With shifts in business due to COVID-19, employers are faced with difficult decisions about how to reduce the workforce. Foreign national employees who are in the U.S. under H-1B visas require special consideration. The most common issues include change to work-from-home, reduction in hours, furlough, and termination.
Work from Home
If an H-1B employee is required to work from home, a determination must first be made as to whether the new location is within the same metropolitan statistical area (MSA), or normal commuting distance, as the work location. If it is, then the only requirement is that the Labor Condition Application (LCA), which was certified before filing the H-1B and posted at the place of employment, must also be posted in the employee’s "home office" for 10 days and then stored in the employer’s Public Access File. If the home location is not within the same MSA or normal commuting distance, then an amended H-1B petition must be filed. Note that there is an exception that allows an H-1B worker to work outside of the MSA for up to 30 workdays per year without having to file an amended petition.
Reduction in Hours
When there is a material change to the terms of employment of an H-1B worker (such as a change in the MSA as described above), then an amended H-1B petition must be filed. A reduction in hours is generally considered a material change. While there can be some flexibility when an H-1B petition for a part-time hourly worker is filed based on a range of hours (part-time is under 35 hours for an H-1B), there are some complex rules that must be followed. But, where a full-time employee is changed to part-time, an amended petition is always necessary.
A furlough is a temporary leave or layoff due to the special needs or conditions of the company, in this case, COVID-19. Furloughed employees typically return to work once the furlough ends. Furloughed employees are usually not paid during the furlough period. Currently, an H-1B employee who is furloughed may violate his or her status, because the regulations require that such an employee be paid. 20 CFR 655.731(c)(7)(i) states that "if the H-1B nonimmigrant is not performing work and is in nonproductive status due to a decision by the employer (e.g., because of lack of assigned work), lack of a permit or license, the employer is required to pay the salaried employee."
However, per that regulation, an employer does not have to pay wages if "an H-1B nonimmigrant experiences a period of nonproductive status due to conditions unrelated to employment which take the nonimmigrant away from his/her duties at his/her voluntary request and convenience (e.g., touring the U.S., caring for an ill relative) or render the nonimmigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant)." Note that this is applicable if such a period is not subject to payment under the employer's benefit plan or other statutes such as the FMLA or ADA.
This section has traditionally been relied upon when an H-1B employee takes an unpaid leave of absence at his or her request, which is approved before the start of leave, and is properly documented. Under this same section, arguably an H-1B worker who is furloughed but continues to be paid would maintain status as long as the other conditions in the regulation are adhered to.
Although this is unchartered territory, it could also be argued that under 20 CFR 655.731(c)(7)(ii) specifying when wages need not be paid, the language "period of nonproductive status due to conditions unrelated to employment … that renders the nonimmigrant unable to work” could mean a stay-at-home order by a local, state or federal government, and that a furlough, for this reason, may create a circumstance where wages need not be paid.
Unfortunately, U.S. Citizenship and Immigration Services (USCIS), Department of Labor, and other agencies have not yet provided any guidance at this time to address the unique situation caused by COVID-19.
Regardless of how an employer chooses to handle a potential furlough, it is important to maintain documentation evidencing the reasons for the furlough. It is also important for employers to consider whether furlough without pay of an H-1B employee may lead to a claim for unpaid wages under the requirements of the Labor Condition Application.
If an employer terminates an H-1B employee, then that employee will cease to maintain his or her status. In this situation, the employer is obligated to notify USCIS of the termination, and offer the employee the reasonable cost of transportation to their home country. As for the worker, in 2017, a new rule was published allowing H-1B workers a 60 day grace period to remain in the U.S. and find new employment after termination. Note that if the employer chooses to rehire the worker, then a new H-1B petition would have to be filed.
Shiva Karimi is a McLane Middleton director, corporate department, immigration practice group and managing director Boston office. Her practice focuses on business immigration law. She advises employers and employees in developing creative and effective strategies for temporary and permanent immigration solutions.