Can H-1B Employers Make Changes to Wages, Hours, and Working Conditions Due to COVID-19?

Not only has COVID-19 put American workers, foreign workers, and their employers at risk, it has stopped most businesses in their tracks. Across the country, employers are struggling to learn how to comply with labor and employment laws within the context of potential COVID-19-related layoffs, reductions in hours, or terminations.

Those who employ foreign workers have the added burden of ensuring that they comply with immigration and labor laws governing the employment of foreign workers in almost every industry. And, workers themselves are scared, not knowing what the future holds and not knowing it they will remain in legal status if their jobs change.

This article discusses some of the effects of COVID-19-related job adjustments on H-1B workers. Subsequent articles will cover what to do when OPT students, physicians, farm workers, J-1 exchange visitors, and hospitality workers are at risk of losing legal immigration status or the employer must make staffing adjustments due to COVID-19.

We have only minimal guidance from U.S. Citizenship and Immigration Services (USCIS) and continually-developing guidance from the U.S. Department of Labor (DOL). Therefore, we recommend following the most conservative strategy possible when making any changes to the working conditions, pay, hours, or worksite for H-1B employees. Additionally, please note that the government guidance can change at any time.

We do know that at this time, even in the midst of the COVID-19 crisis, employers must honor the terms of the Labor Condition Application (LCA), which is known as ETA Form 9035, or potential have to file amended petitions. The LCA contains terms that protect both U.S. and foreign workers. It sets forth the rules on wage rates and hours and provides notice to U.S. workers that the employer will hire a foreign worker for a specific position at a certain location.

Does the employer need to continue paying wages when reducing hours or suspending H-1B employment?

Yes. Even though many companies are reeling from COVID-19s effect on the economy and worker-health, the employer must continue to pay wages.

Yet, it may be impossible for an employer to continue to pay its workforce during such unprecedented times. The economic downturn is forcing employers to reluctantly consider suspensions, layoffs, reduced hours, or furloughs. When making these changes to wages or working conditions, employers of foreign workers must comply with additional federal regulations above and beyond those that apply in the general labor and employment context.

In particular, one clause in the LCA requires the employer to pay the required wage, even if the employee is in non-productive status. Non-productive status is any time that the employee is unable to work. An employee could be unable to work based on an employer’s action or the employee’s action.

→ When the employer places an employee in a non-productive status, due to lack of work or a mandatory quarantine for example, the employer must still pay the required wage.

→ When the employee requests non-productive status, for vacation or because the employee is unable to work for any number of reasons, not directly work-related, the employer is not obligated to pay the required wage unless the time off is subject to:

• Payment under the employer’s benefit plan.

• Family and Medical Leave Act.

• Americans with Disabilities Act.

• Other applicable federal, state, and local statutes, including emergency legislation at all levels, passed during the pandemic.

If the employee is not able to work in the work location, or work from home during a COVID-19 quarantine, this non-productive time falls into the first category. The conditions causing the non-productive time are not caused by the employee. The DOL can fine employers who do not continue to pay the regular wage, force them to pay back wages, or prevent them from hiring foreign labor in the future.

Does the employer have to pay the required wage when the H-1B employee has COVID-19 and cannot work?

Most likely, yes. If an employee cannot return to work for a reason not directly work-related, then the H-1B regulations do not require the employer to pay the employee.. However, the employer may still be required to pay the required wage under its own benefit plan or pursuant to other laws such as those listed above.

For example, if an employer has a sick-leave or COVID-19 policy in place, then it’s likely that the employer will have to continue to pay an H-1B employee who requests time off to recover under the employer’s own policy regardless of the H-1B regulations.

Can the employer lower an H-1B salary?

We do not recommend this. When filing the LCA, the employer agreed to pay a certain wage rate. If the employer is paying the H-1B employee at a rate higher than the wage listed on the LCA, it may be possible to argue that a lowered rate (but still at or above the LCA rate) should be permitted. If the employer wishes to continue, the employer should file a new LCA and an amended H-1B petition.

Can the employer change an H-1B from full-time to part-time?

Yes but the employer must file a new LCA that states the change in the hours and reduced salary. Because a change in hours is a material change to the working conditions requiring a new LCA, the employer must also file an amended H-1B petition. Once USCIS provides notice to the employer that it received the new H-1B petition, the employee can begin the part-time employment.

The American Immigration Lawyers Association (AILA) has requested that USCIS suspend or waive the requirement that employers must file an amended H-1B petition if the reason for the change in hours is due to the national emergency. To-date, DOL still requires a new LCA and USCIS still requires an amended petition in this situation.

If an employer terminates the employee, does that relieve the employer of the obligation to pay the employee?

Yes. If the employer terminates the employee for a bona fide reason, the employer’s obligation to pay the required wage also terminates. the employer must notify USCIS that it has terminated the employment relationship, effectively canceling the H-1B petition.

The law also requires the employer to pay for the employee’s transportation cost to return home if the employer terminated the employee prior to the end of the H-1B petition’s validity period. There may be exceptions in the case of a bona fide termination. However, this discussion is outside the scope of this article.

Does a terminated H-1B employee have any options?

Yes. A terminated employee does have some time after termination, to look for new employment, change to a different non-immigrant status, or extend their stay in the U.S. The terminated employee has a 60-day grace period, or until the end of the approved H-1B petition, whichever is shorter, in which to do so.

Can terminated H-1B employees file for unemployment?

Although the laws vary from state to state, the general answer is no. It is because once an H-1B worker loses employment, they also lose their legal status and the underlying employment authorization. If the former-employee is unable to seek future employment, the employee is most likely not-eligible for unemployment benefits.

It may be possible that an H-4 working spouse of a currently-employed H-1B is eligible for unemployment if the H-4 spouse is terminated. The H-4 is dependent upon a valid H-1B, not the H-4 employer. So, if the H-1B spouse maintains his or her status, then the H-4 spouse still has valid work authorization and can accept future employment with any employer. Again, please consult your state’s unemployment laws.

What do employers need to do if H-1B employees must work from home?

The main considerations related to sending H-1B employees home to work are: 1. Staying in compliance with the geographic area listed on the LCA; and 2. Posting notice of the H-1B position in the new work location.

If the employee’s home is within commuting distance (usually the same Metropolitan Statistical Area) from the work location listed on the LCA, the employer probably does not have to file an amended H-1B petition. However, the employer must post the original posting notice again, in two conspicuous places in the employee’s home. While it is obvious that no other employees will likely see the notice, the employer must still post it. The employer could also send an email to each employee within the area of intended employment (i.e. the employee’s home) or post the notice on the company intranet if everyone has access to it and it notifies employees by email that the notice is available there. The employer may also mail a paper copy of the notice to each employee.

If the employee’s home is not within commuting distance from the work location listed on the LCA, the employer must obtain a new LCA listing the employee’s home address. In this case, the employer would also have to file an amended H-1B petition based on the new LCA.

If the employer believes that the home-placement will be less than 30 days, an exception may apply. The exception to having to file a new LCA and amended H-1B petition allows a one-time-per-year placement that is outside the commuting distance authorized on the LCA. Even if the home-placement runs longer, the employer can still file for the amended H-1B petition within the 30-day period and remain in compliance.

In normal times, the employer must provide this notice before the H-1B employee can begin working at the new location, even if it is at home. However, during the national emergency, DOL permits an employer to place the notice as soon as possible after the employee begins working at home, but not later than the 30 days.

If the employees have a bargaining representative or union, will this change anything?

Yes. Instead of posting notices at the work site or in the employee’s new home office, employers must instead provide notice to the bargaining representative that the employer is filing an LCA. Again, the employer must provide this notice to the bargaining representative within 30 days of an employee moving to a home worksite.

When the national emergency ends, employers will need to revert to providing notices to either the bargaining representative or to employees directly, as soon as they file the LCA and not within 30 days of filing.

What if USCIS denies an H-1B extension but the employee can’t leave the U.S?

Right now, if the H-1B employee does not leave the U.S. within ten days of when his or her status expires, the employee is in violation of the immigration laws. The H-1B cannot work during the ten-day grace period. This is true even if the employee is unable to leave the U.S. due to the impact of the coronavirus, closed borders or canceled flights.

Again, we have no official guidance on how to protect employees in this situation, given that a USCIS denial effectively revokes any employment authorization or lawful immigration status beyond the date of the original H-1B approval.

While the employer may consider asking USCIS to excuse the failure to maintain status based on the employee being prevented from leaving the country due to COVID-19, we have no assurance that USCIS would approve such a request, even if you filed a new H-1B petition. As of now, many CPB officers at U.S. airports will not accept as an excuse that COVID-19 is widespread in the employee’s home country and putting the employee and family at risk.

It’s conceivable that DHS will grant some leniency based on the adjustments it has made for tourists who arrived under Electronic System for Travel Authorization (ESTA) who cannot leave when they are supposed to. But even if granted, an employee would not be authorized to work.

Visitors who have entered the U.S. under ESTA may be able to apply for what is called “satisfactory departure.” Satisfactory departure is an U.S. Customs and Border Patrol-approved extension of your authorized time in the U.S. H-1B employees who have reached the end of their maximum six-years and must leave, may also be able to obtain satisfactory departure extensions for 30 days.

Although this comes with no employment authorization, it can help buy time until the H-1B is able to leave safely and keep any negative immigration actions, like an overstay of authorized time, off of their records. Even a short overstay can prevent someone from obtaining a new H-1B, visitor, or other visa in the future. It can even negatively affect an application for permanent residency.

Bottom Line

Anyone employing foreign nationals should consult with an immigration attorney before making any adjustments to salary, hours, or work location. In addition to placing the employee at risk of being out of legal status, the employer risks fines or debarment from DOL foreign labor programs.

For all of the latest critical COVID-19 information for employers, check our continually updated FAQ’s by clicking on the banner headline at the top of the Felhaber Larson web page.