Under the Immigrant and Nationality Act (“INA”), the hiring of a foreign worker must not adversely affect the wages or working conditions of similarly situated U.S. workers. The INA was also designed to protect foreign workers from being exploited. To make sure that does not happen, the INA requires employers to, among other things, pay foreign workers here on H1-B visas at least the local prevailing wage.
The prevailing wage is defined as “the average wage paid to similarly employed workers in a specific occupation in the area of intended employment.” The prevailing wage is determined by a collective bargaining agreement, if one exists for the relevant occupation. Otherwise, the Department of Labor establishes the prevailing wage based on the “best information available” that is “the arithmetic mean of the wages of workers similarly employed in the area of intended employment.”
While there is no federal law or regulation barring employers from paying employees less than the amount specified in an employment agreement, there are three things employers need to be aware of if they are considering doing that. First, the employer may be subjecting itself to potential liability if it pays the employee less than the contractually agreed amount. On the one hand, the employer may take the position that an employee that voluntarily works fewer hours is entitled to less compensation. As such, the employer may not be paying the employee less than the contractually agreed amount in that case. On the other hand, what if the employee’s hours are cut involuntarily? For example, what if the employer is unhappy with the employee’s performance and decides to hire another employee to work some of the foreign employee’s days.
It is well established that an employer must continue to pay an H-1B employee who is not working at the employer’s direction because of a nonproductive status (i.e. benching because of lack of work, lack of a permit or license, etc.). Employers are liable for nonproductive time, as well as productive time once the employee becomes eligible to work. If the employer is found liable for violating “no benching” policies, it could be liable for back wages, as well as other penalties.
Second, if the employer pays the employee less than the amount specified in the contract, it may need to amend its H1-B petition. Keep in mind, the employer submitted a Labor Condition Application (“LCA”), which was signed under oath, in support of the H1-B petition, and the LCA represents that the employer has agreed to pay the employee a rate of pay that ranges from the prevailing wage to the amount specified in the employment agreement. If there is a minor change in the employee’s work schedule that may affect his or her wages (i.e., the employee is out on maternity or other approved leave), an amendment is not necessary. But if the employer changes the employee’s work schedule so that it will be practically certain the employee will not earn the salary specified in the contract, the better practice would be for the employer to amend the H1-B petition.
Third, in no case can the employer pay the employee less than the prevailing wage. For starters, payment of the prevailing wage is a requirement for an H1-B visa. Moreover, the employer certified (as part of the LCA) that it would pay the employee the prevailing wage. And the employers are required to make the LCA, along with documents showing the wage rate paid to employees working here on an H1-B visa, available for public inspection. There is no exception to the prevailing wage requirement.
If an employer violates that requirement, the penalties can be serious. The Administrator of the Department of Labor’s Wage and Hour Division is authorized to assess civil monetary penalties with maximums ranging from $1,000 to $35,000 per violation, depending on the types and severity of the violations. Employers may also be precluded from future access to the H1-B and other programs for one to three years if they commit certain violations. Accordingly, to the extent that an employer has a question regarding whether there has been a material change in a foreign worker’s employment, the employer should consult its immigration counsel to determine whether an amendment to its H-1B petition is necessary.
For more information, please contact Maria del Carmen Ramos at 813.227.2252 or mramos@slk-law.com.