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