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  • Matthew Kolodziej

Layoffs, Furloughs, Reductions in Hours, and Immigration Compliance During the Coronavirus Emergency

The Coronavirus health emergency has severely impacted U.S. employers who have needed to consider layoffs, unpaid leave, work from home arrangements or reductions in hours of employees, including foreign nationals with work visas. In order to remain in compliance with immigration laws and simultaneously respect their employees’ rights and needs employers must consider the specific requirements of various visas while counseling their employees on their options in order to reduce costs and legal liability while retaining essential employees and workforce continuity whenever possible. With proper planning and compassion harm to the enterprise’s workforce and competitiveness can be reduced and goodwill maintained with affected employees, both citizens and foreign workers, at this difficult time when team spirit and morale are more important than ever.

Layoffs of Foreign Workforce

Most foreign workers, who are not lawful permanent residents (“green card” holders) or other workers with unlimited work authorization not tied to their sponsoring employer, will lose their legal immigration status as soon as they lose their job with the employer who sponsored their work visa. Layoffs will also usually terminate eligibility for lawful permanent residence for employees with pending green card processes sponsored by their employer. However, most work visas (E-1, E-2, E-3, H1B, H1B1, L-1, O-1, TN) allow a 60 day grace period after the layoff during which the employee may change to another status, such as visitor or student status, or renew and extend their work visa if they find another employer to sponsor them, depending on the visa type. Generally speaking, H-1B workers may change employer sponsors within this 60-day period without having to leave the U.S., if their new employer files an H-1B application before the 60-day grace period expires. They may begin working for the new employer upon the filing of the petition. Other visa categories may allow less flexibility. For example, the L-1 visa is for managers or highly specialized workers who have worked for a foreign affiliate of their U.S. sponsoring company, and therefore generally cannot be “transferred” to another employer. A pending green card process also generally cannot be “transferred” to a new U.S. employer, unless it has reached an advanced stage in the process.

Note that for employees whose visa includes a Labor Condition Application (LCA) that guarantees certain wages and working conditions, including workers on H-1B visas, termination must include the following steps to be valid: the employee must be notified of the termination, the immigration service must be notified of the termination, and the employee must be offered payment for transportation home. If these steps are not followed the termination may not be considered bona fide and the employer may be liable for back pay.

Unpaid Leave and Wage Obligations for Foreign Workers

Generally speaking, as noted above, most foreign employees on work visas lose their legal status in the United States upon termination of employment by the sponsoring employer. However, employees with work visas may take unpaid leave in specific situations, if it is their decision and permitted under applicable laws. H-1B workers, who are subject to the LCA wage requirements mentioned above, may not be place on unpaid leave by the employer due to lack of work. This is called “benching” and is specifically prohibited. However, the H-1B employees may choose to take unpaid leave at their request for reasons unrelated to the employment (family leave, illness, injury, maternity leave) if such unpaid leave is permitted pursuant to the employer’s benefit plan and applicable laws (FMLA, Americans with Disabilities Act).

Working from Home

During the current health crisis employers are requiring their employees to work from home. For most work visa types that don’t involve an LCA, which specifies minimum wage and working conditions, this does not pose a problem. However, for those visa types which are subject to LCA requirements, such as H-1B workers, the employer must continue to comply with the LCA wage and notice requirements for the work location. If H-1B workers continue to work within the same metropolitan area as specified in the original H-1B petition and LCA, generally no new H-1B application is needed if the LCA is reposted at the home office location according to the regulations. However, if the new work location is outside normal commuting distance and the change in location lasts more than 30 days a new amended H-1B petition may need to be filed with the U.S. immigration service (USCIS) for the new location.

Unemployment insurance and Foreign Workers

Generally speaking, foreign national employees on work visas are not eligible for unemployment benefits when they are laid off because most localities require that the employee be immediately available for work to qualify. In addition, if they do not have lawful permanent residence (a “green card”) or other permanent work authorization independent of their employer, they lose their legal status as soon as they are terminated by the employer sponsoring their visa. As explained above, most foreign nationals must have an employer sponsor them first before they can obtain work authorization and usually only have a 60 day grace period after a layoff before they must either leave the U.S. or apply to regain and extend their legal status.

Reductions in Wages and Hours via Visa Amendments

For employees in visa categories subject to LCA wage requirements, such as H-1B workers, the employer cannot pay the worker less than specified in the LCA and in the corresponding visa petition (form I-129). This means that if the employee will receive a pay cut that lowers the wage below the wage in the LCA, an amended petition may need to be filed with the U.S. immigration service (USCIS) and a new LCA posted at the work location. This also applies if the employer wants to reduce the hours of the H-1B worker further than permitted by the LCA by changing a full-time employee to part-time. Note the LCA regulations also forbid offering less favorable wages or benefits to H-1B workers than to U.S. workers in comparable positions if this will hurt their working conditions.

Changes in Working Conditions and Visa Amendments

In addition to wage obligations, normally the essential nature of the foreign national’s employment should continue to qualify for their particular visa category. For example, O-1 visas are for workers of extraordinary ability, and the O-1 visa employee should continue to work in the area of expertise. L-1A visa employees are for executives or managers, and an L-1A employee cannot be demoted into a non-managerial job. H-1B employees, as noted above, must work at the location specified in the LCA and continue to work in a specialty occupation requiring their experience and/or education and they cannot receive pay or benefits that undercut the working conditions of similarly positioned U.S. workers.

Reorganizations and Transfers of Foreign Workers to other Entities

As explained above, foreign workers with visas usually must work for their sponsoring employer. They cannot normally be transferred to another U.S. entity, even if that entity is affiliated with the visa sponsor, without filing an amended petition with the U.S. immigration service. Exceptions may be made for H-1B workers whose sponsoring employer has been acquired by another company, or for L-1 visa workers employed by a large company with an approved “blanket” L-1. If the U.S. employer has affiliates abroad the foreign national employee may be transferred to the foreign affiliate and later transferred back when needed using the L-1 visa, if the other L-1 visa requirements are met.

Increased Flexibility for Extensions of Stay and I-9 Compliance

The immigration service (USCIS) has announced that when filling out the I-9 form to verify work authorization for new employees, or when reverifying employment authorization for a rehire or work authorization extension, temporarily the employer may examine electronic copies of the original employee work authorization and identification documents. USCIS and Customs and Border Protection (CBP) have also instituted new policies allowing additional flexibility for foreign nationals that are unable to leave the U.S. during this crisis and who want to extend or change their status without leaving the country.

Managing and Planning for Layoffs to Reduce Disruption and Liability

There are many things employers can do to help reduce disruption and exposure to liability and to maintain continuity of their workforce and keep key employees. Remember if the employer has many visa employees, layoffs and reorganizations may affect whether the employer is H-1B dependent, affecting compliance obligations, and this calculation should be made in advance. Be sure to plan ahead and give foreign employees as much notice as possible of layoffs and reorganizations. Consider offering free consultations with an immigration attorney to affected employees, as this may maintain goodwill and reduce costs if the employee can stay in the U.S. instead of asking the employer to pay for return to the home country (as required for H-1B employees). Explore other visa and working arrangements that may allow the employee to stay in legal status. If the U.S. employer has a foreign affiliate, sometimes the employee may be transferred abroad and then returned to the U.S. when conditions improve. Ensure you are familiar with the requirements of the employee’s visa category, and whether they have other immigration procedures pending, such as a green card application, that will also be affected by the layoff or employment change. By discussing the employee’s situation and all options with a lawyer the employer may be able to improve the employee’s immigration situation dramatically by delaying the layoff or renegotiating the work situation to avoid pain and costs for both employer and employee.

Learn more about the relevant immigration legal issues by contacting the author Matthew Kolodziej.


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