H-1B Employer Obligations Under COVID-19

COVID-19 has abruptly changed our way of life.  Employers are reminded that their obligations under the terms of the H-1B visa program including the obligation to pay the required wages continue to exist.  The following are some Q&As regarding this issue:

1.  Do the terms and conditions of the H-1B employment still apply in light of the COVID-19 pandemic?
Yes, the terms and conditions specified in the Labor Condition Application (ETA 9035) and the H-1B petition still apply in general unless exempt by the regulation or the government.

2.  Does an employer's obligation to pay H-1B employees the required wage continue to exist in light of the government's shelter-in-place policy?
Generally speaking, an employer must continue to pay H-1B employees according to the terms of the LCA.  There are special rules governing the obligation to pay for non-productive hours of the employee (see below.)

3.  Can the employer stop paying the employee if there is insufficient work?
If an employee becomes non-productive due to insufficient work, the employer must pay the employee the normal wages according to the LCA.  "Benching" an employee or failing to pay the required wages for non-productive hours is not permitted by law. 

4. Are laid-off H-1B employees eligible for state unemployment benefits?
No. Although H-1B employees pay for unemployment insurance tax, if they lost their job they would have lost their legal status or ability to work - a requirement for state unemployment compensation. However, their H-4 spouse who worked on EAD may be eligible for state unemployment benefits.

5. If an employee requests for leave because of personal reasons, can the employer stop paying the employee? 
If an employee asks for a leave of absence or unpaid leave for personal reasons unrelated to the employer, the employer does not have to pay the employee.  For example, if an employee requests time for an extended vacation, a sabbatical leave, or caring of a sick relative, then the employer does not need to pay the employee the required wage.

6. If an employee needs time to recover from an accident, must the employer continue to pay the employee? 
This situation is similar to an employee taking maternity leave. The employer's obligation to pay is governed by the employer's benefit plan or other applicable laws such as the Family and Medical Leave Act or the Americans with Disabilities Act.

7. Can an employer furlough or bench an H-1B employee on account of a shelter-in-place order from the government authorities?

No, even under this situation, an employer must continue to pay the H-B employee the required wage. Otherwise, an employer could be subject to liability including fines, back wage obligations, as well as debarment from the DOL’s temporary and permanent immigration programs for a period of time.

8.  What if an employee has contracted with COVID-19 and become unable to work? 

The employer generally does not have to pay an employee who is not able to work because of reasons unrelated to the employer. However, if employer has a rule regarding quarantining an employee who has contracted COVID-19, this could be classified as a decision by the employer. In this situation,  the terms of the employer's benefit plan or other laws such as the Family and Medical Leave Act or the Americans with Disabilities Act may also apply. 

9. Can an employer reduce the hours of an H-1B worker or convert her status from full-time to part-time? 

Yes. In this situation, a material change has occurred and the employer must file a new LCA to reflect this change. Additionally, the employer is also required to file an amended H-1B petition to report this change to USCIS.  The change may only take effect upon the receipt of the H-1B petition by USCIS.

10. If an employer cannot afford to pay an H-1B worker the required wage or simply does not wish to continue the sponsorship, what must the employer do in order to terminate its obligation to pay?
The regulation provides that the obligation to pay the required wage stops if there has been a bona fide termination of the employment relationship. A bona fide termination means that the employer has notified USCIS that the employment relationship has been terminated so that the petition is canceled. Further, an employer is responsible for paying for the return transportation cost of the employee if the employer terminates the employee before the end of the approved period.

11.  If an H-1B employee is laid off due to COVID-19, can the employee change status or transfer to another employer? 

Yes, an H-1B employee who is laid off has a grace period of 60 days or until the end of the approved employment period, whichever is shorter, to file for a change of status or to seek sponsorship by another H-1B employer.

12. If an H-1B employee's work-site changes due to COVID-19, must a new LCA be obtained? 

If the new location is within the same metropolitan area or commuting distance from approved job site, a new LCA is not required.  However, a notice of the H-1B job opening must be posted at the new job site as usual.  DOL will consider the posting timely if the notice is posted within 30 calendar days after the worker begins work at the new job site location.

(Immigration laws and policies change regularly.  If you have any questions regarding this article, please visit www.1visa1.com to schedule a legal consultation.)  

USCIS Clarifies L-1 Visa Foreign Employment Requirement

One of the many requirements of the international company transferee L-1 visa is for the beneficiary to have worked at least one continuous year out of the past three for the petitioner or an affiliate in another country. This employment abroad must be in an executive, managerial, or "specialized knowledge" capacity. The beneficiary's past three years of employment is scrutinized to see if this is met. There has been confusion about how this "one-in-three" rule applies.  Back in March, USCIS already issued a memo on this same issue in regards to the EB-1C immigrant visa petition. Recently, USCIS has issued another memo, this time in regards to the L-1 nonimmigrant work visa petition.

If the employee has been working outside of the U.S. for the petitioner, the one-year requirement is usually counted from the three years before the date of filing for the L-1 petition. It is not interrupted by business or pleasure trips to the U.S. (typically B-1, B-2 visas). However, these days spent in America do not count toward filling the one year period, and an equal amount of time must be spent working to cover them.

The confusion arises when an L-1 visa worker is already present in the U.S. when the L-1 application is filed.  In this situation, when should the 3-year clock begin and end?

Specifically, the one-year period is adjusted if the beneficiary was sponsored by a petitioner to work in the U.S. with a nonimmigrant work visa, such as H-1B or E-2. If the beneficiary worked for the same petitioner in such status leading up to the L-1 petition filing, then the three years looked at will be from the period right before the start of such employment (usually the date of admission). For example, if the employee worked for the petitioning company in the U.S. from 2017 to 2018 in H-1B status, then USCIS will look at 2014 to 2017 for L-1 foreign requirements. This adjustment does not apply to those working for the petitioner in a dependent status such as L-2 or F-1 OPT. For these cases, the three-year period would be counted from the date of filing like the rest of the cases.

Interruptions can, however, occur from periods of the L-1A worker (1) not working while in the States or (2) working for another employer in the States. As the L-1 requirements include a continuous one-year period, these breaks can determine whether or not an applicant qualifies for L-1 status. This also means having a break lasting over two years will render the beneficiary ineligible for L-1 status. 

This memo provide some clarification to the L-1 visa requirements.  Employers and L-1 workers should mind the changes and avoid breaking the one-year continuous employment requirement. The takeaway is to avoid breaks of employment with the L-1 visa employer for two years or longer.

L-1B Visa Denial Rates at All Time High

The denial rate for L-1B "specialized knowledge" multinational employees was all time high in 2014. According to the USCIS statistics, the denial rate for L-1B increased to 35 percent in FY2014.   These numbers were reported and analyzed by  the National Foundation for American Policy in their March 2015 report.  

High Historic H-1B Denial Rate

To put things in perspective, one should note that the denial rate for L-1B petitions was only 6 percent in FY 2006.  The denial rate has increased gradually over the past decade especially the last few years.  Such increase is particularly alarming since the legal requirements for this visa type have not changed.  

Indian Nationals Hit Hardest

The NFAP report also contains these additional insights:

- The L-1B denial rate for Indian nationals is 56 percent for FY2012 through FY 2014, compared to an average denial rate of 13 percent to employees from all other countries during the same period. 

- The denial rate for employees already working in the U.S. (41 percent in FY 2014) is higher than first-time applications (32 percent).  The difference is disturbing as USCIS usually gives deference to visa petitions that have already been approved previously.

- While only 2 percent of L-1B cases received a Request for Evidence in FY2004, 45 percent of L-1B petitions were issued RFE in FY2014, 

Main Reason for Denial

The main reason for denying an L-1B visa petition is usually based on a finding that the job duties are not "specialized" in nature.  While the L-1A is used to transfer executives and high-level managers of international companies to the U.S., the L-1B visa was created to transfer employees who have special knowledge of the company's product, service, research, equipment, techniques, management or other interests and its application in international markets.  Alternatively, the L-1B employee can also be somebody who has an advanced level of knowledge or processes and procedures of the company.

The difficulty lies on the vagueness of this definition.  While the company believes that certain knowledge and skills constitute specialized knowledge, the Immigration Examiners think differently. In fact, USCIS sometimes takes the view that in the modern world, most jobs require certain degree of specialized knowledge and, therefore, an L-1B petition must show more to warrant approval. Another perception is that petitioners are using the L-1B visa in place of the H-1B visa to bypass the latter's visa cap.

In technological jobs, employees must apply technical knowledge of computer hardware and software to perform their job duties.  Is this knowledge specialized knowledge contemplated by the L-1B visa or just regular technical skills that most employees in the profession are expected to possess? Sometimes the distinction is only a fine line, depending on the particular facts of the case and interpretation. 

Conclusion

USCIS has promised to issue more guidance on the standard of adjudication on L-1B visa.  Until then, employers must understand the current high denial rates in this type of cases and act accordingly.  Based on a careful analysis of each case and presentation of appropriate evidence and legal arguments, our office has been able to secure L-1B approvals for our clients even in this unfriendly adjudication environment.