What are an employer’s options for H-1B employees who do not have available projects? Can an employer reduce the work hours of H-1B employees?

By: Brittany Simmons 

Because H-1B workers have a mandatory salary requirement, employers cannot furlough or bench them. Employers should first consider whether there is a different position on any other project, either at an end-client site or in-house, that the beneficiary can perform.

However, if cost is the primary issue, employers have a few different options to reduce or cover payroll costs for H-1B workers.

1. Amend the current H-1B petition and reduce the H-1B worker’s salary:
   
   You can lower an H-1B worker’s salary if their offered wage is the same or more than the prevailing wage for their position. The pay cut is effective once you file an H-1B amendment petition with United States Citizenship and Immigration Services (USCIS). Any significant salary changes, or changes in prevailing wage levels, may create additional scrutiny and should be heavily considered before proceeding.

   Employers should create another employment agreement so that they have in writing that the employee has agreed to take a pay cut. You can place this new employment agreement in the Public Access File (PAF) in the event of a Department of Labor (DOL) audit.

2. File an amendment that reduces the H-1B employee’s hours to part-time:

   Like salary changes above, employers can reduce an H-1B worker’s hours by filing an H-1B amendment petition if the employee’s salary matches or exceeds the position’s prevailing wage. However, employers and H-1B employees should keep in mind that if a H-1B employee receives federal public benefits, they must disclose this to USCIS in subsequent filings. There may be consequences if the employee applies for a green card later.

3. Reduce salary and hours but pay the H-1B petition wage:

   Most of the time an H-1B amendment filing is required to reduce an H-1B employee’s salary or hours below the amount listed on their H-1B petition. However, in extreme economic situations such as the current COVID-19 pandemic, the DOL has provided some exceptions that apply only in rare circumstances.

   You may reduce all your workers’ salaries or hours (i.e. from 40 hours down to 35 hours) for no more than a few months. If the change is likely to last for longer than a short period of time, this is considered a material change and requires an H-1B amendment filing.

   Employers must take several steps to ensure they properly change salary or working hours for all employees, but extra steps must be taken for H-1B employees:

   The changes must be made across the board for the business’s entire workforce.

• • The entire workforce must be notified in writing of the reduction in hours or salary. This notification must also be placed in H-1B employee’s Public Access File (PAF).
  • You are still required to pay the prevailing wage listed on the Labor Condition Application (LCA). However, you may dip below the offered wage listed on Form I-129 if the cut is across the board and the employee is still at or above the prevailing wage.
  • Update the PAF for each H-1B employee to reflect the salary or hour cut. As mentioned above, employers should have a signed employment agreement demonstrating consent for this cut which they may place in the PAF.
  • In the subsequent H-1B filing, the employer must disclose this salary and/or hour cut.

If hours are cut significantly, the H-1B worker’s employment would no longer be considered full-time. This is a material change that would require an amendment filing.

4. Lay off your H-1B employees

   If you lay off an H-1B employee, you must provide them with return transportation to their home country. The laid off H-1B employee has 60 days to make plans and arrange their affairs for departing the United States. If an H-1B employee is unable to return to their home country within the 60-day timeframe due to travel restrictions, they can apply to change their status to a B-2 visitor visa. These individuals will need to demonstrate in their B-2 visa application that they intend to depart the US.

5. Obtain a Paycheck Protection Program (PPP) loan

   If your business qualifies for a Paycheck Protection Program loan, the government can provide funding for two months of non-laid off employee wages. You can reassess your business’s needs toward the end of the two months and see which of the other options described above makes the most sense given your unique situation.

Conclusion

The pandemic has created a lot of uncertainty in US immigration policy, and things are changing daily. H-1B employees may be directly affected by the changing economic circumstances. The information above is provided for general informational purposes only. Prior to acting on any of this information, we recommend contacting a trusted Chugh, LLP immigration attorney to assess which option is the best to pursue given your unique situation.