According to the U.S. Citizenship and Immigration Service, 27% of H-1B workers are paid less than prevailing wage. Every Petition for an H-1B worker is accompanied by a Labor Condition Application (“LCA”). The LCA is a promise by the H-1B employer that it will pay the H-1B worker an actual wage which is at or above the “prevailing wage” for the position. Failure to pay actual wages in compliance with the LCA is a violation of federal labor law.
The U.S. Department of Labor (“DOL”) is responsible for enforcing labor laws associated with the employment of H-1B workers. The DOL has investigators responsible for monitoring compliance with wage and hour requirements for H-1B workers. The DOL actively enforces wage and hour provisions for H-1B workers and vigorously pursues non-compliant employers. In addition to using random site visits and audits to detect non-compliance, the DOL acts on leads and complaints against employers.
Employers of H-1B workers must be strictly attentive to the labor-related obligations. The DOL does not permit an H-1B employee to be “on the bench” or on “involuntary leave” without pay. The DOL expects strict compliance with prevailing wage requirements and can come down hard on employers who fail to comply. Some recent examples include:
- In July, 2016, DOL assessed a civil penalty in the amount of $230,000 against the owner of two convenience stores in Florida for failing to adequately pay three H-1B employees. The employer claimed financial hardship. The ALJ rejected the defense, stating that an H-1B employer is only relieved of paying prevailing wage if the employee voluntarily reduces their work or there is a bona fide termination of employment.
- In August 2016, the DOL accepted a settlement of $178,000 in back wages and $24,640 in civil monetary penalties against six nail salons in Long Island for three years of underpayment of employees.
- In February 2016, the DOL assessed the Florida-based, Goverment Training, LLC back wages of $48,000 for filing to pay an H-1B employee the actual wage specified in the LCA.
- In November 2015, the DOL found that two California technology companies, Scopus Consulting Group and Orian Engineers, owed $84,000 for underpaying H-1B workers using an entry-level wage rather than the wage level commensurate with their job duties.
These are just some of the many examples of DOL enforcement of labor-related provisions linked to H-1B employment. It is essential that all employers of H-1B workers be familiar with and pay close attention to these requirements. For more information about DOL enforcement, click here. For additional information on wage and hour issues associated with H-1B workers, contact us.