    (10) Where the employer makes deduction(s) for repayment of loan(s) 
or wage advance(s) made to the employee, the Department, in the event 
of an investigation, will require the employer to establish the 
legitimacy and purpose(s) of the loan(s) or wage advance(s), with 
reference to the standards set out in paragraph (c)(7) of this section.
    (d) Enforcement actions. (1) In the event that a complaint is filed 
pursuant to subpart I of this part, alleging a failure to meet the 
``prevailing wage'' condition or a material misrepresentation by the 
employer regarding the payment of the required wage, or pursuant to 
such other basis for investigation as the Administrator may find, the 
Administrator shall determine whether the employer has the 
documentation required in paragraph (b)(3) of this section, and whether 
the documentation supports the employer's wage attestation. Where the 
documentation is either nonexistent or is insufficient to determine the 
prevailing wage (e.g., does not meet the criteria specified in this 
section, in which case the Administrator may find a violation of 
paragraph (b)(1), (2), or (3), of this section); or where, based on 
significant evidence regarding wages paid for the occupation in the 
area of intended employment, the Administrator has reason to believe 
that the prevailing wage finding obtained from an independent 
authoritative source or another legitimate source varies substantially 
from the wage prevailing for the occupation in the area of intended 
employment; or where the employer has been unable to demonstrate that 
the prevailing wage determined by another legitimate source is in 
accordance with the regulatory criteria, the Administrator may contact 
ETA, which shall provide the Administrator with a prevailing wage 
determination, which the Administrator shall use as the basis for 
determining violations and for computing back wages, if such wages are 
found to be owed. The 30-day investigatory period shall be suspended 
while ETA makes the prevailing wage determination and, in the event 
that the employer timely challenges the determination through the 
Employment service complaint system (see Sec. ________.731(d)(2) of 
this part), shall be suspended until the Employment Service complaint 
system process is completed and the Administrator's investigation can 
be resumed.
    (2) In the event the Administrator obtains a prevailing wage from 
ETA pursuant to paragraph (d)(1) of this section, the employer may 
challenge the ETA prevailing wage only through the Employment Service 
complaint system. See 20 CFR part 658, subpart E. Notwithstanding the 
provisions of 20 CFR 658.421 and 658.426, the appeal shall be initiated 
at the ETA regional office level. Such challenge shall be initiated 
within 10 days after the employer receives ETA's prevailing wage 
determination from the Administrator. In any challenge to the wage 
determination, neither ETA nor the SESA shall divulge any employer wage 
data which was collected under the promise of confidentiality.
    (i) Where the employer timely challenges an ETA prevailing wage 
determination obtained by the Administrator, the 30-day investigative 
period shall be suspended until the employer obtains a final ruling 
from the Employment Service complaint system. Upon such final ruling, 
the investigation and any subsequent enforcement proceeding shall 
continue, with ETA's prevailing wage determination serving as the 
conclusive determination for all purposes.
    (ii) Where the employer does not challenge ETA's prevailing wage 
determination obtained by the Administrator, such determination shall 
be deemed to have been accepted by the employer as accurate and 
appropriate (both as to the occupational classification and wage) and 
thereafter shall not be subject to challenge in a hearing pursuant to 
Sec. ________.835 of this part.
    (3) For purposes of this paragraph (d), ETA may consult with the 
appropriate SESA to ascertain the prevailing wage applicable under the 
circumstances of the particular complaint.
    (4) No prevailing wage violation will be found if the employer paid 
a wage that is equal to or more than 95 percent of the prevailing wage 
as required by paragraph (a)(2)(iii) of this section. If the employer 
paid a wage that is less than 95 percent of the prevailing wage, the 
employer will be required to pay 100 percent of the prevailing wage.


Sec. ________.732  The second labor condition statement: working 
conditions.

    An employer seeking to employ H-1B nonimmigrants in specialty 
occupations or as fashion models of distinguished merit and ability 
shall state on Form ETA 9035 that the employment of H-1B nonimmigrants 
will not adversely affect the working conditions of workers similarly 
employed in the area of intended employment.
    (a) For purposes of this section, ``similarly employed'' shall mean 
``having substantially comparable jobs in the occupational 
classification at the worksite and in the area of intended 
employment.'' If no such workers are employed at the worksite or by 
employers other than the employer applicant in the area of intended 
employment ``similarly employed'' shall mean:
    (1) Having jobs requiring a substantially similar level of skills 
at the worksite or within the area of intended employment; or
    (2) If there are no substantially comparable jobs at the worksite 
or in the area of intended employment, having substantially comparable 
jobs with employers outside of the area of intended employment.
    (b) Establishing the working conditions requirement. The second 
labor condition application requirement shall be satisfied when the 
employer signs the labor condition application attesting that for the 
period of intended employment its employment of H-1B nonimmigrants will 
not adversely affect the working conditions of workers similarly 
employed. Working conditions encompass matters including hours, shifts, 
vacation periods, and fringe benefits. The employer's obligation 
regarding working conditions shall extend for the longer of two 
periods: the validity period of the certified LCA or the period during 
which the H-1B nonimmigrant(s) is(are) employed by the employer.
    (c) Documentation of the working condition statement.
    (1) In the event an enforcement action is initiated pursuant to 
subpart I of this part, the employer shall document the validity of its 
prevailing working conditions statement referenced in paragraph (b) of 
this section and attested to on Form ETA 9035. The employer must be 
able to show that the working conditions of similarly employed workers 
were not adversely affected by the employment of an H-1B nonimmigrant--
e.g., that the working conditions are similar to working conditions 
which preceded the employment of the H-1B nonimmigrant, or, if there 
are no similarly employed workers working for the employer, are similar 
to those existing in like business establishments to the employer's in 
the area of employment.
    (2) In the event that an investigation is conducted pursuant to 
subpart I of this part concerning whether the employer failed to 
satisfy the prevailing working conditions statement referenced in 
paragraph (b) of this section and attested to on Form ETA 9035, the 
Administrator shall determine whether the employer has produced the 
documentation required in paragraph (c)(1) of this section, and whether 
the documentation is sufficient to support the employer's prevailing 
working conditions statement. If the employer fails to produce any 
documentation to support its burden of proof demonstrating that there 
is no adverse effect on the working conditions of workers similarly 
employed, the Administrator shall find a violation of paragraph (c)(1) 
of this section. Examples of documentation which employers should 
either maintain or produce include any relevant information which 
discusses the working conditions for the industry, occupation and 
locale, such as published studies, surveys, or articles and 
documentation regarding working conditions at the worksite, such as 
fringe benefit packages, which pre-existed the employment of the H-1B 
nonimmigrant. If the documentation is insufficient to determine whether 
the employment of H-1B nonimmigrants has or has not adversely affected 
the working conditions of workers similarly employed in the area of 
employment, the Administrator may contact ETA, which shall provide the 
Administrator with advice regarding the working conditions of similarly 
employed workers in the area of employment.


Sec. ________.733  The third labor condition statement: no strike or 
lockout.

    An employer seeking to employ H-1B nonimmigrants shall state on 
Form ETA 9035 that there is not at that time a strike or lockout in the 
course of a labor dispute in the occupational classification at the 
place of employment. A strike or lockout which occurs after the labor 
condition application is filed by the employer with DOL is covered by 
INS regulations at 8 CFR 214.2(h)(17).
    (a) Establishing the no strike or lockout requirement. The third 
labor condition application requirement shall be satisfied when the 
employer signs the labor condition application attesting that, as of 
the date the application is filed, the employer is not involved in a 
strike, lockout, or work stoppage in the course of a labor dispute in 
the occupational classification in the area of intended employment. 
Labor disputes for the purpose of this section relate only to those 
disputes involving employees of the employer working at the place of 
employment in the occupational classification named in the labor 
condition application. See also INS regulations at 8 CFR 214.2(h)(17) 
for effects of strikes or lockouts in general on the H-1B 
nonimmigrant's employment.
    (1) Strike or lockout subsequent to certification of labor 
condition application. In order to remain in compliance with the no 
strike or lockout labor condition statement, if a strike or lockout of 
workers in the same occupational classification as the H-1B 
nonimmigrant occurs at the place of employment during the validity of 
the labor condition application, the employer, within three days of the 
occurrence of the strike or lockout, shall submit to ETA, by U.S. mail, 
facsimile (FAX), or private carrier, written notice of the strike or 
lockout. Further, the employer shall not place, assign, lease, or 
otherwise contract out an H-1B nonimmigrant, during the entire period 
of the labor condition application's validity, to any place of 
employment where there is a strike or lockout in the course of a labor 
dispute in the same occupational classification as the H-1B 
nonimmigrant. Finally, the employer shall not use the labor condition 
application in support of any petition filings for H-1B nonimmigrants 
to work in such occupational classification at such place of employment 
until ETA determines that the strike or lockout has ended.
    (2) ETA notice to INS. Upon receiving from an employer a notice 
described in paragraph (a)(1) of this section, ETA shall examine the 
documentation, and may consult with the union at the employer's place 
of business or other appropriate entities. If ETA determines that the 
strike or lockout is covered under INS's ``Effect of strike'' 
regulation for ``H'' visa holders, ETA shall certify to INS, in the 
manner set forth in that regulation, that a strike or other labor 
dispute involving a work stoppage of workers in the same occupational 
classification as the H-1B nonimmigrant is in progress at the place of 
employment. See 8 CFR 214.2(h)(17).
    (b) Documentation of the third labor condition statement. The 
employer need not develop nor maintain documentation to substantiate 
the statement referenced in paragraph (a) of this section. In the case 
of an investigation, however, the employer has the burden of proof to 
show that there was no strike or lockout in the course of a labor 
dispute for the occupational classification in which an H-1B 
nonimmigrant is employed, either at the time the application was filed 
or during the validity period of the LCA.


Sec. ______.734  The fourth labor condition statement: notice.

    An employer seeking to employ H-1B nonimmigrants shall state on 
Form ETA 9035 that the employer has provided notice of the filing of 
the labor condition application to the bargaining representative of the 
employer's employees in the occupational classification in which the H-
1B nonimmigrants will be employed or are intended to be employed in the 
area of intended employment, or, if there is no such bargaining 
representative, has posted notice of filing in conspicuous locations in 
the employer's establishment(s) in the area of intended employment, in 
the manner described in this section.
    (a) Establishing the notice requirement. The fourth labor condition 
application requirement shall be established when the conditions of 
paragraphs (a)(1) and (a)(2) of this section are met.
    (1)(i) Where there is a collective bargaining representative for 
the occupational classification in which the H-1B nonimmigrants will be 
employed, on or within 30 days before the date the labor condition 
application is filed with ETA, the employer shall provide notice to the 
bargaining representative that a labor condition application is being, 
or will be, filed with ETA. The notice shall identify the number of H-
1B nonimmigrants the employer is seeking to employ; the occupational 
classification in which the H-1B nonimmigrants will be employed; the 
wages offered; the period of employment; and the location(s) at which 
the H-1B nonimmigrants will be employed. Notice under this paragraph 
(a)(1)(i) shall include the following statement: ``Complaints alleging 
misrepresentation of material facts in the labor condition application 
and/or failure to comply with the terms of the labor condition 
application may be filed with any office of the Wage and Hour Division 
of the United States Department of Labor.''
    (ii) Where there is no collective bargaining representative, the 
employer shall, on or within 30 days before the date the labor 
condition application is filed with ETA, provide a notice of the filing 
of the labor condition application to its employees by posting a notice 
in at least two conspicuous locations at each place of employment where 
any H-1B nonimmigrant will be employed. The notice shall indicate that 
H-1B nonimmigrants are sought; the number of such nonimmigrants the 
employer is seeking; the occupational classification; the wages 
offered; the period of employment; the location(s) at which the H-1B 
nonimmigrants will be employed; and that the labor condition 
application is available for public inspection at the employer's 
principal place of business in the U.S. or at the worksite. The notice 
shall also include the statement: ``Complaints alleging 
misrepresentation of material facts in the labor condition application 
and/or failure to comply with the terms of the labor condition 
application may be filed with any office of the Wage and Hour Division 
of the United States Department of Labor.'' The posting of exact copies 
of the labor condition application shall be sufficient to meet the 
requirements of this paragraph (a)(1)(ii).
    (A) The notice shall be of sufficient size and visibility, and 
shall be posted in two or more conspicuous places so that the 
employer's workers at the place(s) of employment can easily see and 
read the posted notice(s).
    (B) Appropriate locations for posting the notices include, but are 
not limited to, locations in the immediate proximity of wage and hour 
notices required by 29 CFR 516.4 or occupational safety and health 
notices required by 29 CFR 1903.2(a).
    (C) The notices shall be posted on or within 30 days before the 
date the labor condition application is filed and shall remain posted 
for a total of 10 days.
    (D) Where the employer places any H-1B nonimmigrant(s) at one or 
more worksites not contemplated at the time of filing the application, 
but which are within the area of intended employment listed on the LCA, 
the employer is required to post notice(s) at such worksite(s) on or 
before the date any H-1B nonimmigrant begins work, which notice shall 
remain posted for a total of ten days.
    (2) The employer shall, no later than the date the H-1B 
nonimmigrant reports to work at the place of employment, provide the H-
1B nonimmigrant with a copy of the labor condition application 
certified by the Department.
    (b) Documentation of the fourth labor condition statement. The 
employer shall develop and maintain documentation sufficient to meet 
its burden of proving the validity of the statement referenced in 
paragraph (a) of this section and attested to on form ETA 9035. Such 
documentation shall include a copy of the dated notice and the name and 
address of the collective bargaining representative to whom the notice 
was provided. Where there is no collective bargaining representative, 
the employer shall note and retain the dates when, and locations where, 
the notice was posted and shall retain a copy of the posted notice.
    (c) Records retention; records availability. The employer's 
documentation shall not be submitted to ETA with the labor condition 
application, but shall be retained for the period of time specified in 
Sec. ______.760(c) of this part. The documentation shall be made 
available for public examination as required in Sec. ______.760(a) of 
this part, and shall be made available to DOL upon request.


Sec. ______.735  Special provisions for short-term placement of H-1B 
nonimmigrants at place(s) of employment outside the area(s) of intended 
employment listed on labor condition application.

    (a) Subject to the conditions specified in paragraph (b) of this 
section, an employer may place H-1B nonimmigrant(s) at worksite(s) 
(place(s) of employment) within areas of employment not listed on the 
employer's labor condition application(s)--whether or not the employer 
owns or controls such worksite(s)--without filing new labor condition 
application(s) for the area(s) of intended employment which would 
encompass such worksite(s).
    (b) The following restrictions shall be fully satisfied by an 
employer which places H-1B nonimmigrant(s) at worksite(s) (place(s) of 
employment) within areas of employment not listed on the employer's 
labor condition application(s):
    (1) The employer has fully satisfied the requirements of 
Secs. ______.730 through ______.734 of this part with regard to 
worksite(s) located within the area(s) of intended employment listed on 
the employer's labor condition application(s).
    (2) The employer shall not place, assign, lease, or otherwise 
contract out any H-1B nonimmigrant(s) to any worksite where there is a 
strike or lockout in the course of a labor dispute in the same 
occupational classification(s) as the H-1B nonimmigrant(s).
    (3) For every day of the H-1B nonimmigrant's(s') placement outside 
the LCA-listed area of employment, the employer shall pay such 
worker(s) the required wage (based on the prevailing wage at such 
worker's(s) permanent work site, or the employer's actual wage, 
whichever is higher) plus per diem and transportation expenses (for 
both workdays and non-workdays) at rate(s) no lower than the rate(s) 
prescribed for Federal Government employees on travel or temporary 
assignment, as set out in 41 CFR Part 301-7 and Ch. 301, App. A.
    (4) The employer's placement(s) of H-1B nonimmigrant(s) at any 
worksite(s) in an area of employment not listed on the employer's labor 
condition application(s) shall be limited to a cumulative total of 
ninety workdays within a three-year period, beginning on the first day 
on which the employer placed an H-1B nonimmigrant at any worksite 
within such area of employment. For purposes of this section, 
``workday'' shall mean any day on which one or more H-1B nonimmigrants 
perform any work at any worksite(s) within the area of employment. For 
example, one ``workday'' would be counted for a day on which seven H-1B 
nonimmigrants worked at three worksites within one city, and one 
``workday'' would be counted for a day on which one H-1B nonimmigrant 
worked at one worksite within a city. The employer may rotate such 
workers into worksites within such area of employment or may maintain a 
constant work force. However, on the first day after the accumulation 
of 90 workdays, the employer shall not have any such H-1B 
nonimmigrant(s) at any worksite(s) within such area of employment not 
included on a certified LCA.
    (c) At the accumulation of the 90 workdays described in paragraph 
(b)(4) of this section, the employer shall have ended its placement of 
all H-1B nonimmigrant(s) at any worksite(s) within the area of 
employment not listed on the labor condition application, or shall have 
filed and received a certified labor condition application for the 
area(s) of intended employment encompassing such worksite(s) and 
performed all actions required in connection with such filing(s) (e.g., 
determination of the prevailing wage; notice to collective bargaining 
representative or on-site notice to workers).
    (d) At any time during the 90-day period described in paragraph 
(b)(4) of this section, the employer may file a labor condition 
application for the area of intended employment encompassing such 
worksite(s), performing all actions required in connection with such 
labor condition application. Upon certification of such LCA, the 
employer's obligation to pay Federal per diem rates to the H-1B 
nonimmigrant(s) shall terminate. (However, see 
Sec. ______.731(c)(7)(iii)(C) regarding payment of business expenses 
for employee's travel on employer's business.)


Sec. ______.740  Labor condition application determinations.

    (a) Actions on labor condition applications submitted for filing. 
Once a labor condition application has been received from an employer, 
a determination shall be made by the ETA regional Certifying Officer 
whether to certify the labor condition application or return it to the 
employer not certified.
    (1) Certification of labor condition application. Where all items 
on Form ETA 9035 have been completed, the form is not obviously 
inaccurate, and it contains the signature of the employer or its 
authorized agent or representative, the regional Certifying Officer 
shall certify the labor condition application unless it falls within 
one of the categories set forth in paragraph (a)(2) of this section. 
The Certifying Officer shall make a determination to certify or not 
certify the labor condition application within 7 working days of the 
date the application is received and date-stamped by the Department. If 
the labor condition application is certified, the regional Certifying 
Officer shall return a certified copy of the labor condition 
application to the employer or the employer's authorized agent or 
representative. The employer shall file the certified labor condition 
application with the appropriate INS office in the manner prescribed by 
INS. The INS shall determine whether each occupational classification 
named in the certified labor condition application is a specialty 
occupation or is a fashion model of distinguished merit and ability.
    (2) Determinations not to certify labor condition applications. ETA 
shall not certify a labor condition application and shall return such 
application to the employer or the employer's authorized agent or 
representative, when either or both of the following two conditions 
exists:
    (i) When the Form ETA 9035 is not properly completed. Examples of a 
Form ETA 9035 which is not properly completed include instances where 
the employer has failed to check all the necessary boxes; or where the 
employer has failed to state the occupational classification, number of 
nonimmigrants sought, wage rate, period of intended employment, place 
of intended employment, or prevailing wage and its source; or where the 
application does not contain the signature of the employer or the 
employer's authorized agent or representative.
    (ii) When the Form ETA ETA 9035 contains obvious inaccuracies. An 
obvious inaccuracy will be found if the employer files an application 
in error--e.g., where the Administrator, Wage and Hour Division, after 
notice and opportunity for a hearing pursuant to subpart I of this 
part, has notified ETA in writing that the employer has been 
disqualified from employing H-1B nonimmigrants under section 212(n)(2) 
of the INA. Examples of other obvious inaccuracies include stating a 
wage rate below the FLSA minimum wage, submitting a labor condition 
application earlier than six months before the beginning date of the 
period of intended employment, identifying multiple occupations on a 
single labor condition application, identifying places of employment 
within the jurisdiction of more than one ETA regional office on a 
single labor condition application, identifying a wage which is below 
the prevailing wage listed on the LCA, or identifying a wage range 
where the bottom of such wage range is lower than the prevailing wage 
listed on the LCA.
    (3) Correction and resubmission of labor condition application. If 
the labor condition application is not certified pursuant to paragraph 
(a)(2) (i) or (ii) of this section, ETA shall return it to the 
employer, or the employer's authorized agent or representative, 
explaining the reasons for such return without certification. The 
employer may immediately submit a corrected application to ETA. A 
``resubmitted'' or ``corrected'' labor condition application shall be 
treated as a new application by the regional office (i.e., on a ``first 
come, first served'' basis) except that if the labor condition 
application is not certified pursuant to paragraph (a)(2)(ii) of this 
section because of notification by the Administrator of the employer's 
disqualification, such action shall be the final decision of the 
Secretary and no application shall be resubmitted by the employer.
    (b) Challenges to labor condition applications. ETA shall not 
consider information contesting a labor condition application received 
by ETA prior to the determination on the application. Such information 
shall not be made part of ETA's administrative record on the 
application, but shall be referred to ESA to be processed as a 
complaint pursuant to subpart I of this part, and, if such application 
is certified by ETA, the complaint will be handled by ESA under subpart 
I of this part.
    (c) Truthfulness and adequacy of information. DOL is not the 
guarantor of the accuracy, truthfulness or adequacy of a certified 
labor condition application. The burden of proof is on the employer to 
establish the truthfulness of the information contained on the labor 
condition application.


Sec. ______.750  Validity period of the labor condition application.

    (a) Validity of certified labor condition applications. A labor 
condition application which has been certified pursuant to the 
provisions of Sec. ______.740 of this part shall be valid for the 
period of employment indicated on Form ETA 9035 by the authorized DOL 
official; however, in no event shall the validity period of a labor 
condition application begin before the application is certified or 
exceed three years. Where the labor condition application contains 
multiple periods of intended employment, the validity period shall 
extend to the latest date indicated or three years, whichever comes 
first.
    (b) Withdrawal of certified labor condition applications. (1) An 
employer who has filed a labor condition application which has been 
certified pursuant to Sec. ______.740 of this part may withdraw such 
labor condition application at any time before the expiration of the 
validity period of the application, provided that:
    (i) H-1B nonimmigrants are not employed at the place of employment 
pursuant to the labor condition application; and
    (ii) The Administrator has not commenced an investigation of the 
particular application. Any such request for withdrawal shall be null 
and void; and the employer shall remain bound by the labor condition 
application until the enforcement proceeding is completed, at which 
time the application may be withdrawn.
    (2) Requests for withdrawals shall be in writing and shall be 
directed to the regional ETA Certifying Officer.
    (3) An employer shall comply with the ``required wage rate'' and 
``prevailing working conditions'' statements of its labor condition 
application required under Secs. ______.731 and ______.732 of this 
part, respectively, even if such application is withdrawn, at any time 
H-1B nonimmigrants are employed pursuant to the application, unless the 
application is superseded by a subsequent application which is 
certified by ETA.
    (4) An employer's obligation to comply with the ``no strike or 
lockout'' and ``notice'' statements of its labor condition application 
(required under Secs. ______.733 and ______.734 of this part, 
respectively), shall remain in effect and the employer shall remain 
subject to investigation and sanctions for misrepresentation on these 
statements even if such application is withdrawn, regardless of whether 
H-1B nonimmigrants are actually employed, unless the application is 
superseded by a subsequent application which is certified by ETA.
    (5) Only for the purpose of assuring the labor standards 
protections afforded under the H-1B program, where an employer files a 
petition with INS under the H-1B classification pursuant to a certified 
LCA that had been withdrawn by the employer, such petition filing binds 
the employer to all obligations under the withdrawn LCA immediately 
upon receipt of such petition by INS.
    (c) Invalidation or suspension of a labor condition application.
    (1) Invalidation of a labor condition application shall result from 
enforcement action(s) by the Administrator, Wage and Hour Division, 
under subpart I of this part--e.g., a final determination finding the 
employer's failure to meet the application's condition regarding strike 
or lockout; or the employer's willful failure to meet the wage and 
working conditions provisions of the application; or the employer's 
substantial failure to meet the notice of specification requirements of 
the application; see Secs. ______.734 and ______.760 of this part; or 
the misrepresentation of a material fact in an application. Upon notice 
by the Administrator of the employer's disqualification, ETA shall 
invalidate the application and notify the employer, or the employer's 
authorized agent or representative. ETA shall notify the employer in 
writing of the reason(s) that the application is invalidated. When a 
labor condition application is invalidated, such action shall be the 
final decision of the Secretary.
    (2) Suspension of a labor condition application may result from a 
discovery by ETA that it made an error in certifying the application 
because such application is incomplete, contains one or more obvious 
inaccuracies, or has not been signed. In such event, ETA shall 
immediately notify INS and the employer. When an application is 
suspended, the employer may immediately submit to the certifying 
officer a corrected or completed application. If ETA does not receive a 
corrected application within 30 days of the suspension, or if the 
employer was disqualified by the Administrator, the application shall 
be immediately invalidated as described in paragraph (c) of this 
section.
    (3) An employer shall comply with the ``required wages rate'' and 
``prevailing working conditions'' statements of its labor condition 
application required under Secs. ______.731 and ______.732 of this 
part, respectively, even if such application is suspended or 
invalidated, at any time H-1B nonimmigrants are employed pursuant to 
the application, unless the application is superseded by a subsequent 
application which is certified by ETA.
    (4) An employer's obligation to comply with the ``no strike or 
lockout'' and ``notice'' statements of its labor condition application 
(required under Secs. ______.733 and ______.734 of this part, 
respectively), shall remain in effect and the employer shall remain 
subject to investigation and sanctions for misrepresentation on these 
statements even if such application is suspended or invalidated, 
regardless of whether H-1B nonimmigrants are actually employed, unless 
the application is superseded by a subsequent application which is 
certified by ETA.
    (d) Employers subject to disqualification. No labor condition 
application shall be certified for an employer which has been found to 
be disqualified from participation, in the H-1B program as determined 
in a final agency action following an investigation by the Wage and 
Hour Division pursuant to subpart I of this part.


Sec. ______.760  Public access; retention of records.

    (a) Public examination. The employer shall make a filed labor 
condition application and necessary supporting documentation available 
for public examination at the employer's principal place of business in 
the U.S. or at the place of employment within one working day after the 
date on which the labor condition application is filed with DOL. The 
following documentation shall be necessary:
    (1) A copy of the completed labor condition application, Form ETA 
9035. If the application is submitted by facsimile transmission, the 
application containing the original signature shall be maintained by 
the employer;
    (2) Documentation which provides the wage rate to be paid the H-1B 
nonimmigrant;
    (3) A full, clear explanation of the system that the employer used 
to set the ``actual wage'' the employer has paid or will pay workers in 
the occupation for which the H-1B nonimmigrant is sought, including any 
periodic increases which the system may provide--e.g., memorandum 
summarizing the system or a copy of the employer's pay system or scale 
(payroll records are not required, although they shall be made 
available to the Department in an enforcement action).
    (4) A copy of the documentation the employer used to establish the 
``prevailing wage'' for the occupation for which the H-1B nonimmigrant 
is sought (a general description of the source and methodology is all 
that is required to be made available for public examination; the 
underlying individual wage data relied upon to determine the prevailing 
wage is not a public record, although it shall be made available to the 
Department in an enforcement action); and
    (5) A copy of the document(s) with which the employer has satisfied 
the union/employee notification requirements of Sec. ______.734 of this 
part.
    (b) National list of applications. ETA shall compile and maintain 
on a current basis a list of the labor condition applications. Such 
list shall be by employer, showing the occupational classification, 
wage rate(s), number of nonimmigrants sought, period(s) of intended 
employment, and date(s) of need for each employer's application. The 
list shall be available for public examination at the Department of 
Labor, 200 Constitution Avenue, NW., Room N-4456, Washington, DC 20210.
    (c) Retention of records. Either at the employer's principal place 
of business in the U.S. or at the place of employment, the employer 
shall retain copies of the labor condition application, required wage 
information, and documentation showing provision of notice to 
bargaining representatives or employees at the place of employment for 
a period of one year beyond the end of the period of employment 
specified on the labor condition application or one year from the date 
the labor condition application was withdrawn, except that if an 
enforcement action is commenced, the documentation shall be retained 
until the enforcement proceeding is completed through the procedures 
set forth in subpart I of this part. Required payroll records for the 
H-1B employees and other employees in the occupational classification 
shall be retained at the employer's principal place of business in the 
U.S. or at the place of employment for a period of three years from the 
date(s) of the creation of the record(s), except that if an enforcement 
action is commenced, all payroll records shall be retained until the 
enforcement proceeding is completed through the procedures set forth in 
subpart I of this part.

Appendix A to Subpart H--Guidance for Determination of the ``Actual 
Wage''

    In determining the required wage rate, in addition to obtaining 
the prevailing wage, the employer must establish the actual wage for 
the occupation in which the H-1B nonimmigrant is employed by the 
employer. For purposes of establishing its compensation system for 
workers in an occupational category, an employer may take into 
consideration objective standards relating to experience, 
qualifications, education, specific job responsibility and function, 
specialized knowledge, and other legitimate business factors. The 
use of any or all these factors is at the discretion of the 
employer. The employer must have and document an objective system 
used to determine the wages of non-H-1B workers, and apply that 
system to H-1B nonimmigrants as well. It is not sufficient for the 
employer simply to calculate an average wage of all non-H-1B 
employees in an occupation; the actual wage is not an ``average 
wage''.
    The documents explaining the system must be maintained in the 
public disclosure file. The explanation of the compensation system 
must be sufficiently detailed to enable a third party to apply the 
system to arrive at the actual wage rate computed by the employer 
for any H-1B nonimmigrant. The computation of the H-1B 
nonimmigrant's individual actual wage rate must be documented in the 
H-1B nonimmigrant's personnel file.
    Assuming the actual wage is higher than the prevailing wage and 
thus is the required wage rate, if an employer gives its employees a 
raise at year's end or if the system provides for other adjustments 
in wages, H-1B nonimmigrants must also be given the raise 
(consistent with legitimate employer-established criteria such as 
level of performance, attendance, etc.). This is consistent with 
Congressional intent that H-1B nonimmigrants and similarly employed 
U.S. workers be provided the same wages.
    Where the employer's pay system or scale provides adjustments 
during the validity period of the LCA--e.g., cost-of-living increase 
or other annual adjustments, increase in the entry-level rate for 
the occupation due to market forces, or the employee moves into a 
more advanced level in the same occupation--the employer shall 
retain documentation explaining the changes and clearly showing 
that, after such adjustments, the wages paid to the H-1B 
nonimmigrant are at least the greater of the adjusted actual wage or 
the prevailing wage for the occupation in the area of intended 
employment.
    The following examples illustrate these principles:
    (1) Worker A is paid $10.00 per hour and supervises two 
employees. Worker B, who is similarly qualified and performs 
substantially the same job duties except for supervising other 
employees, is paid $8.00 per hour because he/she has no supervisory 
responsibility.
    The compensation differential is acceptable because it is based 
upon a relevant distinction in job duties, responsibilities, and 
functions: The difference in the supervisory responsibilities of the 
two employees. The actual wage in this occupation at the worksite 
for workers with supervisory responsibility is $10.00 per hour; the 
actual wage in this occupation at the worksite for workers without 
supervisory responsibility is $8.00 per hour.
    (2) Systems Analyst A has experience with a particular software 
which the employer is interested in purchasing, of which none of the 
employer's current employees have knowledge. The employer buys the 
software and hires Systems Analyst A on an H-1B visa to train the 
other employees in its application. The employer pays Systems 
Analyst A more than its other Systems Analysts who are otherwise 
similarly qualified.
    The compensation differential is acceptable because of the 
distinction in the specialized knowledge and the job duties of the 
employees. Systems Analyst A, in addition to the qualifications and 
duties normally associated with this occupation at the employer's 
worksite, is also specially knowledgeable and responsible for 
training the employer's other Systems Analysts in a new software 
package. As a result, Systems Analyst A commands a higher actual 
wage. However, if the employer employs other similarly qualified 
systems analysts who also have unique knowledge and perform similar 
duties in training other analysts in their area of expertise, the 
actual wage for Systems Analyst A would have to be at least 
equivalent to the actual wage paid to such similarly employed 
analysts.
    (3) An employer seeks a scientist to conduct AIDS research in 
the employer's laboratory. Research Assistants A (a U.S. worker) and 
B (an H-1B nonimmigrant) both hold Ph.D's in the requisite field(s) 
of study and have the same number of years of experience in AIDS 
research. However, Research Assistant A's experience is on the 
cutting edge of a breakthrough in the field and his/her work history 
is distinguished by frequent praise and recognition in writing and 
through awards. Research Assistant B (the nonimmigrant) has a 
respectable work history but has not conducted research which has 
been internationally recognized. Employer pays Research Assistant A 
$10,000 per year more than Research Assistant B in recognition of 
his/her unparalleled expertise and accomplishments. The employer now 
wants to hire a third Research Assistant on an H-1B visa to 
participate in the work.
    The differential between the salary paid Research Assistant A 
(the U.S. worker) and Research Assistant B (an H-1B nonimmigrant) is 
acceptable because it is based upon the specialized knowledge, 
expertise and experience of Research Assistant A, demonstrated in 
writing. The employer is not required to pay Research Assistant B 
the same wage rate as that paid Research Assistant A, even though 
they may have the same job titles. The actual wage required for the 
third Research Assistant, to be hired on an H-1B visa, would be the 
wage paid to Research Assistant B unless he/she has internationally 
recognized expertise similar to that of Research Assistant A. As set 
out in Sec. ______.731(1)(A) the employer must have and document the 
system used in determining the actual wage of H-1B nonimmigrants. 
The explanation of the system must be such that a third party may 
use the system to arrive at the actual wage paid the H-1B 
nonimmigrant.
    (4) Employer located in City X seeks experienced mechanical 
engineers. In City X, the prevailing wage for such engineers is 
$49,500 annually. In setting the salaries of U.S. workers, employer 
pays its nonsupervisory mechanical engineers with 5 to 10 years of 
experience between $50,000 and $75,000 per year, using defined pay 
scale ``steps'' tied to experience. Employer hires engineers A, B, 
and C, who each have five years of experience and similar 
qualifications and will perform substantially the same 
nonsupervisory job duties. Engineer A is from Japan, where he/she 
earns the equivalent of $80,000 per year. Engineer B is from France 
and had been earning the equivalent of $50,000 per year. Engineer C 
is from India and had been earning the equivalent of $20,000 per 
year. Employer pays Engineer A $80,000 per year, Engineer B $50,000, 
and Engineer C $20,000 as the employer has had a long-established 
system of maintaining the home-country pay levels of temporary 
foreign workers.
    The INA requires that the employer pay the H-1B nonimmigrant at 
least the actual wage or the prevailing wage, whichever is greater, 
but there is no prohibition against paying an H-1B nonimmigrant a 
greater wage. Therefore, Engineer A may lawfully be paid the $80,000 
per year. Engineer B's salary of $50,000 is acceptable, since this 
is the employer's actual wage for an engineer with Engineer B's 
experience and duties. Engineer C's salary, however, at a rate of 
$20,000 per year, is unacceptable under the law, even given the 
employer's ``long-established `home country' system,'' since $20,000 
would be below both the actual wage and the prevailing wage. The 
latter situation is an example of an illegitimate business factor, 
i.e., a system to maintain salary parity with peers in the country 
of origin, which yields a wage below the required wage levels.

Subpart I--Enforcement of H-1B Labor Condition Applications


Sec. ______.800  Enforcement authority of Administrator, Wage and Hour 
Division.

    (a) Authority of Administrator. The Administrator shall perform all 
the Secretary's investigative and enforcement functions under section 
212(n) of the INA (8 U.S.C. 1182(n)) and subparts H and I of this part.
    (b) Conduct of investigations. The Administrator, either pursuant 
to a complaint or otherwise, shall conduct such investigations as may 
be appropriate and, in connection therewith, enter and inspect such 
places and such records (and make transcriptions or copies thereof), 
question such persons and gather such information as deemed necessary 
by the Administrator to determine compliance regarding the matters 
which are the subject of the investigation.
    (c) Availability of records. An employer being investigated shall 
make available to the Administrator such records, information, persons, 
and places as the Administrator deems appropriate to copy, transcribe, 
question, or inspect. No employer subject to the provisions of section 
212(n) of the INA (8 U.S.C. 1182(n)) and/or subpart H or I of this part 
shall interfere with any official of the Department of Labor performing 
an investigation, inspection or law enforcement function pursuant to 8 
U.S.C. 1182(n) or subpart H or I of this part. Any such interference 
shall be a violation of the labor condition application and the 
regulations in subparts H and I of this part, and the Administrator may 
take such further actions as the Administrator considers appropriate.

    (Note: Federal criminal statutes prohibit certain interference 
with a Federal officer in the performance of official duties. 18 
U.S.C. 111 and 18 U.S.C. 1114.)

    (d) Employer cooperation. (1) An employer subject to subpart H or I 
of this part shall at all times cooperate in administrative and 
enforcement proceedings. No employer shall intimidate, threaten, 
restrain, coerce, blacklist, discharge, retaliate, or in any manner 
discriminate against any person because such person has:
    (i) Filed a complaint or appeal under or related to section 212(n) 
of the INA (8 U.S.C. 1182(n)) or subpart H or I of this part;
    (ii) Testified or is about to testify in any proceeding under or 
related to section 212(n) of the INA (8 U.S.C. 1182(n)) or subpart H or 
I of this part;
    (iii) Exercised or asserted on behalf of himself or herself or 
others any right or protection afforded by section 212(n) of the INA (8 
U.S.C. 1182(n)) or subpart H or I of this part;
    (iv) Consulted with an employee of a legal assistance program or an 
attorney on matters related to section 212(n) of the INA (8 U.S.C. 
1182(n)) or to subpart H or I of this part or any other DOL regulation 
promulgated pursuant to 8 U.S.C. 1182(n).
    (2) In the event of such intimidation or restraint as are described 
in this paragraph (d), the conduct shall be a violation of the labor 
condition application and subparts H and I of this part, and the 
Administrator may take such further actions as the Administrator 
considers appropriate.
    (e) Confidentiality. The Administrator shall, to the extent 
possible under existing law, protect the confidentiality of any person 
who provides information to the Department in confidence in the course 
of an investigation or otherwise under subpart H or I of this part.


Sec. ______.805  Complaints and investigative procedures.

    (a) The Administrator, through an investigation either pursuant to 
a complaint or otherwise, shall determine whether an H-1B employer has:
    (1) Filed a labor condition application with ETA which 
misrepresents a material fact.

    (Note: Federal criminal statutes provide penalties of up to 
$10,000 and/or imprisonment of up to 5 years for knowing and willful 
submission of false statements to the Federal Government. 18 U.S.C. 
1001; see also 18 U.S.C. 1546);

    (2) (i) Willfully failed to pay wages as required under 
Sec. ______.731 of this part;
    (ii) Willfully failed to provide the working conditions required 
under Sec. ______.732 of this part;
    (3) Filed a labor condition application for H-1B nonimmigrants 
during a strike or lockout in the course of a labor dispute in the 
occupational classification at the place of employment (see 
Sec. ______.733 of this part); or
    (4) Substantially failed to provide notice of the filing of the 
labor condition application as required in Sec. ______.734 of this 
part;
    (5) Substantially failed to be specific on the labor condition 
application as to the number of workers sought, the occupational 
classification in which the H-1B nonimmigrants will be employed, or the 
wage rate and conditions under which the H-1B nonimmigrants will be 
employed;
    (6) Failed to pay wages as required under Sec. ______.731 of this 
part, for purposes of the assessment of back wages (pursuant to 
Sec. ______.810(a) of this part);
    (7) Failed to make available for public examination the application 
and necessary document(s) at the employer's principal place of business 
or worksite as required in Sec. ______.760(a);
    (8) Failed to retain documentation as required by 
Sec. ______.760(c) of this part; or
    (9) Failed otherwise to comply in any other manner with the 
provisions of subpart H or I of this part.
    (b) For purposes of this part, ``willful failure'' means a knowing 
failure or a reckless disregard with respect to whether the conduct was 
contrary to Section 212(n)(1)(A) (i) or (ii) of the INA, or 
Sec. ______.731 or ______.732 of this part. See McLaughlin v. Richland 
Shoe Co., 486 U.S. 128 (1988); see also Trans World Airlines v. 
Thurston, 469 U.S. 111 (1985).
    (c) Pursuant to Secs. ______.740(a)(1) and ______.750 of this part, 
the provisions of this part become applicable upon the date of ETA's 
notification that the employer's labor condition application is 
certified, whether or not the employer hires any H-1B nonimmigrants in 
the occupation for the period of employment covered in the labor 
condition application. Should the period of employment specified in the 
labor condition application expire or should the employer withdraw the 
application in accordance with Sec. ______.750(b) of this part, the 
provisions of this part will no longer apply with respect to such 
application, except as provided in Sec. ______.750(b) (3) and (4) of 
this part.
    (d) Any aggrieved person or organization (including bargaining 
representatives and governmental officials) may file a complaint 
alleging a violation described in paragraph (a) of this section.
    (1) No particular form of complaint is required, except that the 
complaint shall be written or, if oral, shall be reduced to writing by 
the Wage and Hour Division official who receives the complaint.
    (2) The complaint shall set forth sufficient facts for the 
Administrator to determine whether an investigation is warranted, in 
that there is reasonable cause to believe that a violation as described 
in paragraph (a) of this section has been committed. This determination 
shall be made within 10 days of the date that the complaint is received 
by a Wage and Hour Division official. If the Administrator determines 
that the complaint fails to present reasonable cause for an 
investigation, the Administrator shall so notify the complainant, who 
may submit a new complaint, with such additional information as may be 
necessary. No hearing pursuant to this subpart shall be available where 
the Administrator determines that an investigation on a complaint is 
not warranted.
    (3) If the Administrator determines that an investigation on a 
complaint is warranted, the complaint shall be accepted for filing; an 
investigation shall be conducted and a determination issued within 30 
calendar days of the date of filing.
    (4) In the event that the Administrator seeks a prevailing wage 
determination from ETA pursuant to Sec. ______.731(d) of this part, or 
advice as to prevailing working conditions from ETA pursuant to 
Sec. ______.732(c)(2) of this part, the 30-day investigation period 
shall be suspended from the date of the Administrator's request to the 
date of the Administrator's receipt of the wage determination (or, in 
the event that the employer challenges the wage determination through 
the Employment Service complaint system, to the date of the completion 
of such complaint process) or advice as to prevailing working 
conditions.
    (5) A complaint must be filed not later than 12 months after the 
latest date on which the alleged violation(s) were committed, which 
would be the date on which the employer allegedly failed to perform an 
action or fulfill a condition specified in the LCA, or allegedly took 
an action which, through such action or inaction, demonstrates a 
misrepresentation of a material fact in the LCA regarding such action 
or inaction. This jurisdictional bar does not affect the scope of the 
remedies which may be assessed by the Administrator. Where, for 
example, a complaint is timely filed, back wages may be assessed for a 
period prior to one year before the filing of a complaint.
    (6) A complaint may be submitted to any local Wage and Hour 
Division office. The addresses of such offices are found in local 
telephone directories. The office or person receiving such a complaint 
shall refer it to the office of the Wage and Hour Division 
administering the area in which the reported violation is alleged to 
have occurred.
    (e) When an investigation has been conducted, the Administrator 
shall, pursuant to Sec. ______.815 of this part, issue a written 
determination as to whether or not any violation(s) as described in 
paragraph (a) of this section has been committed.


Sec. ______.810  Remedies.

    (a) Upon determining that the employer has failed to pay wages as 
required by Sec. ______.731 of this part, the Administrator shall 
assess and oversee the payment of back wages to any H-1B nonimmigrant 
employed by the employer in the specific employment in question. The 
back wages shall be equal to the difference between the amount that 
should have been paid and the amount that actually was paid to such 
nonimmigrant(s);
    (b) Upon determining that the employer has committed any 
violation(s) described in Sec. ______.805(a) of this part (other than a 
violation of Sec. ______.805(a)(6)), the Administrator may assess a 
civil money penalty not to exceed $1,000 per violation. In determining 
the amount of civil money penalty to be assessed, the Administrator 
shall consider the type of violation committed and other relevant 
factors. The factors which may be considered include, but are not 
limited to, the following:
    (1) Previous history of violation, or violations, by the employer 
under the INA and subpart H or I of this part;
    (2) The number of workers affected by the violation or violations;
    (3) The gravity of the violation or violations;
    (4) Efforts made by the violator in good faith to comply with the 
provisions of 8 U.S.C. 1182(n) and subparts H and I of this part;
    (5) The violator's explanation of the violation or violations;
    (6) The violator's commitment to future compliance; and
    (7) The extent to which the violator achieved a financial gain due 
to the violation, or the potential financial loss, potential injury or 
adverse effect with respect to other parties.
    (c) In addition to back wages and civil money penalties, the 
Administrator may impose such other administrative remedy(ies) under 
this subpart as the Administrator deems appropriate.
    (d) The civil money penalties, back wages, and/or any other 
remedy(ies) determined by the Administrator to be appropriate are 
immediately due for payment or performance upon the assessment by the 
Administrator, or upon the decision by an administrative law judge 
where a hearing is timely requested, or the decision by the Secretary 
where review is granted. The employer shall remit the amount of the 
civil money penalty by certified check or money order made payable to 
the order of ``Wage and Hour Division, Labor.'' The remittance shall be 
delivered or mailed to the Wage and Hour Division office in the manner 
directed in the Administrator's notice of determination. The 
performance of any other remedy prescribed by the Administrator shall 
follow procedures established by the Administrator. Distribution of 
back wages shall be administered in accordance with existing procedures 
established by the Administrator.


Sec. ______.815  Written notice and service of Administrator's 
determination.

    (a) The Administrator's determination, issued pursuant to 
Sec. ______.805 of this part, shall be served on the complainant, the 
employer, and other known interested parties by personal service or by 
certified mail at the parties' last known addresses. Where service by 
certified mail is not accepted by the party, the Administrator may 
exercise discretion to serve the determination by regular mail.
    (b) The Administrator shall file with the Chief Administrative Law 
Judge, U.S. Department of Labor, a copy of the complaint and the 
Administrator's determination.
    (c) The Administrator's written determination required by 
Sec. ______.805 of this part shall:
    (1) Set forth the determination of the Administrator and the reason 
or reasons therefor, and in the case of a finding of violation(s) by an 
employer, prescribe any remedies, including the amount of any back 
wages assessed, the amount of any civil money penalties assessed and 
the reason therefor, and/or any other remedies assessed.
    (2) Inform the interested parties that they may request a hearing 
pursuant to Sec. ______.820 of this part.
    (3) Inform the interested parties that in the absence of a timely 
request for a hearing, received by the Chief Administrative Law Judge 
within 15 calendar days of the date of the determination, the 
determination of the Administrator shall become final and not 
appealable.
    (4) Set forth the procedure for requesting a hearing, give the 
addresses of the Chief Administrative Law Judge (with whom the request 
must be filed) and the representative(s) of the Solicitor of labor 
(upon whom copies of the request must be served).
    (5) Inform the parties that, pursuant to Sec. ______.855 of this 
part, the Administrator shall notify ETA and the Attorney General of 
the occurrence of a violation by the employer.


Sec. ______.820  Request for hearing.

    (a) Any interested party desiring to request an administrative 
hearing in accordance with section 556 of title 5, United States Code, 
on a determination issued pursuant to Secs. ______.805 and ______.815 
of this part shall make such request in writing to the Chief 
Administrative Law Judge at the address stated in the notice of 
determination.
    (b) Interested parties may request a hearing in the following 
circumstances:
    (1) The complainant or any other interested party may request a 
hearing where the Administrator determines, after investigation, that 
there is no basis for a finding that an employer has committed 
violation(s). In such a proceeding, the party requesting the hearing 
shall be the prosecuting party and the employer shall be the 
respondent; the Administrator may intervene as a party or appear as 
amicus curiae at any time in the proceeding, at the Administrator's 
discretion.
    (2) The employer or any other interested party may request a 
hearing where the Administrator determines, after investigation, that 
the employer has committed violation(s). In such a proceeding, the 
Administrator shall be the prosecuting party and the employer shall be 
the respondent.
    (c) No particular form is prescribed for any request for hearing 
permitted by this section. However, any such request shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the notice of 
determination giving rise to such request;
    (4) State the specific reason or reasons why the party requesting 
the hearing believes such determination is in error;
    (5) Be signed by the party making the request or by an authorized 
representative of such party; and
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto.
    (d) The request for such hearing shall be received by the Chief 
Administrative Law Judge, at the address stated in the Administrator's 
notice of determination, no later than 15 calendar days after the date 
of the determination. An interested party which fails to meet this 15-
day deadline for requesting a hearing may thereafter participate in the 
proceedings only by consent of the administrative law judge, either 
through intervention as a party pursuant to 29 CFR 18.10 (b) through 
(d) or through participation as an amicus curiae pursuant to 29 CFR 
18.12.
    (e) The request may be filed in person, by facsimile transmission, 
by certified or regular mail, or by courier service. For the requesting 
party's protection, if the request is by mail, it should be by 
certified mail. If the request is by facsimile transmission, the 
original of the request, signed by the requestor or authorized 
representative, shall be filed within ten days.
    (f) Copies of the request for a hearing shall be sent by the 
requestor to the Wage and Hour Division official who issued the 
Administrator's notice of determination, to the representative(s) of 
the Solicitor of Labor identified in the notice of determination, and 
to all known interested parties.


Sec. ______.825  Rules of practice for administrative law judge 
proceedings.

    (a) Except as specifically provided in this subpart, and to the 
extent they do not conflict with the provisions of this subpart, the 
``Rules of Practice and Procedure for Administrative Hearings Before 
the Office of Administrative Law Judges'' established by the Secretary 
at 29 CFR part 18 shall apply to administrative proceedings under this 
subpart.
    (b) As provided in the Administrative Procedure Act, 5 U.S.C. 556, 
any oral or documentary evidence may be received in proceedings under 
this part. The Federal Rules of Evidence and subpart B of the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges (29 CFR part 18, subpart B) shall not apply, 
but principles designed to ensure production of relevant and probative 
evidence shall guide the admission of evidence. The administrative law 
judge may exclude evidence which is immaterial, irrelevant, or unduly 
repetitive.


Sec. ______.830  Service and computation of time.

    (a) Under this subpart, a party may serve any pleading or document 
by regular mail. Service on a party is complete upon mailing to the 
last known address. No additional time for filing or response is 
authorized where service is by mail. In the interest of expeditious 
proceedings, the administrative law judge may direct the parties to 
serve pleadings or documents by a method other than regular mail.
    (b) Two (2) copies of all pleadings and other documents in any 
administrative law judge proceeding shall be served on the attorneys 
for the Administrator. One copy shall be served on the Associate 
Solicitor, Division of Fair Labor Standards, Office of the Solicitor, 
U.S. Department of Labor, 200 Constitution Avenue NW., Room N-2716, 
Washington, DC 20210, and one copy shall be served on the attorney 
representing the Administrator in the proceeding.
    (c) Time will be computed beginning with the day following the 
action and includes the last day of the period unless it is a Saturday, 
Sunday, or federally-observed holiday, in which case the time period 
includes the next business day.


Sec. ______.835  Administrative law judge proceedings.

    (a) Upon receipt of a timely request for a hearing filed pursuant 
to and in accordance with Sec. ______.820 of this part, the Chief 
Administrative Law Judge shall promptly appoint an administrative law 
judge to hear the case.
    (b) Within 7 calendar days following the assignment of the case, 
the administrative law judge shall notify all interested parties of the 
date, time and place of the hearing. All parties shall be given at 
least fourteen calendar days notice of such hearing.
    (c) The date of the hearing shall be not more than 60 calendar days 
from the date of the Administrator's determination. Because of the time 
constraints imposed by the INA, no request for postponement shall be 
granted except for compelling reasons. Even where such reasons are 
shown, no request for postponement of the hearing beyond the 60-day 
deadline shall be granted except by consent of all the parties to the 
proceeding.
    (d) The administrative law judge may prescribe a schedule by which 
the parties are permitted to file a prehearing brief or other written 
statement of fact or law. Any such brief or statement shall be served 
upon each other party in accordance with Sec. ______.830 of this part. 
Posthearing briefs will not be permitted except at the request of the 
administrative law judge. When permitted, any such brief shall be 
limited to the issue or issues specified by the administrative law 
judge, shall be due within the time prescribed by the administrative 
law judge, and shall be served on each other party in accordance with 
Sec. ______.830 of this part.


Sec. ______.840  Decision and order of administrative law judge.

    (a) Within 60 calendar days after the date of the hearing, the 
administrative law judge shall issue a decision. If any party desires 
review of the decision, including judicial review, a petition for 
Secretary's review thereof shall be filed as provided in 
Sec. ______.845 of this subpart. If a petition for review is filed, the 
decision of the administrative law judge shall be inoperative unless 
and until the Secretary issues an order affirming the decision, or, 
unless and until 30 calendar days have passed after the Secretary's 
receipt of the petition for review and the Secretary has not issued 
notice to the parties that the Secretary will review the administrative 
law judge's decision.
    (b) The decision of the administrative law judge shall include a 
statement of findings and conclusions, with reasons and basis therefor, 
upon each material issue presented on the record. The decision shall 
also include an appropriate order which may affirm, deny, reverse, or 
modify, in whole or in part, the determination of the Administrator; 
the reason or reasons for such order shall be stated in the decision.
    (c) In the event that the Administrator's determination(s) of wage 
violation(s) and computation of back wages are based upon a wage 
determination obtained by the Administrator from ETA during the 
investigation (pursuant to Sec. ______.731(d) of this part), and the 
administrative law judge determines that the Administrator's request 
was not warranted (under the standards in Sec. ______.731(d) of this 
part), the administrative law judge shall remand the matter to the 
Administrator for further proceedings on the issue(s) of the existence 
of wage violation(s) and/or the amount(s) of back wages owed. If there 
is no such determination and remand by the administrative law judge, 
the administrative law judge shall accept such wage determination as 
accurate. Such wage determination is one made by ETA, from which the 
employer did not file a timely complaint through the Employment Service 
complaint system or from which the employer has appealed through the ES 
complaint system and a final decision therein has been issued. See 
Sec. ______.731 of this part; see also 20 CFR 658.420 through 658.426. 
Under no circumstances shall the administrative law judge determine the 
validity of the wage determination or require source data obtained in 
confidence by ETA or the SESA, or the names of establishments contacted 
by ETA or the SESA, to be submitted into evidence or otherwise 
disclosed.
    (d) The administrative law judge shall not render determinations as 
to the legality of a regulatory provision or the constitutionality of a 
statutory provision.
    (e) The decision shall be served on all parties in person or by 
certified or regular mail.


Sec. ______.845  Secretary's review of administrative law judge's 
decision.

    (a) The Administrator or any interested party desiring review of 
the decision and order of an administrative law judge shall petition 
the Secretary to review the decision and order. To be effective, such 
petition shall be received by the Secretary within 30 calendar days of 
the date of the decision and order. Copies of the petition shall be 
served on all parties and on the administrative law judge.
    (b) No particular form is prescribed for any petition for 
Secretary's review permitted by this subpart. However, any such 
petition shall:
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) Specify the issue or issues stated in the administrative law 
judge decision and order giving rise to such petition;
    (4) State the specific reason or reasons why the party petitioning 
for review believes such decision and order are in error;
    (5) Be signed by the party filing the petition or by an authorized 
representative of such party;
    (6) Include the address at which such party or authorized 
representative desires to receive further communications relating 
thereto; and
    (7) Attach copies of the administrative law judge's decision and 
order, and any other record documents which would assist the Secretary 
in determining whether review is warranted.
    (c) Whenever the Secretary determines to review the decision and 
order of an administrative law judge, a notice of the Secretary's 
determination shall be served upon the administrative law judge and 
upon all parties to the proceeding within 30 calendar days after the 
Secretary's receipt of the petition for review.
    (d) Upon receipt of the Secretary's notice, the Office of 
Administrative Law Judges shall within fifteen calendar days forward 
the complete hearing record to the Secretary.
    (e) The Secretary's notice shall specify:
    (1) The issue or issues to be reviewed;
    (2) The form in which submissions shall be made by the parties 
(e.g., briefs);
    (3) The time within which such submissions shall be made.
    (f) All documents submitted to the Secretary shall be filed with 
the Secretary of Labor, U.S. Department of Labor, Washington, DC 20210, 
Attention: Executive Director, Office of Administrative Appeals, Room 
S-4309. An original and two copies of all documents shall be filed. 
Documents are not deemed filed with the Secretary until actually 
received by the Secretary. All documents, including documents filed by 
mail, shall be received by the Secretary either on or before the due 
date.
    (g) Copies of all documents filed with the Secretary shall be 
served upon all other parties involved in the proceeding. Service upon 
the Administrator shall be in accordance with Sec. ______.830(b) of 
this part.
    (h) The Secretary's final decision shall be issued within 180 
calendar days from the date of the notice of intent to review. The 
Secretary's decision shall be served upon all parties and the 
administrative law judge.
    (i) Upon issuance of the Secretary's decision, the Secretary shall 
transmit the entire record to the Chief Administrative Law Judge for 
custody pursuant to Sec. ______.850 of this part.


Sec. ______.850  Administrative record.

    The official record of every completed administrative hearing 
procedure provided by subparts H and I of this part shall be maintained 
and filed under the custody and control of the Chief Administrative Law 
Judge. Upon receipt of a complaint seeking review of the final agency 
action in a United States District Court, the Chief Administrative Law 
Judge shall certify the official record and shall transmit such record 
to the clerk of the court.


Sec. ______.855  Notice to the Employment and Training Administration 
and the Attorney General.

    (a) The Administrator shall notify the Attorney General and ETA of 
the final determination of a violation listed under Sec. ______.805(a) 
(1) through (5) by an employer upon the earliest of the following 
events:
    (1) Where the Administrator determines that there is a basis for a 
finding of violation by an employer, and no timely request for hearing 
is made pursuant to Sec. ______.820 of this part; or
    (2) Where, after a hearing, the administrative law judge issues a 
decision and order finding a violation by an employer, and no timely 
petition for review to the Secretary is made pursuant to 
Sec. ______.845 of this part; or
    (3) Where a petition for review is taken from an administrative law 
judge's decision finding a violation and the Secretary either declines 
within thirty days to entertain the appeal, pursuant to 
Sec. ______.845(c) of this part, or the Secretary affirms the 
administrative law judge's determination; or
    (4) Where the administrative law judge finds that there was no 
violation by an employer, and the Secretary, upon review, issues a 
decision pursuant to Sec. ______.845 of this part, holding that a 
violation was committed by an employer.
    (b) The Attorney General, upon receipt of notification from the 
Administrator pursuant to paragraph (a) of this section, shall not 
approve petitions filed with respect to that employer under sections 
204 or 214(c) of the INA (8 U.S.C. 1154 and 1184(c)) during a period of 
at least one year for nonimmigrants to be employed by the employer.
    (c) ETA, upon receipt of the Administrator's notice pursuant to 
paragraph (a) of this section, shall invalidate the employer's labor 
condition application(s) under subparts H and I of this part, and shall 
not accept for filing any application or attestation submitted by the 
employer under 20 CFR part 656 or subparts A, B, C, D, E, H, or I of 
this part, for a period of 12 months or for a longer period if such is 
specified by the Attorney General for visa petitions filed by that 
employer under sections 204 and 214(c) of the INA.

Adoption of the Joint Rule

    The agency-specific adoption of the joint rule, which appears at 
the end of the common preamble, appears below:

TITLE 20--EMPLOYEES' BENEFITS

    Accordingly, part 655 of chapter V of title 20, Code of Federal 
Regulations, is amended as follows:

PART 655--TEMPORARY EMPLOYMENT OF NONIMMIGRANTS IN THE UNITED 
STATES

    1. The authority citation for Part 655 is revised to read as 
follows:

    Authority: Section 655.0 issued under 8 U.S.C. 1101(a)(15)(H) 
(i) and (ii), 1182 (m) and (n), 1184, 1188, and 1288(c); 29 U.S.C. 
49 et seq.; sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2103 (8 
U.S.C. 1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat. 4978, 
5027 (8 U.S.C. 1184 note); and 8 CFR 214.2(h)(4)(i).
    Section 655.00 issued under 8 U.S.C. 1101(a)(15)(H)(ii), 1184, 
and 1188; 29 U.S.C. 49 et seq.; and 8 CFR 214.2(h)(4)(i).
    Subparts A and C issued under 8 U.S.C. 1101(a)(15)(H)(ii)(b) and 
1184; 29 U.S.C. 49 et seq., and 8 CFR 214.2(h)(4)(i).
    Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184, and 
1188; and 29 U.S.C. 49 et seq.
    Subparts D and E issued under 8 U.S.C. 1101(a)(15)(H)(i)(a), 
1182(m), and 1184; 29 U.S.C. 49 et seq.; and sec. 3(c)(1), Pub. L. 
101-238, 103 Stat. 2099, 2103 (8 U.S.C. 1182 note).
    Subparts F and G issued under 8 U.S.C. 1184 and 1288(c); and 29 
U.S.C. 49 et seq.
    Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b), 
1182(n), and 1184; 29 U.S.C. 49 et seq.; and sec. 303(a)(8), Pub. L. 
102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1182 note).
    Subparts J and K issued under 29 U.S.C. 49 et seq.; and sec. 
221(a), Pub. L. 101-649, 104 Stat. 4978, 5027 (8 U.S.C. 1184 note).

Subparts H and I [Revised]

    2. Part 655 is amended by revising subparts H and I to read as set 
forth at the end of the common preamble.
Subpart H--Labor Condition Applications and Requirements for Employers 
Using Nonimmigrants on H-1B Visas in Specialty Occupations and as 
Fashion Models
Sec.
655.700  Purpose, procedure and applicability of subparts H and I of 
this part.
655.705  Overview of responsibilities.
655.710  Complaints.
655.715  Definitions.
655.720  Addresses of Department of Labor regional offices.
655.730  Labor condition application.
655.731  The first labor condition statement: wages.
655.732  The second labor condition statement: working conditions.
655.733  The third labor condition statement: no strike or lockout.
655.734  The fourth labor condition statement: notice.
655.735  Special provisions for short-term placement of H-1B 
nonimmigrants at place(s) of employment outside the area(s) of 
intended employment listed on labor condition application.
655.740  Labor condition application determinations.
655.750  Validity period of the labor condition application.
655.760  Public access; retention of records.

Subpart I--Enforcement of H-1B Labor Condition Applications

655.800  Enforcement authority of Administrator, Wage and Hour 
Division.
655.805  Complaints and investigative procedures.
655.810  Remedies.
655.815  Written notice and service of Administrator's 
determination.
655.820  Request for hearing.
655.825  Rules of practice for administrative law judge proceedings.
655.830  Service and computation of time.
655.835  Administrative law judge proceedings.
655.840  Decision and order of administrative law judge.
655.845  Secretary's review of administrative law judge's decision.
655.850  Administrative record.
655.855  Notice to the Employment and Training Administration and 
the Attorney General.

    Signed at Washington, DC, this 14th day of December, 1994.
Doug Ross,
Assistant Secretary for Employment and Training.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Robert B. Reich,
Secretary of Labor.

TITLE 29--LABOR

CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR

    Accordingly, title 29, Code of Federal Regulations is amended as 
follows:

PART 507--ENFORCEMENT OF H-1B LABOR CONDITION APPLICATIONS

Subparts A, B, C, D, E, F, and G (Reserved)

    1. The authority citation for part 507 continues to read as 
follows:

    Authority: 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184, and 
29 U.S.C. 49 et seq.; and Pub. L. 102-232, 105 stat. 1733, 1748 (8 
U.S.C. 1182 note).

Subparts H and I [Revised]

    2. Part 507 is amended by revising subparts H and I to read as set 
forth at the end of the common preamble.

Subpart H--Labor Condition Applications and Requirements for Employers 
Using Nonimmigrants on H-1B Visas in Specialty Occupations and as 
Fashion Models

Sec.
507.700  Purpose, procedure and applicability of subparts H and I of 
this part.
507.705  Overview of responsibilities.
507.710  Complaints.
507.715  Definitions.
507.720  Addresses of Department of Labor regional offices.
507.730  Labor condition application.
507.731  The first labor condition statement: wages.
507.732  The second labor condition statement: working conditions.
507.733  The third labor condition statement: no strike or lockout.
507.734  The fourth labor condition statement: notice.
507.735  Special provisions for short-term placement of H-1B 
nonimmigrants at place(s) of employment outside the area(s) of 
intended employment listed on labor condition application.
507.740  Labor condition application determinations.
507.750  Validity period of the labor condition application.
507.760  Public access; retention of records.

Appendix A to Subpart H: Guidance for Determination of the ``Actual 
Wage''

Subpart I--Enforcement of H-1B Labor Condition Applications

Sec.
507.800  Enforcement authority of Administrator, Wage and Hour 
Division.
507.805  Complaints and investigative procedures.
507.810  Remedies.
507.815  Written notice and service of Administrator's 
determination.
507.820  Request for hearing.
507.825  Rules of practice for administrative law judge proceedings.
507.830  Service and computation of time.
507.835  Administrative law judge proceedings.
507.840  Decision and order of administrative law judge.
507.845  Secretary's review of administrative law judge's decision.
507.850  Administrative record.
507.855  Notice to the Employment and Training Administration and 
the Attorney General.

    Signed at Washington, D.C., this 14th day of December, 1994.
Doug Ross,
Assistant Secretary for Employment and Training.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Robert B. Reich,
Secretary of Labor.

Appendix 1 (Not To Be Codified in the CFR): Form ETA 9035

    Printed below is a copy of Form ETA 9035.

Appendix 2 (Not To Be Codified in the CFR): DOT Three-Digit 
Occupational Groups Codes for Professional, Technical and 
Managerial Occupations and Fashion Models

    Printed below is a copy of DOT Three-Digit Occupational Groups 
Codes for Professional, Technical and Managerial Occupations and 
Fashion Models.

BILLING CODE 4510-30-M and 4510-27-M

TR20DE94.000


TR20DE94.001


TR20DE94.002


[FR Doc. 94-31114 Filed 12-19-94; 8:45 am]
BILLING CODE 4510-30-C and 4510-27-C
_______________________________________________________________________