Employer Compliance LCA – DOL Administrative Review Board Awards Back Pay to H-1B Worker

This is an important decision for all employers with current H1B employees. The Department of Labor’s Administrative Review Board (ARB) found that the time period it took for the employee to obtain a social security card, which the employee’s employer required for their payroll system, was “nonproductive status.” The employer was therefore required to pay wages for the two-week period that it took for the employee to obtain the social security card.

However, the ARB found that the employer did not owe back wages to the H-1B worker for the period between her arrival in the U.S. and the date she contacted her employer to inform them that she was in the U.S. The ARB also found that the employer was not required to pay wages to the H-1B worker for the time period in which she was unavailable for work as a result of personal matters such as opening a bank account, obtaining a car lease, securing a driver’s license, and securing schooling and day care for her children. These were periods in which the H-1B worker was in voluntary nonproductive status.

The DOL has a regulation that states that an employer who files an H1B petition must begin to pay the sponsored worker the required LCA wage when the worker enters into employment. The DOL defines this as when the worker makes himself or herself available for employment or when the worker comes under the control of the employer.

Thus, an H1B employee meets this requirement and the wage obligation begins, in many situations, when the worker is not engaging in productive employment. This can include common situations, such as when the employee is available to start, but is waiting for an end-client assignment, is engaged in any type of training (whether in-house or from the employee’s residence), is attending orientation sessions, and/or is interviewing with end-clients or customers for placement. Thus, employers that do not pay their H1B workers who have made themselves available or are in the employer’s control, as explained above, can be subject to substantial back-wage assessments.

The New Year is a good time to tie up any loose ends, and make sure that one’s company procedures and paperwork are in order. If you have further questions about H1B compliance, feel free to email us.