January 2005 Special Newsletter
PERM

January 6, 2005
By Robert D. Aronson

DEAR CLIENTS AND FRIENDS:

The Department of Labor announced its long awaited reengineering of the Labor Certification Application process. This new program is known as PERM, which stands for “Program Electronic Review Management.” The PERM program will become operational on March 28, 2005, at which time all Labor Certification Applications will be filed and processed under this new program. Until this March implementation date, Labor Certification Applications will continue to be processed under the current system, although the Department of Labor announced its “Backlog Reduction Plan” on July 21, 2004, as an initiative to expedite the processing of all pending cases. The PERM program represents the most significant revision to Labor Certification Application processing procedures in the past 20 years.

As with all newly unveiled government programs, it will likely require some time to accurately judge whether or not this program in its implemented state will meet its stated objectives of providing clear guidelines, faster adjudication times, and more predictable outcomes. However, based upon the regulations as published, the PERM program appears to be a major and positive step forward in terms of providing a more realistic, workable set of procedures governing permanent residence based upon employment positions in the United States.

In a nutshell, PERM provides a procedure through which employers will be able to file Labor Certification Applications directly to a centralized processing facility of the U.S. Department of Labor, thereby eliminating the State Workforce Agencies (SWA) from front-end processing of an immigration case. The Department of Labor will then review for completeness the employer’s attestations and application forms and flag for audit certain Labor Certification Applications that appear to be suspect based either upon a random basis or upon cause, such as a perceived surplus of U.S. applicants for a given position or irregularities in the nature/background of the employer. If an audit is ordered, the employer then has a specific period of time in order to show its good faith fulfillment of its recruitment obligations. If the employer is unable or unwilling to satisfactorily establish its good faith adherence to the PERM standards, it will then conceivably lose its right to expedited processing under PERM, and instead will need to file Labor Certification Applications for a two-year period of time under the strict, ponderous supervision of the Department of Labor. However, if the Labor Certification Application is deemed to be satisfactory so that no audit is warranted or ordered, a PERM-filed Labor Certification Application should be approved within 45-60 days. This, obviously, is a major improvement over current Labor Certification Application processing times that now can stretch for several years.

In essence, then, the PERM program in many ways resembles the process utilized by the Internal Revenue Service, which enables that government agency to process expeditiously huge volumes of tax returns in only a few weeks, while nevertheless reserving the right to audit and investigate instances of apparent abuse of the system.

Therefore, PERM provides all of the stakeholders to employment-based permanent residence a new challenge and a major new opportunity to accelerate the processing time for employment-based cases for permanent residence. It also creates major new responsibilities for both employers and alien beneficiaries to strictly adhere to PERM’s regulatory guidelines. Furthermore, particularly in this transitional period before the March 28 implementation date, those with pending Labor Certification Applications may want to decide whether to transfer a pending Labor Certification Application into the PERM program, or to retain processing under the current system.

It would be impossible to exhaustively summarize all of PERM provisions; after all, the PERM regulations number around 100 pages of three-columned print. Rather, this Newsletter is intended to provide some initial description and guidance on the new PERM program and, more importantly, to provide some initial analysis on its benefits as well as pitfalls. This Newsletter is also intended to initiate a series of future informational pieces that will be issued by this office to inform our community of clients, colleagues and friends of this new immigration program.

WHAT IS A LABOR CERTIFICATION APPLICATION?

Most employment-based cases for permanent residence commence with the filing of a Labor Certification Application. Essentially, a Labor Certification Application seeks the clearance of the U.S. Department of Labor that the employment of a foreign national in a specific position at a specific location will in no manner harm the U.S. labor market. In order to approve such an Application, the employer needs to establish two key points: 1) that its employment of the foreign national will not take a job away from a fully qualified U.S. applicant, meaning that the alien beneficiary needs to be the only fully qualified applicant for the position, rather than simply being the best qualified candidate for the job; and 2) that the employment of the foreign national will not depress the wage rates of similarly employed U.S. workers in the area of employment, meaning that the employer needs to show its intention of paying the alien at the prevailing wage rate for the position in the area of intended employment.

DOES PERM CHANGE THE SUBSTANTIVE OBJECTIVES OF THE LABOR CERTIFICATION APPLICATION PROCESS?

No! PERM does not meaningfully alter the objectives of a Labor Certification Application, which are to show that the alien beneficiary is the only fully qualified applicant for the position and that the employment of the foreign national will not depress the prevailing wage structure for similarly employed U.S. workers in the area. These substantive provisions remain entirely intact under PERM. Rather, PERM substantially transforms the processing procedure for Labor Certification Applications in a number of important, meaningful, and potentially beneficial manners.

HOW ARE LABOR CERTIFICATIONS FILED UNDER PERM?

Effective March 28, 2005, when PERM goes into effect, the Labor Certification Application process will be revised as follows. Using a new form (ETA 9089), an employer will file either electronically (preferred method) or by mail a Labor Certification Application directly to a centralized PERM processing facility of the Department of Labor. At present, the only two processing centers are located in Chicago and Atlanta. Please note that under PERM, the state labor offices will no longer provide front-end processing, which, in most instances, should be a highly desirable development since so many of the states have major backlogs in their processing programs. The target adjudication time for PERM filed Labor Certification Applications is 45-60 days.

WHAT ARE THE EMPLOYER’S RESPONSIBILITIES IN FILING LABOR CERTIFICATION APPLICATIONS UNDER PERM?

Prior to filing a Labor Certification Application, the employer needs to undertake a good faith recruitment effort in order to determine the availability of fully qualified U.S. workers for the position. However, the big difference under PERM is that the employer’s recruitment material will not be submitted initially to the U.S. Department of Labor; rather, the recruitment needs to be produced only if so requested by the Department of Labor as part of an audit and/or investigation.

WHAT CONSTITUTES GOOD FAITH RECRUITMENT?

The PERM regulations create some specific guidelines on the employer’s recruitment obligations, and this relative clarity should considerably assist employers in developing effective, audit-proof Labor Certification Applications. Before filing a Labor Certification Application under PERM, all employers need to undertake the following recruitment efforts.

First, all employers need to place a job offer for a period of at least 30 days with the State Workforce Agency serving the area of intended employment.

Second, an employer needs to obtain from the State Workforce Agency a prevailing wage determination, and then indicate its intention to pay the alien beneficiary at least 100% of the state-issued prevailing wage figure. In contrast with past practice, it will no longer be sufficient for an employer to offer a wage figure set at 95% of the prevailing wage determination. However, the State Workforce Agencies will now need to provide four-tier wage determinations based on the required level of education, experience, and supervisory responsibility, thereby replacing the current and highly inexact two-tier system. This should benefit, in particular, midlevel positions, which traditionally have faced inflated, unrealistic prevailing, wage figures.

Third, the employer needs to post the notice of job opportunity for at least 10 consecutive business days. This is a slightly revised requirement from current law which requires a posting notice for 10 consecutive calendar days; rather PERM requires the posting notice to appear in a fully conspicuous place(s) on the employer’s premises for 10 consecutive business days. The posting notice period must occur between 30-180 days before filing the Labor Certification Application.

Fourth, in addition to a physical posting notice, the PERM regulations require the employer to announce the position opening in any and all in-house media – whether electronic or printed – that would normally be used in the recruitment/announcement for similar positions in the organization.

Fifth, the law then distinguishes between recruitment obligations for professional as opposed to nonprofessional positions.

A nonprofessional position is generally defined as a job that does not require a university degree as an entry-level requirement. For nonprofessional positions, the employer needs to simply place two advertisements in the Sunday edition of the newspaper of general circulation in the area of intended employment.

Professional positions are defined as positions that require a university degree as an entry-level requirement. For professional positions, an employer needs to place two advertisements in the Sunday edition of the newspaper of general circulation in the area of intended employment provided that the newspaper is the most appropriate publication for the occupation and that it will likely elicit applications from qualified workers. This does create some uncertainty particularly in small town and rural communities since the local newspaper may not be an effective publication to reach a professional audience in the occupation, meaning that an employer might need instead to run a recruitment announcement in a statewide edition of a metropolitan paper. If a professional journal is more likely to bring responses of potentially qualified applicants, the employer may substitute one newspaper advertisement with a professional announcement.

In addition, employers seeking to fill a professional position need to fulfill three additional recruitment steps from the following menu:

1. Appearance at Job Fairs;
2. Announcement posted to the Employer’s Website;
3. Announcement posted to a Job Search Website other than the employer’s;
4. On-campus recruiting;
5. Use of Trade or Professional Organizations, including professional journals;
6. Retention of Private Employment Firms;
7. Employee Referral Program provided that it includes incentives;
8. Recourse to Campus Placement Offices;
9. Use of Local and Ethnic Newspapers;
10. Use of Radio and Television Advertisements.

RECRUITMENT REPORT

The employer is also required to prepare a Recruitment Report prior to filing the Labor Certification Application. While neither the Recruitment Report nor the evidence of recruitment is to be submitted with the Labor Certification Application, the Recruitment Report needs to contain a full description of the employer’s good faith recruitment/advertising efforts and the specific, job-related reasons for disqualifying U.S. applicants. While the law enables an employer to reject U.S. applicants who cannot perform the duties of the position in a reasonable manner, the PERM regulations recognize as qualified a U.S. applicant who can “perform the duties involved in the occupation during reasonable period of on-the-job training.” The Recruitment Report needs to be provided upon request by the Department of Labor and essentially should be the core document in describing the employer’s good faith recruitment efforts and overall fulfillment of all PERM requirements. As such, this Report needs to be carefully drafted precisely in anticipation of its role in heading off an audit and/or investigation on an employer’s compliance with PERM requirements.

WHAT ARE THE DOCUMENT RETENTION REQUIREMENTS?

The PERM regulations require the employer to retain its Recruitment Report and all recruitment efforts (including applications/resumes of the applicants) for a five-year period of time from the date of filing.

WHO CAN CONDUCT THE INTERVIEWS OF U.S. APPLICANTS?

Under law, only the employer can review the job applications and determine the suitability of U.S. workers for the announced position. Conversely, neither the alien beneficiary nor the employer’s attorney or agent may have any role in reviewing applications or judging the qualifications of U.S. workers. The rationale is that the employer needs to make a good faith, arm’s length determination of the qualifications of U.S. workers, and that the alien beneficiary and an agent and/or attorney would be too biased to fully and fairly consider applications for the announce position.

HOW WILL THE DEPARTMENT OF LABOR PROCESS LABOR CERTIFICATIONS UNDER PERM?

Upon receipt, the Department of Labor will process the Labor Certification Application, checking initially for completeness of the information provided. The Application will then be forwarded for a computer-based review to determine an audit profile, which is a process somewhat similar to that utilized by the IRS in the income tax arena. In some instances, an audit will simply be triggered on a random basis. In most instances, the Department of Labor will order an audit if it feels that there is a surplus of U.S. workers available for the position, irregularities in the employer’s business activities or profile, or other criteria that would suggest a lack of good faith on the employer’s part.

WHAT HAPPENS IF THERE IS AN AUDIT?

In the event of an audit, the employer will receive an audit letter specifically stating the grounds for the inquiry and/or additional documentation that needs to be submitted. The employer will then have a 30-day period to present a response, although it can apply for a single extension of up to another 30 days. If the employer fails to respond either in a timely or effective manner, the Labor Certification Application will be denied. The Department of Labor can also order the employer to conduct supervised recruitment for up to two years, which would thereby deprive the employer of the expedited, beneficial provisions of the PERM program. This could pose a problem to large, decentralized companies since an improper or even fraudulent filing of a Labor Certification Application by one corporate division or entity could lead to severe penalties on a corporate-wide basis. In this initial phase of PERM, the Department of Labor does not have the right to entirely bar an employer from filing Labor Certification Applications, but rather is limited to requiring the employer to conduct supervised recruitment for up to two years. However, the PERM regulations indicate that the Department of Labor will quite likely issue in the future revised guidelines calling for a total debarment of corporate abusers of the PERM program.

WILL THE DEPARTMENT OF LABOR BE CONDUCTING WIDESPREAD OR FREQUENT AUDITS?

We simply do not know how frequently the Department of Labor will order an audit. However, we do know that a significant percentage of the Fraud Detection and Prevention Fees for H-1B petitions will be allocated to support audits and investigations by the Department of Labor. This funding source along with normal budgetary allotments seem to provide the Department of Labor with a steady stream of financial resources in order to more actively conduct audits and monitor employer compliance with the Labor Certification Application requirements. We suspect that the Department of Labor will seek to conduct several high-profile audits and investigations at the inception of the PERM program so as to affirm its intention of combating abuse and bad faith recruitments.

ARE THERE ANY SPECIAL FILING PROVISIONS FOR UNIVERSITY FACULTY MEMBERS?

The PERM regulations contain some highly favorable provisions specifically covering university teachers. The “Special Handling” provisions of the current law remain largely intact in that universities can continue to utilize previous faculty recruitment searches which resulted in the selection of a foreign applicant within the past 18-month period of time. Over the years, this “Special Handling” procedure has provided universities with an effective, expedited filing procedure for qualifying its foreign faculty for permanent residence. However, in instances in which a university employer fails to file a Labor Certification Application within the allowable 18-month window, it can still utilize the “normal” recruitment procedures as conducted within the previous six month period prior to filing the Labor Certification Application. Regardless of whether a university’s Labor Certification Application is filed under the “normal” or “Special Handling” provisions, a university simply needs to show that it has selected the best-qualified applicant for a teaching position, rather than meeting the far more rigorous standard of showing that the foreign national is the only fully qualified applicant for the position.

DO ALL EMPLOYMENT-BASED CASES NEED TO GO THROUGH THE LABOR CERTIFICATION APPLICATION PROCESS?

While Labor Certification Applications are normally the first required step for permanent residence based upon employment, there are certain instances in which an employer does not need to test the labor market by filing a Labor Certification Application, but rather can file an Immigrant Visa Petition directly to Citizenship and Immigration Services. Most notably, the following scenarios do not require the filing of a Labor Certification Application: 1) “aliens of extraordinary ability”; 2) outstanding professors and researchers; 3) certain qualifying multinational executives and managers; 4) foreign nationals whose services will substantially benefit the United States so as to qualify for National Interest Waiver benefits; 5) certain religious workers; 6) certain foreign investors who are undertaking investment projects that create jobs for U.S. workers; and 7) certain primary care physicians working either within VA facilities and/or designated medically underserved areas.In addition, the PERM regulations continue to recognize certain pre-certified occupations that have been recognized as being in short supply in the United States. Such situations, which are known as “Schedule A” occupations, allow for an employer to complete an abbreviated Labor Certification Application procedure primarily related to certain posting requirements and prevailing wage obligations, and then file the Labor Certification Application directly to Citizenship and Immigration Services (USCIS) along with the Immigrant Visa Petition. The primary occupations qualifying for “Schedule A” benefits include: 1) physical therapists; 2) professional nurses; and 3) foreign nationals possessing exceptional abilities in the sciences and arts.

WILL THERE BE A FEE FOR LABOR CERTIFICATION APPLICATIONS FILED UNDER PERM?

No. As in the past, there will be no fee for filing Labor Certification Applications, although the Department of Labor has indicated that future proposed regulations might well contain certain filing fee requirements. However, for the foreseeable future, there will be no fee for such filings.

DOES PERM CONTAIN ANY CHANGES IN PREVAILING WAGE CALCULATIONS?

One of the most frustrating aspects of the Labor Certification Application process concerns the calculation of the prevailing wage rates. While the law requires the employer to offer the position at the prevailing wage rate, the wage surveys as used by the government have been notoriously inexact, if not outright biased, by setting unnaturally high wage figures which have the effect of burdening further and unfairly employers who are sponsoring foreign nationals for permanent residence. Therefore, employers find themselves facing unrealistic, oftentimes inflated wage figures as issued by the State Workforce Agencies. By their nature, wage surveys are inexact, and the current law recognizes this fact by granting an employer a 5% variance in the prevailing wage determination as issued by the State Workforce Agencies. As a consequence, under current law, an employer needs to set its minimum wage figure for the position at 95% of the prevailing wage for Labor Certification Application purposes. In this respect, the PERM regulations have taken a step backwards by requiring the employer to offer a wage that needs to be at least 100% of the wage figure issued by the State Job Service. But in a major, highly welcomed development, the PERM regulations require that any government issued wage survey contain four (4) skill levels commensurate with education, experience, and supervisory responsibility. At present, the predominating government wage survey based upon the Office of Economic Statistics survey data contains only a junior, entry-level figure and a second figure for positions requiring any level of experience or advanced education. This new four-tier requirement should provide a far more realistic, workable framework in more exactly matching the true requirements of the position to an appropriate wage figure.The PERM regulations further recognize the ability of an employer to provide its own survey data of the wage structure within the intended area of employment provided that the employer’s information clearly indicates the survey sampling methodology and that the survey sampling was conducted within the previous 24-month period of time. The PERM regulations also contain certain provisions specifically relating to the prevailing wage figures for university employees, regardless of whether they are teaching faculty, researchers, administrative staff, etc. In contrast to the current system, the prevailing wage for all university institutions (including affiliated, nonprofit entities) under PERM will to be based upon wage data existing at other local universities, rather than mixing in university salary schedules with a broad range of local, for-profit commercial establishments.

CAN A PENDING LABOR CERTIFICATION APPLICATION BE CONVERTED TO PERM?

In many instances (see discussion below), an employer and/or alien beneficiary will want to re-file a pending Labor Certification Application under PERM so as to benefit from the anticipated expedited processing times. The PERM regulations explicitly describe how to reclassify a currently filed Labor Certification Application under the new PERM system, particularly so as to retain the initial filing (e.g., priority) date. If an employer wants to re-file under the PERM program, it first must fulfill all of the recruitment obligations as discussed on pp. 3-4 of this Newsletter – i.e., it needs to post and circulate a notification of the job; open a job order; advertise in the print media; for professional positions, engage in at least three additional recruitment initiatives; fully and fairly consider all applicants for the position; and compile a full Recruitment Report.If the employer chooses to withdraw its pending Labor Certification Application, it then has 210 days in order to file a PERM-compliant Labor Certification Application. If the position remains identical to the initial position, the employer will then be able to preserve the filing (or priority) date as originally established upon filing the initial Labor Certification Application. In certain instances, the retention of the original priority date can be critically important since it establishes the foreign national’s place in the immigrant visa quota line and a possible claim to seventh year H-1B entitlement. The Department of Labor will determine that the new PERM-based Application is for an identical job if the employer, alien, job title, job location, job requirements, and job description remain unchanged. If there are divergences, the case can still be filed under PERM, but the employer will lose its originally established priority date.

WHO SHOULD RE-FILE UNDER PERM?

While PERM will become the mandatory filing procedure as of March 28, 2005, it presents an intriguing alternative for individuals with currently pending Labor Certification Applications. At present, we do not know how effectively and expeditiously PERM will be implemented, nor do we really know how deeply committed the Department of Labor is to its “Backlog Reduction Plan” for currently pending Applications.Nevertheless, the PERM program will go into effect, and individuals justifiably want to know if it will benefit their pending case. While each case needs to be separately analyzed and discussed, here are some basic guidelines in weighing the PERM program against the stability of the current Labor Department rules and regulations.

Considerations for Re-filing under PERM
You might well want to re-file a case under PERM if the following factors exist:

• You have a willing, supportive employer who will re-advertise and recruit in fulfillment of the PERM requirements;
• Your case has recently been filed or is still being processed by the State Workforce Agency;
• Your employer has recruited extensively for your position since September 28, 2004, thereby possibly fulfilling the various PERM recruitment requirements;
• You have children nearing the age of majority (i.e., 21 years of age) who will benefit from your filing the Immigrant Visa Petition prior to their 21st birthday;
• Your position or employment duties have materially changed from the job description appearing in the originally filed Labor Certification Application;
• You desire to get a final outcome of your Labor Certification Application in the shortest possible time.
  Considerations for Continuing in the Current System and Avoiding PERM
  Among the factors counseling you to keep your Labor Certification Application in its current processing track and NOT to file under PERM would be:
• Your employer is not willing (or highly resistant) to any additional recruitment and advertising efforts;
• Your case has already been processed at the state level and has been forwarded to the Labor Department’s “Backlog Reduction Centers,” which, as noted above, will likely expedite the final processing of its pending case load;
• You are a physician currently working through your three-year H-1B obligation, meaning that you cannot in the immediate future file your final adjustment of status application;
• You are in the Third Employment-Based Preference category (i.e., Bachelor Degree or a skilled worker) from China, India, or the Philippines, and need to retain at any cost your priority date given the developing quota backlogs from these countries;
• You are working in a position with a perceived oversupply of U.S. workers, which would enhance the possibility of triggering an audit under PERM.

WHAT SHOULD YOU DO IF YOU HAVE A PENDING LABOR CERTIFICATION APPLICATION?

It is important for you to make the right choice in pursuing your objective of becoming a permanent resident of the United States as quickly as possible. For many individuals, PERM provides a very meaningful, desirable option; for other individuals, it may not serve their optimal immigration interests.Therefore, it is very important to fully consider this PERM option and to discuss how this new program specifically and uniquely applies to your situation. Conversely, it is unwise and unfair to rely upon general considerations or the experiences of others. In short, you should first consider this PERM option and then discuss this option with both your employer and your attorney.All clients, prospective clients, and other interested parties are definitely encouraged to discuss this PERM option with me. Please feel free to arrange an appointment by telephone either through my Administrative Assistant, Ms. Angelique Montag, or through a Case Manager within my firm. The purpose of this conversation is and should be to determine how PERM can best serve you and your immigration needs, and this requires focused analysis and individualized consultation.

IS PERM A GOOD OR BAD DEVELOPMENT?

In trying to make a unitary conclusion about PERM, I am reminded of the statement of the great American jurist and man of letters, Oliver Wendell Holmes, who remarked: “The life of the law is experience.”On paper, PERM seems like a very favorable, welcome development in that it addresses some very basic deficiencies in the current Labor Certification Application process. In particular, I think that PERM represents a very positive step forward in providing an expedited processing procedure; more clear guidelines on an employer’s responsibilities; more realistic rules in wage determinations; a greater sensitivity to “real world” business realities; and a more transparent adjudication system. If fully implemented, I think that PERM will be of immense service to employers who systematically and responsibly understand the system and fulfill their legal obligations, particularly in the recruitment arena.Yet, as with any new, “improved” program, there are not only countless unanswered questions, but also an overriding concern on the practical implementation of this program. We will continue to monitor and analyze these new developments, and sincerely hope to assist our clients in obtaining the full benefits of this new initiative. We look forward to serving your needs and responding to your inquiries, concerns, ideas, and suggestions.As always, please feel free to contact me with any questions or comments you may have on information appearing above or, more broadly, immigration issues of concern to you.

Cordially,

ROBERT D. ARONSON
January 2005

This memorandum is one of a series of communications prepared as a general public service to our clients and friends. The information herein presented is not intended nor should it be utilized as legal advice on any specific situation. Furthermore, given the rapid pace of change, the veracity of this information is constantly subject to modification and/or reversal. Rather, this piece represents a good faith attempt to orient clients and other interested parties served byAronson & Associates to current immigration developments. This piece in no manner supercedes the need to seek competent legal advice when engaged in activities carrying possible immigration-related consequences.