PERM Updates: Increase in Audits and Changes to DOL Rules

Since March 2005, the filing of an Application for Permanent Employment Certification—typically, the first step in the permanent residence process—has been completed through the "PERM" system developed by the U.S. Department of Labor (DOL). The PERM rules created an attestation and audit system that has facilitated expedited adjudication of labor certification applications.

Until recently, audit letters sent by DOL have not been widespread. However, the number of audits has surged in the last several months—and this trend is only expected to continue.

With PERM electronic filing procedures, DOL has broad discretion on when, how and why it may conduct an audit. In the past, audits typically focused on asking employers to provide backup recruitment evidence or to substantiate any foreign language requirements included in the application. But now, audits increasingly focus on "business necessity" and whether the requirements listed in the application for the position are specifically required to perform the job duties. We have also seen an increase in audits of applications that utilize the "not substantially comparable" standard when using experience an employee has gained with the sponsoring employer.

Under the business necessity standard, the employer must establish that the job requirements are reasonably related to the occupation in the context of the employer's business and are essential to perform the job duties in a reasonable manner. In recent audits, DOL has requested documentation of business necessity for positions requiring a master's degree or equivalent (e.g., bachelor's degree and five years of progressive post-baccalaureate work experience). Classifying a position as one that requires a master's degree or the equivalent can place the foreign national in a more advantageous position with respect to visa backlog delays during the last step of the permanent residence process.

Experience gained with the sponsoring employer can be relied upon in the PERM application if it can be shown that the foreign national will be sponsored for permanent residence for a position that is "not substantially comparable" to the position in which he gained the experience. In recent audits, DOL has requested documentation showing that the positions are at least 50 percent different. For additional information about when a foreign national can rely on experience gained with the sponsoring employer, see the article: PERM: Utilizing Experience Gained with the Same Employer and a Foreign Language Requirement.

Without an audit, labor certification applications typically take 30 to 60 days to process. An audit will add 60 days or more to the overall PERM processing time. After DOL issues an audit letter, the employer has 30 days to respond.

If your company receives audit requests on pending PERM cases, we will work with you to develop the best response for each case. Also, with the increased scrutiny of the business necessity and "not substantially comparable" standards, we may request additional information up front when working on a new PERM case. This information will assist in developing the best PERM and overall permanent residence strategy, and will ensure the availability of necessary information in the audit file so a response can be prepared quickly in the case of an audit.

New Rules Regarding Substitution of Applications for Permanent Employment Certification and Payment of Fees in Permanent Residence Cases

On July 16, 2007, new Department of Labor rules went into effect that impact several aspects of the permanent labor certification process.

This rule requires employers to pay all fees and expenses relating to the Application for Permanent Employment Certification process (PERM) and prohibits employers from requesting reimbursement for these expenses. The new rule also eliminates substitution of foreign nationals into previously approved PERM applications and creates a validity period of 180 days for approved PERM applications.

Pursuant to this rule change, employers cannot require foreign nationals to pay any costs or expenses related to the PERM labor certification process, nor can they seek reimbursement for these expenses at a later date. This rule does not, however, prohibit employers from seeking reimbursement for the Immigrant Petition for Alien Worker (I-140) or the Application to Adjust Status (I-485). In addition, approved PERM applications will only be valid for the foreign national named in the original application and approved PERM applications will expire 180 days after the date of certification (i.e., approval). Employers must file the I-140 petition within that 180-day period, or the PERM application will be void and the process will need to start again. PERM applications that were certified prior to July 16, 2007, expired on January 12, 2008.

Employers should take the following steps to comply with these new rules:

• If your company is currently utilizing an Agreement to Repay Immigration Expenses, the agreement must make it clear that the company will not seek reimbursement for any costs related to the PERM process.
• Employers can no longer require a foreign national employee to pay any fees relating to the PERM process.
• Employers will no longer be able to utilize PERM/Labor Certification substitution. If an employee leaves the company after the PERM application has been approved, the application is considered "dead" and cannot be used for another employee.
• It is important to ensure that I-140 petitions are filed within the 180 days after the PERM application is approved. Employers and the foreign national should be prompt in responding to requests for information to ensure that this deadline is met.

Foreign national employees receive a great benefit from this rule change, as they can no longer be required to pay any expenses related to the PERM process. These fees (attorney fees plus the costs of advertising) make up a significant portion of the expenses for the permanent residence process. Note that employers can still require reimbursement of expenses related to the I-140 petition and I-485 application.

The Federal Register Notice outlining the rule change can be found at 72 Fed. Reg. 27904 (May 17, 2007).

Department of Labor Proposes Changes to Form ETA-9089

On August 24, 2007, the Department of Labor announced proposed changes to the Application for Permanent Employment Certification (Form ETA-9089). These changes include clarifications of the questions relating to the business necessity issues noted above. The form, as proposed, is twice as long as the current one. These changes have not yet gone into effect. When and if they are implemented, the Faegre & Benson Immigration Team will send an email update outlining the revisions.