The question Kyle gets the most often, is "How do I stay in compliance when hiring and onboarding H-2A workers?". We're here to answer that question for you!
This episode is from our webinar series. The full video is linked here.
If you're interested in talking with one of our Business Relationship Developers about solving your business labor needs, click the link and fill out your contact information. We will get back to you shortly!
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**The information provided on this podcast does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available are for general informational purposes only. Listeners of this podcast should contact their attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained within the description do not create an attorney-client relationship between the listener and Kyle Farmer. **
Produced & Edited By: Drew Tattam
The question Kyle gets the most often, is "How do I stay in compliance when hiring and onboarding H-2A workers?". We're here to answer that question for you!
This episode is from our webinar series. The full video is linked here.
If you're interested in talking with one of our Business Relationship Developers about solving your business labor needs, click the link and fill out your contact information. We will get back to you shortly!
Sign up for our free webinars using the links below:
Send an email to media@farmerlawpc.com if you'd like to be featured in an episode, if you have a question Kyle can answer, or if you'd like to purchase an advertisement on the podcast.
Follow Kyle Farmer on LinkedIn, here.
Subscribe to our monthly Immigration Insider Newsletter, here.
**The information provided on this podcast does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available are for general informational purposes only. Listeners of this podcast should contact their attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained within the description do not create an attorney-client relationship between the listener and Kyle Farmer. **
Produced & Edited By: Drew Tattam
So today we're gonna be talking about H-2A hiring and onboarding. This is probably one of the things that, uh, employers ask me about the most this happened. I, I get a lot of questions about H-2A hiring and onboarding, obviously for first-time users of the H-2A program. But I also get… One of the things that I see most in audits where people are failing is not failing the audit cause that's not really a thing, but.
Uh, getting fined in the audit is through the hiring and onboarding process. Very avoidable things. It's just some stuff that you need to be aware of. So, let's go through some of those things. So prior, this is just a regulatory requirement. Lemme get this box off. I'm focusing my face. All right. Uh, this just one of the requirements under the H-2A regulations.
That the workers receive a translated copy in their own language of the ETA 790 or a work contract that has all the information from the ETA 790 on it. Uh, it needs to be in their language. I like to have the workers sign it prior to getting their visas because that's the regulatory requirement.
Uh, but that's something you need, need to do. So, what I like for, to see from employers, is for them to have on their computer a employee folder and then have employee files. So, uh, I've got, here's my employee folder, uh, and then by employee's name. And then in that I would have a sub folder that is the year, and then I would have some of these documents in there.
Uh, that's, that's highly to see 'em organized, but. Uh, anyways, a translated copy of the ETA 790. It needs to have all the pertinent information from the 790, such as, uh, the work site location, the housing location, the terms and conditions of employment, uh, the pay, all that. It's usually easiest just to do it on the ETA 790 and translate that.
Now, this next one is a big one. This is where employers can really have some back wage issues. Ed workers should be made aware that they should not pay for the opportunity to work on an H-2A Visa, uh, to the person recruiting them. Uh, but this actually just applies e even to anyone. They shouldn't be paying their employer for the opportunity to work on an H-2A Visa.
They shouldn't be paying their recruiter, their processor. Uh, no one. It should be paying for the opportunity to work on an H-2A Visa. Uh, the implications for this one is, are pretty enormous, particularly because Department of Labor's position on this is that it is a strict liability issue, meaning the employer doesn't have any, uh, knowledge requirement.
So, you could be a totally innocent employer. Uh, you are using a recruiter. You have no knowledge that e this recruiter is charging each of your 100 guys $1,500 for the opportunity to work on an H-2A Visa. The Department of Labor comes in and they, they find out that your workers are paying $1,500 to either the person that recruited 'em or processed 'em, uh, for the opportunity to work on an H-2A Visa.
You are going to be fined, uh, first of all, you can be fined on a case, but on a person-by-person basis. So, uh, but you can, you would also be liable for all of those. Workers, $1,500 they paid. So, you can see how this adds up with a hundred workers, $1,500 each, you're talking about $150,000. You'd be looking at probably about an $1,800 fine per person also, which is another $180,000.
So, with just your a hundred workers, you could be looking at over 330. Are you looking at $330,000 in that exact circumstance and the worst part about it. Is it doesn't have any knowledge requirement, so you didn't have to have any, uh, any ill intent. You just trusted the wrong person. So, what do you do to protect yourself?
You get the workers to sign something prior to getting their visa that says they did not pay for the opportunity to work on an H-2A visa to anyone. Uh, you also have the anyone recruiting or processing on your behalf sign in that Testation saying the same thing. What you want to do is you want to create a paper trail.
It, it, it puts on the Department of Labor. The Department of Labor is the one with a burden of proof to show that your workers actually paid for the opportunity to work on a work contract, I mean, on a H-2A visa. And so, by putting these policies in place, what are you? Are really doing is providing really good impeachment evidence should you need to impeach workers claiming they were charged to work.
Uh, and again, it is the, you should be making all of those workers known prior to getting their visas. Because what this will do is this will make sure the workers know that it's not allowed for them to pay for that opportunity. A lot of times the workers don't even know. They think, you know, this is just how things work here.
If I have, they have something of value, I want that, something of value, I'm gonna pay for that. Something of value. Uh, but that's just against the rules. So, this might, you could likely, uh, curtail this issue before it ever manifests just by taking some preliminary measures. So have workers, recruiters, processors, anyone dealing with your workers in Mexico?
Or I guess in any country. But, uh, most of the workers come from Mexico, have them signed something stating, uh, that they did not charge or be charged for the opportunity to work on an H-2A visa. All right. When the workers arrive, have them sign another, not charged attestation saying, I did not charge for the opportunity.
I was not charged for the opportunity to work here in the United States. As you can see, uh, this one is a big deal. I'd like to emphasize this one because there is no knowledge requirement, and it is one of the circumstances where the back wages can really, really add up quickly. So, make sure that you get that signed again.
Uh, whenever the workers arrive, you should also have them supply you with receipts for the amount of money that they spent from their home city to the consulate, from the con and from the consulate to the place of employment. Uh, this should include their travel, meals, hotel, and embassy expenses, where applicable.
Uh, sometimes embassy expenses aren't applicable. For example, like with us, we always book embassy expenses on behalf of our clients. We put 'em directly on our credit cards, so the workers are never actually out that money. Uh, now a lot of times one thing that I hear from employers is, okay, well I don't need to reimburse them that money.
From their inbound travel until they complete 50% of the work contract. And if I ask 'em why, they say, well, that's what the regulations say. But that is part of what the regulations say. But the regulations also say, and for the season of that same section, that this is subject to the Fair Labor Standard Act.
And there is oftentimes an FLSA issue when there's not an H-2A issue. If you don't reimburse these workers, uh, upon arrival are on their first check. Uh, and this is because if you deduct, if you subtract the expenses that they incurred from their first paycheck, then the total number of hours weren't in and the amount they were paid.
Is oftentimes below federal minimum wage, and this is when it's an FLSA issue. So, we like to have our employers just go ahead and reimburse these expenses upon arrival of the workers. Uh, this FLSA issue is almost always a problem whenever you are talking about workers coming from South Africa because the cost of inbound transportation is so expensive.
So, uh, it's best to just pay 'em on their first paycheck and move on with your life.
Okay, so when the workers arrive, you need to complete an I-9 for the workers with the I-9. You also want to, uh, you also want to complete section three. Again, if you're rehiring the workers or if you're transferring 'em from one application to another application. So, remember to do your I-9. If the workers don't have a social security number, help them get their social security number.
Now you might think, well, why is that on me? Why is that my problem? Well, if the IRS finds out that you didn't get your workers, their social security number, they can find you something to the tune of 23 to 26%. Of the gross wages of the worker. And so as, as you might imagine, that adds up quickly. So just take 'em to get their social security number so you don't have to deal with the IRS and that kind of issue.
Uh, whenever the workers arrive, you wanna take a copy of the Worker's Visa, passport and I-94. This is very important. After you take the copy of the documents, do not hold onto these documents. Give them back to the worker. Take your copy, return the do documents immediately to the worker. Some employers have asked me, well, what if my, my employees want me to hold onto those documents?
Can I just hold onto 'em for them? They say it's safer at our office than it is at the motel, and the answer is no. Don't hold onto your worker's, your immigration documents, because it becomes a human trafficking issue, and it's one of the. Very rare things that can actually result in criminal consequences.
Should the Department of Labor find out that you are holding on to the immigration paperwork of your workers. So, take a copy of their Visa passport I-94, then return those documents to the workers. Okay. When the workers arrive, if your workers are to have taxes taken out of their pay, have them sign a document stating that this is approved by the worker themselves.
Uh, and the, and so you're gonna have 'em completed W-4 but have them sign a document stating that they approve the tax deduction outside of the W-4, uh, so that you have e evidence in two places that they were informed and that they chose to allow that deduction. Uh, Have the workers sign a document with the workers acknowledging their obligation to leave the US or find a new employer after the visa expires, uh, and then reimburse workers for inbound travel expenses on their first check.
Okay, and if you wanna learn more, we've got all of our, our webinars posted on our videos page on our website, so feel free to use that as a resource. Uh, and now we can go ahead and move on to Q&A. That's all I had in terms of PowerPoints. Um, so if you have any questions, go ahead and pop 'em in the, uh, Q&A section there, and I'll be happy to answer 'em.
The, uh, one thing about onboarding new workers, especially as it relates to a Department of Labor audit, it's one of those things that, uh, the best. Offense is a good defense. So, whenever you're being audited by the Department of Labor, uh, as long as you, you preemptively took care of a lot of the issues that you know they're going to address.
The Department of Labor really likes to see that. They really like to see employers abiding by the reimbursement. On the first paycheck thing, cuz then they, they get to check that off of their FLSA issue as well. Cuz whenever they're auditing these things, they're not only auditing the H-2A regulations, they're arguing MSPA and they're also arguing, uh, or an auditing FLSA.
So, it's important to, uh, to do all those things on the front end. Okay. What happens if the worker paid someone from Mexico that told them about the contract after already signed the document saying they didn't pay anyone to come on the contract? Uh, so. If you have, if you find out that someone paid someone in Mexico for the opportunity to work on an H-2A Visa, you have an obligation to reimburse them for the amount that they've paid to that person.
Now, you might want to request proof from that worker that they actually paid this person, uh, because they, you have proof that they said they didn't. And so, you might want to request some evidence that they actually paid this person, but if they can supply you that evidence, they can also supply the Department of Labor that evidence.
Uh, and so it's best just to pay it preemptively. This is showing compliance with the H-2A regulations too. And if the Department of Labor found that out, they wouldn't be mad about it. They'd be like, oh, the employer did exactly as they were supposed to.
Uh, do we need to offer to withhold state taxes as well as federal taxes? Uh, yes. It's, yes. Yeah, just offer to withhold it. One thing is also take a look at your ETA 790, your work contract in the deduction section to ensure that your, it actually says that you may withhold taxes if the employees request that you do so.
If my HFA workers have arrived and working for a few months, then I have a qualified US worker reply within the 50% period. Do I have to hire the US worker? Yes, you do. Uh, this is call. And so, let's say. Uh, so just to, oops, I'm spill that coffee. Uh, so this question was if I have a US worker, uh, or H-2A workers, so my H-2A workers started in March, my 50, the 50% period.
Just so everyone's aware of what that is. You have an o an ongoing obligation to hire any qualified able and willing US applicants that apply for the position through 50% of the work contract. Uh, so this question is what if I have H-2A workers filling all of those roles and I have a US worker apply while I have H-2A guys?
Do I still have to hire that US worker? Can I tell 'em to buzz off because I've already filled the role with H-2A people, and you applied too late. If it's within the 50%, uh, recruit the recruitment period. You're required to still hire that person and there is, uh, there you would wanna notify if, let's say that this requires you to displace one of your H-2A workers, meaning you get to fire one of your H-2A workers cause you don't have enough work for them.
And the US worker, you get that approved by the Department of Labor certifying officer and then pay for that person's outbound transportation, but you no longer have any three-quarter guarantee obligations. Uh, so. Yes, you do have to hire that person. If it results in the displacement of an H-2A worker.
You kind of just have to deal with that, but you do need to get that approved by the Department of Labor prior to sending that person home. Uh oh. Your next question was, if I hire a US worker and have to fire my H-2A worker, how do I satisfy the three-quarter guarantee? You get it approved by the Department of Labor that this is displacement of a H-2A worker, and then you are no longer obligated to honor the three-quarter guarantee through the duration of the work contract.
But you do have to have, uh, honor the three-quarter guarantee through the period through which the H-2A worker was displaced. Uh, this question is, you mentioned the IRS confined for no social security number. Is that common? Um, I would, I mean, not as common as Department of Labor audits, but definitely an available remedy to the IRS.
Uh, and I, I think that it would probably be more common if more, uh, If the IRS knew that companies were utilizing H-2A Visas, but, um, yeah, so I, I would say it's not super common, but if your company gets audited by the IRS, It's an available remedy for them, so it's worth just getting their social security numbers.
But yeah, not, not super common in that I don't, you know, I think right now I've got nine pending cases with the Department of Labor for audits, and I have none for the IRS. I've only run into that issue two or three times, and so it's definitely not as common, but it is, uh, it does happen. All righty.
Well, I appreciate everyone participating in the Q&A. Uh, if you'll have any questions, you can always email me afterwards. My email's kyle@farmerlawpc.com. Uh, you can also get our website, got tons of content on there for, uh, H-2A Employers. They should be employers. We've got. Uh, my compliance eBook is down right now cuz we're updating it, but, uh, that'll be posted back here pretty soon.
You can also get that on our website. It has a ton of, uh, compliance-related advice in our, in our eBook too. So, if you have any other questions, just let me know. Other than that, I appreciate everyone participating.