On April 9, 2015, the U.S. Citizenship and Immigration Service’s Administrative Appeals Office (AAO) issued an important decision that will impact thousands of H-1B employers across the country.
In its precedential decision, Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015), the AAO held that when an H-1B employee changes his or her place of employment (worksite) to a new geographical area, it constitutes a “material change” in employment that requires the employer to file an amended H-1B petition on behalf of the employee.
In today’s global economy, many employees including H-1B employees complete some or all of their job duties away from company headquarters. Many companies permit employees to “telecommute” and work from their home offices. Other positions require that employees travel to third party client sites for significant portion of their employment. The preparation of H-1B petitions always requires that employers provide detailed information about the location or locations where the work will be performed. However, with the decision in Matter of Simeio Solutions, LLC, employers are well advised to take pause, carefully consider and discuss any and all potential worksites for the H-1B employee throughout the duration of the requested H-1B period. Employers should also carefully review with their telecommuting employees any potential changes in residential address during the validity of the employee’s H-1B status with the company.
The H-1B process requires employers to first file a Labor Condition Application (LCA) (ETA Form 9035/9035E) with the U.S. Department of Labor and have the LCA certified. Once the LCA is certified by the U.S. Department of Labor, an employer may file an I-129 Petition requesting H-1B classification for qualified professional foreign national employees in a specialty occupation.
In filing the LCA for certification by the U.S. Department of Labor, an employer makes several attestations or promises, including that it will pay the required wage, which is the higher of the prevailing wage for the geographic area or areas in which the worksite is located and the actual wage for the position.
The required minimum prevailing wage for a position will depend on the specialty occupation and the geographic location or locations of the worksite. For example, in 2014-2015, the minimum required annual salary for an entry level Software Developer in Los Angeles, California is $69,742.00. In Atlanta, Georgia, the minimum required salary for the same entry level Software Developer position is only $57,949.00. In instances where an H-1B employee will be employed at worksites in multiple geographical areas, the employer is required to pay the employee the higher of the required prevailing wages. Thus, in the example above, the employer would be required to pay the H-1B employee a minimum salary of $69,742.00 for the duration of the H-1B employee’s employment with the company.
Employers with H-1B employees telecommuting or working at third party worksites routinely list any and all potential worksites, including home offices and client sites, on the initial LCA certified by the Department of Labor. The employer agrees to pay the H-1B employee the highest prevailing wage for each of the geographical areas listed. The I-129 petition submitted by the employer to USCIS requesting H-1B classification for a qualified foreign national employee lists all worksites and includes the certified LCA. USCIS then reviews the petition and, if the employer and employee qualify, approves the H-1B petition. In the event that there is a material change in the terms of employment, USCIS requires that the employer file an amended I-129 petition.
Even with careful practices, employers inevitably face issues with their telecommuting H-1B employees’ change of residential addresses to geographical areas not covered on the LCA or the need to assign H-1B workers to a projects at client worksites that are not covered on the LCA.
In the past, due to the lack of clear guidance on the issue, where employers faced a change in geographical location of a worksite, but no other material change in job duties, many employers simply filed a new LCA with the Department of Labor for the new worksite. The Employer would then maintain the new LCA in its Public Access File and abide by the minimum prevailing wage requirements on the new and updated LCA. In these circumstances, many employers would not take any further action to amend the H-1B petition itself, with the understanding that alone, a change in geographic location did not constitute a “material change” in the terms of employment.
The decision in Matter of Simeio Solutions, LLC turns that approach on its head. In the decision, the AAO determined that the change of worksite to a new geographical area not listed on the certified LCA constitutes a “material change” and therefore requires both the filing and certification of a new LCA and the filing of an amended H-1B petition by the employer.
Employers will now be required to file amended H-1B petitions and pay the requisite USCIS filing fees in cases where their H-1B employees change their worksite to a new geographical area. H-1B employers facing issues with changes in worksites for current and future H-1B employees are strongly encouraged to discuss the impact of Matter of Simeio Solutions, LLC with experienced legal counsel. The decision is available here: http://www.justice.gov/eoir/vll/intdec/vol26/3832.pdf.
For more information on the H-1B program or the impact of the decision in Matter of Simeio Solutions, LLC on your business, please contact Kolko & Associates, P.C.