In time of economic downturn, employers with H-1B workers in their workforce are placed in a difficult position. To weather the economic storm, employers may need to cut hours or temporarily furlough workers. Many workers would prefer to accept lower wages to retain employment benefits, such as health insurance. Unfortunately, costly H-1B Department of Labor (DOL) wage regulations require that the employer continue H-1B workers’ work schedules and payment of wages as set forth in the original H-1B petition.
Basic legal provision: Under current DOL regulations, H-1B workers must be paid the required wage rate for all nonproductive time caused by conditions related to employment, such as lack of assigned work, lack of a permit, or studying for a licensing exam. See DOL Fact Sheet 62I
No payment is required under the H-1B program for nonproductive time due to reasons not related to employment, such as a worker’s voluntary absence from work or a hospitalization, etc. Employers, however, remain obligated to comply with the Immigration and Nationality Act or any other statute relating to employment (such as the Family and Medical Leave Act).
Will the COVID-19 pandemic emergency relieve an employer of the requirement to pay workers for non-productive time?
It is unclear how DOL will apply these regulations during this global emergency. A number of states have issued stay at home executive orders. The closure, as such, is not due to the employer’s lack of work or corporate restructuring. In this specific context, it could be argued that this is a situation when wages need not be paid. The following provision may apply:
20 CFR 655.731(7)
(ii) Circumstances where wages need not be paid. If an H-1B nonimmigrant experiences a period of nonproductive status due to conditions unrelated to employment which take the nonimmigrant away from his/her duties at his/her voluntary request and convenience (e.g., touring the U.S., caring for ill relative) or render the nonimmigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant), then the employer shall not be obligated to pay the required wage rate during that period, provided that such period is not subject to payment under the employer’s benefit plan or other statutes such as the Family and Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
If the reduction in hours or furlough is solely due to lack of revenue or work, DOL could required the payment of back wages for the difference between the required pay rate and the actual reduced pay rate. Again, it is unclear what exceptions the DOL will make in this time of national emergency.
How much nonproductive pay is due and for what number of hours?
- Full-time salaried workers must be paid the full amount of the required wage rate;
- Full-time hourly workers must be paid for 40 hours or such other number of hours as the employer can demonstrate as full-time employment for its hourly employees;
- Part-time workers must be paid for at least the number of hours indicated on the Forms I-129/I-129W petition and incorporated by reference on the Labor Condition Application (LCA) (Form ETA 9035 and/or ETA 9035E); and/or
- Part-time workers with a range of hours listed on the Forms I-129/I-129W must be paid for at least the average number of hours normally worked, provided the average is within the range indicated. In no event should the worker be paid for fewer than the minimum number of hours indicated for the range of part-time employment.
What rate of pay is used for nonproductive time?
Nonproductive time must be paid at the required wage rate for the occupation listed on the H-1B worker’s LCA (see WH Fact Sheet #62G).
When does the obligation to pay for nonproductive time stop?
Payment for nonproductive time is not required after a bona fide termination of employment. The best evidence of such termination is documentation that:
- The employment relationship has been terminated;
- The USCIS has been notified of the termination of employment; and
- The employee has been offered payment for transportation home where required by USCIS regulations.
Can I move an H-1B employee to part-time work?
If an employee is moved from full-time to part-time status an amended H-1B petition must be filed with USCIS before the change is made.
What if an H-1B employee requests voluntary unpaid leave? Will my company be subject to payment of back wages?
If the DOL determines that an employee was placed on voluntary leave to avoid payment of wages for nonproductive time or termination, DOL may required the payment of back wages. If an employee has a legitimate personal reason to request voluntary unpaid leave, payment for nonproductive time may be waived.
What enforcement authority does DOL have over wage issues?
If an employer improperly reduces an H-1B employee’s wages below the wages required on the LCA and approved H-1B petition, the DOL may order the payment of back wages to the employee for the difference between the required pay rate and the actual rate paid. These actions are ordinarily triggered by a complaint by an aggrieved H-1B employee. If a complaint is filed, the DOL will investigate wages paid to all H-1B workers employed during the applicable time frame.
Will H-1B workers lose their H-1B status if the required wage is not paid?
If a full-time H-1B worker’s hours are dropped to part-time, the worker will be failing to maintain status unless an amended petition is approved.
If the H-1B worker is terminated, a 60 day grace period is triggered. The worker may change employers or change status during the 60 day grace period.
Status issues are often resolved by taking a quick trip outside the US. Current international travel restrictions will likely eliminate this option for quick resolution of a status issue.
Questions about maintenance of status for individual employees should be addressed by consultation with an immigration attorney.
Is there exposure to liability for citizenship discrimination if H-1B workers are paid for nonproductive periods while US citizens are not paid?
Simply adhering to the regulatory requirements for payment of H-1B workers during nonproductive periods should not expose an employer to a discrimination claim. However, if an employer were to terminate US citizen workers in order to retain H-1Bs in paid status, a discrimination claim could be justified.