U.S. Department of Labor Office of Administrative Law Judges
90 Seventh Street, Suite 4-800
San Francisco, CA 94103-1516
415) 625-2201 (FAX)
Issue Date: 28 June 2007
Case No.: 2006-LCA-00029
In the Matter of:
Administrator,Wage and Hour Division,
Avenue Dental Care aka
Mahadeep Virk, DDS, aka
Mahadeep Virk DMD Puyallup P.S.,
Jeannie Gorman, Attorney
For the Department of Labor
Chase C Alvord, Attorney
P. Robert Thompson, Attorney
For Respondent, Avenue Dental Care aka Mahadeep Virk, DDS, aka Mahadeep Virk DMD
Russell D. Pulver
Administrative Law Judge
DECISION & ORDER
This matter arises under the Immigration and Nationality Act of 1990 (the
“INA” or the “Act”), 8 U.S.C. §§ 1101(a)(15)(h)(i)(b),
1182(n), and 1184(c), as amended by the American Competitiveness and Workforce
Improvement Act of 1998 (the “ACWIA”), as well as the implementing
regulations found at 20 C.F.R. Part 655, Subparts H and I. The Act allows
employers inside the United States to employ non-immigrant workers in
“specialty occupations” within the United States through the
use of H-1B visas. Specialty occupations are those that involve the application
of specialized knowledge as well as a bachelor’s degree or higher.
8 U.S.C. § 1184(i)(1). This case arises out of the employment of
Oshmi Dutta, D.D.S., under this program concerning a determination by
the Administrator of the Wage and Hour Division ("the Administrator")
of six alleged violations under the Act by Respondent Avenue Dental Care,
aka Mahadeep Virk, DDS, aka Mahadeep Virk DMD Puyallup P.S. ("Respondent").
Roberta L. Sondgeroth, a Wage and Hour Investigator for the United States
Department of Labor (“DOL”), investigated Respondent’s
employment practices after receiving complaints that Respondent was violating
the rules surrounding employment under the H-1B program. Following her
investigation, the Administrator issued a determination letter to Respondent,
dated August 8, 2006, which concluded that Respondent 1) had failed to
pay required wages to Dr. Dutta; 2) had failed to provide notice of the
filing of Dr. Dutta’s Labor Condition Application (“LCA”);
3) had accepted the filing fee from Dr. Dutta for his first LCA; 4) had
failed to make the LCA and supporting documentation available for public
examination at Respondent’s principal place of business or at the
place of Dr. Dutta’s employment; 5) had failed to maintain a public
access file at Dr. Dutta’s location; and 6) had failed to cooperate
in the investigation. The determination letter further assessed Respondent
civil money penalties of $3,750.00 for failure to comply with the wage
requirements and $500.00 for failure to cooperate in the investigation.
Additionally, the determination letter found that Respondent had committed
a willful violation of the Act requiring debarment of Respondent from
hiring further alien employees pursuant to the Act.
Respondent requested a hearing on this determination on August 22, 2006.
A hearing was held on January 8-10, 2007 in Seattle, Washington at which
all parties were given an opportunity to be heard. Respondent was represented
by Chase C. Alford, Esq. of Tously Brian Stephens, PLLC in Seattle, Washington
and by P. Robert Thompson, Esq. of Thompson Immigration Associates in
Bellevue, Washington. The Administrator was represented by Jeannie Gorman,
Esq. from the Seattle, Washington branch of the Office of the Solicitor,
U.S. Department of Labor. At the hearing, testimony was received from
Roberta L. Sondgeroth, Mark Wojahn, and Oshmi Dutta, D.D.S. for the Administrator
and from Mahadeep Virk, D.D.S., Erica Young, Paul Robert Thompson, Zehara
Randhawa, and Rodger Kohn for Respondent. Hearing Transcript (“Tr.”)
at 37, 224, 253, 454, 503, 561, 575 & 590. Additionally, deposition
testimony of Varun Sharma, DMD, was accepted into evidence, without objection,
by Respondent in view of his unavailability at the hearing as Respondent’s
Exhibit KKK. Tr. at 558-560. Administrative Law Judge Exhibits (“ALJ
Ex”) 1-7 were received into evidence without objection. Tr. at 8.
The Administrator’s Exhibits (“AX”) 1-15, 17-36, and
39-45 were received into evidence without objection. Tr. at 15 & 560.
Additionally, AX 37 and 38 were admitted into evidence over objections
by Respondent although I permitted Respondent to call Paul Robert Thompson
to testify with regard to his preparation of these documents. Tr. at 13-15.
AX 16 was excluded from evidence based on Respondent’s objection
that the document pertained solely to unsuccessful settlement negotiations
between the parties. Tr. at 10-13. Respondent’s Exhibits (“RX”) A-C, ET,
CC-EE, GG, II, KK, PP-AAA, and DDD-KKK were admitted into evidence without
objection. Tr. at 26, 357, 386-387, 396-397, 411-412, 535, and 560. RX
D, U, V, W, X, Y, Z, AA, BB, FF, HH, JJ, and LL-OO were admitted into
evidence over the Administrator’s objection as to relevance. Tr.
at 21-26. RX BBB and CCC were also received into evidence over the Administrator’s
objection. Tr. at 200-203. Following the hearing, post hearing briefs
were submitted by Respondent on February 26, 2007, and by the Administrator
on March 5, 2007.
Contentions of the Parties
The Administrator, the Prosecuting Party in this matter, contends that
Respondent owes back wages in the amount of $304,813.86 up to January
8, 2007, the date of the hearing, and continuing thereafter until the
expiration of the LCA to H-1B non-immigrant Oshmi Dutta. The Administrator
contends that Respondent failed to pay wages in violation of 8 U.S.C.
§ 1182(n)(1)(A) and 20 C.F.R. § 655.731(c). Further, the Administrator
argues that Mahadeep Virk is individually liable for violations under
the Act because he is the “employer” under the Act or, alternatively,
is no more than an “alter ego” for Avenue Dental Care and
Mahadeep Virk DMD Puyallup P.S. Additionally, the Administrator contends
that Respondent owes the civil monetary penalties sought for failure to
pay the proper wages and for failure to cooperate in the investigation
and should be debarred from participating in the H-1B program for two
years as a result of the willful nature of these violations.
Respondent contends that the Administrator’s claim should be denied
because Dr. Dutta voluntarily terminated his employment with Respondent
and thus has not been “employed” by Respondent since July
of 2003. Alternatively, Respondent argues that if employment is established,
the period of owed back wages is less than that determined by the Administrator
and that credit should be given for sums received by Dr. Dutta as disbursements
from the two Oregon LLCs which he and Dr. Virk owned equally. Further,
Respondent contends that Mahadeep Virk should not be held personally liable
for any violation. Respondent contends that it does not owe reimbursement
to Dr. Dutta for payment of his LCA filing fees in the amount of $2,130.00
as this claim is time-barred. Although Respondent denies violations 4-6
of the findings letter, Respondent agrees to issuance of a compliance
order with respect to these record keeping requirements. Respondent claims
that it cooperated in the investigation and denies that it should be assessed
civil money penalties. Finally, Respondent denies that any violations
were willful and thus contests the applicability of the two year debarment
sought by the Administrator.
The issues presented in this case for resolution are:
1. Is Respondent liable for $$304,813.86 in back wages to Dr. Oshmi Dutta
in violation of 8 U.S.C. § 1182(n)(1)(A) and 20 C.F.R. § 655.731(c)?
2. If Avenue Dental Care and/or Mahadeep Virk DMD Puyallup P.S. are found
liable for back wages, should Mahadeep Virk be held individually liable
for Avenue Dental Care/Mahadeep Virk DMD Puyallup P.S.’s violations
of the Act?
3. Is Respondent liable for reimbursement of LCA filing fees to Oshmi Dutta?
4. Should civil monetary penalties be assessed against Respondent?
5. Should Respondent be debarred?
FINDINGS OF FACT AND CONCLUSIONS OF LAW
A. FACTUAL BACKGROUND
1. Testimony of Roberta Lynn Sondgeroth
Sondgeroth is a Wage and Hour Specialist (Investigator) and has been employed
with DOL since 1990. Tr. at 37-38. She has investigated 10 or 11 prior
cases involving H-1B visas. Tr. at 41. Her supervisor is Assistant District
Director Mark Wojahn. Tr. at 44. Sondgeroth stated that the investigation
against Avenue Dental Care and Dr. Virk was begun in Portland, Oregon
when Dr. Oshmi Dutta filed a complaint in September or October of 2005.
The investigation was then transferred to Seattle where Dr. Virk was located.
Tr. at 44-46, 119. During this investigation, Sondgeroth met initially
with Dr. Sharma of Avenue Dental Care Puyallup’s clinic together
with company attorney P. Robert Thompson. Sondgeroth requested to see
records and asked that they be made available when they were not immediately
produced at the meeting. She thereafter presented her findings by telephone
to Thompson. Tr. at 47; AX 2. Sondgeroth testified that the only difference
in this investigation from others she has conducted was that most employers
had their records readily available at the initial meeting and Avenue
Dental Care did not. Tr. at 48. During the initial April 12, 2006 meeting
with Dr. Sharma and Thompson, Dr. Virk was contacted on his cell phone
but reception was poor. Sondgeroth stated she was promised the requested
records within the week. Tr. at 51-52.
Sondgeroth stated the investigation dealt with two LCAs issued to Dr.
Dutta running from June 1, 2002 to May 31, 2005, and from June 12, 2005
to June 11, 2008, respectively. She also noted that Avenue Dental Care
had several other H-1B employees at several locations. Tr. At 52-56; RX
EE. Sondgoreth computed back wages she found due to Dr. Dutta by Respondent
as part of her investigation due to the failure to pay the prevailing
wage set forth in the LCA. Tr. at 58. Sondgoreth understood that at some
point Dr. Virk had refused to W-2 wages to Dr. Dutta and that Dr. Dutta
had then made disbursements to himself from the two Oregon clinics that
he and Dr. Virk had set up. However, Sondgoreth testified that she did
not consider these disbursements to be wages as there were no deductions
for payroll taxes taken out and the disbursements were not reported as
wages on a W-2 form. Tr. at 60-61. Based on the prevailing wage set forth
in the LCAs and the W-2’s furnished, Sondgoreth calculated that
Dr. Dutta was due back wages of $94,000.00 in 2003; $43,061.82 in 2004;
$50,499.12 in 2005; $115,000.00 in 2006; and $2,076.92 for the first week
of January 2007, up to the date of the hearing. Tr. at 64- 74; AX 44.
Dr. Dutta received some payments in 2003 apparently as some type of contract
laborer but was never given an IRS form 1099. Tr. at 197; RX I. Sondgoreth
stated that had the employer chosen to pay the appropriate employment
taxes on the 2005 disbursements made to Dr. Dutta, then there would be
no back wages owed for 2005. Tr. at 70. Sondgoreth testified that she
concluded Respondent’s failure to pay Dr. Dutta wages as required
by the LCAs was willful since Respondent had other H-1B employees who
were correctly paid and furthermore Respondent refused to pay the back
wages to Dr. Dutta even after the violation was pointed out by her investigation.
Tr. at 75, 78. Sondgoreth also noted that the fact that Respondent paid
the appropriate wage under the first LCA then stopped paying the appropriate
wage indicated that this violation was willful. Tr. at 76. She stated
that Respondent had no prior history of violations and that these violations
apparently pertained only to one of several H-1B employees employed by
Respondent. Tr. at 77.
Sondgoreth further testified that Respondent rationalized its failure
to pay the required wage to Dr. Dutta by claiming that Dr. Dutta was no
longer an employee. Tr. at 81-83. Sondgoreth stated that such an attempt
by Respondent to negate the LCA requirements by a private agreement between
Drs. Dutta and Virk indicated to her that Respondent had willfully violated
the law. Tr. at 84-88. Sondgoreth thus recommended debarment since Respondent
had failed to come into compliance despite her investigation and had refused
to recognize the employment status of Dr. Dutta. Tr. at 87.
Sondgoreth testified that the employer is required to post its intent
to hire an H-1B employee. Tr. at 89. In this case, Sondgoreth stated that
Respondent furnished her a “reconstructed” copy of documents
to show that the posting had been done. Tr. at 89-90. However, Sondgoreth
determined that this “reconstructed” file was insufficient
to show that the posting had been properly done in connection with Dr.
Dutta’s first LCA since Dr. Dutta told her that the posting had
not been done and the “reconstructed” document signed by Dr.
Sharma was dated 30 days after the posting was required to be done rather
than the 10 days prior to the filing of the LCA as is required. Tr. at
91-93, 189-192; AX 36.
Sondgoreth stated that Dr. Dutta was found to have paid his 2002 LCA filing
fee which is prohibited by law although attorney Thompson stated to her
that this violation was a common practice among H-1B employers. Tr. at
95-96. With respect to the 2005 LCA filing fee, this was paid by a check
drawn on the Clackamas, Oregon LLC and was signed by Dr. Dutta. Thus,
Sondgoreth did not view this to be a violation as the payment was not
made by the employee. Tr. at 170.
A public examination file is required to be kept by H-1B employers. Tr.
at 101. Sondgoreth testified that Respondent did not produce all of the
documents required to be kept in the public examination file including
particularly payroll records for Dr. Dutta, notice of change in corporate
liability reflecting Dr. Dutta’s change to the Oregon locations,
and documentation showing the required posting of the notice of filing
for Dr. Dutta’s LCA. Tr. at 102, 108, 194- 195. Sondgoreth recommended
that Respondent be assessed a civil money penalty for failure to cooperate
in the investigation since she had requested records on several occasions
yet was never furnished complete payroll records for Dr. Dutta. Tr. at
110-112. Sondgoreth stated that she only received summaries of Dr. Dutta’s
earnings and not actual payroll records. Tr. at 152; AX 35; RX G.
Sondgoreth stated that there were a number of corporate entities which
all operated under the name of Avenue Dental Care, each of which was owned,
at least in part, by Dr. Virk. Tr. at 106-107. Sondgoreth considered Avenue
Dental Care and all of its locations as a single business enterprise in
this case due to Dr. Virk’s common ownership and the operation of
all the clinics under the name of Avenue Dental Care. Tr. at 137-140;
AX 9; AX 14. Dr. Dutta told Sondgoreth that Dr. Virk essentially forced
Dr. Dutta to move to the Oregon clinics by telling him that he was no
longer needed at the Puyallup location and would have to move to Oregon
if he wished to continue working with Dr. Virk. Tr. at 122, 180-181. Dr.
Dutta is listed as a member on the articles of incorporation for the two
Oregon LLCs and he told Sondgoreth that he was a partner in these two
clinics. Tr. at 123-125, 157; RX U; RX Y. Dr. Dutta claimed that Dr. Virk
sometimes took money from the two Oregon LLCs without leaving enough in
their accounts to make payroll and other expenses. Tr. at 157. Dr. Dutta
received two payroll checks from the Puyallup clinic in 2004 but stated
that he was required to pay these amounts back. Tr. at 164. Although Respondent
claimed that the employer-employee relationship with Dr. Dutta had terminated
with his move to Oregon, Sondgoreth found that Respondent was still Dr.
Dutta’s employee as Respondent had not terminated the LCA which
he had signed for Dr. Dutta. Tr. at 174-175.
2. Testimony of Mark Wojahn
Wojahn is the Assistant District Director of the Wage & Hour Division
of DOL and has been employed by DOL since 1974. Tr. at 225-226. He drafted
the findings letter which was issued to Respondent in this case based
on a cursory review of the investigative report of Sondgeroth. Ms. Hart
was the primary Seattle representative on the review committee who considered
the charges in this matter and authorized the issuance of the findings
letter. Tr. at 230, 250; AX 1. Wojahn testified that he understood that
the findings were issued on the basis that Dr. Dutta should have worked
under the existing LCA at the Puyallup office or else a new LCA should
have been applied for under the name of the Oregon dental clinic or clinics.
Tr. at 247.
3. Testimony of Oshmi Dutta
Dr. Dutta testified that he began work for Avenue Dental Care in September
of 2001 and that he is now working as a dentist at Avenue Dental Care
clinics in Clackamas and Gresham, Oregon. Tr. at 254. He stated that he
initially worked at Avenue Dental Care (previously known as Affordable
Dental Care) during his Optional Practical Training (“OPT”)
as an extension to his student visa and prior to employment as an H-1B
employee. Tr. at 255. Dr. Dutta testified that Dr. Virk told him to pay
his first LCA filing fee of $2,130.00 as well as a fee of $650.00 directly
to attorney Thompson for preparing the LCA. Tr. at 257-258; AX 34.
Dr. Dutta stated that he had first known Dr. Virk’s brother in India
through whom he initially met Dr. Virk in 1998. Tr. at 259. They first
discussed employment in June 2001 leading to Dr. Dutta’s employment
under OPT for Dr. Virk at a daily wage of $400.00 in the Everett and Puyallup
clinics. Tr. at 261-262. Dr. Dutta's wage was raised to $475.00 daily
in June of 2002. Tr. at 263. Dr. Dutta referred to the Puyallup office
as the main office and stated that he was last at the Puyallup office
in February of 2005 for a meeting with Dr. Virk. Tr. at 265-266, 378.
Dr. Dutta testified that after his OPT he received his H-1B visa in June
of 2002 while he was working at the main office in Puyallup. Dr. Dutta
was paid the LCA prevailing wage rate of $108,000 through 2002 as well
as the first four or five months of 2003. He stated that thereafter he
only received a few regular payments in 2004 and for February through
April of 2005. Tr. at 275-276. Dr. Dutta admitted that he was paid $137,000
in 2002. Tr. at 304. Dr. Dutta stated that he never saw any H-1B notices
posted at the Puyallup office. Tr. at 267-272.
Dr. Dutta testified that at the end of 2002, Dr. Virk expanded Avenue
Dental Care to the two Oregon clinics at which time Dr. Dutta felt that
he no longer had a job in Puyallup. Tr. at 274-275. Dr. Dutta stated that
he incurred expenses personally in setting up the Oregon clinics as well
as for some operating expenses for which some of the moneys paid to Dr.
Dutta out of the Oregon clinics’ accounts were meant to reimburse
him. Tr. at 278-279. Dr. Dutta stated that he asked Dr. Virk in February
of 2005 to be paid timely and at the proper rate which he said that Dr.
Virk promised to do but did not do so. Tr. at 282. Dr. Dutta was absent
from work from October 9 through October 24, 2004 for a personal trip
to Dubai and India. Tr. at 283. He also was absent from December 24, 2004
to January 27, 2005 when he was married in India and also traveled to
Dubai. Dr. Virk attended Dr. Dutta's wedding in India. Tr. at 284.
Dr. Dutta also was absent from work from May 17, 2005 through June 13,
2005 when he attended his sister’s wedding in India. Tr. at 285.
Dr. Dutta hired attorney Andrea Bartoloni in Oregon to prepare his second
LCA issuing funds from the Oregon clinics to pay him. Tr. at 289-290,
394-396. Bartoloni sent the prepared LCA to Dr. Virk, who was attending
Orthodontic training in Boston, who signed and returned the second LCA
to Bartoloni for filing. Tr. at 295-296. Dr. Dutta testified that there
was no public access file regarding his H-1B employment kept in the Clackamas,
Oregon office. Tr. at 299. Dr. Dutta stated that he gave some deposit
slips for his personal account to the company bookkeeper so she could
deposit checks for him. Tr. at 325.
Dr. Dutta testified that although he held a 50% interest along with Dr.
Virk in the two Oregon clinics, his agreement states that his shares would
not mature until he had worked with Dr. Virk for five years. Tr. at 339,
341; RX BB at para 9.3.5; RX NN at para 9.3.5. Dr. Dutta stated that he
had signed several different employment agreements for each of the two
Oregon LLCs but has never seen a fully executed copy of any of these agreements
that had Dr. Virk’s signature on it. Tr. at 344, 346, 363; RX FFF.
Dr. Dutta testified that attorney Thompson had advised Dr. Dutta to file
a new LCA in connection with the move to Oregon. Tr. at 347-348. Dr. Dutta
stated that he told Dr. Virk to file such a new LCA. Tr. at 349-350. Dr.
Dutta stated that later Dr. Dutta asked Thompson to hold off on changing
the LCA as Dr. Dutta was not sure he would be staying in Oregon due to
his conflicts with Dr. Virk over cash flow and management of the Oregon
clinics. Tr. at 351-352, 355, 373. Dr. Dutta conceded that he was the
partner in charge of daily operations at both Oregon clinics. Tr. at 361.
In 2006, Dr. Dutta received distributions of over $46,000.00 from the
Gresham clinic and
over $179,000.00 from the Clackamas clinic. Tr. at 364. The bookkeepers
for the company, Fruci & Associates, wrote most of the checks for
the Oregon clinics. Tr. at 365. Dr. Dutta testified that he had two paychecks
issued to him at the end of 2004 by the Puyallup clinic, and due to cash
flow issues with the Oregon clinics he was required to reimburse these
two checks. Tr. at 384. During the course of this investigation, Dr. Dutta
has offered to sell his interest in the two Oregon clinics to Dr. Virk
at fair market value, but has received no response. Tr. at 411, 426; RX
HH. Two other dentists working with Dr. Virk, Dr. Nigham and Dr. Han,
are also involved in disputes with Dr. Virk over their business relationships.
Tr. at 413-415; RX OO; RX PP. Dr. Dutta is in charge of hiring and firing
office staff as well as any associate dentists at the two Oregon clinics.
The office staffs at the two Oregon clinics collect accounts receivable
and coordinate with the Avenue Dental Care bookkeepers (Fruci & Associates)
to get the bills for the clinics paid. Tr. at 429-430.
4. Testimony of Mahadeep Virk
Dr. Virk graduated from University of Pennsylvania dental school in 1998.
He then became an associate of Dr. Stephen Paige at Affordable Dental
Care in Bellevue, Washington, and became Dr. Paige’s partner in
that clinic within two months. Tr. at 454. They then opened three other
Affordable Dental Care offices in Puyallup and Everett, Washington. Tr.
at 455. In 2001, Dr. Virk bought total ownership of the Everett and Puyallup
offices from Dr. Paige and sold his interest in the Everett office back
to Dr. Paige. At the suggestion of his creative manager, Dr. Virk changed
the operating name of his clinics from Affordable Dental Care to Avenue
Dental Care. Dr. Virk stated that he opened another clinic in Bremerton,
Washington in 2001 and then opened locations in Edmonds, Washington and
Clackamas and Gresham, Oregon in 2003. Tr. at 455-456. Dr. Virk presently
owns all of the Puyallup clinic as well as all of the Bremerton clinic
as he recently bought the shares of Dr. Himashu Nigham, his former partner
in the Bremerton clinic. Tr. at 456. Dr. Virk also owns part of the marketing
company which scouts for new business locations for Avenue Dental Clinics.
Tr. at 458. Dr. Nigham was a classmate of Dr. Virk at the University of
Pennsylvania dental school. Dr. Nigham initially worked for Dr. Virk at
the Puyallup clinic until he moved over to the Bremerton clinic as the
business in Bremerton built up in 2002. Tr. at 457-459. Dr. Han was a
partner in the Everett clinic corporation until late 2006. Tr. at 462.
Bremerton and Puyallup are separate corporations with separate tax id
numbers which file separate tax returns. Tr. at 460. The clinics at Everett,
Edmonds, Bremerton and Puyallup are all organized and operated as separate
corporations. Tr. at 463-464. The Clackamas and Gresham clinics are separate
corporations under Oregon laws which were set up in 2003 with Drs. Virk
and Dutta each owning 50%. Tr. at 466. Dr. Virk stated that both Affordable
Dental Care and Avenue Dental Care were dba’s and have no legal
identity. Tr. at 557.
Dr. Virk lived in Boston, Massachusetts from August 2003 through June
2006 as he took orthodontic training at Boston University. Thus, Dr. Dutta
was responsible for running the two Oregon clinics. Tr. at 467. Dr. Virk
testified that all of the Washington clinics are set up as subchapter
S corporations while the two Oregon clinics are LLCs. Dr. Virk stated
that Dr. Dutta told Dr. Virk that attorney Thompson had advised they be
LLCs and not subchapter S corporations due to Dr. Dutta’s H-1B status.
Tr. at 468.
Dr. Virk stated that he met Dr. Dutta through Dr. Virk’s brother
and they became close friends. Tr. at 469. Dr. Virk’s brother, Navdeep
Virk, is also a dentist and operates three dental clinics in Spokane and
Kennewick, Washington under the name of Avenue Dental Care although Respondent
has no ownership in any of these three clinics. Tr. at 470. Dr. Virk testified
that Dr. Dutta suggested the idea of his working for Dr. Virk under the
H-1B program as Dr. Virk was previously unaware of the program. Tr. at
471. Dr. Virk stated that he told Dr. Dutta to hire an attorney for the
first LCA. Tr. at 552. Thereafter, Dr. Virk brought in Dr. Varun Sharma
and three other dentists at his clinics under the H-1B program. Tr. at
472-473. Dr. Virk testified that none of these other H-1B dentists had
made any complaint to him regarding wages. Tr. at 473- 474. Dr. Virk stated
that when he learned of the DOL investigation, he advised calling attorney
Thompson as he was the company’s advisor on H-1B matters. Tr. at 474.
Dr. Virk stated that Dr. Dutta worked for the Puyallup clinic until June
of 2003 when Dr. Dutta left for Oregon. Tr. at 475. Dr. Virk stated that
Dr. Dutta was aggressive in seeking ways to increase his income but wanted
to live in a metropolitan area. The marketing company, Pacific Dental
Alliance, advised that the Seattle area was not a good choice for opening
additional clinics but that the Portland, Oregon area was a good market
for opening two new clinics. Dr. Virk testified that Dr. Dutta was keenly
interested in the two new Oregon offices as Dr. Dutta was aware that Dr.
Virk’s partners in other newer locations, Drs. Han and Nigham, were
making substantial incomes off those clinics. Tr. at 475-476. Dr. Virk
stated that Dr. Dutta was so anxious to open the Oregon clinics that Dr.
Dutta contacted leasing agents in Oregon to look for potential clinic
space to lease. Tr. at 477-478.
Dr. Virk testified that he told Dr. Dutta to talk to attorney Thompson
about his H-1B status and the Oregon clinics. Dr. Virk stated that he
offered to keep all of the Oregon clinics’ shares in Dr. Virk’s
name and then transfer them to Dr. Dutta when he was able to obtain his
green card. Dr. Virk understood from Dr. Dutta that as long as the Oregon
corporations were LLCs, there was no problem with Dr. Dutta’s H-1B
status. Tr. at 479-481. Dr. Virk denied that he ever put any pressure
on Dr. Dutta to move to Oregon and specifically denied that Dr. Dutta
had told him that attorney Thompson had advised that a new LCA be obtained
for Oregon. Tr. at 481-483.
Dr. Virk testified that revenues from the Oregon clinics were not good
for the first six months of operation as they were getting established.
Tr. at 484. Dr. Virk stated that he worked a few days in the Oregon clinics
before he left for school in Boston leaving Dr. Dutta to run the clinics.
Tr. at 485. Dr. Virk testified that cash flow from the Oregon clinics
was poor in 2004 as well and loans from the Puyallup clinic to the two
Oregon clinics had to be made to meet expenses. Tr. at 486; RX K.
Dr. Virk stated that he first learned of a complaint from Dr. Dutta regarding
his pay when he got a letter from Dr. Dutta’s attorney in the summer
of 2005 alleging that Dr. Virk was in violation for not properly paying
Dr. Dutta. Tr. at 487. Dr. Virk stated that Dr. Dutta was paid as a contract
laborer in 2003 because Dr. Dutta told Dr. Virk’s wife, who was
then doing the bookkeeping, that such payments would help Dr. Dutta on
taxes. Tr. at 488. Dr. Virk testified that he did not take any distributions
from the Oregon clinics in 2006 or 2007 and does not believe that he has
taken out more than $10,000.00 since the Oregon clinics started. Tr. at
489. Further, Dr. Virk stated that he did not believe that any of the
Puyallup clinic loans to the Oregon clinics have been paid back. Tr. at
490. Dr. Virk stated that Dr. Dutta wrote checks on the Oregon clinics’
accounts which sometimes resulted in the accounts being overdrawn. Dr.
Virk stated the accountants complained to Dr. Dutta about his writing
checks but could not stop it as Dr. Dutta is an equal partner in the clinics
with Dr. Virk. Tr. at 491. Dr. Virk stated that all of the office staff
and dentist associates were hired by Dr. Dutta for the two Oregon clinics.
Tr. at 492. Dr. Virk stated that Dr. Dutta in his offer to sell Dr. Virk
his shares in the Oregon clinics in the summer of 2005 asked for a salary
in the alternative. Tr. at 494.
Dr. Virk admitted that he signed both of Dr. Dutta’s LCAs as employer
but doesn’t recall whether the LCAs were posted as required. He
stated that he assumed Dr. Dutta posted the LCAs. Tr. at 536-537. Dr.
Virk testified that he received the second LCA when he was at a hospital
clinic in Boston and thus signed it and returned it immediately without
reading it. Dr. Virk stated that when he actually read the LCA later that
evening, he noticed that the Puyallup clinic was still listed as the employer.
Dr. Virk testified that he called Dr. Dutta who responded that he would
take care of getting a new application to correct the employer listed.
Dr. Virk stated that he assumed Dr. Dutta had taken care of this matter.
Dr. Virk stated that he never spoke with attorney Bartoloni. Tr. at 521-525.
Dr. Virk admitted that he did not know the specific record keeping requirements
for an LCA in 2002. Tr. at 551. Dr. Virk stated that he has been unable
to fire Dr. Dutta since they each own 50% of the two Oregon clinics. Tr.
at 527. Dr. Virk testified that he had also been involved in a dental
software venture with Dr. Dutta but after investing $140,000.00, he had
not seen any results. Tr. at 528-529.
When Dr. Dutta complained through his attorney in the summer of 2005,
Dr. Virk hired another immigration attorney who gave conflicting advice
from that of attorney Thompson in that the new attorney opined that an
H-1B worker could also be an owner. Tr. at 531-532; RX JJJ. Dr. Virk stated
that he was aware of only one version of an employment agreement for Dr.
Dutta with the Oregon clinics which Dr. Virk assumes is in effect. Tr.
at 534; RX FFF. Dr. Virk testified that he did not pay Dr. Dutta after
May of 2005 since he felt Dr. Dutta was no longer an employee but rather
a partner in the two Oregon clinics. Tr. at 549. Dr. Virk never attempted
to withdraw Dr. Dutta’s LCA as he understood that an LCA could not
be withdrawn while an investigation was ongoing. Tr. at 551-552.
5. Testimony of Erica Young
Young is a CPA tax accountant with Fruci & Associates of Spokane,
Washington. She testified that all nine Avenue Dental Care clinics have
common ownership or family relationship. Tr. at 503. Fruci & Associates
took over the accounting for Avenue Dental Care clinics in March of 2005
and has handled each of the clinics as separate corporate entities with
separate accounting books kept for each. Tr. at 504-505. Young testified
that Dr. Dutta asked her in April of 2005 to prepare a letter in connection
with his immigration papers which she then faxed to attorney Bartoloni.
Tr. at 505-506; RX HHH. Thereafter, Dr. Dutta called Young back and asked
that she change the letter to delete any mention of the names and Employer
Identification Numbers of the two Oregon clinics leaving only the Puyallup
clinic Employer Identification Number on the letter. Young changed the
letter and faxed it again to attorney Bartoloni. Tr. at 507-508; RX III.
Young’s firm prepared RX F which shows all payments made to Dr.
Dutta. Tr. at 509. Young testified that under IRS rules, the two Oregon
clinics were to be treated as partnerships since there were only two owners
of each LLC, Drs. Virk and Dutta. Tr. at 510. Thus, Young stated that
neither partner in the two Oregon LLCs could be paid as employees under
these IRS rules but rather required that they be paid any “guaranteed
payments” with no deductions for taxes, Social Security, etc. to
be reported to the IRS under the partnership K-1 rather than an employee
W-2 form. Tr. at 511. Young testified that Dr. Dutta was paid pursuant
to K-1’s by the two Oregon entities but could not recall any payments
being made by the two Oregon clinics to Dr. Virk. Tr. at 512-513.
6. Testimony of Paul Robert Thompson
Thompson met with Dr. Sharma and Sondgeroth on April 12, 2006 as counsel
for Avenue Dental Care. Tr. at 561. Thompson testified that his firm prepares
public information files whenever the firm processes an H-1B application
and sends the file to the employer. Tr. at 562. The public information
file for Dr. Dutta’s application could not be located by Avenue
Dental Care so Thompson’s office reconstructed the file from its
own copies of the documents. RX RR. Thompson testified that he never saw
Dr. Dutta’s public information file at Avenue Dental Care’s
offices and has no idea when or how it was misplaced. Tr. at 562, 572-573.
Thompson stated that he did furnish copies of his reconstructed public
information file on Dr. Dutta to Sondgeroth on the day following their
meeting. Tr. at 563; RX AAA. Thompson testified that Dr. Dutta asked Thompson
in late 2003 or 2004 whether Dr. Dutta could own the company employing
him under H-1B rules to which Thompson responded that in Thompson’s
opinion he could not be an owner of the employing entity under H-1B rules.
Tr. at 564-565. Thompson further stated that he advised Dr. Dutta by e-mails
in July and August of 2003 that Dr. Dutta needed to amend his LCA if he
was changing his work location from Puyallup, Washington to the Oregon
clinics. Tr. at 566-567. Thompson stated that Dr. Dutta e-mailed him in
January of 2004 indicating that Dr. Dutta wanted to keep the Puyallup
entity as the H-1B employer since Dr. Dutta stated that he spent some
of his time working at the Puyallup clinic. Tr. at 568; RX JJ.
7. Testimony of Zehara Randhawa
Randhawa was married to Dr. Virk from 1994 through December of 2004, and
acted as bookkeeper for the Avenue Dental Care clinics. Tr. at 575-576.
Randhawa issued Dr. Dutta two payroll checks from the Puyallup clinic
account in late 2004 as Dr. Dutta indicated that he needed these payroll
checks for his prospective wife’s visa with their marriage taking
place in December of 2004. Randhawa then asked Dr. Dutta to repay the
two checks shortly thereafter as he was not a Puyallup employee. Tr. at
580-582. She testified that Dr. Dutta was keenly interested in the business
opportunity presented by opening up the two Oregon clinics with Dr. Virk.
Tr. at 583-584. Randhawa testified that she suggested to Dr. Dutta that
he deposit only every other distribution check while working in Oregon
so that she could deposit or save for him half of his money as she stated
he agreed with her that such savings were a good idea. Tr. at 586. Randhawa
stated that dentists were commonly paid as contract labor and issued IRS
form 1099’s rather than W-2’s because dentists frequently
changed clinics, in her experience. Tr. at 586-589.
8. Testimony of Rodger Kohn
Kohn is a Seattle attorney retained to act as business counsel to Dr.
Virk and the various clinics in which Dr. Virk has an interest. Tr. at
591. Kohn testified that he met and spoke with Drs. Virk and Dutta when
setting up the two Oregon clinics. He testified that he suggested setting
the two Oregon entities up as LLCs and not subchapter S corporations as
the other clinics were because Kohn knew that subchapter S rules require
all owners to be U.S. citizens and Dr. Dutta was not a U.S. citizen. Kohn
denied talking to Dr. Dutta about any immigration issues in connection
with setting up the Oregon clinics as Kohn does not deal in immigration
law matters. Tr. at 592-594. Kohn stated that he understood that there
was an operating agreement for the Oregon clinics signed by both parties
although he could not recall ever seeing a copy with Dr. Virk’s
signature. Tr. at 596-597. Kohn stated that he may have drawn up several
drafts of the agreement but there would have been only one final version
of the agreement which he believed was in effect. Tr. at 598-599. Kohn
testified that he had most of his contact with Dr. Dutta regarding the
Oregon clinics once they were in operation although he sometimes spoke
with Dr. Virk about issues at the clinics. Tr. at 614-615.
9. Deposition Testimony of Varun Sharma
Dr. Sharma is currently employed as a dentist at the Avenue Dental Care
office in Puyallup, Washington where he has worked since August of 2002.
RX KKK at 6, 14. Dr. Sharma holds a DMD, doctorate of dental medicine
which he received from Boston University in 2002. RX KKK at 7. Dr. Sharma
received education in dentistry in India and practiced dentistry and oral
surgery in India for three years prior to applying to Boston University.
RX KKK at 8-9. In view of his training in India, Dr. Sharma completed
an expedited two year course of study at Boston University rather than
the usual four year program required for graduation. RX KKK at 20. Dr.
Sharma initially met Dr. Virk while attending dental school in India.
RX KKK at 15-16. Dr. Sharma first worked at Avenue Dental Care in Puyallup
under the Optional Training Program as an extension of his student visa
at $400 per day. RX KKK at 24-25. Dr. Sharma stated that he applied for
an H-1B visa through Avenue Dental in June of 2003. RX KKK at 26.
Dr. Sharma testified that although he worked primarily at the Puyallup
clinic, he did work briefly at the Bremerton clinic as well as a few days
in the Spokane clinic owned by Dr. Virk’s brother. RX KKK at 30.
Dr. Sharma stated that his H-1B visa was extended for three years and
will expire in 2009. RX KKK at 32. Dr. Sharma currently receives $700.00
per day plus bonuses which reached a total of almost $200,000.00 for 2005,
as reported on his W-2. RX KKK at 32- 33. Dr. Sharma testified that the
Puyallup clinic has an office manager but Dr. Sharma has helped oversee
the work of the office manager, particularly during the three years that
Dr. Virk spent in orthodontic training in Boston; he stated he was acting
simply as a friend to Dr. Virk. RX KKK at 37, 42-44. Dr. Sharma stated
that he receives two weeks of paid vacation per year as well as paid federal
holidays working for Avenue Dental Care. RX KKK at 49-51.
Dr. Sharma testified that he paid about $1,500 to attorney Thompson to
prepare his H-1B application and another $1,500 for the filing fee and
that he was reimbursed by Avenue Dental Care for the filing fee portion,
and that Dr. Sharma’s wife, Arpita Sharma, who is also a dentist,
paid the same amount as fees with similar reimbursement from Avenue Dental
for the filing fees. RX KKK at 53-54, 81. Dr. Sharma testified that he
did not recall if a notice was posted for his initial LCA and that he
did not think one was posted for his second LCA. RX KKK at 59. Dr. Sharma
recalled some type of document being posted in the Puyallup clinic for
Dr. Dutta but could not recall any such postings for the other H-1B workers
at Avenue Dental. RX KKK at 85- 86.
Dr. Sharma testified that he understood that there were problems in the
business relationship between Drs. Dutta and Virk, which he believed arose
out of the two Oregon clinics not producing the revenues that were expected.
RX KKK at 65-66. Dr. Sharma stated that he was told by attorney Thompson
that Thompson was of the opinion that an H-1B worker could not be a partner
in his employing firm. Dr. Sharma testified that he researched this issue
on the internet and came to the conclusion that an H-1B employee could
not be employed by a firm in which the H-1B employee owns 50%. RX KKK at 67.
B. STATUTORY FRAMEWORK
The H-1B visa program permits employers to temporarily employ non-immigrants
to fill specialized jobs in the United States. The Act requires that an
employer pay an H-1B worker the higher of its actual wage or the locally
prevailing wage, in order to protect U.S. workers and their wages. Under
the Act, an employer seeking to hire an alien in a specialty occupation
on an H-1B visa must receive permission from the DOL before the alien
may obtain an H-1B visa. The Act defines a "specialty occupation"
as an occupation requiring the application of highly specialized knowledge
and the attainment of a bachelor’s degree or higher. 8 U.S.C. §
1184(i) (1). To receive permission from the DOL, the Act requires an employer
seeking permission to employ an H-1B worker to submit a Labor Condition
Application (“LCA”) to the DOL. See 8 U.S.C. § 1182(n)(1);
In the Matter of Eva Kolbusz-Kline v. Technical Career Institute, ALJ
No. 93-LCA- 4, 1994 WL 897284, at *3 (Sec'y July 18, 1994). Only after
the employer receives the Department’s certification of its LCA
may the INS approve an alien’s H-1B visa petition. 8 U.S.C. §
1101(a) (15) (H) (1) (B); 20 C.F.R. § 655.700. The Act provides that
the LCA filed by the employer with the DOL must include a statement to
the effect that the employer is offering to an alien status as an H-1B
non-immigrant, that wages for H1-B visa holders are at least equal to
the actual wage level paid by the employer to all other individuals with
similar experience and qualifications for the specific employment in question,
or the prevailing wage level for the occupational classification in the
area of employment, whichever is higher, based on the best information
available at the time of filing the application. 8 U.S.C. § 1182(n)
(1) (A). The Act directs the DOL to review the LCA only for completeness
or obvious inaccuracies. Unless the Department finds that the application
is incomplete or obviously inaccurate, the Department shall provide the
certification described by the Act within seven days of the date of the
filing of the application. 8 U.S.C. § 1182 (n) (1) and 20 C.F.R.
§ 655.740. Upon certification of the LCA by DOL, the employer is
required to pay the wage and implement the working conditions set forth
in the LCA. 8 U.S.C. § 1182(n)(2). These include hours, shifts, vacation
periods, and fringe benefits. Id. The Department has promulgated regulations
which provide detailed guidance regarding the determination, payment,
and documentation of the required wages. See 20 C.F.R. Part 655 Subpart
H. The remedies for violations of the statute or regulations include payment
of back wages to H-1B workers who were underpaid, debarment of the employer
from future employment of aliens, civil money penalties, and other relief
that the Department deems appropriate. 20 C.F.R. §§ 655.810,
655.855. An employer also has a duty to notify INS “immediately”
of any changes in the terms and conditions of an H-1B nonimmigrant’s
employment. 8 C.F.R. § 214.2(h)(11).
C. FAILURE TO PAY WAGES TO OSHMI DUTTA
In Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), the United
Court held that once an employee has shown that he performed work and
was not properly paid for it, and he produces sufficient evidence of the
amount and extent of work as a matter of just and reasonable inference,
the burden shifts to the employer to produce evidence of the precise amount
of work that was performed or evidence to negate the inference created
by the employee’s evidence. Id. at 687-88. The Court explained that
it is the employer’s duty to keep precise records and that such
a burden should not fall on the employee and bar the employee from recovery
when such records cannot be produced. Id. at 687. Although Mt. Clemens
Pottery involved a claim brought under the Fair Labor Standards Act, the
Supreme Court’s holding has been adopted in deciding claims brought
under other acts, such as the Davis-Bacon Act (see In the Matter of Permis
Construction Corp., WAB No. 87-55, 1991 WL 494686, at *4 (WAB Feb. 26,
1991), and most notably, by the Administrative Review Board in an LCA
case (see Administrator, Wage and Hour Division v. Ken Techs., Inc., ARB
No. 03-140, ALJ No. 03- LCA-15, 2004 WL 2205233, at *2 (ARB Sept. 30,
2004). Thus, if I initially find that the Administrator has established
that Respondent failed to properly compensate the H-1B nonimmigrant worker,
then Respondent bears the burden of establishing the existence of circumstances
that warrant the wages not being paid or benefits not being offered, by
a preponderance of the evidence. Ken Techs., Inc., 2004 WL 2205233, at
*2. Otherwise, Respondent is liable for the payment of back wages and
other financial remedies.
The prevailing wage shown on Dr. Dutta’s LCA was the wage that Respondent
was required to pay him. 8 U.S.C. § 1182(n)(1)(A). An employer satisfies
his required wage obligations by paying this wage to the employee, cash
in hand, free and clear, due, except that deductions made in accordance
with paragraph (c)(9) of this section may reduce the cash wage below the
required wage. 20 C.F.R. § 655.731(c)(1). This wage must be reflected
in employer’s payroll records, and taxes withheld and paid to the
IRS. 20 C.F.R. § 665.731(c)(2)(i), (ii). The investigator calculated
the wages due pursuant to the LCA in the amount of $304,813.86 through
the date of the hearing, giving credit for all payroll amounts reflected
in Respondent’s records with appropriate deductions for periods
of Dr. Dutta’s voluntary absences from the country and without any
credit for payments made to Dr. Dutta for which no taxes were withheld
and which were not reflected as payroll amounts on Respondent’s
records. AX 44. Respondent contends that Dr. Dutta was not entitled to
H-1B wages upon his transfer to the new Oregon Avenue Dental Clinics as
he was no longer an “employee” of Respondent. In the alternative,
Respondent contends that Dr. Dutta was paid wages equivalent to, and in
some instances, in excess of the LCA specified wages through distributions
of partnership income from the Oregon clinics and/or other non-payroll
disbursements. RX E-T, DDD-EEE, GGG. In the further alternative, Respondent
contends that Dr. Dutta should not receive any additional wage payments
as Respondent claims that Dr. Dutta has “dirty hands” due
to his role in the filing of the second LCA and/or failure to file a new
LCA and thus “cannot seek vindication under the Act for an asserted
injury caused by his own malfeasance,” citing Balakrishna v. Seymour
Electric, Inc., 00- LCA-6, slip op. at 5 (ALJ Dec. 22, 2000).
Dr. Virk as the Employer
The Administrator named as the Respondent in this case “Avenue Dental
Care aka Mahadeep Virk, DDS, aka Mahadeep Virk DMD Puyallup P.S.”
and argues that Mahadeep Virk is individually liable for violations under
the Act because he is the “employer” under the Act or, alternatively,
is no more than an “alter ego” for Avenue Dental Care and
Mahadeep Virk DMD Puyallup P.S. Respondent apparently contends that the
only Respondent, and thus the only employer in this case, should be Mahadeep
Virk DMD Puyallup P.S. It is on this basis that Respondent contends that
no wages are due Dr. Dutta as Respondent contends his employment under
the LCA was terminated when Dr. Dutta left the Puyallup clinic and began
working in the two Oregon clinics. Thus, the crucial issue with respect
to the back wage claim is the identity of the H-1B employer of Dr. Dutta.
The Regulations at 20 C.F.R. § 655.731(c)(7)(i) provide that: If
the H-1B nonimmigrant is not performing work and is in a nonproductive
status due to a decision by the employer (e.g., because of lack of assigned
work), lack of a permit or license, or any other reason except as specified
in paragraph (c)(7)(ii) of this section, the employer is required to pay
the salaried employee the full pro-rata amount due, […] at the
required wage for the occupation listed on the LCA. Under its “no
benching” provisions, the INA requires that an employer pay the
required wage specified in the LCA even if the H-1B nonimmigrant employee
is in a nonproductive status (i.e., not performing work) because of lack
of assigned work or some other employment-related reason. 8 U.S.C.A. §
1182(n)(2)(C)(vii)(I); 20 C.F.R. §§ 655.731(c)(6)(ii), (7)(i);
Administrator v. Kutty, ARB No. 03-022, ALJ Nos. 01-LCA-010 through 01-LCA-025,
slip op. at 7 (ARB May 31, 2005); Rajan v. International Bus.Solutions,
Ltd., ARB No.03-104, ALJ No. 03-LCA-12, slip op. at 7 (ARB Aug. 31,2004).
But an employer need not pay wages to H-1B non-immigrants that are in
nonproductive status due to conditions that remove the non-immigrants
from their duties at their “voluntary request and convenience”
or which render them unable to work, such as a requested leave of absence.
20 C.F.R. § 655.731(c)(7)(ii).
Payment need not be made if there has been a bona fide termination of
the employment relationship. INS regulations require the employer to notify
the INS that the employment relationship has terminated so that the petition
is cancelled. 8 C.F.R. § 214.2 (h)(11). However, a bona fide termination
does not require strict compliance with statutory formalities. The Board
has held that whether a termination is bona fide does not turn solely
on whether the employer notified INS. The employer should be permitted
to present other evidence concerning whether it terminated the H-1B employee.
Filing such notification with INS constitutes additional, not conclusive,
evidence of termination. Ken Techs., Inc., 2004 WL 2205233, at *3.
The original LCA submitted for Dr. Dutta lists the employer’s full
legal name as “Mahadeep S Virk DBA Affordable Dental Care”.
See AX 4 at 22. Dr. Virk signed the LCA as “Owner Dentist/President”.
AX 4 at 24. The Petition for a Nonimmigrant Worker, INS Form I- 129 filed
in conjunction with the initial H-1B application for Dr. Dutta, contains
the identical information with regard to the proposed employer. AX 5.
The employer’s letter in support of the I-129 Petition filed by
Respondent describes the employer as follows:
Affordable Dental Care is a dental practice that is 100% owned by Mr.
Mahadeep S. Virk, the petitioner. Affordable Dental Care has offices throughout
the State of Washington, in Everett, Puyallup, Spokane and Bremerton.
It employs roughly 50 people, eight of which are dentists. The practice’s
annual revenues are approximately $4.5 million.
AX 9 at 35.
This same letter in support states that it is filed by “Mahadeep
S. Virk, dba Affordable Dental Care (Affordable Dental Care)” and
also is signed by Mahadeep S. Virk as Owner/President of Affordable Dental
Care. AX 29. The second LCA filed on behalf of Dr. Dutta in April of 2005
lists the employer as “Avenue Dental Care” and is signed by
Mahadeep Virk as “Owner Dentist/President”. RX HHH. The attached
letter in support notes that Avenue Dental Care was “formerly known”
as Affordable Dental Care. RX HHH. Notably, Legal Memoranda in support
of H-1B petitions for Drs. Arpita Sharma and Rafael Dimayuga submitted
on behalf of Avenue Dental Care by Respondent’s counsel in this
matter in August and October of 2005 also state the employer as “Avenue
Dental Care” which is described as a dental practice 100% owned
by Dr. Mahadeep S. Virk with offices throughout the state of Washington
and Oregon (emphasis added). AX 37 and 38.
The current DOL regulation defines employer for purposes of the LCA process
Employed, employed by the employer, or employment relationship means the
employment relationship as determined under the common law, under which
the key determinant is the putative employer’s right to control
the means and manner in which the work is performed. . . . Employer means
a person, firm, corporation, contractor, or other association or organization
in the United States which has an employment relationship with H-1B nonimmigrants
. . . The person, firm, contractor, or other association or organization
in the United States which files a petition on behalf of an H-1B nonimmigrant
is deemed to be the employer of that H-1B nonimmigrant.
20 CFR § 655.715 (2002).
The definitions in effect under the previous regulation, prior to passage
of the ACWIA contained only the following definition of employer:
Employer means a person, firm, corporation, contractor, or other association
or organization in the United States:
(1) Which suffers or permits a person to work within the United States;
(2) Which has an employer-employee relationship with respect to employees
under this part, as indicated by the fact that it may hire, pay, fire,
supervise or otherwise control the work of any such employee; and
(3) Which has an Internal Revenue Service tax identification number.
20 CFR § 655.715 (1995).
According to the ACWIA, "employer" means any group which may
be treated as a single employer under subsections (b), (c), (m) or (o)
of Section 414 of the Internal Revenue Code. IRC §414(b) makes reference
to IRC §1563(a) which stipulates that controlled group of corporations
means any of the following: parent-subsidiary controlled group, brother-sister
controlled group; combined group; and certain insurance companies. Prior
to the enactment of the ACWIA, corporations were required to file new
LCAs when a change in corporate structure occurred and this in turn triggered
the requirement of filing amended H-1B petitions with the INS. ACWIA now
provides that a new LCA is not required when there is merely a change
in the tax identification number or EIN, as long as the new employer has
assumed the obligations and liabilities of the former company's previously
approved LCA(s). Additionally, legislation amended Section 214(C) of the
INA to read:
(10) An amended H-1B petition shall not be required where the petitioning
employer is involved in a corporate restructuring, including but not limited
to a merger, acquisition or consolidation, where a new corporate entity
succeeds to the interests and obligations of the original petitioning
employer and where the terms and conditions of employment remain the same
but for the identity of the petitioner.
INA § 214(m)(1).
The DOL regulations state that "[w]here an employer corporation changes
its corporate structure as the result of an acquisition, merger, "spin-off,"
or other such action, the new employing entity is not required to file
new LCAs and H-1B petitions with respect to the H-1B nonimmigrants transferred
to the employ of the new employing entity regardless of whether there
is a change in the Employer Identification Number (EIN), provided that
the new employing entity maintains in its records a list of the H-1B nonimmigrants
transferred to the employ of the new employing entity..." 20 CFR
655.730(e). In addition, the DOL regulations require the employer to maintain
in its public access file, a document which contains the following:
(i) Each affected LCA number and its date of certification;
(ii) A description of the new employing entity's actual wage system
applicable to H-1B nonimmigrant(s) who become employees of the new employing entity;
(iii) The EIN of the new employing entity (whether or not different from
that of the predecessor entity); and
(iv) A sworn statement by an authorized representative of the new employing
entity expressly acknowledging such entity's assumption of all obligations,
liabilities and undertakings arising from or under attestations made in
each certified and still effective LCA filed by the predecessor entity.
Unless such statement is executed and made available in accordance with
this paragraph, the new employing entity shall not employ any of the predecessor's
H- 1B nonimmigrants without filing new LCAs and petitions for such nonimmigrants.
20 CFR § 655.730(e)
The DOL regulations also confirm that the new entity may not use the predecessor's
existing LCAs and must file new LCAs in order to support new or extending
any H-1B nonimmigrant after the corporate change has occurred. 20 CFR
The Administrator named Mahadeep S. Virk as an individual and as aliases
his dba of
Avenue Dental Care as well as the “headquarters” corporation
of Dr. Virk, Mahadeep Virk DMD Puyallup P.S., as Respondent in this case.
Respondent argues that Dr. Virk signed documents only as the President
of the corporation, and not in his individual capacity, so the corporation,
and not Dr. Virk, was the employer. Respondent’s post-hearing brief
at 4. In the ordinary course of events, the individual signing the LCA
and H-1B petitions on behalf of a corporation would not be considered
to be the employer in his or her individual capacity. Investigator Sondgeroth
testified that she considered Avenue Dental Care including all of its
locations to be a single business enterprise due to Dr. Virk’s common
ownership and the operation of all the clinics under the name of Avenue
Dental Clinic. Tr. at 106-107, 137-140. The investigation was commenced
against Dr. Virk dba Avenue Dental Care. AX 2. Indeed, the first notification
to DOL that there were in fact legal entities other than Dr. Virk and
his dba of Avenue Dental Care was the letter dated April 13, 2006 from
Respondent’s counsel to the investigator following the initial meeting
regarding the investigation. AX 14. Only after notification of the investigation
has Respondent attempted to claim that Dr. Dutta’s employer was
anyone other than Dr. Virk under his assumed business names of Affordable
Dental Care and then Avenue Dental Care. While Dr. Virk testified that
he noticed on Dr. Dutta’s renewal LCA that the business location
was still listed at the Puyallup address rather than the Oregon address
and requested that Dr. Dutta correct the location to Oregon and note his
ownership in these two Oregon locations, he signed as the “Owner
Dentist/President” of Avenue Dental Care, the H-1B employer and
took no further steps to change the identification or location of the
employer. Tr. at 521-525. Further, even after this alleged conversation
with Dr. Dutta to “correct” the employer name to the correct
corporate name, Dr. Virk continued to sign and submit LCAs for at least
two other H-1B employees under his assumed business name of Avenue Dental
Care. AX 37 and 38. Had Dr. Virk ever submitted any LCA or supporting
documentation on behalf of Dr. Dutta under an existing legal corporate
name rather than under his assumed business names, then the question of
whether Dr. Virk, as an individual, can be considered to be Dr. Dutta’s
employer, would cast the issue in the context of piercing the corporate
veil. However, no such legal corporate name was ever presented as an H-
1B employer of Dr. Dutta until well after the investigation was under
way when apparently it was felt that such a change would support Respondent’s
position that Dr. Dutta no longer worked for the H-1B employer on his
LCA. Based on the particular facts of this case, however, I conclude that
the Administrator’s view that Dr. Virk was the employer is a reasonable
interpretation of the regulations and of the LCA documents themselves.
Respondent knew or should have known that the INA’s implementing
regulations require that the H-1B nonimmigrant’s employer notify
the INS immediately of any changes in the terms and conditions of the
employment of a “beneficiary” such as Dr. Dutta that might
affect eligibility as an H-1B nonimmigrant. Respondent knew or should
have known that the INA and regulations require the employer to submit
a letter to INS advising of the termination of the “beneficiary”
in order to cancel the petition, or LCA. It is undisputed that Respondent
did not report a termination or any change in the employment relationship.
It is also undisputed that Respondent did not tender to Dr. Dutta the
costs of his transportation home to India, as would be required following
a bona fide termination under the LCA. Considering these facts, it is
obvious that there was no termination of Dr. Dutta’s employment
in this case by his employer, Dr. Virk under his assumed business name
of Avenue Dental Care. Rather, at best there was a “corporate restructuring”
which would have required that the appropriate information be corrected
and maintained in the public access file pursuant to 20 C.F.R. §
655.730(e), or at least a modification requested to change the work location
to Oregon. While none of these actions were taken, the totality of the
circumstances clearly establish that Dr. Dutta has never been terminated
from his employment by Dr. Virk dba Avenue Dental Care and thus is entitled
to be paid his LCA wages.
Only payroll wages are considered wages for H-1B purposes
The Act unequivocally requires the employer to pay an H-1B employee the
greater of the prevailing wage or the actual wage that it pays to other
workers of like qualifications who are working in the same position as
the H-1B nonimmigrant. 8 U.S.C. § 1182(n)(1)(A)(i). The regulations
provide that “The required wage must be paid to the employee, cash
in hand, free and clear, when due, except that deductions made in accordance
with paragraph (c)(9)9 of this section may reduce the cash wage below
the level of the required wage”. 20 C.F.R. § 655.731(c)(1).
In addition, the regulations state that “cash wages paid”
must be shown in the employer’s payroll records as earnings and
disbursed to the employee, cash in hand, and must be reported to the IRS
as employee’s earnings, with appropriate tax withholdings. 20 C.F.R.
§655.731(c)(2)(i) and (ii). Payments made as a share of profits are
not H-1B wages nor a proper deduction from wages within the meaning of
the regulations as the agreement regarding these sums are separate and
apart from the H-1B wage requirements. See Wage & Hour Division, ESA,
USDOL v. Prism Enterprises of Central Florida, Inc., ARB No. 01-080, ALJ
No. 01-LCA-8 2003 WL 22855211, at *3 (Nov. 25, 2003). Accordingly, the
back wages owed are as calculated by the Investigator without any credit
for non-payroll payments.
Alleged Dirty Hands of Dr. Dutta
The “dirty hands” argument put forth by Respondent seeking
to bar any recovery on behalf of Dr. Dutta herein rests on the premise
that Dr. Dutta committed some acts of malfeasance, if not outright fraud,
in connection with his LCA. Respondent contends that Dr. Dutta himself
should have taken steps to amend or file a new LCA upon his move to work
in the two new Oregon clinics. Additionally, Respondent contends that
Dr. Dutta should have modified the renewal of his LCA to reflect his employment
in Oregon. This contention raises the issue as to whether an LCA for an
H-1B employee can be issued to an employing entity in which the H- 1B
employee has an ownership interest. This issue is somewhat analogous to
the LCA determination to be made with respect to an application for permanent
immigration status where, pursuant to the definition of employment in
§ 656.50, the alien must work for an employer other than himself.
If the position for which certification is sought constitutes nothing
more than selfemployment, it does not constitute genuine "employment"
under the regulations, and labor certification is barred per se. Modular
Container Systems, Inc., 89-INA-228, 1991 WL 223955, at *1 (July 16, 1991)
(en banc), citing Hall v. McLaughlin, 864 F.2d 868, 870 (D.C. Cir. 1989);
Edelweiss Manufacturing Co., Inc., No. 87-INA-562, 1988 WL 235693, at
*4 (Mar. 15, 1988) (en banc). Thus, LCAs for permanent immigration status
have been denied where the employer was solely owned by the alien. See
Malone & Associates, 90-INA-360, 1991 WL 223954, at *8 (July 16, 1991)
(en banc); Bulk Farms, Inc., 89-INA-51, 1990 WL 300071, at *3 (Jan. 3,
1990); Amger Corp., 87-INA-545, 1987 WL 341738, at *2 (Oct. 15, 1987).
Although there is no prohibition in the INS and DOL H-1B regulations that
specifically bars H-1B workers from holding an ownership interest, an
employment relationship is required whereby the employer has the power
to "hire, pay, fire, supervise, or otherwise control the work of
such employee.". 8 CFR §214.2 (h)(1)(ii). This regulation further states:
United States employer means a person, firm, corporation, contractor,
or other association, or organization in the United States, which:
(1) Engages a person to work within the United States:
(2) Has an employer-employee relationships with respect to employees under
this part, as indicated by the fact that it may hire, pay, fire, supervise,
or otherwise control the work of any such employee; and has an Internal
Revenue Service Tax identification number."
As noted previously herein, the DOL regulations similarly define an employer
as "a person, firm, corporation, contractor, or other association
or organization in the United States which has an employment relationship
with H-1B nonimmigrants and/or U.S. worker(s). The person, firm, contractor,
or other association or organization in the United States which files
a petition on behalf of an H-1B nonimmigrant is deemed to be the employer
of that H-1B nonimmigrant." 20 C.F.R. § 655.715.
Neither the Statute nor the Regulations set forth any definitive standards
as to exactly what type, degree or percentage of ownership is unacceptable
for approval of an H-1B LCA. The lack of clarity as to this issue is borne
out by the testimony in this case that two immigration attorneys who were
consulted on this issue had differing opinions as to whether the 50% ownership
by Dr. Dutta in the two Oregon clinics was acceptable for H-1B purposes.
A paper prepared for practicing immigration attorneys also notes the uncertainty
surrounding this issue:
It may be difficult for owners with significant ownership interests to
meet the requirement in the regulations that there be an employer-employee
relationship. This includes privately held corporations or partnerships
filing for owner-employees. Just how much is too much to own is arguable,
but an H-1B worker who owns more than 50% of the sponsoring entity will
have a slim chance of meeting the employer-employee relationship and therefore
will not be able to petition for him/herself.
Alan Tafapolsky, Foreign Entrepreneurs and Immigration: Founding and Funding
a Business in the United States--What Are Your Options? How Ownership
Interests Affect Business Immigration, Part I, 03-06 IMMIGRBRIEF 1 (June 2003).
In the present case, Dr. Dutta was putatively a 50% owner of the two Oregon
clinics. While Dr. Dutta certainly had an interest in maintaining his
H-1B status permitting him to stay and work in this country, Dr. Virk
likewise had an interest in Dr. Dutta’s remaining legally in this
country and being able to work in the Oregon clinics thus building the
businesses in which Dr. Virk had a 50% interest, and the right to the
entire ownership of the ongoing businesses in the event of Dr. Dutta’s
departure within the initial five years of operation. Accordingly, both
Drs. Dutta and Virk had significant monetary stakes in maintaining Dr.
Dutta’s H-1B status. However, the regulations require that the employer
take the necessary steps to apply for the LCA and to maintain the required
documentation, including the duty to seek amendment or a new LCA when
required. The obligation is not that of the H-1B employee. While Dr. Virk
attempted to delegate these responsibilities to Dr. Dutta, such delegation
of responsibility is clearly not permissible.
As to the alleged claim of fraud on the part of Dr. Dutta, it has been
noted above that the law is not entirely clear with regard to the partial
ownership issue. Further, and most importantly, the second LCA application
submitted by the attorney retained by Dr. Dutta in Oregon simply retained
the same amalgamated description of the employer as “Avenue Dental
Care” just as had the original LCA for Dr. Dutta, as well as the
LCAs for other Avenue Dental Care H-1B employees. AX 5, 37, 38. Dr. Virk
chose to submit the first LCA for Dr. Dutta, as well as other LCAs for
other H-1B employees, under the name of Affordable Dental Care later changed
to Avenue Dental Care and not under any of his individual clinic corporate
names. Further, the description used in all of these LCAs sets forth the
assets, income, number of employees and other information relative to
all of Dr. Virk’s dental clinics operating under the name of Avenue
Dental Care. Having represented himself as the “president”
of Avenue Dental Care in all of these LCAs, the undersigned finds that
it was reasonable for attorney Bartoloni to continue with this same global
designation. While certainly there should have been a change in the location of Dr.
Dutta’s employment noted at least in the second LCA, the duty to
do so was on the part of the employer and not the employee. While Dr.
Dutta may have been motivated in not making any changes to the LCA by
his desire to avert any possibility of the LCA being questioned, I do
not find in light of all the circumstances herein that any such perceived
“malfeasance” on his part in this respect was so egregious
as to deny him the wages which the LCA clearly set forth.
I recognize that both Dr. Virk and Dr. Dutta might also have other rights
or remedies that arise under, for instance, a separate employment agreement
or contract, common law, or other state or federal statutes apart from
the H-1B provisions of the INA. The scope of the undersigned’s jurisdiction
to review cases involving an employment relationship arising under the
INA, however, extends only insofar as that relationship arises under,
or is terminated pursuant to, the INA’s H-1B provisions. See 8 U.S.C.
§ 1182(n)(1)-(2); 20 C.F.R. §§ 655.705(a)- (b), 655.731,
655.732, 655.845; Secretary’s Order No. 1-2002, 67 Fed. Reg. 64,272;
Amtel Group of Fla., Inc. v. Yongmahapakorn, ARB No. 04-087, ALJ No. 04-LCA-6,
slip op. at 9-10 (ARB Sep. 26, 2006). The issue here does not involve
breach of an employment contract but rather the requirements of Department
regulations governing H-1B visas and sanctions for noncompliance therewith.
An employer is required to comply with the terms and conditions set forth
in an LCA notwithstanding any side agreement he might have with the nonimmigrant
alien employee. See Balakrishna, 00-LCA-6, slip op. at 5. Accordingly,
I decline to adjust the LCA wages due Dr. Dutta. as calculated by Investigator
Sondgeroth, using the various amounts argued by Respondent to be appropriate
setoffs against these calculated wages due as such determination is beyond
the scope of this administrative proceeding.
D. INDIVIDUAL RESPONSIBILITY OF MAHADEEP VIRK
As discussed hereinabove, Dr. Virk should be held individually responsible
as an employer for the violations of the statute and regulations.
E. PAYMENT OF LCA FILING FEES BY DR. DUTTA
Pursuant to the regulations, the employer may not receive, nor may the
H-1B employee pay, any part of the LCA filing fee or attorney fees incurred
in connection with its filing. 20 C.F.R. §§ 655.731(c)(9)(ii),
(iii)(C), and (c)(10)(ii). Pursuant to 20 C.F.R. § 655.810(e)(1),
the Administrator may order the employer to return such funds paid by
the employee. Respondent admits that Dr. Dutta was required to pay both
the filing fee and attorney’s fees in connection with the filing
of his initial LCA but argues that this claim by the Administrator falls
outside the statute of limitations.
The INA contains a one-year statute of limitations for investigations
by the Administrator:
. . . No investigation or hearing shall be conducted on a complaint concerning
such a failure or misrepresentation unless the complaint was filed not
later than 12 months after the date of the failure or misrepresentation,
respectively. . . .
8 U.S.C. § 1182(n)(2)(A).
Dr. Dutta’s complaint was filed in September 2005. The initial LCA
for Dr. Dutta was filed in May 2002. I conclude that the claim on behalf
of Dr. Dutta is not barred by the statute of limitations. The one-year
statute of limitations does not operate as a limitation on the scope of
remedies sought. 20 CFR § 655.806(a)(5). As the Administrative Review
Board stated in a decision pertaining to the Immigration Nursing Relief
Act of 1989 (“INRA”):
At this point we hasten to hold that the question of what time limitation,
if any, applies to calculating back pay awards . . . does not involve
a discussion or analysis of statutes of limitation. . . . “Statute
of limitations” is the term referring to statutes prescribing the
time beyond which a plaintiff may not bring a cause of action; generally,
a fixed time period within which a lawsuit must be brought after a cause
of action accrues. . . . “The purpose of such statutes is to keep
stale litigation out of the courts. They are aimed at lawsuits, not at
the consideration of particular issues in lawsuits.” . . .It is
not unusual for federal statutes to impose different time limits for filing
a complaint and for calculation (of) back pay. For example, Title VII
of the Civil Rights Act of 1964 requires that a charge be filed within
one hundred eighty days after the alleged unlawful employment practice
occurred, but back pay accrues for a period of two years prior to filing
Administrator v. Alden Management Services, Inc., ARB Nos. 00-20 and 00-21,
ALJ No. 1996- ARN-3, slip op. at 14 (ARB Aug. 30, 2002).
The ARB went on to hold that the period for recovery of back pay is the
maximum period a nonimmigrant nurse may be admitted on an H-1A visa, six
years, based on the language of 8 U.S.C. § 1182(m)(4). Id. at 15.
Further, the regulation itself specifically states that the one year jurisdictional
bar “does not affect the scope of the remedies which may be assessed
by the Administrator.” 20 C.F.R. § 655.806(a)(5). Applying
the reasoning in Alden Management, I conclude that just as Dr. Dutta is
entitled to back pay for the entire period he was authorized to work under
his H-1B visa, he likewise is entitled to recovery of the costs and fees
he incurred with his LCA. Dr. Dutta testified that he was required to
pay the filing fee of $2,130.00 directly to attorney Thompson. Accordingly,
I find that Dr. Dutta is entitled to reimbursement by Respondent in the
amount of $2,130.00.
F. VIOLATION OF NOTICE AND RECORD-KEEPING REQUIREMENTS
The Administrator found that Respondent violated the notice requirement
under 20 C.F.R. § 655.805(a)(5) and the record keeping requirement
under 20 C.F.R. § 655.805(a)(14). No penalty was assessed against
Respondent for such violations. Under 20 C.F.R. § 655.805(a)(5),
an H-1B employer must provide notice of the filing of a labor condition
application. The employer is to post notice of filings in two or more
conspicuous locations in the employer’s establishment in the area
of intended employment. The notice shall indicate that H- 1B nonimmigrants
are sought; the number of such nonimmigrants the employer is seeking;
the occupational classification; the wages offered; the period of employment;
the locations at which the H-1B nonimmigrants will be employed; and that
the LCA is available for public inspection at the H-1B employer’s
principal place of business in the U.S. or at the worksite. 20 C.F.R.
§ 655.734. Under 20 C.F.R. § 655.805(a)(14), an H-1B employer
must make available for
public examination the application and necessary documents at the employer’s
principal place of business or worksite. The labor condition application
must be available for public examination within one working day after
the date on which the labor condition application is filed with the Department
of Labor. The following documentation is necessary to have available for
public examination: (1) a copy of the certified labor condition application;
(2) documentation which provides the wage rate to be paid the H-1B nonimmigrant;
(3) a full, clear explanation of the system that the employer used to
set the actual wage paid to the H-1B nonimmigrant; (4) a copy of the documentation
the employer used to establish the prevailing wage for the occupation
for which the H-1B nonimmigrant is sought; (5) a copy of the documents
with which the employer has satisfied the notification requirements of
Section 655.734; (6) a summary of the benefits offered to U.S. workers
in the same occupational classifications as H-1B nonimmigrants; (7) statements
accepting H-1B obligations in the event of a change in corporate structure;
(8) a list of any entities included as part of the single employer in
making the determination as to its H-1B dependency status; (9) where the
employer is H-1B dependent and/or a willful violator, and indicates on
the LCA that only exempt H-1B nonimmigrants will be employed, a list of
such exempt H-1B nonimmigrants; and (10) where the employer is H-1B dependent
or a willful violator, a summary of the recruitment methods used and the
time frames of recruitment of U.S. workers. 20 C.F.R. § 655.760.
While Respondent contends that it fully complied with all notice and recordkeeping
requirements, it is clear from the testimony and evidence herein that
this is not entirely accurate. Investigator Sondgeroth requested the pertinent
records initially but testified that she never did receive actual payroll
records for Dr. Dutta, only summaries of various payments made. Tr. at
110-112, 152; AX 35; RX G. Further the public examination file was deficient
in that it contained neither change of corporate liability information
concerning Dr. Dutta’s elocation to Oregon nor the required posting
of the notice of filing for Dr. Dutta’s LCA. Tr. at 102, 108, 194-195.
In rebuttal, Respondent points to the “reconstructed” file
put together by attorney Thompson following commencement of the investigation
as the original public examination file could not be located by Respondent.
Tr. at 89-90. The fact that the required public examination file could
not be found and had to be reconstructed sufficiently established the
fact that Respondent failed in the recordkeeping requirement. Further,
Dr. Dutta testified that he never saw any H-1B postings. Tr. at 267-272.
While Dr. Sharma is presented as the signatory to the notice in the reconstructed
file, he testified that he recalled some type of document being posted
for Dr. Dutta but could not recall any such postings for himself nor for
any of the other subsequent three H-1B dentists hired by Respondent. RX
KKK at 53-54, 59, 81, 85-86. Dr. Virk testified that he could not recall
whether the notice for Dr. Dutta was posted but assumed that Dr. Dutta
had posted it. Tr. at 536-537. As to the documentation regarding changes
in corporate liability, there is no indication that such documents were
ever prepared much less maintained in the public examination file. Aside
from denying admission of the violation, Respondent has produced no credible
evidence to rebut the Investigator’s finding that the notice and
record keeping regulations were violated. Thus, I find that Respondent
violated Sections 655.805(a)(5) and 655.805(a)(14).
G. CIVIL MONEY PENALTIES
The Administrator assessed $4,250.00 in civil money penalties against
Respondent, consisting of $3,750.00 for willful failure to comply with
the LCA wage requirements and $500.00 for failure to cooperate in the
investigation. Respondent asserts that no civil money penalty should be
assessed because the violations were not willful. Under 20 C.F.R. §
655.810(b)(2), an Administrator may assess civil money penalties, in an
amount not to exceed $5,000.00 per violation for “[a] willful failure
pertaining to wages/working conditions (§§ 655.731, 655.732),
strike/lockout, notification, labor condition application specificity,
displacement (including placement of an H-1B nonimmigrant at a worksite
where the other/secondary employer displaces a U.S. worker), or recruitment.”
Willful failure is defined as “a knowing failure or a reckless disregard
with respect to whether the conduct was contrary to sections 212(n)(1)(A)(i)
or (ii), or 212(t)(1)(A)(i), or (ii) of the INA, or §§ 655.731
or 655.732.” 20 C.F.R. § 655.805(c); see also McLaughlin v.
Richland Shoe Company, 486 U.S. 128, 133-135 (1988). The Administrator
may assess up to $1,000.00 per violation as civil money penalties for
failure to cooperate with the Administrator’s investigation. 8 U.S.C.
§ 1182(n)(2)(C); 20 C.F.R. § 655.810(b)(1). In determining the
amount of the civil money penalty, the Administrator shall consider the
type of violation committed and factors such as: previous violations by
the employer under the INA; the number of workers affected by the violation;
the gravity of the violation; efforts made by the employer in good faith
to comply with the Act; the employer’s explanation of the violation;
the employer’s commitment to future compliance; and the extent to
which the employer achieved a financial gain due to the violation, or
the potential financial loss, potential injury or adverse effect with
respect to other parties. 20 C.F.R. § 655.810(c).
After determining there was a violation of the INA, one must determine
if the violation(s) were willful, meaning there was “a knowing failure
or a reckless disregard with respect to whether the conduct was contrary
to section … § 655.731.” 20 C.F.R. § 655.805(c).
This determination is important, as only violations, as set forth in 20
C.F.R. § 655.805(a)(2), that are willful allow for the assessment
of penalties and disqualification. 20 C.F.R. § 655.805(b). Respondent
has maintained that he was unaware of the legal requirements set forth
under the Act and its regulations, and that any noncompliance was the
failure of attorneys or the employees themselves. While Respondent may
not have been well versed on the INA, his total failure to investigate
any of his responsibilities under the Act, relying instead on the advice
and actions of the H-1B employee, amounts to a “reckless disregard”
for which penalties and disqualification are warranted. See Administrator
v. Home Mortgage Company of America, Inc., et al., ALJ No. 04-LCA-40,
slip op. at 15 (ALJ Mar. 6, 2006). Moreover, Dr. Mahadeep Virk signed
both the LCAs for Dr. Dutta, obligating himself to observe its terms.
On each LCA application, filed by the Employer, there is the following
statement immediately above the signature line:
H. Declaration of Employer
By signing this form, I, on behalf of the employer, attest that the information
and labor condition statements provided are true and accurate; that I
have read the sections E and F of the cover pages (Form ETA 9035CP), and
that I agree to comply with the Labor Condition Statements as set forth
in the cover pages and with the Department of Labor regulations (20 C.F.R.
part 655, Subparts H and I). I agree to make this application, supporting
documentation, and other records, available to officials of the Department
of Labor upon request during any investigation under the Immigration and
AX 4 and RX HHH.
Additionally, next to the signature line is a statement warning of civil
or criminal actions if the statements made therein are found to be fraudulent.
These statements not only warn the signer of possible actions against
him, but point him to the appropriate sections of the regulation to ensure
compliance. Dr. Virk’s defense that he did not read the applications
is not good enough. The forms themselves make one fully aware of the need
for compliance. Dr. Virk’s failure to read the LCAs when he signed
them is not a defense. See Administrator v. Jackson, ARB No. 00-68, ALJ
No. 1999-LCA-4, slip op. at 4 (ARB April 30, 2001). Dr. Virk chose to
submit the LCAs as Avenue Dental Care (and previously Affordable Dental
Care) rather than any particular corporate entity and his attempt now
to claim that the employer was only the headquarters corporation is a
thinly veiled and tardy attempt to change the reality of his actions in
an attempt to gain an advantage in his ongoing business dispute with Dr.
Dutta. This violation is compounded by the efforts to thwart the DOL’s
investigation by not producing documents, delaying in producing other
documents, and producing “reconstructed” public access files.
I find that the failure to pay wages in accordance with 20 C.F.R. §
655.805(a)(2) and the failure to cooperate in the investigation were willful
as defined by the regulations, and therefore civil penalties and disqualification
are warranted per 20 C.F.R. § 655.805(b). After consideration of
the factors under § 655.810(c), the Administrator applied a 25% reduction
to the maximum penalty permitted under 20 C.F.R. § 655.810(b)(2),
thus, resulting in a $3,750.00 civil money penalty. I find that the failure
to pay the H-1B employee the required wage was a willful violation of
20 C.F.R. § 655.731. I further find that the $3,750.00 civil money
penalty assessed against Respondent is reasonable. The Administrator applied
a 50% reduction to the maximum penalty permitted under 20 C.F.R. §
655.810(b)(1), thus, resulting in a $500.00 civil money penalty for failure
to cooperate in the investigation. I find that the failure to cooperate
was willful and that the civil money penalty of $500.00 is reasonable.
H. DEBARMENT OF RESPONDENT FROM H-1B PROGRAM
The Administrator recommended that Respondent should be debarred from
participating in the H-1B program for two years. Under 20 C.F.R. §
655.810(d), an employer shall be disqualified from approval of any petitions
filed by, or on behalf of, the employer pursuant to section 204 or section
214(c) of the INA for at least two years for a willful failure pertaining
to wages/working conditions, strike/lockout, notification, labor condition
application specificity, displacement, or recruitment. Based on the regulation
and Respondent’s willful failure to pay wages, the Prosecuting Party
argues that Respondent should be debarred. As noted above, I find that
Respondent willfully failed to pay wages to Dr. Dutta. Pursuant to 20
C.F.R. § 655.810(d), Respondent is debarred from the H-1B program
for a period of two years.
Accordingly, the Administrator’s decision is AFFIRMED, and Respondent’s appeal is
Russell D. Pulver
Administrative Law Judge
NOTICE OF APPEAL RIGHTS: To appeal, you must file a Petition for Review
(“Petition”) that is received by the Administrative Review
Board (“Board”) within thirty (30) calendar days of the date
of issuance of the administrative law judge’s decision. See 20 C.F.R.
§ 655.845(a). The Board’s address is: Administrative Review
Board, U.S. Department of Labor, Room S-4309, 200 Constitution Avenue,
NW, Washington, DC 20210. Once an appeal is filed, all inquiries and correspondence
should be directed to the Board. At the time you file the Petition with
the Board, you must serve it on all parties as well as the administrative
law judge. See 20 C.F.R. § 655.845(a). If no Petition is timely filed,
then the administrative law judge’s decision becomes the final order
of the Secretary of Labor. Even if a Petition is timely filed, the administrative
law judge’s decision becomes the final order of the Secretary of
Labor unless the Board issues an order within thirty (30) days of the
date the Petition is filed notifying the parties that it has accepted
the case for review. See 29 C.F.R. § 655.840(a)