COVID-19: Duties of Employers with Foreign Workers
By Gerard M. Chapman
Board Certified Immigration Law Specialist
Chapman Law Firm
Updated on April 4, 2020
The COVID-19 outbreak has required employers to make dramatic changes to the workplace to keep everyone safe, and at the same time, to stay in business so that they can continue providing goods and services to customers and clients. Employers of foreign workers face additional challenges, several of which are addressed below. Similar challenges can arise where the employer is going to sponsor a foreign worker in the future, and some of them are addressed here, too.
One assumption that underlies these comments is that most employers are hoping, if not planning, on the current epidemic to be relatively short-lived. Only time will tell if this will be the case.
NOTE: Every client situation is different, and the following comments are not intended to serve as specific advice to clients with different circumstances. In addition, USCIS and/or DOL continues to issue guidance that could change or make some of the following comments inapplicable. Because the current situation is so fluid, employers facing some or all of the issues set out below should make their decisions only after consulting with immigration counsel, and in some instances, with labor or other counsel, too.
A. Employers with H-1B employees already on staff.
1. Allowing or Requiring an existing H-1B worker to work from home
This sort of change raises two potential duties: the duty to file a new Labor Condition Attestation (LCA) with the Department of Labor (DOL), and the duty to file an amended petition with USCIS.
As a starting point, these duties are important ones, and if the employer has the duty to file either a new LCA or a new petition with USCIS, the failure to do so can create significant penalties, and even lead to debarment (being forbidden from filing petitions with USCIS for a period of time). If the employer does not have to file a new or amended petition, it is wise not to do so – under the Trump Administration, USCIS is taking every opportunity to deny H-1B petitions (new or amended). If the employer was fortunate enough to obtain an H-1B approval, then the employer should not give USCIS another opportunity to deny an amended petition. (USCIS has rescinded its prior regulation that stated that a petition involving the same core facts enjoyed a presumption that it should be approved.)
a. When a new LCA is required, based on working in a new location
DOL and USCIS issued new policies in 2015, and the current rule is that a new LCA and a new petition are required if the employee will be working in a “new geographic location”. That term is defined as a location that is not within normal commuting distance of the place of employment stated on the LCA, or is not within the same Metropolitan Statistical Area.
Therefore, if the new location is within the same MSA, or within normal commuting distance of the original place of employment, a new LCA is not required. In other words, where the employee lives within the MSA and normally travels from home each day to work, unless the employee is going to be working from somewhere other than home, no new LCA. Even if the employee will not work from home, if the new location is within the MSA that includes the initial workplace, no new LCA is required.
b. Posting the existing LCA at the employee’s home office
Even if a new LCA does not have to be filed, the employer may need to post the existing LCA at the employee’s home office. On March 17, 2020, DOL issued guidance on this question, and confirmed that, even if a new LCA does not have to be filed and posted, the better practice is to post the existing LCA at the home work office of the H-1B employee for ten (10) consecutive business days, and then place it in the Public Access File when it is taken down.
The posting at the employee’s home may be effective if there is only one employee. However, where there are multiple employees, that posting will not give the other employees sufficient notice. On March 20, DOL issued further guidance, which confirms that the employer can satisfy its posting duty by posting it electronically. If the employer choses to post in that way, it can do so by any means that it ordinarily uses to communicate with its employees about job vacancies or promotion opportunities (e.g., website, electronic newsletter, intranet, or email). In addition, if the employer uses direct notice such as by email, it only has to send the notice once, and does not need to follow the 10 day rule for posting the hard copy.
c. When can the employee begin work at the new location?
The normal requirement is that the LCA has to be posted and employers notified before the employee can begin work at the new location. In its March 20 notice, DOL announced a relaxed rule: it will consider the notice timely if it is posted as soon as practical and no later than 30 days after the worker begins work at the new location(s).
d. When to file a new petition
If a new LCA is not required, neither is an amended H-1B petition, but if a new LCA must be filed with DOL, the employer must file a new or amended petition with USCIS.
e. What if the employee lives outside the MSA and the home is outside of normal commuting distance?
In this situation, the employer still may be able to avoid filing a new LCA and new Petition. In its recent guidance, DOL confirmed that two rules can apply:
The first rule deals with the “Short Term Placement” option. This rule allows an employer to place H-1B workers at a worksite not listed on the approved LCA for up to 30 total workdays each year. Workdays are days actually worked, and do not include weekends and holidays. Also, the 30 day limit is an aggregate sum for the calendar year. If the employer uses this option, keep in mind that the employer also must pay for the actual cost of lodging (for both workdays and non-workdays), and the employer must pay the actual cost of travel, meals and incidental or miscellaneous expenses (for both workdays and non-workdays), incurred by the employee.
The second rule deals with placements of more than 30 days: here the employer must file both a new LCA to cover the employee’s residence and all other LCA requirements, and also an amended Petition.
2. Changes in Terms and Conditions
a. Reductions in wages
Many if not most employers are going to have to consider reducing the salaries of workers across the board, and that may include some H-1B workers. In implementing such decisions, employers much keep several critical points in mind:
First, such reductions must not discriminate against, or in favor of, H-1B workers.
Second, the employer has the duty to pay the H-1B worker the higher of the prevailing wage or the actual wage (the average wage paid to other workers with the employer, holding the same position and having the same qualifications).
Third, if the employer abides by those two rules, the employer can reduce an employee’s salary (and not trigger the duty to file a new LCA or a new petition), as long as the reduction does not constitute a material change in the terms of employment. USCIS has taken the position that a material change in wages is one that is large enough to indicate a significant change in the employee’s responsibilities or duties. There are no specific examples of what this means in a given situation; employers who have to reduce wages and want to avoid filing an amended LCA or an amended petition must be able to show that the employee’s responsibilities and duties have remained largely untouched, despite the reduction in wages.
If the employer needs to make a reduction that is only temporary, the reduction still may drop the employee under the prevailing wage level for the year. In that case, the employer would need to do one of two things to bring the H-1B employee back to the prevailing wage level: it could make a one-time payment to the H-1B employee at some point during the salary year; or, it could make slightly higher monthly payments to that H-1B employee during the reduction period. The employer also must keep in mind that, if it makes up part of the reduction for the H-1B employee, it must similarly compensate all other employees who suffered a salary reduction. Otherwise, the other employees could raise a claim for discrimination.
b. Reductions in hours (what if the employee goes from full time to part time?)
Another consideration includes whether to reduce the salary and keep the hours the same, or to reduce the hours and pay the employee at the same rate. For instance, if the employer reduces the worker’s hours from 40 to 35 hours per week, that change arguably keeps the worker in a full-time position (for green card cases, DOL considers a full time position to be at least 35 hours per week). In addition, if the reduction from 40 to 35 hours is purely due to COVID-19 changes, and the employer can show that the reduction was not caused by a significant change in the employee’s duties and responsibilities, the employer would not have a duty to file a new LCA or a new petition.
However, if the reduction means the employee has gone from full time to part time (even if there is no change in the effective hourly wage), this sort of change would require the employer to file a new LCA with DOL, and an amended H-1B petition with USCIS.
The employee can begin working reduced hours as soon as the petition is filed with USCIS.
c. Documenting the changes in DOL and Public Access files
Whether or not a new LCA has to be filed, the employer must document changes in salary and work locations in the DOL and Public Access files. AILA raised the issue (regarding across the board salary reductions that still left the H-1B employee earning more than the Prevailing Wage) in a 2003 liaison meeting with USCIS, and asked if an amended LCA or an amended petition would be required. The response from USCIS is set out below:
“The DOL is sensitive to the fact that wages can and sometimes do go up and down based on economic conditions. In the circumstance described in your question, there would be no need for a new LCA or a new I-129 petition provided that the employer was still paying the “required wage” [meaning the higher of the applicable prevailing wage or actual wage]. Any change in the beneficiary’s wage rate must be disclosed in the next H-1B petition filing with [USCIS]. It is important that any wage change be documented in the employer’s LCA public disclosure file and disclosed to the [USCIS] in the next H-1B filing.”
3. Furloughs, Layoffs and Termination
a. How to keep the employee in status
In the current crisis, some companies will be required by state or federal mandate to suspend all operations. In some industries and professions, the employees may not be able to work from home (e.g., dentists, dental hygienists, etc). However, if an employee is terminated or laid off, and then rehired when the current situation has stabilized, the employer clearly must file a new LCA and a new petition. In addition, if the new petition is not filed within the 60 day grace period that the regulations currently provide (for the terminated employee to find an employer who will file a petition for him or her), then the employee is out of status and will have to consular process for a new visa before returning and commencing work again.
There is a logical argument that a state or federally mandated shutdown is more in line with a furlough. A furlough is a mandatory leave of absence for all employees (or class of employees), with an intention by the employer to have the employees return to work as soon as possible. In an analogous situation, an H-1B employee who requests a leave of absence that is approved in advance, continues to maintain status. For instance, if the H-1B employee wants to leave for 90 days to take care of a sick relative, and the employer approves the request, that employee remains in status.
In addition, an H-1B worker on an approved leave of absence is not required to look for alternate employment, because the employment has not been terminated, and the 60 grace period has not been triggered.
For these reasons, the employer should furlough the H-1B employee if at all possible.
b. Duty to pay wages suspended during furlough
i. Furlough caused by state or federal mandate
At the present time, DOL has not issued direct guidance on this question in the current context. However, the regulations confirm that an employer does not have to pay the H-1B employee wages during an approved leave of absence. The regulation states as follows:
If an H-1B nonimmigrant experiences a period of nonproductive status due to conditions unrelated to employment which . . . 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 . . . .
20 CFR 655.731(c)(7)(ii) (emphasis supplied).
The first question is whether the current closings mandated by the states are “due to conditions unrelated to employment”, and it appears that they are. The current suspension of office operations in many states is the direct result of the COVID-19 outbreak and the resulting state closure mandates. That still leaves unanswered the ultimate question: must the employer pay the H-1B wages during the furlough?
Some argue that it does not exempt the employer from paying the employee the wages stated on the LCA, because the employee did not cause the conditions that led to the furlough or approved leave of absence. That argument misses the point: the regulation specifically uses an example of a condition that the employee does not cause: being in an auto accident that incapacitates the employee. In that example, DOL confirms that the employer has no duty to pay during the time the employee is out. The logic of that example applies here, too. If the employer has to furlough workers due to a state or federal mandate, that mandate is not the employee’s doing, but it is just the same as an accident that incapacitates the employee. In each instance, the employee experience an event outside of his or her control (and outside the employer’s control) that prevents the employee from being available to work.
In our example regarding dentists, the COVID-19 outbreak is not something that is related to normal employment, it clearly renders the dentist unable to work, and neither the employer nor the employee had any control over the work suspension. As a result, the rule allowing the employer to suspend pay should apply.
ii. Furlough caused by reduced demand for employer’s goods or services
By contrast, where customers have reduced their demand for a company’s products, and the employer has to reduce the work force due to lack of work, the duty to pay wages to a furloughed H-1B worker still applies. In some cases, the employer will be able to pay those H-1B wages through a Payroll Protection Program (PPP) loan. If that loan does not cover all of those wages, but the employee receives unemployment benefits, the shortfall may be minor, if at all.
c. Documenting the employer’s decision; equal implementation required
There are strong, competing policies that DOL will have to consider before it issues guidance, and it is too early to know what DOL will decide. While waiting for that guidance, employers should document their decisions on whether to pay furloughed employees, so it is clear that the employer had no choice but to furlough the employee. And, if an employer decides not to pay wages to furloughed employees, it must treat all similarly situated employees the same way.
d. Contrary employer policies
This discussion and the above DOL regulation assumes that the employer does not have a policy that provides for pay during such circumstances. If it does, then the company policy would apply.
4. Unemployment benefits
a. Eligibility under State Law
Whether an employee can receive state unemployment benefits initially requires an analysis of state law.
In North Carolina, the employee seeking benefits proves eligibility by showing two things: that she is able to work, and available to work. Where the employee has H-1B status, she also would have to show that she remains in valid immigration status, and based on the above furlough discussion, she should be considered in status. The Tips that now appear on the North Carolina DES website confirm that an employee who cannot work because of the COVID-19 outbreak is considered to be both able and available to work, as long as the employee has not removed herself from the labor market. The Tips do not address immigration status, but a foreign national would have to show she has valid immigration status and work permission, to show ability to work.
In California, an employee must prove that she
- was in satisfactory immigration status and authorized to work in the US when earning the wages she used to establish her claim; and
- currently is in satisfactory immigration status, and is authorized to work for each week that she claims benefits.
Regardless of which state rules apply, the employee seeking unemployment benefits must comply with all of the rules and be sure that she can prove eligibility before applying for those benefits.
b. Effect of termination
If the employee is terminated, she would be authorized to work during the 60 day grace period, but probably not afterward. However, if the employee is simply furloughed, both during and after the 60 day period she should be considered authorized to work for purposes of California claims, and “available to work” for North Carolina claims.
c. Receipt of Unemployment benefits and the Public Charge rules
The foreign national employee also will need to know if she should even request those benefits.
USCIS recently issued a new group of rules related to whether a prospective immigrant is likely to become a “public charge”; if the answer is yes, that person’s visa application or green card case can be denied. The rules list a number of positive and negative factors related to this issue. It also lists benefits that are not considered “public benefits” (which could lead to a finding of public charge), and that list contains Unemployment Benefits.
As a result, the receipt of unemployment benefits (at least under the current version of the USCIS public charge rules), would not have a negative impact on that person’s visa application or green card case.
B. Employers filing petitions for new H-1B workers
The COVID-19 outbreak may last quite some time, and employers may want to build in a work at home option for employees for whom they have not yet filed petitions. For those employers who will be filing petitions for such H-1B workers, these considerations are important:
- The wage listed in the LCA and the petition should be set in terms of an hourly wage;
- The LCA should list the regular workplace and the employee’s home; and
- The LCA should be posted in both locations.
C. Students with OPT Work Permission
Students can receive permission to work off campus under rules for Optional Practical Training (OPT). Student OPT is good for 12 months post-degree completion and, if certain requirements are met for STEM students, they can receive an additional 24 months of OPT. Both kinds of OPT must be directly related to the student’s course of studies.
In both situations, the DSO has to be involved and must approve the proposed employment. This is a flexible requirement for the initial OPT period. For the STEM extension, however, students have to sign and submit a special form, and must report to the school’s Designated School Official (DSO) in six month increments and advise the DSO of any changes as to name, residence or employer. It would be prudent for a student with OPT to report any change in work location as well, and this would be a proper step for a STEM student or a non-STEM student.
Where the student working with OPT is furloughed, special rules apply: students with initial OPT cannot accrue more than 90 days of unemployment during the 12 month period; students with STEM OPT cannot accrue more than 150 days of unemployment during the 24 month period. If she does, she is out of status.
D. Employees with L-1 or E status
The rules for workers in L-1 and E status in many ways are less complicated than that the rules for H-1B employees.
a. L-1 employees
However, the L-1 rules do require the employer to file an amended petition where there are changes in corporate relationships that support the L-1, material changes in the companies involved, or major changes that affect the employee’s employment. This could include a significant change in the employee’s duties (e.g., so that the duties become primarily managerial or executive instead of ones that require specialized knowledge, or vice-versa), or where the employee changes employers within the same L-1 organization, or where the employee moves from full time to part time. In those situations, the employer should file an amended petition.
A furlough where everyone is required to leave work, but with the expectation of returning after the furlough is over, should not require a new filing, nor should a reduction in salary, unless that reduction clearly indicates, for instance, that the employee’s duties are no longer managerial or executive (L-1A), and instead indicate the position is one requiring specialized knowledge (L-1B). L-1B employees only have 5 years in the US; L-1A employees can be here for 7 years.
b. The E Visa Employee
The E visa worker should undergo the same analysis, although there are no time limits on an E visa holder’s authorized stay in the US, so there are no similar sub-classifications within the E visa category, like there are in the L visa. Where the E-2 employee’s duties undergo a material change (no longer executive or supervisory, and now essential skill), a change of status filing can be submitted, or the employee simply could apply for a new E visa the next time she leaves the US, if the changes in employment remain in place at that time.
The COVID-19 crisis presents employers and employees with very significant challenges that are new to all of us. What is not new is the need for employers to think carefully before making and executing decisions that will impact their foreign workers. If they act impulsively, the results will be harmful to their employees and to the employers, so their actions must be deliberate, well-reasoned, and fairly applied. If they act with care, consider all alternatives, and document the reasons for all decisions, even if USCIS or DOL later challenges them, the employer should be able to articulate a reasoned judgment, which will strengthen their defenses considerably.
About the author: Mr. Chapman has practiced immigration law since 1987, and has been a NC Board Certified Immigration Law Specialist since 1997. He is the principal of Chapman Law Firm in Greensboro, a firm that represents employers in every kind of employment based immigration matters before USCIS, DOL and DOS. The firm also offers related services such as I-9 audits and consultations regarding possible options for essential employees. He can be reached by phone at (336) 334-0034 or by email at firstname.lastname@example.org.