• Congress to TARP Recipients: "Employ American Workers - Not H-1B's"
  • March 9, 2009 | Author: Mary E. Pivec
  • Law Firm: Keller and Heckman LLP - Washington Office
  • Section 1611 of the Conference Committee Report on the Stimulus Bill (H.R. 1), entitled the "Employ American Workers Act," makes it illegal for any company receiving TARP funding to hire an H-1B worker without certifying that no essentially equally qualified American worker has or will be displaced and that the company made affirmative efforts to first find a qualified U.S. worker for the job, including offering training to existing workers. These new rules are based on requirements found in the American Competitiveness Workplace Improvement Act 1998 (ACWIA), which sought to limit American job losses caused by outsourcing and subcontracting with job contractors that supplied H-1B workers, particularly in the computer programming and engineering fields.

    Enactment of the Employ American Workers Act impacts the hundreds of banks, brokerage houses, and auto manufacturers that took TARP funds and who are now preparing to file H-1B petitions in hopes of securing one or more of the 65,000 visas made available annually in this category through a lottery process. Likewise, it affects the ability of those companies to extend the employment of currently employed H-1B workers and to hire laid off H-1B workers seeking replacement employment. Whatever the circumstances, TARP funded companies will need to complete Labor Condition Applications attesting to satisfaction of the non-displacement and affirmative recruitment requirements – assuming they can do so truthfully, especially given the massive layoffs that have taken place among those employers over the last six months, and the number of U.S. workers looking for work.

    Some critics complain that the Employ Americans Act does not go far enough in preserving American jobs because it does not prohibit TARP recipients from using the services of job contractors for outsourcing jobs previously filled by U.S. workers. Such a work-around could be extremely risky, however, exposing TARP employers to harsh Congressional scrutiny and even potential criminal prosecution for conspiracy.

    This past week, the U.S. Attorney for the Northern District of Iowa released information concerning the indictment of Visions Systems Group, Inc. and the arrest of 11 of its executives on charges of a criminal conspiracy to commit mail and wire fraud growing out of misrepresentations contained in H-1B labor condition applications and visa petitions. The indictment states that the government is seeking a forfeiture of $7.4 million in profits derived from the illegal scheme, in addition to other criminal fines and penalties, and criminal sentences of 10 years or more against the individual defendants. The U.S. Attorney announced that the investigation was conducted with the cooperation of agents from the U.S. Department of Labor, the Department of Homeland Security and the State Department and is ongoing. Senator Charles Grassley (R.-Iowa), a sponsor of the Employ Americans Act, has been a vigorous opponent of the H-1B program over the past several years and it is probably no coincidence that the first criminal prosecution involving an H-1B employer was filed in his home state.

    Simply stated, access to the H-1B program for TARP recipients appears to be dead at least through the second anniversary of enactment under the existing sunset provision. TARP employers are advised to carefully review all existing and proposed H-1B sponsorships and paperwork to ensure that the requirements of the Employ Americans Act have been satisfied. Likewise, job contractors who supply H-1B personnel to TARP recipients should take additional precautions to ensure that they are in satisfaction of the secondary displacement rules with respect to such clients.