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The Collateral Consequences of Furloughing Employees on H-1B Visas

The Collateral Consequences of Furloughing Employees on H-1B Visas Background Decorative Image

Though my primary job is to provide legal advice, during the last several months, I have often found myself providing emotional support to my friends in human resources and corporate law departments who have been charged with conducting layoffs or furloughs at their companies. While it is never easy to terminate someone, it is especially hard to terminate long-term, well-performing employees.

Some of the most heart-wrenching terminations that employers have had to make during the last few months have been those of employees who are on H-1B visas. Employers are often surprised to learn that not only are these employees not eligible for unemployment benefits, but they (and their families) may be required to leave the United States within 60 days of their termination, unless they can find another employer who is willing and able to sponsor their visa within that short time frame, which is understandably a difficult prospect in this economic climate.

Many foreign engineers and scientists currently working on H-1B visas have been in the country for some time. Often, they first came to the United States to study. After earning one or more degrees at an American university, they completed a period of optional practical training with an employer, who subsequently decided to sponsor them for the H-1B visa. In some cases where the employee has been with the employer for some time, the employer may have even taken initial steps to sponsor the employee for a Permanent Resident Card. The employees may have bought houses, enrolled their children in local schools, and made close friends both at work and at home. None of this matters.  If their employment has been terminated, or they have been furloughed, they may need to leave the country quickly.

Some employers have attempted to reduce the number of furloughed or laid off employees by implementing across-the-board pay cuts instead. Unfortunately, that strategy is not permissible with employees on H-1B visas, because employers may not reduce the H-1B employee’s salary below what they stated they would pay when they made their original petition for that visa. If the employer is not able to pay the H-1B employee their full salary, the employee must be laid off, and the employer is obligated to notify the government of the termination. The employer does have an obligation to pay “the reasonable costs of return transportation”; although some terminated employees are likely having difficulty arranging for travel to their home country during the current pandemic.

Employees on visas that do not have a prevailing wage requirement (e.g., O-1, TN, or L-1 visas) are slightly better off because they may be temporarily furloughed without pay, provided their status does not expire during that time period. However, if the furlough lasts beyond the 60-day grace period permitted by USCIS, these employees will also need to leave the country. Employers can also reduce the hours and salaries of employees on these visas without impacting their status. However, if the original petition stated that the employee was going to work “full time,” then the employee’s hours should not be reduced below 35 hours.

As we pointed out in our post last week, the current administration is seeking to limit the number of foreign workers in the United States, and it is unlikely that the administration will be making exceptions to that policy.

Please visit our Coronavirus: Preparation & Response series for additional resources we hope will be helpful.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.