The H-1B visa is not just the most popular nonimmigrant classification in the United States, it is also one of the categories with the most stringent of regulations, especially in terms of employees’ wages and job itineraries. However, as the novel coronavirus pandemic continues to take its toll on the global economy, requiring drastic measures from most organizations, there are several questions in the mind of employers with H-1B employees, which are, unfortunately, not explicitly addressed in the H-1B regulations.
The H-1B Labor Condition Application and Employee’s Required Wages
According to the H-1B LCA, it is mandatory for employers to continue paying their employees the agreed wages from the moment their employment is effected until the end of their relationship, except for a few stipulated circumstances. They are also required to officially notify the Department of Labor of every “material change” to the job description in the original petition.
While many companies have had to furlough, cut wages, change employees’ worksite, and choose other measures in response to the ongoing unpalatable health and economic realities, for H-1B employers, it is not an easy task. This is because they must avoid violating the terms and conditions of employment, as stated in their approved LCA and H-1B petition. This somewhat puts them in a fix and leaves them with several questions begging for answers.
Does An Employer Continue to Pay Wages of an Employee in a Non-Productive Status Due to COVID-19 Epidemic?
As a precautionary measure to reduce the spread of coronavirus, many local and state governments have instituted shelter in place order. But not all jobs can be done remotely, which will make some workers non-productive while the stay at home measure lasts.
Non-productive status, according to the H-1B regulation, is any time an employee is unable to work during LCA validity and H-1B petition. The regulation made it mandatory for employers to pay an employee in a non-productive status the required wages as long as the decision to be non-productive isn’t made by the employee. The only condition whereby an employer is not obligated to pay is when the employee voluntarily requested to be in a non-productive status for his or her own personal reason, which could to tour the U.S. or care for an ill relative. Other reasons may include not being able to work due to maternity or non-work-related accident, which temporarily incapacitate the employee.
Now that the reason for being non-productive is due to coronavirus epidemic, as ordered by the government, and not voluntarily requested by the employee, it will be expected of an employer to continue paying the required wages.
But With Little or No Income for the Employers, Is Furloughing or Benching An Option?
While it is understandable that the current economic downturn has affected the fortune of many companies, furloughing or benching an H-1B employee to stop paying wages may also not be an option. If an employer does this, he or she may be fined or asked to pay back wages. It could also lead to debarment of such employer from various U.S. employment-based visas in the future. It is understandable that many organizations will need to furlough as many employees as possible to alleviate the economic effect of the epidemic. While this can be done for other employees, for an H-1B worker, a furlough cannot include the suspension of the required wage. A temporary laying off of an employee cannot be considered an option as that will mean a termination of employment for the worker. An H-1B employee cannot be said to be in H-1B status if he or she is not at any point in time working under the term of LCA and H-1B petition.
What if an H-1B Employee Is Afflicted With COVID-19, Is An Employer Required to Continuing Paying the Employee Wages?
The United States is now the new epicentre of the COVID-19 pandemic, with over 600,000 positive cases. If an H-1B employee is tested positive and asked to be quarantined in line with the government directives, an employer is not required to pay the required wage. On the other hand, however, it is in some companies policies to place their COVID-19 positive employees in quarantine. In a situation whereby an employer asked an H-1B employee to be in quarantine, it may be argued that the non-productive status, though is due to COVID-19 pandemic, is the employer’s decision. This will make it difficult for such an employer to relieve himself from paying the required wage. An employer could also be subjected to pay the afflicted employee the necessary benefits under the company’s benefit plan. This may also include paying the applicable benefits as stated in the Family and Medical Leave Act or the Americans with Disabilities Act.
Is Converting an H-1B Employee from Full-Time to Part-Time Status an Option? If Yes, What Are the Steps Involved?
Yes, an employer can convert an H-1B employee from full-time to part-time status to cut cost. However, such an arrangement will count for material change under the H-1B regulation. For every material change made to the original H-1B petition, an amended H-1B petition must be filed. Once the USCIS receives the H-1B petition, the employee can switch and start working on a part-time basis. Though the American Immigration Lawyers Association (AILA) has requested a suspension or waiver of amended H-1B petition if the reason for the change in hours is due to national emergency, this is yet to be effected. The USCIS still requires an H-1B amended petition just as the DOL still requires a new LCA for this purpose, regardless.
Can an Employer Reduce Wages Now and Guarantee Bonuses to Make Up the Deficit in Future?
Yes, an employer can lower the salary of an H-1B employee and pay less than the required amount while the COVID-19 economic downturn lasts. This is allowed in accordance with the 20 CFR 655.731(c)(2)(v) in the H-1B LCA. The law allowed employers to give a guaranteed bonus later towards the satisfaction of the required wage obligation. The bonus, the law warns, must not be “conditional or contingent on a certain event, such as employer’s annual profits.” Though this will not completely relieve the employer of the obligation of the required wages, it is a perfect way of managing the economic impact of the COVID-19. To further ensure full compliance with the law, employers must pay the record and report the bonuses as “earnings” with appropriate taxes and FICA contributions withheld and paid.
How Can An Employer Terminate His Obligation to Continue Paying the Required Wages?
For many employers, the economic impact has required them to layoff some employees as that is the only absolute way of relieving themselves from the obligation of paying wages without commeasurable income. But can this be applied in an H-1B employee situation?
Well, according to the H-1B regulation, an employer can terminate the obligation to pay the wage the required wages if there has been a bona fide termination of the employment relationship. Bonafide termination means the employer must follow the Department of Homeland Security (DHS) laid down procedure for terminating an H-1B employee's employment. The employer must notify the USCIS that the employee's employment has been terminated for the USCIS to cancel the H-1B petition. While this will relieve the employer's of the requirement to continue paying the required wages, a certain obligation must still be met. It is mandatory for the U.S. employer to pay for the return transport of the employee. For an employee returning to a North American country, this could just mean a bus ticket. But for those returning to other continents, the cost will significantly be more.
What is the Fate of an H-1B Employee Whose Employment Is Terminated?
Of course, being out of a job during this economic downturn can be challenging, especially when you also risk being out of status soon. Fortunately, there are some options which can be explored for an H-B holder whose employment has been terminated. Firstly, an H-1B holder can leverage the 60-day grace period to seek a change of employer or change of status to a different nonimmigrant visa to extend their stay in the United States. Secondly, they may also file for unemployment benefits. Each of the U.S. states has its own unemployment law. An H-1B holder seeking such benefit must first check what the law says regarding their status and unemployment benefits in their states.
If an Employee Starts Working from Home, What Does the LCA Require in Regards to Notice?
On March 20, 2020, the DOL's Office of Foreign Labor Certification released a publication that addressed numerous issues on H-1B visa. The OFLC addressed the issue of employers who, due to the effect of COVID-19, need to move their employees to a workstation unintended at the time they submitted the LCA.
If the H-1B employee is moving to a new job location within the same intended area of employment in the approved LCA, the employer does not need to file a new LCA, provided there is no any material change in the terms and conditions of employment. However, the employer will need to provide electronic or hard copy notice at the new worksite for 10 calendar days. For a move that includes a material change to the terms and conditions of employment, a new H-1B petition may be required by the USCIS. Ordinarily, the DOL would require this notice be provided before the employee begins working at the new workstation. However, due to the effect of COVID-19 which may cause employers various disruptions, the DOL will consider the notice timely if posted “as soon as practical and no later than 30 days after the employee begins work at the new workstation.”
With the USCIS Support Centers Closed, How is H4 EAD Effected? Can H-4 EAD Holders Work?
At the moment, all USCIS and Applications Service Centers remain closed until May 3. However, while all in-person services have been suspended, the USCIS is still offering some services, which include processing of EADs.
The USCIS announced that they will continue to process Form I-765, Application for Employment Authorization (EAD) extensions and newly filed. So, for all Forms I-765 submitted on or after March 18, 2020, the application will be processed, without having to appear in person at the service center. The USCIS stated that it will re-use the applicant's previously submitted biometrics to process the applications.
How Does the Suspension of I-140 Premium Processing Affect H-1B Holders Reaching Their 6 Years Limit? What Can Be Done?
Due to the coronavirus pandemic, the USCS on March 27, 2020, announced a temporary suspension of premium processing for all I-140 petitions. This means every Form I-907 filed with Immigrant Petitions for Alien Workers will be rejected by the USCIS. For H-1B employees seeking permanent residency at the 6th year of their total validity period, this might prolong the entire processing time.
Another question is what will happen to their status if their visa expires while still waiting for the USCIS to make a decision on their I-140 petition. For this category of H-1B holders, there is an opportunity to apply for one more year extension at the end of their 6-year maximum stay, provided they filed their PERM Labor Certification early enough. H-1B employers are eligible to seek a seventh-year extension of their H-1B status if their PERM Labor Certification has been pending for at least 365 days.
Another Option: Stay Outside the U.S. and Reapply for H-1B Visa
You can also leave the United States and stay outside for a full year and then apply again for another H-1B term. After staying one year outside the U.S., it is allowed to reapply for H-1B once again. The application will involve the same process. The applicant will yet again be subject to the cap and other H-1B visa application requirements. The good news, however, is that if the application is granted, it will come with another 6 years validity period.
We will be happy to help you and explain what can be done if you are on H-1b and are facing one of the above situations. Please do not hesitate to contact us.