On May 6, 2002, the Department of Labor published a Notice of Proposed Rulemaking to amend DOL regulations governing the filing and processing of labor certifications. The new program, called Program Electronic Review Management, or "PERM," was proposed with the goal of creating a more streamlined system for certifying that there are no U.S. workers able, wiling and qualified to fill the permanent position being offered to a foreign national. PERM will replace the current options for filing labor certifications and create a single process modeled after the current RIR process.

The PERM program is the new automated fast track adjudication system that will involve the filing of labor certifications using machine-readable forms. The forms will be fed into a computer, which will review the application for completeness and the presence of any "flags" or issues that warrant further investigation, such as the presence of unusual or restrictive requirements, a wage offer that falls below the minimum prevailing wage, etc. The biggest benefit the PERM program offers is speed in adjudication. PERM promises that cases without defects or issues may be approved in as little as 21 days. However, employers of foreign talent should be aware of several issues that may be of concern under the PERM program as well.

First, it is still unclear when the PERM program is scheduled to go live. The DOL has not yet published final regulations, although recent comments indicate this will be done in early to late Fall of this year - with actual implementation to take place 45 to 90 days after. Second, it is also unclear what the exact standards and guidelines will be for the PERM labor certification program. For example, certain provisions included in the proposed regulations suggest that employers may not be able to delineate specific job requirements for the position described in the application. Also, it is likely that PERM will impose additional recruitment requirements beyond what is currently necessary under the RIR process. This means employers with RIR cases currently in the queue will need to engage in a new PERM based labor market test in order to seek conversion of the case.

It is also unclear what the impact will be on cases currently pending adjudication. The DOL maintains that all cases currently in the system will be processed per the normal course - and will be eligible for conversion to PERM at the Petitioner's election. Finally, employers must keep in mind the current regulations on seeking extensions beyond the six- year maximum stay for H-1B visa holders. In order for H-1B employees to be eligible for an extension of stay, they must be the beneficiary of a labor certification or immigrant petition that has been pending for more than 365 days at the time the extension is sought.

Once the PERM program is fully implemented, it will completely replace the existing system and employers will no longer have the option of filing standard or RIR applications. Considering that PERM, like RIR, will require employers to first engage in an upfront labor market test and establish a shortage of US workers in order to file an application, unless there is a dramatic pick up in the economy, it may be possible that employers will not be able to successfully establish a shortage of US workers in order to file an application once the PERM program goes live. As such, it is recommended that employers of H-1B non-immigrants who may be encroaching on the commencement of their sixth year should not wait for the implementation of the PERM, but should seek to a standard labor certification application as soon as possible.

Employers are advised to consider carefully the benefits and disadvantages for pursuing a particular option - as well as weigh and balance the potential delays and conversion problems that may arise for pending applications once PERM is implemented.

Once PERM is implemented, employers will no longer have the ability to file an RIR or traditional labor certification. Consequently, employers must also factor in the benefits and risks of waiting and filing under PERM.

PERM promises to be a more streamlined system for the processing and review of labor certifications. The proposed PERM process, if implemented, will replace the current manual review process with an automated review/certified attestation process similar to the existing DOL Labor Conditions Application (LCA) program. In addition, the PERM program will do away with the two-tiered review process; applications will no longer be subject to State and Federal review, but will be submitted directly with the DOL Regional Office with jurisdiction over the case. The PERM program is indeed an attractive concept, however, there are concerns that the final regulations will include a few provisions that may be a concern to employers.

First, the proposed PERM regulations limit severely the use of special requirements. Under the current regulations, employers are allowed to describe special skills that employees may need to successfully perform job duties. Under PERM, however, employers would only be able to list job requirements in terms of the number of years of required experience, education and training needed to perform the job.

Second, the proposed regulations suggest the elimination of the business necessity rule. Under the current rule, skills that are not normally required to perform the job duties are flagged by DOL as being unduly restrictive. Should it be determined that a job requirement to be unduly restrictive, the DOL would deny the labor certification unless the employer is able to rebut the DOL's findings by demonstrating that the job requirement bears a reasonable relationship to the position in the context of the employer's business, and thus, is essential to the reasonable performance of the job duties. Under PERM, employers may not have the option to show how a job requirement is a business necessity - which would in effect force employers to submit applications that do not accurately reflect the actual and true requirements for the position.

Third, the proposed PERM regulations appear to eliminate the use of alternative experience. Employers could no longer be able to consider an applicant's experience if it was gained in a field other than the occupation for which the labor certification was being filed. In addition, employees who have experience with a business entity that is affiliated with the employer in any capacity would be unable to count the experience gained in that position towards the experience requirement in the labor certification application.

The proposed PERM regulations requires an employer to consider applicants who are authorized to work in the U.S. even if an applicant does not meet all the requirements listed in a labor certification. Under PERM, if the U.S. applicant can learn the skills needed to perform the job duties during a "reasonable period of on-the-job training," he or she would not be considered an unqualified worker. The final PERM regulations will also remove the 5% variance currently allowed under the existing regulations and thus, require employers to pay a wage equal to or higher than the minimum prevailing wage, require very specific content in employers' advertisements, including the name of the company and wage offered, and allow the DOL to revoke a labor certification for cause if the certification was issued less than one year from the date of revocation or for an application that hasn't received a visa number, whichever is earlier.

While employers should be aware of these potential problems with PERM, they should also consider the potential advantages of PERM. The most significant of these is the expected rapidity of labor certification processing. This is of great consequence given the extensive backlogs facing traditional and RIR applications. Rather than waiting years for adjudication of the labor certification, employers will likely face processing times measured in weeks or even days. With this in mind, it should be clear to employers that there is no "right" way to proceed with labor certifications in these uncertain times. The particular circumstances surrounding the specific employer, job, and employee all play a role in which process may be the best route. The preceding discussion is intended to help employers understand the benefits and risks of each option.

For more information regarding this bulletin, or to schedule a consultation or onsite training, please contact Ryan Cook at 206.448.7000.