Responsibility When Terminating an H1-B Employee

H-1B visas are nonimmigrant visas that allow foreign workers in specialized occupations to reside and work in the United States for a limited time period. To qualify, a foreign worker must be sponsored by a U.S. employer. Employers can terminate an H-1B visa worker without penalty; however, this causes the employee to immediately lose status to live and work in the United States. Because of the immediate circumstances for the employee, this triggers obligations for the employer.

When terminating, the employer must begin by providing clear, unequivocal notification of a “bona-fide termination” to the employee. It must be done in writing and clearly indicate that the employment relationship has been terminated.

Employers are required to notify the U.S. Citizenship and Immigration Services (USCIS) by letter when there has been any “material change” to the terms and conditions of an approved H-1B petition, such as when the employment of an H-1B employee has been terminated. Recommended procedure includes a certified letter to the USCIS service center that approved the H1-B, providing the date of termination and a request to revoke the H-1B petition. Employers should notify the USCIS immediately to limit any claims for unpaid wages for the period after the employee’s termination until the end of the contract. In addition, it is recommended to inform the anti-fraud section of the U.S. consulate in which the visa stamp was originally issued that the H-1B petition has been withdrawn. Finally, the employer must notify the U.S. Department of Labor that it is withdrawing the labor condition application (LCA).

Due to the employee’s immediate loss of status to remain in the United States, the employer has an obligation to provide “reasonable costs of transportation” for the employee back to his or her last place of residence. The obligation does not extend to family or for personal items such as furniture and belongings. (It should be noted that if the employee voluntarily terminates employment, the employer is not obligated to provide the cost of return transportation.) The employer can offer either a direct purchase of a plane ticket or cash payment. However, an employer cannot force an employee to accept the ticket. If the employee refuses to accept a ticket or cash payment for a ticket, the employer should request that the employee sign a statement, with independent witnesses if possible, indicating that the employee declines acceptance of the ticket or cash.

Employers may want to explore other options before terminating, out of compassion for the employee. An H-1B worker can legally transfer his or her visa to another employer before being terminated or before the visa expires. Provided there is enough notice, an employer wishing to terminate an H-1B employee could give that worker reasonable time to find a new petitioning employer; however, there is no requirement to do so. Another option is a practice known as “benching,” in which the employer may temporarily lay off or place the employee on a leave of absence or temporary status before terminating. This may give the employee enough time to find another employer without immediately losing his or her status in the United States. In these instances, the USCIS requires the terms and conditions of employment described in the work visa petition to be maintained, including paying the employee his or her normal wages despite being temporarily laid off or placed on leave—and often, this option may not be affordable to the employer.

The employer should document all steps it has taken to comply with immigration law. If there is a layoff or furlough, employers may have compensatory obligations under the labor condition application. In addition, there are risks of being sued under state contract law if, for example, offer letters and other writings constitute an implied contract. There are risks of discrimination claims if H-1B employees are not treated as other similar employees in such situations. Employers need to be mindful of the special requirements affecting H-1B workers to avoid additional liability. Employers are advised to consult with legal counsel on issues involving H-1B workers.

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