April 3, 2020 – Department of Labor (DOL) regulations require employers to abide by the terms and conditions of the H-1B visa program, including all DOL and U.S. Citizenship and Immigration Services (USCIS) guidelines. With the sudden changes brought about by the COVID-19 pandemic, employers are well advised to re-examine their obligations under the Labor Condition Application (LCA) concerning payment of the required wage, full-time vs. part-time status of employees, and employees working from remote locations. Note: these regulations apply to E-3 workers as well.
Next Wednesday, April 8 at 1:00 p.m. (ET), Ulmer will be conducting a webinar to discuss employers’ obligations under the H-1B and E-3 visa programs during the COVID-19 pandemic. Click here if you would like to register for this event.
1. Does an employer need to continue to pay the required wage set forth in the LCA?
In light of COVID-19, employers are asking what happens should they decide to suspend, furlough, layoff, reduce hours, or otherwise render their employees unproductive during the crisis.
Non-productive status is defined as any time during the validity of the LCA and H-1B petition where an employee is unable to work. When an employee is in a non-productive status due to a decision of the employer (e.g., due to a lack of work), per 20 CFR 655.731(c)(7)(i), the employer continues to be obligated to pay the required wage. On the other hand, an employer is not required to pay the required wage to an employee in non-productive status, when the employee is non-productive at the employee’s voluntary request and convenience (e.g., touring the United States or caring for an ill relative) or because they are unable to work (e.g., maternity leave or an automobile accident that temporarily incapacitates the nonimmigrant) due to a reason that is not directly work related and required by the employer. Of course, per 20 CFR 655.731(c)(7)(ii), the employer would still have to pay the required wage if the employee’s non-productive period was subject to payment under the employer’s benefit plan or other statutes such as the Family and Medical Leave Act (FMLA) (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (ADA) (42 U.S.C. 12101 et seq.).
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?
Generally, this is not permissible given that the conditions are not created by the employee. In this situation, an employer must continue to offer the required wage. Otherwise, an employer 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. Per 20 CFR 655.810(d), debarment prohibits USCIS from approving immigrant and non-immigrant petitions filed by the employer.
However, the regulations requiring payment of wages to H-1B employees rendered non-productive specifically speak to situations where the employee is benched, furloughed, laid off, or otherwise benched due to a “decision by the employer.” Moreover, the regulation exempts payment where an H-1B employee “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).” In such circumstances, the employer shall not be obligated to pay the required wage rate, “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.).”
It is arguable, however far from certain, that an employer may be relieved from the required wage obligation if employment ceases as a direct result of federal, state, municipal, or other local shelter in place orders or public health concerns related to the COVID-19 pandemic. Clearly, the decision to withhold pay from an H-1B worker should be made on a case-by-case basis and with the advice of counsel.
3. Is an employer required to pay the required wage if the employee is afflicted with COVID-19, unable to work, and placed into isolation and quarantine during treatment?
The regulations do not require an employer to pay the required wage if an employee is not able to work due to a reason that is not directly work related and required by the employer. However, where a COVID-19 positive employee remains in quarantine due to the employer’s policy, it’s arguable that the regulations obligate the employer to continue to pay the employee because the quarantine rule is created and imposed by the employer. An employer should also be aware that it could be subject to required payment under the employer’s benefit plan or other statutes such as the FMLA or ADA. Employers are well advised to remain aware of additional agency guidance throughout the COVID-19 pandemic.
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?
An employer seeking to convert a full-time H-1B employee to part-time status must file a new LCA and an amended H-1B petition to reflect this change.
5. What steps does an employer have to take to terminate its obligation to pay the required wage?
Payment of the required wage obligation need not be made if there has been a bona fide termination of the employment relationship. Department of Homeland Security (DHS) regulations require the employer to notify USCIS that the employment relationship has been terminated so that the petition is canceled. The employer must provide the employee with payment for transportation home under certain circumstances.
6. If an employee starts to work from home, what does the LCA require in regards to notice?
On March 20, 2020, the DOL provided guidance on the steps that need to be taken when an H-1B employee works form home as a result of the COVID-19 pandemic.
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.
Note: the DOL regulations prohibit the employer from making the H-1B employee’s initial assignment at a short-term placement location. This would apply, for example, to an onboarding employee who, because of COVID-19, begins work at home from a location outside the intended place of employment. The regulations also prohibit use of the short-term placement rules in any area of employment where the employer has a certified LCA for the same occupational classification. For example, in the case of an H-1B employee who commutes from outside the Metropolitan Statistical Area. In that case, the employer must apply the conditions of any LCA governing H-1B employment the area in which the employee works remotely.
In the context of a short-term placement outside the area of intended employment, once the work day limit is reached at a location, the employer must either file an LCA (and an amended petition) for that site or remove the employee. If any employee exceeds the time limit, or the employer in any other way “violates the terms and conditions of the LCA,” the short-term placement options cannot thereafter be used by the employer for any H-1B employees in that occupational classification in that area of intended employment.
Additional regulations apply if the H-1B employee is working remotely from outside the area of intended employment but not at his or her residence and additional costs are incurred with respect to lodging.
*The information for this client alert was sourced from the American Immigration Lawyers Association.
Ulmer’s Immigration Law Group is closely monitoring developments related to the COVID-19 pandemic and is prepared to support you and your organization during these uncertain times. Please reach out to our immigration attorneys if you have any questions.