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The Department of Labor Administrative Review Board Holds Employer Liable for H-1B Back Wages

January 16, 2009

In a recent decision published by the Department of Labor Administrative Review Board, the Board found an employer liable for back wages to a former H-1B employee. Administrator, Wage & Hour Div. v. Help Foundation of Omaha, Inc. et al. (ARB, 12/31/08).  This decision highlights the importance of employers adhering to the attestations made in the LCA and the notification requirements should termination of the H-1B employment occur.

Under the Immigration and Nationality Act’s (INA) ‘no benching’ provisions, an employer is required to pay the wages as attested to on the Labor Condition Application (LCA) even if the H-1B employee is in nonproductive status due to a decision of the employer.  Approval of an LCA is a necessary step in the lawful hiring of an H-1B nonimmigrant; LCA attestations include rate of wage, classification of occupation, etc.  The employer is not required to continue to pay an H-1B employee if there has been a bona fide termination of the employment relationship. To effectuate a bona fide termination, the employer must notify both the employee and the USCIS of the termination of the employment relationship and provide the employee with transportation costs home.  Additionally, the employer must notify the Department of Labor of its withdrawal of the LCA.

In this case, the employer made several critical mistakes. First, the employer failed to pay the required wage as attested to on the LCA. Second, the employer did not inform the Department of Labor of its termination of the H-1B employment until six months after the actual date of the H-1B termination. Finally, the employer failed to notify the Department of Homeland Security of the H-1B termination and, where appropriate, failed to provide the H-1B employee with payment for transportation home.

In its decision, the Department of Labor Administrative Review Board affirmed that no bona fide termination of an employment relationship was made where the employer failed to properly notify the Department of Homeland Security (DHS) of the termination of the H-1B employment as required. It also noted that periods of unproductiveness not due to unwillingness or unavailability of the employee to work must be compensated for. Accordingly, the Board found that the employer was liable for back wages and interest.

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