DLO Publishes Final Rule Prohibiting Substitution of Labor Certifications with Effect From July 16, 2007
Lal Varghese, Attorney at Law, Dallas

The Department of Labor (DOL) has amended its regulations to enhance integrity and reduce the incentives and opportunities for fraud and abuse related to the permanent employment of aliens in the United States. The final rule includes several major provisions which prohibit the substitution of alien beneficiaries on permanent labor certification applications and resulting certifications. The final rule provides a 180-day validity period for approved labor certifications; employers will have 180 calendar days within which to file an approved permanent labor certification in support of Immigrant Petition for Alien Worker with the Department of Homeland Security (DHS). The rule prohibits the sale, barter or purchase of permanent labor certifications and applications. In addition, this rule requires employers to pay the costs of preparing, filing and obtaining certification. An employer's transfer to the alien beneficiary of the employer's costs incurred in the labor certification or application process is strictly prohibited. The rule makes clear an alien may pay his or her own legitimate costs in the permanent labor certification process, including attorneys' fees for representation of the alien. The rule also reinforces existing law pertaining to the submission of fraudulent or false information and clarifies current DOL procedures for responding to incidents of possible fraud. Finally, the rule establishes procedures for debarment of employer’s from taking part in the permanent labor certification program if fraud is committed.

Consistent with the proposed rule, the provisions in this final rule apply to permanent labor certification applications and approved certifications filed under both the Program Electronic Review Management (PERM) program regulation effective March 28, 2005, and prior regulations implementing the permanent labor certification program. This rule also clarifies the Department's ``no modifications'' policy for applications filed on or after March 28, 2005, under the new, streamlined PERM process. The final rule is effective from July 16, 2007.
The purpose of the final rule is to impose clear limitations on the acquisition and use of permanent labor certification applications and permanent labor certifications in order to reduce incentives and opportunities for fraud and abuse in the permanent labor certification program. It also promulgates key measures to enhance the integrity of the permanent labor certification program. This Final rule continues efforts the Department initiated several years ago to construct a deliberate, coordinated fraud reduction and prevention framework within the permanent labor certification program. The Department laid the groundwork for greater integrity and security during the planning and promulgation of the 2004 Final rule to implement the re-engineered PERM system. While fraud prevention has always been a goal of the Department's labor certification programs, the continuing program experience and that of other Federal agencies has demonstrated the need to focus on the specific opportunities for fraud and abuse addressed in this rule.

The INA does not specifically address substitution of aliens in the permanent labor certification process. Similarly, the Department of Labor's regulations are silent on the question of substitution. On May 6, 2002, the Department published a Notice of Proposed Rulemaking (NPRM) to streamline the permanent labor certification program. A Final rule implementing the streamlined permanent labor certification program was published on December 27, 2004, and took effect on March 28, 2005. The old rule governs processing of permanent labor certification applications filed prior to March 28, 2005, except where certain provisions of this final rule will impact such applications. Previously filed applications may be re-filed under the new PERM rule.
To obtain permanent alien workers, U.S. employers generally must engage in a multi-step process that involves DOL and DHS and, in some instances, DOS. The INA classifies employment-based (EB) immigrant workers into categories, e.g., EB-2 and EB-3, based on the general job requirements and the perceived benefit to American society. U.S. employers must demonstrate that the requested job requirements, and in some cases the alien, fit into one of these classifications. The first step in the process for the EB-2 and EB-3 classifications generally begins with the U.S. employer filing a labor certification application with DOL. The U.S. employer must demonstrate to DOL, through a test of the labor market, that there are no U.S. workers able, willing, qualified, and available at the time of the application for a visa and admission to the United States and at the place where the alien is to perform the work. The employer must also demonstrate that the employment of the alien will not adversely affect the wages and working conditions of similarly employed U.S. workers. Following review of the permanent labor certification application, recruitment report and other supporting documents and evidence the DOL will either certify or deny the application for employment of the foreign worker.

If the Labor Certification is approved the next step is to file the Immigrant Petition for Alien Worker with the United States Citizenship and Immigration Services (USCIS), within DHS, by a U.S. employer for a prospective permanent alien employee. Most petitions filed under section 203(b)(2) and (3) of the Act, the EB-2 and EB-3 classifications, must be accompanied by an approved labor certification issued by DOL. DHS has established procedures for filing immigrant petitions by employers for alien workers.

DHS reviews the approved labor certification in conjunction with the immigrant petition and other supporting documents to evaluate whether the position being offered to the alien named in the petition is the same as the position specified on the labor certification and whether the employment qualifies for the immigrant classification requested by the employer. In addition, DHS evaluates the alien's education, training, and work experience to determine whether the particular alien meets the job requirements specified on the labor certification. The approved labor certification is also used to establish the priority date for which an immigrant visa will be made available to the alien, based on the date the labor certification application was originally filed.

Although not mentioned in the rules, ETA has for years informally allowed employers to substitute an alien named on a pending or approved labor certification with another prospective alien employee. Labor certification substitution has occurred either while the permanent labor certification application is pending at DOL or by DOL's delegation to DHS while immigrant petition filed with an approved labor certification, is pending with DHS. Historically, this substitution practice was permitted as an accommodation to U.S. employers due to the length of time it took to obtain a permanent labor certification or receive approval of the immigrant petition.

Currently, the regulations do not set any validity period on a permanent labor certification and, thus, permanent labor certifications are valid indefinitely. Also, DOL regulations do not address payments related to the permanent labor certification program or debarment authority. In this final rule, the department addresses problems that have arisen related to substitution, lack of a validity period for certifications, and payment of fee to attorneys both by the employer and alien worker related to the permanent labor certification program.

The final rule builds on the foundation laid in the 2004 implementing the streamlined permanent program and follows through on the strong commitment reflected in the NPRM for this rulemaking, culminating a multi-year effort to enhance integrity and fraud prevention mechanisms in the permanent labor certification program. To assist compliance and enforcement under this rule, the department is reviewing available resources to determine its ability to establish a new toll-free telephone number, or to develop other means, to receive reports of potential violations.

The final rule prohibits the sale, barter, and purchase of applications and approved labor certifications, as well as certain payments to employers in compensation or reimbursement for the employer's costs incurred to obtain labor certification. This ban will apply to all such transactions on or after the effective date of the final rule regardless of whether the labor certification application involved was filed on or before March 28, 2005 or after such effective date. As explained in the NPRM, this regulatory change has no retroactive effect on substitutions approved by the Department or DHS prior to the final rule's effective date. As made implicit by the new rule the final rule also has no retroactive effect on substitution requests in progress (submitted) prior to this rule taking effect.