Bonnie Nelsen, LOFP Business Management Specialist
This article is Part 1 of 2 and first appeared in Fruit Notes, a subscription newsletter.
This article has been adapted from a webinar on H-2A audit preparedness hosted by Seso Labor, Inc. on March 6, 2024. Seso also hosted a H-2A lunch and learn session on Wednesday 17 April, 2024, in Sodus Point, NY.
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Insufficient numbers of US workers have prompted many farmers to hire temporary non-immigrant (H-2A) workers for seasonal agricultural labor. Although the H-2A program allows farmers to meet labor needs, the program involves specific requirements for employers. One requirement is participating in periodic, unannounced audits conducted by state and federal departments of labor (DOL hereafter).
There are two possible H-2A audit scenarios: Office of Foreign Labor Certification (OFLC) desk audits and DOL wage and hour investigation audits. Although both types assess an employer’s compliance with H-2A program requirements, each audit is different in its focus, requirements, procedures, and outcomes. Both types are stressful and potentially disruptive to an unprepared employer. Anticipating an audit and being prepared will lower stress and help you achieve a favorable outcome.
This article introduces the topic of H-2A audit preparedness by describing the objectives and procedures for an OFLA desk audit. It will provide recommendations for preparing an audit file, a set of records that will, at a minimum, be requested in a desk audit. Having this documentation ready before its needed will ease the audit process and result in fewer disruptions. The next article on H-2A audit preparedness will examine wage and hour investigation audits.
Desk Audits Defined: A desk audit—also called a paper audit—is a high-level inspection of an employer’s compliance with H-2A rules. A desk audit is conducted by personnel at the Department of Labor’s Office of Foreign Labor Certification (OFLC), which is located in Chicago, Illinois. The OFLC, which is part of the USDOL’s Employment and Training Administration, plays an important administrative role in the H-2A program. When an employer submits a job order (an ETA 790/790a form) to recruit temporary seasonal workers, the request is submitted to a state workforce agency (SWA). After reviewing and conditionally approving the job order, the SWA will refer it to the OFLA for certification or final approval. In addition to certification, the OFLA determines prevailing wages, sets policy, and conducts audits for compliance (N.A., 2024).
A desk audit is a high-level assessment of compliance based on the employers ‘core compliance” documentation—important paperwork that participants must complete and retain to participate in the H-2A program. Desk audits can be random or targeted—if an employer has had problems in the past, they are more likely to be targets of an audit. Because this inspection is non-granular, auditors do not delve into a farm’s work schedules, overtime records, pay records, or other details (that’s a wage and hour investigation). In a desk audit, DOL personnel want to know if an employer recruited and employed workers as described in a previous year’s job order and, if not, why.
The OFLC Audit Process: For employers, the process begins when a letter announcing an audit is received in the mail. This letter will identify a list of documents that must be returned to OFLC within 30 days. Requested documents consist of the “core’ documents in your audit file but many include others. It’s important to send copies of all requested documents for inspection.
Employers are required to keep required H-2A records on file for three years, so an audit can focus on any single or multiple years (single-year audits are the norm). For example, an audit conducted in 2024 can request documents from 2021, 2022, 2023, or several years.
It is very important to respond to the OFLC letter within 30 days! Failure to do so will result in a negative judgment, leading to disbarment (being excluded from the H-2A program) or supervised recruitment for up to three years. According to Daniel Ross (2024), Seso’s in-house H-2A counsel, the main reason for employer disbarment from the H-2A program is failure to respond to an audit notice—farms that are fully compliant and have done nothing wrong can be disbarred from H-2A if they ignore an audit letter! If you’re unable to provide all requested documents within 30 days, it’s possible to request an extension from the OFLC. Extensions should be requested as early as possible. If you have a legitimate reason for the request, you may receive more time at the OFLC’s discretion.
After an employer’s documents are received, OFLC personnel will examine the records and compare them to the job order from the target year. The auditor will look for evidence that the employer has either complied with program requirements or has not based on the records. If discrepancies are found, the auditor will ask for an explanation. For example, if workers were sent home earlier than expected, the employer will have to explain why this happened. If there was a legitimate business reason for discrepancies and proper procedures were followed (for example, the three-fourths pay rule was followed), the discrepancy will probably be allowed. If not, the employer can be penalized. The stakes of an audit are high: debarment or supervised recruitment can result from failure to follow proper procedures and present documentation to prove this. If a desk audit raises suspicion of willful violation, OFLC auditors may refer the case for a wage and hour investigation.
Preparing for A Desk Audit: The best way to manage an audit is to be prepared for one in advance. This involves preparing an audit file containing core H-2A documents. Because employers are required to keep documents for three years from the date of certification (or denial), each audit file should be maintained for three years. While the audit file may not have all requested documents by the OFLC, it will contain most of the paperwork needed for a desk audit. At minimum, your audit file should contain the following documents (Ross, 2024):
- Proof of recruitment efforts and updated final recruitment report.
- Proof of workers’ compensation.
- Copies of each worker’s earnings records.
- The work contract or a copy of the Application for Temporary Employment Certification if no separate contract exists.
- If applicable, records of notice to the NPC and DHS of the abandonment of employment or termination for cause of a worker / early departures (i.e., notice that workers have absconded after arriving at the farm or returned home early after being fired).
- Inbound and outbound transportation reimbursements and subsistence.
- H-2A visas and I-94’s for each worker assigned to the contract.
- Proof that no recruiter fees were charged to workers by third parties.
- Copies of housing inspection from the state or federal inspection, and water test certificates for worker housing.
- Vehicle registration and insurance policies, as well as driver’s licenses for any drivers transporting workers.
- Farm Labor Contractors must also retain copies of surety bonds, grower agreements, and FLC/FLCE licensing.
- I-9’s should be retained for 3 years after the date of hire, or one year after employment ends, whichever is later.
If you have any questions about the required documents, contact the OFLC for clarification. It’s also a good idea to note the reason for any discrepancies that may arise from the paperwork. For example, if fewer workers were needed than expected, be prepared to explain why; if workers returned home early because there was less work than expected, be prepared to explain.
Having this paperwork on hand will put you in a better place when an audit occurs. The process will be less stressful and disruptive to normal operations if you’re prepared!
References:
Ross, Daniel, Schulte, Chris and Stefany, David (2024) “2024 Spring H-2A audit preparedness seminar.” Webinar hosted by Seso Labor, Inc., on March 6, 2024.
N.A. (2024) “Foreign Labor Certification.” US Employment and Training Administration, retrieved from Foreign Labor Certification | U.S. Department of Labor (dol.gov).
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The post A Guide to H-2A Audit Preparedness Part 1 of 2 appeared in Fruit Notes by the Lake Ontario Fruit Team.
