We provide a summary to H-1B (H-1B1 & E3) employers and employee of the rules governing pay and other related labor conditions set forth by Department of Labor (DOL). These regulations cover the requirements for the required wage, full-time vs. part-time status of the employee, and notice to employees in the area of intended employment. Such issues are rising in relation to the impact the pandemic has on the respective parties.
1. Does an Employer need to continue to pay the required wage set forth in the LCA?
Employers must pay the wage set forth in the labor condition application (LCA) even while in a “nonproductive” status. Employers are not required to pay H-1B visa employees if the “nonproductive” status is for reasons unrelated to employment/company-based decisions i.e., worker’s voluntary absence from work, hospitalization, absence to care for sick relatives, etc. Accordingly, employers have to pay H-1B workers in periods of mandatory company-wide furloughs.
Otherwise, an employer could be subject to fines, back wage obligations, and debarment from the DOL’s temporary and permanent immigration programs, which will prohibit USCIS from approving immigrant and non-immigrant petitions filed by the employer.
Unless otherwise prohibited by state law or the paid sick provisions of the new Families First Coronavirus Response Act, which took effect on April 1, 2020, employers are allowed to require furloughed H-1B workers to use their accrued paid time off. Notwithstanding, if the furlough is prolonged, employers are required to continue paying H-1B employees their regular wages throughout the furlough period. The employer’s obligation to pay for furlough time ends in case of a bona fide termination of H-1B employment.
2. Can an employer furlough, bench, or otherwise render an H-1B employee non-productive and stop offering the required wage if the employee is not able to work from home during a COVID-19 pandemic initiated shelter in place order from federal, state, or municipal government authorities?
In this situation, the employer has to continue paying the required wage to the employee, because the conditions are not created by the employee. If an employer fails to abide to this policy, he / she could be exposed to liability such as fines, back wage obligations, and in serious cases debarment from the DOL’s temporary and permanent immigration programs for a period of time.
If an employee is debarred, USCIS is restricted from immigrant and non-immigrant petitions filed by the employer.
3. Is an employer required to pay the required wage if the employee is afflicted with COVID-19, consequently unable to work and is placed into isolation and quarantine during treatment?
As per the DOL regulations, if an employee is not able to work due to a reason which is not directly work related and required by the employer, the employer does not have to pay the employee the required wage.
For instance, if an employee has been tested positive for COVID-19, he/she would have to remain in quarantine. The question as to whether the employer should pay the employee is a subject to required payment under the employer’s benefit plan or other statutes such as the Family and Medical Leave Act or the Americans with Disabilities Act.
We advise that during this national emergency, employers should also keep track of any additional federal legislation passed regarding employers’ obligations.
4. What steps does an employer have to take if it wants to convert an H-1B employee from full-time to part-time status?
If an employee changes from full-time to part-time status, in this situation, if an employee is being changed from full-time to part-time status, the employer must file a new LCA to reflect this change. Once a new LCA is required, the employer is required to file an amended H-1B petition and once the H-1B receipt is received, then only can the employer modify payment and hours.
5. What steps does the employer have to take to terminate its obligation to pay the required wage?
As per DOL guidelines, the payment of the required wage obligation need not be made if there has been a bona fide termination of the employment relationship. Hence if the employer terminates the employee contract, the employer must notify USCIS that the employment relationship has been terminated and withdraw the H-1B petition.
The employer should also provide the employee with payment for transportation to return to the home country if the employer terminates the employee prior to the end of the petition period.
An employee may still use the shorter of a 60-day grace period or the remainder of the approved petition duration to change employers, change status, and extend stay in the United States.
6. If an employee starts to work from home, what does the LCA require in regards to notice?
Generally, if the employee’s home is in the same “area of intended employment” listed on the LCA, a new LCA (and consequently an amended H-1B petition) is not required, provided there are no changes in the terms and conditions of employment. The “area of intended employment” is defined by the DOL as the area within normal commuting distance of the place (address) of employment where the H-1B nonimmigrant is or will be employed.
There is no rigid measure of distance that 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). If the place of employment is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment; however, all locations within a Consolidated Metropolitan Statistical Area (CMSA) will not automatically be deemed to be within normal commuting distance.
The borders of MSAs and PMSAs are not controlling with regard to the identification of the normal commuting area. A location outside of a MSA, PMSA, or CMSA may be within normal commuting distance of a location that is inside (e.g., near the border of) the MSA, PMSA, or CMSA.
Importantly, the employer must provide either electronic or hard-copy notice at those work sites for 10 calendar days unless direct notice is provided to employees in the same occupational classification, such as email notice. While notice is required to be provided on or before the date any worker on an H-1B or E-3 visa begins working at the new work site location, the DOL, in its recently issued COVID-19 answers to Frequently Asked Questions, has acknowledged that the pandemic has created unanticipated service disruptions and stated that notice shall be considered timely when placed as soon as practicable and no later than 30 calendar days after the worker begins work at the new site.
The employer may also move H-1B employees outside the area of intended employment on the LCA using the DOL’s short-term placement provisions. As outlined below, once the day limits set forth in the short-term placement rules are exhausted, the employer is required to file a new LCA and an amended H-1B petition covering the new location.
The regulations limit short-term placements outside the area of intended employment to 30 work days at any work site not listed on the LCA in any given fiscal or calendar year. However, short-term placement can be up to 60 work days in a one-year period so long as the H-1B employee continues to maintain a work station at the permanent work site (e.g. maintains his/her station at the place of employment listed on the LCA), spends a substantial amount of time there during the year, and if the employee’s residence is in the area of the permanent work site.
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