Feds are given immunity from H-1B regulations

Date: Wednesday, July 23, 2008 2:30 PM

<<<<< JOB DESTRUCTION NEWSLETTER No. 1893 -- 7/23/2008 >>>>>

When private employers pay H-1B visa holders less than the prevailing wage,
the Department of Labor (DOL) can order the employer to pay back wages.
There can be other small penalties as well, although these usually amount to
slaps on the wrist. It's a different story when federal agencies underpay H-
1Bs, thanks to the Department of Justice (DOL), who recently deemed that the
entire federal government is immune to the regulations on H-1B.

Sounds crazy, huh?

The story begins at two Veterans Affairs (VA) hospitals where 11 physicians on
H-1B visas were hired. The VA paid the doctors about $101,000 even though the
prevailing salary rates were between $124,000 and $165,000 [see note 1 at the
bottom]. After several years of working at market-busting salaries a few of
the foreign doctors became disgruntled and decided to complain to the DOL. The
DOL determined that the doctors were indeed being underpaid, and then ordered
the VA to pay approximately $230,000 in back wages. It would seem like an open
and shut case since the VA admitted their guilt, and would therefore be
required to pay back wages to the doctors; but that's before the Department of
Justice (DOJ) came into the picture.

To read details of the DOL complaint, you can go here:

http://www.dol.gov/sol/media/briefs/fargo-9-24-2003.htm
Fargo VA Medical Center, Administrator's Response Brief

The DOJ was asked to decide whether the DOL complaint had merit. The decision
skirted the merit issue entirely by stating that all federal agencies,
including the VA, were protected by sovereign immunity. Therefore it doesn't
matter if the DOL complaint had merit!

The opinion was written by Steven A. Engel, Deputy Assistant Attorney General
Office of Legal Counsel. You can read it here:

http://www.usdoj.gov/olc/2008/payment-alien-physicians-h1b-visa.pdf
PAYMENT OF BACK WAGES TO ALIEN PHYSICIANS HIRED UNDER H-1B VISA PROGRAM,
February 11, 2008 MEMORANDUM OPINION FOR THE GENERAL COUNSEL, DEPARTMENT OF
VETERANS AFFAIRS AND SOLICITOR, DEPARTMENT OF LABOR

The title of "Solicitor" was archaic enough to get me to thinking about the
British Empire, and monarchies. Solicitor is a term for British lawyers that
was used during the 15th century. Here is what I found on wiki:

http://en.wikipedia.org/wiki/Sovereign_immunity

Sovereign immunity, or crown immunity, is a type of
immunity that in common law jurisdictions traces its
origins from early English law. Generally speaking it
is the doctrine that the sovereign or state cannot
commit a legal wrong and is immune from civil suit or
criminal prosecution; hence the saying, the king
(or queen) can do no wrong.

Of course the DOJ didn't quite define sovereign immunity the same way. Here is
how they put it -- see if you can tell the difference between the wiki version
and the DOJ version:

Sovereign immunity bars any action against the United
States if the judgment sought would expend itself on
the public treasury or domain, or interfere with the
public administration, or if the effect of the judgment
would be to restrain the Government from acting, or to
compel it to act.

The DOJ said that all federal agencies have sovereign immunity unless they
voluntarily waive their right to never be prosecuted by other federal
agencies. Not surprisingly, very few federal agencies waive their right to be
invulnerable to law suits.

The next item almost seems obvious -- if one federal agency sues another, it
would be tantamount to passing money from the treasury around in circles. It's
rather disingenuous though, because it was the foreign doctors who would have
received the settlement, not the DOL. Nevertheless, the DOJ used this
fallacious argument to justify their case:

In such a context, the resulting administrative penalty
would neither "expend itself on the public treasury or
domain," Dugan, 372 U.S. at 620, nor result in a judicial
order requiring or prohibiting agency action. Instead,
the administrative penalty would amount simply to the
transfer of money from one part of the federal Government
to another.

The DOJ understands that this legal opinion prevents the DOL from enforcing H-
1B regulations at federal agencies, but they simply don't care. They argue,
perhaps correctly, that H-1B doesn't waive sovereign immunity, so therefore
the federal agencies are untouchable. Just consider this to be another gaping
loophole in the H-1B regulations.

Congress s failure to waive sovereign immunity may limit
DOL s ability to enforce the H-1B requirements
retrospectively, but DOL retains authority to ensure
compliance at the front-end through its review of these
applications before an alien may receive an H-1B visa.

Notice how the DOJ shifts the blame to the DOL for not catching the VA's
trickery upfront during the visa application process. No doubt about it, the
DOL goofed, but the fact that the VA cheated seems to be no big deal.

CONCLUSION: Government agencies that hire H-1B employees should pay prevailing
salaries, but if they don't, there is nothing the Dept. of Labor can do about
it once the Labor Condition Application is approved.
Effectively the DOJ opinion lets all federal agencies off the hook -- they can
lowball wages and discriminate against Americans and H-1Bs with impunity. This
decision will probably discourage the DOL from pursuing other complaints of H-
1B exploitation and abuse within the federal government.

NOTE 1: Employers and H-1B pundits often like to say that they pay their H-1Bs
very good. While that may be true in general terms, it's not true in relative
to the prevailing salaries paid by career category. In this case physicians
such as primary care doctors, neurologist, and hematologist/oncologists were
being paid about $120,000. That's a lot of money compared to a Walmart
employee, but it's at least $50,000 below what a comparable American would be
paid. Actually, I thought doctors of this type would be paid far more, which
just goes to prove how the salaries of all professionals spirals downward as
the number of foreign workers spirals upwards.

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