Impact of Remote Work, Furloughs, Pay Cuts & Terminations on H-1B, E-3 and H-1B1 Employment

Employers have had to adjust rapidly to the ongoing COVID-19 outbreak. Some have closed their doors completely, others are asking employees to work from home, and unfortunately many have had to furlough and terminate employees. These changes have a unique impact on foreign national employees, particularly those working in H-1B, E-3 and H-1B1 status.

If an H-1B, E-3 or H-1B1 employee starts to work from home, what does the LCA and employer Public Access File require in regards to notice?

Under DOL regulations, employers with an approved labor condition application (LCA) may move workers to unintended worksite locations, including to the worker’s home, without needing to file a new LCA, provided that the new worksite location is within the same area of intended employment (i.e. same Metropolitan Statistical area (MSA) or within normal commuting distance) and there are no other material changes to the terms and conditions of the employment. When this occurs, the employer must provide electronic or hard-copy notice at the new worksite for ten calendar days, unless direct notice is provided. Direct notice can include a copy of the certified LCA and can be sent via email or regular mail.

The notice will be considered timely when placed as soon as practical and no later than 30 calendar days after the worker begins work at the new worksite locations. The Employer will need to update the LCA Public Access File with a copy of the email or proof of mailing of the notice.

If the employee’s new work location is outside the area of intended employment, a new LCA, coupled with an amended H-1B petition, may be required.

Example: Employee will work from a new work location that is within the same Metropolitan Statistical Area (MSA) or within normal commuting distance:

• – Repost the LCA notice at new work location (including the employee’s home) either electronically (i.e. e-mail) or as hard-copy (for 10 continuous days).
• – Update the Public Access File to reflect compliance.

Example: Employee will work from a new work location that is NOT within the same MSA or within normal commuting distance:

• – Must usually file a new LCA listing the new location and then file an H-1B amendment with USCIS.
• – A new LCA notice will need to be posted either electronically (i.e. e-mail) or as hard-copy (for 10 continuous days).

Does an employer need to continue to pay the required wage set forth in the LCA if there is a change to employee’s employment status (furlough, layoff, reduced hours, etc.)

DOL regulations require payment of the required wage irrespective of non-productive work status, with limited exceptions. Non-productive status is defined as any time during the validity of the LCA and H-1B petition where an employee is unable to work. When an employee is in a non-productive status due to a decision of the employer (e.g. due to a lack of work), the employer continues to be obligated to pay the required wage.

 Can an employer furlough an H-1B, E-3 or H-1B1 employee and stop paying the required wage if the employee is not able to work from home during a COVID-19 pandemic initiated shelter-in-place order?

No, this is not permissible given that the conditions are not created by the employee. In this situation, an employer must continue to offer the required wage. Otherwise, an employer could be exposed to liability, such as fines, back wage obligations, and in serious cases, debarment from the DOL’s temporary (LCA) and permanent (PERM) immigration programs.

Is an employer required to pay the required wage if the employee is afflicted with COVID-19, consequently unable to work and is placed into isolation and quarantine during treatment?

The regulations do not require an employer to pay the required wage if an employee is not able to work due to a reason which is not directly work-related and required by the employer. That said, if an employer has policies in place where a COVID-19 positive employee would have to remain in quarantine, there is an argument to be made that the employer must continue to pay the employee, given that the quarantine rule is created and imposed by the employer. An employer should also be aware that it could be subject to required payment under the employer’s benefit plan or other statutes, such as the Family and Medical Leave Act, the Americans with Disabilities Act, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

What steps does an employer have to take if it wants to convert an H-1B, E-3 or H-1B1 employee from full-time to part-time status?

An employer seeking to convert a full-time H-1B, E-3 or H-1B1 employee to part-time status must file a new LCA with the DOL and an amendment with the USCIS to reflect this change.

 What steps does the employer have to take to terminate its obligation to pay the required wage?

Payment of the required wage obligation need not be made if there has been a bona fide termination of the employment relationship. A bona fide termination occurs only when (a) the employer notifies the USCIS of the termination and withdraws the H-1B, E-3 or H-1B1 petition, (b) the employer notifies the employee of the termination, and (c) the employer provides the employee with payment for transportation home under certain circumstances.

If you anticipate having to make any changes to your sponsored nonimmigrant employees, please contact your attorney at Minsky, McCormick & Hallagan, P.C. to ensure compliance with immigration laws.