The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) is responsible for investigating and enforcing federal minimum wage, overtime pay, and recordkeeping requirements, as well as various employment standards and worker protections required under U.S. immigration law. Such investigations are often triggered by a complaint submitted to the DOL, but with the increased scrutiny and usage of the site visit program, it is possible that investigations by the WHD may be instigated by referral or the recommendation of another federal agency. As such, it is critical that employers of H1B workers understand their wage and hour obligations and ensure that they are compliant.
Determining the Required Wage for a H1B Employee
A company that employs an H1B worker must pay the worker the “required wage,” defined as either the actual wage or the prevailing wage, whichever is higher. The actual wage reflects what a company pays similarly situated employees in a specific geographic area. The prevailing wage is determined based on a review of the job description, area of intended employment, and minimum hiring requirements for the position. Often, this wage is obtained from the Foreign Labor Certification Data Center. Once the actual wage and prevailing wage are verified, the employer must then pay the H1B worker the higher of the two wages. Further, as discussed in the MurthyDotCom NewsBrief, Six Things Every H1B Employer Must Include in Its Public Access Files (24.Apr.2017), the employer must maintain documentation of how the actual wage and prevailing wage were established.
Required Wage Must be Paid Free and Clear
Under immigration law, the required wage must be paid to the H1B worker free and clear. Bonuses that are not guaranteed to the worker cannot be used to satisfy the wage requirements. The employer may not factor in the value of benefits offered to the worker, such as health insurance, to meet the wage requirements.
Certain Deductions Not Permitted, Including Payments of H1B Fees
Only certain deductions may be taken from an H1B worker’s wages. These include deductions required by law, such as income tax, employee contribution to the premium for a health insurance plan that is offered to all employees, or contributions to savings or retirement funds. The employer’s business expenses, however, including certain fees and costs related to filing an H1B petition, cannot be recouped from the H1B worker.
Employee Cannot be “Benched” Without Pay
The employer must continue to pay the H1B worker’s salary, even if the worker is benched – that is, if the employer does not have work for the employee for a period of time. Further, such salary payments typically must continue through the validity period of the H1B petition unless the H1B worker is unavailable or unable to work, or if there is a bona fide termination of employment. The MurthyDotCom NewsBrief, Bona Fide Termination Requirement for H1B Employee (01.Nov.2012) provides more details on the steps an employer must take to end an H1B worker’s employment with the company.
Conclusion
U.S. immigration and labor laws include numerous provisions to ensure that employers do not take advantage of H1B workers. With the increased numbers of site visits and investigations being mounted by the DOL and other government agencies, it is now more important than ever for employers to ensure that they comply with the law and its obligations towards their employees.
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