Liability for H1B Back Wages : Result of Appeal
Posted Sep 10, 2004
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The employer that was the subject of a previous MurthyBulletin article has successfully appealed a controversial decision relating to the payment of wages to H1B employees during nonproductive ("bench") status and through to termination. Our May 9, 2003 article, entitled DOL Crackdown on H-1 Employer for Back Wages and available on MurthyDotCom, addressed a decision that involved the payment of back wages to persons on H1B. After the appeal, the employer was only required to pay back wages from the date the nonproductive (bench) status started until the termination of employment that was clear and unequivocal.
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The earlier decision ordered that the employer pay back wages to an H1B employee from the date his nonproductive status began, through the date that Legacy INS acted upon the employer's request to withdraw the H1B petition. Thus, the employer was required to pay back wages for a period after the individual had been terminated and Legacy INS had been requested to terminate the petition. The request to terminate was made on September 28, 2001, but not acted upon until January 3, 2002. The employer, therefore, was required to pay back wages from April 4, 2001, the day that the nonproductive status began, to January 3, 2002, the day Legacy INS acted upon the employer's September 28, 2001 request to withdraw the H1B petition.
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The employer appealed the decision. The decision was evaluated by the Administrative Review Board (ARB) of the DOL on August 31, 2004. Though the ARB upheld the other portions of the decision, it ruled that the employer need only pay back wages to the employee for the period from the date the nonproductive (bench) status began through the date termination of the petition was requested. The result was that the employer had to cover back wages from April 4, 2001, to September 28, 2001, but was not forced to pay for the additional months it took the Legacy INS to act upon the employer's request to terminate the H1B petition. This finding is in keeping with the regulations on this matter.
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Though this outcome was modified, it is best to follow the precautions mentioned in our article cited above. H1B workers must be paid the wages set out in the H1B petition and the Labor Condition Application submitted with the H1B petition, at all times during their employment. If the employer wishes to terminate an H1B employee, the termination should be done in a clear, unambiguous, and well-documented manner. The employer should notify the USCIS of the termination and request termination of the H1B petition without delay to avoid additional back wages and other potential obligations.