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Did You Really Terminate That H-1B Employee?

5/21/19

By: Layli Eskandari Deal

U.S. Department of Labor Awards $43,366 Back Pay to Engineer.
In January, a Microfabrication Engineer, employed under the H-1B visa program by Minnesota-based TLC Precision Wafer Technology, Inc., was awarded $43,366.67 in back wages and interest after an investigation by the Department of Labor’s Wage and hour Division.
The employment began in October 2008 under the H-1B visa program. After a downturn in business, the company began experiencing financial difficulties. In a letter dated November 16, 2008, TLC notified the Engineer that he would be laid off effective immediately. However, TLC continued to employ the Engineer until January 2009, at which point he was advised by email that his hours would be reduced to part-time. The Engineer resigned his position in February 2010 and in the same month filed a complaint with the Department of Labor’s Wage and Hour Division alleging that the company had failed to pay him the required wage.
Department of Labor Regulations set the wage requirement employers must meet in employing H-1B workers. Employers must pay the H-1B employee the greater of the prevailing wage for the occupational classification or the amount they pay other employees with similar experience or qualification. The H-1B employee must be paid beginning on the date that they “enter into employment” with the employer. This condition occurs when the employee becomes “available for work or otherwise comes under the control of the employer, such as reporting for orientation or training.” H-1B employees must be paid the required wage even if they are not performing work and are in nonproductive or idle status.
In the instance case, the Administrative Law Judge found that TLC was obligated to pay the Engineer $43,000 per year starting in October 2008 until his departure in February 2010.
How can employers limit exposure?
U.S. Citizenship & Immigration Services (USCIS) regulations address the employer’s obligations with regard to material changes to H-1B employment.

  1. Employer must notify USCIS immediately of any changes in the terms and conditions of employment which may affect eligibility under the H-1B regulations. This includes changes in position or duties, changes in job location, changes in any condition of employment such as going from full-time to part-time status.
  2. If the employer no longer employs the H-1B worker, the employer must send a letter to USCIS indicating the termination of employment. DOL considers such communication to USCIS to effectively terminate the employer’s wage obligation.

It is clear that DOL will look at the actions of the employer and communication with USCIS to determine whether the employer has abided by rules governing the employment of H-1B workers.  It is vitally important for employers to be familiar with the rules and timely communicate with USCIS when dealing with changes in employment status of foreign national employees.
For additional information related to this topic and for advice regarding how to navigate U.S. immigration laws, you may contact Layli Eskandari Deal of the law firm of Freeman Mathis & Gary, LLP at (770-551-2700) or LDeal@fmglaw.com.