H-2B FRAUD IN CONSTRUCTION AND RELATED TRADES

UNCLAS SECTION 01 OF 03 MONTERREY 000203

SIPDIS

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: H-2B FRAUD IN CONSTRUCTION AND RELATED TRADES

REF: MONTERREY 201

MONTERREY 00000203 001.2 OF 003



1. This cable is the second in a two-part series examining
fraud trends in the H-2B temporary workers program. The first
cable looked at misrepresentation among staffing agencies; this
piece focuses on fraud in construction and related trades.
This cable has been coordinated with other H-2B issuing posts in
Mexico. See action request paragraph 10.


2. Summary. Since February 1, 2009, post has recommended to
USCIS the revocation of more than 60 H-2B petitions. Based
on the testimony of the beneficiaries, and in some cases the
petitioners themselves, 28 of these petitions required a job
title and wage rate differing from those authorized by the
petition; further, all appeared to lack the permanent workforce
required by 8 C.F.R. ' 214.2(H)(6)(ii)(3) to justify a peak-load
need. This trend seems to manifest itself most commonly
in the construction sector, and particularly among such trades
as carpentry, masonry, painting and roofing firms, where
beneficiaries are overwhelmingly petitioned as "assistants,"
"helpers," or simply, "common labor." Such a petition would
be perfectly valid were the beneficiaries actually performing
the duties described in the corresponding labor
certification. However, interviews at post have revealed that
in many cases, such beneficiaries are working as the actual
tradesmen while being paid as assistants. Such activity
exploits the beneficiaries and disadvantages US workers the
firms
that employ them. End summary.

TOO MANY APRENTICES, NOT ENOUGH JOURNEYMEN?


3. Beneficiaries often averred that they worked together in
teams, without the assistance of any permanent US workforce.
Even those who did claim that they were assistants often found
it difficult - after having testified that their firm
employs no permanent U.S. workforce - to explain who it is that
they assist. In each identified case, the petitioner
listed in block 12 of the I-129 Petition for Nonimmigrant Worker
a number of current employees at odds with the returning
workers' testimony. In several such cases, post's Fraud
Prevention Unit requested quarterly wage statements from the
petitioner: in each instance in which the petitioner complied
with this request, post learned that the company had few or
no permanent employees.

GEOGRAPHIC CONCENTRATION


4. Post deals regularly with petitions coming from the
Southeast, the Midwest, and the eastern seaboard, however the
majority of the cases under discussion come from firms based in
Texas. They appear, in fact, to be concentrated among a
few preparing agencies, in particular two law offices and one
temporary staffing agency. As the following case study
demonstrates, both petitioners and beneficiaries tend to be
candid about their activities, apparently unaware that they are
in violation of the rules governing the H-2B program; post
suspects that they may be the victims of misguided legal
counsel.

CASE STUDY: LUIS MEZA MORENA DBA LUMOR FABRICATED METAL


5. Luis Meza Morena DBA Lumor Fabricated Metal,
EAC-09-064-51381, petitioned for 59 named Mexican citizen
beneficiaries to
fill a peak-load need for entry level laborers in Universal
City, Bexar County, TX. According to the DOL form ETA 750,
these beneficiaries were to perform "entry level labor
associated with metal roofing installation such as loading and
unloading roofing material; placing metal roofing at place of
installation; cutting and breaking metal roofing; and
assisting installers of metal roofing." Interviews with the
beneficiaries - returning workers of at least two seasons
experience - confirmed that they were installing the roofing and
siding, not "assisting installers." They further
testified that aside from the owner, Mr. Meza Morena, there were
no US workers employed by the firm. Accordingly, post put
their applications on administrative hold to investigate further.


6. The petitioner, Mr. Morena, later contacted post to inquire

MONTERREY 00000203 002.2 OF 003


about the delay in securing his beneficiaries' visas. He
testified openly that the interviewees were his only employees
and that they were the actual roofers. He was unable to
explain why he had failed to describe them as such while seeking
certification or petition approval; nor was he able to
explain why he had claimed 34 permanent employees on his
petition. He noted that his attorney was responsible for
preparing the associated paperwork.

SHOW ME THE MONEY


7. DOL's Foreign Labor Certification Data Online Wage Library
indicates that the lowest prevailing wage for the most
inexperienced roofer engaged in this activity in Bexar County
would not be the petitioned rate of $8.61/HR, but rather
$9.60/HR. Since these beneficiaries were experienced, working
independently, and supervising projects, it seems likely
that they merited at least the level 2 wage proscribed by DOL:
$11.09/HR.


8. Post notes that even at the DOL's level 1 prevailing wage of
$9.60/HR paid to 59 workers over an 8 month period, the
firm would have saved approximately $74,765.00 over a similar
firm paying the prevailing wage to a US workforce. This is a
significant advantage for a small business. In many such cases,
the difference between the petitioned wage and the correct
prevailing wage is even greater: for example, Ornamental Iron
Works, EAC-09-034-50063, proposed to pay beneficiaries
welding decorative iron fencing as production assistants at the
rate of $6.65/HR: the correct prevailing wage for this
activity is at least $9.85/HR. Rivera Drywall petition
EAC-09-066-51355 proposed to pay beneficiaries performing
drywall
installation as construction laborers earning $8.10/HR: the
prevailing wage is at least $12.71/HR. Efrain Aguirre Backhoe
Services petition EAC-09-046-51083 proposed to pay beneficiaries
operating backhoes and doing pipefitting as construction
workers at the flat rate of $8.10/HR: prevailing wages are at
least $11.80 and $14.04, respectively.

TRUTH IN ADVERTISING


9. While these examples illustrate a significant undercutting
of U.S. workers and the small businesses that employ them,
post suspects that the adverse impact of this fraudulent
practice manifests itself in other ways as well. For example,
in
order to earn certification from the DOL, petitioners are
required to demonstrate that they have first advertised the
employment opportunity to qualified U.S. workers. It seems
highly unlikely that those petitioners that misrepresent to the
DOL and USCIS the nature of the work to be performed are
advertising it accurately to the general public. Therefore
qualified tradesmen, seeking employment independently, via a
State Workforce Agency (SWA),or a local union, may never get
a chance to compete for these positions in the first place,
because they do not appear to be a match in skill level and
wage expectation. Likewise, the DOL may never have an
opportunity to consider the actual need for nonimmigrant workers
performing skilled trades in the counties specified.

ACTION REQUEST


10. 9 FAM 41.53 N28.1 states that underpayment of wages is
considered a labor violation, and that posts are to address
this problem not by a recommendation for revocation of the
underlying petition, but by a written report to the DOL cleared
through the Kentucky Consular Center (KCC). Post wishes to
emphasize that these cases are not simply examples of employers
paying less than the wage authorized by the DOL and USCIS, but
rather fraudulent representations of the actual work to be
performed and the nature and needs of the petitioning firm.
This makes it impossible for either agency to determine the
actual wage required, or whether or not the petitioned workforce
is even justified by a peak-load need. Accordingly, post
requests from Washington agencies clarification of this 9 FAM
41.53 requirement specifically as it applies to the H-2B
program.


MONTERREY 00000203 003.2 OF 003


COMMENT


11. The fraudulent practice described in this cable has been a
very significant trend among construction and contracting
firms participating in the H-2B program during this season.
Post acknowledges that many petitioners may legitimately
employ helpers and assistants to supplement their workforce
during a peak season. However, post has found this particular
form of fraud so common among such firms during this year's H-2B
peak season that those petitions genuinely employing
tradesmen's assistants as such, and the even fewer petitions
that actually request - and offer the prevailing wage for -
qualified tradesmen, appear to be the exception rather than the
rule. Post invites interested addressees to review
further case summaries at MTR's SharePoint site,
http://wha.p.state.sbu/sites/Monterrey/Consul ar/NIV/default.aspx.
WILLIAMSON