In 1998, the American Competitiveness and Workforce Improvement Act (ACWIA) clarified that the H-1B employer’s obligation to pay LCA wages continued during periods of non-productivity, except in a few instances. More specifically, 8 U.S.C.A. § 1182(n)(2)(C)(vii) provides that an H-1B employer violates the INA if it fails to pay an H-1B employee who is “in nonproductive status due to a decision by the employer (based on factors such as lack of work) . . . .” The Department of Labor (DOL) also subsequently promulgated regulations to implement the continuing wage obligations under ACWIA and to clarify that a bona fide termination can end the H-1B employer’s wage obligations.

20 C.F.R. § 655.731(c)(7)  States that –

Obligation to Pay even in Nonproductive Time:

The employer must pay the required wage rate for all nonproductive time caused by:

  • conditions related to employment
  • lack of work
  • lack of permit
  • studying for licensing exam
  • employer required training

Failure to pay will result in the employee’s being “benched.” Benched time must be compensated.

When is payment not required?

Payment is not required if reasons unrelated to employment exist, such as:

  • Voluntary absence for pleasure
  • Voluntary absence due to illness
  • Absence must be truly voluntary
  • Full-time workers must be paid the full amount of the required wage rate

Part-time workers must be paid for the number of hours indicated on the I-129 and referenced on the LCA.

 Bona fide termination of employment –

20 C.F.R. § 655.731(c)(7)(ii)  States that – The employer’s obligation ceases only after a bona fide termination of employment, as indicated by:

  • Notification to the H-1B worker that employment relationship has been terminated
  • Notification to USCIS that the employment relationship is canceled
  • Payment and/or offer to pay transportation home if required by USCIS regulation

ARB affirmed this rule In Amtel Group of Fla., Inc. v. Yongmahapakorn, ARB No. 04-087, ALJ No. 2004-LCA-006, slip op. at 11 (ARB Sept. 29, 2006).

However ARB in its recent decision of Kuanysh Batyrbekov v. Barclays Capital stated that The Amtel definition of a bona fide termination cannot be strictly applied to cases involving multiple H-1B employers. A bona fide termination of employment can occur and end back wage liability for an employer that proves it (1) expressly notified an H-1B employee that it terminated the H-1B employment, and (2) thereafter, the H-1B employee secured USCIS’s approval for a “change of employer.” The burden of proving the end of back wage liability remains with the employer. To clarify, this does not mean to suggest that an H-1B employer may ignore an obligation it might have to request that USCIS officially cancel an H-1B authorization after the H-1B employer terminated an H-1B’s employee’s employment

Sources –

Amtel Group of Fla., Inc. v. Yongmahapakorn, ARB No. 04-087, ALJ No. 2004-LCA-006, slip op. at 11 (ARB Sept. 29, 2006)

Kuanysh Batyrbekov v. Barclays Capital (Barclays Group US Inc.), ARB Case No. 13-013, Final Decision and Order (ARB, July 16, 2014)