The Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”), the Federal agency responsible for enforcing affirmative action mandates against Federal contractors and subcontractors, recently reported on its enforcement efforts for fiscal year 2009. OFCCP collected $9.31 million in back pay from 94 federal contractors through settlements of discrimination claims last year. It completed close to 4,000 compliance evaluations, resulting in conciliation agreements with nearly 700 employers. OFCCP issued this data in connection with its budget request for 2011, which anticipates continued growth and aggressive enforcement efforts. Federal contractors can anticipate that OFCCP’s enforcements efforts will likely increase this year. The Agency’s budget for fiscal year 2010 was increased significantly by the Obama administration in order to increase the number of compliance officers and to meet the agency’s goal of conducting more on-site compliance reviews.

As reported by BNA’s Daily Labor Report, in 2010, the agency also intends to change its focus by increasing its affirmative action compliance efforts and more closely scrutinizing Federal contractors’ affirmative action plans. Construction industry employers are among those who are likely to be targeted in the coming year.

OFCCP has also announced a renewed emphasis on affirmative action efforts for veterans and disabled workers, which includes plans to amend and strengthen regulations under the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act. In light of OFCCP’s expressed intent to make affirmative action its enforcement priority, federal contractors should ensure that their Affirmative Action Plans, and related data on employment actions, are in place, up to date, and in full compliance with regulatory requirements.
 

There is a second bite at the COBRA apple for employees who initially lost group health plan coverage as a result of a reduction in hours of employment during the period beginning September 1, 2008, which is followed by an involuntary termination of employment on or after March 2, 2010. These individuals (and their affected family members) would normally not be eligible for COBRA continuation of coverage because they were not covered by the health plan on the day before the termination of employment. However, the Temporary Extension Act of 2010 extends the availability of COBRA continuation of coverage, and the 65% COBRA subsidy, where there is a reduction in hours (resulting in a loss of coverage) followed by an involuntary termination of employment.

If the employee did not make a COBRA election when eligible as a result of the reduction in hours, or made the election and later dropped coverage, the involuntary termination of employment is treated as a qualifying event. However, the 18 month period of COBRA continuation is considered to have begun at the reduction in hours qualifying event. Therefore, the COBRA subsidy for involuntary terminations is only available for the difference between 18 months and the number of months of COBRA available after the loss of coverage due to reduction in hours.

For example, if a reduction in hours qualifying event occurred on 11/30/2009, COBRA would have begun on 12/1/2009 and would end on 5/31/2011. If that individual had an involuntary termination on 3/9/2010 (with the loss of coverage at the end of the month in which the termination occurred, 3/31/2010), the post-termination COBRA continuation would be offered from 4/1/2010 through 5/31/2011 (18 months – 4 months of reduction-of-hours COBRA = 14 months). Because the entire post-termination COBRA period is less than 15 months, the 65% COBRA subsidy will be available for the entire 14-month period.

The COBRA administrator must provide a notice describing this new right to elect subsidized COBRA to qualified beneficiaries who lost group health plan coverage as a result of reduction in hours on or after 9/1/2008 and who are terminated between 3/2/2009 and 3/31/2009 (proposals in Congress would extend this date to 12/31/2009). The notice must be provided within 60 days following the involuntary termination of employment.
 

U.S. employers continue to rely upon the H-1 B Specialty Occupation Worker category to facilitate the temporary employment of foreign nationals in professional positions.  In 2010, the U.S. Citizenship and Immigration Services ("USCIS") is authorized to issue 65,000 H-1 B approvals for those beneficiaries who possess at least a bachelor's degree, and an additional 20,000 approvals for those beneficiaries who have obtained a master's or higher degree from a college or university in the United States. These limits are often referred to as the "H-1B cap." These approvals authorize employment beginning October 1, 2010 (the beginning of the federal government's fiscal year).

Pursuant to federal regulations, interested U.S. employers may file H-1 B petitions six months in advance of the start of the fiscal year. This means that the earliest that a U.S. employer may submit a petition for a new H-1B worker, who has not already been counted against the H-1B cap, is April 1, 2010.
 

Over the past several years, the USCIS reached its 65,000 H-1B cap in two days, having received almost twice as many petitions as the allotted quota by April 2. Further, it took approximately four weeks for the USCIS to reach the H-1 B quota for master's level candidates. The remaining H-1 B cases were rejected.

While the H-1 B cap for 2009 was not fully exhausted until December 2009, we nevertheless anticipate a strong influx of H-1B filings this year. Employers are well advised to file their petitions for new H-1 B employees on April 1, 2010 to avoid being closed out of consideration by the H-1B cap.

In April 2009, the U.S. Department of Labor ("DOL") implemented a new electronic process for filing the Labor Condition Application ("LCA"), a necessary component of the H-1 B petition dealing with prevailing wage issues. Prior to April 2009, employers and their legal representatives could instantaneously certify the LCA. Since the LCA can no longer be automatically certified, the application must now be manually verified by the DOL. This new verification system, known as i-CERT, can take a minimum of seven (7) days to be completed by the DOL. Accordingly, additional time is needed to prepare this portion of the H-1 B petition.
 

We previously reported on President Obama’s nomination of three individuals, Democrats Craig Becker and Mark Pearce, and Republican Brian Hayes, to the National Labor Relation Board (“NLRB”). The most controversial nominee, AFL-CIO Associate General Counsel Becker, has come under criticism from lawmakers and employers for his well-documented pro-union views. Becker’s nomination has been blocked by Republican senators in light of these concerns, as well as concerns that he would have to recuse himself from a great number of cases for up to two years after his confirmation in light of his current employment with the AFL-CIO and the Service Employees International Union.

Department of Labor Secretary Hilda Solis, speaking at the AFL-CIO’s Executive Council meeting on March 3, indicated that unions would be very pleased with how Becker’s nomination gets resolved. This implies that Becker will be appointed to the NLRB as a recess appointment later this month, which does not require Senate approval, for a term of up to 20 months.

If Becker and fellow Democratic nominee Pearce, a former NLRB Regional Attorney from Buffalo, are appointed, they would join current NLRB Chair Wilma Liebman to form a three person Democratic majority on the NLRB. There is concern that Becker, and this new found majority, might attempt to implement some parts of the Employee Free Choice Act via administrative rule making or by means of NLRB decisions and case law. Possible changes could include more expeditious representation elections and/or the use of card check for recognition in some situations.

This development bears watching. The potential for change in a number of areas with a change in the composition of the Board is great. This includes a number of Bush-Board NLRB decisions about which we have previously reported.
 

At a time when many companies are owned or heavily leveraged by private equity firms, a decision by the District Court for the District of Connecticut in Austen v. Catterton Partners V, LP serves as a warning that such entities may be held liable for WARN Act violations by companies in which they have invested. The Federal WARN Act generally requires at least 60 days’ notice prior to a mass layoff or plant closing.  In New York, the state WARN Act requires 90 days’ notice of such events.

Catterton Partners V, LP, a Greenwich, Connecticut-based private equity firm, with over $2.0 billion in holdings such as Outback Steakhouse, Breyers Yogurt and Restoration Hardware, also owned Archway & Mother’s Cookies, Inc., (“Archway”) whose companies produced various brands of cookies, including cookies sold under private label programs for national retailers such as Target and Kroger.

Archway filed for bankruptcy protection in October 2008, shortly after it closed its factories and laid off hundreds of workers without notice. In a class action WARN Act complaint filed in August 2009, plaintiffs, who are former Archway employees, alleged that Catterton was an “employer” for WARN Act purposes and should be held liable for the failure to provide workers with notice prior to shutdown of the factories and termination of their employment.
 

On February 17, 2010, the United States District Court for the District of Connecticut denied Catterton’s motion to dismiss, holding that the private equity firm and the bankrupt cookie company may be considered a “single employer” for WARN Act purposes.  In so concluding, the Court adopted a five-part test contained in the federal regulations implementing the WARN Act, which assesses whether two separate entities should be combined for purposes of WARN Act liability. 20 C.F.R. § 639.3(a)(2). The test assesses whether: (1) the entities are subject to common ownership; (2) the directors and/or officers of the entities are the same; (3) the parent exercises de facto control over the subsidiary; (4) there is a unity of personnel policies emanating from a common source; and (5) there is a dependency of operations among the entities.

Notably, the Court concluded that the de facto control prong is perhaps the most important aspect of the test, because it assesses whether the parent was the decisionmaker who is responsible for the actions giving rise to the litigation. Because the complaint alleged that Catterton made the decision to shut down the factories, terminate the employees and file for bankruptcy, there was no dispute as to the extent of Catterton’s control over Archway. Based on application of the test to the allegations of the complaint, the Court’s ruling means that Catterton may be held liable for WARN Act damages for a class of perhaps 600-700 employees.  Given the widespread nature of private equity investment in American companies and the ongoing economic downturn, Austen v. Catterton Partners V, LP may be a harbinger of other efforts to reach into the “deep pockets” private equity firms.
 

This morning, President Obama signed the Temporary Extension Act of 2010 (H.R. 4691) after Senator Jim Bunning of Kentucky agreed to end his filibuster and the Senate voted Tuesday night to pass the measure.

The Act, generally referred to as an extension of unemployment benefits, also extends eligibility for the 65% COBRA subsidy to individuals who have involuntary terminations through March 31, 2010. Eligibility had expired for terminations after February 28, 2010. The law is retroactive, so that persons who were involuntarily terminated on March 1st and 2nd are eligible for the subsidy. No other changes in the terms of the COBRA subsidy were made.

Employers and other health plan sponsors should adjust their COBRA notices to reflect the new March 31, 2010 subsidy eligibility expiration date.
 

Social networking and blogging sites, such as Facebook and Twitter, continue to grow in popularity. The number of participants is staggering. Facebook alone recently reported that it now has more than 400 million active users.

Given the rise in use of social networking sites, employers should consider implementing  a policy governing employee use of such sites. A well-drafted social networking policy is essential because an employer’s existing policies, such as those governing confidentiality or the use of the employer’s computer systems, may not be broad enough to protect against employee misuse of these sites. This post covers some of the issues to consider in drafting an effective social networking policy, and also discusses the practicalities of investigating alleged violations of such a policy.
 

One of the first things to consider in drafting a social networking policy is whether to allow employees to access the sites through the use of the employer’s technology, such as computer and email systems or handheld devices, and whether access will be permitted during work time. The answer to these questions may depend upon the nature of the employer’s business and whether there are business-related reasons for employees to use the sites.

A social networking policy should also prohibit inappropriate postings on, or the inappropriate use of the sites, and should advise employees what is considered inappropriate. Defining the line between appropriate and inappropriate, however, may be the most difficult challenge, particularly for those employers employing a relatively young workforce. Examples of inappropriate postings include comments and complaints that are disparaging to the employer, or the disclosure of an employer’s proprietary or confidential information or of any information that is protected by law. Employers should also consider whether to forbid employees from posting any information about the employer, or if certain information would be permissible with the employer’s prior approval. Employees should generally not be allowed to speak on behalf of their employer, unless specifically authorized to do so. See our January 27, 2010 post.

In defining what constitutes impermissible conduct under the policy, employers must use caution to avoid infringing on employees’ rights under Section 7 of the National Labor Relations Act. The policy cannot be drafted in a way that employees would reasonably construe as prohibiting discussion of wages, hours, and working conditions. A policy which prohibits and specifically describes a broad range of inappropriate communication is less likely to run afoul of the National Labor Relations Act.

Because enforcing a social networking policy can be difficult, the policy should require employees to report known violations to the human resources office or a member of management. As with other key policies, employees should be told that it is their “responsibility” to help the employer ensure compliance with the policy. The potential consequences of a violation of the policy should also be described. This can be as simple as a warning that an employee may be subject to discipline, up to and including discharge.

Once developed, the policy should be distributed to all employees, who should be required to acknowledge in writing that they have received it. The policy should be redistributed to employees periodically.

A social networking policy is most effective when developed in conjunction with a policy governing employee use of technology belonging to the employer. A policy of this kind should be designed to lower employees’ expectations of privacy when using the employer’s technology by including language stating that the employer reserves the right to access, intercept and monitor all information accessed, sent, or received through the employer’s systems. Employers should also obtain the express consent of employees both to monitor communications and to access stored communications. This is best accomplished by requiring employees to sign written consent forms. Alternatively, an employer can establish that employees have consented to the monitoring and accessing of communications by requiring them to click on a pop-up screen acknowledging consent to the employer’s policies before access is granted to the employer’s computer systems.

Even with a well-drafted social networking policy in place, investigating potential violations, such as an allegation that an employee has posted something inappropriate on a site, can be challenging. It may be difficult to verify that the alleged misconduct occurred because the information may be posted on a secured site not accessible to the public or it may be deleted before the investigation has been completed. If the posting was prepared or accessed using technology belonging to the employer, an employee’s consent to access that information could be obtained through the type of technology use policy discussed above.

If the employer’s technology was not used, it may be impossible to view the posting without the employee’s consent. In that scenario, an employer may have no recourse other than to simply question the employee about the posting, and to speak to any co-workers who may have seen it. Employers should hesitate before asking employees for their personal log-in information. Aliases or similar surreptitious means to access a secured site should not be used, and an employer should take steps to protect an employee’s privacy in the investigation.

If an investigation concludes that an employee has violated the social networking policy, appropriate discipline should be considered, but an employer should use caution when meting out discipline. Public employers should also be aware that the First Amendment may protect an employee who speaks on what is considered to be a matter of public concern.
 

On February 12, 2010, the New York State Department of Labor issued revised, emergency regulations concerning the New York State Worker Adjustment and Retraining Notification Act (“NY WARN Act”), Section 860 of the New York Labor Law. The revised regulations are effective immediately and replace the regulations first published by the agency in January 2009. The NY WARN Act requires 90 days advance notice to employees and other designated officials prior to a mass layoff, plant closing, relocation or covered reduction in hours, which, in general, affects 25 or more employees.

Employers considering upcoming employee layoffs or plant shutdowns should review closely the revised regulations. Included among the many changes made by the revised regulations are the following:

• use of email to notify employees; 
•  a requirement that the notice from the employer be signed by an individual who can bind the employer and that the individual attest to the truthfulness of all information contained in the notice;
• an expansion of the types of information that must be included on the various notice forms; and
• a specification that an employer’s violation of NY WARN may be shared with other public entities in New York.
   

The U.S. Occupational Safety & Health Administration (“OSHA”) recently launched an enforcement initiative focused on identifying employers who underreport workplace injuries and illnesses. This initiative—which OSHA has classified as a National Emphasis Program (“NEP”)—was prompted by recent government reports which found that a high percentage of workplace injuries and illnesses are not being reported by employers. Accordingly, employers should be mindful of the NEP, and that OSHA has made clear that its investigators will be paying particularly close attention to workplace policies and practices which have the effect of discouraging employees from reporting their job-related injuries and illnesses.

The Occupational Safety and Health Act of 1970 (the “Act”) requires employers to maintain accurate records of, and make periodic reports on, work-related deaths, injuries and illnesses. 29 U.S.C. §657(c). OSHA has also promulgated detailed regulations implementing these requirements. See 29 C.F.R. §§1904 et seq. The principal record employers use for this purpose is OSHA's Form 300 (“Log of Work-Related Injuries and Illnesses”). For each work-related injury and illness that requires medical treatment beyond first aid, employers must use the Form 300 to record certain information, including a brief description of the injury or illness and the number of days the worker was away from work. Employers are also required to describe each work-related injury and illness on OSHA’s Form 301 (“Injuries and Illnesses Incident Report”).

Despite these requirements, however, a recent report issued by the U.S. Government Accountability Office (“GAO”) found that workplace injuries and illnesses are being significantly underreported. Moreover, the GAO report found that certain employer policies and practices, which discourage workers (sometimes unintentionally) from reporting their injuries and illnesses, are a “primary factor” causing this trend. According to the GAO, its investigation revealed that “workers may not report a work-related injury or illness because they fear job loss or other disciplinary action, or fear jeopardizing rewards based on having low injury and illness rates.”

The GAO report followed a separate—and more scathing—report on the same topic published by the U.S. House of Representatives’ Committee on Education and Labor. This report, like the GAO report, claimed that work-related injuries and illnesses are being “chronically and even grossly underreported” by employers. Further, the report likewise found that employer “disincentives” have played a major role in this underreporting, and also emphasized that these practices can have a catastrophic impact on worker safety.

For example, the House report repeatedly cited the 2005 British Petroleum (“BP”) refinery fire in Texas, which killed 15 workers and injured at least 170 others, as an example of the harms presented by underreporting:

Programs that have the result of discouraging workers from reporting incidents that may be predictive of future or more serious accidents can have a detrimental effect on worker safety. The Chemical Safety Board, in its report on the 2005 BP Texas City explosion that killed 15 workers, noted that one thing missing at BP was a ‘reporting culture where personnel are willing to inform managers about errors, incidents, near-misses, and other safety concerns.’ When workers were not encouraged to report, managers did not investigate incidents or take appropriate corrective action.

The 2005 BP refinery fire resulted in record OSHA fines and penalties. BP originally settled with OSHA and agreed to $21 million in penalties. More recently, BP was assessed an additional $88 million in penalties because of alleged new violations at the Texas refinery and its failure to abate earlier violations.

Both the GAO and House reports prompted OSHA to issue its NEP and to concurrently shift its focus towards employer practices and policies which may lead to the underreporting of workplace injuries and illnesses. In fact, the NEP specifically instructs OSHA investigators to ask employees the following questions during audit-related interviews:

• Have you ever been encouraged not to report an injury or illness or been encouraged to report an injury or illness as a non-work-related event or exposure?
• Are there any safety incentive programs, contests, or promotions or any disciplinary programs here? Do these — or anything else — affect your decision whether to report an injury or illness?

Significantly, the NEP makes clear that OSHA also has its sights set on safety incentive programs, which, although well-intended, may nevertheless have the effect of pressuring workers not to report their injuries. As a matter of policy, OSHA has not adopted any specific directives addressing safety incentive programs, but officials are plainly looking towards these types of initiatives with a strong measure of skepticism—particularly where the program links the incentives to the number of injuries reported or to some other similar metric. In contrast, incentive programs which are more proactive in nature—such as ones rewarding employees who attend safety training sessions or who demonstrate exemplary safety practices—are likely to face less skepticism from OSHA.

The NEP is currently limited to select industries with historically high injury rates (including animal slaughterhouses, steel and iron foundries, and nursing care facilities), but OSHA may expand the program beyond this group. With respect to the construction industry, for example, OSHA has stated that “recordkeeping in the construction industry has a long history of complexity and questions raised due to the nature of the workforce associated with mobile worksites.” Given this concern, OSHA has stated that the NEP will include several pilot inspections of construction employers in order to better understand how to approach potential underreporting issues within the industry on a broader scale.

Employers investigated by OSHA—whether through the NEP or through an independent audit—and subsequently found to have violated their record-keeping obligations may be subject to appropriate citations and monetary penalties. The corresponding financial liability can be significant, particularly where suspect record-keeping practices are pervasive, as OSHA has in the past “stacked” penalties for multiple violations. Additionally, employers should be mindful that, under Section 11(c) of the Act, workers are protected from being discriminated against on the basis of any protected activity. 29 U.S.C. §660(c). This “protected activity” expressly includes the reporting of work-related injuries and illnesses. See 29 C.F.R. §1904.36.

Accordingly, employers who actively discourage their employees from reporting workplace injuries or illnesses may run afoul of the Act. In this regard, Section 11(c) issues are clearly on OSHA’s priority list, as evidenced by recently publicized enforcement actions which entailed considerable penalties and fines. See, e.g., OSHA Regional News Release, “Illinois-based Railroads Ordered by U.S. Department of Labor to Compensate Employee Fired for Reporting Work-Related Injury” (February 11, 2010) (assessing $80,453 in penalties); OSHA Regional News Release, “U.S. Labor Department’s OSHA Finds Metro North Commuter Railroad Co. Retaliated Against Four Employees Who Reported Work Injuries” (June 18, 2009) (assessing $300,000 in punitive damages).

So, what can employers do to avoid liability for potential reporting violations and/or Section 11(c) discrimination claims? Among other things, companies should review, and, if necessary, modify, their current polices, practices, and procedures to ensure that workers are being affirmatively encouraged to report injuries and illnesses. Along the same lines, companies should also incorporate a policy statement that workers will be protected against any unlawful retaliation for making such reports. Additionally, employers should carefully consider whether safety incentive programs already in place may have the unintended consequence of discouraging workers from reporting injuries and illnesses, and, if so, modify these programs accordingly. More generally, employers should also consider conducting a safety and health audit of their operations to ensure compliance with all applicable OSHA regulations.
 

A model notice that informs employees of the availability of premium assistance for employer-provided group health plan coverage was published in the Federal Register on February 4, 2010, one year after President Obama signed the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA). Employers who offer group health plan coverage must provide this notice to employees before the beginning of the next plan year, and annually thereafter. CHIPRA’s impact on employer health plans and the notice requirements are described below.

CHIPRA’s Impact on Employer Health Plans

CHIPRA affects employer group health plans in two ways:

• It requires most group health plans to have a special enrollment period when there is a termination of Medicaid or CHIP coverage, or when a child becomes eligible for assistance in the purchase of employment-based coverage. The employee must request coverage within 60 days of the event.
• It allows a State to offer a premium assistance subsidy for qualified employer-sponsored coverage to all targeted low-income children who are eligible for child health assistance under the plan and have access to such coverage. New York and 39 other states have chosen to offer such assistance. Election of the subsidy is voluntary on the part of the child (or the child’s parent). The subsidy amount is the difference between the employee contribution required for enrollment only of the employee, and the amount required for enrollment of the employee and the child in such coverage, less any applicable premium cost-sharing applied under the State child health plan. The premium assistance may be paid either as reimbursement to an employee for out-of-pocket expenditures or directly to the employee’s employer. The employer may opt out of the direct payment with notice to the State.

Notice Requirements

The model notice issued by the Department of Labor is available in modifiable, electronic form on its website, www.dol.gov/ebsa.

Employers must provide the notice, free of charge, to each employee, regardless of enrollment status. The initial copy of the notice must be provided in connection with the annual enrollment period for the first plan year that begins after the date of publication, or May 1, 2010 (if later). For employers that operate health plans on a calendar year basis, the first notice is due in advance of the plan year that begins January 1, 2011. It is also a good idea to include the notice in enrollment materials for new hires. Each year, another copy of the notice must be provided to all employees.

Although the notice must be a separate, prominent document, it may be delivered with the annual enrollment packets or the summary plan description, as long as the delivery of those documents meets the timing requirements described above. No separate mailing is required. Electronic delivery in accordance with the Department of Labor’s electronic disclosure safe harbor is permitted.
 

The Office of Fraud Detection and National Security (“FDNS”) is part of the United States Citizenship and Immigration Services. FDNS’s mission is to detect, deter, and combat immigration benefit fraud. FDNS consists of approximately 650 Immigration Officers, Intelligence Research Specialists, and Analysts located in field offices throughout the United States. In addition, FDNS has contracted with multiple private investigation firms to conduct site visits on its behalf. In 2010, FDNS intends to increase its H-1B site audits to 25,000 – a fivefold increase. If you are unlucky enough to be chosen for one of those 25,000 site audits, what should you do? The American Immigration Lawyers Association has provided suggestions.  This post contains some of those site audit basics and recommendations for preparation.

What Happens During an H-1B Site Audit?

H-1B site audits are usually unannounced, and take place at either the employer’s principal place of business or the foreign national’s physical work-site location. During the site visit the investigator will often ask to speak with the employer representative who signed the H-1B Petition. If this person is unavailable, the investigator usually requests, as an alternative, to speak with a Human Resources representative. During the audit, the investigator will typically ask specific questions to verify the representations made by the employer in the H-1B Petition, and may also request a tour of the facility. In addition, the investigator may ask to interview the H-1B employee about his/her job title, duties, responsibilities, employment dates, position locations, academic background and previous employment experience. Finally, the investigator may request the opportunity to speak with colleagues and/or managers of the H-1B employee.

How Should an Employer Respond to the Audit?

If an employer is subject to an unannounced H-1B site visit, the employer should immediately request that its immigration attorney be present. Even though the investigator will not reschedule a site visit so that an attorney may be present, the investigator will allow counsel to be present by phone. The employer should also have procedures in place to ensure that the investigator is directed to a designated company official. That designated official should request the name, title, and contact information for the site investigator. If the investigator introduces himself/herself as a contractor of FDNS, the employer’s representative should request a business card and confirm the investigator’s identity before permitting the individual to enter the employer’s premises, and before providing any detailed information about the employer’s business.

The employer should have at least two employer representatives accompany the investigator during the site visit. One representative should be the primary spokesperson on behalf of the employer. The second representative should take detailed notes of all information requested by and provided to the investigator, the locations visited, pictures taken, and/or any other relevant information from the site visit.

If the employer has strict policies regarding audio recording, photography, or video recording, the employer should advise the investigator accordingly. If the investigator requests information from the employer and the employer cannot provide accurate information without further research, the employer should so inform the investigator, and offer to contact the investigator as soon as the requested information is obtained. Under no circumstances should the employer “guess” about any information requested during the site visit.

Prepare for Site Visits Before They Occur.

An adverse assessment by the FDNS could be used to deny a petition, if the site visit occurs during re-adjudication, could result in a revocation of a previously approved petition in the post-adjudication process, and/or could be referred to U.S. Immigration and Customs Enforcement (“ICE”) for further investigation. A referral to ICE could lead to civil or criminal penalties and prosecution. Given the potential consequences of an adverse audit, and because most H-1B site visits are unannounced, employers must be prepared for such visits well in advance.

Ensuring that required documentation is up-to-date and is easily accessible is the best way to prepare for a site visit. Specifically, employers should retain complete copies of all submitted I-129 petitions and supporting documents in confidential files, and be familiar with and ensure the accuracy of the representations made in the I-129 petitions. With respect to each filed H-1B Petition, the employer must maintain a public access file. Employers should also ensure they are in compliance with any mandatory employment posting obligations to prepare for the possibility the investigator will request a tour of the facility.

To better prepare the designated official for possible questioning by the investigator, consider staging a mock visit under the supervision and direction of counsel and subject to the attorney-client privilege. To prepare the beneficiary for potential questioning, employers can consider providing a redacted copy of the I-129 Petition and supporting documents to the beneficiary, including information on the nature of the job opportunity, the terms and conditions of employment, and the beneficiary’s education and prior work history. A mock interview of the beneficiary, with counsel present, can also be helpful.
 

The percentage of employers conducting background checks as part of the hiring process has steadily increased. Background checks can be useful tools to uncover any misconduct or dishonest behavior at previous jobs or outside of work, and to determine whether the applicant possesses the positive traits desired in an employee. They can also be useful to avoid later claims of negligent hiring if things go wrong with a new hire. However, the decision to use background checks should be carefully considered and implemented. More than one employment law applies to use of this tool in the hiring process.

First, be sure to know and observe the requirements of both the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, and the New York Fair Credit Reporting Act, General Business Law Article 25. These state and federal statutes largely mirror each other, and both contain technical requirements regarding the collection and use of background check information. However, in certain areas, state law contains more restrictive requirements. For that reason, it is a mistake to assume a background check vendor has all the technical requirements covered, especially if it is an out of state vendor. Another common mistake is assuming the FCRA and the state equivalent only apply when an employer is seeking credit information. Even though the titles of both laws contain the term “Fair Credit Reporting,” they cover a much broader set of reports. For example, if a criminal background check is performed by an outside agency instead of by the employer, it is a “consumer report” and is covered by both laws. A third common mistake is relying solely on an employment application to inform applicants they will be subject to a background check. The FCRA requires employers to provide applicants with a stand alone authorization form. 15 U.S.C. § 1681b(b)(2)(A). These are just a few examples of the mistakes employers make when conducting background checks.  There are many more potential state and federal FCRA pitfalls. The bottom line: if you are running background checks, be sure you are fully versed on the details of the state and federal FCRAs.

Second, be aware of Article 23-A of the New York Correction Law. Most employers understand that it is unlawful to refuse to hire an applicant simply because of a prior conviction, except in certain circumstances. However, many employers may not yet recognize that pursuant to an amendment to the New York Fair Credit Reporting Act (General Business Law Section 380-c and 380-g) which took effect in February 2009, employers must provide applicants with a copy of Article 23-A whenever they obtain an investigative consumer report (a narrow subset of background investigations) or a criminal background check. (This same amendment includes a new posting requirement: Labor Law Section 201-f now requires all employers--not just those conducting background checks--to post a copy of Article 23-A in the workplace.)

Finally, be sure to apply any background check policy consistently. Cherry picking certain applicants for a background check, and/or skipping the process altogether for others, can expose an employer to claims of discrimination or negligent hiring.