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U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210 February 21, 2001
Ms. Lynn Shotwell
Director, Government Relations
American Council of International Personnel
1212 New York Ave. N.W., #475
Washington, D.C. 20005
Subject: Determination of H-1B-Dependent Employer Status
Dear Ms. Shotwell:
In response to a question and concern which you raised in our January 16,
2001 technical assistance meeting concerning the H-1B Interim Final Rule,
we are adopting the following enforcement policy:
In applying section 655.736(d)(7), the Wage and Hour Division will not
assess penalties if an employer which is a single employer under the
Internal Revenue Code (IRC) definition at 26 U.S.C. 414(b),(c),(m), or
(o), does not perform the "snap-shot" test where all of the entities
which make up the single employer have readily apparent non-dependent
status. However, if any of the entities has borderline status and,
therefore, would have to perform the "snap-shot" test, then the
employer, as a whole, must perform the test. Whether or not such a
test is performed, the employer must retain in its public access file
a list of all the entities included within the "single employer" under
the IRC definition. Under these circumstances, it is our view that the
failure to perform the test would not impede our ability to determine
whether an employer is a dependent employer. See section
655.810(b)(1)(vi).
We note that this enforcement policy will not affect the right of any
aggrieved party to file a complaint challenging the employer's failure
to perform the "snap-shot" test.
We trust that this application of the regulation will accommodate your
concerns, as you described them at our meeting. If you have further questions,
please do not hesitate to call me at (202)693-0563.
Sincerely,
Michael Ginley
Director
Office of Enforcement Policy
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