Q&A on Compliance Regarding Non-Immigrant Workers During COVID-19
The COVID-19 pandemic is forcing employers to make changes to the terms and working conditions of their workforce. Some employers have had to terminate or furlough employees due to business closure or slowdown. Others have had to move employees to new worksites to provide needed coverage or because the employee’s primary worksite is no longer operational. And large swaths of the American workforce have been asked or are being required to work from home to prevent the further spread of the disease, including foreign nationals in H-1B, H-1B1, E-3, TN, L-1, O-1 and E-2 nonimmigrant visa categories.
The H-1B, E-3 and H-1B1 categories present particularly unique challenges and require special consideration in this environment considering the required wage and compliance components associated with these visa types. And, despite the unprecedented nature of COVID-19, the rules surrounding compliance remain, to date, largely unchanged.
Below are some Q&As to assist in navigating through changes in business practices during this challenging time. Employers and employees should consult with counsel regarding case-specific options and to understand the latest developments on COVID-19’s impact on foreign nationals working in non-immigrant visa categories.
What do I need to do if I must permanently terminate a nonimmigrant employee?
In general, if you terminate employment of someone in nonimmigrant status, both the United States Citizenship and Immigration Services (USCIS) and Department of Labor (DOL) expect that an employer will also withdraw that individual’s nonimmigrant visa petition (if applicable) and the Labor Condition Application (LCA) (applicable to H-1B, E-3, and H-1B1 statuses) supporting the individual’s status. For certain visa categories, such as the H-1B, an employer must also offer to pay return transportation costs for foreign national employees back to their last countries of residence.
The withdrawal of the visa petition and accompanying LCA effectively terminates the foreign worker’s nonimmigrant status and authorization to work for the employer sponsor. If workers in E-3, H-1B, H-1B1, L-1, O-1, TN or E-2 status are terminated, they have up to 60 days or the time remaining on their current I-94 document (whichever is shorter) to file a new nonimmigrant visa petition based on sponsorship through another employer, change their status to another nonimmigrant status, or depart the United States.
What if we are considering placing someone in nonimmigrant status on furlough (i.e. an unpaid leave of absence during which the employee remains on payroll, but is not being paid because no work is being performed)?
To date and because the law in this area has not changed, unpaid leave for foreign workers in certain non-immigrant status could be problematic in that it is tantamount to benching, which is prohibited under the regulations for H-1B, E-3 and H-1B1 status. Under current law and absent additional guidance from the DOL, the only time these workers can go unpaid is if they voluntarily request an unpaid leave. See rule below:
20 CFR 655.731(7):
(ii) Circumstances where wages need not be paid. 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 ill relative) or render the nonimmigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the nonimmigrant), then the employer shall not be obligated to pay the required wage rate during that period, provided that such period is not subject to payment under the employer’s benefit plan or other statutes such as the Family and Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
A furlough is likely not problematic for individuals in L-1, O-1 and TN status, since there is no underlying LCA requiring certain wages and hours of employment. While these nonimmigrant statuses are also tied to employment, employees would likely have a defensible claim to maintenance of status while on furlough as long as the employer treats them as active with a valid employer-employee relationship.
If the employee is unable to work due to COVID-19, through no fault of the employer or the employee, is an employer still required to pay the required wage (i.e. the wage listed in the individual’s labor condition application)?
To date we have not received guidance from the DOL that suggests COVID-19 creates an exception to the rule that H-1B, E-3 and H-1B1 workers must be paid in accordance with the terms and conditions of their labor condition applications and nonimmigrant visa petitions, including for those employers in locations where there is a mandatory shelter in place order.
Similarly, no DOL guidance has emerged as to how L-1, O-1, TN and E-2 nonimmigrant workers will be treated in similar situations. That said, employers have somewhat more flexibility in dealing with individuals in L-1, O-1, TN and E-2 status because these positions are not subject to an LCA. If an employer can pay the annual wage, minor variations in the timing and frequency of those payments may be acceptable from an immigration perspective. Please note that any changes to working conditions and payments may also raise employment issues, and an employer should reach out to legal counsel to discuss the employment ramifications.
I currently employ F-1 students who are authorized to work under OPT or STEM OPT. Will their lawful status be impacted if I place them on furlough or terminate them?
F-1 students in OPT status may accrue no more than 90 days of unemployment (whereas F-1 STEM OPT students may accrue no more than a total of 150 days of unemployment) during their total OPT period. F-1 students who exceed the permitted days of unemployment will violate their status. SEVP Policy Guidance allows international students employed on the one-year, post-completion version of OPT to consider employment that is not paid. Unpaid work is permissible for students employed on the one-year OPT if it does not violate any labor laws and is at least 20 hours per week. Please note that STEM OPT students cannot have periods of employment where they are not paid.
Employers must work with the student employee to report material changes or deviations from the STEM OPT student’s formal training plan to the student’s Designated School Officials (DSOs). These include any reduction in student compensation that is not tied to a reduction in hours worked and any significant decrease in hours per week that a student engages in a STEM training opportunity. In the event of termination of employment, employers must report the termination to the appropriate DSO no later than five business days after the student’s employment terminates, or the student has departed.
What happens to the status of nonimmigrant employees if they are placed on furlough?
Under present law, to maintain status nonimmigrant employees must provide services to the sponsor employer pursuant to the terms and conditions (and required wages) listed in their nonimmigrant visa petitions or applications. If not reported to USCIS through an amended petition, a reduction in hours or pay, material changes to the duties the person is performing, or non-performance of duties, and certain changes to the location of employment (see below), may cause USCIS to find that the foreign national is not maintaining status, effective on the date those changes took place.
If your workplace is considering a furlough, it is recommended you consult with counsel beforehand to understand your options and the impacts on your foreign and U.S. workers.
What are the Labor Condition Application Posting and Notice Requirements for H-1B, E-3 and H-1B1 workers and have there been any changes to the rules after COVID-19?
Prior to the filing of a nonimmigrant visa petition for these workers, the employer is required to obtain a certified Labor Condition Application (LCA) from the Department of Labor. Before filing the LCA and before employees start work at the place of employment, the DOL requires employers to notify employees of the H-1B, E-3 or H-1B1 employment by posting a notice of filing of at each of the foreign employee’s worksites for 10 consecutive days. The posting requirement has not changed with COVID-19; however, hard copy posting at the physical site or electronic posting is acceptable. Please contact our office for more information about these options.
Because individuals in L-1, O-1, TN and E-2 status are not subject to an LCA, these considerations do not apply to employees in these statuses.
What happens if my employee needs to work from a location not listed on their LCA such as a home office? What if they have already started working at this new worksite?
Nonimmigrant employees subject to an LCA who move to a new worksite in the same area of intended employment are not required to obtain new ones; however, the existing LCA must be posted at the new worksite.
Under 20 CFR § 655.715, “Area of intended employment means the area within normal commuting distance of the place (address) of employment where the H-1B nonimmigrant is or will be employed. There is no rigid measure of distance which constitutes a normal commuting distance or normal commuting area, because there may be widely varying factual circumstances among different areas (e.g., normal commuting distances might be 20, 30, or 50 miles). If the place of employment is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment; however, all locations within a Consolidated Metropolitan Statistical Area (CMSA) will not automatically be deemed to be within normal commuting distance. The borders of MSAs and PMSAs are not controlling with regard to the identification of the normal commuting area; a location outside of an MSA or PMSA (or a CMSA) may be within normal commuting distance of a location that is inside (e.g., near the border of) the MSA or PMSA (or CMSA).”
To date, the requirement to post the existing LCA at a new worksite within the same area of intended employment as that listed on the LCA extends to individuals working from home, unless the work from home arrangement lasts for a period of time shorter than 30 days and the individual is in H-1B status (See below regarding short term placement). To post at an employee’s home, the employer would typically want to forward the employee’s existing, valid LCA to the employee via email along with instructions to post for the required 10-day period. Please contact our office with questions regarding how to effectuate such postings.
In general, employers are required to post existing LCAs in the new worksite prior to an employee starting work at the new site. Thankfully, the DOL has provided some relief with respect to this rule. In a recent FAQ, the agency indicated:
“Because OFLC acknowledges employers affected by the COVID-19 pandemic may experience various service disruptions, the notice will be considered timely when placed as soon as practical and no later than 30 calendar days after the worker begins work at the new worksite locations.”
Because individuals in L-1, O-1, TN and E-2 status are not subject to an LCA, these considerations do not apply to these employees.
What if the move to a new worksite is only very temporary or if the move takes the employee outside of the area of intended employment listed on the LCA?
Employers who have an approved LCA may also move H-1B workers to new locations that fall outside of the area of intended employment listed on the LCA without the need to post an existing or new LCA under the DOL’s short-term placement provisions.
Under the short-term placement provisions at 20 CFR §655.735, a petitioner may place an H-1B employee at a new worksite for up to 30 days, and in some cases 60 days (where the employee is still based at the “home” worksite), without obtaining a new LCA. In these situations, the petitioner does not need to file an amended or new H-1B provided there are no material changes in the terms and conditions of the H-1B worker’s employment. Please note short-term placement provisions apply only to H-1B workers.
If the H-1B workers, as a result of COVID-19, are working from home or a different site not listed in their H-1B and that site is outside of the area of intended employment, then an amended H-1B petition might be warranted.
Because individuals in L-1, O-1, TN and E-2 status are not subject to an LCA, these considerations do not apply to employees in these statuses.
What if my nonimmigrant employees’ job duties have substantially changed, they are temporarily not providing the services listed in their petition, their hours have been reduced or they have received a pay cut?
In the absence of additional guidance from USCIS, such changes to an H-1B, E-3 or H-1B1 petition are considered material changes and may warrant the filing of an amendment with USCIS. If any of the above situations apply, please seek the advice of counsel as to whether an amended petition is warranted.
Because they are not subject to an LCA, nonimmigrant employees working pursuant to an L-1, TN or O-1 status have greater flexibility in minor changes to their employment and working conditions. From an immigration law perspective, an employer may vary the payment amounts and frequency for these individuals if in the end the they are being paid the amount listed in the relevant immigration forms. Likewise, some reduction in hours and services can be acceptable for individuals in these nonimmigrant statuses.
For E-2 investors and employees specifically, the current regulations and USCIS policy allow for a certain level of flexibility in temporary job changes. The regulations require an amended filing in the event of a “substantial change,” which is defined as a fundamental change in the employer’s basic characteristics such as a merger, acquisition or sale where the applicant is employed. Whereas if the changes in the terms or conditions of the employees’ employment would not affect their eligibility for E classification, an amended petition may not be required. Therefore, temporary hour reduction or pay cuts can be allowable for E-2 investors and employees provided that the employer and the employees otherwise maintain qualifications for E classification.
In addition, it has long been the policy of USCIS that E-2 investors and employees, under certain circumstances, may engage in compensable activities that are incidental to their E-2 status, provided that they are reasonably related to and a necessary outgrowth of the treaty employment. One example provided by the USCIS is that, during an emergency, an E-2 manager may temporarily perform the duties of a subordinate incident to his or her managerial functions. As such, temporary changes to the duties of E-2 employees may be allowed under certain circumstances.
Please seek the advice of counsel as to whether any revisions or amendments to the employment conditions of individuals in L-1, TN, O-1 or E-2 status are acceptable.
I am an H-2 employer, and I cannot meet the three-fourths guarantee due to COVID-19; what are my options?
1. H-2A Temporary Agricultural Workers
Per 20 CFR 655.122(i), in order to qualify for an H-2A, an employer must guarantee that it will offer employment during three-fourths of the employee’s hours. However, as stated in DOL Fact Sheet #78E: Job Hours and the Three-Fourths Guarantee under the H-2B Program, if “services of the worker are no longer required for reasons beyond the control of the employer due to fire, weather, or other Act of God that makes the fulfillment of the contract impossible, the employer may terminate the work contract.” See 20 CFR 655.122(o). For procedures as to what is required when unable to meet the three-fourths guarantee, please contact legal counsel.
2. H-2B Temporary Non-Agricultural Workers
Per 20 CFR 655.20(f), the above provision regarding Acts of God similarly applies. As stated in the DOL Fact Sheet #78E, if the Certifying Officer (CO) makes the determination that an event has occurred that makes it impossible for the employer to fulfill the three-fourths requirement, the employer must do so at least until the date that the contract is terminated due to such event and make efforts to transfer the employee to a comparable workplace. The three-fourths guarantee obligation begins with the first work day after the arrival of the worker at the place of employment or the advertised first date of need, whichever is later, and ends on the termination date indicated in the job order (or its extensions, if any). A work day means the number of hours stated in the job order. Interestingly, the Appropriations Act of 2018 prohibits the enforcement of the three-fourths guarantee. Therefore, H-2B employers are obligated to meet the three-fourths guarantee requirement, but DOL is not allowed to enforce it.
Who will make the determination as to whether an event has occurred that renders the job impossible to complete under the three-fourths guarantee?
The Certifying Officer has discretion to determine whether an employer must complete the three-fourths requirement, or whether there has been an event outside the employer’s control that relieves the employer of that duty. To have an employment contract cancelled, the employer must apply directly to the CO for such a cancellation.