Award of Payment of Back Wages to VA Aliens Hired under the H-1B Program is BARRED by U.S. Federal Government’s Sovereign Immunity

The Department of Labor (DOL) determined that the Department of Veteran’s Affairs (VA) failed to pay the prevailing wage to eleven alien physicians employed by VA hospitals pursuant to the H-1B visa program.

The H-1B is an employment based nonimmigrant visa that enables United States employers to seek highly skilled foreigner workers from around the world to increase productivity and develop new innovations within their fields. The system was designed to protect both U.S. and foreign workers by: (1) including labor certifications and attestations; (2) implementing costly filing fees; (3) requiring extensive background documentation/proof; and (4) conducting on-site employer investigations and continuous oversight by several federal agencies. Specifically, the program requires that a U.S. employer using the program guarantee that the alien will be paid the prevailing wage or higher for the specialty occupation, and that the foreign professional will not adversely affect the working conditions of U.S. workers.

Unfortunately in this case, several of the alien physicians filed administrative complaints asserting that the hospitals had failed to pay them the prevailing wage for their occupation. The DOL Administrative Review Board ruled in favor of the complainants’ and ordered the VA to pay approximately $230,000 in back wages.

However, the Supreme Court has recognized that absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit. The Executive Branch has no power to waive immunity that power rests solely with Congress. Congress did not expressly address the federal Government’s sovereign immunity anywhere in the H-1B program. The Supreme Court has demanded a clear statement of waiver so as to ensure that Congress directly considers the consequences of exposing the federal Government to suit and potential financial liability. No statement of waiver was included in the H-1B program .

Accordingly, the Deputy Assistant Attorney General concluded that the statute authorizing the H-1B program did not waive the federal Government’s sovereign immunity. Consequently, the administrative award of $230,000 to the eleven alien workers was barred by sovereign immunity. However, the DOL and VA reached an agreement that will allow the VA to continue participation in the H-1B program if they follow proper procedures for all future alien workers, yet this arrangement does nothing to help the eleven alien physicians rightly owed their back pay.