Workers beware!

Our last column on Jan. 29, 2014, titled “CW Pitfalls: Traps for the Unwary,” was a practical guide on how to avoid common mistakes in CW renewals. Today, we will address some bad practices with respect to CW applications and employment that we encounter more and more often in our practice. Some of these bad practices are due to mistakes, reliance on rumors, and ignorance of the law. Others are simply abusive employment practices aimed at exploiting gullible and powerless workers. A large number involve collusion between employer and worker to avoid the rules. In this kind of collusive setup both parties profit, at least in the short term: the employer maximizes profits from cheap labor, and the employee maintains status in the CNMI. In the end, however, most often the employee suffers the consequences.

Our CW clients include both employers and workers. Most employer clients come to us because they want to make sure they are complying with the law, or to get into compliance. This discussion is not about them. Most worker clients come to us because something has gone wrong: they are out of status, their CW has been denied, they have a request for evidence, or RFE, they have not answered or have difficulty answering, their motion to reconsider/reopen or appeal has been denied. Please remember that a petition for CW is the employer’s application (the worker is the beneficiary). Therefore, any defects in the application would have been made by the employer; the employer must be the one to cure it. If the employer truly wants to retain the worker, the employer must take any steps that may be possible to cure the deficiency or challenge the ruling by USCIS.

As we said in our prior column, the first round of CW applications went pretty smoothly except for delays in approvals. The second round is not going as smoothly. We surmise that this has several causes. Among others:

• USCIS is scrutinizing applications more closely. Review of the first round of applications appears to have been pretty liberal; employers were given the benefit of a doubt in close cases. Current review appears more focused, and less forgiving.

• More employers are preparing applications in-house and not using professional assistance, thus more mistakes are made. Or worse, employers are using non-attorney fixers who are engaged in the unauthorized practice of immigration law, and typically don’t know what they are doing. Talk about mistakes: we’ve seen some real doozies made by helpful “friends” who are paid to “fix my papers,” to use the phrase workers use over and over again.

• Employers too often fail to document that the employment remains current, and apply using outdated payroll information. At the very least, this leads to an RFE when USCIS demands the most recent pay stubs to prove that the employee’s valid immigration status was maintained, and remained current at the time of the renewal application.

Whatever the reasons, we are seeing a real uptick in denials. The most common reasons are unlawful presence at the time of application and failure to prove continued employment for the prior CW employment period:

1. Unlawful presence at the time of renewal application. This can arise for many reasons. We will list the ones we see most often; but the list is by no means exhaustive:

• Worker is out of status at the time of application. If the worker is out of status at the time of application, the application will be denied. If the worker has been out of status for less than 180 days, the employer can petition the worker for CW status, but the worker needs to exit the CNMI and then go through consular processing to obtain a CW visa. If the worker has been out of status for more than 180 days but for less than one year, he will be barred from returning to the U.S. (including the CNMI) for three years; if the worker has been out of status for more than a year, he cannot return to the U.S. for 10 years.

• Filing for renewal after prior CW status has expired. A renewal must be filed prior to the expiration of the previous status. We advise filing at least 60 days before expiration. That will give time to respond to any deficiencies that might arise. It also allows for continued employment since a CW worker must stop work if there is a gap between the expiration of the prior CW and the approval of the renewal. If the petition for CW renewal is filed after the prior status is expired, the worker must exit the CNMI and wait for the home country U.S. consulate to process the application and obtain a visa.

• Filing more than 30 days after involuntary termination of worker. If a worker is involuntarily terminated, a new employer may file a new CW application to employ him within 30 days of the termination. If the new employer fails to file a CW petition within 30 days, the worker must depart the CNMI. The new employer can still file the application, but the worker must depart and go through consular processing. Remember that “filed” means “received by USCIS,” not merely deposited in the mail.

• Filing first and advertising later. This is a common mistake by the employer that has severe consequences to the worker. We discussed it in our last column, but it bears repeating. An essential part of the CW application is the employer’s attestation that there are no U.S. qualified workers available for the position. This requirement is generally fulfilled by advertising the position (JVA). Filing first and advertising later guarantees denial because the employer’s attestation that there are no qualified workers available is a conclusion that can only be made after the responses to the JVA have been received and evaluated. There is no way to cure this defect in an application. The only way for the employer to retain or hire the worker who is the beneficiary of such an application is to file a whole new petition. By this time, 30 days have surely passed and the worker must exit and consular process his visa in the home country.

• Employer is a shadow or illegitimate business: There are still many so called businesses in the CNMI that are simply fronts to give workers status. These are always collusive situations between employer and worker. In one scenario, there is either no business at all or just a very marginal front. Workers are not paid at all. Rather, they pay the shadow employer for processing their application and then pay him a scheduled fee for their status. They then work in the grey economy for low wages. Often they will pay to the employer the equivalent of taxes for minimum wage earnings. The shadow employer then either pockets the “taxes” or files a fraudulent return. In another scenario, there is a legitimate business but the income generated is not sufficient to pay the workers even minimum wage. By agreement between the employer and worker, the workers are paid a small stipend plus commissions. This is especially true in the personal service industries, such as massage and beauty. We have yet to meet a masseuse or a beautician who is paid a minimum wage. All employees work on commission plus a small monthly “allowance.” Often these wages are paid in cash and, in any event, rarely reach the minimum wage income level. All of these employment practices will end in a denial because the employer is unable to produce satisfactory and recent employment records, such as pay stubs, W-2 forms and so forth.

• Failure to provide employment record for the prior employment period. This issue is really just a form of determining continued lawful presence. Whether a CW application is a renewal for ongoing employment or a petition by a new employer, the petition must show that the proposed beneficiary of the application was lawfully present in the CNMI at the time the application is made. If the beneficiary’s prior status was CW, whether with the petitioning employer or a prior one, USCIS must be satisfied that the beneficiary actually worked during the prior period. There are many reasons for not being able to meet this requirement.

• Prior employer stopped paying worker long before new application, no recent wage records exist.

• Prior employer went out of business but did not notify USCIS.

• Employees paid in cash; no sufficient records.

• Prior employer kept insufficient payroll records for purpose of evading taxes.

• Prior employer did not pay minimum wage but rather allowances and/or commissions.

• Employer engages in “creative” bookkeeping. Businesses frequently seek to minimize their tax obligations by understating their income, gambling that they will not be subject to an audit by Rev&Tax. Even when they succeed, there are other potential consequences. An employer who files a CW application must prove that the company is a real business; this means submitting tax records as well as other proof of a valid business. All too often we see tax records showing business incomes that logically cannot support the business or its employees. We have seen denials that begin with a summary that goes something like, “Your corporation operates a gift shop with 20 employees and an annual gross income of $40,000, and you seek to employ Ms. X as a sales associate for minimum wage.” Although we haven’t seen a denial that states this as the direct reason, there is a clear subtext from USCIS of “Huh? Who do you think you’re kidding?”—coupled with a real close look at the employee’s payroll records and dates as a basis for saying “no.”

We titled this column “Workers beware!” for a reason. All of the bad and often fraudulent practices described above will harm the worker more than the employer. The most the employee will get out of these questionable arrangements is short-term status followed by the inability to renew, find other employment and remain in the CNMI. To unscrupulous employers, foreign workers are “fungible,” which means that each worker is like any other and in their view, all can be exploited. To our foreign worker readers we say: Please get reliable information. USCIS has been very patient and cooperative in giving out information. Do not listen to rumors. Do not let desperation to remain in the CNMI lead you into fraudulent, collusive arrangements with employers. You will be the one to pay the price.

The information contained in this column is intended as general information only, and not as individual legal advice. Readers should obtain professional legal advice before taking action with respect to their individual situations. Readers may submit questions regarding federalization or immigration issues to the authors by email to lexmarianas@pticom.com. Readers may also e-mail written questions through the Saipan Tribune at editor@saipantribune.com.