The COVID-19 pandemic has caused significant uncertainty in our lives, which includes our workplaces. This Q&A seeks to address common questions our firm has received from employers with foreign national employees on a variety of work visas. Although this Q&A is designed to give an overview of employer obligations under the H-1B work visa program and touches on employer obligations related to other statuses (E-1, E-2, E-3, L-1, O-1, and TN), it is intended to be general and not case-specific. This Q&A does not take the place of specific legal advice tailored to your unique circumstances. Please engage immigration counsel for your specific situation and questions.
First, we are finding employers using a variety of terms to describe how they are managing staffing issues, and those terms require definitions, as they are not interchangeable. Here are some common employment law concepts to consider:
Termination – most employees in the U.S. are “at-will” employees and most at-will employees can be terminated by their employer for nearly any reason or for no reason. A termination ends the employment relationship between the employer and the employee. This is also referred to as a separation.
Layoff – this is a common term used to indicate an employee has been terminated, usually due to a change in economic circumstances, change in company direction or offerings, or lack of business. There are provisions under state law in many instances regarding the employee’s ability to maintain health insurance, whether employers must give a certain amount of notice to employees about an upcoming layoff, and regarding payment of any accrued sick and vacation time.
Furlough – this is a very common term in the COVID-19 pandemic, as employers in many circumstances are unable to have their employees report to work or maintain their same level of business. Furlough is used frequently in the federal worker context when there is a delay in appropriating funds to continue to pay federal workers in the country’s budget. The furloughed federal employees stay home from work, are not paid during that time period, but with the assumption they will return to work when Congress appropriates funds and they will retain their position and seniority upon their return. In the private sector context, a furlough could be a complete cessation of work for a temporary period, or a reduction in hours or reduction in pay for a temporary period. In many instances, furloughed employees are provided with assurances from their employers regarding continuation of health benefits and a date certain or possible date for return (“we will resume operations when the Governor lifts the stay at home order”). Many states permit furloughed workers to file for unemployment benefits, for all or part of their salaries (depending on whether a complete or partial reduction in hours or pay).
Reduction in Hours – when an employer reduces the number of hours per week an employee works, which may also impact the employee’s benefits (i.e. moving from full-time to part-time employment).
Reduction in Pay – when an employer reduces the employee’s hourly pay or offered salary.
1. What happens if I terminate an H-1B employee with no expectation of return?
If the employer or foreign national (FN) employee permanently terminate the employment, the following actions must be taken:
DHS regulations require the employer to notify USCIS that the employment relationship has been terminated so that the petition is canceled (8 CFR 214.2(h)(11)).
Must offer and provide FN with payment for transportation home under certain circumstances (8 CFR 214.2(h)(4)(iii)(E)). Employer does not have to cover travel expenses of dependent family members.
If the employer does not notify the USCIS about the termination and offer to provide the employee with payment for the return transportation home, DOL will not consider it as a bona fide termination and may still hold the employer liable for back wages (20 CFR 655.731(c)(7)(ii)). For additional information, see DOL’s Wage and Hour Division’s Fact Sheet #62I.
2. What happens if I furlough employees?
H-1B regulations require that companies must continue to pay prevailing wages during the entire duration of the H-1B status. The only existing exceptions to this requirement are when the foreign national themselves request a leave of absence from their duties (such as caring for a sick relative or medical leave). To be compliant such an employee request must be approved prior to the start of leave and be properly documented.
Currently, the U.S. Department of Labor has not made any allowance for an interruption of employment and salary when the cause is related to a government stay-at-home order. Therefore, the H-1B employer must continue to offer continued employment and salary under the terms and conditions as indicated in the H-1B petition.
3. What happens if I lay off employees?
The consequences of a layoff depend on the visa status of the employee. For workers in H-1B status, the petitioning employer is required to immediately notify USCIS of the termination and offer the worker reasonable transportation home. Once USCIS receives such notice, the agency will revoke the employer’s petition on behalf of the H-1B worker. The termination will also place the H-1B worker in a grace period in which he or she is considered in status. See Q and A #10 below for more details about grace periods.
4. What happens if I lay off employees but will pay them back wages when things are back to normal?
A layoff is a termination for immigration purposes. See Q and A #1 above but in summary, an employer is relieved of its wage payment obligation under the H-1B program so long as it communicates the termination to the H-1B worker and notifies USCIS of the termination. 20 CFR 655.731(c)(7)(ii); Amtel Group of Florida Inc v. Yongmahapakorn, 2004-LCA-0006 at 11 (ARB 2006).
5. What happens if an H-1B employee leaves work voluntarily to care for themselves or a sick relative?
The INA requires H-1B employers to provide H-1B workers access to the same benefits package that it offers to US workers. Furthermore, the Act allows H-1B employers to suspend wages to an H-1B worker for “nonproductive time due to non-work related factors, such as the voluntary request” of the H-1B worker. INA 212(n)(2)(C). Taking both of these provisions together, employers who offer paid sick leave or family leave will need to provide the same to H-1B workers who request such leave. Employers who do not offer paid leave may place H-1B workers who request sick leave in unpaid status. DOL regulations provide that
If an H-1B nonimmigrant experiences a period of nonproductive status due to conditions unrelated to employment which take the nonimmigrant away from his/her duties at his/her voluntary request and convenience (e.g., touring the U.S., caring for ill relative) or render the nonimmigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant), then the employer shall not be obligated to pay the required wage rate during that period, provided that such period is not subject to payment under the employer's benefit plan or other statutes such as the Family and Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
20 CFR 655.731(c)(7)(ii)
Although the Immigration Act and DOL rules recognize that H-1B worker may request a voluntary leave, there is no bright line rule setting out how much leave an H-1B worker may take before he or she could be accused by the Department of Homeland Security as failing to maintain status.
6. What if an employer temporarily reduces the wage but keeps the hours as full-time?
The required wage should be the higher of the actual or prevailing wage:
The actual wage is the wage paid to similarly situated workers in the employer’s organization within the area of intended employment.
The prevailing wage is the wage rate for the occupational classification in the area of employment, which is determined at the time of filing the Labor Condition Application (LCA).
If the employer reduces the actual wage for all similarly situated employees then they may be able to drop the wage below what is listed on the LCA and I-129 to as low as what is listed as the prevailing wage (but no lower). In some cases, the potential reduction in wage could be significant if there is a large gap between the salary and prevailing wage. In other cases, the gap may be minimal, if anything at all.
While the safest course of action is to file an amended petition, there is an argument to be made that this is allowed. According to the Field Operations Handbook from 2006 (AILA InfoNet Doc No. 09012871), “Changing economic conditions (or other valid factors) can require an ER make substantive changes to its actual wage system; the AW can go up (merit increases, cost of living, promotions, etc.) or down (wage reductions). At the time that the AW change occurs, it should be recorded in the public access file (20 CFR 655.760(a)(3)). Moreover, the argument is bolstered by the fact that employers are not required to file an amended petition if the actual wage increases during the validity period of the H-1B. Accordingly, an amendment should not be required if there is a reduction in wage, where the required wage remains above the prevailing wage.
7. What if an employer temporarily reduces an H-1B employee’s hours from full-time to part-time?
The employer must notify USCIS of most reductions in hours by filing an H-1B amendment petition with USCIS. In Matter of Simeio Solutions (26 I&N Dec. 542 (AAO 2015)), USCIS confirmed that an amendment petition is required if there is a material change to the H-1B’s workers’ employment. A material change may include a change in worksite location or reduction in hours. Depending on how the original Labor Condition Application (LCA) was drafted and what was listed on the Form I-129, converting the employment from full-time to part-time employment would be considered a material change as it requires the employer must obtain a new LCA reflecting the part-time wage. Once the amendment petition is received by USCIS, the employee may work under reduced hours while the petition is pending. Please note filing an amended petition can take weeks to prepare during this crisis, and the reduction in work hours cannot take place until filed.
8. Can the employer reduce the wage of an H-1B worker during COVID-19 period, but still guarantee a bonus to the worker later on to make up the deficit?
If the employer temporarily reduces the salary of an H-1B employee below the required wage, the employer can give a guaranteed bonus in the future that may satisfy of the required wage obligation (20 CFR 655.731(c)(2)(v)). The bonus cannot be conditional or contingent on some event such as the employer’s annual profits. Once the bonus is paid, it must be paid as a salary and reported as earnings with appropriate taxes and FICA contributions withheld and paid.
9. We are a business that employs several professionals under the H-1B visa program. Due to social distancing directives issued by our state Department of Health we have asked nearly all of our employees, including those on H-1B visas, to work from home until the COVID emergency subsides and our state health officials give us clearance to resume normal operations. Are there any actions we need to take on the Labor Condition Applications (LCAs) that we have on file for our H-1B workers, do our H-1B workers need to post any notices in their homes, and do we need to file new LCA’s for them now that they are working from home?
The statute and regulations governing the H-1B program are very detailed but do not address these precise questions. Although there is some debate on these issues, considering the purpose and text of the statute, employers should not be required to update existing LCAs, post LCA notices at H-1B worker homes, or file new LCAs.
The essential components of the LCA have remained consistent since they were first established nearly last thirty years ago. The statute requires employers to make four attestations in each LCA. Those promises are that:
(1) H-1B workers will be paid wages that equal what the employer pays its other employees in the occupation with similar education and experience or the prevailing wage in the area of employment, whichever is higher;
(2) H-1B workers will not adversely affect the working conditions of other workers at the place of employment;
(3) There is no strike or lockout at the place of employment; and,
(4) The employer has provided notice of its intent to hire H-1B workers to any relevant union or if there is no union by a physical posting in conspicuous locations at the place of employment or by electronic notification to employees in the occupational classification for which H–1B nonimmigrants are sought.
See INA §212(n)(1)
Employers should not be deemed to have broken any of these four promises by requiring H-1B employees to stay away from the office and work from their own homes due to the COVID emergency.
Starting with the first promise, no adjustment should need be made to H-1B workers rates of pay because they are now working from their own homes. The statute defines an "area of employment" as
the area within normal commuting distance of the worksite or physical location where the work of the H–1B nonimmigrant is or will be performed. If such worksite or location is within a Metropolitan Statistical Area, any place within such area is deemed to be within the area of employment.
INA §212(n)(4)
The DOL through regulation clarifies that there
is no rigid measure of distance which constitutes a normal commuting distance or normal commuting area, because there may be widely varying factual circumstances among different areas (e.g., normal commuting distances might be 20, 30, or 50 miles).
20 CFR §656.715
The fact that H-1B workers commuted to the work location listed on the LCA before the COVID emergency is very good evidence that their commute was from a "normal distance." Accordingly, there should be no need to adjust wages due to H-1B workers working from their own homes as they remain working within the same area of employment.
Similarly, the remaining three promises are not compromised by H-1B workers working from home. Each of the remaining promises relate to a "place of employment." Based on the promises themselves, the statute contemplates that a place of employment is a location where unrelated individuals regularly congregate to engage in an activity for which workers are generally compensated. A place of employment must be location that an employer has some control over working conditions. An employer has no control over the working conditions within an H-1B workers private residence. Similarly, a place of employment must be a site where a strike, lockout or other industrial action could occur. It is seemingly impossible to conceive of a situation where a strike or lockout could occur at an H-1B workers private residence. Finally, no purpose is served by H-1B workers posting LCA notices in their own homes. The posting requirement was designed so that employers provide public notice of the wages being offered to H-1B nonimmigrants. See 56 FR 37175, 37176 ("employer is required to attest that...it has publicly notified...its employees...of its intent to employ H-1B" workers) (August 5, 1991).
DOL’s definition of a "place of employment" is broad and provides:
Place of employment means the worksite or physical location where the work actually is performed by the H-1B...nonimmigrant.
20 CFR §655.715.
DOL however has made clear that the definition of "place of employment" does not include every single location where an H-1B employee might perform work, such as work activities that come under the "employee developmental activity" exception. Working from home during a pandemic is not for the convenience of the employer but a matter of public health and safety. It is a matter of employee preservation and is similar to an employee developmental activity.
In addition, to the regulatory exclusion for employee developmental activities, DOL’s regulations outlining what steps an employer needs to take in order to send H-1B worker to new worksites provide further reinforcement that an H-1B employee’s home is not a “place of employment” for LCA purposes. The DOL’s short-term placement rule allows an H-1B employer to make short-term placements or assignments of H-1B workers to new locations without filing a new LCA provided the employer pays its H-1B employee
“the actual cost of lodging (for both workdays and non-workdays); and...the actual cost of travel, meals and incidental or miscellaneous expenses (for both workdays and non-workdays).”
20 CFR §655.735(b)(3).
An H-1B employee working from his or her home is not commuting to a new location and incurs no expenses for travel, meals or incidentals. DOL’s travel and meals reimbursement requirement is further indication that DOL’s short-term placement rules apply to situations where a worker is forced to leave his or her residence and travel to a new location at the behest of the employer.
The DOL Wage and Hour Division’s view on posting is consistent with the above analysis. In an October 2017 meeting with AILA and WHD the question of work from home was raised. AILA asked
"Many H-1B workers are now working remotely from their homes, instead of the employer's office. If the employer has an LCA for its office but then will allow the H-1B worker to work remotely from home in a geographic area of employment that is not covered by the LCA, is the employer required to file a new LCA prior to the H-1B worker being allowed to work from home (assuming that the short-term placement option does not apply)? Is an employer required to complete the LCA notifications for an H-1B worker who will be working from home? If so, how/where should these notifications be posted at the H-1B employee's home?"
The WHD responded:
"We do not expect employees to post at their houses. If the worker will be working at HQ and at home, the employer should post at HQ. Unless one of the short-term placement exceptions apply, the employer will need to file a new LCA for the employee's home location if the employee will be working at a home location that is not within normal commuting distance of the location on the existing LCA covering the employee."
Based on the statute and regulations governing the H-1B program, work from home arrangements due to the COVID emergency should not require updates to existing LCAs, the posting of LCA notices at H-1B worker homes, or require the filing of new LCAs.
10. Is the H-1B worker entitled to a grace period upon termination of employment?
Yes. 8 CFR § 214.1(l)(2) provides that “An alien admitted or otherwise provided status in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 or TN classification and his or her dependents shall not be considered to have failed to maintain nonimmigrant status solely on the basis of a cessation of the employment on which the alien’s classification was based, for up to 60 consecutive days or until the end of the authorized validity period, whichever is shorter, once during each authorized validity period. DHS may eliminate or shorten this 60-day period as a matter of discretion.”
Thus, if the employment is terminated prior to the validity period listed on the Form I-129 and/or I-797 Approval Notice, the foreign national may be entitled to up to 60 days grace period. If the employment was due to end already within 60 days of termination, then they will only be granted until the normal cessation of their validity period (not beyond). You cannot “terminate” them a week before they are already set to expire to give the foreign national additional status in the U.S. The H-1B (and any dependents in H-4 status) are to use this period to prepare to depart the US, potentially find a new employer to file a change of employer H-1B petition, or file a change of status to another nonimmigrant visa status.
When a worker is going to be terminated at a future date, the worker may sometimes be put on “garden leave” while still considered an employee and is paid the full salary. For an H-1B worker, one must consider what the final termination date is and when the grace period starts to run. Although one needs to view these scenarios on a case by case basis, an argument can be made that the any grace period starts running from the final termination date and not from the date when the H-1B worker was placed on garden leave. It is important for the H-1B worker to be able to demonstrate to USCIS that he or she has maintained H-1B status to file for a change of employer H-1B petition or any other change of status.
11. Can the employer rehire the H-1B employee within 60 days of the termination?
This is not generally possible. The purpose of the grace period provided at 8 CFR § 214.1(l)(2) is to allow a worker to change or extend status within the 60-day period or to depart the US. However, if the worker is still within the H-1B validity period, then arguably the H-1B worker can resume employment with the same employer provided the employer has not yet notified USCIS of the H-1B worker’s termination. The worker never lost H-1B status during that grace period, and if joining the same employer, may not need to file a new H-1B petition with the same employer. This is also a situation where the H-1B worker would most likely not be able to get a second 60-day grace period, as it is only available once during each authorized validity period.
However, the employer is required to notify USCIS of any H-1B terminations. If the employer does not notify USCIS of the termination before having the H-1B worker re-join the employer, the employer will likely be liable for back wages under its obligation to pay the required wage under the Labor Condition Application (LCA) for failing to notify USCIS of the termination. Otherwise, if the employer notified the USCIS of the termination, which results in the automatic revocation of the H-1B petition, the employer would need to file a new H-1B petition for the H-1B worker.
12. How do these regulations apply to other workers in nonimmigrant statuses who may be employed?
As discussed above, if employees are working from home due to COVID-19 government orders, the home office may not be considered a worksite. Therefore, reposting a notice would not be required for the H-1B workers. Similarly, these same rules apply to H-1B1 (professional visa categories for Singaporean and Chilean nationals), or E3 visa category for Australians as they also require a certified labor condition application to support employment.
The L-1 regulations require the employer / petitioner to file an amendment to reflect changes in approved corporate relationships, additional qualifying organizations under a blanket petition, change in capacity of employment (i.e., from a specialized knowledge position to a managerial position), or any information which would affect the beneficiary's eligibility under the Immigration & Nationality Act. A layoff/termination would require notification to USCIS and termination will also automatically end lawful status. The L-1A/L-1B employee would be entitled to the 60-day grace period
Similar to the L-1 category, an O-1 petitioner shall file an amended petition on Form I-129 to reflect any material changes in the terms and conditions of employment or the beneficiary's eligibility as specified in the original approved petition. The O-1 would be entitled to a 60 day grace period to change status or employers. The employer must also offer return transportation home to the principal employee (not family members).
The employer would not have to notify USCIS of a change to temporarily working at home as this would not be a material change as long as the other conditions as indicated in the petition remain unchanged, e.g. job title, duties.
A nonimmigrant TN employee is admitted for a period of up to three years and must maintain TN status by working for the employer that sponsored their entry to the U.S. If the underlying TN employment ends, then TN status ends. As noted under Question #10 above, the TN employee may have up to 60 day grace period.
As with the H-1B category, a layoff/termination would require notification to USCIS and termination will also automatically end lawful status of the H-1B/H-1B1/E3/L-1A/L-1B, O-1 and TN categories.
Therefore, any changes in employment should be discussed with an immigration attorney to understand the immigration consequences both to the employer and employee.
Students on Optional Practical Training (OPT) status are permitted a maximum of 90 days of unemployment during the initial 12-month OPT period and 60 days of unemployment for students granted a 24-month STEM OPT extension. The student must inform the school about any changes in employment to the school’s International Scholar’s Office in order to update SEVIS resulting in termination of F-1 status. Therefore, before the limitation on unemployed days is reached, the student must either transfer to another academic program or file a request for change of status to a different nonimmigrant status.
The J-1 regulations require that the exchange visitor inform the J-1 program’s responsible officer of any changes that occur in the program. If employment/training ends, then the J-1 would normally have a 30-day grace period to leave the U.S. A J-1 visitor should consult with J-1 sponsoring organization to ensure program end date properly recorded in SEVIS.
The Department of State’s (DOS) has authorized Responsible Officers to push a two-month extension to program end dates in SEVIS on active records with a program end date between April 1 – May 31, 2020 in order to provide exchange visitors the opportunity to complete either their educational or training programs, or continue to finalize travel plans to return home. Examples of categories with exchange visitors who could be extended are au pairs, interns, trainees, scholars, and specialists.
Additionally, for exchange visitors who completed their exchange programs in March but remain in the U.S. due to circumstances outside of their control (lack of flights home, etc.), the Department will work with sponsors to push a reinstatement and extension in SEVIS resulting in a program end date of May 31, 2020.
If your program has ended prior to the expected date on your Form DS-2019, please contact your program sponsor in order to obtain the proper, updated Form DS-2019 to reflect the new Department of State extension dates.
