Employers are facing issues related to their workforce to a degree never experienced before due to COVID-19, and it is critical for employers to protect themselves as they make decisions surrounding continuing business operations. There have been many relevant changes to employee-related immigration processes and procedures as a result of COVID-19. Holland & Knight's fourth installment in its series of alerts focusing on immigration under COVID-19 is a discussion of considerations that employers with H-1B visa workers should take into account when making employment decisions during the pandemic.
At this time, employers are facing increasingly difficult decisions regarding how to manage their employees and keep their doors open during business slowdowns related to COVID-19. Inevitably, many employers have been forced to lay off or furlough some or all of their employees. This alert will address the tough decisions faced by those employers with H-1B visa holder employees.
What Is a Layoff?
In general, a layoff is a separation from employment due to a lack of available work. It is usually not associated with any performance-related reason, and the employee has no expectation of returning to work. This is the typical situation when an employee is terminated without cause.
What Is a Furlough?
A furlough is a mandatory and temporary leave of absence where the employer and employee have the expectation that the employee will return to work or be restored from a reduced work schedule. Furloughs are often required by employers who are trying to avoid terminating the employment relationship but who do not have enough cash to make payroll or whose business is very slow. In most cases, the slowdown is expected to be temporary.
Furloughed employees often are eligible to continue to receive their employee benefits and may also collect unemployment insurance for the reduction in their work schedule.
Why Are H-1B Visa Holders Treated Differently?
Prior to an individual receiving H-1B visa status enabling him or her to work in the U.S., the employer must file a Labor Condition Application (LCA) with the U.S. Department of Labor (DOL) and H-1B visa petition forms with U.S. Citizenship and Immigration Services (USCIS). In these forms, the employer must attest to: 1) the terms of the visa holder's employment, including the prevailing wage rate of similarly employed individuals in the region, 2) the salary to be paid to the employee and 3) the location in which the individual will work. Employer layoffs or furloughs can change the terms and conditions of employment that were provided to the DOL and the USCIS in the underlying LCA and H-1B visa petition forms, and potentially result in liability for the employer.
What Happens to an H-1B Visa Holder Who Is Laid Off?
When an H-1B visa holder is laid off, their H-1B visa status effectively ends because the foreign national's H-1B visa status is tied to the terms and conditions of the employment with that specific employer. As such, that foreign national has a reasonable period of time (generally, not to exceed the shorter of the individual's authorized period of stay or 60 days) to leave the U.S. or secure a different visa status. If the H-1B visa holder is able to find a new employer willing to sponsor him or her, that new employer will need to file a new LCA with the DOL detailing the prevailing wage rate, salary to be paid to the H-1B employee and location of employment. Once the application is approved by the DOL, the new employer must file an H-1B visa petition with the USCIS, to secure new H-1B visa status for the laid off H-1B visa holder.
What Is an Employer's Responsibility When Laying Off an H-1B Visa Holder?
Upon terminating the employment of an H-1B visa holder, an employer is required to 1) withdraw the underlying LCA filed with the DOL, 2) notify the USCIS of the termination of employment and 3) pay the "reasonable cost of return transportation" for the employee (but not his or her family) to his or her home country. These requirements do not apply if the employee voluntarily terminates his or her employment prior to the expiration of his or her H-1B admission period or is terminated once the authorized period of stay has expired.
What Happens to an H-1B Visa Holder Who Is Furloughed?
An H-1B visa holder who is furloughed must continue to receive the required salary indicated on the underlying LCA filed with the DOL and H-1B visa petition forms filed with the USCIS. Any material change to the terms and conditions of the employment – such as a reduction in salary (discussed below) to what is stated in the underlying forms, a reduction in hours from full time to less than full time or a change in employment location outside the intended region – requires that the employer first file an amended LCA with the DOL and H-1B visa petition forms with the USCIS to have such material change(s) approved by the DOL and USCIS.
Can an Employer Require a Furloughed H-1B Worker to Use Accrued Paid Time Off or Sick Leave?
In certain situations, this may be possible, but such situations should be reviewed with immigration and labor counsel to ensure adherence to H-1B requirements and the paid leave provisions of the Families First Coronavirus Response Act (FFCRA). The DOL has indicated that furloughed employees are not eligible for paid leave under the FFCRA. In general and unless otherwise prohibited by state law or the employer's policies, employers may require furloughed H-1B workers to exhaust their accrued paid time off, as long as workers are not required to do so before taking any leave for which they may be eligible under the paid sick leave provisions of the FFCRA. However, if the furlough period is extended, employers are still expected to pay the H-1B visa workers their regular salaries through the furlough period.
Can an H-1B Visa Holder Work Remotely During the Pandemic?
Many employers have instituted remote work policies so that individuals are able to be productive while adhering to social distance recommendations and to help "flatten the curve" of COVID-19. In the LCA and H-1B visa petition forms filed with the DOL and USCIS, respectively, the employer attests to a number of things, including the location(s) from which the employee will be working (as well as the prevailing wage rate of similarly employed workers in the same regional area and the salary to be paid to the employee). The prevailing wage rate provided to the DOL on the LCA is typically determined by county, with various counties often grouped together. As such, it is important for the employer to consider the DOL's classification of the "area of intended employment" for LCA purposes when changing the work location. In general, as long as the remaining employment conditions remain the same, an H-1B visa holder can work from a new worksite in the same area of employment attested to in the LCA and H-1B visa petition forms without having to advise the DOL or USCIS.
What Is an Employer's Responsibility When There Is a Change to the Worksite at Which an H-1B Visa Holder Works?
In a March 20, 2020, release from the DOL's Office of Foreign Labor Certification regarding operations during COVID-19, the DOL confirmed that if an H-1B worker starts working from a new worksite within the same area of intended employment, such as the employee's home office located within the same areas noted for LCA purposes, a new LCA does not need to be filed with the DOL. However, the DOL has advised that the employer should provide either electronic or hard-copy notice of the new employment location to workers at the new worksite location(s) for at least 10 calendar days unless direct notice, such as via email, is provided. If the new work location is outside the intended worksite location as reflected in the underlying LCA, the employer can take advantage of the short-term placement provisions in the law as long as all of the strict regulatory requirements are met. If the short-term placement provisions are not able to be met, an amended H-1B visa petition must be filed, including a new LCA filed with the DOL.
What if the Employer Institutes Across-the-Board Salary Reductions?
The immigration regulations, DOL and the USCIS have not addressed across-the-board salary reductions, which are increasingly common during the current pandemic. However, in 2003, the American Immigration Lawyers Association posed a question to USCIS asking USCIS to confirm if an amended H-1B visa petition would be required if, due to across-the-board salary reductions, an H-1B visa worker earned less than the offered salary stated on the H-1B visa petition filed with USCIS but continued to be paid above the prevailing wage certified on the LCA filed with the DOL. USCIS consulted with the DOL and responded as follows: "The DOL is sensitive to the fact that wages can and sometimes do go up and down based on economic conditions. In the circumstances described in your question, there would be no need for a new LCA or a new [H-1B visa petition] provided the employer was still paying the "required wage." (The "required wage" is the higher of the applicable prevailing wage rate of similarly employed individuals in the area of intended employment or the actual wage to be paid to the employee, as reflected on the LCA.) The response further stated that any change in the H-1B employee's wage must be disclosed in the subsequent H-1B visa petition filed with the USCIS and that it is important to document any wage change in the employer's LCA Public Access File.