In a growing economy, organizations in knowledge-intensive industries face a unique challenge: bringing together the best experts and specialists to support ambitious projects and to maintain a pipeline of talent for prospective growth. The relative flexibility of sourcing specialized talent as contract professionals or consultants comes with a countervailing challenge if that talent happens to come from outside the United States. The seemingly-flexible option of utilizing contract professionals now presents a significant increase in scrutiny from the Departments of Labor and Homeland Security.

Getting Pulled in Opposite Directions: Flexibility of Contract Professionals amidst Increasing Immigration Regulations

Temporary work visas in the U.S. are available for professional and “specialty occupation” foreign workers (such as the H-1B, H-1B1, or E-3). These visa categories are dually-regulated by the Department of Homeland Security (DHS) and the Department of Labor (DOL). Specifically, employers that want to sponsor such professionals must first file a Labor Condition Application (LCA), which is then certified by the DOL. The LCA collects key pieces of information on the petitioner (employer), the position, the location of work, the prevailing wage, and the offered wage. These requirements are placed on the employer, not the end-client where the work may be performed in a consulting or staffing arrangement.

However, new disclosure requirements on the latest iteration of the LCA regarding the “end-client” or the “place of employment” changes the calculus and now identifies companies that are benefiting from the expertise of contract professionals and consultants at their worksite.

A New DOL Form Potentially Ropes in Organizations That Rely on Contract Professionals

The DOL has made effective an updated LCA that employers must complete before they can file a petition for an H-1 or E-3 temporary worker. Notably, the revised form now requires employers (such as professional consulting firms) to disclose whether the worker associated with the LCA will be placed at a “secondary entity.” If so, the LCA must list the legal business name of that entity as well as the address of the place of employment.

The Fine Print: What Exactly Is the Revised LCA Asking for and Has Anything Changed?

While at first glance this end-company disclosure requirement may appear problematic, companies should be aware that not all placements of an H-1 or E-3 worker at their worksite must be disclosed. The DOL regulations regarding the LCA continue to reference “placement” and “place of employment,” which define when this disclosure is required.

In particular, DOL regulations allow for the presence of H-1 and E-3 employees at another company’s location, as long as the placement is “short-term” and “recurring but not excessive,” where it is the nature of the position to engage in frequent travel. In addition, the regulations specify several real-world business situations where a worker’s presence at another employer’s location is not considered a “place of employment.”

Reconciling the Apparent Conflict between Economic Reality and Business Immigration

The apparent tension between the flexibility of contract professionals and consultants and business immigration regulations is not unusual. Business immigration regulations strive to ensure that foreign national professionals have a U.S. employer that will provide a relatively-reliable source of employment, with fair compensation, that is on par with what is available to domestic workers. However, this concern has been heighted by the addition of initiatives intending to actively shield the American workforce from competition from global talent. This results in evolving administrative requirements that can dissuade the uninformed organization from sourcing contract and temporary talent. Given real shortages of highly-specialized professionals, the broad stroke of application of these initiatives can hurt growing organizations in knowledge-intensive industries.

Companies that currently rely on such contract professionals, as well as professional services organizations that hire, cultivate, develop, and place professional consultants on challenging and varied projects, should discuss the new disclosure requirements. Contracts for services should be reviewed to determine if and to what extent consent exists for sharing of information related to the specific locations and projects with which contract professionals will be engaged.

The Bottom Line: What Should Companies Do?

Employers that have H-1 and E-3 workers who are placed at client sites, and companies that receive those workers, should consider the following:

• The new LCA form requires that the end-client name and place of work be listed. The LCA is publicly available (through a bit of digging) at DOL's Labor Certification Registry. Therefore, the presence of H-1 or E-3 workers at a company’s worksite will now be publicly available.

• Companies should be aware of the limited short-term placement and non-worksite exemptions that may be available pursuant to DOL regulation, and determine if any H-1 and E-3 workers who have limited presence at client workplaces even trigger a disclosure requirement.

Moreover, thanks to the miracle of modern technologies, some organizations may not even be effectively impacted. Technology has broken geographic barriers and torn down the proverbial cubicle. Workers are increasingly “dialing-in,” “conferencing out,” and are effectively working from anywhere, including from a remote office location. Many professionals may be able to successfully do their job with little need to visit a physical client workplace, and primarily perform client-facing work from their direct employer’s location. With the right combination of communication technology and an inclusive culture for on-site and telework colleagues, a host organization can ensure that such members of the team have the right interaction and engagement to remain valuable and engaged members of the team.