Handling Issues Arising from Terminating H-1B Employees *

Following up on our discussion last week on responding to immigration-related audits here, this week’s Tuesday Topic addresses how employers should address H-1B employee terminations.  The H-1B program allows U.S. employers to hire foreign workers on a temporary basis in jobs that require specialized knowledge and at least a bachelor’s degree, or equivalent, in a related specialty.  The intent of the program is to help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce by authorizing the temporary employment of qualified individuals who are not otherwise authorized to work in the United States. 

While the H-1B program has many rules and requirements, there are several important legal issues relating to the termination of H-1B employees in the United States. Employers should be aware of what obligations they have with respect to any H-1B employees that they employ and terminate.  For example, if any H-1B worker is laid off before the end of the employee's authorized period of stay, the employer must provide reasonable costs for the employee to return to his or her last country of residence. The law requires the employer to provide only the employee with reasonable transportation costs, such as an airline ticket, and not the transportation costs of the employee's associated family members. Also, the requirement to provide reasonable transportation costs is usually waived if the H-1B employee chooses and is authorized to remain in the United States.

With respect to fulfilling its obligation to pay the return travel costs, the employer has several options. Initially, the employer can provide a financial amount equal to the reasonable return costs and a written release from the terminated H-1B employee. Alternatively, the employer can provide the H-1B employee with a return plane ticket from the employer's travel agent within a reasonable time after the employee's termination. Either way, it is important for the employer to document its actions and compliance with these obligations. In the event the employee chooses to remain in the United States, we recommend that the employer obtain a written waiver stating that the employee rejected an offer to pay the reasonable cost of return transportation.

The current law also provides that each H-1B employer should notify the USCIS immediately of "any material changes in the terms and conditions of employment" regarding an H-1B employee. Therefore, immediately upon the decision to terminate an H-1B employee, the employer should send a letter to the same USCIS Service Center that approved the H-1B petition, notifying the Center of the termination of the employee. The employer should also withdraw the Labor Condition Application (LCA), filed with The U.S. Department of Labor (USDOL), corresponding to the employee’s H-1B.  Also, it is suggested that the employer send written notice of termination to the H-1B employee so that the H-1B employee can consider making alternative arrangements to maintain legal work visa status in the United States. The employer may consider informing the employee in its termination letter that it is obligated to inform the USCIS and that, therefore, eventual revocation of the H-1B petition will occur.

The USDOL has also published regulations that require employers to pay an H-1B employee until termination. What this means is that, if the employee is temporarily not working due to the employer's request or lack of work, the employer must continue to pay the H-1B employee his or her regular wages until the actual termination of employment. The withdrawal of the LCA signals to USDOL that the employee is no longer employed with the company.

In conclusion, it is important for H-1B employers to be aware of the obligations and responsibilities that arise once an H-1B employee is terminated. The key is to maintain clear written records when fulfilling these obligations and to contact your legal counsel to ensure that the company's actions are consistent with existing immigration laws and regulations (which, in today's legal environment, are frequently changing).

As an aside, and as you can imagine, the current Administration is looking closely at this program, especially as it relates to the propensity to discriminate against U.S. citizens over those individuals in other nations.  On this topic, next week, on Wednesday, April 16th, I am moderating a panel discussion on immigration issues facing employers under the current Administration.  If interested in attending this free webinar, you can register by clicking here.    

Next week, we will conclude our discussion on immigration issues by discussing some new directives being issued by the current Administration and such directives are impacting employers.   

* This is one of a series of weekly articles containing helpful tips and “best practices” for employers to keep in mind when managing their workforce.  These articles are partially adapted from my book, Employment Law Toolkit for Employers.  If you would like a copy of my book, please reach out to me at 312-876-6676 or jason.tremblay@saul.com. Nothing contained in this article shall be construed as legal advice and this article does not create an attorney-client relationship between Saul Ewing LLP and any reader.