Terminating an H-1B worker requires the employer to take additional steps beyond the normal termination process. The general rule is that visa sponsorship does not alter the at-will employment relationship, however, the employer does have wage and reporting obligations with sponsoring H-1B’s. What are an employer’s obligations and what issues should they be on the lookout for?
1. Overview Of The Employer’s Obligations
First, employers should offer to pay employees for one-way return airfare to their home country. This is a U.S. Department of Labor (“DOL”) requirement. If the employee declines the offer, the employer is relieved of this obligation.
Second, after termination, employers must withdraw the Labor Condition Application (“LCA”) that was filed with the DOL and notify U.S. Citizenship & Immigration Services (“USCIS”) to withdraw the H-1B petition. Until the petition is withdrawn from the USCIS, the DOL does not consider a bona fide termination to have taken place.
In an H-1B layoff, there should be a clear termination date. The offered wage must be paid up until the termination date. Furthermore, the DOL considers there to be a continuing wage liability until the USCIS is notified to withdraw the petition, thereby creating a “bona fide termination.”
The LCA must be withdrawn on-line from the DOL after the termination date.
2. Return Airfare Obligation
Employers must offer to pay the one-way return airfare to any H-1B worker that is terminated before the petition expiration date. This would be for the reasonable airfare to their home country. There is no obligation to pay for H-4 family members.
An employer should document that it offered the return airfare reimbursement in writing to the foreign national at the time of termination.
The government regulations do not provide any specifics on return airfare. The DOL regulations merely state that the return airfare is a USCIS requirement. The USCIS regulations merely state the general rule and do not provide any additional guidance.
Some employers advise the H-1B worker that if they purchase an airline ticket for a departure within 60 days of termination they will reimburse the former employee at that time.
However, if an employer does not want to worry about any misunderstandings, employers could pay the one-way return airfare at the time of termination to resolve this issue. This is the lowest risk option.
3. Continuing Wage Liability
The DOL takes the unusual position that the employer has continuing wage liability until the LCA and H-1B petition are formally withdrawn, even if the foreign national has been terminated and is off the payroll. Proper steps to effectuate a bona fide termination would include:
1. The employee is notified in writing of the termination so that no allegation of benching can be made.
2. The employer offers the H-1B employee in writing to pay the return airfare back to their home county.
3. The employer notifies the USCIS in writing of the termination including the employee’s name, I-129 receipt number, etc.
4. The LCA is withdrawn with the DOL. The attorney who filed the H-1B can withdraw it, or the company can e-mail and notify the DOL directly.
5. Maintain the Public Access Folder (“PAF”) for one year beyond termination, and notate in the Public Access Folder that the individual left the company on x date.
4. Severance Paid After Termination With Extended Paystubs
Some employers want to help the foreign national with severance paid out over one to two months after termination, with the severance being less than the offered wage on the LCA. Unfortunately there is still some risk to the employer, albeit low.
Grace Period: If the individual finds a new employer to sponsor them for an H-1B and they file a new I-129 H-1B Petition within 60 days of termination, the USCIS will likely issue them a new I-94 as long as they have 60 days or more left on their current H-1B validity/I-94. If not, they will make the individual leave the U.S. and re-enter with a new visa stamp. Since they already have an H-1B, they are not subject to the quota, assuming they have time left on the 6-year H-1B clock.
Extended Paystubs and Garden Leave: In some cases, as a courtesy, an employer will provide severance through several extended paystubs to allow the individual more time to find a new H-1B employer and not have to return home to pick up a new visa. With a more recent paystub, they can show the USCIS that their termination was within 60 days of filing their new I-129 H-1B filing. But severance should be for time after termination so that the employee is paid the offered wage on the visa petition up until termination. However, until the USCIS is notified of the withdrawal, the employer can be on the hook by the DOL for full wages.
While the risk of the employee filing a complaint with the DOL is minimal since they want the severance to create extended paystubs over a period of time so they have more time to look for new work, the employer should know that there is still some risk that if the former employee complains to the DOL, the employer could be asked by the DOL to pay full wages up until the point that the USCIS is notified of the withdrawal (also known as the point of Bona fide termination).
I-539 Change of Status to B-2 Visitor: In some cases the USCIS will approve an I-539 change of status application to B-2 visitor for the purpose of winding up one’s affairs etc. It is discretionary by the USCIS and whether to file an I-539 should be reviewed on a case-by-case basis.
Overstay: Under no circumstances should an H-1B who is terminated remain in the U.S. 180 days or more without status as if they subsequently depart the U.S. they would be subject to a 3 year bar from returning to the U.S., and if they were 365 days or more out of status, then they will be subject to a 10 year bar. Staying for 60 days after termination to wind up one’s affairs is reasonable and is within the USCIS recognized grace period. An employer is not responsible if a former employee overstays their authorized stay.
Green Card Sponsorship Issues: If the employer has already sponsored the employee for a green card through PERM labor certification and an I-140 Immigrant Petition has been filed by the company and approved by the USCIS, then the priority date of the labor certification can be used by a future employer with a labor certification.
However, if no I-140 Immigrant Petition was approved, then the employee cannot recapture the old priority date. The priority date is the place in the queue vis-à-vis the government’s annual quotas for green cards. As a courtesy, most employers leave the I-140 alone and do not withdraw it, thereby allowing the individual to obtain new H-1B employment in 3 year increments. If there is a pending 9089 PERM application at the DOL, that cannot be used for a future immigration benefit unless it is certified and an I-140 petition is filed.
AC-21 I-140 Portability: If the employee already has an I-485 green card pending for 180 days or more, he or she can port to another company or be self-employed in a same or similar position.
Compelling Circumstances EAD: The beneficiary of an approved I-140 who is not eligible to file for an immigrant visa based on their priority date not being current may be eligible for an EAD if they are facing compelling circumstances, like losing their job in a lay-off and substantial harm will affect them or their dependents. The USCIS has stated that if a compelling circumstances EAD application is filed during the 60-day grace period after being laid off, the foreign national will not accrue unlawful presence while the application is pending. The EAD would be issued for one year.
5. Conclusion
Terminating an H-1B worker requires the employer to follow certain protocols with the DOL and the USCIS. Counsel should be notified prior to termination to review all checklist items with Human Resources and General Counsel. Other visa categories have post termination requirements as well.
To read more articles like this one, subscribe to the ALERT Newsletter today!
About The Authors
Greg L. Berk is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County office. He leads the Firm’s immigration practice and is a Certified Specialist in Immigration and Nationality Law by the State Bar of California Board of Legal Specialization>. He has over 25 years of experience advising on all aspects of U.S. immigration matters. He assists employers worldwide with the hiring and retention of foreign national executives and highly talented individuals that are needed in their U.S. workforce. He also works with investors on E-2, L-1, and EB-5 matters. He also handles I-9 and other immigration compliance matters.
Greg frequently lectures on immigration issues and is a regular contributor to the California Labor and Employment ALERT Newsletter and Sheppard Mullin’s Labor & Employment Law blog. Mr. Berk received his J.D. from Western State University College of Law, his M.B.A. from George Washington University and his B.A. from California State University.
Christine L. Doyle is Special Counsel in the Labor and Employment Practice Group with Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County office. Christine has experience in a broad range of immigration law, with a focus on employment-based immigrant and nonimmigrant visa petitions. She has numerous years of experience counseling employers and their employees on U.S. immigration, global immigration, and I-9 compliance matters.
Christine is a regular contributor to the California Labor and Employment ALERT Newsletter and Sheppard Mullin’s Labor & Employment Law, French Desk Law, and Latin American Law blogs. She received her J.D. from Pepperdine University and her B.A. from Boston College. She also served as an extern at the Los Angeles Immigration Court and Department of Justice.
