Bona Fide Termination Requirement for H1B Employee

Employers who hire H1B workers typically do so with the intent of employing these foreign national workers for the full duration of time requested in the employer petitions. However, for a variety of reasons, employers may find themselves in the difficult position of having to terminate the employment relationship before the end of the H1B validity period. Whether it be due to lack of sufficient work for the employees, job performance, or any other valid reason, employers must ensure that they comply with H1B regulations regarding bona fide termination when dismissing H1B workers.

Bona Fide Termination of H1B Workers

Terminating a U.S. worker usually involves little more than simply notifying the employee and addressing some administrative issues. However, in order to terminate a worker in H1B status, and end any responsibilities to that worker, employers must take specific steps.

In some cases, courts have interpreted the relevant regulations to mean that a bona fide termination only takes place after specific steps are followed. Failure to follow these steps can lead to harsh consequences for a business.

Employers must complete three steps to assure that termination of an H1B worker is considered bona fide.

  1. Notify the H1B worker that s/he is being or has been terminated.
  2. Notify the U.S. Citizenship and Immigration Services (USCIS) that the H1B employment relationship has been terminated.
  3. Offer to pay the H1B worker for the reasonable costs of return transportation abroad.

All of these steps must be clearly documented. If a complaint for non-payment of wages is filed against the employer, the burden of proving compliance with the aforementioned steps in terminating the H1B worker rests with the employer. An employer that does not properly attend to these matters, may be found responsible for back wages as well as interest on those back wages.

Proper Documentation Critical

As previously mentioned, the employer has the burden of proving compliance with each of the three steps to execute a bona fide termination. The Murthy Law Firm recommends that employers create and maintain a paper trail documenting that each of the required steps has been properly followed. This is to comply with the regulations, increase transparency, and establish a consistent policy for all H1B employees.

Employers should offer in writing to pay for the employee's airfare. Usually, such a letter should indicate a deadline for the employee to accept the offer. In many cases, the employee will not accept the offer and will find new employment or other alternatives that will make remaining in the United States possible.

If the employer actually purchases the return flight for the terminated employee, the employer should retain a copy of the ticket and proof of payment. If the employee purchases the ticket and the employer issues a reimbursement, the employer should retain receipts for this purchase and, if possible, have the employee sign a document acknowledging receipt of the payment for the return ticket for the principal H1B applicant.

In notifying USCIS that the H1B employee has been terminated, the notification should be sent in writing with a return receipt or other traceable mail delivery. As the OALJ in the above case put it, "... [f]or the price of a postage stamp, the Employer often can absolve itself of further liability."

Providing Employees Advanced Notice of Termination

When possible, an employer should consider giving an H1B employee advanced notice of his/her pending termination. While such a conversation can prove difficult for both parties, it may be in everyone’s best interests that the worker be made aware of his/her end-date well in advance.

An H1B worker typically falls out of status as soon as he/she is terminated unless the individual is able to transfer to a different H1B employer or into a different status prior to the actual termination date. Advanced notice gives the employee time to take steps which may preserve his/her valid status in the U.S. Not only is this good for the H1B worker, but if the worker finds a way to remain in the U.S., it also may relieve the employer of the need to pay for the worker’s return flight.

The issue of an employee’s status following termination is discussed in greater detail in H1B Layoff: Strategy When Changing H1B Employer.

Conclusion

Employers must be especially mindful of their employment practices pertaining to H1B employees. While it is certainly possible to terminate H1B workers if necessary, employers need to take appropriate steps and keep documentation related to the steps taken in this process. Potential liability can be avoided by putting proper procedures in place. Employers with questions on these matters should consult with an experienced attorney at the Murthy Law Firm.

Copyright © 2012, MURTHY LAW FIRM. All Rights Reserved

Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.

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