Why Me? Employers and the PERM Audit

This article will explain the Department of Labor (DOL) PERM audit. We will explore what a PERM audit is; reasons why an audit may occur; how the audit will be conducted; and what are the consequences for an employer if an adverse finding is the outcome of the application.

WHAT IS AN AUDIT?

Unlike the Reduction in Recruitment (RIR) or Traditional Processing (ROR) processes, which required the employer to provide documentary evidence when filing the application, the PERM process allows the employer to file the application to the Department of Labor without submitting any supporting documentation. The regulations guide the employer as to what is required for filing a PERM application, and instruct that all documentary evidence should be maintained by the company for a period of five years. In most instances, when a government agency allows filings to occur without the submission of documentation (i.e. income tax return) they establish an audit procedure to ensure compliance with the government regulations. In basic terms, a PERM audit is merely a request by the government for the employer to provide documentary evidence, which proves all information that the employer attested to in the PERM application. The audit determines that all statutory and regulatory requirements have been met for the PERM application. The DOL will determine the following when processing the PERM application: 1) Did the employer meet the procedural requirements of the regulations; 2) Was the U.S. labor force tested and no qualified U.S. workers were found; 3) Will the employment of the alien have a damaging effect on wages and working conditions for U.S. workers likewise employed. The following are examples of what a PERM audit may review: are the employer’s job requirements too restrictive, does the wage offered by the employer meet the prevailing wage requirements, did the employer conduct proper recruitment and adequately test the U.S. labor market. An employer should gather and organize all documentation into a comprehensive file prior to submitting the PERM application. This documentation should be kept readily available in the event of an audit by the DOL for a period of five years. The DOL will no longer be issuing “Notice of Findings” (NOFs) as they had previously with the prior RIR and ROR systems. In the past, NOFs had allowed the employer to have an opportunity to correct any oversights that may have occurred in the application and resubmit the application for continued processing. The new PERM system will not issue NOFs, instead an audit letter will be sent to the employer requesting legal analyses and business necessity documentation in reference to the particular application under audit.

WHY MIGHT AN AUDIT OCCUR?

There will be two types of audits performed by the DOL. The first is the “targeted” audit, which occurs when the DOL finds a specific fault with the application, and the second is the “random” audit, which will assist the DOL in ensuring the integrity of the new PERM system and its’ regulations. In the next few paragraphs we will explain several of the reasons that may trigger an audit in your PERM application.

The DOL will attempt to verify whether or not the company is a bona fide business entity and how many employees are on the company payroll. Smaller businesses will be at a higher risk for these types of audits. The ETA 9089 (PERM application) includes questions regarding how many workers a business employs, and in what year the company started doing business. The answers to these questions may cause the auditors to research the employer’s tax identification number, verify the U.S. address of the employer, and ultimately send out an audit letter to the company to authenticate that the company is a verifiable business entity with the ability to employ the worker.

Another common audit may be the question of ability to pay. Usually the employer provides financial evidence at the I-140 stage of the Green Card process; however, the DOL may issue an audit letter to verify that the employer has the ability to pay the prevailing wage during the PERM review process. The employer will need to prove that the company has sufficient funds to pay the prevailing wage, and show that the company will be putting the alien on payroll on or before the alien’s proposed arrival to the United States. The DOL may also audit to obtain a copy of the “Prevailing Wage Determination,” that was issued to the employer by the State Workforce Agency (SWA). They will use the prevailing wage determination to verify that the wage listed on the PERM application is correct and valid for the position and location of the job.

As we have previously stated, it is critical that employers maintain detailed files on all recruitment efforts that are made for a PERM application. An audit may request copies of all recruitment efforts that were taken for a particular application and a detailed outcome of these recruitment steps. This type of audit will corroborate that all the required recruitment efforts were executed within a 6 month period of filing the application and that the employer made a good faith test of the U.S. labor market before applying for PERM. The employer should maintain information on each applicant and detail the reason/s why they were not qualified for the position offered. Resumes, interview questionnaires, and a comprehensive recruitment report may be requested to show that recruitment took place and each applicant was considered for the position.

Another “red flag,” for the DOL auditors would be substantial lay offs within 6 months prior to the filing of the application. The DOL is able to cross check databases to determine if the employer has had any lay offs, and would issue an audit requesting documentation that laid off workers were given notification and consideration for the position prior to the filing of the PERM application.

As PERM is an online system, a critical concern for audit may be, “Uniformity in Employer Job Requirements”. The DOL will have easy access to all cases filed by an employer and may look for inconsistencies in job requirements and job descriptions for each applicant. For example, if an employer is filing numerous Software Engineer positions with the minimum requirements as a Bachelor’s degree and 3 years of work experience, then in order to obtain the EB2 category for a particular applicant, files the same job title and job description with the minimum requirements as a Master’s degree and 2 years of experience, an audit may occur.

AUDIT CONDUCTED AND CONSEQUENSE?

A PERM labor certification may be examined and immediately certified or an audit may be issued before a final determination is made by the DOL. The audit letter should include the following information: 1) state the documentation that is to be submitted; 2) state the due date of the requested documentation; 3) advise that the application will be denied if employer fails to submit the documentation, and that no administrative or judicial relief will be available. The employer must submit the response to the audit letter within 30 days and will be given a “one time only,” 30 day extension if “good cause,” is provided when requesting the time extension. The DOL stresses that employer should avoid requesting extensions, as it has been repeatedly emphasized that the employer should not submit any application until they have a comprehensive file consisting of all evidence for the PERM application. To this end, the DOL feels that the employer should be prepared to answer any audits and extensions will rarely be granted. Once the employer responded to the audit letter, a certifying officer will review the response and decided if the documentation is adequate hence certifying the applicant; additional supplemental information is needed before a decision is made; or that the case is denied and any future labor certifications will need to be prepared under DOL supervised recruitment.

The denial of a labor certification or supervised recruitment is not the most awful consequences of an audit letter, although these are definitely not pleasant, it is important to remember that criminal proceedings against the employer, alien, agent, or attorney can occur if the laws and regulations are not abided by. Employers and aliens will be asked to sign the ETA 9089 forms under penalty of perjury once an approval is issued. If a misrepresentation occurs and is later discovered in the I140/485 stage, the consequences could be grim for all parties involved.

CONCLUSION

It is very important to keep in mind that the DOL will make its initial decisions to certify the labor certification based on the information found within the four corners of the ETA 9089. If the ETA 9089 is detailed and provides all the relevant information, then it is likely that an audit could be avoided altogether. In the event that an audit letter is issued employers must make sure that they keep diligent files about each PERM case, including meticulous recruitment summaries and copies of all documentary evidence. As this system is very new and updated information about regulations and tips for filing PERM application are released on a regular basis, it is advisable to speak with an immigration attorney to assist with any questions or concerns when filing a PERM Labor Certification application.