Client Alert commenting on the scope of the prohibition on H-1B hires under Sec. 1611 of the Stimulus Bill

1. KELLER AND HECKMAN LLP
CLIENT ALERT
Keller and Heckman LLP
February 13, 2009 Serving Business through Law and Science ®
Congress to TARP Recipients: “Employ American Workers – Not H-1B’s”
Section 1611 of the Conference Committee Report on the Stimulus Bill (H.R. 1), entitled the
“Employ American Workers Act,” makes it illegal for any company receiving TARP funding to hire an H-1B
worker without certifying that no essentially equally qualified American worker has or will be displaced and
that the company made affirmative efforts to first find a qualified U.S. worker for the job, including offering
training to existing workers. These new rules are based on requirements found in the American
Competitiveness and Workplace Improvement Act of 1998 (ACWIA), which sought to limit American job
losses caused by outsourcing and subcontracting with job contractors that supplied H-1B workers,
particularly in the computer programming and engineering fields.
Enactment of the Employ American Workers Act impacts the hundreds of banks, brokerage
houses, and auto manufacturers that took TARP (Troubled Assets Relief Program) funds and who are now
preparing to file H-1B petitions in hopes of securing one or more of the 65,000 visas made available
annually in this category through a lottery process. Likewise, it affects the ability of those companies to hire
laid off H-1B workers seeking replacement employment. Whatever the circumstances, TARP funded
companies will need to complete Labor Condition Applications attesting to satisfaction of the non-
displacement and affirmative recruitment requirements – assuming they can do so truthfully, especially given
the massive layoffs that have taken place among those employers over the last six months, and the number
of U.S. workers looking for work.
Some critics complain that the Employ Americans Act does not go far enough in preserving
American jobs because it does not prohibit TARP recipients from using the services of job contractors for
KELLER AND HECKMAN LLP WASHINGTON, D.C. | BRUSSELS | SAN FRANCISCO | SHANGHAI | www.khlaw.com

2. outsourcing jobs previously filled by U.S. workers. Such a work-around could be extremely risky, however,
exposing TARP employers to harsh Congressional scrutiny and even potential criminal prosecution for
conspiracy.
This past week, the U.S. Attorney for the Northern District of Iowa released information concerning
the indictment of Visions Systems Group, Inc. and the arrest of 11 of its executives on charges of a criminal
conspiracy to commit mail and wire fraud growing out of misrepresentations contained in H-1B labor
condition applications and visa petitions. The indictment states that the government is seeking a forfeiture of
$7.4 million in profits derived from the illegal scheme, in addition to other criminal fines and penalties, and
criminal sentences of 10 years or more against the individual defendants. The U.S. Attorney announced
that investigation was conducted with the cooperation of agents from the U.S. Department of Labor, the
Department of Homeland Security and the State Department and is ongoing. Senator Charles Grassley
(R.-Iowa), a sponsor of the Employ Americans Act, has been a vigorous opponent of the H-1B program over
the past several years and it is probably no coincidence that the first criminal prosecution involving an H-1B
employer was filed in his home state.
Simply stated, access to the H-1B program for TARP recipients for new hires appears to be dead at
least through the second anniversary of enactment under the existing sunset provision. TARP employers
are advised to carefully review all proposed H-1B sponsorships and subcontractor relationships to ensure
that the requirements of the Employ Americans Act have been satisfied. Likewise, job contractors who
supply H-1B personnel to TARP recipients should take additional precautions to ensure that they are in
satisfaction of the secondary displacement rules with respect to such clients.
KELLER AND HECKMAN LLP WASHINGTON, D.C. | BRUSSELS | SAN FRANCISCO | SHANGHAI | www.khlaw.com

3. For more information on Keller and Heckman LLP’s labor, employment and immigration worksite enforcement issues, please
contact Mary E. Pivec at 202-434-4212 pivec@khlaw.com
KELLER AND HECKMAN LLP WASHINGTON, D.C. | BRUSSELS | SAN FRANCISCO | SHANGHAI | www.khlaw.com