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Making
Business Work :
Workforce Reductions &
Immigration Law Compliance
Posted
Feb 23,
2009
©MurthyDotCom
This article was written by the attorneys of the Murthy Law Firm for
Murthy's Corporate Bulletin. If you are an employer or HR manager,
interested in the services offered by our firm, contact our
Corporate Services Manager.
©MurthyDotCom
In a
slowing economy, businesses of all types are taking measures to cut costs,
restructure operations, and enhance efficiency. In the January 2009 Murthy
Law Firm teleconference, Sheela Murthy and her team of attorneys discussed
the ways that corporate restructuring and downsizing can impact the
employment of foreign nationals and sponsorship for permanent residence,
commonly referred to as the "green card." The issues covered in this
teleconference were intended to inform decision-makers and other responsible
parties of the need to enhance awareness of issues relating to compliance
with the complex laws administered by U.S. Citizenship & Immigration
Services (USCIS) and the U.S. Department of Labor (DOL). As economic changes
can quickly confront a business with novel issues, the Murthy Law Firm
understands the importance of proactively gathering information to
strategize working through tougher times for a brighter future.
©MurthyDotCom
Reducing H1B Workforce
©MurthyDotCom
Question 1. The company is experiencing an unexpected slowdown in the
amount of work for its employees. Can the company keep its H1B employees,
even if they are not performing any work?
©MurthyDotCom
The DOL's
rules prohibit the practice referred to as
"benching"
H1B workers, by generally requiring the H1B employer to pay for
nonproductive time at the full-time rate of the DOL's prevailing wage. If an
employee's work visa is based on a part-time H1B petition quoting a range of
hours, then the DOL rules may permit payment of wages calculated based on an
average of those cited hours, but in no event for less than the minimum
number of hours.
©MurthyDotCom
Question 2. What if the H1B worker is nonproductive because of non-work
reasons?
©MurthyDotCom
The DOL rules apply when the nonproductive status is employment-based, such
as lack of assigned work, lack of a necessary permit or studying for a
licensing exam. Generally, when a company's H1B worker is taking time off
for family leave or for other personal reasons, or departs the U.S., the
company is not required to pay the prevailing wage.
©MurthyDotCom
Question 3. If the company is reducing its workforce due to economic
changes, can the company stop paying nonproductive workers?
©MurthyDotCom
An employer's obligations under the DOL rules generally stop when there is a
bona fide termination of the employment relationship. When this occurs, the
company is required to notify the USCIS of the termination and request
revocation of the H1B petition.
©MurthyDotCom
Question 4. I have heard from other employers about former H1B workers
seeking back wages after termination. How can I avoid this from happening to
my business?
©MurthyDotCom
Foreign nationals seeking back wages that they are owed under the law can
initiate a request by filing a claim with the DOL. Typically, these claims
arise when the individual was in nonproductive status and was not paid, in
violation of DOL requirement.
©MurthyDotCom
An employer generally can defend itself against a claim for back wages by
showing that wages owed were paid while the individual was employed and by
documenting when the employment relationship was terminated, that notice was
given to USCIS, DOL, and the worker, as well as showing that the employee
was given or offered the "reasonable" cost of return transportation.
©MurthyDotCom
Status after Employment Ends
©MurthyDotCom
Question 5. I want to help the H1B employees that I am letting go. Can I
tell them about a grace period during which one can find a job so s/he can
stay in the U.S. in H1B status?
©MurthyDotCom
Unfortunately, there is no grace period for an H1B worker to find a job
after being terminated. USCIS generally takes the position that once the job
ends, the individual is not in H1B status any longer. As a practical matter,
USCIS may overlook a small amount of unemployed time when processing an H1B
petition from a new employer, if the period is reasonable. This situation
will be evaluated on a case-by-case basis. The employer can provide as much
advance warning as possible prior to the termination. However, the employer
must protect itself by documenting the termination, including revoking the
petition once the employer / employee relationship terminates.
©MurthyDotCom
Question 6. If the H1B worker is out of status after being terminated by
the company, is there anything of which s/he should be especially aware in
planning for the future?
©MurthyDotCom
Generally, when an H1B holder is out of status, s/he may not change
employers in H1B, change to another status that allows working in the U.S.,
or request an extension of permission to stay in the United States. It may
be possible to regain status by departing the U.S. and returning in a valid
status. If the foreign national remains in the U.S. for more than 180 days
while being out of H1B status, then s/he may not be eligible to obtain an
approval of the final stage of the green card process known as Adjustment of
Status. Staying in the U.S. without status can cause difficulties with visa
approvals and other discretionary matters.
©MurthyDotCom
Question 7. Can the company continue paying the former employee his or
her benefits and severance package spread out over a few months so the
foreign national is still "in H1B status?"
©MurthyDotCom
An H1B worker is admitted into the United States to provide services to a
U.S. company. Unfortunately, providing benefits and / or wages as part of a
severance package will generally not be considered as the foreign national
maintaining status. An employer also should be cautious about ensuring the
former employee understands the employment relationship has ended to
minimize the risk of becoming subject to back wages under DOL rules.
©MurthyDotCom
Reducing Hours and Wages while Keeping H1B
Workers Employed
©MurthyDotCom
Question 8. While layoffs will be the last resort, right now the company
just does not have enough work for full-time employment and wages. We do
expect things to improve, however, and do not want to lose these employees,
who are a valuable asset to our business and ability to grow as the economy
improves. What can we do?
©MurthyDotCom
An employer may consider reducing salaries or reducing hours, but only after
certain steps are taken to avoid becoming subject to back wages or violating
the prohibition against benching. H1B petitions will have to be amended to
reflect any such change in hours and terms.
©MurthyDotCom
Question 9. What is required of the company in the case of reduction in
salary?
©MurthyDotCom
An employer generally is required to pay an H1B worker the greater of the
actual wage or the prevailing wage for the job. If the salary reduction
would not result in a wage below the required wage, set out in the Labor
Condition Application, then there is no need to take any remedial action.
However, if the new salary drops below the required wage, a new Labor
Condition Application is required, with a wage that is still within the
greater of actual or prevailing wage rates. It may be necessary to amend the
H1B petition.
©MurthyDotCom
Question 10. What
is required of the company in the case of a reduction in hours?
©MurthyDotCom
One of the components of every H1B petition submitted to and approved by the
USCIS is hours. An employer generally needs to obtain a new Labor Condition
Application and submit an H1B petition to the USCIS changing the hours to be
worked by the employed foreign national. An H1B can be approved by the USCIS
for part-time employment or, more generally, for a range of hours to be
worked.
©MurthyDotCom
It is important, however, to note that, given the intersection of rules from
the USCIS and the DOL in the H1B program, if a worker employed based on an
H1B petition with a range of hours is benched, the DOL generally requires
that the employee must be paid for at least the average number of hours
normally worked.
©MurthyDotCom
Employing H1B Worker before USCIS Approval
v
Question 11. My business has located a foreign national being laid off
and would like him to start as soon as possible. Can he start before the H1B
we file for him is approved?
©MurthyDotCom
Generally, if an employer hires a foreign national in H1B status, and files
an H1B petition with the USCIS, the employee can begin working once the H1B
case has been filed, even though it is not yet approved. The law provides
that, if the foreign national has been lawfully admitted into the U.S.,
filed a non-frivolous H1B petition before his or her current status expired,
and has never worked without permission previously, s/he can work for the
new petitioner once the H1B is filed.
©MurthyDotCom
Conclusion
©MurthyDotCom
We at the Murthy Law Firm closely monitor developments effecting employers
across the United States and their relationships with foreign national
employees. In difficult times such as these, the USCIS and the DOL more
closely monitor compliance with the law. Our attorneys leverage our
knowledge of the law and experience in advising employers on ways to meet
their business needs while complying with the law. We develop strategies to
help you - our valued clients - meet your goals. Whether you are faced with
reducing your workforce, or just keeping your business flexible enough to
meet your operational goals while complying with the law, it can be
difficult to manage in these times. The experienced attorneys at the Murthy
Law Firm are able to provide the knowledge and counsel to help you make the
right choices, enabling your business survive and, hopefully, even thrive in
this environment.
©MurthyDotCom
"We know immigration matters!"
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