Can the Employer Deduct from an Employee's Salary or Receive from the Employee the H-1B Government Fees?
The H-1B regulations prohibit an employer from receiving, or the employee from paying, the filing fee for the visa. The employer may make certain - authorized deductions like tax withholdings and other deductions that are - reasonable and customary in the occupation and/or area of employment (e.g., union dues; contribution to premium for health insurance policy covering all employees; savings or retirement fund contribution etc.). Certain deductions are not permitted, including - business expenses, or costs connected to the performance of the H-1B program. Business expenses include - attorney fees and other costs connected to the performance of the H-1B program functions which are required to be performed by the employer, e.g., preparation and filing of LCA and H-1B petition. Where a worker is required to pay an expense, it is in effect a deduction in wages which is prohibited if it has the effect of reducing an employee's pay below the required wage.
When Does an Employer's Wage Liability Commence if an Employee is "Benched?"
An employer's back wage liability extends over the period of employment covered by an approved LCA petition. An employer must pay wages on the date that an H-1B employee enters into employment with the employer, i.e. the date that the nonimmigrant employee makes him or herself available for work or otherwise comes under the control of the employer, such as by waiting for an assignment, reporting for orientation or training, going to an interview or meeting with a customer, or studying for a licensing examination, and includes all activities thereafter.
The regulations also provide that if a nonimmigrant has not yet entered into employment with the employer, then for a nonimmigrant who is present in the United States on the date of the petition's approval, the employer must pay wages beginning sixty days after the nonimmigrant becomes eligible to work. The H-1B nonimmigrant becomes eligible to work for the employer upon the date of need set forth on the approved H-1B petition filed by the employer, or the date of adjustment of the nonimmigrant's status whichever is later.
When Does an Employer's Back Wage Liability End if an Employee is "Benched?"
An employer's liability for back wages ends when the employer effects a bona fide termination of the employment relationship. From case law it is established that there are three requirements to effect a bona fide termination of H-1B employment. This test requires an employer to demonstrate that it: (1) expressly terminated the employment relationship with the H-1B worker; (2) notified the USCIS of the termination so that the petition could be cancelled; and (3) provided the worker with the reasonable cost of return transportation to his or her home country.
The applicable date for determining when an employer has provided notice to the USCIS is not the date the USCIS notifies the employer that it has revoked the H-1B petition but the date that the employer notifies the USCIS of its desire to revoke petition.
An employer fails to terminate its employment relationship with a nonimmigrant if it continues to market the nonimmigrant to its clients or if an employer providing contract services, continues to email the nonimmigrant job opportunities after his alleged termination.
Is the Employer Liable to Pay Wages for the Entire Employment Period?
Once the H-1B employer's obligation to pay H-1B wages begins, the employer must continue to pay wages unless the employer can prove with evidence the presence of any of circumstances where wages need not be paid for an H–1B worker experiences a period of nonproductive status due to conditions unrelated to employment which takes the nonimmigrant away from his or her duties at his or her voluntary request and convenience. These circumstances could include situations where the employee was on a leave of absence to travel around the U.S., away on leave without pay at the employee's instance, or the circumstances render the nonimmigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant) etc. There is case law that further clarifies that an employer needs to prove the existence of conditions unrelated to the employee's employment that either: (i) took the employee away from his or her duties at his or her request and convenience; or (ii) otherwise render the employee unable to work to be absolved from paying wages for nonproductive periods.
The H-1B employer must pay the required wage if the H-1B nonimmigrant is not performing work and is in a nonproductive status due to a decision by the employer (e.g., because of lack of assigned work), lack of a permit or license, etc. This sort of non-productive time is often called "benching." It can occur when a company brings H-1B workers into the United States intending to contract their labor out to other entities, rather than to use the workers' labor directly in its own business. The regulations do not permit a failure to pay until placement in a job.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.