With shifts in businesses due to COVID-19, employers are faced with difficult decisions about how to reduce workforce. Foreign national employees who are in the U.S. pursuant to H-1B visas require special consideration. The issues are most common thus far include: change to work-from-home, reduction in hours, furlough, and termination.
Work from Home
With shifts in businesses due to COVID-19, employers are faced with difficult decisions about how to reduce their workforce. Foreign national employees who are in the U.S. pursuant to H-1B visas require special consideration. The most common issues thus far include changes resulting from work-from-home, reduction in hours, furlough, and termination.
Work from Home
As noted in our blog dated March 19, 2020, if an H-1B employee is required to work from home, a determination must first be made whether the new work location is within the same metropolitan statistical area (MSA), or normal commuting distance, as the employer’s location. If it is, then the only requirement is that the Labor Condition Application (LCA) which was certified prior to filing the H-1B, and posted at the place of employment, must also be posted in the employee’s "home office" for ten days and then stored in the employer’s Public Access File. If the home location is not within the same MSA or within normal commuting distance, then an amended H-1B petition must be filed. Note that there is an exception allowing an H-1B worker to work outside of the MSA for up to 30 workdays per year without having to file an amended petition.
Reduction in Hours
When there is a material change to the terms of employment of an H-1B worker (such as a change in the MSA as described above), then an amended H-1B petition must be filed. A reduction in hours is generally considered a material change. While there can be some flexibility when an H-1B petition for a part-time hourly worker is filed based on a range of hours (part-time is under 35 hours for an H-1B), there are some complex rules that must be followed. But where a full time employee is changed to part-time, and amended petition is always necessary.
A furlough is a temporary leave or layoff due to special needs or conditions of the company, in this case COVID-19. Furloughed employees typically return to work once the furlough ends and are usually not paid during the furlough period. Currently, an H-1B employee who is furloughed may violate his or her status, because the Regulations require that such an employee be paid. 20 CFR 655.731(c)(7)(i) states that "if the H-1B nonimmigrant is not performing work and is in a nonproductive status due to a decision by the employer (e.g., because of lack of assigned work), lack of a permit or license,” the employer is required to pay the salaried employee.
However, in accordance with 20 CFR 655.731(c)(7)(ii), an employer need not pay wages if "an H-1B nonimmigrant experiences a period of nonproductive status due to conditions unrelated to employment which take the nonimmigrant away from his/her duties at his/her voluntary request and convenience (e.g., touring the U.S., caring for ill relative) or render the nonimmigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant) …" Note that this is applicable if such period is not subject to payment under the employer's benefit plan or other statutes such as the FMLA or ADA.
This section has traditionally been relied upon when an H-1B employee takes an unpaid leave of absence at his or her request which is approved prior to the start of leave, and which is properly documented. Under this same section, arguably an H-1B worker who is furloughed, but continues to be paid, would maintain status as long as the other conditions in the Regulation are adhered to.
Although this is unchartered territory, it could also be argued that under the language in 20 CFR 655.731(c)(7)(ii) specifying when wages need not be paid, that the language "period of nonproductive status due to conditions unrelated to employment … that render the nonimmigrant unable to work” could mean a stay-at-home order by a local, state or federal government. If so, then a furlough for this reason may create a circumstance where wages need not be paid.
Unfortunately, USCIS, DOL, and other agencies have not yet provided any guidance at this time to address the unique situation caused by COVID-19.
Regardless of how an employer chooses to handle a potential furlough, it is important to maintain documentation evidencing the reasons for the furlough. It is also important for employers to consider whether the furlough without pay of an H-1B employee may lead to a claim for unpaid wages under the requirements of the Labor Condition Application.
If an employer terminates an H-1B employee, that employee will then cease to maintain his or her status. In this situation, the employer is obligated to notify USCIS of the termination, and to offer the employee the reasonable cost of transportation to their home country. Under a new rule published in 2017, allows terminated H-1B workers a 60 day grace period to remain in the U.S. and find new employment after termination. If the employer chooses to rehire the worker, then a new H-1B petition would have to be filed.