H-1B Compliance in the Time of COVID-19

COVID-19 National Emergency & State Shutdowns – How can employers comply with LCA and H1B regulations when faced with sudden changes? Employees may be working from home, reassigned to new sites, facing reduced hours, furloughs or layoffs.

Question: Everyone at our company is working from home in accord with state mandates to close nonessential businesses, but this wasn’t contemplated at the time of filing, so our H-1B workers’ home addresses are not listed as secondary worksites on the Labor Condition Applications. What can we do now?

Answer: the DOL considers working from home to be a benefit, so it must be offered equally: If available to your U.S. workers, then it must be available to all your H1B workers as well. However, an employer’s documentary obligations differ depending on where its H-1B workers live in relation to their primary worksites.

For H1B workers who live in the same Metropolitan Statistical Area (MSA) as their worksite, an LCA posting at a new worksite is still required. Regulations require that LCA postings go up at a new worksite before employment at the site begins, but in pandemic-related emergency shutdowns, such foresight was impossible. How to post: You may either provide each worker with a hard copy of their original LCA to post at their residence, or you may repost the LCAs electronically on your company intranet, for 10 consecutive business days. Once posting is complete, the employer must sign the notice, indicate the dates it was posted, and retain in the Public Access File. Also, create a memo for all Public Access Files memorializing the date of the state’s COVID-19 stay-home order, and the date your company sent everyone home. For each worker, put signed proof of LCA re-posting (hard copy or electronic) into the Public Access File, along with a current printout from OFLC DataCenter to prove that as of the stay-home date, that worker’s hometown was in the same MSA as their worksite. Boundaries of MSAs can change over time: the greater NYC metro area now includes much of New Jersey, including some parts beyond the 75-mile “commuter distance” limit, such as Ocean County.

 
For H1B workers living outside the MSA where their worksite is, you should prepare new LCA postings, listing the office as primary and home address as secondary worksite, post as described above (either in hard copy at the worker’s home, or electronically, where all employees can see it), file new LCAs listing both office and home address, then file amended H1B petitions with USCIS. Again, regulations actually require that new postings be done , new LCAs filed, and amended petitions be approved before work begins at a secondary worksite, but the COVID-19 pandemic renders that timeline impossible, and USCIS has suspended Premium processing, so approval of amended petitions may take months. File as soon as practicable, to demonstrate a good faith effort to comply in a timely fashion.

The regulations carve an exception for “Short-Term Placements,” where the employer does not need to file a new LCA or amended petition where H1B workers are assigned temporarily to work from home or another undisclosed location outside the original intended worksite MSA, for a total of 30 days or less in a one-year period. In some circumstances, a Short-Term Placement may last up to 60 days, but only if three conditions are all met, which explicitly exclude the above-described scenario: 1. Worker continues to maintain an office at the permanent worksite; 2. Worker spends a substantial amount of time at the permanent worksite within a one-year period; and 3. Worker’s residence is in same area (MSA) as the permanent worksite, not the temporary worksite. Disruptions due to COVID-19 will probably outlast temporary work-from-home assignments of 30 days.

Question: What do we do if we need to reduce everyone’s hours in order to keep our business financially viable?

Answer: A reduction in hours from full-time to part-time is always a material change, requiring a new LCA that frames the wage as hourly, not annual, and an amended petition to USCIS. If the employer reduces an H1B worker’s hours but does not file a new LCA and amended petition, they may be liable for back wages meeting the full salary amount. If an employer does file a new LCA and petition for part-time employment, the worker must be paid for the number of hours actually worked.

Question: What do we do if we have had to furlough employees?

Answer: If your company’s business is one deemed non-essential by state authorities who have ordered all such personnel to stay home, you may have no choice but to furlough employees. Whether COVID-19 is a special circumstance that relieves H1B employers of their wage obligations is a question now being hotly debated by immigration attorneys, since the DOL has remained unhelpfully silent so far. The regulatory provision at issue is part of the “wages paid” rules at 20 CFR 655.731(c)(7)(ii), describing, “Circumstances where wages need not be paid.” It reads:

“If an H1B nonimmigrant experiences a period of non-productive status due to conditions unrelated to employment which take the non-immigrant away from his/her duties at his/her voluntary request and convenience (e.g. touring the U.S., caring for ill relative) or render the non-immigrant unable to work (e.g. maternity leave, automobile accident which temporarily incapacitates the nonimmigrant) then the employer shall not be obligated to  pay the required wage during that period, provided that such period is not subject to payment under the employer’s benefit plan or other statuses, such as the Family And Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.). Payment need not be made if there has been a bona fide termination of the employment relationship.”

The interpretive question is whether “at his/her voluntary request and convenience” is one set of qualifying circumstances and “render the non-immigrant unable to work” is another, or whether the latter is a subordinate clause, also requiring a voluntary request by the worker. The regulation offers no examples of act-of-God type events beyond the control of both worker and employer, rendering the H1B nonimmigrant and the rest of the employer’s workforce unable to work, but that is the situation many employers find themselves in now. A statewide stay-home order defining the employer’s business as “non-essential” may render the H1B nonimmigrant employees of such businesses unable to work, but as yet there has been no clarifying guidance on this point from the Department of Labor.

Question: Our company’s revenue stream has already dropped precipitously and we are considering a round of layoffs. What must we do when laying off H1B workers?

Answer: Per the regulation above, employers must effect a “bona fide termination” when laying off an H1B workers, in order to end wage obligations under the LCA.  This means getting a signed release from the worker acknowledging termination, plus withdrawing the H1B petition for the laid off worker. An employer who terminates an H1B worker prior to the end of petition validity is also responsible for “reasonable costs of return transportation” to the  worker’s home country: this means one-way economy airfare to the worker’s home city in their last country of permanent residence abroad. It does not include airfare for family dependents, nor shipping costs for their furniture or personal belongings. 

Question: Will terminated H1B workers be out of status? Do they have to leave the country immediately?

Answer: No. Any H1B worker who has either a valid I-94 or approval notice with a replacement I-94, who is terminated before the ending validity date has a grace period of 60 days, or until the I-94 expiration date (whichever is less). During this grace period, the worker may file for a change of status, or find a new H1B employer willing to file a petition for them, or leave the country.

Question: What if our company later wants to re-hire the terminated workers?

Answer: They can re-hire the workers, but will need to file a new LCA and a new petition for each of them, and the current applicable prevailing wage may be higher than it was at the time of filing the previous petition, so the company may have to pay those workers more upon re-hire than when it laid them off. If the company rehires the workers within less than 60 days of layoff, it may be able to file petitions for them while they are still in the grace period. 


These are just a few of the many questions employers may have about how to respond to rapid changes impacting their foreign professionals in these stressful and uncertain times.

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