Business & Immigration Report: Winter 1997

Congress Revises Immigration Law

1998 Visa "Lottery"

Victory in Suit Against DOL Results in Voiding of Restrictive Labor Condition Requirements

Social Security Numbers for Foreign Nationals

New Law Changes Employment Verification (I-9) & Citizenship Status Discrimination Rules

Processing Updates

The 1996 Congress considered proposals for sweeping changes to the immigration laws, many of which would have had devastating consequences for businesses that make use of international personnel. Fortunately, most of these proposals were averted, due to significant efforts on the part of coalitions of business leaders, lawyers, social and ethnic groups and others. The head of Paul, Hastings, Janofsky & Walker's immigration practice, Daryl R. Buffenstein (in his capacity as national president of the American Immigration Lawyers Association [AILA]) led AILA in a coalition with major national business groups, including the National Association of Manufacturers, the U.S. Chamber of Commerce, the Information Technology Association of America and others, in opposing the proposed ill-conceived restrictions. Many of the Firm's clients joined this fight, succeeding in turning back the most severely damaging provisions of the proposed law.

Unfortunately, the law does contain provisions that can significantly impact the ability of companies to retain international employees who do not pay meticulous attention to maintaining their statuses at all times. Much of this new law is poorly written. Some provisions can be interpreted in several ways, some provisions make no sense whatsoever, and other provisions already are legally effective but no infrastructure exists to implement them. As a result, the new law's full meaning may not be known for some time.

Some impacts of the new law, designated the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, are:

Drastic Consequences for Staying in the U.S. Longer than the Admission Period

If a foreign national is in the U.S. on other than a green card, the document that usually governs his status is the I-94 Departure Record, a small white card that is ordinarily inserted in the individual's passport upon entry. This document tells the individual what status he is in and for how long he has been admitted to the U.S. If he stays longer than the I-94 card says he can stay, several consequences can ensue under the new law:

His visa is voided. If the individual entered the U.S. under a visa, and stays even one day longer than the admission period on his I-94 card, his visa is considered void and he must return to the U.S. consulate in his home country to obtain a new visa. It is important to note that the expiration date of the visa and the expiration date of the I-94 can differ. The expiration of the I-94 is what matters. Therefore, the employee must carefully inspect his I-94 card each time he enters the U.S. and a "tickler" system should be maintained to monitor I-94 expiration.

He cannot obtain a new visa anywhere but the U.S. consulate in his country of citizenship. With certain limited exceptions, an individual who has overstayed his period of admission by even one day must forever return to his home country to obtain new visas. He cannot go to a consulate in a neighboring country, like Canada or Mexico, cannot use a consulate in a country where he happens to be traveling on business or vacation, and cannot use the visa revalidation office in Washington, D.C. Again, monitoring of I-94 expiration is essential to avoid this burdensome consequence.

If, starting on April 1, 1997, he overstays by more than 180 days and leaves the U.S., he cannot reenter for three years. If he overstays by one year or more, he cannot reenter for ten years. Exceptions to and waivers of this rule are extremely limited, and the average employee would not qualify for such relief. Thus, it is extremely important that employees be mindful of the expiration dates on their I-94 cards, and be certain to request extensions before their expirations. Each time an employee enters the U.S., he should check his I-94 card while still in the Immigration Inspections area to ensure that it is correct. Even an inadvertent error gone undetected could have the drastic effect of barring an employee from entering the U.S. for many years to come.

Individuals under E-1 or E-2 status should be particularly mindful of these provisions. While most E visas are valid for five years, the I-94 admission is usually valid for only one year. Each time the person travels, a new I-94 card is issued upon reentry, establishing a new expiration date. Problems frequently arise if the family does not travel, and rely on their visa expirations rather than their I-94 expirations. Some families have been known to remain in the U.S. for one or two years without realizing that their statuses have expired. If this happens after April 1,1997, those family members could be barred from entry to the U.S. for as long as ten years.

INS Inspectors at the Airports and Borders Will Have Absolute Authority to Refuse Entry to a Foreign National On Visa Grounds, and to Subject Him to a Five-Year Bar From Admission

The new law appears to permit INS inspectors at ports of entry to "remove" a foreign national attempting to enter if the inspector believes that the foreign national does not have the proper visa. For example, if the foreign national is attempting to enter under a visitor's visa or the visa waiver program, and the inspector believes that he really should have a working visa, or believes that he is misstating his intent and actually plans to work instead of visit, the inspector can place him in "removal."

The process for removal appears to be swift and unappealable, and the impact of removal is profound. Under the language of the statute, the INS inspector can "remove" a foreign national by simply declaring him removed. The law specifically precludes any form of appeal, except in very narrow circumstances that would not apply to most business travellers, and does not even allow for referral to a supervisor (however, future INS procedures may provide for at least this latter level of review). Any INS inspector at any level of seniority and knowledge can effect a removal. Once removed, the individual is barred from returning to the U.S. for five years, unless the Attorney General grants permission to reapply for admission. This permission is rarely granted.

Fortunately, removal is not inevitable in a dispute over whether a foreign national has the proper visa to enter. It is possible that the foreign national could prevail in such an argument. Even if he does not prevail, the INS could allow him to withdraw his application for admission, meaning that he immediately leaves the U.S. but is not considered removed. Also, he could be placed in deferred inspection, with the result that he will be required to appear at the local INS office at a date in the near future to defend his right to enter the U.S. However, all of these options are at the discretion of the INS inspector, and not the discretion of the individual. Any INS inspector can decide to invoke removal, and there is no recourse from this decision.

To avoid the drastic consequences of removal, it is critical that the employee have the correct visa and be thoroughly prepared to explain why that visa is correct.

This provision takes effect on April 1, 1997.

New Complications Added to Some Permanent Residence Processes

In this new law, Congress added some new requirements for permanent residence and complicated some existing requirements:

Vaccinations are required to obtain permanent residence. The law now requires that an individual obtaining permanent residence present proof of inoculation against at least nine diseases, such as Hepatitis B and measles. Although this provision took effect immediately, INS and the State Department have deferred its implementation while they attempt to establish a mechanism to make it workable.B>Non-physician health care workers must present new certifications. Effective immediately, the new law requires such health professionals as nurses, physical therapists and occupational therapists to present a certificate from an independent credentialing agency approved by the INS with respect to certain of the worker's qualifications. After significant discussion with INS and the State Department by PHJ&W's immigration team and others, the agencies have waived implementation of these provisions with respect to H-1 visas. However, H-1B visas will be issued only for single entries and valid only for six months. Also, the agencies will not be able to complete processing of permanent residence for such health care workers until the certification process can be implemented.

"Fines" increased for persons applying for adjustment of status who have been out of status or worked without authorization. Previously, an individual who violated his status could adjust status to permanent residence within the U.S. by paying a penalty of $650. As of December 29, 1996, that fine increases to $1,000. It is important to note that the very existence of the option of adjustment of status for a person who has been out of status will "sunset" after October 1, 1997. This means that, unless Congress extends this provision, a person who has violated his status will be required to process for permanent residence at the U.S. consulate in his country of last residence. If, after April 1, 1997, he has overstayed his admission by 180 days or more, his leaving the U.S. to process at the consul would subject him to the three-year or ten-year bars to entry discussed above.

Foreign Nationals Who Return to Their Home Countries After an Assignment Will Be Severely Limited in the Ability to Leave Their Children Behind to Finish Public School

When a foreign national comes to the U.S. for a temporary business assignment of any length, he ordinarily will enroll his children in the local public school. The children are permitted to attend school under L-2, H-4, E-1, E-2 or other dependent status. When the employee returns to his home country, a concern often arises that the children are at a stage in their education that makes absorption into the home country's school system difficult. A typical solution has been to change the child's status to F-1 student and allow him to finish his school in the U.S.

The new law severely limits this option. The child is completely prohibited from attending a public elementary school under student status, and can attend a public secondary school under F-1 student status only for a total of 12 months. Even then, the student must prove that his family has paid the school district for the cost of his education. Many school districts do not have in place a mechanism for such payment, making it difficult for the student to meet this requirement.

The law places no limitation on attendance at private schools under F-1 status. However, if the student obtains F-1 status to attend a private school, and later transfers to a public school, the mere fact of changing to a public school could subject the student to a five-year bar from entering the U.S.

New Civil and Criminal Penalties Imposed for Requesting a Benefit That Has No Basis in Fact or Law, and for Making False or Misleading Statements

The new law subjects to civil, and possibly criminal, penalties the acts of submitting a petition that has no reasonable basis in law or fact, and of preparing and filing documents with false or misleading statements, including statements reflecting a reckless disregard for the truth or submissions omitting material facts. These provisions apply to the company or individual submitting the application or petition, as well as to the preparer of the document, such as human resources or legal personnel.

These provisions could have serious consequences for companies and preparers of documents who submit petitions requesting benefits for which no reasonable argument for eligibility can be made or that fail to disclose facts that would show the person to be ineligible. For example, a person who is not currently maintaining status is ineligible under INS regulations to change or extend status. Requesting a change or extension of status could be construed as submitting a petition that has no basis in law, subjecting the preparer and the submitting company to civil fines. Failing to disclose that the person is out of status might result in civil and criminal sanctions under certain circumstances. Thus, care in the preparation and submission of immigration documents is imperative.

Despite the lack of clarity of the new law, careful attentionmust be paid to its provisions. Running afoul of the requirementscould have the sometimes disastrous results discussed above.

1998 VISA "LOTTERY"

The State Department has released information on how to apply for immigrant visas under the DV Immigrant Visa "Lottery" Program for fiscal year 1998. The registration period begins on February 3 and continues through March 5, 1997. Only one application per person may be submitted during the registration period. Multiple applications will disqualify an applicant. Applicants will be selected strictly in random order from among all those who submit requests during the registration period.

As in previous years, there are strict guidelines as to the format and mailing of the applications. Only individuals from designated countries may apply under the "lottery." Furthermore, each applicant must have at least a high school education or its equivalent or, within the past five years, have two years of work experience in an occupation requiring at least two years of training or experience.

While PHJ&W would be pleased to assist you in entering the "lottery," we believe that the assistance of legal counsel is not necessary.

For information regarding procedures and requirements for the "lottery," you may call the Department of State at 900-884-8840 at a flat rate of $5.10 per call.

VICTORY IN SUIT AGAINST DOL RESULTS IN VOIDING OF RESTRICTIVE LABOR CONDITION REQUIREMENTS

The D.C. District Court, in the case National Association of Manufacturers v. Department of Labor, has invalidated key portions of the Department of Labor's H-1B Labor Condition regulations and permanently enjoined the Department from enforcing those provisions. The court found that the provisions were unlawfully implemented without proper notice and comment, and noted that "very substantial questions that may ultimately cause the court to strike the regulations as exceeding defendant's statutory authority..." were presented. The court let stand certain other, less draconian, provisions.

Paul, Hastings, Janofsky & Walker LLP represented the National Association of Manufacturers (NAM) in this suit, which attackedthe more unrealistic provisions of the Department of Labor's regulations governing the H-1B process. According to Crystal Williams, one of the Paul, Hastings attorneys representing NAM, "Some employers already were not complying with certain parts of the regulations at the time the suit was brought, due to thesheer impossibility of compliance. The result of this action has beento shield these employers from penalties, such as fines, back payand debarment from obtaining work authorization for international personnel, for violations of regulations that had no bearing onthe substance or purpose of the law."

The Voided Provisions

The regulatory provisions voided by the court's order are:

The "90-day rule" that compelled employers to either monitor the cumulative visits of all of its H-1B workers in any given area to ensure that such placements do not exceed 90 days within any three-year period or file a new labor condition application("LCA") for every business trip.

The requirement that H-1B employees on temporary assignment be paid per diem expenses at no less than the federal government's per diem rate.

The requirement that notices be posted at any site,including locations belonging to third parties, where any work-connected visit is made by an H-1B employee, if the site is in the same area stated on the LCA.

The requirement that employers develop an objective wage system and apply it to non-H-1B and H-1B employees alike.

The requirement that payroll records be kept on allemployees in the same employment as the H-1B employee, regardless of whether those employees have comparable qualifications.

The rule compelling employers to pay for nonproductive time and allowing DOL to summarily adjust payment of part-time H-1B employees to full-time based on short-term situations. The court noted that these provisions have "the potential of creating strange and economically unsound incentives for the use of H-1B employees."

Department of Labor's Response

The Department of Labor did not appeal the court's order. In theory, the Department could re-issue the same regulations by complying with statutory requirements for notice and public comment. However, such an action could raise serious issues of good faith. In any event, as noted above, the judge in the NAM action indicated that serious questions had been raised regarding the Department's authority to issue these regulations, raising the strong possibility that duplicate regulations could be struck down on that basis as well.

Thus, even if the Department were to re-issue the regulations as they existed before the court's order, there is some question as to whether the court would allow them to stand. As of this writing, the Department has taken no action with respect to the regulations.

SOCIAL SECURITY NUMBERS FOR FOREIGN NATIONALS

The Social Security Administration has determined recently that it will no longer issue a Social Security Number (SSN) to foreign nationals in this country who are not authorized to work, in most cases. Exceptions to this rule will be made when federal, state and local laws require an SSN. In particular, it is possible for persons defined as tax dependents of persons who have work authorization (this does not include spouses) to obtain an SSN. Spouses and others who are not eligible for an SSN may apply for a Taxpayer Identification Number (TIN), using the Internal Revenue Service's Form W-7, Application for IRS Individual Taxpayer Identification Number. It should be noted that an SSN is not required to conduct business with a bank (request IRS Form W-8, Certificate of Foreign Status).

NEW LAW CHANGES EMPLOYMENT VERIFICATION (I-9) & CITIZENSHIP STATUS DISCRIMINATION RULES

The new legislation discussed elsewhere in this newsletter also contains some changes to the employment verification process. Under the new law, if an employer makes a good faith effort to comply with the I-9 verification requirements, that employer cannot be fined for merely technical or procedural errors in completing the I-9 form, unless the Immigration & Naturalization Service(INS) or another enforcement agency has first explained the error and given the employer 10 business days to correct it. This provision took effect immediately, but only with respect to errors made after September 30, 1996.

Some question exists as to what will be considered "technical or procedural" errors. At least one INS office has indicated that it would not regard some of the more common paperwork errors, such as failing to date the employer's signature or failing to ensure that the employee affirms his current immigration status, as technical or procedural. Thus, the new provision may not immediately prove to be the "fix" to INS overreaching in paperwork fines that it was intended to be.

The new law also severely reduces the number of documents acceptable to prove work authorization and identity for Form I-9 completion purposes. This provision will take effect only after the INS issues new regulations, which are not expected until much later in 1997. Since many of the changes are subject to interpretation by INS, the true impact of the law remains to be seen. The law also mandates a pilot program that would enable employers to contact a centralized telephone number or computer site to verify the validity of work authorization. This program will be voluntary, unless the employer has been required to participate by an order relating to a citizenship status discrimination or knowing employment of an undocumented worker violation.

With respect to the citizen status discrimination provisions, existing law considers it to be an act of discrimination if an employer requests more or different documents for I-9 completion than those presented by the employee, if the documents are on the list of acceptable documents, appear on their faces to be valid and appear to relate to the employee. The new law requires a complainant to show that the request for more or different documents was made with an intent to discriminate.

PROCESSING UPDATES

Employment-Based Adjustment of Status Applications are now filed directly with the Immigration Service's regional service centers in most jurisdictions, rather than with the local offices (effective November 29, 1996). The implementation of these new processing procedures is causing significant delays in the adjudication of applications. It is too soon to tell how effective the "streamlined" processing procedures will be, but we are hopeful that they will reduce processing times in the long run.

A Backlog of Immigrant Visa Numbers has recently occurred for Indian nationals in the second and third employment-based preference categories. Many Indian nationals are now joining Philippine nationals (who have a backlog in the third employment-based preference category) to wait for limited visa numbers, which are allocated by preference category with no more than 7% of available numbers going to any individual nationality. There is a possibility that worldwide availability, at least in the third preference employment-based category, will have a backlog before the fiscal year is over on September 30, 1997.

Delays in Labor Certification Application Processing are being caused by significant procedural changes that the Department of Labor is implementing. Major staff reductions, due to budget cuts of nearly 50% for many offices around the country, are also plaguing the labor certification adjudication process, and are expected to cause further slowing in processing times.

65,000 Annual Cap on H-1B Nonimmigrant Worker Petitions may be reached prior to the September 30, 1997 end of the fiscal year.If the cap is reached, the Immigration Service will place a hold on the adjudication of H-1B petitions until the start of the new fiscal year in October. Petitions should be filed as early as possible when circumstances permit, to ensure complete adjudication of the petitions.

Business Immigration Report is published solely for the interest of friends and clients of Paul, Hastings, Janofsky & Walker LLP and should in no way be relied upon or construed as legal advice. For specific information on recent developments or particular factual situations, the opinion of legal counsel should be sought. Paul, Hastings, Janofsky & Walker LLP is a limited liability law partnership including professional corporations.