In the past years, the U.S. Department of Labor ("DOL") has been involved in two important actions that should remind employers of their obligations to pay legal and other expenses associated with the H-1B process. In a Prince George County School District case, the DOL claimed that the school district improperly required the 1,000+ H-1B teachers it sponsored to pay the legal expenses associated with their H-1B petitions. Administrator, Wage and Hour Division vs. Board of Education, Prince George’s County, Case No. 2011-LCA-0026 (2011). In settling the case, the school district agreed to reimburse the sponsored teachers the total sum of $4,222,146, pay a civil fine of $100,000, and be barred from using the H-1B program for two years.

In USDOL v. Kutty, the DOL claimed that the defendant, a medical doctor with five clinics in Tennessee, violated federal law by failing to cover the expenses that H-1B employees incurred in securing the J-1 waivers that they needed to remain in the United States. USDOL v. Kutty, No. 3:05-CV-510 (E.D. Tenn. 2011). Under U.S. immigration laws, FNs who participate in medical residency programs here in J-1 status are subject to a two-year foreign residence requirement. They can avoid this requirement by seeking a waiver that involves, among other things, practicing in a medically underserved area. If they find a position in such an area, the employer can sponsor them for H-1B status while the J-1 waiver process continues. In the Kutty case, the DOL took the position that the costs of the J-1 waiver process were part of the expenses that the H-1B employer was required to pay. This position was upheld by the DOL Administrative Review Board and by the U.S. District Court for the Eastern District of Tennessee. This decision presents new considerations for health care employers seeking to sponsor foreign medical graduates who must obtain J-1 waivers.