The U.S. Department of Labor (DOL) just issued its 2009 Annual Report on Foreign Labor Certification. The figures are intriguing and noteworthy, but not surprising. In 2007, there were very few audits issued and most cases were quickly certified, often just days from the date of filing. From FY2007 to FY2008, the number of audits rose and there was a staggering 42% decrease in cases certified. From FY2008 to FY2009, there was another significant decrease of 40% in certified cases. Indeed, the total number of permanent labor certification cases approved in FY2009 was 29,502. California was the largest draw, with 6,155 cases; New York was a distant second with 3,093.
Interestingly, the DOL report does not spend much time discussing the increase in audits. It does, however, acknowledge that the enhanced audit effort has led to longer processing times. While the increase in audits is certainly a significant factor in the dramatic decrease of certified cases, it is not the only culprit. The financial crisis that took hold in the United States in 2008 and continued through 2009 was a major contributor. The large number of unemployed looking for positions resulted in many tests of the labor market finding qualified and available U.S. workers for specified positions. When a test of the labor market for a specified position turns up a willing and qualified U.S. applicant, it may prevent a bona fide permanent labor certification from being filed for a minimum period of six months.
Furthermore, with companies looking to reduce spending, the sponsorship of immigration benefits is one area that experienced cutbacks. And because attorney fees for permanent labor certification require payment by the sponsoring company, this case type was probably impacted more than others.
The other significant factor in reduced certifications over the past few years is layoffs. Many U.S. companies were compelled to reduce their workforce due to decreases in demand for their products and services. When a U.S. citizen employee is laid off, permanent labor certifications for the position held by the U.S. worker cannot be sponsored for a minimum of six months. Some very large U.S. companies experienced widespread rolling layoffs, inhibiting their ability, in some cases, to file permanent labor certifications for extended periods of time.
The decline in the number of certifications was experienced across all occupations, with agriculture experiencing the biggest slide – a decrease of over 83 percent from FY2008 to FY2009. Several other industries saw significant drops of over 50 percent, including retail trade, construction, waste management and remediation support services, and mining.
From a demographic standpoint, India and China remained the two top countries of origin for foreign workers in the PERM program. India far exceeded any other country, however, accounting for nearly 39% of certified cases. At number two, China only accounted for 7% of certified cases. South Korea and the Philippines joined the top four, while Mexico dropped out of this top grouping. Canada came in at number five, with nearly 5.5%.
We anticipate that, for the reasons discussed above, the downward trend of certified permanent labor certifications has continued in FY2010.