It is axiomatic that the entire world is experiencing drastic and immediate changes in real-time. This article discusses its impact on the H-1B workers in the United States. Specifically, as a result of the severe impact the novel coronavirus pandemic is having on businesses, employers are struggling to pay H-1B workers the required Labor Condition Application (“LCA”) wage. In order to provide emergency assistance to both businesses and workers, legislators have created ways to maintain payment and benefits to employees through the CARES Act. Employers are wondering how they can secure relief and do the same for their H-1B workers, whom they still believe to be essential to their business.
Although the Department of Labor and USCIS have not purported any clear and conclusory rules governing H-1B workers during the COVID-19 pandemic, they have been historically inflexible during past disasters, including the rigidity of DOL rules governing H-1B works during 9/11, the Recession of 2008 and Hurricane Sandy.
Given that these laws have not changed, we can – so far – expect the same response and hardships for H-1B workers and employers in the coming weeks.
Employers with H-1B workers working from home due to mandatory quarantines and stay-at-home orders should be sure to comply with the DOL’s geographic scope of position rules. If an H-1B worker’s home is within commuting distance of the workplace, there will likely be no amendment required. If the worker’s home is not in commuting distance of the workplace, the employer should file an H-1B amendment.
Furlough & Unemployment
If an employer temporarily suspends employment or furloughs an H-1B worker in response to the coronavirus pandemic, the worker would be considered to be in nonproductive status. Workers in nonproductive status must still be paid the required wage (20 CFR 655.731(c)(7)(i)). Employers who do not pay furloughed H-1B workers the required wage might be burdened with fines, back wage obligations, or debarment from immigration programs. If instead, the H-1B worker voluntarily requests leave for the COVID-19 illness, the employer should likely treat the worker in the same way as other employees. Unless otherwise included in the employer’s benefit plan, voluntary leave at the worker’s request does not require The CARES Act guarantees extended paid leave to all employees quarantined due to COVID-19. If the worker is still employed and in fact on leave, paid or unpaid, their H-1B status should not be effected.
Generally, an H-1B worker cannot collect unemployment benefits because there is no expectation of future work due to the loss in H-1B status. An H-1B worker may be able to collect unemployment benefits if they are linked to a spouse with an H-4 status with the ability to work in the future.
An employer can convert the H-1B worker from full time employment to part time employment by filing an amendment to the petition and obtaining a new LCA reflecting the change in wage and employment.
Reduction in Wages
Required wages are the higher of the actual wage (wage paid to similarly situated workers in employer’s organization), and the prevailing wage (rate for the occupational classification based on a wage survey). If the wage paid to similarly situated workers drops based on the effects of the coronavirus pandemic, there may be a reduction in the required wage allowing employers to temporarily reduce wages of H-1B workers. The safest option for employers is to file for an amendment to the H-1B petition if they plan on reducing wages of H-1B workers. An employer might want to reduce wages during the current pandemic and guarantee bonuses that will make up for the required wage amount once the financial crisis is over. This will likely be okay, so long as the bonus is not conditional on the employer’s profits. However, the reduction of H-1B workers’ wages with the deficit paid in stock options does not meet the wage requirements even during a time of crisis. The value of a stock option changes and does not guarantee the required wage.
Termination of H-1B Workers
As businesses struggle to stay afloat, many H-1B workers’ employment is being terminated. If an employment contract with an H-1B worker is terminated, the employer must notify the DHS and provide the employee with compensation for transportation home. An employer is not obligated to pay the H-1B worker once there has been a bona fide termination. It is unclear on how the 60-grace period will be handled during the current global pandemic because it unprecedented during any past disaster. It is likely that the employer is obligated to pay the H-1B worker during the inactive status, known a “garden leave,” and that the obligation will expire at final termination. An H-1B worker does not lose status during that 60-day grace period, and if hired back by the same employer, may not need to file an extension with the same employer. If the employer properly notified the USCIS, the employer would need to file a new H-1B petition within the 60-day grace period. If the employer did not effectuate a bona fide termination by notifying the USCIS, the employer might be liable for back wages under its obligation to pay the required wage under the Labor Condition Application.