Employers nationwide are implementing work reductions, closures and furloughs in order to reduce costs during the COVID-19 economic slowdown in the United States. When employees are put on reduced hours or furloughed, employers face changing legal obligations in multiple areas of labor and employment law. Companies that employ nonimmigrant workers should not overlook the additional legal obligations they have toward these employees, especially those who are on visas that have prevailing wage requirements.
Which nonimmigrant visas have prevailing wage requirements?
Employers of H-1B workers have prevailing wage requirements, which also apply to the H‑1B1 (for Chile and Singapore nationals) and E-3 (for Australians) visas. For all three visa types, the employer must:
- Pay the higher of: (a) the prevailing wage where the job is located, or (b) the wage the employer pays workers in similar positions who have similar qualifications;
- Offer benefits on the same basis as the employer offers US workers; and
- Continue paying the required wage even if the employer puts the worker on non‑productive status. If the worker voluntarily requests that status for reasons unrelated to employment, the employer is not required to continue paying unless a benefit plan or other law (e.g., FMLA) requires it.
Does a company-wide furlough relieve the employer of these obligations?
In short, no. To remain in compliance with DOL regulations, the employer must continue to pay these workers the required wage. However, it may be possible to reduce these workers’ hours within certain limits and with the required government filings. Employers who wish to explore these options should consult with immigration counsel.
Can an employer accept the worker’s offer to use accrued, paid time off during a furlough?
Possibly, with caveats. Paid time off may generally be used at the worker’s discretion, in accordance with applicable state and federal law. If the worker voluntarily requests paid time off during the furlough, arguably the employer may accept this offer. However, DOL may view the arrangement as circumventing the requirement to pay for non-productive time that results from the employer’s decision rather than the employee’s. Employers should consult with immigration counsel before making any decision that affects wages during a furlough.
Can an employer terminate the worker during a furlough?
Yes. Employers are not prohibited from terminating these workers during the validity of their work authorization, as long as the termination complies with state and federal law. To end compensation obligations under immigration law, the employer must: (a) notify the worker, (b) notify DOL and/or USCIS, and (c) pay the worker reasonable costs of return transportation to their home country. The worker will have a grace period of 60 days or until the end of their authorized stay, whichever is shorter. During the grace period, the worker may seek another job, change status to a different category (if eligible), or depart the United States. Workers may be rehired after the furlough ends, as long as any required government filing is done on a timely basis.
What other visa categories may be affected by a furlough?
If an employer furloughs a worker in a visa category that does not have a prevailing wage requirement, additional action may still be needed. For example, employers must notify the universities of F-1 workers who have STEM OPT work authorization if their training plans change significantly. O-1, TN, and L-1 workers may be furloughed without pay, but if their authorized stay expires before the 60-day grace period ends, they may be unable to remain in the United States. In addition, nonimmigrant workers may use a grace period only once during each period of authorized stay regardless of how many days the grace period lasts. So, for example, these workers could not be furloughed one week per month during the same period of authorized stay. Instead, the employer would have to file a new petition, seeking a new period of authorized stay in order to furlough the worker for a second time.
If you have questions about the best way to handle the furlough, reduced hours, or termination of a nonimmigrant employee, please contact one of our attorneys.