MISREPRESENTATIONS BY STAFFING AGENCIES UNDER THE H-2B

UNCLAS SECTION 01 OF 04 MONTERREY 000201

SIPDIS

C O R R E C T E D C O P Y (CHANGED ACTION ADDEE)

DEPT FOR CA/VO AND CA/FPP
DHS FOR USCIS
DOL FOR ITA, FRAUD DETECTION AND PREVENTION DIVISION
NEW DELHI PLEASE PASS CONSTITUENT POSTS

E.O. 12958: N/A
TAGS: CVIS KFRD ELAB MX
SUBJECT: MISREPRESENTATIONS BY STAFFING AGENCIES UNDER THE H-2B
TEMPORARY WORKER PROGRAM

MONTERREY 00000201 001.4 OF 004



1. Summary/Action Request. Post has identified a growing trend
in which staffing agencies are petitioning increasing numbers of
H-2B temporary worker visas for needs that are neither temporary
nor seasonal, but year-round. Such action a) introduces
multiple opportunities for fraud and abuse, b) ultimately
dilutes the benefits of this program for both H2B employers and
their beneficiaries, and c) disadvantages U.S. workers who might
want to compete for these jobs. Action request for VO guidance
on temporariness and staffing agencies in paragraph thirteen.
This cables has been coordinated with other H-2B issuing posts
in Mexico. End Summary/Action Request.



BACKGROUND




2. Additional personnel and resources from H&L Anti Fraud Funds
have enabled FPU to conduct more thorough verification of
information on petitions prior to applicants arriving for
interviews. The information provided by USCIS officers who
participated in the H2 Anti-fraud conference in Guatemala in
September 2008 and a visit to USCIS California Service Center
gave officers and LES a clearer understanding of how the labor
certification and petition adjudication process is intended to
function. Officials in both CIS and DOL have asked post to
exchange information from interviews with returning workers and
this cable is a part of the information sharing process.




3. Since February 1, 2009 post has found more than 60 cases in
which H2B petitions had to be sent back to USCIS with requests
for revocation. The information below pertains to one of the
most common types of fraud, that committed by staffing agencies
falsely claiming that their need for workers is temporary or
seasonal.



THE WORK OF TEMPORARY STAFFING AGENCIES




4. Temporary staffing agencies petition for H2B temporary
workers in order to contract them out to other firms. Staffing
agencies advertise themselves as a "one stop shop" for clients
that prefer not to recruit workers abroad or navigate the H2B
petition process themselves. Because staffing agencies
typically retain the H-2 beneficiaries in their employ and "rent
them out" to client firms, they relieve those clients of all the
administrative work and financial responsibilities required of a
direct employer. In return for supplying a temporary workforce,
the staffing agency charges its clients a premium over the wage
authorized by the Department of Labor. The majority of H2B
petitions received in Monterrey are for either common
construction laborers or landscape laborer that list a salary as
between $8 - 11 US/hour depending on the location the work is
being performed. The margin between what the end user pays the
staffing agency and what the staffing agency pays the
beneficiaries represents the staffing agency's gross income.



WHEN TEMPORARY AND SEASONAL IS NOT




5. Under the H2-B program, a petitioner's need for temporary
workers must not be ongoing or continuous. In the case of a
staffing agency, the need for work performed for the end user
might be temporary and seasonal, but the need of the staffing
agency is not, as it provides labor year round to anybody who
will contract it. Post has found that petitions from staffing
agencies often overlap to cover an entire year, shifting among
multiple company names and with a variety of justifications of
dubious credibility. Since many such staffing agencies publicly
advertise year round availability even on short notice, it would

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appear that the job descriptions and locations submitted in
their petitions are at best informed guesses. Their business
model often stands in stark contrast to the DOL requirement that
petitioners specify the kind of work to be performed and the
location where it will be performed. DOL's Foreign Labor
Certification Training and Employment Guidance Letter number
21-06 states, "when the job opportunity requires work to be done
at multiple locations either within the jurisdiction of the
State Workforce Agency (SWA) or within the metropolitan
statistical area (MSA) that covers multiple SWA's, the
application must include the names and physical addresses of
each location." Post understands the purpose of this rule is to
provide the ICE, DS, and DOL-OIG the opportunity to conduct
unannounced inspection at authorized job sites as listed by the
petitioner. Post has seen multiple petitions approved this year
in which the worksite locations were not specified.



TRUTH IN PETITIONING




6. Staffing agencies overwhelmingly petition for the lowest
paying labor categories defined by the DOL, regardless of the
work to be performed. While all petitioners have a financial
incentive to do so, staffing agencies truly do not know how
their beneficiaries will ultimately be employed, and so choose
the most unskilled and labor categories available, such as
landscaper or general laborer. Meanwhile, agencies advertise on
websites that workers that can "lead crews" and perform
"specialized skills." It also seems likely that staffing
agencies are aware that demand for H2B workers has long
outstripped the annual supply made available by Congress, and so
strive to secure as many H2B visas as they can, regardless of
actual, contracted needs.



THE LAW OF UNINTENDED CONSEQUENCES




7. Many businesses with temporary and seasonal needs are
willing to enlist the services of a staffing agency and pay for
the services described in paragraph (4). If the H2B program was
not limited by the annual cap of 66,000 visas per year, this
would be an understandable business decision. However, given
the annual cap on H2B visas, staffing agencies have a financial
incentive to petition as many H2B beneficiaries as they can,
with or without actual contracts of employment, with the
intention of "flipping them," that is, seeking new contracts not
disclosed on the original petition. Additionally, the agencies
then seek extensions of the workers' visas from USCIS, and keep
them gainfully employed among shifting job sites as much as
possible, regardless of the terms of the original petition. As
evinced by the number of businesses every year who fail in their
attempt to petition H2B workers before the cap is reached,
staffing agencies force out many business who would otherwise
participate directly in the H2B program. There is little doubt
that some of these businesses are then driven to work with and
pay a premium to the staffing agencies who managed to get their
petitions approved first, often via fraudulent claims.



CASE STUDY I: GB CAPITAL




8. GB Capital is listed in Lexus Nexus as an investment
consulting business in St. Charles, Missouri. They describe
themselves as a "Hospitality Service" in petition WAC0903850043
and EAC0904451724. Monterrey's FPU investigation determined
that GB Capital does not own or operate any hotels or
hospitality-related operations. Monterrey noted that the 26
applicants applying with GB Capital to serve as housekeepers for
the Intercontinental Hotel in Kansas City were male and only
needed for two months according to the petition. In

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investigating GB Capital further, it was discovered that in
petition EAC0904451724 the company had again petitioned male
applicants to perform maid services for the Hyatt Regency in
Tampa Bay, FL for a shorter period than most petitions.




9. (SBU) FPU Monterrey contacted the human resource (HR)
manager of the Intercontinental Hotel in Kansas City. The
manager confirmed the hotel had a relationship with GB Capital,
but that it had not recently requested workers nor was the hotel
expecting any additional workers. The hotel was actually
releasing staff due to the local economic conditions. FPU also
contacted HR manager at the Hyatt Regency in Tampa Bay, FL. The
manager confirmed the Hyatt had no relationship with GB
Capital. The manager also stated the hotel was not requesting
any workers. In both cases, the managers informed FPU that
their hotels do not employ male housekeepers. The visa
applications were refused under Section 221g and post sent the
petitions WAC0903850043 back for revocation consideration. No
applicants for petition EAC0904451724 applied in Monterrey.
Monterrey shared information about this petition with Embassy
Santo Domingo; officers there refused applicants for GB Capital
on this petition under Section 221(g).




10. Weeks later, the applicants refused in Monterrey arrived
along with others in Mexico City to apply for visas under a new
petition filed by Ambassador Seasonal Concepts, petition number
EAC0904450718. FPU investigation confirmed that an owner at
Ambassador Seasonal Concepts is married to a manager at GB
Capital. Monterrey and Mexico City FPMs coordinated during the
adjudications and the visas were not issued.



FRAUD CASE STUDY II: WORKFORCE PLUS (DBA THE ACCENT GROUP)




11. One of the most egregious cases of staffing agency
misrepresentation can be found in a petition EAC0813150959 filed
by Workforce Plus LLC from Baton Rouge, Louisiana. Workforce
Plus, which also files under the name The Accent Group, filed a
petition for 150 workers to perform electric substation repair
work in Louisiana. This petition was approved in April 2008.
Prior to the arrival of 26 applicants to for interview in
Monterrey March 5, 2009, post's FPU contacted a representative
of Workforce Plus who confirmed the workers were going to work
as substation repairman for a client named Irby Construction
Company (ICC). Further research revealed that ICC is owned by
the mother-in-lawn of the owner of Workforce Plus.




12. The beneficiaries of this petition stated that they were
returning workers, destined for Money Hill Golf and Country Club
in Baton Rouge LA. A representative at that club confirmed to
FPM in a phone conversation that the club had contracted with
Workforce Plus to provide the group of workers for a flat fee of
US $9000, and were awaiting their arrival. There was no
sub-station work, nor were the workers qualified or experienced
to conduct such work. The visa applications were refused 214b
on March 5, 2009 and post subsequently sent the petition back
for revocation. A golf club representative told FPM that the
club used Workforce Plus because the I-129 petition it had filed
with USCIS was not processed because the H2B cap had already
been met.



ACTION REQUEST




13. Post requests assistance from VO/L/A in clarifying with DOL
on the question of temporariness of need as it applies to
staffing agencies. DOL officials told conoffs both at the

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Guatemala conference and in the March 3 teleconference that in
order for a staffing agency to obtain labor certification for
temporary workers, the staffing agency itself must have a
temporary or seasonal need for the workers. The temporariness
or seasonality cannot be based on the needs of the staffing
agencies client companies. However, post has seen a number of
petitions similar to the examples described above in which labor
certifications and subsequent I-129 petitions for H2B workers
for year round staffing agencies have been approved.
WILLIAMSON