The fine for “Benching” H-1B employees

The Immigration and Nationality Act (INA) permits employers to employ nonimmigrant alien workers in H-1B specialty occupations in the United States. In order to employ H-1B non-immigrants, an employer must obtain certification from the United States Department of Labor (DOL) after filing a Labor Condition Application (LCA). The LCA stipulates the wage levels and working conditions that the employer guarantees for the H-1B non-immigrants. After the employer received a certified LCA, the employer then petitions The United States Citizenship and Immigration Services (USCIS) for an H-1B visa on behalf of the nonimmigrant. An employer violates the INA if, for employment-related reasons, it fails to pay an H-1B nonimmigrant worker who is in “nonproductive status.” Employment-related nonproductive status results from factors such as lack of available work for the non-immigrant or a non-immigrant’s lack of a permit or license. Furthermore, an employer violates the INA when it deducts from a nonimmigrant’s wages filing fees that INS collects from the employer to process the H-1B petition.

In a recent decision, Rajan v. International Business Solutions, Ltd.,
03-104 (ARB 8/31/04), the U.S. Department of Labor’s Administrative Review Board (ARB) examined some important H-1B related issues relating to the LCA. In particular, the ARB benching in the context of the LCA, the validity of a beneficiary’s employment start and end dates and payment of H-1B fees by an H-1B beneficiary.

Case Background
International Business Solutions, Ltd (IBS), hired Ms. Rajan in a specialty occupation on an H-1B. IBS subsequently discharged Ms. Rajan after it failed to pay her salary while she was in nonproductive status (i.e., she was on “bench”). Ms. Rajan complained to theDOL’s Wage and Hour Division seeking back wages and reimbursement of $1,500 she paid to IBS, at its request, for the H-1B filing fee. After an investigation, the DOL found that IBS had violated the INA by failing to post notice of the LCA and failing properly to establish the prevailing wage rate. The DOL’s administrator did not make findings regarding Ms. Rajan’s complaint that IBS failed to pay her wages and charged her for the H-1B filing fee. Ms. Rajan then requested a hearing before an Administrative Law Judge (ALJ) who found that IBS violated the INA by failing to compensate her while in nonproductive status and by assessing her money to pay the H-1B filing fee. The ALJ accordingly ordered IBS to pay Ms. Rajan back wages and to reimburse her for the money she had paid IBS for the fee. The ALJ remanded the case to the Administrator to determine whether to impose a civil money penalty for the filing fee violation. IBS petitioned for review of the ALJ’s decision.

Where an H-1B non-immigrant is not performing work and therefore is in a nonproductive status because of lack of assigned work, lack of a permit or license, or some other employment-related reason, the employer is required to pay the wages due under the LCA. 8 U.S.C.A. § 1182(n)(2)(C)(vii); 20 C.F.R. § 655.731(c)(7)(i).

An employer is not required to pay wages to an H-1B non-immigrant in nonproductive status due to conditions unrelated to employment which remove the non-immigrant from his/her duties at their “voluntary request and convenience” or which render them unable to work (i.e., caring for a relative who is ill, maternity leave, or a temporarily incapacitating accident.

In the case at hand, Ms. Rajan’s H-1B visa became valid on January 24, 2001. However, she departed the United States for India on February 6, 2001 to undergo surgery. After recovering from her surgery, she returned to the United States on April 2, 2001 and reported for work at IBS on April 4, 2001. IBS did not assign her work on that date or thereafter. Therefore, IBS argued that it was not required to pay Ms. Rajan wages because she abandoned her employment and thus was nonproductive voluntarily.

The ARB found that on April 4, 2001 when Ms. Rajan returned to work, her status changed from voluntarily nonproductive to nonproductive because of lack of assigned work and therefore she did not abandon her employment and is due back wages.

The dates that the H-1B beneficiary’s employment would be considered to have started and ended
The ARB found that Ms. Rajan’s with reference to the start date of her back wage period, her employment began with IBS on the date that she made herself available to work or become under the control of the employer (i.e., by waiting for an assignment, reporting for orientation or training, etc.). Therefore, her “entered into employment” date was April 4, 2001.

As for her end date of the back wage period, the ARB administered a two prong test that terminates an employment relationship if : 1) there has been a bona fide termination of the employment relationship; and 2) the employer has notified the USCIS that the employment relationship has been terminated so that the H-1B petition can be cancelled. IBS met both of these prongs on September 28, 2001. IBS had sent a termination letter to Ms. Rajan on September 14, soo1 and notified the USCIS of the termination on September 28, 2001. Therefore, the ARB found that the payment of back wages ended on September 28, 2001, the date that IBS notified the USCIS of Mr. Rajan’s termination.

Payment of H-1B fees by the beneficiary
The ARB found that IBS violated the INA by charging her for the filing fees. Therefore, ARB imposed a $1000.00 monetary penalty on IBS.

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