Payment of Back Wages to Alien Physicians Hired Under the H-1B Visa Program

Payment of Back Wages to Alien Physicians

Hired Under the H-1B Visa Program

The statute authorizing the H-1B visa program does not waive the federal government’s sovereign

immunity. Therefore, an administrative award of back wages to alien physicians hired by the

Department of Veterans Affairs under the program is barred by sovereign immunity.

February 11, 2008

MEMORANDUM OPINION FOR THE GENERAL COUNSEL

DEPARTMENT OF VETERANS AFFAIRS

AND THE SOLICITOR

DEPARTMENT OF LABOR

The Department of Labor (“DOL”) has determined that the Department of

Veterans Affairs (“VA”) failed to pay the required prevailing wage to eleven alien

physicians employed by VA hospitals pursuant to the H-1B visa program. VA

requested our opinion regarding its statutory authority to pay back wages pursuant

to the DOL order. DOL also provided its views on this issue. Before resolving the

merits of this dispute, we requested additional views from both agencies regarding

whether sovereign immunity bars the award of such monetary relief in an adminis-

trative proceeding. We now conclude that the statute authorizing the H-1B

program does not waive the federal government’s sovereign immunity, and the

award of back wages is therefore barred.

I.

The H-1B visa program (which takes its name from the paragraph of the Immi-

gration and Nationality Act (“INA”) in which it is codified) allows aliens to enter the

United States on a temporary basis to perform certain specialty occupations,

including the practice of medicine. See 8 U.S.C. § 1101(a)(15)(H)(i)(b) (2000). In

order to obtain an H-1B visa, the alien’s prospective “employer” (a term not defined

in the Act) must submit a “labor condition application” to the Secretary of Labor. As

part of that application, the employer must agree to pay wages that are at least “the

actual wage level paid by the employer” to similarly situated employees or “the

prevailing wage level” in the area, whichever is greater. Id. § 1182(n)(1)(A) (2000).

The INA charges the Secretary of Labor with investigating and resolving any

complaints over the employer’s compliance with those conditions. See id.

§ 1182(n)(2)(A). Should the Secretary find, after a hearing, that “an employer has

not paid wages at the wage level specified under the application,” then the Secretary

“shall order the employer to provide for payment of such amounts of back pay as

may be required to comply.” Id. § 1182(n)(2)(D).

Two VA hospitals submitted labor condition applications and hired eleven

physicians under the H-1B program. The hospitals set the physicians’ pay based

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Opinions of the Office of Legal Counsel in Volume 32

on VA’s government pay scale. See 38 U.S.C. § 7404(b) (Supp. V 2005). Most of

the physicians also received additional pay pursuant to VA’s special pay authori-

ties. See id. §§ 7431–7433 (Supp. V 2005). Several years later, the physicians filed

administrative complaints asserting that the hospitals had failed to pay them the

prevailing wages for the areas in which they were employed. The DOL Adminis-

trative Review Board ruled in the complainants’ favor and ordered the VA to pay

approximately $230,000 in back wages.

II.

The principles governing sovereign immunity are well-established. As the

Supreme Court has recognized, “[a]bsent a waiver, sovereign immunity shields the

Federal Government and its agencies from suit.” FDIC v. Meyer, 510 U.S. 471,

475 (1994); see also United States v. Mitchell, 463 U.S. 206, 212 (1983) (“It is

axiomatic that the United States may not be sued without its consent.”). Sovereign

immunity bars any action against the United States if “the judgment sought would

expend itself on the public treasury or domain, or interfere with the public

administration, or if the effect of the judgment would be to restrain the Govern-

ment from acting, or to compel it to act.” Dugan v. Rank, 372 U.S. 609, 620

(1963) (internal quotation marks and citation omitted). The Executive Branch has

no authority to waive the federal government’s sovereign immunity; rather, that

authority rests solely with Congress. See, e.g., United States v. Shaw, 309 U.S.

495, 500–01 (1940) (explaining “that without specific statutory consent, no suit

may be brought against the United States. No officer by his action can confer

jurisdiction.”); United States v. N.Y. Rayon Importing Co., 329 U.S. 654, 660

(1947) (“It has long been settled that officers of the United States possess no

power through their actions to waive an immunity of the United States.”). And the

terms of any statutory waiver must be unambiguous, both as to the nature of relief

that may be ordered and the forum in which the relief may be sought. See, e.g.,

Lane v. Pena, 518 U.S. 187, 192 (1996).

Because Congress has the sole authority to set the terms of any waiver, an

administrative agency has no more authority to prosecute or adjudicate a claim

against the federal government than does a federal court. The federal courts

accordingly have applied the same sovereign immunity principles in reviewing

administrative adjudications as they have in federal court suits. See, e.g., United

States v. Nordic Village, Inc., 503 U.S. 30, 37 (1992) (applying sovereign

immunity principles to bankruptcy proceedings); Ardestani v. INS, 502 U.S. 129,

137 (1991) (holding that sovereign immunity bars fee award to prevailing party in

INS proceeding); Foreman v. Dep’t of Army, 241 F.3d 1349, 1352 (Fed. Cir. 2001)

(applying sovereign immunity principles to conclude that the Merit Systems

Protection Board lacks authority to impose monetary damages); cf. Fed. Mar.

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Payment of Back Wages to Alien Physicians Hired Under the H-1B Visa Program

Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 76061 (2002) (state sovereign

immunity applies in federal administrative proceeding). 1

This Office likewise has recognized that sovereign immunity principles “apply

with equal force to agency adjudications.” Authority of the Equal Employment

Opportunity Commission to Impose Monetary Sanctions Against Federal Agencies

for Failure to Comply With Orders Issued by EEOC Administrative Judges, 27

Op. O.L.C. 24, 27 (2003) (“EEOC Opinion”). For instance, we recently concluded

that sovereign immunity prevents the EEOC from imposing an attorney’s fee

award against the federal government during an administrative adjudication. Id. at

33. We also found that the USDA generally lacks the authority to award monetary

relief to individuals whom it finds to have been discriminated against in USDA

programs. See Authority of USDA to Award Monetary Relief for Discrimination,

18 Op. O.L.C. 52 (1994) (“USDA Opinion”). And we found that the Special

Counsel for Immigration Related Unfair Employment Practices may not bring

administrative employment claims against a federal agency because the anti-

discrimination statute in question did not expressly include the federal government

within its ambit. See Enforcement Jurisdiction of the Special Counsel for Immigra-

tion Related Unfair Employment Practices, 16 Op. O.L.C. 121 (1992) (“Special

Counsel Opinion”); see also Waiver of Sovereign Immunity With Respect to

Whistleblower Provisions of Environmental Statutes, 29 Op. O.L.C. 171, 174

(2005) (concluding that Clean Water Act whistleblower provision does not waive

federal government’s sovereign immunity).

Notwithstanding these decisions, DOL contends that sovereign immunity

should not apply to enforcement actions between two federal agencies. In support,

DOL relies principally upon our opinion in EPA Assessment of Penalties Against

Federal Agencies for Violation of the Underground Storage Tank Requirements of

the Resource Conservation and Recovery Act, 24 Op. O.L.C. 84 (2000) (“EPA

Opinion”), where, in concluding that the statute at issue clearly granted the EPA

the authority to assess administrative penalties against federal agencies, we

observed that “the doctrine of sovereign immunity does not apply to enforcement

actions by one federal government agency against another.” Id. at 88. In another

opinion, we observed that with respect to a dispute between two agencies, a

sovereign immunity issue “would only arise if the judicial enforcement aspect of

the enforcement scheme were found applicable.” Authority of Department of

Housing and Urban Development to Initiate Enforcement Actions Under the Fair

Housing Act Against Other Executive Branch Agencies, 18 Op. O.L.C. 101, 104

n.4 (1994) (“HUD Opinion”).

1

Cases addressing state sovereign immunity may provide some guidance, as the Supreme Court has

applied similar principles in the state and federal sovereign immunity contexts. See, e.g., Nordic

Village, 503 U.S. at 37.

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Opinions of the Office of Legal Counsel in Volume 32

These opinions suggest that an administrative action, consisting of a dispute

between two federal agencies, and resolved entirely within the Executive Branch,

would not constitute a “suit” against the United States. See Special Counsel

Opinion, 16 Op. O.L.C. at 124 n.3 (“We assume for purposes of this opinion that

sovereign immunity would not bar administrative proceedings in which one

executive agency would press charges against another executive agency and final

decisional authority would be vested in the Executive.”) (emphasis added). In such

a context, the resulting administrative penalty would neither “expend itself on the

public treasury or domain,” Dugan, 372 U.S. at 620, nor result in a judicial order

requiring or prohibiting agency action. Instead, the administrative penalty would

amount simply to the transfer of money from one part of the federal government to

another. See Special Counsel Opinion, 16 Op. O.L.C. at 124 n.4 (“The assessment

of a civil penalty against a federal agency in a sense would not expend itself upon

the fisc, because it would not have any net effect on the Treasury balance.”).

Although some language in the EPA and HUD Opinions may be in tension with

our subsequent recognition that sovereign immunity principles “apply with equal

force to agency adjudications,” EEOC Opinion, 27 Op. O.L.C. at 27, we need not

resolve that tension here, because the dispute between DOL and VA does not fall

wholly within the Executive Branch. Rather, DOL’s order follows an administra-

tive adjudication brought at the behest, and on behalf, of private parties—namely,

the H-1B physicians. In the VA cases, DOL has ordered the payment of back pay

awards that would go directly to the physicians in question—relief that clearly

would “expend itself on the public treasury,” Dugan, 372 U.S. at 620. As the D.C.

Circuit has recognized, sovereign immunity applies to actions like these, which are

“brought by a government official acting for the benefit of private parties.” Dep’t

of Army v. FLRA, 56 F.3d 273, 276 (D.C. Cir. 1995); see also Hubbard v. MSPB,

205 F.3d 1315, 1317 (Fed. Cir. 2000) (affirming MSPB’s holding that sovereign

immunity barred its award of back pay against EPA).

DOL disagrees with this characterization and maintains that it should not be

regarded as “acting for the benefit of private parties,” but rather should be seen as

representing the public interest in enforcing the conditions on the H-1B program.

DOL points out that the prevailing wage provisions of the H-1B program are not

primarily intended to reward alien physicians, but rather to protect the wages of

American workers from cheaper foreign competition. This may be so, but the

argument does not bear on the sovereign immunity question. Federal agencies may

represent the public interest through a wide variety of actions, but they do not have

the authority to permit private parties to bring judicial or administrative suits

against the government, or to order another federal agency to pay money judg-

ments to private parties, unless Congress has unambiguously waived sovereign

immunity.

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Payment of Back Wages to Alien Physicians Hired Under the H-1B Visa Program

III.

We consider then whether Congress waived sovereign immunity for DOL

administrative proceedings brought against federal employers under section

212(n)(2) of the INA. See 8 U.S.C. § 1182(n)(2). The Supreme Court has made

clear that any waiver of the federal government’s sovereign immunity “must be

unequivocally expressed in statutory text . . . and will not be implied.” Lane, 518

U.S. at 192 (citations omitted); see also Nordic Village, 503 U.S. at 37 (a reading

of a statute that imposes monetary liability on the government will not be adopted

unless it is “unambiguous”). Waivers of immunity are “construed strictly in favor

of the sovereign and not enlarged beyond what the language requires.” Dep’t of

Energy v. Ohio, 503 U.S. 607, 615 (1992) (internal quotation marks, citations, and

alterations omitted). If an alternative reading of a statutory provision is available,

then Congress has not waived sovereign immunity. See Nordic Village, 503 U.S.

at 37.

In this regard, we take it as a given that the fact that a VA hospital may qualify

as an employer under the H-1B visa program does not conclusively establish that

Congress waived sovereign immunity. Federal agencies may well be subject to

substantive obligations when participating in a particular statutory program

without falling subject to the statute’s remedial provisions. See, e.g., Dep’t of

Energy, 503 U.S. at 623 (distinguishing among “substantive and procedural

requirements” of statute, “administrative authority,” and “process and sanctions”);

see also USDA Opinion, 18 Op. O.L.C. at 72 (concluding that although antidis-

crimination provisions of both Fair Housing Act and Rehabilitation Act expressly

apply to the federal government, these statutes do not waive sovereign immunity

for monetary relief); Shaw, 309 U.S. at 500–01 (sovereign immunity may be

waived only by Congress through statute, not by actions of Executive Branch

officers). In the Eleventh Amendment context, the Supreme Court has held that

states do not waive their constitutional immunity merely by participating in a

federal program, even though the relevant statutes expressly contemplate that

states fall within the class of beneficiaries. See, e.g., Atascadero State Hosp. v.

Scanlon, 473 U.S. 234, 245–47 (1985) (although Rehabilitation Act applies to

states, state does not waive Eleventh Amendment immunity by participating in

program); Edelman v. Jordan, 415 U.S. 651, 673–74 (1974) (mere fact that state

participated in federal aid program does not waive Eleventh Amendment immuni-

ty, which bars retroactive award of benefits). Accordingly, the question is not

whether federal agencies, such as VA, may hire workers through the H-1B visa

program, but whether Congress has unambiguously determined that those agencies

shall be subject to DOL’s remedial authority to adjudicate administrative com-

plaints under the H-1B program and to award back pay.

We are unable to find such an unambiguous waiver in this case. Congress did

not expressly address the federal government’s sovereign immunity anywhere in

the H-1B program. Nor did Congress clearly provide that a federal employer

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Opinions of the Office of Legal Counsel in Volume 32

would be subject to DOL’s remedial authority under section 212(n)(2) of the INA.

See 8 U.S.C. § 1182(n)(2). Section 212(n)(2) does not contain a definition of

“employer,” nor is the term otherwise defined for purposes of the H-1B program.

We have recognized that general terms such as “employer” or “person” “should

not be read to include federal agencies in the absence of affirmative evidence that

Congress intended that they be included.” Special Counsel Opinion, 16 Op. O.L.C.

at 124; see also United States v. United Mine Workers, 330 U.S. 258, 270 (1947)

(declining to construe “employer” under the Norris-LaGuardia Act to include the

United States “where there is no express reference to the United States and no

evident affirmative grounds for believing that Congress intended to withhold an

otherwise available remedy [obtaining a restraining order] from the Govern-

ment”). 2 That rule of construction would preclude the finding of an “unambigu-

ous” waiver of sovereign immunity, unless some other provision of the INA made

clear that federal agencies must be included under the back pay provisions of

section 212(n)(2). 3

Seeking to identify such provisions, DOL points to several that it asserts show

Congress’s expectation that federal agencies would fall within the scope of the

term “employer” for purposes of section 212(n)(2). The first provision, 8 U.S.C.

§ 1184(l)(1) (2000), allows an “interested Federal agency” to request the waiver of

a foreign residence requirement for alien graduate students who, following their

education, seek to remain in the United States for employment at a health care

facility. The statute specifically addresses “the case of a request by the Department

of Veterans Affairs” for a waiver on behalf of an alien who “agrees to practice

primary care or specialty medicine.” Id. § 1184(l)(1)(D)(i) (Supp. V 2005). This

provision, however, does not apply only to applicants for H-1B visas, but also to

aliens seeking other types of immigration benefits. The provision likewise does

not directly refer to DOL’s remedial authority under section 212(n)(2). According-

2

The Secretary of Labor has defined “employer” by regulation to mean “a person, firm, corpora-

tion, contractor, or other association or organization in the United States that has an employment

relationship with H-1B . . . nonimmigrants and/or U.S. worker(s).” 20 C.F.R. § 655.715 (2007); see

also 8 C.F.R. § 214.2(h)(4)(ii) (2007) (similar definition in Department of Homeland Security regula-

tions). This regulatory definition could not waive the federal government’s sovereign immunity, be-

cause the waiver “must be unequivocally expressed in statutory text.” Lane, 518 U.S. at 192. We note,

however, that like the statute, this regulatory definition is ambiguous as to whether federal agencies fall

within its ambit, because neither “person” nor “other association or organization in the United States”

clearly includes federal agencies. See, e.g., Vt. Agency of Natural Res. v. United States, 529 U.S. 765,

780 (2000) (noting “longstanding interpretive presumption that ‘person’ does not include the sover-

eign”).

3

The lack of an explicit waiver in the H-1B statute contrasts sharply with other statutes expressly

authorizing one federal agency to enforce the statute’s requirements against another federal agency.

See, e.g., 42 U.S.C. § 2000e-16(b) (2000) (authorizing EEOC to enforce antidiscrimination provisions

of Title VII against federal agencies in administrative proceedings, including through award of back

pay); id. § 6903(15) (2000) (defining “person” to “include each department, agency, and instrumentali-

ty of the United States” for purposes of DOL’s administrative enforcement of whistleblower provisions

of Solid Waste Disposal Act).

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Payment of Back Wages to Alien Physicians Hired Under the H-1B Visa Program

ly, we cannot regard this provision as an unequivocal waiver of sovereign

immunity for the award of back pay.

DOL also points to a 1998 amendment to the INA prescribing special rules for

an H-1B employer that is “an institution of higher education . . . or a related or

affiliated nonprofit entity; or . . . a nonprofit research organization, or a Govern-

mental research organization,” 8 U.S.C. § 1182(p)(1) (2000). With respect to

institutions and organizations covered by this provision, “the prevailing wage level

shall only take into account employees at such institutions and organizations in the

area of employment.” Id. In addition, such employers are exempt from paying the

H-1B filing fee, id. § 1184(c)(9)(A) (Supp. V 2005), and from the annual numeri-

cal limitations on H-1B visas, id. § 1184(g)(5). DOL reasons that Congress’s

efforts to prescribe special rules for “Governmental research organizations”

demonstrates an understanding that federal agencies as a class would be H-1B

employers. The statute does not define the term “Governmental research organiza-

tion,” however. 4 Even assuming that this term includes certain federal government

entities such as the National Institutes of Health, it could not be read unambigu-

ously to waive sovereign immunity for all federal agencies under section

212(n)(2). The 1998 amendment demonstrates that Congress did address one way

in which the prevailing wage requirement might impact universities, nonprofit

organizations, and some government research entities. 5 Congress spoke with no

such clarity, however, as to whether federal agencies generally could be subject to

administrative complaints and the award of monetary relief.

Finally, section 212(j)(2) of the INA permits an H-1B nonimmigrant who is a

medical school graduate, but who has not fulfilled certain licensing requirements,

to teach or conduct research for “a public or nonprofit private educational or

research institution or agency in the United States.” 8 U.S.C. § 1182(j)(2) (2000).

Once again, this phrase is ambiguous. An “educational or research institution or

agency in the United States” does not clearly include federal agencies. Even if this

phrase does signal that a federal agency may be an employer under the H-1B

program, the phrase neither appears in the definition portion of the statute, nor in

the remedial provisions. Insofar as a waiver of sovereign immunity “must be

unequivocally expressed in statutory text . . . and will not be implied,” Lane, 518

4

DOL regulations define this term to mean “a United States Government entity whose primary

mission is the performance or promotion of basic research and/or applied research.” 20 C.F.R.

§ 656.40(e)(1) (2007).

5

The legislative history of this provision indicates that Congress recognized a distinction between

private entities and the nonprofit or government entities in question. The Senate Report on a bill

containing an earlier version of this provision noted that it “separates the prevailing wage calculations

between academic and research institutions and other nonprofit entities and those for for-profit

businesses. . . . The bill establishes in statute that wages for employees at colleges, universities,

nonprofit research institutes, and other nonprofit entities must be calculated separately from industry.”

S. Rep. No. 105-186, at 29–30 (1998).

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Opinions of the Office of Legal Counsel in Volume 32

U.S. at 192, we cannot read this provision as an express waiver of sovereign

immunity.

We agree with DOL that these provisions, taken together, suggest that Congress

contemplated that certain federal entities may file applications as employers under

the H-1B program, but we do not regard these suggestions as the unambiguous

text required to subject the United States to liability for back pay judgments. The

Supreme Court has demanded a “clear statement” of waiver so as to ensure that

Congress directly considers the consequences of exposing the federal government

to suit and potential financial liability. As the initial dispute between DOL and VA

demonstrates, it is hardly clear that Congress gave such consideration in enacting

the INA provisions governing the H-1B program. Indeed, the INA makes no

provision for the potential conflict between the INA’s “prevailing wage” require-

ment and the pay scales established by the federal civil service laws. Nor did

Congress address this conflict in 1998, when it created certain exceptions to the H-

1B rules for educational and research entities, but made no express provision for

federal agencies other than “Governmental research organizations.”

The present dispute between VA and DOL itself constitutes evidence that

Congress did not directly consider the consequences of applying the H-1B

program to federal employers, much less that it considered the consequences of

waiving sovereign immunity and exposing the VA hospitals to financial liability.

VA originally requested our advice as to whether it had the statutory authority to

depart from civil service pay scales and pay a prevailing wage. The uncertainty

over that question reflects the fact that in contrast to other federal laws, here,

Congress did not clearly address the impact of the H-1B program on federal pay

statutes. See, e.g., 10 U.S.C. § 2164(e) (2000) (authorizing Secretary of Defense to

appoint school staff “without regard to the provisions of any other law relating to

the number, classification, or compensation of employees” based on consideration

of compensation paid to comparable employees by local educational agencies in

the State in which the military installation is located); 42 U.S.C. § 288-4(c)(3)

(2000) (authorizing Director of National Institutes of Health to appoint certain

individuals “without regard to the provisions of title 5 relating to appointment and

compensation”). Congress’s silence on this issue demonstrates why a clear

statement of a waiver is required and further supports the conclusion that the INA

does not constitute an “unambiguous” waiver of sovereign immunity.

IV.

DOL requests that if we find that the administrative awards of back pay are

barred by sovereign immunity, we nonetheless clarify that VA must comply with

the prevailing wage requirements in future cases. We agree that VA should not file

a labor condition application seeking DOL approval under the H-1B program

unless VA is able, under its statutory pay authorities, to honor the prevailing wage

requirements of that application. Although VA has no authority to pay an H-1B

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Payment of Back Wages to Alien Physicians Hired Under the H-1B Visa Program

employee compensation beyond what is authorized by its pay statutes, see, e.g.,

Kizas v. Webster, 707 F.2d 524, 535–37 (D.C. Cir. 1983), VA’s special pay

authorities do appear to provide it with sufficient flexibility to enable the Depart-

ment to pay the prevailing wage in many instances. Should VA determine that it

underpaid employees wages to which they were entitled under the law, we agree

with DOL that VA may correct that error to the extent that it could have paid the

higher wage in the first instance. See, e.g., 3 General Accounting Office, Princi-

ples of Federal Appropriations Law 12-5 (2d ed. 1994) (recognizing that an

agency has authority to pay an employee money erroneously not paid). In the

absence of a clear waiver of sovereign immunity, however, VA may neither be

required to defend itself in an administrative proceeding nor compelled to pay

back wages as a result of that administrative proceeding. 6

Congress, of course, provided an additional mechanism for ensuring compliance

with these requirements by granting DOL the authority to review labor condition

applications in advance and to deny any that do not meet the statutory requirements.

Cf. In re Hunter Holmes McGuire Veterans Affairs Med. Ctr., No. 94-INA-00210,

1996 WL 616606, at *1 (Bd. Alien Labor Cert. App. Oct. 7, 1996) (affirming denial

of labor certification where VA hospital was unable under federal law to offer

prevailing wage to anesthesiologist; finding “that the labor certification regulations

do not provide an exception, either express or implied, for a Federal wage sched-

ule”). It is true that the statute permits DOL to review applications “only for

completeness and obvious inaccuracies.” 8 U.S.C. § 1182(n). Still, an employer’s

failure to list an acceptable source of prevailing wage data, as we understand

occurred with respect to the applications submitted by some of the VA hospitals in

question, would seem to fall within the scope of that review. Congress’s failure to

waive sovereign immunity may limit DOL’s ability to enforce the H-1B require-

ments retrospectively, but DOL retains authority to ensure compliance at the front-

end through its review of these applications before an alien may receive an H-1B

visa.

STEVEN A. ENGEL

Deputy Assistant Attorney General

Office of Legal Counsel

6

We note in this regard that sovereign immunity does not apply simply to awards of retrospective

relief, such as back pay. Rather, sovereign immunity also would prevent a private party from bringing an

administrative action against VA under the INA’s retaliation provision, 8 U.S.C. § 1182(n)(2)(C)(iv), or

requiring VA to reinstate an employee after such a proceeding. See, e.g., Dugan, 372 U.S. at 620

(sovereign immunity bars an action against the United States “if the effect of the judgment would be to

restrain the Government from acting, or to compel it to act”).

55