Terminating employment of H-1B workers

By Reuben S. Seguritan

July 06, 2016

Through the years, the H-1B visa program has become a way for American companies to fill their need for highly skilled workers. Through this program, US companies temporarily employ foreign nationals to work in specialty occupations or those requiring a bachelor’s degree or higher.

What happens however if after bringing in an employee into the company, the employer discovers that he is not a good fit or that he/she is not what the company needs? After all the tedious paperwork, does it have any recourse?

Any employer planning to terminate an employee on an H-1B visa status must follow not only the employment contract and applicable state and federal laws but also must adhere to regulations regarding H-1B employees. They must undertake a bona fide termination of the employment relationship, otherwise they could end up paying a considerable amount of money in back wages and other penalties.

The bona fide termination of employment involves a three-step process: (1) notifying an employee that his/her employment has been terminated; (2) notifying USCIS of the termination so that the petition could be revoked; (3) providing the worker with the reasonable cost of return transportation to his or her home country.

In one case involving a Filipino H-1B worker, the US Department of Labor (DOL) said that the employer failed to terminate its employment relationship on a certain date because it continued to market the non-immigrant to its clients. In the said case, the employer never sent an official termination notice to the worker. While it claimed to have written a letter terminating his employment, said letter was not offered in evidence. Moreover, even after the date that the employer claimed to have expressly told the worker that the employment was terminated, the former still continued to arrange for job interviews. Because of this, the first requirement was not fulfilled.

Next, the employer must notify USCIS that the employment relationship has ended. In the said case, it was stated that the applicable date for determining when the employer provided notice to USCIS was not the date the USCIS notified the employer that it had revoked the H-1B petition but the date the employer notified USCIS of its desire to revoke the petition.

Lastly, the employer must pay for the H-1B worker’s return trip home. An offer of return transportation is sufficient to fulfill this process.

It is important for employers to realize that failure to follow these steps could mean that they do not end their obligations of paying wages to their H-1B worker. Under the H-1B regulations, the employer must continue to pay wages unless the employer can prove by a preponderance of evidence that a bona fide termination was undertaken.

If the DOL determines that the employer committed a wage violation, it may also order the employer to pay back wages for the entire term of the LCA supporting the H-1B petition, calculated at the higher of the actual or prevailing wage. The H-1B employee may likewise be entitled to pre- and post-judgment interest on all back wages due.

In the same case, the DOL ordered the employer to pay back wages from February 15, 2010 to October 27, 2010 even if the employer notified the USCIS of the termination of employment in June 2010 and offered a plane ticket home on May 21, 2010. It was only on October 27, 2010 when the employer unequivocally put on notice that he was no longer an employee.