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COVID-19 and the Special Impact on Employers of Foreign Workers – Special Rules for H-1B, H-1B1 and E-3 Employers

In response to the COVID-19 pandemic, many government authorities in the US and around the world issued shelter-in place orders in an attempt to protect public health and slow the spread of Coronavirus. In the US, employees in jobs listed as non-essential are ordered to work from home. As a result of the economic downturn, employers are evaluating business operations, including the options and consequences of termination, furlough, and reductions in pay and or hours. 

Employers of foreign workers often have additional legal obligations that must be considered before taking such action. In particular, employers of foreign professionals on H-1B, H-1B1 and E-3 specialty occupation worker visas have additional obligations and liabilities under US immigration law that must be considered, in addition to the other legal requirements under relevant state and federal employment law. 

Labor Condition Application

These employers are bound by attestations that the employer was required to make on the Labor Condition Application (LCA) filed with the visa petition, pursuant to  Department of Labor (DOL) regulations. The COVID-19 pandemic may impact the ability of employers to fulfill these obligations.  DOL recently issued additional guidance for scenarios likely to occur during this challenging time. 

Obligation to continue to pay the offered wage indicated in the LCA

DOL regulations require employers to pay the wage promised in the LCA with only limited exceptions.

The employer remains liable to pay even during nonproductive time caused by conditions related to employment, such as lack of work. When an employee is in a nonproductive state due to a decision made by the employer, the employer’s obligation to pay continues. 

However, no payment is required if the nonproductive time is caused by reasons unrelated to employment, such as a worker’s voluntary absence from work or a hospitalization. 

Note that the employer must still pay the required wage if the employee’s nonproductive period was subject to payment under the employer’s benefit plan, or state or federal law, such as the Family and Medical Leave Act or the Americans with Disabilities Act. 

When does the obligation to pay start?

The duty to pay is the earlier of:

  • The date the employee is first available for work or otherwise comes under the control of the employer, such as reporting for orientation or studying for a licensing exam;
  • No later than thirty (30) days after the worker is first admitted into the U.S. pursuant to the H-1B petition, whether or not employment otherwise commences; and
  • For a worker already in the United States, generally no later than sixty (60) days after the date the worker becomes eligible to work for the employer (usually the petition validity start date printed on the USCIS Notice of Action Form I-797 for a change of status or change of employer petition), whether or not employment commences.

How much pay is due and for how many hours?

The employer must pay full-time workers the full amount of the wages stated on the LCA.

If the LCA indicated that the job is part-time, the employer must pay for at least the number of hours indicated on the visa petition and the LCA. If the LCA and visa petition state a range of hours, then the amount paid must be for the hours actually worked, so long as the employer pays for no fewer than the minimum number of hours indicated for the range of part-time employment. 

When does duty to pay stop?

The obligation to pay stops when there is a bona fide termination of employment or one of the exceptions mentioned earlier applies. 

Note that bona fide termination under the immigration law differs from the federal and state employment law.  DOL regulations require the employer to notify the USCIS that:

  • The employment is terminated;
  • The petition should be withdrawn; and
  • The employee was offered payment for transportation home, if the termination occurs before the worker’s H-1B expiration date. 

The duty to pay continues even during a COVID-19 shelter-in-place order

The employer’s obligation to pay continues even during a COVID-19 shelter-in-place/quarantine order,  because these conditions are considered to have been caused by reasons unrelated to employment and the employee is otherwise able to work.  

Therefore, employers cannot furlough, bench, or otherwise render an H-1B, H-1B1 or E-3 employee who is nonproductive, and cannot stop paying the required wage, merely because an employee is unable to perform their work from home due to a COVID-19 – related order. 

Violation of this DOL rule exposes the employer to fines, back wage with interest and, in the most egregious cases, ineligibility to sponsor foreign workers for visas through the DOL’s temporary and permanent immigration programs for a period of time. In addition, the USCIS would withhold approval of immigrant and non-immigrant petitions filed by that employer. 

The duty to pay when an employee is afflicted with COVID-19 and consequently unable to work due to isolation and quarantine

The regulations do not require an employer to pay the required wage if an employee becomes nonproductive due to a reason which is not directly work-related and required by the employer, such as a worker’s voluntary absence from work or a hospitalization. 

That said, if an employer has policies in place requiring  an employee who has tested positive for COVID-19 to remain in quarantine, arguments may be made that the employer must continue to pay the employee because the quarantine rule was created and imposed by the employer.

An employer should be aware that it could be subject to required payment under the employer’s benefit plan or other statutes such as the Family and Medical Leave Act or the Americans with Disabilities Act.

Furthermore, this is an evolving situation.  New statutes, regulations and agency guidance is anticipated. Even more than usual, employers should consult with legal counsel regarding employers’ obligations during this national emergency.

Reductions in Pay

Employers seeking to reduce compensation may file a new LCA with the DOL and visa petition amendment or extension with the USCIS stating the new wage offer.

Note that the wage offer must still be at least the higher of the prevailing wage paid to similarly employed workers in the same geographic area or similar employed workers of the employer. 

The lower wage may start after the USCIS receives the visa petition. There is no requirement to wait for agency approval.

Converting a job from full-time to part-time

Employers seeking to convert a job from full-time to part-time must file a new LCA and a petition amendment or extension. The change may commence after the petition is received by the USCIS. 

Changes in work location / working at home

In response to shelter-in-place or similar provisions arising from the COVID-19 pandemic, many employers have employees working from home. Unless that new job site was included on the original LCA, DOL rules govern what action is required.

DOL regulations require employers to post notice of the LCA filing at the job site in two clearly conspicuous locations for 10 days, regardless of whether a new LCA was filed. Though the regulations do not provide specific exceptions for home worksites, during a 2017 American Immigration Lawyers Association’s Liaison meeting with the DOL’s Wage and Hour Division, the DOL indicated that the agency would not expect employees to post at their home residences. If the worker will be working at home in a geographical area of employment that is not covered by the LCA, the employer can post at its headquarter. 

Employers who have closed their offices due to the COVID-19 may not be able to physically post the notice at the headquarter office. In that case, employers may opt for electronic notification. DOL regulations provide that an employer may accomplish electronic notice by any means it ordinarily uses to communicate with its workers about job vacancies or promotion opportunities. For example, the employer can post the notice on an internal “home page” or “electronic bulletin board.” 

DOL regulations also state that the posting is required on or before work at the new site begins. In response to COVID-19, the DOL relaxed this requirement and issued guidance stating that employers are in compliance if the posting is done within 30 days after work at the new site begins. 

No new LCA if the new job site is in the same geographic area

If the new job site/home office is within the normal commuting distance of the job site listed on the approved LCA, no new LCA is required.    

The DOL has not clearly identified how many miles is considered the normal commuting distance. If the new job location is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment. The borders of MSAs and PMSAs are not definitive measures. If the new job site is within 50 miles, that is likely to qualify. 

No new LCA required for short-term placement

DOL regulations also state that a new LCA is not required for short-term placement at the new job site. 

This rule applies to H-1B only.  To qualify, the employer must first meet the following conditions:

  • must fully satisfy the other requirements to which it agreed upon on the approved LCA;
  • shall not place, assign, lease, or otherwise contract out any H-1B workers to any worksite where there is a strike or lockout in the course of a labor dispute in the same occupational classification(s) as that of the H-1B worker;
  • must continue to pay the required wage, the actual cost of lodging, and the actual cost of travel, meals and incidental or miscellaneous expenses for the duration of the assignment. 

The DOL identifies 30 workdays or less in a one-year period as short-term. 

Sixty workdays or less in a one-year period is considered by the DOL to qualify as short-term only if all of the following conditions are met. The employee must:

  • continue to maintain an office or work station at the previously approved permanent worksite (e.g., the worker has a dedicated workstation and telephone line(s) at the permanent worksite);
  • spend a substantial amount of time at the permanent worksite in a one-year period; and
  • maintain a residence located in the area of the permanent worksite and not in the area of the short-term worksite(s) (e.g., the worker’s personal mailing address; the worker’s lease for an apartment or other home; the worker’s bank accounts; the worker’s automobile driver’s license; the residence of the worker’s dependents).

The short-term placement rule does not apply for worksites for which the employer has a certified LCA for the occupational classification. In other words, if the employer has a certified LCA for a worksite, it must follow the proper rules to post notice. 

The DOL regulations did not contemplate a home office as a short-term placement. In any event, employers may well need to have employees working from home for well more than 60 days. Once any H-1B worker’s short-term placement has reached the time limit as stated above, the employer should take one of the following actions, if applicable:

  • File an new LCA for the new worksite and an amended H-1B petition; or
  • Immediately terminate the placement of the H-1B worker and revert to the permanent worksite as indicated on the approved LCA. 

Keep in touch

These are difficult times and government rules are reasonably expected to evolve, but not always as fast or in the ways expected. Dentons makes available to clients a large number of COVID-19 related resources regarding laws and regulations around the world. 

Please contact your Dentons lawyer for further assistance.

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COVID-19 and the Special Impact on Employers of Foreign Workers – Special Rules for H-1B, H-1B1 and E-3 Employers

Going, going gone: USCIS no longer accepting H-1B visa petitions for FY21

The registration and random selection period for new H-1B visas under the fiscal year 2021 quota limitation is over.

On March 31, 2020, the US Citizenship and Immigration Services (USCIS) completed the random selection of new H-1B registrants and updated their online database for employers and attorneys listing selections.

USCIS now needs to receive, starting April 1, 2020, the Department of Labor certified labor condition application and visa petition for each selected registrant within 90 days or less. The agency has not announced any extension of this deadline in response to COVID-19 pandemic. While USCIS has announced extensions of deadlines in many other situations and there remains the possibility that this deadline too might be extended in the future, it is best to prepare and file well before the current deadline.

H-1B quota background

The H-1B is one of the most commonly used visas for US employers of foreign professionals. In 1990, the US Congress, for the first time, imposed quota limits on the number of new H-1B visa petitions that the government would grant each fiscal year, setting the number at 65,000. 

Quota limits were not reached in the years immediately after 1990, but began to be a problem in the mid-90’s as the US economy expanded and the demand for foreign professionals by US employers increased. Congress increased the supply of new H-1B visa petitions to meet the country’s needs, but only temporarily. By the time the temporary increase expired, the US economy was suffering from the tech bubble burst of 2000 and the aftermath of September 11, 2001. New H-1Bs remained readily available.

However in 2004 quota limits on new H-1Bs began to be a problem again. On October 1, 2004, the very first day of fiscal year 2005, the FY05 quota was exhausted.  Congress responded by creating an additional 20,000 slots but limited their availability to those with graduate degrees from US universities.

The increase helped, but was insufficient to meet the needs of US employers. In each of the subsequent fiscal years, the quota was exhausted more and more quickly.  For fiscal year 2008, more petitions were received on the first day than the quota permitted, and the same was true in fiscal year 2009.

Fiscal years 2010, 2011 and 2012 broke with the historical pattern. Although the quota was used up, the same economic climate that limited job opportunities generally also impacted job opportunities for H-1B workers.  As a result, for those fiscal years, USCIS continued to accept new H-1Bs until December, January and November, respectively. 

By fiscal year 2013, the historical pattern resumed and US employer demand for new H-1B workers far outstripped the limited supply allocated by Congress. For many years now, the number of petitions received in the first five business days was so much greater than the quota that the likelihood of selection was less than 50 percent, making it hard for employers and foreign professionals to plan for the future.

For fiscal year 2021, USCIS implemented a new registration system that required employers and attorneys to create accounts and register prospective H-1B employees in March 2020. The agency’s random selection was done from this pool of registrants.

The limited supply of new H-1B visas is inadequate to meet demand. The problem that we have experienced for more than a decade continues to this day, with Congress failing to take the action needed to increase the number of new H-1B visa petitions to meet the needs of American employers. The result has been a shifting of many jobs to other countries, with resulting loss of revenue and business opportunity for the US.

What to do now

Although no new H-1B petitions will be accepted, there are still a number of solutions available to employers and foreign professionals. 

‘Old’ H-1Bs are quota-exempt

Note that only new H-1B petitions are subject to quota limits. A foreign professional granted H-1B status under the quota already is generally exempt from quota limits. This can be true if changing employers or changing from other visa status. For example, a former H-1B visa worker attending US university on F-1 student visa status may be eligible to return to H-1B status without being subject to new quota limits.

Exempt employers

Petitions by some employers are exempt. These are generally government, academic institutions and related research organizations.

Other visas available

There are a number of other visas that US employers may consider as alternatives to the H-1B. 

  • F-1 STEM OPT.  Some foreign students may be able to extend their pre- or post-graduation employment authorization. The list of STEM degrees that offer the chance of an additional 24 months of post-graduation employment authorization beyond the normal 12 months was recently expanded. 
  • Free Trade Agreement TN/H-1B1/E-3.  Citizens of Canada, Mexico, Chile, Singapore and Australia may want to consider free trade visa benefits available by treaty only to citizens of those countries.
  • H-3/J-1.  Training visas are a solution for some. While H-3 authorize only incidental productive work for what is primarily classroom-type training, the J-1 permits on-the-job training involving regular productive work.
  • Extraordinary-Ability Nonimmigrants.  For individuals who can document their extraordinary ability and have job offers using those skills, the O-1 visa is not subject to numerical limitations.
  • EB1A Extraordinary-Ability Immigrants.  Similar to the O-1, but without the requirement of a sponsoring employer. 
  • EB1B Outstanding Professors and Researchers Immigrants. Universities use this to sponsor qualified professors and researchers to immigrate. Other employers use this for qualified researchers.
  • EB2 and EB3 Professional Immigrants.  This is how employers sponsor most professionals to immigrate to the US.

There are many other nonimmigrant and immigrant visas that may be available.  Immigrant visas are subject to quota limits based in part on place of birth, with people born in mainland China and India often experiencing longer waiting times. The requirements for each solution vary from the H-1B, so employers and foreign nationals are well advised to consult their Dentons attorney to determine eligibility for these benefits.

Other countries

Quota limits in past years have driven the jobs offered by many employers offshore and this year is no exception. A number of the countries around the world where our law firm and clients do business have rules for the employment of foreign nationals that are as or even more generous than those offered by the US. 

Employing a candidate abroad, rather than losing a needed skill set, is an option for many employers. Where proximity to a US facility is desired, employers often consider near-shoring in Canada or Mexico.  Dentons is the world’s largest law firm and our global network of offices uniquely positions us to help guide employers through all of the options.

Next fiscal year

And there is always next year when the USCIS will begin to accept new H-1B registration for jobs starting October 1, 2021, under the fiscal year 2022 quota.

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Going, going gone: USCIS no longer accepting H-1B visa petitions for FY21

March 20, 2020, US immigration updates regarding border closures, employment verification completion, premium processing, and signature requirements

Several important announcements were made on March 20 by different US immigration-related agencies. For the full article please read Dentons client alert here.

Dentons will continue to monitor these issue and for the new developments, please visit COVID-19 (Coronavirus) hub. Please contact your Dentons lawyer if you have any questions.

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March 20, 2020, US immigration updates regarding border closures, employment verification completion, premium processing, and signature requirements

DOS suspends routine visa services at all US Embassies and Consulates worldwide

In response to the worldwide outbreak of COVID-19, the State Department is suspending routine visa services at all US Embassies and Consulates.  All routine immigrant and nonimmigrant visa applinets will be canceled as of March 20, 2020.  These embassies will resume service as soon as possible but are unable to provide a specific date at this time. Clients are advised to check the website of the embassy or consulate for its current operating status. 

This suspension of service does not affect the visa waiver program. 

Applicants with a need to travel immediately or other urgent matter may be able to request an emergency appointment following guidance provided at the Embassy’s website. 

More information can be found at the US Embassy website.

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DOS suspends routine visa services at all US Embassies and Consulates worldwide

An analysis of Canadian travel restrictions due to the COVID-19 outbreak

Update: On March 18, 2020, Prime Minister Trudeau announced that Canada and the United States had agreed to temporarily close the Canada-US border to non-essential travel, in order to preserve “critical” supply chains between the two countries. President Trump also announced this temporary closure in a tweet on March 18, 2020. Prime Minister Trudeau confirmed that travel for the purposes of recreation and tourism will be prohibited. Both Prime Minister Trudeau and President Trump have also stated that trade will not be affected. However, very little details have been provided regarding what will be considered essential travel. It is also not known at this time whether this measure will apply only to the land ports of entry or if it will modify the existing air travel ban that is already in effect.

Please click here to read the full Dentons client alert.

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An analysis of Canadian travel restrictions due to the COVID-19 outbreak

An overview of United States travel restrictions due to the COVID-19 outbreak (United States)

President Trump has recently issued several Presidential Proclamations in response to the 2019 Novel Coronavirus (COVID-19) outbreak, which have restricted the ability of foreign nationals to travel to the United States. Dentons immigration partner, Henry Chang (who is based in our Toronto office) provides a summary of the US travel restrictions that have resulted from the COVID-19 outbreak (that the World Health Organization declared a pandemic on March 11, 2020). Please click here to read the full Dentons client alert.

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An overview of United States travel restrictions due to the COVID-19 outbreak (United States)

New ban on hiring expatriates in Oman

The Ministry of Manpower has issued Ministerial Decision 47/2020 (the MD). The MD adds “sales representative/sales promoter” and “purchase representative” to the categories of jobs from which expatriates are banned (although an expatriate currently working in a position which is subject to the MD can continue in his/her job until his/her current visa expires).

Please click here to read the full Dentons client alert.

New ban on hiring expatriates in Oman

E-1 Visas for Canadian production companies

Canadian production companies that sell films and/or television productions to US-based companies (including US studios, independents and streaming services) can face difficulties when sending their key personnel to the United States. The issue frequently arises when some or all of the Canadian production is scheduled to take place on location in the US. 

Canadian production companies often focus on traditional US work permit categories that were created with the film and television industry in mind, such as the O-1B for aliens of extraordinary achievement in the motion picture or television industry, or the O-2 for related essential support personnel. However, these categories are relatively difficult to use and many foreign nationals will be unable to satisfy the onerous eligibility requirements.

Fortunately, the E-1 (treaty trader) category is a viable alternative to the O-1B and O-2 categories. Despite this fact, Canadian production companies tend to overlook the E-1 category, because it was initially intended for entrepreneurs rather than the film and television industry. For a brief overview of E-1 eligibility requirements and to read the full article please click here.

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E-1 Visas for Canadian production companies

DHS commences pilot project to collect DNA from certain travellers

The Department of Homeland Security (DHS) recently announced a pilot project to collect DNA samples from certain travellers, which commenced on January 6, 2020.

This announcement has prompted questions from Canadians (and other foreign nationals), who are concerned that they may be required to provide a sample of their DNA when travelling to the United States. Although privacy advocates are concerned about this mandatory collection of DNA, the pilot project, as it presently stands, may not be a significant departure from current practices. Please click here to read the full article.

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DHS commences pilot project to collect DNA from certain travellers

Coronavirus US arrival restrictions: US entry will be denied to non-US citizens who were in China within the past 14 days

Effective February 2, 2020, new restrictions apply to all flights from the People’s Republic of China and all passengers who have traveled to the PRC, excluding Hong Kong and Macau, within the 14 days prior to admission to the United States. The US consular posts in China have canceled visa appointments, effective February 3.

President Trump issued a proclamation on January 31 suspending the arrival of immigrants and nonimmigrants who pose a risk of transmitting the coronavirus.

Restrictions on US citizens and returning US residents

US citizens, returning US residents and certain others (see “Exemptions” section below) who have been in the PRC’s Hubei province within 14 days of their return will be subject to up to 14 days of mandatory quarantine to ensure they are provided proper medical care and health screening.

Those who have been in other areas of mainland PRC within 14 days of their return will be required to undergo proactive entry health screening and up to 14 days of self-quarantine with health monitoring to ensure they have not contracted the virus and do not pose a public health risk.

Restrictions on citizens of other countries

The Department of Homeland Security (DHS) announced that foreign nationals who have traveled in the PRC within 14 days of their arrival (other than immediate family members of US citizens, permanent residents and flight crew) will be denied entry into the US.

Exemptions

Entry will not be denied, but the quarantine process described above will apply, to: US permanent residents, the spouses of US citizens or permanent residents, the parents/guardians of US citizens/residents (if the citizen/resident is unmarried and under 21), and certain others.

Restrictions apply to all parts of the US

The restrictions apply to travel to all 50 states of the US, the District of Columbia, and territories and possessions of the US, including Puerto Rico, the Virgin Islands, American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and Guam.

Other countries with arrival restrictions

Similar arrival restrictions were announced by a number of other countries around the world, including Australia, India, Iraq, Israel, Italy, Japan, Kazakhstan, Mongolia, New Zealand, North Korea, South Korea, Philippines, Russia, Singapore, Uzbekistan and Vietnam.

The full text of the proclamation can be found here. Click here for DHS’s arrival restrictions.  And the DHS press release is available at the DHS website

Please contact your Dentons lawyer for further assistance.

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Coronavirus US arrival restrictions: US entry will be denied to non-US citizens who were in China within the past 14 days