Staffing Firms Using Skilled Foreign Workers May Need to Name Clients

May 30, 2018, 6:33 PM

• Labor Department plan would require staffing companies using skilled foreign worker visa program to disclose clients’ business names • Trump administration has been targeting IT staffing companies in particular • Public comment on proposal open until June 25

Pretty soon it may be easier to find out what businesses use staffing companies that hire individuals on skilled foreign worker visas.

The Labor Departmentplanson adding to the labor condition application for H-1B visas a requirement to list the name and address of third-party work sites, which means staffing firms’ client companies could find themselves in a brighter public spotlight. The street address of the work site has been required for a while, but the business name of the end client was not.

“This information will presumably be put out in the disclosure data” that the DOL publishes regularly on its website, Kevin Miner of Fragomen, Del Rey, Bernsen & Loewy in Atlanta told Bloomberg Law May 29. Although it’s possible now to figure out where H-1B workers are placed based on the street address, adding the company name will make it “much more visible” and easier to determine, he said.

The public has an opportunity to comment on theplanned changesby June 25.

“The Department of Labor is under a 30-day public comment period in which inquiries should be directed to OMB,” a Labor Department spokesman told Bloomberg Law May 29.

Staffing Companies Targeted

Staffing companies that use the H-1B program, particularly those in the information technology industry, have faced heat from both sides of the aisle since U.S. workers were laid off and required to train their H-1B replacements at Southern California Edison and Walt Disney World.

Recently, a group of former Disney workers dropped their lawsuit after admitting that the practice is legal—but calling on President Donald Trump to push legislation to change immigration law.

The Trump administration, following the president’s April 2017 Buy American and Hire Americanexecutive order, has done its part to target IT staffing companies.

U.S. Citizenship and Immigration Services updated itspolicyon a post-graduate training program for international students with science, technology, engineering, and mathematics degrees to ban their placement at third-party work sites. The USCIS also issued a newpolicy memorandumseeking the itineraries for H-1B workers’ placements for their entire stay, usually a three-year period.

The policy memorandum has sparked alawsuitclaiming that it effectively prevents staffing companies from hiring H-1B workers.

Just a Clarification?

The DOLmaintainsthat the change is a clarification of existing regulatory requirements that “the employer must identify all intended places of employment on the LCA.”

But there are some “confidentiality concerns” with requiring that third-party companies be identified by name, Miner said.

Some staffing companies are subject to contracts that prohibit them from revealing the names of their clients, he said. Those contracts likely will have to be reworked, or the companies will have to find another way to avoid violating them, he said.

Disclosure of clients’ names also makes them available to staffing companies’ competitors, Miner said.

The DOL has responded to some public comments since the agency firstproposedadding the requirement last August, he said.

“A number of groups that commented raised concerns with the concept of calling the location where the individual will be placed a ‘secondary employer,’” Miner said. The concern was that the description could lead to joint employer status for the third-party client, he said.

Now, the form requires listing a “secondary entity” instead, Miner said.

Some commenters also were concerned that staffing companies would be committed to keeping their H-1B workers at the third-party site listed on the LCA even if circumstances later change, he said. But the DOL responded that staffing companies only have to list the names and addresses of the work sites where they intend to place their H-1B workers.

H-1B workers can be moved to other sites without having to file a new LCA as long as those sites are within the same geographic area, Miner said.

(Updated to include comments from the Labor Department.)

To contact the reporter on this story: Laura D. Francis in Washington atlfrancis@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland atthyland@bloomberglaw.com

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