presentation about liabilities for termination of h 1 b employees

Termination Termination of of

H-1B H-1B EmployeesEmployees

H-1B Employer H-1B Employer ObligationsObligations

Liability for Reasonable Liability for Reasonable Costs of Return Costs of Return TransportationTransportation

If an employer terminates an H-1B employee before If an employer terminates an H-1B employee before the end of that employee’s period of authorized stay, the end of that employee’s period of authorized stay, the employer is liable for the “reasonable costs” of the employer is liable for the “reasonable costs” of return transportation for the employee to his or her return transportation for the employee to his or her last country of residence.last country of residence.

Immigration statutes and regulations suggest that the Immigration statutes and regulations suggest that the employer’s liability is limited to the reasonable cost of employer’s liability is limited to the reasonable cost of physically returning the H-1B employee, and does not physically returning the H-1B employee, and does not extend to the cost of relocating family members or extend to the cost of relocating family members or property.property.


If a terminated H-1B employee believes that an If a terminated H-1B employee believes that an employer is not complying with this obligation, he or employer is not complying with this obligation, he or she may file a complaint with the United States she may file a complaint with the United States Citizenship and Immigration Services (“USCIS”). Citizenship and Immigration Services (“USCIS”).

USCIS policy regarding enforcement of this obligation, USCIS policy regarding enforcement of this obligation, however, is unclear, and USCIS lacks statutory however, is unclear, and USCIS lacks statutory authority and a regulatory mechanism to enforce this authority and a regulatory mechanism to enforce this obligation.obligation.


Employers should be aware that the statute does not Employers should be aware that the statute does not impose an obligation to provide the costs of return impose an obligation to provide the costs of return transportation to an employee who elects not to transportation to an employee who elects not to depart the United States; however, the Department of depart the United States; however, the Department of Labor considers the payment of these costs to be a Labor considers the payment of these costs to be a normal incident of a “bona fide termination.”normal incident of a “bona fide termination.”

Employers may wish to provide terminated H-1B Employers may wish to provide terminated H-1B employees with a sum approximating the employee’s employees with a sum approximating the employee’s reasonable return costs and obtain a release from the reasonable return costs and obtain a release from the employee. employee.


Alternatively, the employer may be able to satisfy the Alternatively, the employer may be able to satisfy the return transportation requirement by offering to return transportation requirement by offering to provide a ticket for the employee within a reasonable provide a ticket for the employee within a reasonable period after the date of termination through the period after the date of termination through the employer’s travel agent. employer’s travel agent.

This approach would provide evidence that the This approach would provide evidence that the employer made a good-faith effort to satisfy its employer made a good-faith effort to satisfy its obligation, while avoiding a windfall to an employee obligation, while avoiding a windfall to an employee who elects to remain in the United States. who elects to remain in the United States.


A terminated employee may seek to enforce the A terminated employee may seek to enforce the employer’s obligation in state court; however, it is employer’s obligation in state court; however, it is unclear whether such a suit could succeed.unclear whether such a suit could succeed.

Employers should retain records of compliance with Employers should retain records of compliance with this obligation.this obligation.

USCIS Notification of USCIS Notification of TerminationTermination

Regulations require an H-1B employer to notify USCIS Regulations require an H-1B employer to notify USCIS “immediately” of “any material change in terms and “immediately” of “any material change in terms and conditions of employment” affecting an H-1B conditions of employment” affecting an H-1B employee. employee.

USCIS policy is that a termination is such a “material USCIS policy is that a termination is such a “material change”. change”.

Employers may satisfy this notification obligation by Employers may satisfy this notification obligation by sending a letter explaining the change of termination sending a letter explaining the change of termination to the USCIS office that approved the petition.to the USCIS office that approved the petition.


Employers should be aware that there is no sanction Employers should be aware that there is no sanction provided in the USCIS regulations for failing to make provided in the USCIS regulations for failing to make timely notification of an H-1B worker’s termination.timely notification of an H-1B worker’s termination.

After receipt of a letter from an H-1B employer After receipt of a letter from an H-1B employer indicating that the H-1B employee is no longer indicating that the H-1B employee is no longer employed by the employer, USCIS will respond with a employed by the employer, USCIS will respond with a notice revoking that employee’s H-1B petition.notice revoking that employee’s H-1B petition.

The eventual revocation of the H-1B petition may The eventual revocation of the H-1B petition may cause a dilemma for an H-1B employee, who may have cause a dilemma for an H-1B employee, who may have remained in the United States to seek other remained in the United States to seek other employment. employment.


Employers should consider informing terminated Employers should consider informing terminated employees of the employer’s obligation to notify employees of the employer’s obligation to notify USCIS of the termination and the eventual revocation USCIS of the termination and the eventual revocation of the employee’s H-1B petition that will result.of the employee’s H-1B petition that will result.

Employers should retain records of compliance with Employers should retain records of compliance with this obligation.this obligation.

Department of Labor Department of Labor ImplicationsImplications

Employers should be aware that the Department of Employers should be aware that the Department of Labor (“DOL”) has issued regulations preventing the Labor (“DOL”) has issued regulations preventing the “benching” of H-1B workers-that is, underpaying or “benching” of H-1B workers-that is, underpaying or not paying an employee who is not engaged on a not paying an employee who is not engaged on a matter that will produce revenue for the employer. matter that will produce revenue for the employer.

These regulations impose a requirement that These regulations impose a requirement that employees in nonproductive status or otherwise employees in nonproductive status or otherwise temporarily laid off “due to the decision of the temporarily laid off “due to the decision of the employer” continue to receive their normal wages.employer” continue to receive their normal wages.

This requirement ceases once there is a “bona fide” This requirement ceases once there is a “bona fide” termination of employment.termination of employment.


DOL regulations tie the obligation to pay an employee DOL regulations tie the obligation to pay an employee until “bona fide” termination to the obligation to until “bona fide” termination to the obligation to inform USCIS of an H-1B employee’s termination.inform USCIS of an H-1B employee’s termination.

The DOL’s enforcement position has been that any The DOL’s enforcement position has been that any evidence of a “bona fide” termination, such as written evidence of a “bona fide” termination, such as written notice to the employee, will be sufficient to end the notice to the employee, will be sufficient to end the employer’s wage obligation.employer’s wage obligation.

A recent decision of the DOL’s Administrative Review A recent decision of the DOL’s Administrative Review Board, however, held that an employer’s obligation to Board, however, held that an employer’s obligation to pay the offered salary continues up until the date the pay the offered salary continues up until the date the employer sends notice of termination to USCIS. employer sends notice of termination to USCIS.


While USCIS’ position is that an H-1B petition is valid While USCIS’ position is that an H-1B petition is valid until revoked, so that a terminated H-1B employee until revoked, so that a terminated H-1B employee whose petition has not been revoked could later begin whose petition has not been revoked could later begin work for the same employer immediately and would work for the same employer immediately and would not need a new H-1B petition, the DOL’s position is not need a new H-1B petition, the DOL’s position is that failing to file a new petition means no “bona fide” that failing to file a new petition means no “bona fide” termination occurred, so that the employer is liable for termination occurred, so that the employer is liable for wages during the entire period between the wages during the entire period between the “termination” and “re-hire.”“termination” and “re-hire.”

Employers should maintain careful records of an H-1B Employers should maintain careful records of an H-1B employee’s termination, and immediately notify USICS employee’s termination, and immediately notify USICS of the termination, in the event that the DOL questions of the termination, in the event that the DOL questions when the employee actually was terminated. when the employee actually was terminated.

Consequences for theConsequences for the H-1B Employee H-1B Employee

Maintenance of StatusMaintenance of Status

Contrary to popular belief, there is no “10-day,” “30-Contrary to popular belief, there is no “10-day,” “30-day” or other grace period for terminated employees day” or other grace period for terminated employees holding H-1B status.holding H-1B status.

Once the employment relationship terminates, the H-Once the employment relationship terminates, the H-1B employee is out of status. 1B employee is out of status.

While USCIS has proposed a 60-day period within While USCIS has proposed a 60-day period within which an which an

H-1B worker may seek new employment, that period H-1B worker may seek new employment, that period remains only a proposal. remains only a proposal.


USCIS policy is that periods during which an H-1B USCIS policy is that periods during which an H-1B employee receives severance payments, or remains employee receives severance payments, or remains on the employer’s payroll without reporting for work, on the employer’s payroll without reporting for work, are not periods of valid status for an H-1B are not periods of valid status for an H-1B nonimmigrant.nonimmigrant.

Technically, H-1B employees who remain in the United Technically, H-1B employees who remain in the United States after termination of their H-1B employment States after termination of their H-1B employment without changing their status are in violation of their without changing their status are in violation of their status, and persons in violation of their status are not status, and persons in violation of their status are not allowed to change, amend or extend their status.allowed to change, amend or extend their status.


In deciding whether to approve a change, amendment In deciding whether to approve a change, amendment or extension of status for any out-of-status or extension of status for any out-of-status nonimmigrant, however, USCIS may exercise nonimmigrant, however, USCIS may exercise discretion on a case-by-case basis to grant the discretion on a case-by-case basis to grant the extension, change or amendment of status in spite of extension, change or amendment of status in spite of the failure to maintain status.the failure to maintain status.

The longer the time out of status, the less likely USCIS The longer the time out of status, the less likely USCIS will be to approve the change, extension or will be to approve the change, extension or amendment of status.amendment of status.


If the period out of status is very short (10 days or If the period out of status is very short (10 days or less), a change, extension or amendment of status will less), a change, extension or amendment of status will usually be approved.usually be approved.

USCIS offices, however, have increasingly refused to USCIS offices, however, have increasingly refused to exercise discretion in favor of laid-off H-1B workers, exercise discretion in favor of laid-off H-1B workers, unless the gap in status is very short. unless the gap in status is very short.


Terminated H-1B employees should be aware that Terminated H-1B employees should be aware that time is not on their side.time is not on their side.

If the employee has plans to have another H-1B If the employee has plans to have another H-1B petition filed on his or her behalf, or to change to petition filed on his or her behalf, or to change to another nonimmigrant status, those plans should be another nonimmigrant status, those plans should be implemented as quickly as possible. implemented as quickly as possible.

Difficulty in Taking Difficulty in Taking Advantage of the Advantage of the Portability RulesPortability Rules

The portability rules allow an individual in H-1B status The portability rules allow an individual in H-1B status to begin work for a new H-1B employer, if certain to begin work for a new H-1B employer, if certain conditions are met. conditions are met.

One condition is that the new petition must be filed One condition is that the new petition must be filed before the date of “expiration of the period of stay.”before the date of “expiration of the period of stay.”

USCIS has not made it clear when the expiration of the USCIS has not made it clear when the expiration of the period of stay occurs, though the same language has period of stay occurs, though the same language has been interpreted in other contexts to refer only to the been interpreted in other contexts to refer only to the expiration date of the nonimmigrant's Form I-94, rather expiration date of the nonimmigrant's Form I-94, rather than to when the nonimmigrant fails to maintain status.than to when the nonimmigrant fails to maintain status.

Difficulty in Taking Difficulty in Taking Advantage of the Advantage of the Portability RulesPortability Rules

The dilemma for the terminated H-1B employee is The dilemma for the terminated H-1B employee is that, if the period of stay expires on the last day of that, if the period of stay expires on the last day of employment, the employee is left with little or no time employment, the employee is left with little or no time to coordinate the filing of a new petition by a new to coordinate the filing of a new petition by a new employer.employer.

While the legacy INS indicated it would propose a While the legacy INS indicated it would propose a grace period to allow terminated H-1B workers to take grace period to allow terminated H-1B workers to take advantage of the portability rules for a particular advantage of the portability rules for a particular period of time (such as 60 days_, there has been little period of time (such as 60 days_, there has been little activity from the Department of Homeland Security on activity from the Department of Homeland Security on the issue so far.the issue so far.

ConclusionConclusion

There are many issues to consider regarding the There are many issues to consider regarding the termination of H-1B employees.termination of H-1B employees.

The Update is a general treatment of these issues and The Update is a general treatment of these issues and challenges.challenges.

Each individual termination will present unique Each individual termination will present unique circumstances that may require more detailed analysis. circumstances that may require more detailed analysis.

As individual terminations are carried out, both As individual terminations are carried out, both employers and employees should keep these general employers and employees should keep these general issues and challenges in mind and should consult with issues and challenges in mind and should consult with immigration counsel for an individual determination of immigration counsel for an individual determination of their options. their options.

Questions?Questions?

Please feel free to contact our office if Please feel free to contact our office if you still have questions:you still have questions:

[email protected][email protected] ext. 100201-670-0006 ext. 100

http://http://www.visaserve.comwww.visaserve.com

Thank you.Thank you.

presentation about liabilities for termination of h 1 b employees

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