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Corporate Cuts: Reductions in Pay and Hours for Nonimmigrants
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By Naomi Schorr and Stephen Yale-Loehr* Much has been written about the immigration consequences of terminating the services of H-1B and other nonimmigrant workers. By contrast, there has been little commentary on the effects of reducing their pay or hours. This article attempts to fill that void. While not exhaustive, it addresses some immigration issues that arise for H-1B, E, L and O nonimmigrants whose hours and/or salary are reduced, either temporarily or permanently. Among the questions we attempt to answer are: (1) can nonimmigrants in those statuses properly be employed on a part-time basis; (2) may an employer reduce the benefits it provides to its workers; and (3) whether, in an effort to save costs, an employer may ask its nonimmigrant employees to foot the bill for the attorneys fees associated with their immigration status. We use the following hypothetical throughout this article: An employer plans to cut the wages and/or hours of certain nonimmigrants by 20 percent, and wants to know how to do that without violating U.S. immigration laws. We leave for other authors to ponder whether our proposed analysis and answers remain the same if the pay/hour cut is more or less than that. 1. H-1B Nonimmigrants A. Reduction in Pay Only The question of pay cuts for those in H-1B status presents a host of issues because of the intricacies of the relevant provision in the Immigration and Nationality Act (INA) as well as the extensive rule published by the Department of Labor (DOL) in 2000 implementing the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). The first concerns reductions in pay. If an H-1B employer decides to impose a 20 percent across-the-board pay cut on all workers within an occupational classification, the immediate question is this: Is the employer still paying those workers the "required wage"? For example, suppose an employer is paying all of its entry-level systems analysts $70,000 a year (the actual wage) and that the prevailing wage in the area of intended employment is $50,000. If that employer then reduces the salary of all of those systems analysts by 20 percent, they would each be earning $56,000. That would be the new actual wage. The next part of the analysis concerns the prevailing wage. Does the employer still meet the prevailing wage even with the 20 percent cut? If the employer is paying the H-1B employee the higher of the actual or the prevailing wage, which in our example it is, there is no violation. If, however, the reduction in pay brings the H-1B employee’s salary below the required wage, the reduction may not be made. Assuming that even with the 20 percent pay cut the H-1B employee is still earning the required wage, does the employer have to file a new labor condition application (LCA) to reflect the lowered "wage rate"? Or is the previously filed and certified LCA still valid? According to the Labor Department, the certified LCA is still good. Here’s the reasoning: The LCA asks the employer to enter the "wage rate" for a position, not the "actual wage." In the view of the Labor Department, the wage rate is really the "intended wage," the salary that the employer intends in good faith to pay that worker when it hires him or her. In all cases the wage rate must be at or above the prevailing wage. The Labor Department recognizes that the wage rate on an LCA, which can be valid for up to three years, may not remain accurate for that entire time, and that employers cannot predict how the rate might vary. For example, a worker covered by an LCA may receive a $1,000 a year increase for seniority or experience. Likewise, the employer may suffer a setback, and pay the worker less than the wage rate entered on the LCA. The employer’s wage rate as reflected on the LCA, in other words, may differ from what the worker is actually being paid. Thus, as long as the H-1B employee is still earning the required wage, no new LCA is required. B. Reduction in Both Hours and Pay What about a 20 percent cut in both hours and pay? In an effort to cut costs and avoid layoffs, may an employer reduce the number of hours that its employees work, including those in H-1B status, and impose a four-day rather than a five-day week, along with a 20 percent reduction in pay? The statute is clear on this. It is a violation of the law for an employer who has filed a petition for full-time employment to change the terms of the employment to part-time and not continue to pay full-time wages. The Labor Department puts it in its own terms: It would view any reduction in hours below full-time as an impermissible "benching." The regulations provide that if an H-1B employee is not performing work and is in a nonproductive status because of a decision of the employer, the employer must pay the salaried employee the full pro-rata amount due or pay the hourly-wage employee for a full-time week. What is full-time? Although an employer may define its own "full-time" employment, the DOL will not consider any number of hours below 35 a week to be full-time for H-1B purposes. Once an employer deviates from its normal full-time hours to a lesser number, that would be considered part-time. If an employer’s normal work week is 40 hours, and it then reduces the number of hours worked by employees to 35 hours, that would be considered a benching for the H-1B workers on staff. So what must an employer do if it wants to reduce the hours, and with it the salary, of an H-1B employee? Pursuant to the DOL’s regulations, the employer must file and have certified a new LCA reflecting that the position is now part-time in nature. In addition, according to the DOL, even if an LCA is certified for the part-time position, the H-1B employer is "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 [Immigration and Naturalization Service]." That means that the employer must also file an amended I-129 petition, reflecting the reduced number of hours to be worked, and designating the salary as an hourly wage. Does the employer have to wait for the amended petition to be approved by the Immigration and Naturalization Service (INS or Service) before it may begin to impose its cuts in salary and hours? Not according to our reading of the regulations and Service policy. We believe that the petitioner may begin the cutbacks in time and pay upon the filing, not the approval, of the amended petition. At least two sources support this proposition. First, a 1995 letter by an INS official concerning the question of "material change" in the H-1B context stated that "there is nothing in the current regulation which specifies when the amended petition should be filed. Therefore a petitioner would not be penalized for filing an amended petition after the occurrence of the material change." Second, some commenters argue that the portability provisions of the American Competitiveness in the Twenty-first Century Act of 2000, which allow an H-1B employee to begin "new" employment upon the filing of a "new" petition, would also permit an H-1B employee to continue in "changed" employment upon the filing of an "amended" petition. That position is less generous than the 1995 INS letter mentioned above, which would allow the changed terms to go into effect before the filing of the amended petition. The Labor Department is authorized to investigate whether an employer has filed an LCA containing a misrepresentation of a material fact or has failed to pay the H-1B nonimmigrant the required wage. The penalties can be harsh. They include payment of back wages and a fine of $1,000 per violation, with willful violations exposing the employer to fines of up to $5,000 per violation and debarment. That being the case, an H-1B employer must be certain that cutbacks comply with both INS and DOL provisions. C. Practice Pointers What should an employer do when it decides to cut back by 20 percent both the pay and the hours of those H-1B workers currently employed on a full-time, full-pay basis? Here are some practice pointers. The first two are rather straightforward, the others are less so.
D. Reduction in Benefits As a method of belt-tightening, may an employer cut back on the benefits it offers to its H-1B workers? That can be an option, provided that the employer imposes the same benefits cuts, on the same basis, on similarly situated U.S. workers. Here’s the reasoning. Under the statute, it is a violation for an employer to fail to offer benefits and eligibility for benefits to its H-1B workers on the same basis and in accordance with the same criteria as it offers to its U.S. workers. The statute lists some of the benefits contemplated to come within its embrace, including health, life, disability, and other insurance plans, retirement and savings plans, cash bonuses, and noncash compensation (such as stock options). The Labor Department regulations add to the mix paid vacations and holidays. In determining which benefits are to be offered to which employees, it is crucial to compare similar workers. The employer’s obligation is only to make benefits available to an H-1B worker if the employer makes those benefits available to a like U.S. worker. If an employer’s practice, for example, is not to offer any benefits to part-time U.S. workers, then it is not required to offer any benefits to part-time H-1B employees. That reciprocity does not apply to temporary workers. If an employer does not offer benefits to its temporary U.S. workers, it must still offer them to its H-1B employees, under the theory that by the very nature of the classification, all H-1B workers are temporary. Thus, if an employer offers benefits to U.S. workers who hold certain positions, it must offer those same benefits to H-1B workers who hold those positions. On the other hand, if an employer does not offer a particular benefit to U.S. workers who hold certain positions, it is not obligated to offer that benefit to a similarly placed H-1B worker. If the employer requires its U.S. workers to meet eligibility and vesting requirements, the same would apply to its H-1B employees. If an employer offers performance-based bonuses to certain categories of U.S. workers, it must give H-1B workers in the same categories the same opportunity to earn that bonus. But the employer has no obligation to pay the bonus if the H-1B worker does not earn it. Similarly, if an employer offers benefits based on length of service for the employer, it must offer benefits to its H-1B workers on that basis as well, and need not provide them until the service requirement is met. Cutbacks on benefits, then, must be effectuated on the same basis that they are given: with equal treatment for similarly placed U.S. and H-1B workers.
An interesting question is whether an employer may cut back on the benefits it provides for its U.S. workers but not cut them back for its H-1B workers. The Labor Department’s regulations state that "an employer may offer greater or additional benefits to the H-1B nonimmigrant(s) than are offered to similarly employed U.S. worker(s)," but warn that the disparate treatment must be consistent with all applicable nondiscrimination laws. Then-Senator Spencer Abraham remarked that while the statute is not intended to require that an H-1B worker be given access to more or better benefits than those accorded a U.S. worker for the same position, there is nothing in the statute to forbid an employer from doing so. Although the statute and the regulations do not forbid it, an employer who is thinking of cutting back on benefits to its U.S. workers but not its H-1B employees should first make sure that doing so will not violate other federal or state laws, including those barring discrimination based on citizenship. E. Attorneys Fees Many employers pay all the legal fees associated with employing their foreign nationals. In an effort to cut back on expenses, may an employer pass those costs onto its nonimmigrant employees? When it comes to nonimmigrants in every status except H-1B, nothing in the immigration laws precludes an employer from asking the employee to pay his own way. But for employees in or seeking H-1B status, the Department of Labor has stepped in, interpreted the statute, issued regulations, and put a few speed bumps on the road. In other words, there are "issues." Congress, says the DOL, has clearly laid down the law. An employer seeking to employ a foreign national in H-1B status must pay the worker the greater of:
The DOL refers to the higher of these two wages as the "required wage," an important concept, because anything that brings a worker’s wages below the required wage is forbidden. So, for example, if the prevailing wage for an entry-level accountant in New York City is $39,000 a year, and the employer is offering all its entry-level accountants $55,000, the required wage is $55,000. If an accountant to whom the employer had made an offer were to pay for his own lawyer in obtaining H-1B status, and the legal fees were $2,500, the DOL would say that his wages would really be $52,500, and hence would fall short of the required wage. That the accountant’s wages are still above the prevailing wage has nothing to do with the DOL’s determination that the worker is being short-changed. Why does the DOL take this position? According to the Department, legal fees associated with preparing the LCA and the H-1B petition are the employer’s business expense. Those expenses cannot be imposed on a worker if by doing so his protected wage (i.e., the required wage) would be reduced. While the DOL recognizes that an employer is not required to seek legal representation in preparing an LCA and H-1B petition, once it uses the services of an attorney for those purposes, it has incurred an expense for which it has "legal responsibility." The DOL is specific about what the employer’s "legal responsibility" is: only the LCA and the H-1B petition. All other expenses associated with the H-1B program may be borne by the worker. For example, any attorneys fees for functions that are connected to verifying the validity of visa status, reviewing an employment contract, or obtaining H-4 visas for dependent family members are not the employer’s business expense. The DOL acknowledges that it has "no right or any interest in inquiring into those." In fact, an attorney may allocate the various fees involved in an H-1B case, determining how much is for a consultation, an equivalency evaluation, advice regarding permanent residence, advice concerning the immigration status of the spouse and children, preparation of the I-539 application to change or extend the status of the family members, preparation of the DS-156, advice regarding travel, portability issues, and related matters. Viewed in that light, the preparation of the petition and the LCA is just a part of the total fee, and one that an otherwise money-strapped employer may find easy to afford. The Labor Department has actually signed onto the allocation approach. One DOL official has publicly stated, "we are in absolute agreement on the allocation of fees and the demonstration of what is paid for what. . . . If we get that kind of information, that’s all we’re looking for." So who can pay for what? This much is clear. The H-1B nonimmigrant may not bear any of the legal expenses associated with the actual preparation of the H-1B petition or the LCA. But nowhere does the DOL state or even suggest that a third party may not pay for those fees. In fact, a senior official of the Labor Department was very clear on this point: The regulations do not proscribe the payment of attorneys fees by a third party so long as the H-1B worker does not later reimburse the third party. The DOL position on attorneys fees, then, is similar to its position on the $1,000 H-1B filing fee:
Since the Labor Department agrees that a third party may pay the attorneys fees, and since the Department expressly limits the employer’s business expense to the LCA and the petition, the issue of an attorney accepting fees from an H-1B worker should not often arise. Without being alarmist, we would like to present the worst case scenario of what might be at stake if an attorney were to do so. First, the Labor Department is authorized to investigate whether an employer has filed an LCA that misrepresents a material fact. If the employer files an LCA stating it is paying the required wage, when actually it is paying the required wage minus the attorneys fees, that might be deemed to be a misrepresentation of a material fact. How would an attorney be involved in the misrepresentation? Federal criminal statutes, as specifically noted in the Labor Department regulations, provide penalties for knowingly and willfully submitting false statements to the federal government. Those statutes also punish as a principal anyone who aids, abets, or counsels an offense against the United States. Whether an attorney who accepts attorneys fees from an H-1B nonimmigrant for preparing the LCA and petition, or advises the employer that the employee may pay the fee, is "aiding, abetting, or counseling" an offense against the government, is an open question. Criminal statutes aside, various codes of professional responsibility forbid an attorney from counseling a client to engage in illegal conduct. Attorneys, then, who accept fees from an H-1B worker for preparing the LCA and I-129 petition do so at their own peril. To summarize the DOL’s position on the payment of attorneys fees:
To those three points, we would add the following:
2. E Nonimmigrants The INS has given no explicit advice on what must be done if an employee in E-1 or E-2 treaty trader/investor status has his or her hours or salary reduced. The only relevant language in the INS’ E regulations is the following: "Prior Service approval must be obtained where there will be a substantive change in the terms or conditions of E status." The regulation defines a substantive change as "a fundamental change in the employing entity’s basic characteristics, such as a merger, acquisition, or sale of the division where the alien is employed." The INS equates "substantive" with "fundamental." But the Service fails to define either term. Is a 20 percent cut in hours or pay a substantive or fundamental change for E purposes? In our view, no. The INS’ attempt to define "substantive" or "fundamental" changes for E visa purposes looks to basic changes in eligibility for E classification. For example, if a corporate acquisition occurs, the new parent company may be incorporated in a country that does not have a qualifying treaty with the United States for E visa purposes. If so, employees who were in E status may suddenly find that they no longer qualify. By contrast, the amount a person gets paid is not directly relevant to E visa eligibility. Whether an executive makes $100,000 or $80,000 (a 20 percent pay cut), he or she is still an executive and, all other facts remaining the same, continues to remain eligible for E classification. Thus, by itself, a 20 percent cut in hours or pay should not be considered a substantive change for E status purposes. 3. O Nonimmigrants As in the E visa context, very little guidance is available to help analyze potential cuts in pay and/or hours of O-1 extraordinary ability employees. No known INS policy memos or letters exist on this issue for Os. The closest the INS comes to addressing the issue is the following language in its regulations:
Theoretically, failure to notify the INS gives the Service the right to revoke an approved O-1 petition. The Service paints with a broad brush stroke when it refers to "any changes…which may affect [O-1] eligibility." Is a 20 percent cut in pay a change that might affect eligibility for O-1 classification? Possibly. The INS regulations list six factors to consider in determining eligibility for O-1 status. One of the factors is whether the individual has a "high salary or other substantial remuneration for services in relation to others in the field." Consider a research scientist who obtains O-1 classification in part because she is paid more than other similarly situated scientists. If she suffers a 20 percent pay cut, the INS might want to know about that to reevaluate her O eligibility. If all employees are being paid 20 percent less, the employer could note that in its letter to the INS, and point out that the O-1 scientist is still getting paid more than other similarly situated research scientists at the company. That might satisfy the INS. However, to be prudent, it might be wise to at least notify the Service. By contrast, we doubt that a 20 percent cut in hours affects O eligibility. For that reason, there should be no reason, on that basis alone, to notify the INS. Practice tip: If, in recessionary times, an employer is considering pay or hour cuts for O employees, here is one way the employer can save money, depending on the facts. The maximum initial validity period for an approved O petition is three years. By Service regulation, an employer can seek to extend an O visa petition only in one-year increments to complete or continue the same activity or event specified in the original petition. But if an employer knows that it wants an O employee to stay for up to three years longer, why file three one-year extension requests, with their attendant filing fees and other expenses (including lawyer’s fees), when the employer could accomplish the same result at a lower cost by filing a new petition for O classification seeking consular notification and requesting a three-year approval? Nothing in the regulations prohibits this. 4. L-1 Nonimmigrants While there is no question that an employer may reduce by 20 percent the number of hours worked by its H-1B, E-1, E-2, and O-1 employees, there are some interesting issues that arise in the L-1 setting. Although nothing in the INA or INS regulations precludes part-time employment for those in L status, nothing explicitly endorses it, either. Part-time employment in certain circumstances does have approval. The question is whether those circumstances include a 20 percent reduction in time. A series of State Department pronouncements in its Foreign Affairs Manual (FAM) and in cables, and an INS Operations Instruction (OI), leave a slight fog on the answer. The INS OI seems straightforward. It advises that the statute "does not require [an L-1] beneficiary to perform full-time services within the United States." The employer must establish, however, that a "significant portion" of the L-1’s time is spent in "productive employment" performing executive, managerial, or specialized knowledge duties on a regular and systematic basis. Under that test, there would be no violation if an L-1 employee’s hours were reduced by 20 percent, since a significant portion of his time, in fact 80 percent of it, would still be spent engaged in L-1 activities. With a reduction in time of just 20 percent, there would also be no need to file an amended L petition. Take, for example, a 1992 memorandum written by then-INS Executive Associate Commissioner for Operations James J. Hogan, which provided general policy guidelines relating to the requirements for filing amended or new petitions for H and L nonimmigrants. Mr. Hogan pointed out that an amended petition must be filed only when there is a "material" change in the terms and conditions of employment, and cautioned that the amended petition procedure was "not devised merely as an avenue to advise the Service of minor changes in the conditions of employment." In setting forth those changes in the L setting that he deemed to be "material," Mr. Hogan did not include changes in the number of hours worked or the salary paid. A significant change in the beneficiary’s duties, from specialized knowledge to managerial, or a transfer from one company to another within the same organization, would require the filing of an amended petition. Presumably, a reduction by only 20 percent of the time worked and the salary paid would not require an amended filing. Why, then, is there even a question whether an L-1 employee may be employed on a less than full-time basis? Because INS policy and State Department directives take on the question from a different angle. They ask the question this way: May an L-1 employee work only part of the time, rather than part-time, in the United States. The INS, for example, had earlier addressed the question of part-time employment and amended petitions for an L-1 executive. In 1988, the Service was asked whether an L-1 nonimmigrant who was in the United States as the president of an Arizona corporation could pare his time down with that firm to concurrently serve as president of its California affiliate. The Service response was clear: "[P]art-time employment with more than one corporation of the same international organization is permitted under our regulations." The INS was equally clear that the reduction in time at the Arizona site would not trigger the requirement to file an amended petition. "In this case," the INS stated, "a change in the number of hours which the intracompany transferee will be working at the first subsidiary is not significant enough to require an amended petition." The problem with that case is that it contemplates full-time L-1 activities within the United States, but with time divided between two locations. In that event, part-time at each location passes muster. Leading scholars in the field also assent to part-time employment of L nonimmigrants, but couch their comments within the framework of a bifurcated work schedule. The L-1 may work part of the time in the United States, and render services abroad part of the time for the same multinational group. Similarly, the State Department’s FAM authorizes 100 percent L activities but at more than one location:
This FAM provision was later explained and revised by a 1998 cable sent to all diplomatic and consular posts. The note, the cable offered, was written principally to address a problem arising in the context of Mexican maquiladoras, where a noncitizen wanted to live in the United States, work in Mexico, and justify L status by occasionally engaging in business activities in the United States. The State Department reminded posts that a noncitizen’s principal intent must be consistent with status, and cautioned that a noncitizen whose principal place of residence was the United States, but who worked in this country on only a part-time, meaning an intermittent, basis would not qualify for L status. So, may an employer reduce the number of hours and the salary of its L-1 employees by 20 percent? Our view is, yes. The concerns of the State Department in issuing L-1 visas are not the same as those governing L-1 status while in the United States. The INS Operations Instructions seem to endorse, and clearly do not prohibit, part-time employment, and Service memoranda and letters may be read to sanction part-time L employment. Finally, it would be illogical to permit part-time employment for individuals working in H-1B, E-1, E-2, and O-1 status, but to forbid it for those in L status. Conclusion Determining the immigration consequences of reductions in pay and hours on nonimmigrant employees can be complex, especially for those in H-1B status. A no less daunting task for employers is how to effectuate those cuts without running afoul of the immigration laws and without exposing their foreign national employees to status violations. The analysis in this article assumes a 20 percent cut in salary and hours. As that percentage increases, the results may change. The INS and the State Department have advised that in reviewing a case, they will focus on the person’s "principal purpose" for being in the United States. The more that purpose slides from full-time employment to something else, the greater the risk that an immigration violation may be found. *Naomi Schorr (schorrn@rspab.com) is Special Counsel at Robinson Silverman Pearce Aronsohn & Berman LLP in New York City, where she practices business immigration law. She thanks her colleague Ted Ruthizer for reviewing this article, and for his astute comments and suggestions. Stephen Yale-Loehr (syl@millermayer.com) is co-author of Immigration Law and Procedure, the leading immigration law treatise. He also teaches immigration law at Cornell Law School and practices immigration law at True, Walsh & Miller, LLP in Ithaca, New York. Copyright © 2002 Naomi Schorr and Stephen Yale-Loehr. All rights reserved. See, e.g., Yoshiko I. Robertson, Avoiding the Abyss: H-1B Strategies When Facing Reductions in Force, 6 Bender’s Immigr. Bull. 1285 (Dec. 15, 2001); Stanley Mailman & Stephen Yale-Loehr, When H-1B Workers Lose Their Jobs, 6 Bender’s Immigr. Bull. 851 (Sept. 1, 2001); Stanley Mailman & Stephen Yale-Loehr, More on the Impact of Corporate Restructurings on H-1B Workers, 6 Bender’s Immigr. Bull. 381 (Apr. 15, 2001).INA § 212(n), 8 U.S.C. § 1182(n). 65 Fed. Reg. 80,110 (Dec. 20, 2000). American Competitiveness and Workforce Improvement Act (ACWIA) (enacted as tit. IV of Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 1999, Pub. L. No. 105-277, 112 Stat. 2681).The required wage is the higher of the actual wage or prevailing wage. 20 C.F.R. § 655.715. The actual wage is the wage rate paid by the employer to all individuals with experience and qualifications similar to those possessed by the H-1B for the specific employment in question at the place of employment, 20 C.F.R. § 655.715. The definition of "prevailing wage" is found not in the ACWIA regulations, but rather in the regulations governing the labor certification process, and is defined as the average rate of wages in the area of intended employment paid to similarly employed workers. Since it may be difficult to determine the average rate with exact precision, the wage will be deemed to meet the prevailing wage standard if it is within 5 percent of the average rate of wages. 20 C.F.R. § 656.40. Bear in mind that if the wage cut is for just one quarter, for example, not for the entire year, that should be taken into account when the employer calculates whether it is meeting the prevailing, and thus the required, wage. What at first glance may look like a salary that dips below the prevailing wage may not when the salary is annualized properly. For example, a 20 percent cut for one quarter is only a 5 percent cut over the year. The "wage rate" is the number that the employer enters at Part B, item 1 of the LCA. It is defined as "the remuneration (exclusive of fringe benefits) to be paid, stated in terms of amount per hour, day, month or year." 20 C.F.R. § 655.715. Comments of Linda Jan Pack, Counsel, Employment Standards, Fair Labor Standards Division, Department of Labor, on the panel "ACWIA H-1B Regulations: Three Years Later," 2001 Annual Conference of the American Immigration Lawyers Association (AILA), Conference Tape #60 [hereinafter AILA Tape 60] (copy on file with authors). Ms. Pack was specifically addressing the question of pay cuts during her presentation. She added that when the Labor Department starts an enforcement action, it does not enforce the number in the "wage rate" blank on the LCA. Instead, it enforces the "required wage," which is the higher of the prevailing wage or actual wage. Id. Note, however, that if the employer makes use of a so-called "blanket" LCA, valid for multiple employees, a different result may obtain. If, for example, an LCA is valid for five slots, and the wage rate is lowered after the LCA is submitted with two earlier H-1B petitions, then that same LCA may not be used with subsequent petitions filed under that lowered wage. In those later cases, the employer no longer intends to pay the wage rate indicated on the LCA when filing the H-1B petitions, and a new LCA is required. Comments of Linda Jan Pack on the panel "DOL-ESA Roundtable" at the AILA 2002 Spring CLE Conference (Mar. 8, 2002) (Conference Tape #8). INA § 212(n)(2)(C)(vii)(I), 8 U.S.C. § 1182(n)(2)(C)(vii)(I) (it is a violation to place full-time employee in nonproductive status and not pay full-time wages). The DOL ACWIA regulations do not use the term "benching" but rather "nonproductive status." See, e.g., 20 C.F.R. § 655.731(c)(7). 20 C.F.R. § 655.731(c)(7). 20 C.F.R. §655.736(a)(2)(iii)(A).Id. ("A full-time employee is one who works 40 or more hours a week, unless the employer can show that less than 40 hours per week is full-time employment in its regular course of business (however, in no event would less than 35 hours per week be considered to be full-time employment)."). Even if the H-1B employees were still earning the required wage at the reduced time, the Labor Department would find the employer to be engaging in an unlawful benching. The DOL regulations state that "in all cases the prevailing wage must be expressed as an hourly wage if the H-1B nonimmigrant will be employed part-time." 20 C.F.R. § 655.731(a)(2)(vii). In the supplementary information to the DOL’s interim H-1B LCA regulations, the DOL takes the position that when an employer changes work time from full-time to part-time, or vice versa, the employer must file a new LCA that reflects the change. 65 Fed. Reg. 80,110, 80,172 (Dec. 20, 2000). See also id. at 80,169 ("[W]orkers designated as full-time on the petition filed with INS must be paid full-time wages, and employees designated as part-time on the petition must be paid the hours designated in the petition.") 20 C.F.R. § 655.731(c)(7) (emphasis added). See also INA § 212(n)(2)(C)(vii)(II), 8 U.S.C. § 1182(n)(2)(C)(vii)(II), which makes it a violation for an employer to pay a part-time employee for fewer than the number of hours designated on the petition. Letter from Yvonne LaFleur, then-Chief of the Nonimmigrant Branch, INS Office of Adjudications, to Susan J. Cohen, File No. HQ 214h-C (Oct. 12, 1995), reprinted in 72 Interpreter Releases 1600-01 (Nov. 20, 1995). But see letter from Jacquelyn A. Bednarz, Chief, Nonimmigrant Branch, INS Adjudications Office, to attorney Mark N. Bravin, File Nos. CO 214h-C, CO 1773-C (Sept. 10, 1993), reproduced in 70 Interpreter Releases 1573-74 (Nov. 22, 1993) ("If an amended petition is required, it must be adjudicated prior to the alien commencing employment under the terms of the amended petition."). Pub. L. No. 106-313, § 105(a), 114 Stat. 1251, 1253 (codified at INA § 214(m), 8 U.S.C. § 1194(m)). Comments of H. Ronald Klasko on AILA Tape 60, supra note 8. See also Nathan Waxman, H-1B Portability: Is There a Safe Harbor in These Uncharted Waters?, 79 Interpreter Releases 97, 99 (Jan. 21, 2002). 20 C.F.R. § 655.805(a)(1), (2). 20 C.F.R. § 655.810(a), (b)(1), (b)(2). See supra notes 17-19 and accompanying text. The employer can avoid paying the additional $1,000 fee if the amended petition does not request an extension of time. See INA § 214(c)(9)(A)(i), (ii), 8 U.S.C. § 1184(c)(9)(A)(i), (ii). We liken the two certified LCAs, one for full-time employment, the other for part-time work, to two certified LCAs for a so-called traveling H-1B employee. The first may have been filed for services to be performed in New York, and a later one may have been filed when the job took the employee to Chicago. The LCA for New York need not be withdrawn when the H-1B employee leaves New York to work temporarily in Chicago, and is still valid when he or she later returns to New York to render additional services there. Here we tread cautiously, but offer our opinion that the amended petition effects a change to the prior petition but does not nullify it. Therefore the earlier petition remains valid. See In re Hoffman Bros. Packing Co., Inc., 173 B.R. 177, 183 (Bankr. 9th Cir. 1994) ("[a]mendment or alteration, whether major or minor, connote survival and continuation to a greater or lesser degree of the original subject matter"); In re Black, 225 B.R. 610 (Bankr. M. D. La. 1998) ("‘amendment’ does not include ‘repeal’"). See also 84 N.Y. Jur. 2d Pleading § 215 (a supplemental pleading sets forth transactions which take place subsequent to service of original pleading, and is to be read in conjunction with the original pleading) (emphasis added). Accord S.E. Nichols, Inc. v. Grossman, 376 N.Y.S.2d 749 (App. Div. 4th Dep’t 1975). Although one of the authors has had success with this procedure, INS adjudications are sometimes quirky, and past approvals do not always guarantee future success. This discussion of benefits does not include the rules governing multinational firms. INA § 212(n)(2)(C)(viii), 8 U.S.C. § 1182(n)(2)(C)(viii). 20 C.F.R. § 655.731(c)(3). The Labor Department believes that certain benefits are more in the nature of compensation, and thus treats the subject under its regulations governing wages. Thus, an employer who violates the benefits provisions is subject to "back benefits" and civil money penalties. 20 C.F.R. § 655.810. 20 C.F.R. § 655.731(c)(3)(i). See also 144 Cong. Rec. S12,753 (Oct. 21, 1998) ("care must be taken to find the right U.S. worker to whom to compare the H-1B worker in terms of access to benefits") (Sen. Abraham). See the supplementary information to the DOL’s ACWIA regulations, which includes important legislative history. 65 Fed. Reg. 80,110, 80,163 (Dec. 20, 2000). See also 144 Cong. Rec. S12,753 (Oct. 21, 1998) (Sen. Abraham). 20 C.F.R. § 655.731(c)(3)(i); 65 Fed. Reg. at 80,165. But see 144 Cong. Rec. S12,753 (Oct. 21, 1998) ("[i]f an employer’s practice is not to offer benefits to. . .temporary U.S. workers, then it is not required to offer benefits to. . .temporary H-1B workers employed for similar periods") (Sen. Abraham). Those remarks may have been aimed at H-1B transfers from multinational employers abroad. 144 Cong. Rec. S12,753 (Oct. 21, 1998). 65 Fed. Reg. at 80,165. 144 Cong. Rec. S12,753 (Oct. 21, 1998). 65 Fed. Reg. at 80,165. Note that the benefits actually received by an H-1B employee need not be the same as those received by a comparable U.S. worker. As long as the H-1B worker is offered the same benefits package, he may voluntarily choose to receive different benefits. For example, an H-1B worker may elect a cash payment rather than a stock option, or may decline health insurance because of the contribution required of him. 20 C.F.R. § 655.731(c)(3)(ii). 20 C.F.R. § 655.731(c)(3)(i). 65 Red. Reg. at 80,163 (quoting 144 Cong. Rec. S12,753 (Oct. 21, 1998) (Sen. Abraham). Senator Abraham’s remarks do not seem to contemplate a situation where the employer cuts back on the benefits it had already provided to U.S. workers while keeping the benefits in place for H-1B employees. His comments involved relocation expenses, which, he opined, an employer may properly pay for its H-1B, but not its U.S., workers. The statutory provision in question is INA § 212(n)(1)(A)(i), 8 U.S.C. § 1182(n)(1)(A)(i). See the supplementary information to the Labor Department’s December 2000 regulations implementing the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), 65 Fed. Reg. 80,110, 80,199 (Dec. 20, 2000) ("[a]n H-1B employer is prohibited from imposing its business expenses on the H-1B worker–including attorney fees and other expenses associated with the filing of an LCA and H-1B petition–only to the extent that the assessment would reduce the H-1B worker’s pay below the required wage.") (Emphasis added.) See, e.g., 20 C.F.R. § 655.731(c)(9) (deductions from wages may not recoup employer’s business expenses, including attorney fees in connection with H-1B program functions, "which are required to be performed by the employer"). The DOL finds analogous support for this proposition in the Fair Labor Standards Act, which forbids an employer from imposing the costs of materials and equipment on the worker as a precondition of employment. Whether the analogy is a good one is open to question. 65 Fed. Reg. at 80,199. While the regulations and the supplementary information to the regulations speak of the H-1B "petition," the DOL has suggested informally that it does not adhere to the plain meaning of the word "petition." According to the DOL, a petition does not just refer to INS form I-129. Rather, it includes the papers submitted in support of the petition. Comments of Linda Jan Pack on AILA Tape 60, supra note 8. Comments of Linda Jan Pack to H. Ronald Klasko, who proposed the allocation approach on AILA Tape 60, supra note 8. January 2002 telephone conversation between one of the authors and a senior official at the Labor Department intimately involved in writing the ACWIA regulations. 65 Fed. Reg. at 80,175. That the DOL took it upon itself to opine on the subject of filing fees when the INS has left the question for another day should come as no surprise to anyone familiar with the DOL. In the preamble to its final rule for H-1B filing fees, the INS rejected comments requesting that the rule should permit a petitioner to be reimbursed for the filing fee by a third party: "The Service will not adopt this suggestion because there is no support in the statute for such a provision. Again, section 413(a) of the ACWIA prohibits an employer from requiring an alien beneficiary to reimburse, or otherwise compensate the employer for part or all of the cost of the [then] $500 filing fee. However, the ACWIA does not discuss the issue of third party reimbursements. Therefore, the issue of third party payments is outside the scope of this rule." 65 Fed. Reg. 10,678, 10,682 (Feb. 29, 2000) (emphasis added.) 20 C.F.R. § 655.805(a)(1). We save for another article (and other authors) an analysis of the terms "material" and "misrepresentation" in the LCA context. For a general discussion of material misrepresentations in the immigration context, see 6 Charles Gordon, Stanley Mailman & Stephen Yale-Loehr, Immigration Law and Procedure § 71.04[2][a][ii] (rev. ed. 2002). The regulation at 20 C.F.R. § 655.805(a)(1) cites the federal criminal statute found at 18 U.S.C. § 1001. 18 U.S.C. § 2. See, e.g., the New York State Lawyer’s Code of Professional Responsibility, Disciplinary Rule 7-102(A): "In the representation of a client, a lawyer shall not: (7) Counsel or assist the client in conduct that the lawyer knows to be illegal or fraudulent." We recognize that our advice may not be palatable to many readers, and offer an observation once made by Anton Chekhov: "There are a great many opinions in this world, and a good half of them are professed by people who have never been in trouble." Joseph Epstein, Quotatious, in A Line Out for a Walk: Familiar Essays 96-97 (1992).8 C.F.R. § 214.2(e)(8)(iii). Id. The INS’ lack of clarity in defining terms like "substantive," "fundamental," or "material" change is explored in more detail in Angelo A. Paparelli et al., "It Ain’t Over till It’s Over:" Immigration Strategies in Mergers, Acquisitions and Other Corporate Changes, 5 Bender’s Immigr. Bull. 789, 793 (Oct. 1, 2000). 8 C.F.R. § 214.2(o)(8)(i)(A). 8 C.F.R. § 214.2(o)(8)(iii)(A)(4) ((INS may revoke on notice if the petitioner has violated any part of 8 C.F.R. § 214.2(o), presumably including the notification requirement in 8 C.F.R. § 214.2(o)(8)(i)(A)). 8 C.F.R. § 214.2(o)(3)(iv)(B)(6). 8 C.F.R. § 214.2(o)(6)(iii). 8 C.F.R. § 214.2(o)(12)(ii). INS Operations Instructions (OI) 214.2(l)(5)(ii)(B), reprinted in Immigration Law and Procedure, supra note 49, at Volume 16. That segment of the OI is labeled "Nature of employment. Extent of services." Id. Memorandum from James J. Hogan, INS Executive Assoc. Comm’r for Operations, to all INS offices, Guidelines for the Filing of Amended H and L Petitions, File No. CO 214h-C, CO 214l-C (Oct. 22, 1992), reproduced in 69 Interpreter Releases 1448 (Nov. 9, 1992). Id. Id. Letter from Lawrence J. Weinig, Deputy Assistant INS Commissioner, Adjudications, to attorney Nancy-Jo Merritt (Dec. 18, 1987), reprinted in 65 Interpreter Releases 518-19 (May 16, 1988).Id. See 2 Immigration Law and Procedure, supra note 49, at § 24.04[2] (full-time employment not required when, for example, an executive of a U.S. company with branch in Canada divides workweek between those two offices). See also 8 C.F.R. § 214.2(l)(12)(ii), which carves out an exception for the normal five- or seven-year cap on L stays. The regulation provides that the limitations shall not apply to those whose employment in the United States is for fewer than six months each year, or to those who reside abroad and regularly commute to the United States "to engage in part-time employment." Id. U.S. Dep’t of State, 9 Foreign Affairs Manual (FAM) § 41.54 n.8.5. U.S. Dep’t of State, Cable No. 98-State-095,200 (May 28, 1998), reprinted in 3 Bender’s Immigr. Bull. 690 (July 1, 1998); 75 Interpreter Releases 814 (June 8, 1998). See, e.g., id; 9 FAM, supra note 70, § 41.11 n.3.1.
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