Immigration Intel: DOL reaches back pay settlement for H-1B worker

Employers of H-1B nonimmigrants should pay attention to their wage obligations, especially for time spent in nonproductive status. The U.S. Department of Labor (DOL) recently negotiated a deal with SRV Pizza Inc. and its president, Sunil Singh, regarding payment of back wages owed to a former H-1B employee.

The employee worked at SRV from 2009 through 2012. The DOL investigated the company’s compliance with H-1B regulations in 2011 and determined in 2014 the company had failed to pay the worker for all applicable overtime and time spent in nonproductive status. These violations amounted to over $250,000 owed in back wages. The agency amended its determination in 2016 to include a charge of retaliation, which carries a fine of $3,000 and a bar from participation in the H-1B program for two years.

Nonproductive status

H-1B regulations require employers to pay employees in nonproductive status (when the employee isn’t performing work) under certain conditions. You must continue to pay H-1B workers if they aren’t performing work because of employment-related reasons, such as a lack of assigned work or studying for a licensing exam. You aren’t required to pay them if no work is performed for reasons unrelated to employment, such as personal travel or hospitalization.

You are obligated to pay for nonproductive time after the earliest of the following events: (1) the worker makes himself available for work, (2) 30 days after he first enters the United States in H-1B status, or (3) if he is already in the United States, 60 days after he becomes eligible to work.

Full-time workers in nonproductive status must be paid the full amount of the required wage rate—if they’re hourly, then they must be paid for the number of hours that count as full-time employment. Part-time workers must be paid at least the number of hours listed on their labor condition application (LCA) or the average number they normally work if a range is listed. All workers must be paid, at a minimum, the rate on their LCAs.

Your obligation to pay for nonproductive time isn’t required after employment has been terminated. Always remember to cancel the H-1B petition with U.S. Citizenship and Immigration Services (USCIS) after terminating an H-1B employee, and pay attention to the rules requiring payment for travel back to an employee’s home country. Failure to completely terminate the employment relationship and notify USCIS could result in a finding that you owe back wages.

Employer’s penalty

In SRV’s case, the DOL determined in 2014 that the H-1B worker was owed $254,587.93 for overtime and time spent in nonproductive status. However, under the terms of the recent settlement agreement, the company and Singh are jointly liable for $130,629 to the former employee. This amount doesn’t include the taxes and contributions SRV was required to make under federal or state law, such as unemployment compensation payments. They have 18 months to pay the full amount, with an initial payment of $60,000 due within 30 days of the agreement and the rest to be paid in monthly increments.

Jacob M. Monty, the managing partner of Monty & Ramirez, LLP, practices at the intersection of immigration and labor law. He can be reached at jmonty@montyramirezlaw.com or 281- 493-5529.