Employer’s Responsibility for Terminating H-1B Employees (Update)

In our February 9, 2014 blog Employer’s Responsibility for Terminating H-1B Employees, we discussed an employer’s responsibility for ending the employer/employee relationship of H-1B employees. In that blog, we explained an employer must effect a bona fide termination of an H-1B employee’s employment in order to avoid back wage liability. At the time of the blog, the leading decision on this subject was the Department of Labor, Administrative Review Board’s (ARB) holding in Amtel Group of Fla., v. Yongmahapakorn. In Amtel Group of Fla., the ARB panel of administrative law judges set forth three requirements to effect a bona fide termination of H-1B employment and end an employer’s obligation to pay wages promised under the terminated employee’s Labor Conditional Application (LCA): (1) expressly terminate the employment relationship with the H-1B employee; (2) notify the United States Citizenship and Immigration Services (USCIS) of the termination so that the I-129 petition may be cancelled, and; (3) provide the terminated H-1B employee the reasonable cost of return transportation to his or her home country.

Subsequent to our February 2014 blog, the ARB issued another important decision in Batyrbekov, v. Barclays Capital. In Barclays Capital, the ARB panel addressed a situation where a terminated H-1B employee sought back wages on the theory his former H-1B employer did not effectuate a bona fide termination under the three-part test set forth in the Amtel Group of Fla. decision. More specifically, the employer in Barclays neglected to notify USCIS of the H-1B employee’s termination and did not initially pay for the employee’s travel home. However, under the facts of the Barclays case, the terminated employee’s H-1B employment status was transferred (or “ported”) to another employer via an approved H-1B “change of employer” petition. The ARB in Barclays found the three-part test in Amtel does not govern a situation where a new employer obtains USCIS approval to hire the terminated H-1B employee after the previous employer has given clear notice of termination to the H-1B employee.

Thus, to synthesize the two ARB decisions: (1) the Amtel three-part definition of bona fide termination does not strictly apply to cases with multiple H-1B employers; and, (2) in cases involving multiple H-1B employers, back wage liability may cease if the employer expressly notifies the H-1B employee of termination and the employee thereafter secures USCIS approval for a change of employer.

The above is a synopsis of the Amtel and Barclays ultimate conclusions which were, in turn, based upon the totality of many facts underlying each decision. Each individual H-1B termination will present a unique set of circumstances that may require detailed legal analysis by an experienced attorney. Despite the ruling in Barclays Capital, we still recommend H-1B employers to abide by the three-part definition laid out in Amtel.