IT companies’ clients required to meet H1-B filing obligation under new US rule

According to the office of foreign labour certification, the regulations require all common-law employers of H-1B workers to file a labour condition application (LCA).

The US department of labor (DOL) on Friday followed the final wages rule, signed in the Federal Register on January 14, with a new interpretation of the regulations and accompanying guidance for companies that sponsor H-1B visa holders. Under the new guidance, the secondary employers, also known as clients, will have to comply with the filing requirements and other obligations which, currently, only lie with the primary employers or the staffing agencies.

US Tech Workers said that the new regulation will hold those secondary employers accountable that claim to be not directly involved in the sponsoring of H-1B visas. (Photo for Representation)

According to the office of Foreign Labor Certification (FLC), the regulations require all common-law employers of H-1B workers to file a Labor Condition Application (LCA). It will not only put the liability on employers for compliance obligations relating to wages and working conditions but will also lead to higher administrative burden and costs for clients. The new guidance documents will take effect in 180 days, which means the employers have to comply with the obligations for the applications filed on or after July 14.

The labor department said that the interpretation and guidance are “more consistent with the H-1B statute and regulations”, adding that it is also “appropriate” in the wake of interpretative changes made by US Citizenship and Immigration Services (USCIS). “This revised interpretation is long overdue in light of the language of the regulations, better comports with the goals of the H-1B program, and is consistent with recent Executive Branch directives,” John Pallasch, assistant secretary for employment and training, said in a statement.

After the announcement, US Tech Workers, a non-profit organisation “representing the voices of American workers harmed by the H-1B visa program”, said that the new guidance was a “great way to target companies” that use staffing agencies to “displace Americans.” In a series of tweets, US Tech Workers said that the new regulation will hold those secondary employers accountable that claim to be not directly involved in the sponsoring of H-1B visas.

“When Disney was sued for laying off American workers and replacing them H-1B workers brought in from third party IT outsourcing firms (Cognizant & HCL), Disney’s defense was that they weren’t the ones who sponsored the H-1B visas. This regulation would now hold them accountable,” it tweeted.