H-1B Employees and Benching
During difficult times, businesses have to take measures to cut costs by restructuring growth plans and reducing workforce. When it comes to H-1B workers, well-intentioned cost cutting by an employer can run afoul to federal regulations, resulting in civil and criminal penalties.
Department of Labor (DOL) sets guidelines and regulates H-1B employer’s wage payments to high skilled foreign workers. DOL requires that employers provide H-1B workers payment during non-productive time “caused by conditions related to employment”, which has been coined as the “no benching rule.” Non-productive time can include hours when workers lack assignments, are studying for licensing exams, or are training for the position. Employers often inquire about the timeline for non-productive payments under obligations outlined by DOL, as well as the conditions that elicit non-productive paid time.
Non-Productive Time Caused by Employer
The DOL requires payment for non-productive time depending on the cause of the non-productive status of the worker. Further, if the employer is responsible for conditions of the non-productive status, then the employer has an obligation to pay full wages during that period. Examples include plant shutdowns, lapses in assignment, lack of assignments, and holidays.
Employee responsible for Non-Productive Time
An employer does not pay wages for non-productive time if the non-productive status resulted from a H-1B worker’s voluntary request to leave employment. Examples include leave for family matter, maternity leave, and vacation. In cases involving hospitalization or family leave, employers must follow the rules of the Family and Medical Leave Act (FMLA).
When does the Non- Productive Time Begin?
Employers are responsible for non-productive pay once the H-1B worker has “entered into employment.” DOL loosely defines the beginning of employment as the moment when H-1B worker makes themselves available for work. Additionally, employers should review obligations to pay their H-1B workers (30/60 day rule) i.e. employers must provide payment for non-productive time 30 days after the worker is first admitted into the U.S., or 60 days after a worker, previously in the United States, receives eligibility for employment under a H-1B visa.
When does Payment Obligation Cease?
An employer’s obligation to pay wages for non-productive ends if there is a “bona fide termination of employment.” This occurs once the worker has been terminated, the USCIS is notified of the termination, and the petition has been cancelled; see our previous blog post on Employer’s Responsibility for Terminating H-1B Employees for complete details.
DOL guidelines for wage payments for H-1B workers are extremely complicated. A foreign worker can file a complaint with the Wage and Hour Division (WHD) of the Department of Labor (DOL) to seek back wages owed under the law. Such a complaint can result in a prolonged investigation of the employer by the DOL whereby they could ask an employer to document that none of its foreign workers has been benched.
We at Sharma Law Offices, LLC monitor any developments on H-1B front very closely and can guide employers on how to best meet their business needs while complying with the law. If you or your company have any question regarding payment obligations under Department of Labor regulations, feel free to contact our office.