BALCA Sets Standard on PERM Employee Referral Program

Since the foreign labor certification application process was converted into an online system in March of 2005, there have been many uncertainties about the requirements of the new system called PERM.  Over the last five years, some of these requirements have been clarified by the Department of Labor; some others had to be explained by the Board of Alien Labor Certification Appeals (BALCA) on appeal.   Recently, BALCA resolved an important PERM requirement in regards to the use of employee referral program as a recruiting step.

 

Generally speaking, a U.S. employer is required to perform a series of pre-filing recruiting steps before submitting a labor certification application for a foreign worker.  For instance, either two Sunday advertisements or one Sunday advertisement plus a trade journal advertisement must be taken out to announce the job opening.  The job must also be posted on the State Job Bank managed by the State Workforce Agency for 30 days.  For professional positions, the employer must perform three additional recruiting steps.  The regulation has ten prescribed recruiting options from which an employer may choose.  One of these options involves the use of an employee referral program.  The idea of such a program is to ask the existing the employees to refer new workers to join the company.  Should the relationship work out between the employer and the new worker, some sort of reward (usually cash) is offered to the referring employee as an incentive.

 

However, the requirements of the Employee Referral Program (ERP) have not been clearly defined by the regulations.  There has been confusion as to when the ERP notice must be posted, where it should be posted, and how much information it must contain, etc.  In the Matter of Sanmina-Sci Corporation, BALCA set up a three-prong requirement for the use of Employee Referral Program by an employer:  "(1) its employee referral program offers incentives to employees for referral of candidates, (2) that the employee referral program was in effect during the recruitment effort the employer is relying on to support its labor certification application, and (3) that the company's employees were on notice of the job opening at issue."

 

The first prong requires incentives be offered but it does not restrict what sort of incentives that must be offered. Therefore, the employer can conceivably offer time-off, special recognition, stock options, etc., as incentives in addition to cash.  The second prong clarifies the timing of the ERP – as long as the program is in effect during the period of recruiting, it does not have to be posted within the recruiting window (30 to 180 days before the submission of labor application).  Finally, other employees of the company must be informed of the job opening listed in the labor application.  The idea is that if the employees are not aware of the job opening, they would not be able to refer applicants specifically for this opening.  It does not mean that the job must be specifically listed in the ERP posting, as long as the employees are made aware of the job opening through other sources.  For examples, in Sanmina-Sci Corporation, the employees were informed by the job opening through the Notice of Filing, and the company website posting (two other PERM recruiting requirements).  BALCA ruled that there was sufficient notice to employees. 

 

Employers invest a lot of time and money in petitioning a foreign worker for a permanent position. We welcome decisions such as Sanmina-Sci Corporation, as they provide clear instructions as to what an employer must do to meet the legal requirements of PERM.