H1B Back-Wage Assessment for Employee Sent Abroad
Posted Aug 21, 2009
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Many employers of H1B workers assume that their wage obligations end if the employees are not in the United States. In a July 30, 2009 decision, the U.S. Department of Labor (DOL)'s Administrative Review Board (ARB) enhanced an award of back wages to include salary for two months when the H1B employee was in Australia. As explained below, the ARB focused on the fact that the foreign national was taking a course that may have been related to his H1B employment, as opposed to taking a period of voluntary leave or vacation. The Murthy Law Firm was not involved in representing any parties in this case. This decision is shared with MurthyDotCom and MurthyBulletin readers because of its importance to many H1B employers, to assist them in understanding wage obligations that may be imposed by law.
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Role of the DOL Wage & Hour Division
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The DOL's Wage & Hour Division (WHD) is responsible for investigating claims of underpayment or nonpayment of wages owed to U.S. workers of all types. These investigations extend to employers of H1B workers. The purpose of these investigations is to enforce the provisions in the labor condition applications (LCAs) filed in connection with H1B petitions.
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Complaints Filed with WHD
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In the case of Michal Vojtisek-Lom v. Clean Air Technologies International, Inc. (PDF, 230KB), the ARB reviewed a decision awarding back wages to an engineer. He had been employed to help commercialize his own invention. Mr. Vojtisek-Lom was hired in 2000 as a mechanical / design engineer. His title was later changed to environmental engineer. He did not have a set schedule. He was free to pursue outside academic and professional interests, in addition to his work for the company. In 2005, the company terminated Mr. Vojtisek-Lom following certain disagreements. Mr. Vojtisek-Lom filed a complaint with the WHD claiming LCA violations.
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WHD Investigation and Standard Policies
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The WHD investigator testified that he was assigned to investigate Mr. Vojtisek-Lom's claim of improper payments. The agent stated that it is 'standard policy' for the WHD to investigate the year preceding the employee's complaint and, if any violations of DOL regulations are found, then to check an additional year before the complaint. Thus, the investigatory period began in 2003 and ended in 2005. As a result of this investigation, the WHD found that the employer owed $20,076.99 in back wages.
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Appeal Taken from WHD Findings
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The company did not appeal or contest the WHD findings. Mr. Vojtisek-Lom requested a hearing on his claims. The Administrative Law Judge (ALJ) held a hearing, including testimony from the agent and the company's fiscal manager, and found that the company had not paid all of the wages owed. However, the ALJ calculated the back wages owed from 2000 until 2005. This resulted in a finding that the company owed Mr. Vojtisek-Lom $46,955.37 plus interest.
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Appeal to the ARB : Back Wages Ordered for Time Spent Outside U.S.
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The company filed an appeal of the ALJ's decision to the DOL's ARB. The ARB found that Mr. Vojtisek-Lom's complaint was timely, because it was made within 12 months of the termination of his employment. It noted that, when an employer signs an LCA, it attests that the wage for the entire period of authorized employment will be paid. The ARB found that the company was required to pay back wages to Mr. Vojtisek-Lom for two months in 2000, when he was outside of the U.S. and taking a class in Australia. The company did not produce any payroll records for those two months, nor did it produce any writing or documentation that Mr. Vojtisek-Lom was in Australia for his own purposes or engaged in personal pursuits. The ARB included back wages for these two months as part of its award.
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Benching Versus Voluntary Absences
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The ARB noted that the Immigration and Nationality Act (INA) prohibits employers from benching H1B employees and withholding their wages. The key is whether such an H1B worker's nonproductive status is due to a voluntary absence from work, a condition or problem that renders the worker unable to work, or whether it is the result of a decision on the part of the employer or a lack of work for the H1B employee. If the nonproductive status is based on the employer's decision, then back wages may be owed to the H1B worker.
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Absence from U.S. May Not End Wage Obligation
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The principle set forth in this decision is particularly important during the current economic downturn. If an employer sees a decrease in business, it may not be possible to temporarily reduce the wage obligation by simply sending a worker to his/her country of origin. Based on the concepts set forth in this case, the employer may be found to owe back wages to an employee whose departure is at the behest of the employer, due to a lack of work assignments.
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Similar Benefits Owed
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The ARB found that the company did not pay Mr. Vojtisek-Lom for a two-week vacation. H1B employers are required to offer the same benefits to their H1B workers as those offered to their U.S. workers. This company gave paid vacation time to other workers, thus, two additional weeks of back wages were owed for Mr. Vojtisek-Lom's vacation.
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Conclusion
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This DOL decision emphasizes how important it is for employers of H1B workers to meet all obligations under the H1B and LCA programs. An employer's decision to send or encourage its H1B employees to leave the United States between assignments (or when there is a slowdown in business) exposes the company to DOL investigation and possible assessment for back wages, even for time the employee spent outside of the United States. Further DOL decisions will be monitored and reported to MurthyDotCom and MurthyBulletin readers so that they can better understand and plan in these situations.