Implications of H1B Visa Changes in Work Location, Salary, Furloughing, and More

The outbreak of the novel coronavirus has upended and impacted the lives of many nonimmigrant visa holders including those holding H1B visa status and the U.S. businesses who rely on the world’s top talent. The pandemic greatly disrupted immigration services within the country and raised a host of issues for employers employing nonimmigrant visa holders in their workforce. There are also important impacts on immigrant visa (“Green Card”) applications.  

It is therefore critical for foreign national employees and their employers to fully understand the rules and how they apply to various material changes of employment terms including working from home, changes in wages and more.

Work location changes and the Impact on H1B visas

With shelter-in-place being the norm in many states in the United States, work from home is the new mantra for most employees including foreign nationals in H-1B and other status types. In the H-1B context, work locations specified in the petition are extremely important and will be deemed a material change to the terms of employment in many situations, sometimes warranting the filing of an amendment petition with USCIS. 

There are exceptions to requiring an amended filing: (i) If the home worksite is within normal commuting distance (usually within 50 miles) from the worksite location listed on the Labor Condition Application (a required part of any H1B or E3 application), then a copy of the previously certified LCA should be posted at the home worksite location within 30 days of commencing work here (an extended time period granted during the Covid-19 outbreak; (ii) if the home office is outside normal commuting distance, employers may opt to treat such worksites as a short-term placement and could possibly allow the employee to work at the new location for up to 30 days in most cases and 60 workdays in some cases if also posting the LCA at the new worksite location.  In both instances above, employers must continue to pay the wages as per the certified LCA. It is also worth noting that LCA postings can be made electronically. 

It is important to know that commonly, short-term placement rules apply where the employer has a business reason to move the employee to a new work location, and regulations mandate employers to pay for lodging and meals during these placements. So, if short-term placement conditions are not fully met by the employer we recommend filing a new LCA and an amendment petition to record the material change in worksite location.

Reduced Work Hours and the Impact on H1B Visa Employees

To avoid seeming like ‘benching’ which is strictly forbidden by the H1B visa rules, it is best practice to file amendments in these situations. If not there may be back pay liability and civil penalties that accrue for violation of LCA.

It is a violation of the law for an employer who has filed a petition for full-time employment to change the terms of employment to part-time and not continue to pay full-time wages. The Labor Department will view any reduction in hours below full-time as an impermissible "benching." The regulations provide that if an H-1B employee is not performing work and is in a nonproductive status because of a decision of the employer, the employer must pay the salaried employee the full pro-rata amount due or pay the hourly-wage employee for a full-time week. 

Although an employer may define its own "full-time" employment, the DOL will not consider any number of hours below 35 a week to be full-time for H-1B purposes. Once an employer deviates from its normal full-time hours to a lesser number, that would be considered part-time. If an employer’s normal workweek is 40 hours, and it then reduces the number of hours worked by employees to 35 hours, that would be considered a benching for the H-1B workers on staff.

Reductions in Pay Across-the-Board for H1B and E3 Visa Holders

If there are set pay cuts across-the-board within an occupational classification and if you as a company are paying the H1B employee the higher of the actual wage (the new lowered wage paid to others in the position) or the prevailing wage, there should be no violation and this should be fine without a new Labor Condition Application or amendment being required. If, however, the reduction in pay brings the H-1B employee’s salary below the required wage which is the actual or prevailing wage, the reduction may not be made.

Reductions in Pay Which are Not Across-the-Board Cuts for H1B and E3 Visa Holders

For reductions in salary that do not adhere to LCA and where there was not a wage range indicated in the filing, the reduction should only happen once an amendment is filed. Of course prevailing wage still needs to be met in the new filing and if others in the role are being paid higher (actual wage) this can be problematic.

Implications of Furloughs on H1B Visa Holders

For those in H1B visa status, Immigration status is not being maintained if furloughed. Further, furloughing in the H1B context can lead to liability. Note that when terminated an H1B worker there is a 60-days grace period provided to leave the US, assuming the employee has at least 60 days left on their authorized period of stay (I-94).

Can H1B Workers be ‘Off-shored’?

It is worth noting that employees sometimes can work from abroad and re-enter for the remainder of the 6 year H1B period at a later time if a company is unable to keep the H1B worker on the ground in the U.S. If you wish to offshore an individual however it may be the best practice to terminate the employee and then have them work as a contractor from abroad or work through a related foreign entity if available. This helps limit any possible findings by DOL of back pay liability or penalties where DOL may look at the arrangement and question whether it has been set up as a way to circumvent benching (non-productive employment) provisions. This could be found where an employer forces an employee to work offshore due to a lack of work and to save costs.

Impacts of H1B Layoffs

If there are layoffs that occur in the H1B visa context it is important to remember that this may impact the way a company can proceed with certain Green Card filings on behalf of other international visa holders. The typical rule is that if there is an involuntary layoff or termination within 180 days prior to the filing of the recruitment based labor certification, then notice of the job has to be provided to all citizens or permanent residents who have been laid off in a related occupation, within the area of intended employment. This is in addition to normal recruitment that occurs. A more detailed consideration of these issues can be read here.

Note that a “related occupation” can be any occupation that requires workers “to perform a majority of the essential duties” involved in the LC occupation.

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Disclaimer: The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation. Legal standards and rules often change.