Who can pay the cost of the H-1B is a recurring question. And the US Department of Labor provides the answer.
The short answer is: the employer. However, like most legal questions, the more detailed answer is more complicated.
It is that time of year again—H-1B filing season. Employers, recent graduates, and professionals overseas are starting to prepare for the annual filing of new H-1B visa petitions to authorize professionals from other countries to be employed in the US.
The process is expensive. There are government filing fees and attorney's fees, charges for expert evaluations of foreign education and/or experience and charges for translations. For some, there may also be costs associated with relocation, transportation, accompanying family members, etc. Even generous employers often question whether some of the expenses can be lawfully paid the employee himself or herself, or which of the expenses the employer may recoup if the employee leaves employment.
The DOL's Wage and Hour Division issued Fact Sheet #62H, "What are the rules concerning deductions from an H-1B worker's pay?," in 2009. The DOL's position is that there are certain expenses that can never be deducted from an employee's pay. In pertinent part, these include:
- The US Citizenship and Immigration Services training and processing fee;
- The USCIS fraud protection and detection fee;
- The USCIS optional premium processing fee;
- A penalty for the workers failure to complete the full employment period authorized by the approved H-1B;
- Any expenses, including attorney fees, directly related to the filing of the Form ETA 7035E labor condition attestation; and
- Any deduction that would reduce the worker's pay below the required wage rate, which is stated on the Form ETA 7035E.
The DOL does identify some expenses that can be paid by either the employer or the employee. Of course deductions required by law (e.g., income tax) can be made. Deductions authorized by the employee also are permissible, but only if:
- There is a voluntary, written authorization by the employee;
- For a matter principally for the benefit of the employee, such as reimbursement for travel to the United States or payment for food and lodging that was not incurred while traveling on the employer's business;
- For an amount that does not exceed the fair market value or the actual cost (whichever is lower) of the matter covered; and
- The amount does not exceed the limits for garnishments set by the Consumer Credit Protection Act.
It is important to note that the US Citizenship and Immigration Services guidance in this area is much less comprehensive than the DOL. USCIS provides clear guidance on their position with respect to the various USCIS filing fees. While some may consider the differences as creating a grey area to justify allocating certain expenses to employees, conservative employers will want to minimize exposure to potential liability and the specter of a government enforcement action or civil suit by a disgruntled employee. Following the DOL's guidance is the best practice.
Employers should review their employee handbooks, employment agreements, offer letters and collateral materials to ensure that they are in compliance with the DOL framework.
The full text of Fact Sheet #62H is available on the DOL website.
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