Benching of H-1B Employees
It is not permitted to bench H-1B employees without pay. At any point when an H-1B employee is not performing work or not in productive status because a company does not have an immediate project for them, the employee must still continue to receive the same wage listed in the Labor Condition Application (“LCA”) (Form ETA 9035 and/or ETA 9035E) filed for the H-1B petition. Failure to do so on the employer’s part may result in an investigation by the Department of Labor (“DOL”) and monetary compensation to the employee.
Here are some frequently-asked questions on benching of H-1B employees:
Q: Must an H-1B employer pay for nonproductive time?
A: Yes. H-1B workers must be paid the required wage rate for all nonproductive time caused by conditions related to employment, such as lack of assigned work, lack of a permit, or studying for a licensing exam.
Q: What rate of pay is used for nonproductive time?
A: Nonproductive time must be paid at the required wage rate for the occupation listed on the H-1B worker’s LCA (see WH Fact Sheet #62G).
Q: When does the obligation to pay for nonproductive time stop?
A: Payment for nonproductive time is not required after a bona fide termination of employment. The best evidence of such termination is the employer’s notification to the USCIS that:
- The employment relationship has been terminated;
- The Petition should be cancelled; and
- The employee has been provided with payment for transportation home where required by USCIS regulations.
Q: Must the employer pay the guaranteed minimum hours if no work is provided?
A: Yes. The employer must pay the guaranteed minimum hours unless the H-1B worker is unavailable for work because of non-work related factors, such as the worker’s own voluntary request for time off, or in other circumstances where the worker is unable to work.
Thus, an employer’s obligation to pay its H-1B employees, even for nonproductive time, ends only with bona fide termination from the U.S. entity.
Benching of L-1 Employees
There are no firm DOL rules on whether it is permitted to bench L-1 employees without pay if the employer doesn’t make an assertion to DOL specifically through an LCA for an L-1 employee. However, the employer will have to rely on the “employer/employee” definitions and frame the benching issue in the context of what would be considered the employee’s proper “maintenance of status.”
Under 8 CFR 274a.1(f), an “employee” must “provide services or labor for an employer for wages or other remuneration…” Also, an “employer” as defined in 8 CFR274a.1(g) is someone who “engages the services or labor of an employee…” It is important to note that the focus on “services or labor” in both definitions.
Arguably, if someone is placed on an unpaid leave of absence and does not provide services or labor to the employer, then that person does not come within the definition of an “employee”–even if the individual still receives full benefits. It’s very possible the employee could be deemed to have fallen out of status immediately upon being “benched.” The employee would be subject to the 60-day grace period from that initial benching date. It should be noted that this same analysis could also apply to H-1B above (i.e., the date of unpaid benching puts employee out of status, and the employer is in violation due to lack of proper remuneration per H-1B regulations).
Here are a couple hypothetical scenario applying this analysis:
Hypothetical 1: An L-1 employee is 2 years into his initial 3-year L-1B approval. He is benched and currently not working because he is on an unpaid leave of absence. The employer pays his benefits, but not his salary rate.
- Under immigration regulations and the interpretation of employer/employee above, it is advisable that the employee has a 60-day grace period from his benching date–that is, the date he falls out of L-1 status. It is advisable that he depart or file an I-539 change of status to a visitor by day 60. If he goes back into a project and on payroll with his employer before day 60, then it is assertable that there is no issue.
Hypothetical 2: An L-1 employee is working hard to find a new project and secures one, but the start date is at the 80-day mark following his initial benching date.
- The reality of that 20-day period beyond the 60-day grace period being an issue during the employee’s L-1 renewal is probably very low. It would be important to include 2-3 recent paystubs at the time of filing, which the employee will have. L-1 forms don’t have a place to notify USCIS of the benching/gap in employment.
- However, both I-485 AOS applications and the DS-160 application for a visa screen for status violations. This benching scenario should technically be disclosed, although the employee may not understand or recognize that he actually had a violation of status.
Inconsistent Benching Policies and Liability for Discrimination Claims
Notably, the H-1B payment requirement stands even if U.S. workers are not paid during such times; however, it is important to note that treating H-1B workers differently from U.S, citizens and lawful permanent residents (“LPR”) and giving them what might arguably be better “benefits” (i.e., more paid time to find a new project), could also lead to a sort of “reverse” claim of national origin discrimination. Additionally, treating H-1B workers differently from L-1 workers could also be problematic for similarly complicated reasons. Thus, it is advisable that employers have benching policies written in a formal instrument. That way, if the employer were to be challenged on disparate treatment, they can provide the benching policy as a form of protection. Although the benching policy can help the employer, it is not a guaranteed form of protection.
I-9/E-Verify Repercussions and the Administrative Burdens of Benching Foreign Nationals
Whether the employees hold an L-1 or H-1B visa, the employer will want to make sure that their team is watching closely for necessary I-9 reverifications, especially if an employee is terminated and/or rehired.
If you have any further questions on benching H-1B or L-1 employees, contact our office today to set up a consultation with one of our attorneys!
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