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[Blogger’s Note: Today is the last day to submit comments to the Justice Department on its proposed rule which would modify its immigration-related antidiscrimination regulations, which are enforced by the Office of Special Counsel for Unfair Immigration-Related Employment Practices (the Special Counsel). The proposal’s fine print reveals that DOJ’s effort is in essence an unlawful power grab that would expand the time for the Special Counsel to file a claim before an Administrative Law Judge from 180 days to five years, strengthen the government’s hand in proving its case, and strip employers of legitimate defenses. My colleague, Maura Travers, and I drafted a comment which lays out why this grab for power should be stopped. Today, on behalf of the Alliance of Business Immigration Lawyers, I submitted the following ABIL comment without the caption and byline of this post. Stay tuned for the final rule. Meantime, see all public comments here. Comments of the American Immigration Lawyers Association and the U.S. Chamber of Commerce are accessible at the preceding links.]
Beware the Justice Department’s Stealthy Grab for Enhanced Power to Enforce Immigration Discrimination Rules
By Angelo A. Paparelli and Maura Travers
Submitted Electronically via https://www.regulations.gov
Hon. Loretta E. Lynch
U.S. Department of Justice
RE: Comment on Proposed Rulemaking entitled “Standards and Procedures for the Enforcement of the Immigration and Nationality Act,” 81 Fed. Reg. 53965, with deadline extended, 81 Fed. Reg. 63155. [CRT Docket No. 130; AG Order No. 3726-2016] RIN 1190-AA71
Dear Attorney General Lynch:
This comment will respond to your Notice of Proposed Rulemaking entitled Standards and Procedures for the Enforcement of the Immigration and Nationality Act, 81 Fed. Reg. 53965 (the proposed rule). I submit this comment on behalf of the Alliance of Business Immigration Lawyers, of which I am a member, and in my capacity as a lawyer who has litigated numerous administrative claims of unfair immigration-related employment practices. The views I express are those of ABIL and me, and do not necessarily reflect the opinions of any other person or entity.
ABIL is comprised of 19 of the top U.S. business immigration law firms and practice groups, each led by a prominent member of the U.S. immigration bar. ABIL member firms employ over 250 attorneys (700+ total staff) devoted to business immigration in 25 major U.S. cities, and 25 international destinations. A number of our ABIL members have served as a past President or as members of the Board of Governors of AILA (the American Immigration Lawyers Association), the 11,000-member organization comprised of most U.S. immigration lawyers. Our ABIL lawyers are also immigration law professors at prominent law schools, and have written well regarded immigration treatises and textbooks. ABIL regularly comments on proposed rules and draft agency memoranda.
Introduction. The proposed rule would amend 28 CFR § 44 — which was codified to enforce § 102 of the Immigration and Control Act of 1986 (IRCA) — in order to incorporate the statutory text as amended by § 421 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). The current rule prohibits certain unfair immigration-related employment practices and designates the Office of Special Counsel for Immigration-Related Unfair Employer Practices (Special Counsel) to investigate complaints.
As explained below, the proposed rule, without adequate or convincing justification, would inter alia unlawfully expand the class of individuals protected against citizenship status discrimination to include all non-citizens, and unfairly expand the liability of employers and other respondents alleged to have engaged in unfair immigration-related employment practices. These changes contravene the statutory text and the legislative history of the governing statutes, and would impose unreasonable burdens on employers, even though an employer’s actions were not motivated by immigration-related animus or hostility. The proposed rule would also substantially expand the authority of the Special Counsel to investigate allegations of immigration-related unfair employment practices and the time periods within which individuals and the Special Counsel must file complaints against employers with the Office of the Chief Administrative Hearing Officer (OCAHO).
Overly Broad Proposed Definition of Citizenship Status. Proposed 28 CFR § 44.101(c) would provide a new definition of the phrase “citizenship status” found in Immigration and Nationality Act (INA) § 274B [codified at 8 U.S.C. § 1324b] to mean “an individual’s status as a U.S. citizen or national, or non-U.S. citizen, including the immigration status of a non-U.S. citizen.” By statute, however, the protection against citizenship status discrimination only applies to certain protected individuals, not to all non-citizens. Protected individuals under § 274B include only U.S. citizens, certain lawful permanent residents who are taking timely steps to become U.S. citizens through naturalization, and persons granted classification as refugees, asylees or temporary residents under IRCA’s 1986 legalization program (assuming that such temporary residents still exist).
The citizenship-status definition should not be expanded to include all non-citizens but only to persons who are protected individuals under INA § 274B. Thus, the definition must be narrowed so that, as revised, it would expressly exclude the following foreign nationals (1) lawful permanent residents who have not timely pursued naturalization, (2) applicants for asylum or refugee status, and (3) foreign citizens in the United States, with or without a particular legal status, who are not “protected individuals” under § 274B.
The Department of Justice (DOJ) offers Kamal-Griffin v. Cahill Gordon & Reindel, 3 OCAHO no. 568, 1641, 1647 (1993), as justification for the inclusion of all non-citizens in the proposed definition of citizenship status. That decision, however, is inapplicable because the supposed proposition for which the Special Counsel cites the case is obiter dictum — given that the claimant, Ms. Kamal-Griffin, was a U.S. lawful permanent resident. As a result, this case only provides justification for limiting the class of non-citizens to persons who are statutorily protected against citizenship status discrimination, including lawful permanent residents such as that claimant. In Kamal-Griffin, the Administrative Law Judge stated:
IRCA’s legislative history makes clear that Congress intended the term “citizenship status” to refer both to alienage and to non-citizen status. The House of Representatives Committee on the Judiciary (“Committee”), recognizing the importance of an authorized individual’s right to work, stated its rationale for prohibiting employment discrimination based on citizenship status:
The Committee does not believe barriers should be placed in the path of permanent residents and other aliens who are authorized to work and who are seeking employment particularly when such aliens have evidenced an intent to become U.S. citizens. It makes no sense to admit immigrants and refugees to this country, require them to work and then allow employers to refuse to hire them because of their immigration (non-citizenship) status. Since Title VII does not provide any protection against employment discrimination based on alienage or non-citizen status, the Committee is of the view that the instant legislation must do so.
H.R. Rep. No. 682, Part 1, 99th Cong., 2d Sess. 70 (1986), reprinted in 1986 U.S.C.C.A.N. 5649, 5674. (Emphasis added.)
Clearly, then, Kamal-Griffin stands for the proposition that only narrowly prescribed categories of non-citizens are eligible to assert citizenship status discrimination, namely, lawful permanent residents, refugees and asylees. Accordingly, the definition of citizenship status should be correspondingly narrowed to exclude non-citizens who are not “protected individuals” under § 274B.
Proposed Elimination of Burden on Special Counsel to Prove Animus or Hostility. Among the most pernicious amendments to the current regulation sought by the DOJ in the proposed rule would hold employers liable for citizenship status discrimination if they treat employees or applicants for employment differently based on their immigration status, regardless of whether there is proof of animus or hostility involved. The proposed rule would amend the discriminatory intent requirement by incorporating the term “discriminate” as the term is allegedly now defined in § 274B following enactment of § 421 of IIRIRA in 1996. The proposed rule seeks to clarify that “discrimination means the act of intentionally treating an individual differently, regardless of the explanation for the discrimination, and regardless of whether it is because of animus or hostility.”
The Special Counsel’s position seems to be that the DOJ must merely prove that the employer intended the natural and foreseeable consequence of its actions and that essentially violations can be found on virtually a strict liability basis. That position is incompatible with the current regulation and the cases interpreting INA § 274B. To establish a violation under applicable case law, the Special Counsel must prove that an employer knowingly and intentionally discriminated on the basis of citizenship status.
The regulations interpreting INA § 274B provide:
(a)(1) General. It is an unfair immigration-related employment practice for a person or other entity to knowingly and intentionally discriminate or to engage in a pattern or practice of knowing and intentional discrimination against any individual (other than an unauthorized alien) with respect to the hiring, or recruitment or referral for a fee, of the individual for employment or the discharging of the individual from employment-
Because of such individual’s national origin;
In the case of a protected individual, as defined in 44.101(c), because of such individuals’ citizenship status.
28 C.F.R. § 44.200 (emphasis added.) Sections (a)(2) and (a)(3) describe the companion retaliation and documentation abuse provisions, which are defined as “unfair immigration-related employment practices,” subject to the same standard. Id.
The cases discussing the statute and regulations make clear that a specific, discriminatory intent must motivate any alleged violation of anti-discrimination provisions of INA § 274B.
Instructive is the case of U.S.A. v. Diversified Technology & Services of Virginia, Inc., 9 OCAHO 1095 (2003). In that case, the Special Counsel maintained, just as in the proposed rule, that “intentional discrimination does not require proof that the employer subjectively harbored some special, hostility, toward the protected group, only that the employment decision was premised upon the protected characteristic.” Diversified Technologies, 9 OCAHO 1095. The Administrative Law Judge (ALJ) rejected that analysis, finding instead that
The adverse decision must be shown to have actually been made by reason of, on account of, or on the basis of the protected characteristic. . . . This means at a minimum that there must be a factual basis upon which a rational fact-finder could infer a causal connection; the nexus cannot be established just by a formulaic assertion that the protected characteristic was the reason.”
Id. at 19. (Emphasis added.) The court also ruled:
Congress did not intend that all mistakes in the verification process should give rise to penalties under § 1324b either; by amending 1324(b)(a)(6) in the manner it did, Congress has specifically instructed us that errors in carrying out documentary inquiries for purposes of § 1324a compliance can now be penalized under § 1324 only where there is a showing that there actually was a discriminatory intent.
Id. at 21 (emphasis added). See also, Ondina-Mendez v. Sugar Creek Packing Co., 9 OCAHO 1085 (2002) (holding that “[t]he addition of the intent requirement means that now an employer may avoid liability if the employer can present persuasive evidence that its request for additional documents, its refusal to accept verification documents that appear genuine on their face, was made for legitimate reasons not attributable to discrimination.”)
Given these decisions, the proposed rule should be revised so that the Special Counsel must still present direct evidence of a discriminatory intent, hostility or animus in order to establish a violation of the statutory protection against citizenship status discrimination.
Unjustifiable Expansion of Time Periods for Investigation and Deadlines to File Complaints. Under the current regulations at 28 CFR § 44, an individual or an organization may file a charge with the Special Counsel within 180 days of the alleged occurrence of an immigration-related unfair employment practices. If the Special Counsel receives a charge more than 180 days after the alleged occurrence, the Special Counsel must dismiss the charge with prejudice.
The proposed rule would vastly expand the Special Counsel’s investigatory timeframe by granting the Special Counsel discretion to apply the principles of “waiver, estoppel, or equitable tolling” to investigate charges filed beyond the 180-day filing deadline. These expanded “equitable” provisions provide the Special Counsel with immense leeway to obviate the statutory 180-day filing deadline found in INA § 274B.
As provided in § 274B and 28 CFR § 44, the Special Counsel must undertake an investigation of a charge and file a complaint before an administrative law judge (ALJ) within 120 days of receipt of the charge. If the Special Counsel declines to file a complaint, the charging party must file a complaint with an ALJ within 90 days after receipt of the Special Counsel’s letter of determination.
Under the proposed rule, however, the Special Counsel will not be bound by the statutory time limits that are applicable to individuals filing private actions. The Special Counsel’s authority to file a complaint based on a charge by a complaining party would be subject to the “equitable limits on the filing of a complaint.” In other words, the Special Counsel would have up to five years to file a complaint with the Office of the Chief Administrative Hearing Officer (OCAHO).
As a practical matter, the elimination of the current deadlines, quite foreseeably, would be extremely burdensome and disruptive to employers who are asked to produce documents for inspection during an investigation — including Employment Eligibility Verification Forms (Forms I-9) — up to five years after an alleged occurrence. Under the current U.S. Citizenship and Immigration Services I-9 regulations, employers are only required to retain Forms I-9 for terminated employees for a maximum of three years after the date of hire or one year after the date of termination, whichever is later.
Even more troubling, the proposed rule would inexplicably eliminate the current 180-day limit within which the Special Counsel may file a complaint alleging an unfair immigration-related employment practice with the OCAHO. In making this proposal, the DOJ does not explain why it is no longer reasonable to continue with the current rule which was found acceptable to the Department in 1987, as shown in the excerpt from the Supplementary Information accompanying the current rule:
Section 44.304 Special Counsel acting on own initiative.
Section 44.304(b) has been amended in the final rule to limit the period of time in which the Special Counsel. on his or her own initiative. may, investigate and file a complaint of an unfair immigration-related employment practice. We believe that requiring a complaint to be filed within 180 days of the occurrence of an unfair immigration-related employment practice is a reasonable implementation of the desire of Congress reflected in 8 U.S.C. 1324b(d)(1), (3), to place a time limit on the actions of the Special Counsel.
52 Fed. Reg. 37402, 37409 (Oct. 6, 1987). (Emphasis added.)
Accordingly, these proposed changes unjustifiably expanding the time periods for investigation and the deadlines to file complaints, should not be adopted. The current rule should stay the same. If in a given case equitable principles ought to be applied to extend these time periods, then the decision to do so should be reposed solely in the discretion of the Administrative Law Judge based on the evidence presented.
Misleading Change of Definition of Charging Party. The proposed rule contains an amended definition of the term “charging party.” It would replace the word “individual” with the term “injured party.” The DOJ maintains that the changed term is merely undertaken “in order to simplify the regulatory text.” The definition of charging party should remain as it now is or be clarified to eliminate the impression, even if only subliminally, that an individual filing a claim has been “injured.” Use of the phrase, “injured party,” will then likely appear in every OCAHO published decision where a person files a claim, even in cases where an Administrative Law Judge has dismissed the claim as unproven. The mere assertion of injury is insufficient to be given the designation of “injured party.” This term in the definition should remain the same or be changed to a neutral term, such as “claimant.”
* * *
For these reasons, Attorney General Lynch, you should reject the Special Counsel’s proposed changes to the current regulations. The changes reflect the unlawful and unfair placement of the government’s finger on the scales of justice. When Congress enacted INA § 274B, and amended it with the enactment of IIRIRA, it could never have been envisioned that the 1996 limitations on the authority of the Special Counsel would be used as justification for a wholesale expansion of governmental power and the regulatory elimination of lawful defenses that employers may assert before an ALJ. The scales of justice are in equipoise. They should remain that way.
The Alliance of Business Immigration Lawyers
Angelo A. Paparelli, member
The Department of Homeland Security, through its component agency, U.S. Citizenship and Immigration Services (USCIS), has issued a proposed regulation to allow a qualified foreign citizen to gain entry and be employed in the United States if he or she will engage in activities that are likely to “increase and enhance entrepreneurship, innovation, and job creation in the United States” with a “start-up” entity. The USCIS proposed regulation would not change any other means of gaining work permission under the existing employment-based visa categories, e.g., the EB-5 immigrant investment program, immigrant visa classifications based upon, or exempt from, PERM labor certification, or through family-based immigration avenues.
Under the Immigration and Nationality Act, parole (an immigration “term of art” having nothing necessarily to do with the criminal laws) is a discretionary grant of permission to enter the U.S. under narrowly prescribed terms. Parole is not a formal “admission” to the country but a specially permitted “entry.” Unlike a green card or work visa — both of which are considered a legal “status” in the United States — parole can be automatically revoked by immigration officials without mandatory notice to the parolee. USCIS proposes that once the application for entrepreneurial parole is approved, the applicant and family members must leave the U.S. in order to be granted parole; they may not change to a nonimmigrant status within the United States.
USCIS proposes an initial two-year grant of parole to a qualifying “International Entrepreneur,” with one additional three-year renewal allowed. Under the proposal, the entrepreneurial parolee may work only in a start-up entity formed within the last three years in which s/he (a) will play a “central role in the operations and future growth of the entity,” and (b) owns at least a 15 percent interest. USCIS also proposes that the parolee’s spouse and children may be given parole entry, and that the spouse can be granted open-market employment authorization. The entrepreneurial parolee, however, may only be employed by the USCIS-approved start-up entity. USCIS also proposes to amend its Form I-9 (Employment Eligibility Verification) to allow a start-up entity to accept an original foreign passport and Form I-94, issued by U.S. Customs & Border Protection with the notation “PE-1,” as a “List A” document of identity and employment authorization.
The pre-publication version of the rule and its preamble run to 155 double-spaced pages. Once it is published in the Federal Register, expected in the next few days, the public will have 45 days to offer comments. Proving eligibility as an International Entrepreneur will require a $1,200 filing fee, completion of an Application for Entrepreneur Parole (Form I-941) and the submission of extensive evidence. USCIS will review the evidence and give a thumbs-up approval or deny the application with no right of rehearing or appeal.
In order to qualify, the parole applicant must show that the start-up entity has the “substantial potential for rapid growth and job creation.” This can be established through investments from established “U.S. investors (such as venture capital firms, angel investors, or start-up accelerators).” The parole applicant may prove this with evidence that the “entity has received investments of capital totaling $345,000 or more from established U.S. investors with a history of substantial investment in successful start-up entities.” USCIS proposes that aside from the parole applicant, only U.S. citizens and lawful permanent residents (green card holders) may invest in the start-up. A start-up entity may employ no more than three entrepreneurial parolees, according to the USCIS proposed rule.
Alternatively, the proposed rule suggests that the submitted evidence should include proof of grants or awards of at least $100,000 from local, state or federal government entities that have “provided support for economic, research and development, or job creation purposes.”
Venture capitalists and foreign entrepreneurs — who have waited since November 2014 to see how USCIS would articulate President Obama’s Executive Action announcing a proposed rule — are likely to be disappointed. They may see the benefit of entrepreneurial parole as too small and too short in duration in return for the effort to establish the proposed rule’s very burdensome and narrow requirements. Moreover, they may be disappointed to learn that the USCIS proposal fails to take into account the harm associated with a revocation of parole (whether based on material business changes or otherwise) and the absence of any administrative or judicial review. Also disappointing is the realization that the proposed regulation offers no pathway to lawful permanent resident status.
Fortunately, however, if USCIS receives compelling and substantiated comments within the next 45 days, the final rule may become a more viable avenue to jump-start innovation, job creation and economic growth. Only time will tell.
Several widely-publicized actions by the Securities Exchange Commission (SEC), and the inevitable litigation that has piled on in consequence, have pressure-tested the EB-5 ecosystem and found it defective. Simply stated, the system too likely and too often fails. Sadly, many EB-5 investors, after writing half-million-dollar or greater checks, ultimately have learned that no balances remain in their capital accounts and no green cards land or stay in their own and their family’s wallets.
Stripped of cash and cards, an unacceptable number of EB-5 investors find out that they have been fleeced. This calamity is not necessarily attributable to the ever-present moral hazard of failing to thoroughly investigate a proposed investment, and imprudently placing at-risk funds into an unsound business opportunity. Rather, the flaw lies in structural and process failures of malfeasant government officials and market participants to take care that EB-5 investors are adequately protected from errant or unscrupulous promoters, developers, regional-center principals and migration agents, and from sundry Ponzi schemers, garden-variety fraudsters and sophisticated con artists.
No EB-5 stakeholders and the ecosystem itself cannot continue to thrive if too many investors are defrauded of money and the promised permanent residency. Clearly, a healthy, sustainable EB-5 ecosystem cannot endure without meaningful investor protections and reliable safeguards that promote real job creation.
Why is this happening?
Culprit number one — thoughtless lawmakers. The successive Congresses that crafted and amended the EB-5 program surely must have known that some degree of fraud, waste, and abuse are the inevitable byproducts of all government programs. Yet, lawmakers never included investor protections in the enabling EB-5 legislation. Even more appalling, our legislators should have foreseen that foreign investors, many of whom lack rudimentary English fluency or business savvy, would at once be dazzled by the allure of a green card and likely unaware of the risk that the U.S. government’s own EB-5 program would be unsafe.
The Immigration Act of 1990, the law that ushered in the EB-5 program, and follow-on amendments, never authorized federal immigration administrators to debar from program participation blatantly out-of-compliance regional centers, developers, hucksters and their co-conspirators, or to protect investors from the harsh consequences of clearly foreseeable fraud and financial crimes. On the contrary, Congress knew from the outset that some deals will likely go south because scoundrels might hoodwink investors, or because other investments involve business plans with little likelihood of actual success.
Nonetheless, from inception, the law has provided that conditional residency would end and EB-5 investors brought before immigration judges in deportation proceedings if investments were not sustained — something that’s hard to do if one has been swindled — or the requisite jobs were not created.
Congress should also have known that securities law enforcers and immigration administrators would probably not quickly uncover the shenanigans hiding in some unregistered investments whose job-creating worthiness — by legislative design — would only be determined some two years hence.
Regrettably, Congress never provided for a real-time, on-the-scene watchdog to protect investors’ interests and make sure that promised actions supposedly leading to job creation for U.S. workers would actually happen.
Culprit number two — unaware and insensitive bureaucrats. As the SEC has acknowledged, it arrived several years late to the EB-5 program, having been oblivious for too many years to the Commission’s established statutory duty to protect investors in all securities transactions, including EB-5 deals. While SEC enforcement of EB-5 investments has fortunately intensified in the last few years and months, the Commission most often will likely play only an ex post facto enforcement role in punishing wrongdoers and trying to make investors whole once a deal has already failed or investors have been hurt, unless a whistleblower or grieving investor surfaces sooner.
So too have immigration administrators been derelict. Regulations of the legacy agency, the Immigration and Naturalization Service (INS), and the current Department of Homeland Security immigration components — U.S. Immigration & Customs Enforcement (ICE) and U.S. Citizenship and Immigration Services (USCIS) — offer defrauded investors no relief or even the possibility that discretion might be favorably exercised. To be sure, USCIS has tasked its Fraud Detection and National Security Directorate to make unannounced site visits to projects and regional centers and called for investor interviews when the issue of removing conditions on residency are to be ultimately adjudicated. These actions, however, have yet to occur in great numbers, may not be efficacious, or may just be too little too late.
Culprit number three — EB-5 market participants. The construction, lending and escrow industries — sectors especially active in EB-5 projects — have long been accustomed to the salutary, sentinel effect of meaningful oversight. Money doesn’t move from one contracting party to another unless predetermined and mutually agreed conditions are satisfied. The ever-present risk that funds or assets will be stolen, lost or wasted, or that desired outcomes might not be achieved, can be eliminated or mitigated if a real-time watchdog monitors contract compliance and fulfillment. The same safeguard could readily be applied for the protection of EB-5 investors and the assurance of job creation — but until now EB-5 market players seemed not to care. Instead, conflicts of interests continue to abound in the EB-5 industry and wrongdoers still go undetected until it’s too late.
What’s to be done?
All three culprits can expiate their sins if they act together or at least separately to introduce a new participant in the EB-5 ecosystem — the independent fiduciary — a person or firm that would represent the interests of investors in trying to assure the ultimate return of principal, the maximization of profits (once job creation at the requisite level has been confirmed by USCIS), and the ultimate prize — unconditional permanent residence.
An independent fiduciary would act much like a bank officer who decides whether agreed conditions have been satisfied before releasing progress payments of loan proceeds. The investors’ independent fiduciary could also perform:
an auditing function to confirm that required business and accounting records are maintained, and only permissible expenditures are paid,corporate secretary/treasurer functions to make timely disclosures to investors of financial activities, monitor fund administration and job creation/hiring, give notice of the time, date and methodology for investors to vote on corporate matters, and report any significant developments or material changes to the business plan,a watchdog function to confirm that insurance underwriter conditions are fulfilled and required permits and licenses are maintained; andan education and information function to explain to investors the role and activities of the independent fiduciary, and formally confirm to government officials how EB-5 program requirements are met when and as they are due.
Other loss mitigation safeguards could also be established. These include (a) the expanded availability and acquisition of EB-5 insurance to pay a form of indemnity (the return of the investment) if investor petitions are not approved or conditions on residence are not removed, (b) the addition of other traditional forms of insurance protection (e.g., fidelity bonds, and coverage for errors and omissions, business interruption, directors and officers liability and general liability), and (c) the use of letters of credit.
Without eliminating moral hazard, Congress could provide in the forthcoming integrity measures that a regional center’s or project developer’s engagement of an independent fiduciary, purchase of particular types of insurance, and/or arrangement for a letter of credit would serve as a good-faith prohibition against the denial or loss of lawful permanent resident status in cases where the SEC, ICE or USCIS determines that EB-5 investors have been defrauded.
USCIS could add similar protections in its (reportedly) soon-to-be-published EB-5 regulations. The agency could also specify by regulation or policy memorandum circumstances where the exercise of prosecutorial discretion should be exercised and of the full range of its parole authority and employment authorization are granted to defrauded but otherwise admissible EB-5 investors.
Market players should also have “skin in the game” of protecting EB-5 investors. They should require the engagement of independent fiduciaries and procurement of appropriate insurance coverages or letters of credit that reduce but do not eliminate all investment risk so that USCIS’s at-risk capital requirements are nonetheless satisfied. Market participants should also recognize that risk reduction will add costs but likely generate overriding cost savings that will redound to the benefit of primary lenders, project developers and regional centers while also attracting migration agents, investment advisors and the EB-5 investors themselves. Ultimately and ideally, only deals with fiduciary and insurance protections will be marketable.
* * *
Checks and balances — the brainchildren of the Founding Fathers — established our constitutional form of government that has endured for centuries. One of these features is the protection of minorities against majority power. So too will a new system of checks and balances protect vulnerable EB-5 investors likely reduce the prospect that investors will write very sizable checks but yield no balances in their capital accounts or place green cards in their wallets.
Updated 06-24-2016 at 12:48 PM by APaparelli
[Blogger’s Note: This post is submitted as a necessarily-lengthy formal comment to the November 20, 2015 draft guidance of U.S. Citizenship and Immigration Services, PM-602-0122, interpreting the phrase, “the same or [a] similar occupational classification” as used in the “increased job flexibility” provisions of Immigration and Nationality Act (INA) §§ 204(j) and 212(a)(5)(A)(iv). This comment incorporates by reference the content of all hyperlinked words and phrases below.
[By email: email@example.com
[Attention: Hon. León Rodriguez, Director, U.S. Citizenship and Immigration Services
[SUBJECT: Comment of Angelo A. Paparelli to Draft Policy Memorandum PM-602-0122, “Determining Whether a New Job is in ‘the Same or a Similar Occupational Classification’ for Purposes of Job Portability, Immigration and Nationality Act (INA) §§ 204(j) and 212(a)(5)(A)(iv), ” as provided in Public Law 106-313, the American Competitiveness in the 21st Century Act (AC21).]
A frisson of fear coursed through me when I learned that U.S. Citizenship and Immigration Services (USCIS) would issue new policy guidance on “job flexibility” — the statutory right of some long-patient green card applicants to change jobs or careers within the same or a similar occupational classification. Congress introduced this limber possibility in the American Competitiveness in the 21st Century Act (AC21), S.2045 , at a time when the legacy agency, the Immigration and Naturalization Service (INS), still held sway over immigration-benefits decisions.
The better way — APA Notice-and-Comment Rulemaking. In lieu of USCIS policy guidance, my strong preference would have been that the successor immigration agency pursue notice-and-comment rulemaking under the Administrative Procedure Act (APA). I worried that the more relaxed exercise of issuing draft policy guidance and inviting public comments would become yet another sad episode in the continuing manifestation, particularly in the last ten years, of America’s new form of extra-constitutional government, the Administrative State. Increasingly, the Administrative State — a form of government by bureaucracy “under which [federal] administrative agencies are able to push policy toward their preferences rather than being wholly faithful to their legislative principals” — has become the unwelcome default mode of lawmaking and governance in this era of Congressional impasse.
The Road to Good Intentions. As USCIS forecasted in November 2014 (Item 4 in its list), the forthcoming interpretation would “[p]rovide clarity on adjustment [of status] portability [in order] to remove unnecessary restrictions on natural career progression and general job mobility [and] provide relief to workers facing lengthy adjustment delays.” (Emphasis added.) Despite these soothing words, I foresaw that an admittedly informal “flexibility” practice that had worked reasonably well under a generally relaxed interpretation announced in a series of five agency advisories, e.g., here and here, would ossify in the hands of the current crop of policy formulators at USCIS’s headquarters. Unfortunately, these fears have come home to roost. As this blog post and comment will show, the November 20, 2015 draft guidance, PM-602-0122, is as stiff and lacking in vitality as a corpse in rigor mortis.
The Pre-AC21 Status Quo. When Congress enacted AC21, it added two provisions promoting “job flexibility” for long-delayed adjustment of status (green card) applicants. In doing so, the House and Senate tipped their hats to Buddha’s fundamental Law of Impermanence, the precept that, over time, stuff happens. In other words, as William Gladstone, the noted British statesman, reportedly said, “justice delayed is justice denied.”
Congress knew when it passed AC21 that INS decisions on employment-based applications for adjustment of status, the benefit of gaining green card status while in the U.S., were taking far too long. In a predecessor bill to AC21, the “Immigration Services and Infrastructure Improvements Act of 2000″ (S. 2586), Senator Dianne Feinstein, its lead author, along with several other senators, acknowledged what immigration stakeholders of the era had long known:
[Section 2](a) Findings.–Congress makes the following findings:
. . .
(3) The processing times in the Immigration and Naturalization Service’s other immigration benefits [cases, i.e., other than naturalization applications] have been unacceptably long. Applicants for family- and employment-based visas are waiting as long as 3 to 4 years to obtain a visa or an adjustment to lawful permanent resident status.
(4) In California, the delays in processing adjustment of status applications have averaged 52 months. In Texas, the delays have averaged 69 months. Residents of New York have had to wait up to 28 months; in Florida, 26 months; in Illinois, 37 months; in Oregon, 31 months; and in Arizona, 49 months. Most other States have experienced unacceptably long processing and adjudication delays. (Emphasis added.)
Clearly, Congress recognized when including in AC21 a “Title II” (also entitled, the “Immigration Services and Infrastructure Improvements Act of 2000”) that agency processing delays were forcing indentured adjustment applicants to wait years longer than the targeted 180-day period in the new law’s job-portability provisions:
[Sec. 202](b) POLICY.—It is the sense of Congress that the processing of an immigration benefit application should be completed not later than 180 days after the initial filing of the application, . . .
SEC. 203. DEFINITIONS.
In this title:
(1) BACKLOG.—The term ‘‘backlog’’ means, with respect to an immigration benefit application, the period of time in excess of 180 days that such application has been pending before the Immigration and Naturalization Service.
(2) IMMIGRATION BENEFIT APPLICATION.—The term ‘‘immigration benefit application” [includes] any application . . . to . . . adjust . . . status . . . under the Immigration and Nationality Act. (Emphasis added.)
Thus, the 106th Congress that enacted AC21 clearly knew about inordinate green card delays when it provided “job flexibility” relief to beneficiaries whose adjustment of status applications had been “long pending” — meaning those remaining unadjudicated for more than 180 days. Thus, it allowed a worker (sponsored for a green card in any one of four employment-based immigrant visa preference categories) to change jobs or employers after the adjustment application had been pending more than six months. The only AC21 condition imposed, however, is that the new position must be in the “same or [a] similar occupational classification” as the one described in the employer’s labor certification application or immigrant visa petition.
Need for a Regulation. Undoubtedly, publishing a proposed USCIS regulation and allowing formal comment from stakeholders before finalizing the rule would be a welcome approach. To be sure, prior agency guidance left a few lingering ambiguities requiring clarification and did not establish procedures which could and should be formalized in the rulemaking process. For example, some adjustment applicants probably remained tethered unhappily to Employer #1 because they feared that USCIS might disagree about job similarity and refuse the long-awaited green card. Moreover, as I proposed in “‘Parting is Such Sweet Sorrow': Musings on Adjustment of Status Portability” (Musings), Employer #2 gets a windfall, the hiring of an incipient permanent resident already granted open-market authorization pending the adjudication of the adjustment application. But Employer #2 might still lose if costly training which it provided is wasted or its project engagements are impaired by an adverse USCIS adjudication on the same-or-similar-job issue. Even worse, Employer #1 — the firm that did the heavy trudging through the red tape and suffered the time required to traverse trap-laden Department of Labor (DOL) and USCIS rules, incurring legal fees and other costs en route — becomes collateral damage in the war for talent as it loses the services of the the porting worker.
The Equitable Solution — Cell Mitosis. APA rulemaking could thus provide necessary equitable relief to all three deserving parties (the adjustment applicant and Employer #1 on the one hand, and Employer # 2 on the other) by adopting some variant of the “cell mitosis” theory I proposed in Musings.
Just as cells dividing through mitosis inherit cellular DNA, pipeline immigration benefits could likewise be “inherited.” If mitosis principles were to be applied, the porting employee and Employer #2 would win because their cellular “inheritance” endows green card status, and in an increasingly overheated labor market, the employment of an in-demand worker. But Employer #2 should not lose everything, given that the DOL’s test of U.S. worker unavailability for the position in question had already been passed. Instead, Employer #2 could “inherit” (a) the earlier “priority date,” the place in the immigrant visa waiting line, which Employer #1 had reserved for the departing worker, and (b) the right to petition for a comparably qualified non-citizen candidate to fill the same, now-vacant job and to help the new hire and his or her immediate relatives gain green cards through adjustment of status. Thus, subject to any waiting period in the green-card queue and the same numerical limits of the immigrant visa quota, the porting employee, his or her equally qualified substitute, and Employers #1 and #2, would ultimately gain salutary immigration benefits. Why? Because they earned them under AC21 and a flexible, job-flexibility final regulation — a rule well within USCIS’s regulatory authority to prescribe.
To those at USCIS or elsewhere who might argue that Employer #2’s “inheritance,” as I’ve described it, would contravene the DOL regulation, 20 CFR § 656.12(a), prohibiting the “offer [of an approved labor certification] for sale, barter or purchase by individuals or entities,” this blogging promoter of applying mitosis principles in the immigration ecosphere would respond that that horse has already left the barn. In practical effect, AC21’s portability provisions already refute the DOL notion, also espoused in § 656.12(a), that an approved labor certification is not “an article of commerce.” The statutory and commercially-valuable right of adjustment portability effectively permits Employer #2 to “purchase” (though a “same or similar” job offer accepted by the porting worker) the intangible proprietary right to employ the individual as long as s/he has secured the interim adjustment benefit of a USCIS-issued Employment Authorization Card or another form of work permit.
The Need for Transparency. An APA-compliant proposed rule would also make all stakeholder comments publicly accessible on Regulations.gov, and USCIS would be required to elucidate in writing its rationale for accepting some suggestions and eschewing others. This transparency is unlike the current USCIS practice which provides no access to public comments and no explanation of why stakeholder proposals to change draft guidance were accepted or rejected in the final policy. Regrettably, this behind-the-walls process of willful obscurantism is likely to apply to the finalized USCIS adjustment-portability policy once the comment period for the November 20, 2015 draft guidance (the Draft) expires on January 4, 2016.
What’s Wrong with the USCIS Draft Memorandum? As a partial remedy to the agency’s opaqueness in declining to publish stakeholder comments on job-flexibility, this blog lists several objections and suggest improvements to the Draft:
1. The Draft ignores AC-21’s legislative history of abhorrence to immigration case backlogs and the resulting need for job flexibility. As noted above, Congress clearly saw and tried to mitigate the interrelated problems of bureaucratic delays and the likelihood of changed circumstances. Delays in adjustment processing had grown unreasonably — up to as long as 69 months. To lessen the foreseeable risk that changed job circumstances would cause the loss of green-card eligibility, Congress enacted a law which — in the words of USCIS quoted above — would ” [(1)] provide clarity on adjustment [of status] portability[,] [(2)] remove unnecessary restrictions on natural career progression and general job mobility, [and] . . . [(3)] provide relief to workers facing lengthy adjustment delays.”
2. The Draft cherry-picks an especially strict definition of the word, “similar,” which AC21 left undefined. Although the USCIS cites Taniguchi v. Kan Pacific Saipan, Ltd., 132 S. Ct. 1997, 2002-03 (2012), for the principle that “when a term goes undefined in a statute, an agency ordinarily should ‘give the term its ordinary meaning,'” its proffered Draft violates the “ordinary meaning” principle. The Draft opts for the online version of a British dictionary, the Oxford English Dictionary (OEM), publicly inaccessible except by paid subscription, which apparently defines “similar” as “having a marked resemblance or likeness.” USCIS also cites the second definition of “similar” in the American online dictionary, Merriam-Webster.com (MW), to mean “alike in substance or essentials” — a definition clearly less restrictive than the OEM‘s “marked resemblance” formulation. The Draft does not explain, however, why it omitted MW‘s first definition of “similar,” to wit, “having characteristics in common : strictly comparable [emphasis added].” Perhaps the omission is an example of the Administrative State where agencies “push policy toward their preferences.” This stricter definition, however, would contravene the Supreme Court more recent application of the rules of statutory construction, Utility Air Regulatory Group v. EPA, a 2014 decision which restricted administrative-agency interpretations of statutes in the following words:
Under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., . . . we presume that when an agency-administered statute is ambiguous with respect to what it prescribes, Congress has empowered the agency to resolve the ambiguity. The question for a reviewing court is whether in doing so the agency has acted reasonably and thus has “stayed within the bounds of its statutory authority.” . . . .
Even under Chevron‘s deferential framework, agencies must operate “within the bounds of reasonable interpretation.” And reasonable statutory interpretation must account for both “the specific context in which … language is used” and “the broader context of the statute as a whole.” Robinson v. Shell Oil Co. A statutory “provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme … because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.” Thus, an agency interpretation that is “[inconsistent] with the design and structure of the statute as a whole,” does not merit deference. (Citations omitted; emphasis added.)
Instead of requiring the stricter showing of “marked resemblance,” USCIS should give the phrase, the “same or similar occupational classification,” its ordinary meaning, namely that a job would be “similar” to another if the subject matter expertise required in each of the two jobs, or the stated duties, skills and qualifications, are fairly “comparable.” Thus, the Shakespearean comparison (“Shall I compare thee to a summer’s day?”) would not withstand a reasonable “comparability” analysis, but an engineer employed in a huge multinational enterprise who morphs in today’s gig economy into a self-employed engineering consultant or a professor of engineering seeking multiple teaching assignments, in most cases should (not the permissive “may” in the Draft) be accorded AC21 job-flexibility benefits.
3. The Draft misapplies and gives undue probative weight to the DOL’s Standard Occupational Classification (SOC) system — a complicated, arbitrary and abbreviated composite of occupational classifications not developed for the legislative purpose of AC21 job-flexibility analysis. Rather the Labor Department’s Bureau of Labor Statistics (BLS) intended the SOC to permit statistical analyses for use by “Federal statistical agencies to classify workers . . . for the purpose of collecting, calculating, or disseminating data.” As the BLS explains the SOC system, however, its shortcomings for immigration adjustment job-flexibility analysis becomes apparent:
All workers are classified into one of 840 detailed occupations according to their occupational definition. To facilitate classification, detailed occupations are combined to form 461 broad occupations, 97 minor groups, and 23 major groups. Detailed occupations in the SOC with similar job duties, and in some cases skills, education, and/or training, are grouped together.
Although the Draft treats the SOC like a veritable Code of Hammurabi, or revered totem (“this memorandum instructs [Immigration Services Officers] on how they may use the [DOL’s] . . .SOC . . . codes”), USCIS should not prescribe it as the exclusive source of job-similarity comparisons.
4. The Draft fails to offer reasonable alternatives to the SOC. USCIS should offer a variety of alternative ways in which job-similarity, with the SOC listed as merely one of other acceptable measure of comparability, can be established by the “preponderance of the evidence” standard of proof. For example, given that USCIS views the DOL as authoritative in the evaluation of job comparisons, then the AC21 flexibility analysis should also allow use of the Labor Department’s easily applied “substantially comparable” job or position test used in 20 CFR § 656.17(i)(5)(ii) of its PERM labor certification regulation:
A “substantially comparable” job or position means a job or position requiring performance of the same job duties more than 50 percent of the time. This requirement can be documented by furnishing position descriptions, the percentage of time spent on the various duties, organization charts, and payroll records.
The application of a “substantially comparable” or the equivalent “more than 50%” rule is already familiar to Immigration Service Officers who must routinely apply this test in many other visa categories. Consider the L-1A nonimmigrant and EB-1(3) tests for intracompany or multinational managers or executives whose employer must show that the foreign candidate has been and will be “primarily” engaged in managerial duties or executive responsibilities. Similarly, treaty-based E-1 visa applicants must show that the treaty national or entity is “principally”engaged in trade of goods or services between the treaty country and the United States. USCIS interprets the adverbs, “primarily” and “principally,” as requiring a greater than 50% bright-line test. Indeed, the “preponderance of the evidence” test applicable in virtually all immigration-benefits decisions is itself a “more than 50%” test. Furthermore, the “substantially comparable” test is much more easily and quickly decided than the abstruse SOC system. As 20 CFR § 656.17(i)(5)(ii) notes, the “substantially comparable” measure “can be documented by furnishing position descriptions, the percentage of time spent on the various duties, organization charts, and payroll records.”
5. The Draft expressly supersedes all job-flexibility discussions in five prior INS and USCIS advisories. By revoking prior guidance, the Draft makes it uncertain whether earlier pronouncements allowing self-employment as an approved basis for adjustment portability, holding that multinational managers or executives can port and/or disregarding as irrelevant any issue of whether Employer #2 can satisfy the otherwise applicable standard of “ability to pay” the wage stated in the labor certification or immigrant visa petition will reappear in the final job-flexibility policy guidance.
6. The Draft offers no explanation of procedures to tee-up the granting of a request for adjustment of status job-flexibility benefits. Given the Draft’s revocation of the prior adjustment portability policy memos, USCIS fails to say whether the usual way to invoke adjustment portability — the adjustment applicant’s submission, after having ported, of a letter from Employer #2 demonstrating job similarity — will continue to be required. The Draft also offers no clue whether USCIS will establish, before a porting occurs, a form-based process for the adjudication of a prospective change of job or employer. Clearly, USCIS should obviate the need for the current bet-the-green-card procedure whereby the adjudication of job similarity is only available after a change of job or employer has already occurred. Hence, the Draft’s lacunae of guidance on procedures and its dubious over-reliance on the SOC makes job moves by the adjustment applicant still the risky business it has always been.
* * * * *
President Obama and USCIS deserve praise for their desire to help adjustment applicants change jobs or employers more freely. Unfortunately, however, the agency’s chosen vehicle of movement — an unduly cramped interpretation of AC21’s job flexibility provisions, coupled with its unwarranted fixation on the SOC — will freeze in place AC21’s intended beneficiaries and thereby impair the virtuous economic goal of enhanced worker mobility. The USCIS should scrap the Draft and publish a proposed job flexibility regulation.
Updated 12-15-2015 at 03:03 PM by APaparelli
Two hundred days ago President Obama stoked the hopes of immigration advocates with his announcement of wide-ranging executive actions to try — as far as his authority would carry him — to change America’s broken immigration system for the better.
Generating most of the media fanfare and Republican outrage were his plans to expand eligibility for the DACA program and create a new DAPA program for the undocumented parents of citizens and green card holders. Expanded DACA and the new DAPA programs now seem dead on arrival unless the Fifth Circuit or the Supreme Court lifts an injunction by a federal judge in Texas. Time will tell whether the President has developed (as the New York Times editors urge) a Plan C, which may or may not end the detention of immigrant families and children, or lead to the publication of proposed regulations allowing notice and comment on expanded DACA and the new DAPA programs, as the Center for Human Rights and Constitutional Law has proposed.
On the legal immigration front, last November the President also offered hope, and he promised change — but so far hopes have been dashed, and the only change observed has been of the chump variety. What has become of his November 21, 2014 Presidential Memorandum (“Modernizing and Streamlining the U.S. Immigrant Visa System for the 21st Century“) which instructed the Secretaries of Homeland Security and State to report back to him by March 15, 2015 on recommendations to improve the legal immigration system? So far, certainly not the publication of the required report, and beyond that almost nothing else.
Immigration stakeholders heard the President proclaim at the March 23, 2015 SelectUSA Investment Summit that the new L-1B guidance memo on specialized knowledge would “[allow] corporations to temporarily move workers from a foreign office to a U.S. office in a faster, simpler way [that] could benefit hundreds of thousands of nonimmigrant workers and their employers.” Yet the L-1B guidance — long in gestation and butt ugly at birth — will only provide bureaucrats with more grounds to issue burdensome requests for evidence and ultimately say “no” in additional ways.
More inflated Obama Administration rhetoric spewed forth on April 15, 2015. That’s when the State Department’s Catherine A. Novelli, Under Secretary for Economic Growth, Energy, and the Environment, at a conference on “Deepening the U.S.-India Commercial Partnership” — with tongue firmly in cheek — proclaimed:
Indian companies are world class and strong, and do not need government protection from outside competition. . . . Indian-owned companies have invested over $11 billion in the U.S. and employ over 44,000 people here. These Indian companies have proven their ability to thrive in the United States, one of the most competitive markets in the world. . . .
The United States and India each have strong comparative advantages that become stronger when we work together. The United States and India have shared values and a shared commitment to democracy. Together, we are partners in upholding an international, rules-based order that ensures global peace, security, and prosperity. We want to seize this moment and bring to fruition the unrealized potential that still exists between our economies, for the betterment of the lives of both our citizens.
Since her speech, proponents of employment-based immigration reforms have seen what the Obama Administration apparently means when it proposes to uphold “an international, rules-based order that ensures global . . . prosperity.” The actions of the Administration’s immigration bureaucrats have recently offered their version of “rules-based” order — actions which hurt U.S. and Indian companies alike, to wit:
The release of the poorly reasoned precedent decision, Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO, Apr. 9, 2015), which witnessed the USCIS Administrative Appeals Office’s foray into foreign turf, viz., the Labor Department’s H-1B regulations, to require that employers file amended petitions with USCIS each time an H-1B worker moves to a worksite located in a different metropolitan area. The AAO took this action even though it acknowledged that prior USCIS guidance distributed widely through an immigration stakeholder association expressly stated that no new filings would be necessary.The USCIS pronouncement on May 21, transformed into a draft on May 27, that Simeio Solutions would be applied retroactively, even though precedent decisions by regulation, 8 CFR § 103.3(c)(“Service precedent decisions”), provide “for publication as precedent in future proceedings . . . (emphasis added).” With these May 21-May 27 actions, USCIS offered to grant an amnesty against the taking of “adverse action” against H-1B employers and workers for prior worksite changes, as long as amended petitions are filed by August 19, even though USCIS has not stated how far back in time its retroactive application of Simeio Solutions would go — an announcement sure to upend the summer vacation plans of company HR personnel and their immigration counsel.On the heels of its retroactive application of Simeio Solutions, USCIS in a further surprise announced the suspension on May 26 of expedited adjudication of H-1B petitions under the USCIS Premium Processing Service purportedly because of the wholly foreseeable increase in applications for H-4 spousal work permits — a workflow the agency had been planning since May, 2014.The AAO’s recent release under the Freedom of Information Act of a 41-page non-precedent decision holding on a variety of newly articulated but nonetheless spurious theories that the position of management analyst is not an H-1B specialty occupation and the proposed H-1B beneficiary is not qualified serve in the proffered position. Immigration observers ask why the AAO would take 41 pages to deny H-1B eligibility in a non-precedent case. The probable answer is that it wanted to float new grounds for USCIS adjudicators to use as a script, much like the non-precedent 2008 L-1B GST case, with which to deny ever more H-1B petitions.The failure of the USCIS EB-5 Immigrant Investor Program Office (IPO) over several months, despite repeated requests, to offer clarifying guidance on whether and under what circumstances the redeployment of EB-5 investor capital may be allowed under the regional center program where projects have long ago been completed, the requisite jobs have been created, but investor petitions seeking removal of conditions on residency cannot be filed or approved because immigrant visa retrogression affecting huge numbers of Mainland-China born investors delayed the initial grant of conditional residency. Equally or perhaps even more egregious is the IPO’s reversal of prior interpretations and its current interpretation that when a prospective EB-5 investor takes out a loan and uses those funds as a cash investment into an EB-5 project is treated a prohibited contribution of debt rather than an investment of capital. Apparently, cash is king in the investment world, except in the never-never-land of USCIS’s EB-5 IPO.
Meantime, as President Obama makes plans for his presidential library, he apparently seems focused not at all, or to put it charitably, not enough, on the passive-aggressive actions of immigration bureaucrats who seem to be playing out the clock in the apparent hope that his presidency will end before these laudable initiatives ever are allowed to occur:
Updated 06-08-2015 at 03:27 PM by APaparelli