Submitted by Rajiv S. Khanna on Feb 4th 2010
INDIVIDUAL LIABILITY UNDER THE LCA REGULATIONS
In Administrator, Wage and Hour Division v. Avenue Dental Care, ARB No. 07-101, ALJ No. 2006-LCA-29 (ARB Jan. 7, 2010) the ARB found that the ALJ properly found a dentist who owned outright or operated dental clinics under assumed names, was individually liable as an employer under the LCA regulations' definition at 20 C.F.R. § 655.715. The dentist had signed the LCAs as the sponsoring employer. The clinics had no separate legal identity.
FACT THAT H-1B WORKER STARTED NEW BUSINESS IN PARTNERSHIP WITH THE EMPLOYER WHO SIGNED THE LCA DID NOT CONSTITUTE A BONA FIDE TERMINATION OF THE EMPLOYMENT RELATIONSHIP WHERE THE EMPLOYER DID NOT NOTIFY DHS, DID NOT PROFFER THE COST OF TRANSPORTATION HOME, AND LATER SIGNED A NEW LCA
In Administrator, Wage and Hour Division v. Avenue Dental Care, ARB No. 07-101, ALJ No. 2006-LCA-29 (ARB Jan. 7, 2010), the Respondent (a dentist) argued that the H-1B worker's employment relationship with the Respondent ended when the worker (also a dentist) left the dental clinic at which he began employment under the LCA, and became a partner with the Respondent in new clinics opened in a neighboring state, or that the H-1B voluntarily placed himself in nonproductive status when he moved to the neighboring state and became self-employed. The ARB rejected these arguments, finding that the Respondent did not report to the DHS that he terminated the H-1B worker's employment, that the Respondent did not give the H-1B worker the cost of transportation home, and that two years after the worker had moved to the new clinics, the Respondent signed a second LCA. The ARB found that the employment relationship thus continued and that "[t]he Act and its regulations impose the duty to terminate the employment relationship on the employer, not the H-1B nonimmigrant." Slip op. at 7-8 (footnote omitted).
H-1B WORKER'S PARTICIPATION IN FRAUDULENT LCA DOES NOT NEGATE BACK PAY LIABILITY OF EMPLOYER
In Administrator, Wage and Hour Division v. Avenue Dental Care, ARB No. 07-101, ALJ No. 2006-LCA-29 (ARB Jan. 7, 2010), the Respondent (a dentist) argued that the H-1B worker (also a dentist) had fraudulently failed to amend the LCA or to submit a new one to reflect the changed circumstance that he had left the dental clinic at which he began employment under the LCA, and became a partner with the Respondent in new clinics opened in a neighboring state. The Respondent argued that the failure to report this new circumstance constituted fraud, and therefore the H-1B worker should not be entitled to recover back wages as an H-1B worker. The ARB agreed with the ALJ, however, that it was the Respondent's responsibility alone to amend the existing LCAs or to file a new one. The ARB also rejected the Respondent's explanation that he signed a second LCA without reading it and only later noticed that the original clinic was still listed as the employer. The ARB found that the Respondent had constructive knowledge of the documents he signed.
EMPLOYER'S LIABILITY FOR H-1B BACK WAGES IS NOT NEGATED BY THE FACT THAT THE H-1B WORKER RECEIVED A DRAW OF MONIES OR A SHARE OF PROFITS AS PART OF A BUSINESS ARRANGEMENT WITH THE EMPLOYER
In Administrator, Wage and Hour Division v. Avenue Dental Care, ARB No. 07-101, ALJ No. 2006-LCA-29 (ARB Jan. 7, 2010), the Respondent (a dentist) sponsored an H-1B worker (also a dentist). About one year into the LCA, the H-1B worker left the dental clinic at which he began employment under the LCA, and became a partner with the Respondent in new clinics opened in a neighboring state. At the new clinics, the H-1B worker received draws of money pursuant to his business agreement with the Respondent, rather than cash wages. The ALJ, having found that the Respondent had not paid H-1B wages after the move, refused to credit the non-payroll payments, even though the Respondent argued that the H-1B worker would thereby receive double payment. The ARB affirmed. Under the statute, regulations, and ARB precedent, H-1B wages must be shown in the employer's payroll records and disbursed to the employees, less authorized deductions, and the payments must be reported to the IRS with appropriate withholdings and deductions. The ARB also agreed with the ALJ that payment of a share of profits under a side agreement did not constitute payment of H-1B wages.
CLAIM BY H-1B WORKER FOR REIMBURSEMENT OF FILING FEE IS SUBJECT TO A ONE-YEAR STATUTE OF LIMITATIONS
In Administrator, Wage and Hour Division v. Avenue Dental Care, ARB No. 07-101, ALJ No. 2006-LCA-29 (ARB Jan. 7, 2010), the ALJ erred in applying the ARB's ruling in USDOL v. Alden Mgt. Servs, Inc., ARB Nos. 00-020, -021, ALJ No. 1996-ARN-3 (ARB Aug. 30, 2002), that back wages are calculated for the entire period of the H-1B employment, to the question of employer liability for failing to reimburse to an H-1B worker the LCA filing fee. The ARB explained that in Alden, the H-1B workers had filed a timely claim for back pay, and the issue decided was how far back in time to go in calculating the back pay award. Here, the claim for reimbursement of the filing fee was time barred under the 12 month statute of limitations.
WILFULLNESS FINDING NOT NEGATED BY POOR ADVICE FROM ATTORNEY OR H-1B WORKER'S FAILURE TO AMEND LCA
In Administrator, Wage and Hour Division v. Avenue Dental Care, ARB No. 07-101, ALJ No. 2006-LCA-29 (ARB Jan. 7, 2010), the Respondent (a dentist) sponsored an H-1B worker (also a dentist). About one year into the LCA, the H-1B worker left the dental clinic at which he began employment under the LCA, and became a partner with the Respondent in new clinics opened in a neighboring state. Under the new business arrangement, the worker was compensated by draws and a share in the profits rather than a cash salary complying with the H-1B regulations.
The ARB affirmed the ALJ's holding that the Respondent wilfully failed to continue to pay the H-1B worker H-1B wages. The ARB rejected the Respondent's contentions that the failure was due to bad advice from his attorneys or the H-1B worker's failure to amend the LCA. The ARB agreed with the ALJ that "an H-1B employer's ignorance of the INA's requirements or contention that noncompliance was due to an attorney or employee will not excuse noncompliance." Slip op. at 12 (footnote omitted).
CIVIL MONEY PENALTY FOR IMPEDING INVESTIGATION BASED ON FAILURE TO MAINTAIN OR PRODUCE REQUIRED RECORDS
In Administrator, Wage and Hour Division v. Avenue Dental Care, ARB No. 07-101, ALJ No. 2006-LCA-29 (ARB Jan. 7, 2010), The ARB affirmed a $500 civil money penalty for lack of cooperation with the Administrator's investigation where uncontroverted evidence showed that the Respondent impeded the investigation because he had not maintained or produced records requested by the investigator.
