Employers have downsized and reorganized their workforce to weather the current economic downturn. For those employers who employ H-1B nonimmigrants, it is important to understand what the law requires in the event of a change in employment terms or conditions.

Layoffs

If an employer lays off an H-1B employee, the employer must effect a bona fide termination to halt its obligation to pay the H-1B employee the wages listed in the Labor Condition Application filed with the Department of Labor (DOL). A bona fide termination has three elements: 1) notify the employee, 2) provide notice to U.S. Citizenship and Immigration Services, and 3) offer to pay the employee’s transportation cost to return to his or her home country. Until there has been a bona fide termination, the employer is required to continue paying the H-1B employee his or her wages.

Employers should note that there is no grace period once H-1B status ends. Strictly speaking an H-1B employee falls "out of status" as soon as the employment relationship ends. Because H-1B employees may have the option of "porting" to another employer willing to sponsor them, employers might wish to consider giving H-1B employees advance notice of the termination to minimize the impact on their immigration status.

Benching

Benching is a period of time that an H-1B employee spends in non-productive status due to a decision by the employer. For example, annual plant shuts down for holidays or retooling; summer recess or semester breaks; pre-employment training; mandatory vacation; or disciplinary action are considered benching. However, a period of non-productive status due to a choice by the employee is not considered benching (e.g., extended leave to care for an ill family member, absence from work to travel). When an employer benches an employee, the employer is required to continue to pay its H-1B employee pursuant to the Labor Condition Application that the employer filed with the DOL.

Penalties

If the DOL finds that an employer has failed to pay wages to an H-1B employee as required prior to a bona fide termination or during certain periods of non-productive status, the employer may be subject to the following penalties:

  • payment of back wages to any H-1B worker who was not paid in accordance with the LCA attestations;
  • civil money penalties;
  • disqualification from approval of nonimmigrant petitions filed by the employer for a period of time; and
  • other administrative remedies as appropriate.