Compliance Risks for Employers of H-1B and H-2B Workers

While much of the national news focuses on the problem of illegal immigration and employment verification/I-9 enforcement, employers that make use of legal employment visa categories face continuing and new risks in attempting to comply with the requirements of these visa programs.

The H-1B classification allows U.S. employers to temporarily employ foreign professionals in a “specialty occupation,” with those positions generally requiring a bachelor’s or higher degree. As part of the H-1B process, employers also attest to providing certain wages and working conditions to H-1B workers in a Labor Condition Application (LCA) attestation. Employers may be subject to back pay penalties and/or civil fines for failure to pay the wage indicated on the LCA or for failing to formally withdraw the H-1B petition following termination of the employment relationship with the H-1B worker. Commentators have indicated that the Department of Labor (DOL) will be increasing audits of LCA records, whether randomly or based upon specific complaints. This is not surprising considering a September 2008 Department of Homeland Security report indicated an overall 20.7% violation rate among users of the H-1B visa program. LCA compliance concerns have been increased due to the economic crisis as well. For example, amending LCA wage attestations may be required due to reductions in pay and employers must also consider the impact of a layoff or furlough on H-1B workers. Employers need to be mindful of such changes and the special implications and requirements affecting H-1B workers.

The H-2B classification allows U.S. employers to sponsor “guest workers” to enter the United States to perform nonagricultural labor to address temporary needs. Industries that commonly use the H-2B category include hospitality, landscaping, forestation, construction and meatpacking (among others).  Employers using the H-2B program must demonstrate the unavailability of U.S. workers and attest to provide a certain wage and working conditions to H-2B guest workers.

Recently, H-2B employers have found themselves to be the subject of Fair Labor Standards Act (FLSA) actions and class actions for failing to pay the required wage level to H-2B workers. For example, in one Georgia case the judge determined that the award available to thousands of guest workers may exceed $500,000, refusing to agree to the employer’s request to limit potential damages. The judge indicated that the costs of passports, visas and other travel costs incurred by H-2B workers to reach the U.S. worksite drove the workers’ pay below the required wage rate, citing the FLSA. These sorts of class action suits have grown in number and scope and have created a risk for employers that use the H-2B program.

Furthermore, the DOL’s Wage and Hour Division has created an H-1B Workers’ Rights Card and H-2B Workers’ Rights Card to help workers identify possible employer violations. Against this background, employers that make use of the H-1B and/or H-2B visa programs must revisit their policies and procedures to ensure compliance with the programs and thereby limit risk. 

Note: This article was published in the January 2009 issue of the Immigration eAuthority.