Employers – especially small companies and those new to the world of work visas – often assume that obtaining a work-authorized visa status is the responsibility of the foreign worker. It isn’t. Any work visa petition to U.S. Citizenship & Immigration Services (“USCIS”) is by definition a request by the US employer for permission to employ that foreign worker in the specifically described professional job for a specified period of time, and constitutes a promise by the employer to pay that worker at or above the prevailing wage for that job.
Foreign workers are often anxious to oblige, in order to secure a firm job offer and the promise of visa sponsorship, and they may offer to cover the costs of H-1B visa sponsorship to the sponsoring employer, by payment up front to the attorney, through reimbursement to the employer, via salary deductions over time, or indirectly, through payments made to the employer by a third party. Both federal agencies overseeing the H-1B program view any such payments, reimbursements, or salary deductions as unlawful or fraudulent, and each may take agency-specific corrective actions.
The U.S. Department of Labor (USDOL) views payment by the sponsored worker of any legal fees or government filing fees associated with an H-1B petition as an illegal assumption of costs which are the explicit responsibility of the employer under the labor regulations. In any enforcement action under the Labor Condition Application, USDOL will subtract any upfront or reimbursement payments made by the worker for H-1B legal and/or filing fees from the wages actually paid to that worker when determining whether the H-1B employer has met its obligations under the Labor Condition Application (LCA) to pay the “actual wage” promised.
Thus, an investigation into LCA compliance may result in a finding that the employer has violated its wage obligations. Depending on the number and severity of violations, and the perceived degree of the employer’s disregard for the rules, an LCA investigation by the USDOL Wage & Hour Division which reveals payment of H-1B legal and/or filing fee costs by the sponsored worker(s) may result not only in restitution to the worker, but in fines to the employer, and/or debarment from the H-1B program. The USDOL also views early termination penalties paid by the worker, sometimes called “clawback” provisions, as unlawful deductions from the actual wage owed to an H-1B worker. Clawback provisions which demand reimbursement of the employer’s H-1B visa petition costs if the worker leaves before a specific date are specifically prohibited by law at INA 212(n)(2)(C)(vi)(I) and by regulation at 20 CFR 655.731(c)(10)(i).
While the labor regulations governing LCA compliance do allow for “liquidated damages,” employers must keep in mind that it is always at the Department of Labor’s discretion to determine case-by-case whether a particular provision constitutes permissible liquidated damages or an unlawful early termination penalty (clawback). If the provision takes effect based on the date when the worker quits, it is likely to be construed as the latter, and unlawful.
U.S. Citizenship and Immigration Services (USCIS) takes an equally dim view of any payments by the worker for any H-1B petition costs, regarding them explicitly as an indicator of fraud, i.e., as an improper inducement for the employer to provide visa sponsorship; there is no support for this definition of fraud in the USCIS regulations. However, the only H-1B filing fees that the U.S. employer is required by law to pay, for which they may not seek nor accept reimbursement, is the ACWIA fee for training U.S. workers (normally $1,500). Both agencies claim it is also unlawful to demand reimbursement of the $500 H-1B fraud detection fee from the worker, but the relevant statutory provision at INA 214(c)(12)(A) is at best unclear on this point. USCIS interpretation is at odds with the practical reality: the foreign worker who offers to assume some H-1B costs is just trying to bring the cost of their own prospective hire closer to the employer’s cost of hiring a comparably-qualified person who does not need visa sponsorship.
When USCIS conducts a site visit of an H-1B employer – which they may do either while a petition is pending, or at any time thereafter during the petition validity period, after it has been approved – the investigator from USCIS Fraud Detection & National Security will customarily ask to see payroll records, and may directly contact H-1B workers to ask if they paid any of their own H-1B petition costs. Site visits are now occurring in roughly 30% of all petitions, and USCIS aims to increase that percentage. If any of the parties contacted are unresponsive, and the site visit is inconclusive, USCIS may issue a Request for Evidence, Notice of Intent to Deny, or Notice of Intent to Revoke.
One item of proof commonly demanded in such notices from USCIS is a pair of sworn statements, one each from the US employer and from the sponsored H-1B worker, attesting that no such payments have been made or promised by the worker, nor received by the employer, including any payroll deductions for the purpose of reimbursing H-1B petition costs.
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