H-1Bs - Who has to pay?
Many employers would prefer not to pay for the H-1B process for their employees that they agree to sponsor. It can be an expensive process, and it would ease the concern of many employers if they did not have to foot all of the bill. Alternatively, some employers want to be able to recoup those fees if the employee leaves their employment. The question then is “Is it legal for an employee to pay for the H-1B process or to re-pay the employer for such process?” The short answer to this will almost always be No.
The Department of Labor regulations lay out two important factors in this regard. First, the DOL has determined what “authorized” deductions from an employees pay are allowed. This includes things such as tax payments, health insurance, etc. The DOL has also determined what “unauthorized” deductions are, and this does include “necessary business expenses” which the DOL states included all fees associated with the H-1B and LCA process. Unauthorized deductions are not allowed to depress the wage paid to the foreign worker below the “required” wage level.
What is the “required wage”?. According to the DOL, the wage the employer is “required” to pay is the HIGHER of the prevailing wage (which is what the DOL determines is the minimum wage that should be paid for that position) or the “actual” wage. The actual wage is the wage paid to other similarly qualified employees in the same or similar position to the alien being sponsored. So if the alien has a Master’s degree, you would be looking only at other employees in similar positions with Master’s degrees, etc. However, if there are no similar qualifies employees in similar positions, the actual wage is the wage that is being paid to the alien as listed on the LCA and I-129.
Putting all the above together, in almost every case, the foreign worker will not be making more than similarly situated employees, therefore theH-1B fees could not be paid by the employee. What if though, for some reason, the foreign worker WAS being paid more than their US counterparts, could they pay the wage then? Judging from the reactions of the DOL to employees paying such fees while it may not violate the above principles, it is not preferred and could still lead to fines, etc. Why? The DOL has stated that requiring the employee to pay the H-1B fees is considered by them to be “fraud” in the LCA process. In addition, the DOL also feels that if by paying the fees, it brings the wage below the level that the employer stated that they would pay in the H-1B forms and the LCA, it is still a violation, and back wages, at a minimum, could still be due. Lastly, it should be noted that the training fee, by law, is ALWAYS required to be paid by the employer, no exceptions allowed.
Best practice as an employer is to just pay the fees and not worry about H-1B or DOL audits. As always remember while blogs are good at disseminating general information, you can only get good legal advice by contacting and discussing your specific case with a qualified attorney.
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