Terminating an H-1B: Employer Obligations and Considerations

If an employer chooses to terminate an employee who is authorized to work by H-1B, the employer faces certain obligations.

1. Notify the Employee: An employer who seeks to terminate an H-1B holding employee should first notify the employee in writing of the termination of their employment. While there is no requirement to give an employee early warning, employers should consider giving as much notice as possible of a termination. When an H-1B holding employee is terminated, their status is also terminated. That person is no longer authorized to work or even remain in the United States. As of January 2017, there is a grace period of 60 days (or the expiration of a current I-94, whichever is sooner). Giving an employee advance warning of a potential termination would give them more time to seek a new sponsoring employer.
2. Notify USCIS: Termination of an H-1B employee qualifies as a “material change in the terms and conditions of employment” which is requires immediate USCIS notification. The employer must send a letter with information about the termination to the service center that originally approved the H-1B petition, providing the date of termination and a request to revoke the H-1B petition. When USCIS receives the letter, they will revoke the petition. Employers should notify the terminated employee of the revocation letter to allow the worker to either leave the U.S. or find an alternative visa category. The employer should also withdraw the Labor Condition Application with the U.S. Department of Labor. Note that while there are no employer sanctions for failing to notify, an employer must show that the employee was terminated to avoid repercussions for “benching” (discussed below) and potentially owing back wages to the employee.
3. Provide cost of return home: When an employer terminates an H-1B worker prior to the end of their authorized period of stay, the employer must provide the terminated employee with “reasonable costs” of returning to their home country. Note that this requirement applies to the employee only, not family members or household belongings.
4. Retain records: Employers should always retain records of compliance with requirements of notification and providing reasonable costs of returning to the employee’s home country.
5. Avoid “Benching:” The Department of Labor prohibits employers from withholding pay while an employee is temporarily not working, due to employment conditions such as studying for a required exam or a lack of available work on the part of the employer. This concept is known as “benching.” If the reason for nonproductive time is not related to the terms of the employment – for example, vacation or sick time requested by the employee – payment is not required. Once an employee is terminated, payment is not required. The easiest way to show termination is to notify USCIS of the termination, which will in turn result in a revoked petition, and provide reasonable cost to return home to the employee.

If you have any questions about terminating an H-1B holding employee, or your rights as a terminated employee, please contact one of our experienced employment immigration attorneys.