Law Offices of Stuart J. Reich, PLLC

Practice Limited to Immigration & Nationality Law

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New York, NY 10004

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H-1B Employer Obligations

Q: What additional obligations does an employer have as a result of sponsoring an H-1B visa for an employee, and should a company be concerned about its ability to fulfill the obligations?

A: There are several additional obligations of the H-1B employer, although they tend to be less burdensome than they first appear. Generally, it is the job of the immigration lawyer to brief you on these obligations and to provide the necessary guidance and materials to assist in compliance wherever possible.

Most of the obligations can be divided into the following five categories: obligations during the application process, obligations which go into effect upon filing of the H-1B Petition, ongoing obligations during the period of H-1B employment, ongoing record-keeping obligations, and obligations upon termination. We'll discuss each type individually:

I. Application Process Obligations

Many of the employer's obligations stem from the requirement of the Labor Condition Application ("LCA"), an application which must be filed with and approved by the Department of Labor prior to the H-1B petition filing with U.S. Citizenship and Immigration Services. Signing and submitting the LCA involves the obligation to make certain promises:

  • A promise to pay the required wage (the higher of either the actual wage you are paying to other employees doing similar jobs with similar credentials or the prevailing wage rate determined by commercial or government survey). An important note here: fees the employee pays towards obtaining the H-1B are not counted towards pay for purposes of meeting the required wage requirement - if the employee will take on any financial responsibility for H-1B legal and government fees, the employee must make at least that amount above the required wage. Even if this requirement is met, one particular government fee must still be paid by the employer, without reimbursement form the employee, no matter what. It’s typically more straightforward and best for all parties if the empoyer covers the fees;
  • A promise to offer the prospective H-1B employee the same benefits package you offer to US employees upon the same terms (foreign national workers may not be denied benefits as temporary employees);
  • A promise that the employment of H-1B employees will not adversely affect the working conditions of US workers similarly employed in the area of intended employment;
  • A promise that there is no strike, lockout, or work stoppage in effect at the place of employment effecting this job classification, and if one occurs during the course of H-1B employment that the employer will notify the Department of Labor within three days & will not use this LCA in support of another H-1B petition;
  • A promise that a copy of the approved Labor Condition Application will be provided to the prospective employee .

Most of these promises entail obligations which must actually be performed at the time of H-1B approval or on an ongoing basis thereafter.

Also, the employer is obligated to post the Labor Condition Application which includes the job title and offered wage (though not the name of the proposed H-1B employee) in two conspicuous places at the work location. Alternatively, if there is a union in place with a collective bargaining agreement covering the position, the employer must provide notice to a collective bargaining representative.

The posting requirement is an especially unpalatable obligation for most employers, but it is unavoidable and rarely causes any real problem in our experience.

II. Obligations which come into play upon approval of the H-1B

Upon approval of the H-1B visa, the employer is obligated to bring the foreign national employee on board (i.e.: put the employee on payroll and have them begin productive employment with the company) within a very specific period of time.

If the employee is entering the U.S. from overseas to begin employment with the U.S. company, employment must begin within 30 days of entry into the U.S. If the employee is simply changing from some other status to H-1B employment with the company while already present in the U.S., employment must begin within 60 days of approval of the H-1B.

Further, the employer must provide the H-B employee with a copy of the Approved Labor Condition Application (which provides information on the promised wage rate) on the first day of the H-1B foreign national's employment with the company.

III. Ongoing Obligations During the Period of Employment

During the time that the company employs a foreign national on an H-1B visa, the employer may not "bench" that employee (to place that H-1B employee in a non-productive - in other words, a "non-working" - status and fail to pay that employer after that employee has started full-time employment with the company).

This is primarily an issue for consulting companies, often in the technology or business fields. It should be noted, however, that the anti-benching provision does not prohibit the employee for asking for a leave from the position, nor does it conflict with or prohibit application of the Family and Medical Leave Act.

Of course, the "required wage" obligation discussed above remains in force for the full period of employment.

IV. Ongoing Record-keeping Obligations

The employer must maintain a public inspection file at either its primary place of business in the U.S. or the place where the H-1B employee will work. This file must be in place from the day after the Labor Condition Application is filed and remain on file for one year after the Labor Condition Application expires (longer in some rare cases). The immigration lawyer will generally provide the employer with this file – or guidance on how to assemble it - and the specific items which it must include.

This obligation is in addition to normal I-9 requirement of verifying employment eligibility on the first day of work, applicable to all U.S. employers for all workers hired after November 7, 1986.

V. Obligations Upon Termination

There are no unusual restrictions upon termination of an H-1B employee. Generally, the employer has the same obligations (and potential liabilities) here as with any other “at will” employee - with a few exceptions.

The employer is obligated to offer the terminated H-1B employee a one-way plane ticket back to his or her home country. This obligation does not extend to family members or the cost of shipping possessions back, and there are no recognized government sanctions for an employer's failure to fulfill this duty; it is viewed as a private contractual matter between employer and employee and so liability to the employee would fall under the rubric of contract law.

The employer should inform U.S. Citizenship and Immigration Services of the termination of the H-1B visa; failure to do so risks a finding that the employer was continuing to employer the H-1B employee and so was liable for back wages from the point of termination to formal notification or expiration of the visa.

Q: For which of these obligations do I need to be responsible and with which can a lawyer assist us?

A: Virtually all of the obligations connected with filing and approval of the application are items for which a qualified immigration lawyer can provide guidance and supply materials sufficient to meet the employer's burden.

For instance, our office will guide you on wage requirements, when and where to place an LCA and when to provide a copy to the foreign national. We will prepare and provide the public inspection file and instructions for maintaining it, and inform you of time lines for bringing the employee on board (among other things). We also provide guidance concerning responsibilities upon termination, as well as various other employer obligations.

About the only thing that we can't assist with are ongoing obligations which are impacted by changes of circumstances during the period of employment. The employer must - of its own initiative - contact the immigration lawyer for advice if there is to be a change in work location or job duties, there is a strike or lockout at the company, or any other change which is even suspected of making a difference in the validity of the application.

Q::If an employee decides to leave the company after all the effort and expense that went into the H-1B visa application, is there anything we can do to get our money back?

A: A normal clause in an employment contract for liquidated damages (providing for a specific payment to defray actual costs to the employer, rather than payment as a penalty or punishment) is acceptable and enforceable against the employee. Whether a specific liquidated damages clause is truly designed simply to reimburse expenses rather than as a penalty is a state law question which must be examined with an employment lawyer.

However, the employer must not charge the employee an arbitrary monetary penalty for leaving merely to punish the employee for leaving - the amount must only cover the reasonable value of the company's expenditures. Further, there can be no reimbursement for the Fraud Detection and Prevention Fee or the Education/ACWIA fee.

Contact us here to arrange a consultation, to inquire about retaining us to handle your immigration matter, or simply to suggest topics you would like to see covered on our site.

The above is presented for informational purposes only, and does not constitute legal advice or create an attorney-client relationship with our firm. The information provided should not be used as guidance in pursuing an immigration matter absent consultation with a qualified immigration attorney.