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28–386 PDF








JUNE 22, 2006

Serial No. 109–149

Printed for the use of the Committee on the Judiciary
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Available via the World Wide Web: http://judiciary.house.gov


F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois
HOWARD COBLE, North Carolina
BOB INGLIS, South Carolina
MARK GREEN, Wisconsin
DARRELL ISSA, California
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JOHN CONYERS, Jr., Michigan
HOWARD L. BERMAN, California
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ADAM B. SCHIFF, California
LINDA T. SÁNCHEZ, California

PHILIP G. KIKO, General Counsel-Chief of Staff
PERRY H. APELBAUM, Minority Chief Counsel

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Subcommittee on Immigration, Border Security, and Claims

JOHN N. HOSTETTLER, Indiana, Chairman

BOB INGLIS, South Carolina
DARRELL ISSA, California

HOWARD L. BERMAN, California
ZOE LOFGREN, California
LINDA T. SÁNCHEZ, California
MARTIN T. MEEHAN, Massachusetts

CINDY BLACKSTON, Professional Staff
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NOLAN RAPPAPORT, Minority Counsel


JUNE 22, 2006

    The Honorable John N. Hostettler, a Representative in Congress from the State of Indiana, and Chairman, Subcommittee on Immigration, Border Security, and Claims

    The Honorable Sheila Jackson Lee, a Representative in Congress from the State of Texas, and Ranking Member, Subcommittee on Immigration, Border Security, and Claims

    The Honorable Louie Gohmert, a Representative in Congress from the State of Texas, and Member, Subcommittee on Immigration, Border Security, and Claims

    The Honorable Darrell Issa, a Representative in Congress from the State of California, and Member, Subcommittee on Immigration, Border Security, and Claims


Mr. Sigurd L. Nilsen, Ph.D., Director for Education, Workforce, and Income Security Issues, United States Government Accountability Office
Oral Testimony
Prepared Statement
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Mr. Alfred B. Robinson, Jr., Acting Director, Wage and Hour Administration, Employment Standards Administration, United States Department of Labor, accompanied by Bill Carlson, Administrator, Office of Foreign Labor Certification, Employment Training Administration
Oral Testimony
Prepared Statement

Mr. John M. Miano, Director, Programmers Guild
Oral Testimony
Prepared Statement

Ms. Ana Avendano, Associate General Counsel and Director, Immigrant Worker Program, American Federation of Labor-Congress of Industrial Organizations
Oral Testimony
Prepared Statement

Material Submitted for the Hearing Record

    United States Government Accountability Office Report on ''H-1B Visa Program: Labor Could Improve Its Oversight and Increase Information Sharing with Homeland Security,'' submitted by the Honorable Sheila Jackson Lee, a Representative in Congress from the State of Texas, and Ranking Member, Subcommittee on Immigration, Border Security, and Claims

    Response to Post-Hearing Questions from Alfred B. Robinson, Jr., Acting Director, Wage and Hour Administration, Employment Standards Administration, United States Department of Labor
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    ''H-1B Violations Report'' submitted by the U.S. Department of Labor in response to request from the Honorable Lamar S. Smith, a Representative in Congress from the State of Texas



House of Representatives,
Subcommittee on Immigration,
Border Security, and Claims,
Committee on the Judiciary,
Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:05 p.m., in Room 2141, Rayburn House Office Building, the Honorable John Hostettler (Chairman of the Subcommittee) presiding.

    Mr. HOSTETTLER. The Subcommittee will come to order.

    Good afternoon.

    Today we have the opportunity to examine issues raised in a new report issued by the Government Accountability Office entitled,''H-1B Visa Program: Labor Could Improve Its Oversight and Increase Information Sharing.'' This report raises serious questions about whether the Department of Labor is adequately protecting U.S. workers from being harmed by foreign workers on H-1B visas.
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    The H-1B visa program exists to allow employers to bring a limited number of highly skilled workers to the United States each year. The law requires employers who petition for an H-1B worker to first file a labor condition application, or LCA, with the Department of Labor. In the LCA, the employer attests that it will pay the worker the prevailing wage in the area, or the same wage it pays other workers for a similar job; whatever is greater. The employer also attests that it will offer the same working conditions to H-1B workers as it offers to citizens, that no strike or lockout is ongoing, and that the employer has notified its other employees that it intends to hire an H-1B worker.

    When an employer files such an application with the Department of Labor, it is now reviewed electronically. While the process is quick, the Department only checks for omissions and obvious inaccuracies on the LCA. Even then, the GAO found that some inaccuracies are not caught by the system. For example, over 3,000 LCAs were approved despite the fact that the actual wages to be paid the H-1B employee were below the prevailing wage. This is concerning, because it means that potentially 3,000 jobs were given to foreigners who are paid less than Americans for the same job.

    The H-1B program is based on employers making promises, promises to pay the prevailing wage and so on. It is up to the Labor Department to ensure that the employers are making good on their promises. The Department has the authority to investigate in situations where an employer is believed to have violated the terms of the H-1B program.

    Most complaints are filed by aggrieved parties, such as the H-1B worker himself, or others with knowledge of a violation. The Department of Labor may also conduct random investigations of employers who have previously violated the program's requirements. According to the GAO, such random investigations were just begun several months ago, and were not conducted sooner because of a lack of resources due to high caseloads.
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    There have been allegations that Labor does not vigorously enforce the H-1B program, that H-1B workers are routinely mistreated, and that this lack of enforcement has resounded to the detriment of American high-tech workers. We will address the truths of these allegations at today's hearing.

    I find it disturbing that the Department of Labor has recently asked appropriators to divert money for an H-1B antifraud account recently created by this Committee specifically for the purpose of funding H-1B enforcement. The account is funded through a new $500 antifraud fee which is split between the Labor, State, and the Department of Homeland Security. The Department of Labor has asked for a redesignation of these funds away from immigration enforcement when it appears they don't have the resources or motivation to do an adequate job as it is.

    I am interested in learning more from the Department of Labor on how they are currently using H-1B anti fraud funds. Furthermore, if the Department has difficulty effectively expending all available funds on H-1B fraud due to some roadblock in the law. I would hope that we can work together to examine those barriers and determine if a change in the law is warranted.

    Finally, the GAO report notes that information sharing between the Department of Labor and the Department of Homeland Security is a problem. Barriers in current law might prevent commonsense information sharing for the purpose of combating H-1B fraud. For example, in processing H-1B renewals, Citizenship and Immigration Services occasionally runs across situations in which an employee is not being paid the prevailing wage; however, the Department of Labor has concluded it cannot use this information in an investigation. I hope that we can take a close look at such barriers today and evaluate whether changes to the law are needed in order to facilitate information sharing.
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    I am hopeful that today's hearing will provide a forum to examine both the current law and the current enforcement structure at the Department of Labor. The reason the Department of Labor has a role in H-1B visa approvals is to protect American workers and their livelihoods. We must ensure that the Department is fulfilling its obligations in this regard. If Congress needs to tweak the current law to facilitate aggressive enforcement of the H-1B program, then I hope we can examine such changes as well.

    At this time the Chair recognizes the gentleman from Texas for the purposes of an opening—to make an introduction.

    Mr. SMITH. Thank you, Mr. Chairman. I do not have an opening statement other than to thank you for having this hearing today.

    What I would like to do, however, is to recognize some friends and constituents who traveled all the way to Washington, DC from Dripping Springs, Texas, and one of the primary reasons they came to Washington, DC, Mr. Chairman, is because of a specific interest in the subject of immigration. We just had a nice discussion in my office, and they are knowledgeable, interested and informed.

    I would like to ask them to stand just so we can express our appreciation for their interest in the subject at hand today. If there are more Members here, Mr. Chairman, I would ask our colleagues to be on good behavior because of their presence, but since it's just you and me right now, I hope we are in good company.

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    Let me ask them to stand and just be recognized. Wonderful. Thank you all for being here.

    Thank you, Mr. Chairman.

    Mr. HOSTETTLER. The gentleman yields back his time, and welcome as well from the Chair.

    At this point I would like to introduce our distinguished panel of witnesses.

    Dr. Sigurd Nilsen is the Director for Education, Workforce and Income Security Issues at the United States Government Accountability Office, where he has served since 1984. He is a national expert on workforce development issues and performance management, who frequently participates in forums where policy alternatives are developed in advance.

    Working for Congress, Dr. Nilsen has been responsible for research on a range of issues related to Federal workforce programs and labor policy areas. He is regularly asked to testify before Congress and has appeared before numerous national associations and on National Public Radio to discuss these issues.

    Alfred B. Robinson, Jr., was named the Acting Director, Wage and Hour Administration, effective June 14, 2004. The Wage and Hour Division of the Employment Standards Administration administers and enforces a variety of labor standard statutes that are national in scope and enhance the welfare and protects the rights of our Nation's workers.
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    Before joining the Department of Labor, Mr. Robinson served in the South Carolina House of Representatives and on the board of the South Carolina Jobs-Economic, where he focused on job creation and economic development.

    John Miano is the founding chairman of the Programmers Guild and currently serves as a director of that organization. He is an expert in computer science, having 18 years in computer software development. Mr. Miano currently operates his own computer consulting firm, Colosseum Builders, Inc., in Summit, New Jersey.

    In December of last year, the Center for Immigration Studies published a study authored by Mr. Miano on the wages of H-1B workers in the computer programming profession. He has testified on the H-1B program before this panel in March of this year.

    Ana Avendano, in her capacity as Associate General Counsel and Director of the Immigrant Worker Program at the AFL-CIO, provides legal and technical assistance on matters related to immigration and workers' rights to labor unions and their members in all sectors of the economy, from farm workers to high-tech workers. Ms. Avendano served as the United States Worker Representative to the International Labor Organization Committee on Migration in 2004 and on the ILO's Panel of Experts on Migration in 2005. She has also served as a consultant to the National Immigration Law Center and in the appellate court branch of the National Labor Relations Board.

    I would now ask the witnesses to please stand and raise your right hand.

    [Witnesses sworn.]
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    Mr. HOSTETTLER. Let the record show that the witnesses have responded in the affirmative.

    At this time, before we turn to our witnesses for opening statements, the Chair recognizes the Ranking Member of the Subcommittee, the gentlewoman from Texas, for purposes of an opening statement.

    Ms. JACKSON LEE. Mr. Chairman, thank you, and I will ask unanimous consent that my opening statement in its entirety be submitted into the record.

    Mr. HOSTETTLER. Without objection.

    Ms. JACKSON LEE. I will just make a few points. First of all, I would like to thank our witnesses for their presence here today, and I will acknowledge on the record that the Department of Labor is not performing the functions dealing with enforcing labor condition applications under H-1B visas as well as we would like it to do so.

    In fact, the GAO study on the H-1B program, which is entitled ''Labor Could Improve Its Oversight and Increase Information Sharing with Homeland Security,'' speaks to that issue, and I hope that this hearing will be enlightened.

    What I will say is that we are in the throes of a dilemma as relates to immigration reform. I would have much preferred that we were in the process of a conference to really address the concerns of the American people, and that is comprehensive immigration reform that might, in fact, even answer some of these concerns inasmuch as we would have the opportunity to provide legislative teeth to enforcement, employer sanctions and enforcement of their responsibilities.
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    We would also be able to, if you will, ensure that attestations work. We would have the potential of a pathway to citizenship, and, yes, of course, we would have another vital aspect of comprehensive immigration reform, and that would be border security. But we are here today discussing H-1Bs, which is a limited aspect of immigration reform.

    In fact, as I have met with a number of immigrant groups, including, Mr. Chairman, a 60-plus group of stakeholders in Houston, Texas, coming from the medical profession, coming from the pros and the cons, meaning those against and those for, some sort of immigration reform, advocates, nonadvocates, religious leaders, all wanting to get at least a voice on this issue.

    We are here with the H-1B, which certainly has its elements of fractures, but it is certainly a legal program, as the J1 visa is, with some need for reform. At the same time, if we are going to look at the H-1B, and we are not going to have comprehensive immigration reform, then we should also be looking at 245(i), the ability to reunite families.

    Then I would say that one of the issues that I would hope would come to our attention, and probably additional failures that may not be spoken about at this particular hearing with the H-1B visas, is that it was supposed to create a pool of dollars to assist in training Americans. We thought that the fees utilized by H-1B applicants could then be a partner to Americans who were desirous of vital new job training that met the market of today.

    Frankly, I think that we have failed in the utilization of those funds. The Department of Labor has failed in educating Americans, nonprofits and others about those funds. As we move toward comprehensive immigration reform, I think it is imperative that besides border security and the requisite responsibility and the insight about undocumented individuals who are here in this country working and paying taxes, what are we doing for Americans?
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    I think it would be very important that as we make our way through this process, that we reinstitute the dollars that would be used for any pathway to citizenship, any new visas, any new temporary workers that should be invested in job-training dollars for Americans. We should say to Americans, when I say that, to citizens who are here—who might be prone to accept the divisive debate that this immigrant system is taking something away from them we have an obligation, even in this Committee, Mr. Chairman, to look to utilizing those funds that we might garner from any sort of legalization process to invest in our underserved, underutilized urban and rural areas that need investment of job-training and job-creation dollars.

    So I will look forward to listening to all of the, if you will, menders of this system, because this is all that I assume these particular witnesses can talk about is mending a system, because the overall system of immigration is broken. For that reason I would hope that we would expand our reach and begin to look at a comprehensive system.

    By the way, Mr. Chairman, since we worked on a number of issues dealing with legal immigration, I think it's important to note that the legal immigration system has its failures. Why does it have its failures? Because staff is overworked, underpaid; we are losing both documentation and fingerprints. We have people aging out, who have been on the list who happen to have been children. And so I hope that our voices will be raised for a comprehensive response to all of the ills we are looking at before us and will not subject ourselves to piecemeal mending, which I believe these witnesses will offer us today.

    With that, I yield back.

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    Mr. HOSTETTLER. I thank the gentlewoman.

    The Chair recognizes the gentleman from Texas for purposes of an opening statement.

    Mr. GOHMERT. I want to thank the Chairman. I appreciate the hearing. These are critical things we are talking about, and I don't want the gentlewoman from Texas to fall out of her chair, but I agree with her on so many things she had to say.

    Immigration is broken. It needs some fixing, and these kinds of hearings are a step toward doing that. I personally think not only should we be looking at H-1B visas and how we need to fix those and make them more available as needed, we are hearing from the industry more and more, it seems, about the importance of that, then we hear from the Administration, gee, we need a guest worker permit or something of that nature.

    We have things called worker visas, temporary worker visas, and it may be that it's manual labor. We ought to be looking at that instead of some additional program, I believe.

    We appreciate your being here, the witnesses today. We appreciate the input that you have given in writing and that you will give orally. I would just urge us to keep moving on in this direction, Mr. Chairman, with H-1B visas and also other visas, because those of us who believe that the real cure will be securing the borders, and I do say borders, avenues of entry, so we know who is coming in, and that we can manage it effectively—because until we can secure our borders, we can have all the temporary visas, guest worker visas, all those things, it won't make a hill of beans difference because people are already coming and going, working, leaving. The first step is to get the border secure, and then these will mean a whole lot more than they do right now.
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    Thank you, Mr. Chairman.

    Mr. HOSTETTLER. I thank the gentleman.

    The Chair recognizes the gentleman from California for purposes of an opening statement.

    Mr. ISSA. Thank you, Mr. Chairman. I want to thank you for holding this important hearing. The H-1B and perhaps the H-2A are perhaps the best examples of what we should be doing in theory and what we are not doing in reality.

    I hope today we go a long way toward taking the H-1B and getting it to where it meets our real needs, getting rid of an artificially low cap, but, at the same time, finding ways to get rid of the exportation that is going on, the jury-rigging, the very question of whether or not an employee is needed, because without reforming farm workers, high-tech and other legitimate, needed worker programs to where they function, all the security in the world is still going to leave us with no legitimate way to bring in the workers that will be an addition to our economy.

    I would like to associate myself with the gentleman from Texas, because, in fact, we do have to secure the border, but we also have to make these work. Every potential guest worker program that we would ever go into would be modeled substantially on these failed programs. If we can't get the high-tech workers that we need, we can't make sure that we actually need them, then where are we to go when we say that we want to explore potentially millions of needed jobs in this country, needed slots in this country, presently occupied by undocumented workers? In fact, there's no hope if we can't manage these programs that we will be able to manage a much broader program.
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    With that, I yield back.

    Mr. HOSTETTLER. I thank the gentleman.

    I would now turn to the witnesses for your testimony. Dr. Nilsen, we will begin with you. You will see a series of lights. The lights essentially will let you know when the testimony time is up with the red light, calling for termination in about 5 minutes. If you could sum up your remarks, without objection, your full written testimony is made a part of the record. If you can summarize that as close to 5 minutes as you could, it would be very helpful. Thank you very much.

    Dr. Nilsen.


    Mr. NILSEN. Thank you, Mr. Chairman.

    Mr. Chairman and Members of the Subcommittee, I am pleased to be here today to assist you in your oversight of the H-1B immigrant visa program. I will discuss the results of a study being issued today that you, along with Ranking Member Jackson Lee and Representative Smith, requested to first describe how the Department of Labor carries out its H-1B responsibilities and, second, to assess how well labor works with other agencies involved in enforcing H-1B program requirements.
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    The administrative structure of the program is complex, involving parts of four different agencies. Labor takes the initial application and is also responsible for enforcing the rights of H-1B workers. Homeland Security approves the petition for which the State Department then issues a visa, and the Justice Department handles complaints from displaced U.S. workers.

    First, with regard to Labor's role, we found that Labor's oversight of the H-1B program is limited, even within the scope of its existing authority. By law, Labor's review of employers' H-1B applications is limited to identifying omissions and obvious inaccuracies. Labor reviews almost all applications electronically by subjecting them to data checks and certifies or denies them within minutes.

    Of the more than 960,000 applications that Labor reviewed from January of 2002 through September of 2005, 99.5 percent were certified. The Labor system does not consistently identify all obvious inaccuracies. For example, as the Chairman noted, we found 3,229 applications that were certified even though the wage rate on the application was lower than the prevailing wage rate listed on that application.

    Additionally, Labor only looks at the application's employer identification number to make sure that it has the correct number of digits and the number does not appear on the list of employers who are ineligible to participate in the program. However, we found nearly 1,000 certified applications with invalid employer identification prefixes. Such errors can be indicative of a fraudulent application.

    Labor enforces H-1B program requirements primarily by investigating complaints filed against employers. H-1B workers or others who believe an employer has violated program requirements can file a complaint with Labor's Wage and Hour Division, which received over 1,000 complaints from fiscal year 2000 through 2005. Over this period H-1B complaints and violations and corresponding employer penalties increased. In 2000, employers paid $1.2 million in back wages to 226 workers. By 2005, back-wage penalties quadrupled to $5.2 million to over 600 workers.
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    Next, I want to discuss the coordination between Labor and Homeland Security. Homeland Security reviews Labor's certified application as part of the adjudication process. However, it lacks the ability to easily verify whether employers have submitted petitions for more workers than it originally requested on the application because its data system does not include Labor's application number. As a result, employers can potentially use the application for more workers than they were certified to hire.

    In addition, during the process of reviewing employers' petitions, Homeland Security may find evidence the employer is not meeting the requirements of the H-1B program. But even if Homeland Security forwarded the information to the Department of Labor, current law precludes the Wage and Hour Division from using this information to initiate an investigation of the employer.

    The Department of Justice is responsible for pursuing charges filed by U.S. workers who allege that an H-1B worker was hired in their place. Most of the 101 investigations started by Justice from 2,000 through 2005 were found to be incomplete, withdrawn, untimely, dismissed or investigated without finding a violation. Of the 97 investigations closed, Justice found discriminatory conduct in six cases and assessed $7,200 penalties in three of the six cases, all in 2003. In the other three cases, the actions appeared to be inadvertent, and no penalties were assessed.

    In conclusion, we think that Congress should consider eliminating the restriction on using application and petition information submitted by employers to initiate an investigation and direct Homeland Security and Labor to share information to investigate whether an employer is fulfilling its H-1B responsibilities.
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    Further, we recommend that Homeland Security include Labor's application case number in its new information system. Homeland Security, incidentally, agreed with that recommendation.

    Finally, we recommend that Labor strengthen its oversight of employers' applications by improving its procedures for checking obvious inaccuracies, including better procedures for checking for wage inaccuracies and invalid employer identification numbers. Labor took issue with this recommendation in our report, saying the benefit of using more stringent measures was unclear. However, we are concerned that the errors we uncovered by our cursory review may be indicative of additional problems.

    Mr. Chairman, this concludes my prepared statement. I would be happy to respond to questions you or other Members of the Subcommittee may have at this time.

    Mr. HOSTETTLER. Thank you, Dr. Nilsen.

    [The prepared statement of Mr. Nilsen follows:]


[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]

    Mr. HOSTETTLER. Mr. Robinson.
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    Mr. ROBINSON. Thank you, Mr. Chairman and Members of the Subcommittee. I am pleased to appear before you today to discuss the H-1B provisions of the Immigration and Nationality Act. The Labor Department is responsible for H-1B—the responsibilities of the Labor Department for H-1B is divided between two agencies, the Employment Training Administration and the Wage and Hour Division of the Employment Standards Administration. Today I am joined by Bill Carlson, the Administrator of the Office of Foreign Labor Certification within ETA.

    The mission of Wage/Hour is to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce. Wage and Hour is responsible for administering and enforcing some of our Nation's most comprehensive labor laws, including the H-1B worker protections.

    As noted earlier, the focus of today's hearing is a recently issued report from GAO on the H-1B visa program. In this report, GAO highlights the effective work that Labor performs in this program and outlines the respective responsibilities of the Departments of Labor, Homeland Security and State. While GAO made no formal recommendations for Wage and Hour, it raised two issues for Congress to consider that would affect Wage and Hour.

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    If Congress implements GAO's recommendations, the result would be an increase in H-1B enforcement by Wage and Hour. We fully support this outcome and agree with GAO's recommendations. Moreover, we believe consideration should be given to additional changes to the program to further enhance Wage and Hour's ability to ensure the integrity of the H-1B program, enforce employers' obligations and to protect U.S. workers and H-1B workers.

    As noted by the Chairman, Wage and Hour currently initiates an H-1B investigation under four different authorities, aggrieved party, specific credible source, willful violator and secretarial certification. As you are aware, our written statement provides more details on each one of these limited authorities enabling Wage and Hour to initiate an investigation.

    As part of the application process, an H-1B employer is assessed a $500 fraud fee that is divided equally between the Departments of Labor, Homeland Security and State. Wage and Hour's portion of this fee totals approximately $30 million annually. However, the statute limits DOL's use of this money only to the enforcement of the H-1B program.

    Given the statutory restrictions on its investigative authority, the Department of Labor estimates that it will continue to spend approximately $4 to $5 million annually for H-1B enforcement and education. If Congress were to change the statute to include broader H-1B investigative authority, Wage and Hour could significantly increase its enforcement activities.

    Wage and Hour has taken additional steps to improve enforcement of the H-1B program and its ability to detect fraud. For example, we have updated the H-1B chapter of our investigators' manual to encompass recent changes to the statute and to the regulations. Also, Wage and Hour is conducting nationwide training for its investigators and managers as well as attorneys from the Office of the Solicitor.
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    As part of its compliance assistance and educational efforts, we have implemented a number of activities including releasing 26 H-1B fact sheets that are available on our Website and distributing H-1B worker rights cards. The updated procedures, investigator training and new educational tools will protect domestic and foreign workers against fraud and enhance the integrity of the program.

    Finally, assuming Congress were to expand H-1B enforcement authority of Wage and Hour, as the GAO recommends, we would still expect there to be a surplus of H-1B fraud fee funds because of the current statutory language that limits its use solely to H-1B enforcement.

    The Department believes a modification to the statute would provide greater flexibility to fully utilize the antifraud money. Such a change in the statutory language would supplement overall enforcement activity to further combat fraud and protect American workers.

    The effect of a change in the statutory language would permit Wage and Hour to maintain a strong and viable H-1B enforcement and compliance assistance program, and simultaneously to strengthen enforcement programs and activities that focus on low-wage industries likely to employ foreign workers.

    Mr. Chairman, this concludes my statement, and I, along with Mr. Carlson, would be pleased to respond to any questions from Members of the Subcommittee. Thank you.

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    Mr. HOSTETTLER. Thank you, Mr. Robinson.

    [The prepared statement of Mr. Robinson follows:]



    Mr. Chairman and Members of the Subcommittee:

    I am pleased to appear before you today to discuss the H-1B labor provisions of the Immigration and Nationality Act (INA). Responsibilities for H-1B within the Department of Labor are divided between two agencies, the Employment Training Administration (ETA) and the Wage and Hour Division (WHD) of the Employment Standards Administration (ESA). I am joined today at this hearing by Mr. Bill Carlson, who is Administrator of the Office of Foreign Labor Certification within ETA.

    The mission of the WHD is to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce. WHD is responsible for administering and enforcing some of our nation's most comprehensive labor laws, including the minimum wage, overtime, and child labor provisions of the Fair Labor Standards Act (FLSA); the Family and Medical Leave Act; the Migrant and Seasonal Agricultural Worker Protection Act; the prevailing wage requirements of the Davis-Bacon Act and the Service Contract Act; and the worker protections provided in several temporary visa programs.

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    The Government Accountability Office (GAO) recently issued a report outlining WHD's responsibilities under the H-1B statute. GAO made no formal recommendations for WHD, however, GAO raised two issues for Congress to consider that would have a direct effect on WHD. GAO recommended that Congress consider (1) eliminating the restriction on using application and petition information submitted by employers as the basis for initiating an investigation, and (2) directing Homeland Security to provide Labor with information received during its adjudication process that may indicate an employer is not fulfilling its H-1B responsibilities. If Congress implements GAO's recommendations, the result will be an increase in H-1B enforcement for WHD. We fully support this outcome and therefore agree with GAO's recommendations. Moreover, we believe consideration should be given to additional changes to the program to further enhance WHD's ability to reduce fraud, enforce employer's obligations, and protect H-1B and U.S. workers.

    The H-1B statutory provision that we will discuss today appears in Section 212(n) of the INA (8 U.S.C. 1182(n)). This section outlines the H-1B Labor Condition Application process and the related labor enforcement requirements. The program was initiated in 1990 and the statute has been amended a number of times. The first major revision was pursuant to the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) and the most recent was pursuant to the H-1B Reform Act of 2004, which re-enacted a number of provisions that had sunset and made other changes to the law.


    The H-1B statute establishes an annual ceiling on the number of workers issued H-1B visas. This ceiling is currently set at 65,000. As you know, the FY 2007 cap has already been reached. The INA defines the scope of eligible occupations, specifies the qualifications for H-1B status, requires an employer to file a Labor Condition Application (LCA), which establishes conditions of employment, and establishes an enforcement system to determine compliance with the LCA requirement.
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    The H-1B program requires the coordination of multiple federal agencies. The Department of Labor's ETA approves the LCA, the Department of Homeland Security (DHS) approves the H-1B visa classification, and the Department of State (DOS) issues the visa. WHD enforces the worker protection provisions. In addition, the Department's Office of the Inspector General (OIG), has investigative authority with respect to certain types of fraud within the H-1B program, such as false statements. The OIG issued audit reports on H-1B in 1996 and 2003.

    WHD recognizes that its enforcement of the H-1B program is important to not only protect the integrity of the program, but also to ensure that similarly employed U.S. workers are not adversely affected by the H-1B workers' presence.

    A filing fee, in addition to the base fee for a petition to classify an alien as an H1-B, is charged to most employers. Qualifying educational establishments and research organizations are excluded. This fee is $750 for employers with 25 or fewer full time equivalent workers and $1,500 for employers with more than 25 workers. An additional $500 anti-fraud fee is assessed on most H-1B employers. Restrictions on the use of the proceeds from the anti-fraud fee will be discussed later in this testimony.


    Every employer is required to submit a completed LCA to ETA. The LCA outlines the wages, duties, and working conditions of the job. The employer must sign the LCA. By signing the LCA the employer attests that the ''facts'' specified on the LCA are true and accurate. The employer must accurately specify the following information:
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 Employer Information (firm name, employer identification number (EIN), address, phone);

 Rate of Pay (amount, salary/hourly, full/part time);

 Period of employment;

 Occupation information (number of H-1Bs sought, their occupation code, and job titles);

 Work locations (including additional or subsequent locations); and

 Prevailing Wage (amount, source, date of rate) for all work locations listed.

    The statutory language mandates that ETA limit its review of LCAs to ensure that they are complete, not obviously inaccurate, and that the employer has not been debarred. In accordance with those requirements, ETA does not determine the validity of the information submitted on the LCA. ETA is mandated by the statute to complete the processing of an LCA within seven (7) days.

    The WHD enforces the provisions of the LCA. Some of the provisions, such as the employer information, wages, period of employment, job classification, work locations, and prevailing wage data, represent ''material facts.'' An employer that knowingly provides incorrect information on the LCA or shows reckless disregard for the truth of the information has committed a willful misrepresentation. For purposes of H-1B enforcement, WHD considers a willful misrepresentation as fraud and will cite a violation and will assess penalties.
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    On the LCA the employer must agree to abide by (or ''comply with'') the following Labor Condition Statements:

 Wages: The employer will pay the higher of the actual or prevailing rate, which includes offering benefits on the same basis as offered to U.S. workers. The actual wage is based on the employer's own pay scale or system. The prevailing wage rate must be no less than the minimum wage required by Federal, State, or local law. The prevailing wage is typically the weighted average of wages paid to similarly employed individuals in the area of intended employment.

 Working Conditions: The employer will provide working conditions (including hours, shifts, vacations, and seniority based benefits) which will not adversely affect similarly employed U.S. workers.

 Strike, Lockout or Work Stoppage: There is no strike or lockout in the same occupational classification on the LCA at the place of employment. These provisions also require that:

   ETA will be notified if a strike/lockout occurs; and

   No H-1B will be placed at a site with a strike/lockout.

 Notification of the LCA filing to the union or workers by:

   Posting a copy of the LCA for 10 days at 2 conspicuous locations at the place of employment; or
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   Posting a copy of the LCA electronically.

    In addition to the above Labor Condition Statements, an H-1B Dependent Employer or Willful Violator must agree to the following recruitment and non-displacement of U.S. workers provisions:

 An employer will make good faith efforts to recruit U.S. workers;

 An employer will offer the job to an equally or better qualified U.S. applicant (enforced by Department of Justice);

 An employer will not displace a similarly employed U.S. worker within 90 days before or after an H-1B visa petition is filed; and

 An employer must inquire of a secondary employer whether an H-1B worker placed with the secondary employer will displace a similarly employed U.S. worker.

    An H-1B Dependent Employer is defined under the statute by a specific formula. As a general matter, an employer that has 15% or more of its workforce employed as H-1B workers is an H-1B Dependent Employer.

    An H-1B Willful Violator is defined as an employer who, in a final agency action, was determined to have committed a willful failure or a willful misrepresentation of a material fact after October 21, 1998, and within 5 years of the filing of the LCA.
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    IV. Compliance

    Compliance with the H-1B provisions requires an employer to abide by the provisions of the LCA. One of the most basic provisions is an employer's responsibility to pay the H-1B worker properly.

    An employer's obligation to pay an H-1B worker commences on the earliest of the following events:

 The H-1B worker ''enters into employment'' with the sponsoring employer, which occurs when the worker first makes him/herself available for work or otherwise comes under the control of the employer, such as reporting for orientation or studying for a licensing exam;

 No later than thirty (30) days after the H-1B worker is first admitted into the U.S. pursuant to the H-1B petition, whether or not the H-1B worker has ''entered into employment'';

 No later than sixty (60) days after the date the H-1B worker becomes eligible to work for the employer (the approval date found on the United States Citizenship and Immigration Service (USCIS) Notice of Action, Form I-797), whether or not the H-1B worker has ''entered into employment''; or

 For an H-1B worker already in the United States, on the date of the filing of the Petition for a Nonimmigrant Worker (including the Forms I-129, the H Classification Supplement, and the H1-B Data Collection and Filing Fee Exemption Supplement) by the sponsoring employer under the H-1B portability provisions.
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    The employer is obligated to pay the required wage rate for all non-productive time caused by:

 conditions related to employment;

 lack of work;

 lack of permit;

 studying for licensing exam; or

 employer-required training.

    If the non-productive time is the result of a decision by the employer, the full required wage rate must be paid. A worker cannot be ''benched'' by the employer without receiving the required wage rate.

    If the H-1B worker is not available to work for reasons unrelated to employment, such as voluntary absence for pleasure or an absence due to illness, then the employer is not required to pay. If the non-productive time is the result of a decision, made freely by the worker and without coercion by the employer, the required wage rate need not be paid unless it is payment under a required benefit plan—for example, paid vacation or sick leave.

    Full-time workers must be paid the full amount of the required wage rate and part-time workers must be paid for at least the number of hours indicated on the petition for a nonimmigrant worker filed with USCIS (I-129) and referenced on the LCA. If the I-129 indicates a range of hours, the worker must be paid for the average number of hours normally worked.
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    The employer's wage obligation ceases only after a bona fide termination of employment. Once such termination takes place, the employer is required to notify USCIS that the employment relationship is canceled. A worker may not be terminated and then re-hired under the same petition. The employer is liable for the reasonable costs of the return transportation for the H-1B worker if the employer prematurely terminates the employment.

    ''Wages'' are specifically defined in the regulations. The required wage must be paid to the worker, cash in hand, free and clear, when due, and no less often than monthly. Deductions which reduce the worker's wage to below the required wage rate may be taken only if they are required by law (i.e. taxes), are reasonable/customary (i.e. insurance, savings, or retirement) or are authorized by a collective bargaining agreement. The deductions must be voluntarily authorized in writing by the worker, and be principally for the benefit of the worker. They may not exceed the fair market value or actual cost of a provided benefit (lodging, transportation, goods, for example) or the garnishment limits. Deductions may not be taken to recoup an employer's business expense, as a penalty for early cessation of employment, to recover the USCIS petition filing fees, to cover any additional costs incurred in the petition process or to recover the $500 Anti-Fraud Fee.

    An H-1B worker may not be assessed a penalty if he or she ceases employment with the employer before the contract period ends. The employer may, however, seek liquidated damages from the H-1B worker to recoup damages caused by the worker's early departure. The employer may not withhold the last paycheck of the H-1B worker to recover the liquidated damages.

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    H-1B Dependent or Willful Violator employers are prohibited from terminating a U.S. worker in an equivalent position 90 days before and after the filing of the H-1B petition. In addition, if an H-1B Dependent or Willful Violator employer intends to place the H-1B worker with a secondary employer, then the H-1B employer must inquire from the secondary employer whether the secondary employer has terminated, or intends to terminate, a U.S. worker from an essentially equivalent job 90 days before or after the placement of the H-1B worker.

    As I have noted, an H-1B Dependent or Willful Violator employer has additional responsibilities dealing with recruitment and hiring. The H-1B Dependent or Willful Violator employer must take good faith steps to recruit U.S. workers before an LCA or petition is filed. The recruitment must be done using ''industry wide'' standards; i.e. recruitment standards common or prevailing in the industry. An employer's recruitment methods must include, at a minimum, internal and external recruitment and at least some active recruitment. If a better or equally qualified U.S. worker applies for the job, then the employer must offer the job to the U.S. worker.

    The additional provisions for H-1B Dependent or Willful Violator employers do not apply to ''exempt'' H-1B workers. An H-1B worker may be considered an ''exempt'' worker if he or she makes at least $60,000 a year; or has the equivalent of a master's degree or higher in a specialty related to the H-1B employment.

    Finally, no employer may retaliate against any current, former, or prospective worker for asserting H-1B rights or cooperating in H-1B enforcement. This anti-discrimination requirement includes intimidation, threats, restraint, coercion, blacklisting, discharge or any other form of discrimination.
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    The employer must make the LCA and supporting documentation available to the public within one working day of the filing. A public access file must be available to anyone who requests it. It must be maintained at the employer's principal place of business in the U.S., or at the place of employment. The access file must include, for example, the LCA, wage rate documentation, actual wage system, and the summary of employee benefits.

    In addition to the information which must be available in the public access file, during a WHD investigation the agency may require for inspection a complete petition package, payroll and basic records, such as name, address, social security number, occupation of workers, benefit plans, and a record of dependency determination.


    WHD has the following four types of H-1B enforcement authority (the latter two were added to the INA in 2005 and were similar to authority that had sunset in 2003):

Aggrieved Party

    The WHD may conduct an investigation pursuant to a complaint received from an aggrieved party, if there is reasonable cause to believe a violation occurred. An aggrieved party is a person or entity whose operations or interests are adversely affected by the employer's alleged non-compliance with the LCA. Also, the WHD has consistently defined an aggrieved party to include the State Department. In order for WHD to accept the complaint, the aggrieved party must allege a violation of the H-1B program that occurred within 12 months of the complaint. When WHD receives a complaint from an aggrieved party indicating a violation of the H-1B program, which occurred within 12 months of the alleged violation, an investigation must be conducted and a determination issued. All investigations prior to April 2006 were conducted pursuant to this enforcement authority.
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Willful Violator

    The WHD may reinvestigate an employer that previously has been determined by the Labor Department to have committed a willful failure to meet a condition specified on the LCA or willfully misrepresented a material fact in the LCA within the last five years. WHD maintains a list of these willful violators, available on the WHD Web page located at http://www.dol.gov/esa/regs/compliance/whd/FactSheet62/whdfs62S.htm. In FY2006, WHD will conduct investigations under this authority for the first time. It is important to note that most employers that have committed a willful violation were subject to a civil monetary penalty (CMP) and debarment. It has been WHD's experience that in many instances these employers are no longer in business, making it difficult to utilize this authority.

Credible Source

    The WHD may conduct an investigation based on credible information from a known source, if the information provides reasonable cause to believe that the employer has willfully failed to meet certain LCA conditions, has engaged in a pattern or practice of failures to meet such conditions, or has committed a substantial failure to meet such conditions that affects multiple workers. This information must be received within 12 months after the date of the alleged violation. This use of this authority, however, has two explicit statutory limitations; specifically the information:

(1) Must originate from a source other than an employee of the Department of Labor or be ''lawfully obtained by the Secretary of Labor in the course of lawfully conducting another Department of Labor investigation under this Act (INA) or any other Act;'' and
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(2) May not include information submitted by the employer to DOL or DHS as part of the H-1B process.

Secretary's Certification

    The WHD may initiate an investigation if the Secretary of Labor personally certifies that there is reasonable cause to believe that a violation has occurred and personally approves commencement of an investigation. This authority may be exercised only for reasons other than completeness of the LCA and obvious inaccuracies by the employer.


    When the investigation is complete, WHD issues a determination letter offering the employer and interested parties an opportunity to appeal the findings. The employer or interested party has 15 days from the date of the letter to appeal the determination and request an administrative hearing. The violations cited may include a misrepresentation of a material fact, a failure to meet an LCA condition, or a failure to comply with the regulations. There are 16 separate violations listed in the regulations at 20 CFR 655.805(a), which are classified by the WHD as a simple failure, a substantial failure, or a willful failure. The level of gravity of the violation affects whether CMPs will be assessed and their amount, and whether the employer may be debarred and for how long.

    The H-1B Visa Reform Act of 2004 amended the law to preclude the WHD from finding a violation for a ''technical'' or ''procedural'' failure, if there was a good faith attempt to comply, the employer corrects the failure within 10 business days after DOL or another enforcement agency has explained the failure, and there is no pattern or practice of willful violations. WHD will carefully evaluate the employer's intent to comply when making decisions concerning this defense. It is important that an employer realize that immediate correction of the violation is the most important factor to this defense.
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    The H-1B Visa Reform Act of 2004 also provided that an employer found to have violated the prevailing wage requirements during the course of an investigation will not be assessed fines or penalties if the employer can establish that the manner in which the wage was calculated was consistent with industry standards and practices.

    If a violation is found by WHD, then the employer will be required to remedy the violation. Remedies may include the payment of back wages or fringe benefits, the assessment of CMPs, a recommendation to USCIS that the employer be debarred, and other actions deemed appropriate to achieve compliance with the H-1B program requirements.

    The determination letter issued by WHD will list both the specific violations and the remedies for those violations. Employers must abide by the determined remedy and comply with H-1B provisions in the future.


    As mentioned above, WHD has four distinct and limited enforcement authorities: aggrieved party, willful violator, credible source, and the Secretary's certification. This is the only program WHD administers and enforces that has such restrictions on its enforcement authority.

    Prior to April 2006, WHD's H-1B enforcement was essentially a complaint-based program. Previously, WHD did not have a specific program to reinvestigate past willful violators. Our experience showed that, of the few employers that were found to be willful violators, many chose to go out of business subsequent to their debarment (approximately 50% in FY 2006), and thus, could not be reinvestigated. The current list of willful violators is approximately 50 employers nationwide. In April 2006, as acknowledged by the GAO report, WHD began the process of randomly reinvestigating willful violators.
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    As noted above, the credible information source investigation (added to the INA in 2005) relies on someone other than a DOL/ETA or DHS employee coming forward with information suggesting that an employer has committed a willful failure, a pattern or practice of failures, or has substantially failed to meet a condition of the LCA which affects multiple workers. To date, no person has been able to present enough information to warrant opening an investigation under this authority.

    Finally, the Secretary's authority (added to the INA in 2005) requires the Secretary to personally certify that she believes reasonable cause exists for an investigation. Again, the authority is limited to cases that involve violations other than incompleteness or obvious inaccuracies by the employer. This authority has never been exercised.

    GAO suggests that Congress consider (1) eliminating the restriction on using application and petition information submitted by employers as the basis for initiating an investigation, and (2) directing Homeland Security to provide Labor with information received during its adjudication process that may indicate an employer is not fulfilling its H-1B responsibilities. We believe that these changes would increase WHD's enforcement ability, but we defer to DHS as to whether it is necessary or appropriate statutorily to direct DHS to provide this information to DOL. Although we support GAO's recommendations, it should be recognized that GAO's suggestions would maintain the current four distinct, yet limited, enforcement authority provisions. Congress may want to consider instead, replacing this complex mixture of enforcement authorities with a broad grant of authority similar to that found in the FLSA. The FLSA authorizes the WHD to ''investigate such facts, conditions, practices or matters as . . . necessary or appropriate to determine whether'' a violation has occurred.
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    As previously mentioned, the anti-fraud fee is $500 per petition. The $500 is divided equally between DOL, DHS, and DOS. WHD's portion of this fee totals approximately $30 million annually. However, the statute limits DOL use of this money only to enforcement of INA Section 212(n) (describing H-1B). Without unrestricted investigative authority, the Department estimates that it will continue to spend approximately $4.0 million annually for H-1B enforcement. If Congress changes the statute to include broader H-1B investigative authority, it would be reasonable to expect WHD to significantly increase current H-1B enforcement activities.

    WHD takes very seriously its responsibility to enforce the H-1B program's requirements. Over the last three years, WHD averaged between 130 and 170 completed H-1B cases per year. Approximately 75 percent of all complaints resulted in a violation. In FY 2005 alone, WHD collected over $3.3 million for more than 500 workers. Among the violations found in FY2005, there were 20 in which the agency determined that an employer misrepresented a material fact.

    As for how WHD spends these funds, WHD determines the amount to offset with H-1B funds each quarter based on the percentage of H-1B enforcement time compared to total enforcement time. For example, if 2 percent of enforcement time is H-1B related during the first quarter, then WHD offsets 2 percent of our obligations from the first quarter with H-1B funds.

    Recently, WHD increased its H-1B compliance assistance and educational activities. It currently is conducting a nationwide H-1B training program for WHD investigators and managers, as well as attorneys in the Office of the Solicitor. The training will result in greater enforcement, heightened awareness of fraud and an increase in H-1B compliance assistance activity, all of which should result in additional complaints for WHD to investigate and incidences of fraud to report to other authorities. In preparation for this training, WHD recently released on its Website 26 H-1B Fact Sheets, which are part of the larger compliance assistance program. The program includes the recently issued H-1B chapter for WHD's Field Operations Handbook, H-1B worker rights cards, a PowerPoint presentation, seminars to the public, and a series of H-1B press releases. In addition, WHD is an active member of the Immigration Benefit Fraud Working Group, which includes other Federal departments, such as the DOS and DHS.
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    Even if Congress were to expand WHD's H-1B enforcement authority as GAO recommends, given current statutory language limiting the use of the funds solely to H-1B enforcement, we would expect a surplus of H-1B fee money. The Department believes a modification in INA Section 286(v)(2)(C) would provide greater flexibility to fully utilize the anti-fraud money. Such a change in the statutory language would help to supplement overall enforcement activity to further combat fraud and protect American workers. The effect of the language that the Department proposes, along with similar improvements to the fraud fee provision proposed by DOS and DHS with respect to their shares of the fraud fee, would maintain a strong and viable H-1B enforcement and compliance assistance program while, at the same time, strengthening enforcement programs and activities that focus on low-wage industries likely to employ foreign workers.

    Mr. Chairman, that concludes my statement and I will be pleased to respond to questions from the Members of the Subcommittee.

    Mr. HOSTETTLER. Mr. Miano, am I pronouncing that correctly?

    Mr. MIANO. Yes, you are.


    Mr. MIANO. Thank you, Mr. Chairman and Members of the Committee.

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    I have been following the H-1B visa program closely for 12 years now, and what has struck me the most over these years is how little protection is given to U.S. workers and how little has been done to fix the problems.

    The only real protection for U.S. workers in the H-1B program is the annual quota. The quota serves the important function of limiting the amount of damage the H-1B program can cause U.S. workers.

    These are some of the problems that I see with the H-1B visa program. The most odious of these is the use of H-1B workers to directly replace U.S. workers, often with employers requiring U.S. workers to train their foreign replacements to collect severance. This Committee passed a bill in 1978 to ban this practice. Unfortunately, the provision appeared before it came to the floor for a vote.

    Employers replacing third parties have no liability whatsoever under the law, so the practice continues. The prevailing wage requirements in the H-1B program is simply ineffective. There is no way the prevailing wage requirements can protect U.S. workers when employers are allowed to use wage claims that do not reflect the actual prevailing wage in the industry.

    There is poor data collection, sharing and reporting. We have no idea how many H-1B workers are in the country, what they are doing or even how many H-1B visas are being approved each year.

    There is no active monitoring of the H-1B program. There is no mechanism of auditing or following up on suspicious activity, and there is no limit to the number of H-1B visas a single employer may have. In the computer industry the majority of H-1B visas are going to contract labor companies or body shops. Instead of filling jobs where Americans cannot be found, these workers are in direct competition with U.S. workers for actual employment.
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    However, the biggest problem with the H-1B program is that it has been designed to inhibit enforcement the bizarre restrictions imposed upon the Department of Labor that I have noted in my written statement, ensure the law cannot be enforced. Quite simply, the Department of Labor has an impossible task.

    However, even where the Department of Labor has the power to investigate, they do not seem to be eager to do so. Recently I submitted a complaint against one of the largest users of H-1B visas, alleging that it was not complying with a requirement to recruit U.S. workers in good faith. As evidence of this, I submitted 130 job postings from the company that stated only H-1B workers could apply or that they preferred H-1B workers.

    Department of Labor's response to this complaint was that they could not investigate, because this was insufficient evidence of a violation. If 130 job postings telling U.S. workers not to apply is insufficient evidence to investigate whether a company is not meeting the good faith recruitment requirement, what is?

    For a number of the largest H-1B-dependent employers, I can find no evidence of them recruiting in the U.S. whatever. I cannot even imagine what kind of evidence the Department of Labor would require in order to investigate one of these companies.

    Over the past year, I have seen a dramatic change in the way employers approach the H-1B program. Abuse that used to go on behind the scenes now takes place out in the open. Apparently word has gotten out that there is no H-1B enforcement.

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    For example, people in the computer industry have always known that there are companies that simply do not hire Americans for technical positions, and that these companies rely entirely on visa programs for staffing. However, this practice used to take place mainly under the table.

    In previous years I never found more than a small number of ads asking only for H-1B workers where the employers slipped up and documented their illicit recruiting practices. In the past 6 weeks, I have found over 1,500 ads requesting H-1B workers only from 350 employers.

    There are now Web sites that are virtually visa bazaars; companies don't advertise jobs, they advertise visas. The H-1B program allows people to start a company in their basement and import H-1B workers. The 2003 LCA data contains a few of these cottage industry H-1B operations, while the 2005 data shows many of them up and running.

    In addition, this year I have found a large number of H-1B employers that have never filed an LCA before, so the practice clearly is growing. I suspect that many of these basement visa operations are simply selling visas, and that the H-1B workers disappear once they arrive in the U.S.

    Having examined the available data on the H-1B visa program very closely, and seeing the absurdities that it contains, I am not surprised at all that the annual quota is being consumed before the start of the fiscal year. With the current state of enforcement, the quota is all that stands between the H-1B program and total chaos.

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    I have included a number of recommendations in my written statement, and I would be happy to answer any questions. Thank you.

    Mr. HOSTETTLER. Thank you, Mr. Miano.

    [The prepared statement of Mr. Miano follows:]


[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]

    Mr. HOSTETTLER. Ms. Avendano.


    Ms. AVENDANO. Thank you, Mr. Chairman, Members of the Committee. On behalf of the 9 million working men and women who are members of AFL-CIO-affiliated unions, I would like to thank you for the opportunity to speak with you about this critically important question: Is the Labor Department doing enough to protect U.S. workers?

    As is set out in more detail in my statement, the answer is, unfortunately, a resounding no. We are deeply concerned about the DOL's failure to adequately enforce workplace laws. That failure harms all workers in the Nation, and continues to cause downward pressure on workplace standards across the country and across the economy.
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    It is very telling that we heard this morning that the Department of Labor's failure to enforce the H-1B protections have allowed employers to pay less than otherwise required by law in at least 3,200 jobs in the high-tech industry.

    The Federal Government's ruling and enforcement of worker protections is particularly important in the context of guest worker programs; that is, programs that allow employers to import foreign workers in temporary status into certain jobs into the economy, like the H-1B program and its unskilled worker counterpart, the H-2B program. Workers who are imported into our economy under those programs are at a great disadvantage, because, by the very nature of the programs, those workers rely on their employers not only for their jobs, but also for their own immigration status. Exploitation of workers in temporary worker programs like the H-1B and H-2B and L visa programs is thus made that much more easier because if workers complain that they are not being paid what the law requires, or they are not being paid at all, as is the case in many H-1B instances, they not only risk losing their jobs, but they also risk either having to leave the country or remain here unlawfully.

    Now, that kind of exploitation harms all workers in our Nation, because workers in the industry, H-1, that are covered by the H-1B program and the other guest worker programs don't labor in isolation. Temporary foreign workers work alongside their U.S.-born counterparts in high-tech industries, and as teachers and engineers and nurses under H-1B visas, and alongside U.S.-born hotel workers, landscapers, service workers under H-2B visas.

    When employers have a system, a legitimatized system, to import workers, exploitable workers, and thus lower working conditions for those workers, they are essentially lowering standards for all workers in those very important and critical sectors of our economy.
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    It seems clear that the Federal Government is moving in exactly the wrong direction in protecting U.S. workers in this context. Instead of reinforcing mechanisms that would ensure employers don't import foreign workers in order to depress wages and other labor standards, the Government is moving toward a simple attestation program, essentially that DOL wants to abandon the small, or at least the way it's exercising it, insignificant role that it has today.

    The labor certification process, flawed as it is, is the last remaining protection that U.S. workers have for two important reasons. One, it's designed to make sure that the Government agencies that most understand local labor markets actually are the ones that are doing the application, so there is technical expertise that again provides protection for U.S. workers.

    Most importantly, labor certification, the process acts as a gatekeeper to make sure that there are no violations of the system before the workers are even imported. That is critical, because there are very few remedies after the fact both for the U.S. workers that are potentially displaced by the employers who are importing foreign workers to replace those workers and for the foreign workers themselves.

    Now, the issue of guarding against abuses in guest worker programs is particularly important right now, given that the Senate has adopted an immigration reform proposal that significantly increases the number of foreign visas available to employers and abandons the long-standing national policy of only allowing workers to fulfill seasonal or temporary labor shortages. Indeed the Senate bill creates a whole new class of temporary workers, the H-2C workers, and significantly increases the number of H-1B visas to employers.
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    Whatever concerns we now have about the lack of enforcement of labor standards in temporary worker programs are sure to be magnified when the new hundreds of thousands of temporary workers are imported into our economy.

    In conclusion, Mr. Chairman, in response to the Ranking Member's question of what should we do, what are we to do for American workers, the best thing we can do is to protect U.S. working standards so that workers can earn a decent wage, work in dignity and under decent conditions, and not continue to foster systems like the H-1B program that simply provide employers with a steady supply of exploitable workers. Thank you.

    Mr. HOSTETTLER. Thank you, Ms. Avendano.

    [The prepared statement of Ms. Avendano follows:]


    Chairman Hostettler, Ranking Member Jackson Lee and Members of the Committee, thank you for the opportunity to address the critically important question: is the Labor Department Doing Enough to Protect U.S Workers? As I will explain in more detail shortly, the answer is a resounding, NO.

    The AFL-CIO is a voluntary federation of 53 national and international labor unions. Our affiliates represent more than nine million working men and women of every race and ethnicity and from every walk of life. We are teachers and truck drivers, musicians and miners, engineers, landscapers, nurses, electricians, and more.
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    We are deeply concerned about the Department of Labor's (DOL) failures to adequately enforce workplace laws, including the protections afforded under the H1-B and other temporary foreign worker programs. I understand that the focus of this hearing is on the way that the DOL reviews and enforces Labor Condition Applications for H1-B visas, and I will address that issue specifically later in my testimony. The DOL's failures go well beyond that specific issue. In fact, the failures are systematic, to the detriment of all workers in our nation, and have caused—and continue to cause—downward pressure on workplace standards across the country and across the economy.

    When the DOL fails to enforce any of the statutes under its jurisdiction, all workers suffer. Nowhere is that more evident today than in the Gulf region, where workers involved in the post Katrina reconstruction—both foreign born and US—are being cheated out of their wages by major US companies and forced to work in substandard, unhealthy and unsafe conditions.

    In February, a group of worker advocates, including the AFL-CIO met with DOL representatives here in Washington, DC to raise concerns about the ongoing labor and employment violations occurring in the Gulf region. The worker advocates painted a clear picture of unscrupulous contractors, rampant labor violations and sheer lawlessness in the Gulf region. Prior to the meeting, the advocates provided DOL a list of very basic questions including how many wage claims arising from the post-Katrina reconstruction effort had been filed, the processing time for claims, and various questions concerning DOL outreach efforts to workers. The DOL was unable to respond to any of those questions. The DOL's lack of concern for working conditions in the Gulf was, frankly, appalling.
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    The DOL's failure to take seriously its law enforcement function in the Gulf region has left workers with no alternative but to rely on private enforcement that is through lawsuits. The Southern Poverty Law Center has filed two class action suits on behalf of thousands of workers in the Gulf who have not been paid at all, or not paid the minimum wage or overtime. But as the Center itself recognizes, ''lawsuits alone will not stop the widespread exploitation of workers that is going on in New Orleans. . . . The people working in New Orleans to rebuild its schools, hospitals and university buildings need and deserve the protection of the federal government.''

    The federal government's involvement is particularly important in the enforcement of protections in the context of foreign temporary worker programs, like the H1B program and its unskilled worker counterpart, the H2B program. Workers who are imported into our economy under those programs are at a great disadvantage because, by the very nature of the programs, those workers rely on their employers not only for their jobs, but also for their immigration status. Exploitation of workers in the H1B and H2B programs is thus easier, because if workers complain that they are not being paid what the law requires, or expose other employer violations of law, they not only risk losing their job, but also risk either having to leave the country or remain here unlawfully.

    That kind of exploitation harms all workers, including US workers. The temporary foreign workers who are being cheated of their wages do not labor in isolation. They work along side their US-born counterparts in the high technology industry and as teachers and engineers (under H1B visas), and along-side US-born hotel workers, landscapers and service workers (under H2B visas). When employers are able to exploit one class of workers, that exploitation lowers the floor for all workers.
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    The poultry industry provides a perfect example. Roughly half of poultry workers today are African American, and the others Latino, mostly immigrant. In 2000, the DOL conducted an industry-wide survey of compliance with wage and hour laws. That survey concluded that the industry as a whole was one hundred percent out of compliance with wage and hour laws. Clearly, the African American poultry workers suffered as much as their immigrant counterparts.

    That type of government compliance effort—that is, industry-wide investigations that do not rely on individual worker complaints—is a key part of a robust and meaningful monitoring system. And it is one that is of particular importance in the context of foreign temporary worker programs. Unfortunately, it is not one from which US workers can currently benefit because the DOL has essentially abandoned that key tool. We have been unable to locate any industry-wide targeted compliance efforts under the current Administration.

    It seems clear that the federal government is moving in exactly the wrong direction. Instead of reinforcing mechanisms that would ensure that employers do not import foreign workers in order to depress wages and other labor standards, the government is moving toward simple attestation programs, where the DOL has no significant role, if any at all.

    The labor certification process—as flawed as is it—is the last remaining protection that US workers have. That process is designed to ensure that the government agencies with the most expertise on local labor markets and with the greatest ability to find available US workers and determine how employers could recruit job applicants—the State Workforce Agencies—act as the gatekeepers for the temporary foreign worker programs. The certification process is also designed to prevent various harms before the fact, rather than after-the-fact, since there are few, if any adequate remedies available after the fact for those who bear the harm caused by abuses of temporary foreign worker programs. In addition, the inadequacy of after-the-fact enforcement mechanisms mean that there are few disincentives for employers to violate their labor law obligations. An attestation process completely removes the DOL or the SWAs as the independent gatekeeper, thus opening up the foreign temporary workers programs for further employer abuse, subjecting the foreign temporary workers to further exploitation, depriving US workers of gainful employment, and degrading wages and working conditions within the domestic labor market.
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    We fully agree with Congresswoman Sheila Jackson Lee's concerns that the current requirements may not be enough to protect US workers, even if enforced adequately. We believe that more attestations are not the answer. The attestation structure—in and of itself—fails to meet the essential gatekeeper function.

    The DOL has the statutory responsibility for ensuring that employers do not abuse guestworker programs. Because of the exploitative nature of those programs, the DOL should be using every tool available and seeking to make current tools—like the labor certification process—stronger, not weakening it by abandoning its role to an employer attestation process.

    The issue of guarding against abuses in guestworker programs is of particular importance now, given that the Senate has adopted an immigration reform proposal that significantly increases the number of foreign visas available to employers, and abandons the long standing national policy of only allowing employers to import workers to fill seasonal or temporary labor shortages. Indeed, the Senate bill creates a whole new class of temporary foreign workers, the H2C workers, in addition to increasing the number of H1B workers that employers are able to import. Whatever concerns we have now about the lack of enforcement of labor standards in temporary worker programs are sure to be magnified when the new hundreds of thousands of temporary workers are imported into our economy.

    These concerns are real and long-standing. The United States has spent years studying and experimenting with guestworker programs, and the resounding conclusion is that guestworker programs are bad public policy. The ''Jordan Commission,'' for example, which was created by the 1986 Immigration Reform and Control Act to study the nation's immigration system squarely rejected the notion that guestworker programs should be expanded. In its 1997 final report, that Commission specifically warned that such an expansion would be a ''grievous mistake,'' because such programs have depressed wages, because the guestworkers ''often are more exploitable than a lawful U.S. worker, particularly when an employer threatens deportation if workers complain about wages or working conditions,'' and because ''guestworker programs also fail to reduce unauthorized migration'' [in that] ''they tend to encourage and exacerbate illegal movements that persist long after the guest programs end.''(see footnote 1)
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    In conclusion, we fully agree that we must significantly increase the mechanism for ensuring compliance with labor standards. Increased attestations alone are not the answer. We must also ensure that the DOL does not abandon its traditional oversight role and the gatekeeper role that it has exercised through the labor certification process.

    Targeted wage and hour investigations in the high technology industry, which is known to hire the most H1B workers, are essential and should be conducted immediately. The data from these investigations will allow Congress to meaningfully assess whether the H1B labor inspection mechanism is adequate to protect both US workers and the foreign workers who labor in those programs.

    Thank you and I look forward to your questions.

    Mr. HOSTETTLER. At this time we will turn to questions from Members of the Subcommittee. First of all, Dr. Nilsen, you note in your testimony that the Labor Department probably certified even more LCAs erroneously, but because your review was narrow—I think you refer to it as cursory in your oral statement—only a small portion were uncovered.

    Can you elaborate on the scope and nature of the other potential problems and errors in the LCA process?

    Mr. NILSEN. In particular, I was referring to the review of the employer identification number where an error in that field is not seen by Labor as an obvious inaccuracy. So they just make sure all the fields are filled in with the number. We just took a look, there's a two-number prefix, and we know there are only certain numbers that are valid. So many of those were, in fact, valid.
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    There are many other checks that could be done, and while I don't know the extent to which they would reveal erroneous numbers, but certainly they are in the permanent Labor certification program. Labor takes the employer's identification number and checks it against a database to make sure it's a valid employer.

    There's a relatively low-cost exercise that they can do, but because they see this as a verification process, they feel it goes beyond the scope of their current authority. So there are many other checks like this that they can do, likewise looking at the programming and finding out why the prevailing wage information on those 3,200 applications got through their data checks.

    Mr. HOSTETTLER. Can you just elaborate quickly on the difference between the verification, why the verification process is not necessarily a grounds for investigation?

    Mr. NILSEN. Labor, in its view of what it has the authority to do, is just to make sure that the information is completely filled in, but that it's beyond the scope of their responsibility to actually make sure that the information is accurate.

    Mr. HOSTETTLER. Would there be——

    Mr. NILSEN. I believe that would be a legislative change that would have to occur.

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    Mr. HOSTETTLER. Is there a reason why that is—is there a statute as to why they cannot use that? Or is it just their regulation, that they don't need to do that, they don't have to do that?

    Mr. NILSEN. As I understand it, it's a legislative requirement. But perhaps Labor could elaborate on that.

    Mr. HOSTETTLER. How about that? Is there specific preclusion from using that?

    Mr. ROBINSON. Yes, Mr. Chairman, there is. The statute, as we talked about four mechanisms to initiate an investigation, we refer to one of those as a credible source rule, but the statute explicitly prohibits us from getting information from ETA, in this instance, or the Homeland Security. So we cannot use that information as the basis to initiate an investigation.

    Mr. HOSTETTLER. Very good, that is helpful. Go ahead.

    Mr. ROBINSON. Excuse me, Mr. Chairman. As to your earlier point, and Mr. Carlson could give you some more information, and we would be glad to put that in writing if you would like, or if you wanted to hear from him, but as far as ETA's responsibility under the certifying or checking the accuracy, they do not have, under the statute, the authority to go beyond, as Dr. Nilsen mentioned, go beyond what is presented on the information to actually do some verification. So they don't have that statutory authority to do that. The statute is, again, sort of very explicit in that area.
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    We would be glad to, if you wish, get you some additional information in writing.

    Mr. HOSTETTLER. Thank you, sir. That is very helpful.

    Mr. Robinson, when a complaint is filed, how is it investigated, and has the Labor Department done outreach to H-1B and American high-tech workers to let them know how to file complaints?

    Mr. ROBINSON. Yes, sir. The complaint process is just like any other process. We would take a complaint. We have a procedure where we investigate, do fact-finding, do interviews. So we do have a process take we would go through.

    We follow that, and I think it's table 4 in the GAO report shows we have an increasing track record of increasing complaints and processing and recovery of back wages, as well as helping employees.

    We do educational events, if you will, outreach, with employers and employee groups, so we do try to educate the H-1B community as to the requirements as well as follow up with our enforcement activities, yes, sir.

    Mr. HOSTETTLER. One more thing. What about Americans, high-tech—American citizens, high-tech workers that are American citizens?

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    Mr. ROBINSON. I can—I can't give you any examples. If you like, I could maybe try to do that and perhaps put something in writing for you to give you some information there.

    Mr. HOSTETTLER. That would be helpful.

    Mr. ROBINSON. The type of outreach that we have done in that area.

    Thank you. My time at this point has expired.

    The Chair now recognizes the gentleman from Texas Mr. Smith for questions.

    Mr. SMITH. Thank you, Mr. Chairman.

    Dr. Nilsen, as I recall reading in some of your materials, the proportion of H-1B visas that go to individuals who we might call high-tech workers, those connected to the computer industry, really is only about a third of the total number. Is that roughly accurate?

    Mr. NILSEN. Yes, I believe that's correct. It certainly is the largest component. It's probably closer to 40 percent.

    Mr. SMITH. Let's assume that it is 40 percent of the H-1B visas go to the high-tech workers. I just have to say, and I know this is outside the purview of our hearing today, but I am looking at some of the other occupations and individuals who receive the H-1B visas, and they include accountants, chefs, dieticians, hotel management and interior designers.
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    I am not sure I am convinced, nor am I convinced that the other individuals in America who might be working in those occupations are convinced, that we need more people in those particular areas. That is something I realize is a policy question for Congress to decide. But, at the same time, I am not convinced that a case has been made in those areas.

    Mr. Robinson, I wanted to direct a couple of questions to you, particularly in regard to H-1B-dependent companies.

    Mr. ROBINSON. Yes.

    Mr. SMITH. When the original legislation was written, I was involved in a compromise that ended up focusing on those H-1B-dependent companies. I am just wondering how many investigations the Department of Labor has conducted in regard to the H-1B-dependent organizations.

    Mr. ROBINSON. Congressman, I can't answer that question. I can check our database and see how many of our investigations have focused on H-1B-dependent——

    Mr. SMITH. Do you know whether it's a significant number or not? Can you just give me an idea?

    Mr. ROBINSON. I am afraid I am unable to do that. I just don't know, but I can get you that information. Sorry.
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    Mr. SMITH. In that case let me ask you if H-1B companies were advertising for H-1B-only job applicants, would that be a possible violation of the two attestations that the employers have to make? The two attestations, of course, being that you have to advertise for an American worker first, and that if you can't find an American worker, that you can replace that worker with a foreign worker.

    So my question is if someone were advertising for an H-1B-only applicant, wouldn't that imply it had to be a foreign worker as opposed to being an American worker?

    Mr. ROBINSON. Congressman, you are correct about the two additional attestations that the H-1B-dependent employer must satisfy.

    There is an exception, and I think this might go a little bit toward testimony as well. For an H-1B employee who is earning $60,000 or more in annual wages or has a master's degree or higher, that attestation of recruiting and hiring does not apply. So it is quite possible in the instance that was mentioned earlier in checking the LCAs, we found that these people were exempt H-1B workers from that recruit and hire.

    Mr. SMITH. That's correct. So we are talking about individuals who earn less than that. Do you still feel if you were advertising——

    Mr. ROBINSON. Oh, if they were earning less than that? That would probably be something we want to pursue and do some fact-finding.

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    Mr. SMITH. If you would, within a week, if you could get back to me on the number of H-1B investigations you have conducted and what the results of those investigations were; and also whether any of the attestations were violated, and, if so, which ones. That would be good.

    Mr. ROBINSON. Yes, sir.

    Mr. SMITH. Dr. Nilsen, do you have anything else to add to my concern about those attestations being violated by H-1B-dependent companies?

    Mr. NILSEN. No, I don't have anything to add on that question at that point.

    Mr. SMITH. One other thing for you, Dr. Nilsen. Did you notice in your investigation that there was any particular occupation that seemed to—in which you found more fraud than another occupation?

    Mr. NILSEN. No. We didn't do that kind of analysis that broke it down by occupation.

    Mr. SMITH. So it was across the board.

    Mr. NILSEN. Yes. We didn't actually look at specific occupations and find which ones were more likely.

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    Mr. SMITH. You have no knowledge of that either, then?

    Mr. NILSEN. No.

    Mr. SMITH. Thank you.

    Thank you, Mr. Chairman.

    Mr. HOSTETTLER. Thank you.

    The Chair recognizes the gentlewoman from Texas, the Ranking Member, for 5 minutes.

    The gentlewoman yields to the gentleman from Texas Mr. Gohmert.

    Mr. GOHMERT. Thank you, Mr. Chairman. I don't know, the gentlewoman from Texas may still be shocked that I agreed with her earlier. But anyway, pardon my ignorance, but that's the way I learned. And some people thought I was a decent judge, but that is because I didn't mind asking questions and exposing my ignorance.

    But I was just wondering, and it may be, Dr. Nilsen, we will start with you, but if somebody could take me step by step through the process that the U.S. Government goes through, you know, from what you know, from whether its immigration, DOL, whoever, once you get an application from someone wanting an H-1B visa, what do we do?

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    Mr. NILSEN. I am happy to take you through that. It was complex to us, too.

    In our report on page 10, we just have a little graphic takes you through that, where the application is filed electronically with Labor.

    Mr. GOHMERT. That is great. I am just seeing this report.

    Mr. NILSEN. It was just issued today.

    Mr. GOHMERT. Okay. Maybe that is why I hadn't seen it.

    Mr. NILSEN. Yes. In the back on page 32, in fact, is a copy of the Labor condition application that they file with Labor. This identifies the company, the kinds of workers, and each application is for a particular occupational series. It lists the wages they are going to be paying, what the prevailing wage is, et cetera.

    Then once that gets approved by Labor, and, as I indicated, that is a matter of minutes, it's an electronic process, make sure all the data is there, it gets forwarded then to the Department of Homeland Security.

    Mr. GOHMERT. The deep abyss. Okay.

    Mr. NILSEN. Along with—and we also have the next appendix, shows the petition that goes along with the application that gets filed with the LCA.
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    That gets investigated, adjudicated by Department of Homeland Security. Once that has been approved, then they check against the caps, et cetera. Then it would be forwarded to the State Department for a visa to be issued for an individual.

    Mr. GOHMERT. Just looking at figure 1 of page 10, in the review of the H-1B visa process, it explains, submit the application electronically. ETA approves the application within 7 days if complete. You say that's the process that takes minutes.

    Normally then the employer submits a H-1B petition, okay, and the CIS—and the CIS adjudicate and approve the petition. I guess it's kind of like when Steve Martin says, I am going to write a book and tell people how to have $1 million and not pay taxes. Okay, first get $1 million and then just don't pay taxes. I mean, it's like, okay, but I am curious about what the process is by the Government. You got Labor, maybe approved within minutes. You said that can be done on line.

    Mr. NILSEN. Yes.

    Mr. GOHMERT. We may need to get you all to help Homeland Security with their computers so that they can do those kinds of things. But what is it that CIS does between those last three, four and five boxes?

    Mr. NILSEN. They look at the application.

    Mr. GOHMERT. Okay. That takes several days to read that probably.
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    Mr. NILSEN. Verify that is an occupation that qualifies.

    Mr. GOHMERT. But how do they do that, just by looking at it, and their training and knowledge?

    Mr. NILSEN. This is actually a hands-on process by Homeland Security, CIS, where they go through and they actually do checking of the information. Anything that comes——

    Mr. GOHMERT. But how do they check that information? That is what I am trying to get to, and I realize my time has expired. If I could just finish this line.

    Mr. HOSTETTLER. Without objection, the gentleman is recognized for another minute.

    Mr. GOHMERT. Thank you, Mr. Chairman.

    Mr. NILSEN. If they see anything that raises a question, they will talk to the employer to get additional information. They make sure it's a specialty occupation, and they verify the worker qualifications, for example, if they need a higher level of degree, bachelor's or master's in engineering, making sure that the documentation is there that verifies that this is, in fact,correct, that this person qualifies under those conditions.

    Mr. GOHMERT. Okay. So they review, though, what's there.
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    Mr. NILSEN. What's there, and they will contact the employer who filed the petition if there are any questions.

    Mr. GOHMERT. I guess that's what I was getting to. They look at the documentation, and if somebody has got somebody else to say, this is what's needed, whether it's true or not—and I don't want to shock your conscience, but I found as a judge, chief justice, and now it's been absolutely confirmed here in Congress, people will lie to you. It just happens. So I guess I'm wondering what kind of outside verification there is.

    Mr. NILSEN. They're supposed to provide certified transcripts from universities;, not just a copy but a certified transcript, for example, that documents that they have the training that they purport that they have in a particular field.

    Mr. GOHMERT. But how about for the certification that this is exactly what's needed for this position?

    Mr. NILSEN. They look at the occupational series that's listed, and look at the—you know, if it's in the computer field that it's a relevant occupation for a relevant degree for that occupational series.

    Mr. GOHMERT. And so I was surprised to see the list my colleague had here that lists things like chiropractor, and I frankly didn't realize there was such a huge shortage of chiropractors here that we were having to bring them in from other places. I know some chiropractors that are struggling that didn't realize that either. Anyway, I guess you have a list of what's required in order to be a legitimate chiropractor in the U.S., correct?
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    Mr. NILSEN. I would presume they do.

    Mr. GOHMERT. Okay. That's where we get in trouble.

    Mr. NILSEN. And it is basically a paper review of the documentation provided.

    Mr. GOHMERT. All right. I realize I have vastly exceeded my time, and I appreciate the Chairman's indulgence. Thank you.

    Mr. HOSTETTLER. Thank the gentleman. The Chair recognizes the gentlelady from Texas, the Ranking Member, for 5 minutes.

    Mr. JACKSON LEE. Thank you. Dr. Nilsen, thank you for your report. My question to you, in your assessment, do you believe this program can be reformed?

    Mr. NILSEN. I guess I would have to say yes. Anything can be reformed. I think if you're going to ask can additional work be done to improve the verification process of the application, certainly much more can be done. But Labor, or whoever, would have to be given the authority to do verification and share the information and do a relevant investigation process in order to improve it. Right now, as we've been saying, the LCA process is very cursory, the review process that Labor does. The fact that Homeland Security and Labor cannot share information for purposes——

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    Ms. JACKSON LEE. Is that in the legislative framework—are you suggesting they can do it in a regulatory framework or they need legislative framework?

    Mr. NILSEN. They need legislative authority.

    Ms. JACKSON LEE. What can they do presently? One of the concerns is how energetic the Department of Labor is in terms of the attestation. You make the point that between January 2002 to September 2005, 9,563 applications and 99.5 percent were certified. Is there not an administrative fix or sort of an in-depth review that might be given?

    Mr. NILSEN. Certainly. But under current legislative authority, there's only a little bit more I think that Labor can do. Certainly the work that we did defined the 3,200 erroneous wage levels and the erroneous employer identification numbers; Labor can do that now. There's something broken in their software that doesn't do that match properly, and they don't look at the employer identification numbers to actually verify that they're in a relevant series. They then could get some additional information to match and make sure that information is relevant. But beyond that, they are limited statutorily.

    Ms. JACKSON LEE. Well, I always like to be a problem-solver and I think that Labor owes us at least a performance of excellence under the present legislative structure, and they can do what you just said.

    Mr. NILSEN. Yes.

    Ms. JACKSON LEE. And one of the reasons, of course, is that we see the conflicting voices here. There is a great need for H-1B visas in a number of our professions, particularly our software, high-tech, Internet highway, if you will, constituencies; and it matches up or clashes, if you will, against those who argue that we need to increase the number of engineers and software specialists and others here in the United States, which I hope we can do by using our training dollars in the right way. But I don't think we should leave this hearing without Labor acknowledging present failures under the present legislative process or system, and they should do something about it. Can they do something about it at least as what you have just indicated?
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    Mr. NILSEN. In our opinion, yes, they can. In our report, they did take issue with even the modest steps we've proposed, however.

    Ms. JACKSON LEE. I thank you for that.

    Ms. Avendano, let me thank you for your presence here today. You mentioned in your statement that the attestation structure in and of itself fails to meet the essential gatekeeper function. Can you give us some options that we can utilize?

    Ms. AVENDANO. Certainly. Thank you, Congresswoman. I think it is clear the role, the independent oversight role that the Department of Labor should play should be strengthened and not weakened through an attestation program. That role is important for two reasons. One, because the importance of relying on the State recourse agencies who have the knowledge of, who have the technical expertise, who understand local labor markets, to be able to determine whether employers are gaming the system from the git-go is essential. And also it is the Department of Labor who plays that gatekeeper role to, ensure again on the national level, that employers aren't using this program for the intent of undermining working standards. If that role is abandoned, then all we are left with is after-the-fact mechanisms and remedies, which don't provide adequate protections for the U.S. workers.

    Ms. JACKSON LEE. So you want the Labor Department to do what?

    Ms. AVENDANO. One thing that the Labor Department can do right now is to conduct targeted wage-and-hour investigations into the high-tech industry and particularly in the occupations that are highlighted in the GAO report: computer systems analyst and programming occupations. Many of these programmers who will laboring under H-1B visas are not being paid at all, and those employers are not just violating labor certification conditions but also the Fair Labor Standards Act. There is no reason why the Department of Labor cannot conduct a targeted investigation into an entire industry, granted this Administration hasn't done that. The last targeted industry that we've seen was of the poultry industry in the year 2000. When that survey concluded, that industry as a whole was 100 percent——
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    Ms. JACKSON LEE. So you don't want to extinguish H-1B. You want to make it true to what it is supposed to do, which is to provide the staffing for industries or positions which we cannot find or have no source of an American worker. Is that the sense of it?

    Ms. AVENDANO. I respectfully—the question really—there's two separate questions. One is that the H-1B program, as a guest worker program, as a mechanism that has provided employers with a constant supply of exploitable workers, is a bad thing and should be limited in scope, and it should have much more regulatory authority. To mitigate the damage of this program, much more needs to be done to protect both U.S. workers and the foreign workers who labor in these programs.

    Ms. JACKSON LEE. I got you. Mr. Robinson can you do better?

    Mr. ROBINSON. Thank you Congresswoman. Yes. Let me just say two quick things. First of all, ETA is very concerned about the incorrect approval of applications with low prevailing wages. They don't exactly know today why this occurred. ETA is checking its system as to why it occurred. We're investigating it. We'll be running simulations to determine the cause, and fully intend to correct any problems that are found. ETA joins you in wanting to have this corrected and will be shooting for the goal of being 100 percent accurate all the time. And so ETA does want this to occur.

    As far as the other comment about targeted investigations, we've talked a little bit here today about our authority, and under the H-1B statutory framework, Department of Labor does not have the authority to conduct targeted investigations.
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    Ms. JACKSON LEE. I do understand that. As I close, let me just say we have these conflicting interests that I think are important interests. The supplementing of a profession that needs H-1B visas and the protecting of both the H-1B visa worker and the American worker and providing opportunities for American workers. What we want—at least what I'm saying to you now within this framework as we leave you to go vote—that DOL needs to do better than it has done. GAO has laid out a number of recommendations, two of which—two important ones are legislative. I want you to do what you can do in the course of your present framework.

    Mr. ROBINSON. Understood. And we'll do that.

    Ms. JACKSON LEE. With that, Mr. Chairman, I yield back. Thank you very much. I thank the witnesses.

    Mr. HOSTETTLER. I thank the gentlelady.

    At this time the Chair will ask one question before we part—before we go to vote. The title of the hearing today is, ''Is The Labor Department Doing Enough to Protect U.S. Workers?'' and we've heard very good testimony today as to that.

    But Mr. Miano, you have done a fairly significant study on the impact of the H-1B program on especially the IT industry. And let me just end the hearing by asking a question not so much about the Labor Department, but as the program is currently constituted, does the program—even if the Department of Labor did everything right and used all of its authority that it is granted today to execute the law and enforce the law—does the H-1B program even give them that adequately to protect American high-tech workers?
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    Mr. MIANO. No, Mr. Chairman, not at all. The restrictions on the Department of Labor are so extreme that the types of complaints that they can handle are just at the fringes. I mean, they just can kind of pick at little things. They cannot address the heart—the big issues in this system.

    Mr. HOSTETTLER. Very good. Very good. And we yield time to Mr. Gohmert from Texas.

    Mr. GOHMERT. Just a very quick question. I know we have to go vote. But I continue to want to know more about what's done before these visas are granted. And when I see that accountants, chefs, chiropractors, dieticians, fashion designers, hotel managers, interior designers, journalists—journalists?—medical records librarians, ministers, show room managers, social workers—we don't have enough social workers to be hired in this country?

    Anyway, I'm just curious, when you see an application—when people at CIS or Labor see an application like this—and I was going there before—but what assurance is there that there really aren't enough people in America that don't want to be social workers or don't want to be librarians or don't want to be hotel managers? I get the impression that they don't call the AFL-CIO to see if they have any workers available to see if they'd like to fill these positions and meet the requirements.

    I'm just curious, rather than looking at, you know, a document on its face, seeing our list—yes, it meets the requirements—is there any investigation at all to see if there are workers available that would fill this position? That's my question.
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    Mr. MIANO. I would like to answer. You know, the lawyer's best friend is an ambiguous law, and the problem that you have in this program is that the eligibility requirement is so vague, specialty occupation, that it's basically a packaging by lawyers, whoever you can fit into that, and so you get that. You can add into that restaurant hostesses. My favorite from this one this year was called—specialty occupation was the job title, and the employer in the contacts job title listed as retired.

    Mr. ROBINSON. Mr. Chairman, could I also interject? We talked a little earlier about the H-1B-dependent employer which does have that hire—recruit and hire attestation, but there is no corresponding attestation for the normal H-1B employer, someone who's not a willful violator or an H-1B-dependent employer. So that—it only applies to a small segment, if you will, of the H-1B employer.

    Mr. GOHMERT. So as long as you haven't been caught being a problem before, you can keep going.

    Mr. ROBINSON. And you don't meet the definition of H-1B dependent as to the occupations, I believe, but the Department of Homeland Security is the agency that actually sets what those specialty occupations are.

    Mr. GOHMERT. You've been most enlightening. Thank you very much.

    Mr. HOSTETTLER. I thank the gentleman. And it was the reason for my last question that we will—this Subcommittee will continue to investigate the H-1B program on some more fundamental grounds as to how the program can better be crafted and the Department of Labor and others can be given better tools to ultimately provide for, first of all, the protection of American workers and, to the extent that there may be a demand for further workers, then to provide those for the various industries. But our obligation here first of all in the Congress is to protect American citizens and their ability to work.
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    I want to thank the panel for your very helpful input today. It has been enlightening, as my colleague has suggested, and you have added greatly to the record. All Members will have 5 legislative days to make additions to the record. The business before the Subcommittee being complete, without objection, we are adjourned.

    [Whereupon, at 3:18 p.m., the Subcommittee was adjourned.]


Material Submitted for the Hearing Record


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(Footnote 1 return)
See U.S. Commission on Immigration Reform, Becoming an American: Immigration and Immigration Policy, U.S. Commission on Immigration Reform, 1997. An earlier well known Commission—the Select Commission on Immigration and Refugee Policy (SCIRP)—chaired by Rev. Theodore Hesburgh had reached the same conclusions. See, National Commission on Immigration and Refugee Policy, U.S. Immigration Policy and the National Interest: Final Report. National Commission on Immigration and Refugee Policy, 1981.