The Department of Labor rejected requests that employers should sponsor employment-based immigrants at a significantly higher rate in the second quarter of FY 2023. The DOL has denied hundreds of requests for permanent labor certification (PERM) program that is not based on worker protections, but on how job titles are listed on government forms, according to attorneys. New data shows that the denial rate of PERM applications increased — rather than decreased — after the DOL agreed to review cases in March 2023. Later action by the DOL may have finally solved the problem.

What the numbers show

To obtain “labor certification”—a key step for most employment-based immigrants to obtain permanent residency (a green card)—the DOL requires employers to test the labor market by posting an ad and then filling Form 9089. The DOL has never issued guidelines for filling out the form, notes Lynden Melmed, a partner at Berry Appleman & Leiden, and for years companies have filled out the forms in various ways without government officials rejecting PERM applications. However, in FY 2022 and FY 2023, the DOL began issuing multiple denials based on responses to a single question.

In FY 2022 and FY 2023, DOL officials rejected applications at an increased rate related to responses to question H.10-B from Form 9089: “Is experience in another occupation acceptable?” for the position. The DOL rejected many applications as materially incomplete if employers listed job titles or other occupations, even though these “broader” ways of filling out the job application form would increase the chances that an American worker would qualify for the position, Melmed noted.

To immigrants, employers and lawyers, it all seemed like bureaucracy for bureaucracy’s sake. The data tells the story.

National Foundation for American Policy Analysis DOL disclosures held that the DOL was denied more than twice percentage of PERM filings in the first quarter of FY 2023 (October through December 2022) as well as in the first quarter of FY 2022 (October through December 2021), 6.2% vs. 3.0%. (Note: the data in this article differs slightly from a March 2023 Forbes article (because the DOL updated data for prior quarters when it released PERM data for the second quarter.)

The rejection rate in PERM increased significantly to 8.5% during the second quarter of FY 2023. This represented a 37% increase in the rejection rate between the first and second quarters of FY 2023.

In mid-March 2023, the DOL Liaison Committee of the American Immigration Lawyers Association (AILA) discussed this issue with the DOL’s Office of Alien Labor Certification. “DOL OFLC has agreed to review cases where PERM denials were based on an H.10-B issue,” the AILA committee said in a March 14, 2023, statement. “OFLC recognizes the inconsistencies in their rulings over the years and agreed is to review applications where the employer has filed a Request for Reconsideration (“RFR”) based on the denial of the H.10-B issue. When the reason for the denial is only an H.10-B issue, the OFLC will withdraw the case from the normal sequence to review and certify the application where necessary. OFLC stated that there are several hundred of these cases. While the OFLC will begin reviewing these cases immediately, it may take several weeks to process them all.”

NFAP found that in the immediate period after the DOL acknowledged the problem, the agency rejected more PERM applications, not fewer. The DOL rejected 11% of PERM applications after March 15, 2023, compared to 7.8% during the second quarter of FY 2023 prior to March 15, 2023. Data for the third quarter of FY 2023 is not yet available.

Looking Ahead

Vincent Lau, a partner at Clark Lau LLC and the current chair of the AILA DOL Liaison Committee, said his AILA committee has repeatedly warned the DOL about denials, including as early as fall 2022. “We’ve definitely seen a much higher number of denials in in early 2023, and they brought it to their attention again in March 2023,” says Lau. “Then in March we received a call from the OFLC and we issued a practice alert to AILA members.” Lau said he hasn’t heard AILA members report denials since March, but instead the DOL is reversing earlier PERM denials.

On April 14, 2023, the Foreign Labor Certification Office issued no warning on its website. “As a result of employers not providing enough information in H.10-B either. or H.14, OFLC has recently rejected applications because they are incomplete,” according to the DOL. “OFLC has evaluated these denials and determined that, while appropriate, it is not consistent when it denies an application for this reason, which could confuse applicants. As a result, OFLC has stopped issuing denials on this issue for pending applications and will not deny for this reason any application filed on or before May 30, 2023, by which time OFLC expects to accept the updated version of Form ETA-9089 in the gateway system for reporting foreign work.

“Furthermore, OFLC will reverse denials based solely on this issue. OFLC will identify applications that have been denied for this issue and for which reconsideration has not yet been requested; employers whose applications have been rejected solely for this reason and have not yet requested reconsideration are encouraged not to request reconsideration. Once reconsideration has been requested, the OFLC will prioritize processing for all pending denial-based reconsideration requests where that is the only denial issue. In cases denied for additional reasons for denial, the OFLC will reverse the H.10-B. reasons for denial, but uphold the denial on other grounds if the employer has not filed a request for reconsideration for the additional reason(s) for denial or if the additional reason(s) for denial are found to be correct.”

Denying PERM applications based on this issue may be a thing of the past, but new challenges are likely to arise. “OFLC should implement its new ETA 9089 on FLAG [Foreign Labor Application Gateway] portal from June 1,” Lau said. “The H.10-B issue is gone. With the new form, I’m sure there will be a steep learning curve for everyone, including the potential for more rejections and revisions as we become more familiar with the form – on both sides.”