H-2B Visa Employer Series: The Dreaded Audit Investigation

Every H-2B Visa Employer fears an audit investigation. And, this fear is for good reason. Audits are time consuming and costly, and can take the time and attention of several employees to comply with the lengthy demands of an investigation. However, if the proper steps have not been taken during the H-2B Visa application process and during the course of an H-2B Visa season, this lengthy process can be followed by a lengthy list of consequences and penalties for an H-2B Employer. This Post will touch on several compliance items that arise throughout the course of an H-2B Visa application and H-2B Visa season that that can prove costly if overlooked or ignored. This list is far from exhaustive, and if you have any questions, please reach out to H2BLawyer at Info@trentwilliamslaw.com.

1. Prevailing Wage Determination

   This is the first step in the H-2B Visa application process, and it is the first item that can go wrong. Remember that the wages returned correspond with geographic areas. If a geographic area is listed on the Prevailing Wage, then it can be listed on the 9142B. And, if it is listed on the 9142B, then the Employer must pay the HIGHEST of all geographic regions listed — even if workers never actually complete work in that geographic area once the H-2B employment begins. For example, If Nashville has a $15.00 PWD and is listed in the 9142B, but all work is actually done in Mt. Juliet, which has a $14.00 per hour PWD, then $15.00 is the rate that all work must be paid - even if the worker never physically steps foot in Nashville.

2. Job Order and 9142B

   The State Workforce Agency Job Order and the 9142B are the primary governing documents for how H-2B Visa Employers must treat H-2B Visa Beneficiaries. In addition to the wage rate, and Employer must abide by ALL other items listed in these documents. Such as the geographic locations (workers cannot work somewhere not listed), job description (worker duties cannot change once they are in the country), deductions (items may not be deducted unless disclosed).

   Deductions are a BIG hiccup for many Employers. Many Employer do not intend to provide housing and do not want the responsibility of providing housing and deducting an appropriate amount from each Beneficiary’s wages. However, housing can be quite difficult to secure for temporary workers, and once this reality becomes clear to an Employer, an Employer may decide to help out its workers by signing a lease, paying a deposit, etc., and then deducting an appropriate amount from wages. Most workers will even execute a binding lease agreement that clearly states what amount will be deducted from each paycheck, and will require a signed statement by the Beneficiary acknowledging that this is their choice and that they request this be done. Unfortunately, this can still result in penalties for an Employer because this deduction was not previously listed on the Job Order and the 9142B.

3. Local Recruitment

   We cannot stress this enough…RECRUIT LOCALLY. If an interested individual contacts your company about an H-2B position, RESPOND. If they ignore your response, document it. If they respond to your response, INTERVIEW. Regardless of what their résumé says, interview an interested individual and see if they might meet the criteria for the position(s). If they interview and do have the skills/experience for the position(s), HIRE.

   We understand the current difficulties facing Employers. It is hard to find workers who are interested. It is harder to find workers who will accept a job offer. It is near impossible to find workers who will actually show up for their first day of work. We understand. But, if you want to fully comply with H-2B Visa requirements and avoid potential penalties, HIRE.

   And, if you don’t interview or hire, document the WHY.

   And, this same train of thought applies to and former workers who you have laid off. Most H-2B Visa Employers do not have workers who were laid off (without cause), but if you do, then reach out to them and give them every benefit of the doubt and interview/hire them if they meet the requirements of the position(s).

   And again, document the process. In the event of an audit, it is not always about whether the correct steps were taken, but whether an Employer can provide evidence of this compliance.

4. Departing Workers

   While it is not incredibly common that an H-2B Visa worker will abandon their H-2B Employer, this does happen. It may also be the case that an H-2B Visa worker needs to return home for some acceptable reason. And, it is entirely possible that an H-2B Employer may choose to terminate an H-2B Visa worker. While all of these scenarios are permissible, there are compliance steps that must occur, such as notifying the proper authorities of the change in circumstances. Additionally, records of this notification should be retained and produced in the event of an audit investigation.

5. Record Keeping

   As mentioned above, an audit is not always about whether the correct steps were taken, but whether an Employer can provide evidence of compliance. Below is a quick list of items that require detailed and accurate records and will be requested during an audit investigation:

   1. All H-2B application documents

   2. Evidence of local recruitment efforts and results - probably an updated Recruitment Report as well

   3. Proof that visa costs, travel, daily subsistence, etc., were paid for or reimbursed

   4. Wage statements to all H-2B workers to demonstrate the proper wage was paid, the proper hours were worked, and no improper deductions were taken

   5. Evidence that local workers in a similar position were not treated as inferior to H-2B workers. Ex) H-2B workers receive a monthly bonus, but local employees do not have such bonus

   6. Work Schedule to demonstrate that hours work mirror hours paid and that no work was done outside of the disclosed geographic area(s)

   7. Evidence of departed worker notifications to clearly establish the date on which a worker’s relationship with the Employer has ended and thereby ended an expectation of hours and wages

Audits generally occur because a domestic employee, an H-2B worker, or a disgruntled former employee lodges a complaint, or is able to convince other individuals to lodge complaints against an Employer. For that reason, every H-2B Employer should conduct themselves in a professional manner, and should fully comply with the requirements of the H-2B Visa program. While some complaints are impossible to avoid and some audit investigations are impossible to avoid, the items above will help an H-2B Employer prepare in case a dreaded audit investigation arises for any reason.

If you are worried about any actions or record keeping, and want us to provide an Opinion on any matter, please reach out to us and we will evaluate your practices to help you determine whether you are prepared in the event of an audit.

Thank you for tuning in to the H2BLawyer H-2B Visa Employer Series. We are confident that this series can help your company, your agency, or your law firm in the upcoming H-2B Visa Cycle. At this time, we intend to convert the H-2B Visa Employer Series into a single-document Ebook that will be made available for free to all interested Employers, Agents and Attorneys.

Cheers!

-Trent Williams