Seyfarth Blog Synopsis: In today’s posting we discuss the impact that COVID-19 related changes in working conditions, furloughs and layoffs have on businesses with employees currently working on H-1B, H-1B1 or E-3 work visas.
As we continue complying with shelter-in-place and safer-at-home orders implemented in response to COVID-19, organizations nationwide are also starting to assess the impact of these measures on their businesses and operations. For some employers and industries the sudden transition to a work-from-home model may have been seamless, but overall, the sheer force of the economic impact of these changes is now being felt as company after company considers possible furloughs, salary reductions, and layoffs to help them revamp operations and survive the economic consequences of the COVID-19 pandemic. For employers who also sponsor non-citizens for temporary work visas like the H-1B, H-1B1 and E-3 (specialty occupation) categories, opting for work-from-home models, furloughs, changes in employment terms, or layoffs as cost-saving measures will require additional analysis.
To help U.S. employers of non-citizens on these work visas navigate such changes, consider critical questions, and proactively plan for the foreseeable legal and practical consequences of these measures, Seyfarth is providing this Q&A covering the following topics for queries related to H-1B, H-1B1 and E-3 employees:
I: Work From Home, Salary Reductions and Other Changes in Employment
II: Furloughs and Returning to Work
III: Workforce Reductions and Layoffs
I. Work From Home, Salary Reductions & Other Changes in Employment Conditions
Q. Is an H-1B worker permitted to transition to work remotely from home?
A. Yes, an H-1B worker may work remotely from home if certain conditions are met. Changes in worksite within the same Metropolitan Statistical Area (MSA) do not require new filings with U.S. Department of Labor (DOL) and U.S. Citizenship and Immigration Services (USCIS).
Q. Does the employer need to file a new LCA and/or fulfill posting notice requirements?
A. Last month, the DOL confirmed that a new LCA is not required so long as the home office or remote work location is within normal commuting distance of the employer’s permanent location.
Q. What if working remotely is for a short period?
A. Short-term placement provisions may be an option if the employee will work remotely from more distant locations for 30, to a maximum of 60, days per year. The nuances of these rules are complex and should be worked through with your Seyfarth immigration attorney.
Q. Does the employer need to fulfill posting notice requirements even if the employee is working from home?
A. Yes. A hard-copy notice needs to be posted at the new worksite for a minimum of 10 days. In these circumstances, a home office qualifies as a new worksite.
Q. Can specialty occupation employees be transitioned from full-time to part-time status?
A. Yes, but if the USCIS visa petition noted full-time employment, this would likely be considered a material change. Material changes will require an amended filing with USCIS. Timing of the petition filings and changes in the terms of employment should be discussed with your Seyfarth immigration attorney.
Q. What is the impact of a company-wide pay cut?
A. It depends. The “required wage” for these visa categories is the greater of the “actual wage” level the employer pays to similarly situated employees, or the “prevailing wage” level for occupation in the area of employment.
If company-wide pay cuts mean the employee’s salary does not fall below the required wage, then the employer may not need not file a new LCA or an amended petition with USCIS. The employer should document the changes to its pay system in its business records and in the Public Access File.
If company-wide pay cuts mean the employee’s salary does fall below the required wage, or below the wage stated in the LCA and petition filed with USCIS, this will require additional analysis and potentially a new LCA and amended petition submission to USCIS.
II: Furloughs & Returning to Work
Q. What is a furlough and how could it impact an employer’s specialty-occupation workers in these categories?
A. A furlough is an involuntary, temporary period of reduced schedule or time off from employment of all or any subset of employees. Furloughs may occur on a one-time basis (e.g., for a specific number of weeks starting on a specific date) or on a recurring basis (e.g., one week per month).
Q. What is an employer’s responsibility to its specialty-occupation workers during a furlough?
A. Employers may not “bench” and must continue to pay full-time and part-time H-1Bs and other specialty-occupation employees the “required wage” reported to the Department of Labor (DOL) if the employee “is not performing work and is in a nonproductive status due to a decision by the employer.” It is not necessary to pay the required wage if an employee experiences a period of nonproductive status due to conditions that make the nonimmigrant unable to work.
Q. Does a shelter-in-place order classify these employees as “unable to work”?
A. DOL has not clarified whether a public-health emergency, such as COVID-19, in which a federal, state or local governmental has issued an order to shelter in place at one’s home, would classify the employee as “unable to work.”
DOL regulations offer examples of “[c]ircumstances where wages need not be paid.” These include situations where the period of nonproductive status is “due to conditions unrelated to employment which. . . render the nonimmigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant).”
Shelter-in-place orders issued by government authorities in some respects resemble the examples of health-related causes, such as maternity leave or an automobile accident. These orders are mandated to mitigate harm to public health and that like pregnancy or accidental injury make continued work dangerous and infeasible. On the other hand, if a pay reduction involves the continuing performance of some work, the claim of being temporarily incapacitated under a condition unrelated to employment may lose its force.
These examples illustrate that any assessment in this respect is nuanced and very fact-specific, these scenarios should be discussed with your Seyfarth immigration attorney.
Q. What are the consequences of a “benching” violation, i.e., failing to pay the required wage during periods of nonproductive status?
A. Failure to continue to pay the required wage during furloughs, i.e., if the employee is in nonproductive status at the employer’s instruction, can be enforced by the DOL’s Wage and Hour Division through a variety of sanctions. These include civil fines, back-wage payment orders, debarment of the employer for periods of one to three years from petitioning and employing foreign workers under all employment-based provisions of the immigration laws, and other “make-whole” equitable relief.
Enforcement of benching violations is often derived from whistleblower complaints, even after termination from employment. This means that an employer may continue to deal with the repercussions of furloughs and layoffs caused by the COVID-19 crisis for years to come.
Q. Will these employees lose visa status if furloughed?
A. In general, these employees must work under the terms and conditions described in the petition and visa application in order to maintain lawful status. USCIS will consider time spent in nonproductive status during a furlough as “benching,” but this alone may not automatically cause the worker to be considered by USCIS as having violated nonimmigrant status. An assessment of what this means for particular employees is fact specific and should be discussed with your Seyfarth immigration attorney.
III: Terminations – Workforce Reductions and Layoffs
Q. Under the current COVID-19 circumstances, what obligations apply if the employee is terminated?
A. When employment ends, the employer is required to update USCIS of the termination of employment. To end all related visa obligations and wage obligations in particular, and qualify as a “bona-fide” termination of employment that DOL and USCIS would recognize, the employer must:
- • confirm the termination to the employee in writing and notify USCIS that the terms of employment have changed;
- • withdraw the LCA from DOL; and
- • offer to pay for the reasonable cost of transportation for the employee to return to their country of nationality or permanent residence.
Q. If terminated, must the employee leave the U.S. immediately?
A. No. There is a 60 day grace period. The individual may remain in the U.S. for up to a 60 day period following the termination or for the remainder of the existing visa petition and status validity period, whichever is shorter.
During this grace period, the employee may search for a new employer and may also be rehired by the original employer. If rehired, the original employer must file a new petition if it has notified USCIS of the prior termination.
In light of the COVID-19 crisis and current health safety and travel restrictions, a terminated employee may also consider filing for a change of status to the B-2 visitor visa category or change to a dependent status if that option is available.
Seyfarth will issue subsequent alerts as further changes arise. Should you have any questions, please reach out to your Seyfarth immigration attorney or the authors Tieranny L. Cutler, Mahsa Aliaskari, Angelo Paparelli and Dawn Lurie.