Solutions to Help Employers with H1B Compliance
Posted Mar 20, 2009
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There has been a great deal of concern generated as a result of recent arrests in connection with H1B compliance. MurthyDotCom and MurthyBulletin readers were apprised of the current situation in our February 27, 2009 article, Arrests of H1B Employers Increase. Many companies do not know where to begin in order to address these matters. For the benefit of our readers, some matters for consideration are provided here to help employers comply with the U.S. Department of Labor (DOL) and the U.S. Citizenship and Immigration Services (USCIS) regulations.
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Given the depth and complexities of the regulatory requirements related to the H1B Labor Condition Application (LCA), violations are possible even for those trying hard to comply with the rules of the system. The DOL recognizes this by having certain inadvertent violations classified as technical in nature. Following are some basic steps employers can take to address a common H1B compliance concern.
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Revoke H1B Petitions for Terminated Employees
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When H1B employment terminates, it is necessary for the employer to document the termination and revoke the H1B petition. When employment has ended and the H1B petition has been revoked, there is a clear end to wage obligations. Even when there is a clear end date to the employment, but no revocation, there have been cases in which wages were found to be appropriate until the confirmation date of H1B petition revocation. This is covered in our February 6, 2009 article, H1B Employee Termination: Employer Concerns. Thus, if an employee is no longer working for a company, the H1B petition should be revoked. The employer needs to keep complete documentation of the employment termination, request revocation, and request USCIS confirmation that H1B was revoked.
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Terminate or Pay Benched H1B Employees
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The LCA regulations prohibit benching (failing to pay) H1B workers during times when there is a lack of work. The LCA requires workers be paid the prevailing wage during their employment. It is required that employers with workers for whom they have no work terminate the employees and revoke the H1B petitions. If the employer has some work, it may be worth amending the H1B petitions for part-time employment, as explained in our December 5, 2008 article, Part-Time H1B Helpful during Recession.
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While it is possible for an employee to request leave, employers should not try to use this provision as a disguise for benching, since it could be tantamount to fraud or misrepresentation. This effort is usually quite transparent, as workers in the United States do not routinely request extended periods of unpaid leave, other than for maternity or serious personal or family emergency situations. Such claims, therefore, need to be well supported and should be consistent with normal U.S. business practices and common sense.
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If an employer simply does not have work for an individual to perform, and cannot afford to pay the employee, then, unfortunately, it is time to terminate the position and revoke the H1B petition. While most employers would prefer not terminate good workers, compliance with H1B law and requirements is mandatory to avoid problems with enforcement and in order to be allowed to continue sponsoring H1B workers who are needed. Employees in this difficult situation are not without options. See article #2 in this week's MurthyBulletin entitled, Impact of H1B Revocations on Employees. If necessary, this matter should be discussed in consultation with a qualified, experienced immigration attorney.
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Obligation Applies upon Change of Status
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If a foreign national employee is in the United States and has obtained a change of status to H1B, the employer's obligation to pay begins on the first day of the H1B validity or "eligible to work" date, if the employee makes her/himself available. Employers sometimes are under the mistaken impression that they can control the obligation to pay new H1B employees by not releasing the H1B I-94 documents. They erroneously believe that the H1B LCA obligations are not activated until they say so. This is not correct for foreign nationals within the U.S. for whom the employers have requested and obtained changes of status. It is also not correct for foreign nationals who have entered the U.S. and who hold H1B status based upon the particular employer's approved H1B petition.
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Employers Must Show Good Faith to Avoid Harsher Penalties
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The DOL has some discretion, once it has conducted an investigation, as to the types and levels of penalties assessed. There may be less harsh consequences for past violations, if there is evidence of current compliance. While it is appropriate to take remedial action to fix problems for the future, however, there should not be any attempted cover up or falsification. Efforts of this type will make the problem worse, potentially leading to criminal charges. Revoking H1B petitions is a typical remedial action. Other corrective steps often include filing H1B petition amendments and new LCAs for changed locations of employment, paying back wages, and organizing documentation, including public access files.
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Conclusion
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Employers must take H1B compliance seriously. It is important to recognize the seriousness of the obligations contained in the LCA. At the heart of the matter is the need to have proper LCAs in place and to pay the required wages. Employees should seek sound legal advice to know their options, rather than trying to convince their H1B-petitioning employers not to revoke their petitions. Employers with concerns about their H1B practices should obtain legal advice. It may be necessary for employers to make changes in their practices and business models to ensure compliance with H1B requirements.