With the economic uncertainty created by COVID-19, many companies are face with the difficult possibilities of layoffs and a Reduction in Force (RIF). A common question faced by H-1B employers is, “When does my obligation to pay the offered wages specified in the LCA and H-1B petition end?” The correct answer may come as a surprise to some.
Federal regulations provide that an H-1B employer is relieved of its obligations to pay the offered wages to an H-1B employee once there has been a bona fide termination. In most instances, for there to be a bona fide termination three things must happen : 1) The employer must expressly notify the employee of the termination; 2) The employer must notify the USCIS of the termination by submitting a withdrawal letter; and 3) the employer make an offer to pay the H-1B worker for the reasonable costs of return transportation home. Without completing all three steps, an employer can be found to continue to be obligated to pay the offered wages to the H-1B employee, in addition to potential civil penalties for non-compliance.
The third step is one that is often mired in confusion. How does the employer make such an offer? What are considered “reasonable costs”? Does an employer have to pay for an H-1B employee’s family members as well?
The easiest way to accomplish making the offer of paying for return transportation costs is to include this offer within the termination letter or separation agreement with the employee. In this way, steps 1 and 3 are accomplished together, and there is clear documentation of both steps. As to what is considered “reasonable costs”, these typically include the cost of an economy class ticket to the employee’s last foreign address and does not include the transportation costs for any of the employee’s family members. It is also important to note that an employer need only to offer to pay these costs to comply with the requirements of a bona fide termination, regardless of whether the employee utilizes said offer.
The exception to the above-mentioned process is when an employee’s employment ends voluntarily by the employee, such as in the case of a resignation. In the case of a resignation, the employer still needs to document the termination of the employee-employer relationship, typically by issuing a letter to the employee acknowledging and accepting their resignation, and by filing a withdrawal with the USCIS, but with a resignation, there is no obligation on the employer to offer to pay the reasonable return transportation costs to the employee.
We recognize that ending an employer-employee relationship can be a difficult process, which is why our firm is here to assist you with the process to ensure strict compliance with all relevant regulations.