H-1B Compliance: What To Do When You Terminate Your H-1B Employee

Many employers are aware that they are responsible for the reasonable cost of an H-1B worker's return transportation home if they terminate an employee prior to the expiration of their H-1B petition. What many employers do not realize is that this requirement is also an important step in effecting a bona fide termination of an H-1B employee with respect to back wage obligations. Employers face a heightened risk of being audited or investigated by U.S. Citizenship and Immigration Service (USCIS) and Department of Labor (DOL). Given that, it is increasingly important to make sure your organization has appropriate compliance protocols that are mandated for specific visa types, like the H-1B visa status.

What Is a Bona Fide Termination Under the H-1B Visa Rules?

Under the H-1B rules, a bona fide termination must meet certain criteria in order for an employer's wage obligation under the Labor Condition Application to cease. First, the employer must expressly terminate the employment relationship with the H-1B worker. Second, the employer must notify USCIS of the termination so that agency can revoke its prior approval of the employer's H-1B petition under 8 CFR 214.2(h)(11). Third, the employer must provide the H-1B worker with an offer for payment of reasonable costs of return transportation home under INA 214(c)(5)(A) and 8 CFR 214.2(h)(4)(iii)(E). These steps are mandated by the DOL.

What are considered "reasonable costs"? Reasonable costs of return transportation typically include the cost of an economy class ticket to the employee's last foreign address and does not include the transportation costs for any of the employee's family members. It is important to note that if the employee voluntarily terminates their employment, then the employer is not obligated to offer return transportation, but must notify USCIS of their last date of employment.

A common misstep is to terminate the H-1B worker and not follow through with steps two and three. If the employer explicitly terminates the employment relationship but fails to follow the second and third steps, the employer may still be obligated to pay the required wage for failure to make a bona fide termination.

The Impact of the 60-Day Grace Period

As of January 18, 2017, USCIS provides a 60-day grace period to H-1B under 8 CFR 214.1(2)). The 60-day grace period is a salutary feature where it not only gives the worker more time to leave the U.S., but it also provides a window of opportunity to...

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