H1B Employee Termination : Employer Concerns
Posted Feb 06, 2009
©MurthyDotCom
It is important for employers to understand their obligations and how to best avoid back-wage issues in the H1B context, in the event of a U.S. Department of Labor (DOL) investigation. This helps employers comply with the law and also helps employees maintain valid legal status in the United States.
©MurthyDotCom
Employer's Obligations under the H1B and LCA
©MurthyDotCom
In order to employ an H1B worker, the employer must obtain approval of a Labor Condition Application (LCA) from the DOL. Stipulated in the LCA are the wage levels and working conditions the employer guarantees to the H1B worker for the period of his/her authorized employment. By signing and filing the LCA, an employer attests that, for the entire period of authorized employment, the required wage rate will be paid to the H1B worker. Thus, the employer must take appropriate steps to avoid continued liability wages if it is determined necessary to terminate the H1B worker. The same is true when the employer must reduce the employee's hours below the range set forth in the LCA. In our January 30, 2009 article, Company and Owner Both Liable for H1B Back Wages, MurthyDotCom and MurthyBulletin readers were informed of a case in which the employer ran afoul of these requirements.
©MurthyDotCom
Wage Obligation Runs until Bona Fide Termination
©MurthyDotCom
The DOL regulation, which addresses the termination of the wage obligation once it is triggered, states that the employer must pay the required wage until a bona fide termination is effected. The regulation does not define "bona fide termination," but it references USCIS regulations requiring notification upon termination of employment, as well as the payment of return airfare.
©MurthyDotCom
In the case discussed in the January 30th article cited above, the DOL Administrative Review Board (ARB) took a strict view and found that it would be appropriate to assess back wages until the notification was sent to the USCIS. This was a significant determination, since the undisputed termination of employment occurred eight months earlier. Arguably, this goes beyond the requirements of the regulation.
©MurthyDotCom
Acceptable Evidence of Valid Termination
©MurthyDotCom
DOL enforcement guidelines reference a fact-specific determination for employment termination. The best evidence is the employer's notification to the USCIS of the employee's termination. If this has not been done, however, or is not available, the employer can present other evidence (such as a termination letter) to establish the date employment ceased. DOL investigators evaluate the evidence for credibility and sufficiency when making their determinations.
©MurthyDotCom
Obviously, the simplest, easiest, cleanest method for addressing the termination of an H1B worker is to notify the USCIS via traceable transmission, retaining copies, proof of receipt, and any USCIS confirmation when it is finally issued. Employers that have terminated employees without following these steps should do so without delay. Since they may have to rely upon alternative proof, if investigated, they should retain any relevant documents, such as termination letters, resignation letters, severance agreements, and other related correspondence. Termination before the date on the H1B petition should also offer one-way return transportation home, in compliance with the law.
©MurthyDotCom
Rehiring an H1B Employee
 ©MurthyDotCom
There are instances when an employee will leave a position with employer A, work for employer B, and later wish to return to employer A. This is possible if employer A has not notified the USCIS of the termination, thereby having the H1B petition revoked. This is permitted under the concept known as the dormant H1B. The Murthy Law Firm obtained an opinion letter on this topic from the USCIS, as described in our May 3, 2002 article, 'Dormant' H-1 Petitions Remain Valid. Although helpful, in avoiding filing and legal fees for a new H1B petition,  this practice can create back-wage issues for the employer.
©MurthyDotCom
Under DOL guidelines for investigators, a bona fide termination has not occurred if the employer claims to have terminated and rehired the worker, with limited exceptions. In order to utilize the exceptions, it is necessary to submit a new H1B petition to the USCIS, according to the guidelines. Thus, as it is set forth for DOL investigators, there is no exception to the back wages if the employer uses the dormant H1B petition approach.
©MurthyDotCom
The exceptions set forth are as follows:

• Rehiring the H1B worker after s/he has been working for another employer in H1B status

• Rehiring after departure to the home country and cancellation of the petition

• Rehiring after a change of status to another category