Employers employing foreign nationals in H-1B nonimmigrant visa status must pay their H-1B employees the wage specified on the Labor Condition Application (LCA) certified by DOL, regardless of whether the H-1B employer is enduring difficult economic or financial periods due to struggling national economy, an Administrative Law Judge for the Department of Labor has ruled in Department of Labor Wage and Hour Division v. Shriiji Krupa Inc.

This ruling reminds H-1B employers that they must adhere to the attestations made in the LCA governing the employment of their H-1B employees, even in the face of claimed business hardship.

An H-1B employer must pay an employee the greater of the actual or prevailing wage specified in the certified LCA (see 20 C.F.R. § 655.731). If the actual wage is the same as the prevailing wage, then the employer must pay that wage to the employee during the term of the approved employment, even during periods of nonproductive time due to lack of available or assigned work. An employer is relieved from fulfilling its wage obligation only where an H-1B employee has voluntarily requested or decided to minimize or leave employment or where an employer has effectuated a bona fide termination of the employee (see 20 C.F.R. § 655.731(c)(7)(ii)).

In Shrijii Krupa, the Administrator for the DOL’s Wage and Hour Division alleged that the employer, which operates two gas station convenience stores in Florida, failed to pay three of its H-1B employees wages totaling nearly $230,000 in violation of its obligations under the applicable LCAs. WHD alleged the employees were essentially paid on a part-time basis, at a lower wage than specified on the LCA, in which the employer attested it would pay these full-time employees the prevailing wage for their positions. The employer argued the effects of the national recession of 2008 made it impossible to meet the wage obligations under the LCA.

Siding with WHD, the ALJ rejected the employer’s “flagging economy” defense as legally insufficient to justify relief of its obligation to pay the required wage under the LCA. The ALJ emphasized that the employer’s non-payment of the required wage was not due to any voluntary action or request of the H-1B employees. The ALJ further noted the employer’s delayed submittal of a new LCA to reflect part-time employment did not relieve it of its obligation to pay full-time wages under the LCA applicable to the H-1B employees’ employment prior to submittal of the new LCA. Accordingly, the ALJ found that the employer must pay the nearly $230,000 in back wages to its H-1B employees.

This case is a stark reminder to H-1B employers that they must comply with wage obligations under the certified LCA unless the employee voluntarily reduces work, there is a bona fide termination of employment, or a new LCA becomes effective. Absent one of those circumstances, the employer must pay wages as attested in the controlling LCA.

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Photo of Forrest G. Read IV Forrest G. Read IV

Forrest Read is a Principal in the Raleigh, North Carolina, office of Jackson Lewis P.C. He has extensive experience in both business immigration law and employment law and has particular focus in legal issues in graduate medical education (GME).

Mr. Read’s immigration practice…

Forrest Read is a Principal in the Raleigh, North Carolina, office of Jackson Lewis P.C. He has extensive experience in both business immigration law and employment law and has particular focus in legal issues in graduate medical education (GME).

Mr. Read’s immigration practice focuses on assisting employers in obtaining employment-based nonimmigrant visas (e.g., H-1B, L, O, TN) for foreign national employees and work-related immigrant (green card) visas, including PERM Labor Certifications, and advising employers on compliance with U.S. immigration laws and regulations. He has broad experience in advising large, mid-size and small employers on their various immigration needs and developing strategies to help them navigate through complex immigration issues. He also has particular experience in counseling employers in the health care industry and addressing immigration-related issues that arise for their broad range of health care professional employees (including advising on and obtaining employment authorization for medical residents and fellows and obtaining J-1 visa waivers for foreign national physicians completing their medical training in the United States). His immigration practice also includes defending employers in connection with Department of Labor H-1B and H-2B investigations.

Mr. Read’s employment law experience includes representing management, particularly academic medical centers in the GME context, in a wide array of workplace disputes and litigation before federal and state courts and administrative agencies, including matters related to discrimination, retaliation, harassment, disability, family and medical leave, various wage and hour issues, contracts, and intentional torts. He advises academic medical centers on the interplay between applicable academic law and employment law and the ramifications of what are divergent legal requirements and standards. Mr. Read also provides counsel with respect to the legal impact of competency standards for residents and trainees in GME, including situations involving discipline, remediation, and dismissal. He provides advice and guidance in the peer review process, including provision of verification and assessment of training in response to third party inquiries.

As a member of the Firm’s Corporate Diversity Counseling group, Mr. Read also has experience in providing assessments and making recommendations to corporate and institutional clients with respect to diversity and inclusion policies and initiatives, conducting related internal investigations, and shaping, developing and enforcing effective policies and initiatives to ensure consistency with client values and in furtherance of business goals and objectives.