On February 15, 2011, the United States District Court for the Western District of New York denied a motion to dismiss a complaint by foreign H-2B workers that alleged that their employer violated the minimum wage provisiosn of the Fair Labor Standards Act (FLSA) by refusing to reimburse the workers' transportation, visa and recruitment expenses. See Teoba v. Turgreen Landcare LLC, No. 10-6132 (W.D.N.Y. Feb. 15, 2011). In Teoba, the plaintiffs seek to represent a class of H-2B workers who were recruited over a three-year period by Trugreen, a landscape services company, but not reimbursed for the recruitment, visa and transportation costs they incurred to accept employment. The district court recognized that there was a split of authority on this issue in the circuits but sided with the courts that found FLSA violations for the failure to reimburse these challenged expenses.
The Teoba decision is important for employers in the Hospitality Industry due to their growing reliance on H-2B workers to address seasonal labor shortages. In past blogs, we have reported the growing number of criminal prosecutions against staffing companies in this area due to fraud in the application process, and advised hospitality employers to carefully monitor their use of H-2B employees to avoid complicity in these illegal activities. The Teoba decision highlights another potential exposure to employers of these workers under the FLSA and reinforces the need to carefully plan for, control and oversee the recruitment and employment of these workers.