H-1B compliance during Covid-19; Telecommute, Layoffs and Pay Cuts
Employers of H-1B workers are subject to U.S. Department of Labor regulations designed to protect the jobs of U.S. workers. Those regulations require that the H-1B worker perform his or her duties at one or more specific locations at which he or she must be paid at least the same wages as other similarly qualified U.S. workers. In addition, H-1B workers go out of status if their employment is terminated for any reason, subject to grace periods of between 10 and 60 days.
The COVID-19 pandemic has resulted in most employees in the knowledge economy being forced to work from home due to government orders, with very little notice. In addition, many employers are instituting workforce reductions and/or salary reductions for employees. These necessary measures raise many questions for U.S. employers about working from home, salary reductions, layoffs, furloughs and other matters of compliance with H-1B program requirements.
H-1B Workers Working from Home
Before hiring an H-1B worker, employers must post notices advising the U.S. workforce that the company is hiring the worker. The notices must be posted at the actual worksite where the H-1B worker will perform his or her job duties. That job may be the employer’s premises, a home office or a third party location. If the work-from-home option or requirement is not contemplated at the time of filing the H-1B petition, but later is added, DOL guidance states that the employer need not file a new LCA for the worksite if it is within the same metropolitan statistical area (“MSA”). An MSA is an area within normal commuting distance of the place of employment.
Thus, if the H-1B worker’s home is within the same MSA as the employee’s normal worksite location, a new LCA need not be filed for the new worksite location, but the LCA posting notices should be posted at the employee’s home for ten consecutive business days, and the posting notices must be placed in the Public Access File when taken down.
If, however, the employee’s home is outside the MSA in which his or her worksite is located, then the following rules apply:
First, LCA regulations at 20 C.F.R. §655.735 provide a “short term placement” option for up to 30 workdays. “Workdays” are days actually worked and do not include weekends and holidays. It could therefore typically cover at least 6 weeks of work at a temporary location. (Please be aware that the 30 workday limit is in the aggregate for the calendar year; if some days have already been used under this option, then an employer will not have the full 30-day period for COVID-19 purposes.)
Note that §655.735(c) permits working at the non-worksite location up to 60 days, but only if the employee’s residence is not in the MSA of the temporary location; therefore, it would not work where the temporary worksite is the employee’s residence.
Second, if the quarantine lasts longer than 30 workdays, the employer will need to file a new LCA to cover the employee’s residence and comply with all of the LCA notice requirements. In addition, an amended petition must be filed.
If a new LCA is required, an amended petition must also be filed with USCIS. Thus, this requirement would come into play following exhaustion of the “short term placement” provision, and only for employees who live outside of the MSA where they work.
Salary Reductions or Layoffs for H-1B Workers
DOL regulations require employers to pay the wage set forth in the Labor Condition Application approved and filed along with the H-1B petition. In response to the ongoing COVID-19 outbreak, employers are weighing options regarding whether to reduce the hours or salaries of some or all of their employees, including some H-1B workers.
H-1B regulations require employers to pay H-1B workers at the wage level specified in the H-1B petition and for the number of hours per week set forth in the H-1B petition unless:
the worker is granted a leave of absence that is unpaid or partially paid due to the request of the employee or under 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.) nonetheless per 20 CFR 655.731(c)(7)(ii). This may include new, additional federal legislation passed during the COVID-19 pandemic; or
the worker’s employment is terminated. Termination of the employer’s wage obligation to an H-1B worker occurs when the worker is notified and USCIS is notified of the termination (which results in revocation of the H-1B petition). In addition, if the employment is terminated by the employer prior to expiration of the H-1B petition, the employer must provide the reasonable cost of return transportation to the H-1B worker’s home country.
Thus, if employers wish to reduce an H-1B worker’s annual salary or to reduce his or her hours, an amended petition may be required. In any event, the H-1B worker’s salary may not be reduced below the prevailing wage for the geographic area established by the Department of Labor, nor may the H-1B worker’s salary be reduced below that of similarly situated U.S. workers.
Furthermore, H-1B workers may not be furloughed or temporarily laid off without pay due to the employer’s inability to continue paying the H-1B worker. Employers who are unable to continue to pay the required H-1B wage must either file an amended H-1B petition to accommodate fewer hours or a permissible wage reduction; or they must terminate the employment of the H-1B worker. Employers who bench H-1B workers without pay and without terminating the employment relationship as outlined above are subject to fines, back wages and potentially debarment from DOL’s immigration programs.
Bottom line, every situation has unique facts and we’re happy to schedule a strategy session to make sure that your organization has the right answers to the pressing questions facing your workforce today.