Employee Benching

Nonimmigrant workers in the United States have various rights and protections accorded to them under immigration laws and Department of Labor (DOL) regulations. One of the most important issues for a non-immigrant worker with H-1B status to be aware of is commonly referred to as “benching.” Benching of an H-1B worker occurs when their employer, say during a time of low productivity or otherwise slow business, is not paying their H-1B employee their wages, a.k.a. “benching” them. By law, the only way an employer can stop paying an H-1B employee their wages is by bona fide termination. For example, say Tom is working in the United States under H-1B status and during the economic downturn his company experienced a period of non-productivity. Since Tom had no work to do, Tom’s employer stopped paying him his wages during this time period. This would be a case of benching.

An employer has more obligations to their H-1B worker than simply ensuring they are being paid their wages, however. The DOL has clearly outlined the specific legal obligations of employers towards their employees when hiring H-1B workers. These obligations include:

The employer will pay the H-1B employee the higher of:

The actual wage rate it pays to other employees with similar experience and qualification that was specified in their H-1B visa application, or
The prevailing wage for their position in their area of intended employment.

The employer will guarantee that employment of the H-1B worker will not adversely affect the working conditions of workers similarly employed.
The employer will guarantee that there is no strike or lockout involving the prospective H-1B worker’s petition at his or her workplace.
The employer will provide notice of filing of the Labor Condition Application (LCA) to the respective employee collective bargaining representative for the H-1B occupation. Or, if no such person exists, they will conspicuously post such notice at the worksite on or within 30 days before they file the LCA.
The employer will maintain the following documents for public examination:

A copy of the LCA that was filed
Documentation of the salary paid to the H-1B employee
An explanation of how the actual wage was determined, and
Documentation of the basis used for the prevailing wage

The employer must agree to pay the alien the return costs to his or her home country if their employment is terminated by the employer prior to the end of their authorized employment period. Additionally, depending on the type of violation committed by the employer, there may be civil penalties ranging from $1,000 to $35,000 per violation. In some cases, employers may even be prohibited from participating in the H-1B or other immigrant programs for at least one year.

According to the DOL, “H-1B workers must be paid the required wage rate for all non-productive time caused by conditions related to employment, such as lack of assigned work, lack of a permit, or studying for a licensing exam.” When an employer files an H-1B petition for a nonimmigrant worker, they also file a Labor Condition Application (LCA), attesting to the government that they will pay that employee the prevailing wage for their job in that geographic area. Even in instances of “annual plant shutdowns or holidays or other events, which affect both U.S. and H-1B workers,” H-1B employees must be paid their wages “even if the U.S. worker is not paid.” Failure to do so on the employer’s part may result in an investigation by the DOL and monetary compensation to the employee. The purpose of regulating benching is twofold: on the one hand, the DOL seeks to protect H-1B workers from unfair treatment by their employers based on their foreign status. The concern is that employers will regularly underpay or bench foreign workers in order to cut costs. On the other, the DOL also wants to ensure that U.S. workers’ job opportunities and wages are being protected. If employers feel they can pay their H-1B employees less than the prevailing wage for their assigned job, it could be detrimental to the U.S. workers’ job market in that field.

The DOL has laid out specific guidelines for when an employer’s obligation to pay for nonproductive time starts. Nonproductive pay requirements begin with the earliest of the applicable following events:

The H-1B worker “enters into employment” with the sponsoring employer, which occurs when the worker first makes him/herself 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 days after the H-1B worker is first admitted into the U.S. pursuant to the H-1B petition, whether or not the H-1B worker has “entered into employment.”
No later than sixty days after the date the H-1B worker becomes eligible to work for the employer, whether or not the H-1B worker has “entered into employment.”
For an H-1B worker already in the United States, on the employee’s start date of work with the employer under the portability provisions when an H-1B extension or transfer was filed with the USCIS.

The rate of nonproductive pay due to an H-1B employee must be paid at the required wage rate for the occupation listed on the H-1B worker’s LCA that was filed by their employer. An employer’s obligation to pay for nonproductive time stops only with bona fide termination of employment. It is important to remember, however, that it is not considered benching if wages are not being paid for nonproductive time “due to reasons not related to employment, such as a worker’s voluntary absence from work or a hospitalization, etc.” The employer will not be held legally accountably for lost wages if the failure to pay was due to a voluntary request by the employee, such as taking leave during his or her working time. For example, an employer is not liable to pay lost wages if an H-1B employee takes extra time off on top of their covered maternity leave. For more information on benching, see the U.S. DOL’s Wage and Hour Division and Fact Sheet #62I.

For example, in one benching case brought before the DOL, an H-1B worker employed as a dentist left the clinic he worked at with his employer to become a partner with the same employer at a recently opened clinic in a neighboring state. The employee did not receive any wages at the rate established under the LCA at the beginning of his employment when he moved to the new clinic; rather, he only received a share of the profits as a party of a business arrangement with his employer. The two clinics were not separate legal entities. His employer argued that, rather than not paying the H-1B worker his due wages, their employer-employee relationship was terminated when the worker moved to the new clinic and that he was no longer liable to pay the back wages under the changed circumstances. Furthermore, the employer argued that by not reporting the change in situation to the DOL the H-1B worker was committing fraud and should therefore not be entitled to recover his owed wages. The DOL found however that it was the employer’s responsibility alone to inform the proper authorities of the change in circumstance and amend the relevant LCAs and, that since the original clinic was still listed on the LCA as the employer, the H-1B employee was being benched and they were required to pay the backed wages. For the full case, see Administrator, Wage and Hour Division v. Avenue Dental Care.

In another case, Administrator, Wage and Hour Division v. The Lambents Group and Venkat Potini, the DOL Administrative Review Board found that the Lambents Group owed various nonimmigrant workers a total of $185,241.81 in backed wages and civil money penalties of $72,000. The company, among other things, was unable to provide documentation supporting the prevailing wages they attested to in the LCAs filed with the DOL. The company was paying its employees less than the appropriate wage rate for their jobs. The Administrator found that “Lambents and Potini willfully failed to pay wages as required, willfully misrepresented a material fact on a LCA, substantially failed to provide notice of the LCA filing, [and] failed to make available for public examination the LCA and other documents as required.” The company was therefore responsible for paying the employees their owed wages for both productive and nonproductive time, as required by law and the benching rule.

An extreme example of benching gone wrong would be the 2005 DOL investigation into Computech Inc., a Michigan firm that places computer professionals at locations throughout the United States. In addition to frequently benching workers without wages, Computech also failed to pay their H-1B employees the prevailing wage rate in their geographic areas of employment. Secretary of Labor Elaine L. Chao commented on the case, stating:

“The DOL aggressively enforces the law to ensure that temporary foreign workers are compensated fully and fairly. Abuse of the temporary foreign worker program is not tolerated and violators, as this case shows, are vigorously pursued.”

Computech was ordered by the DOL to pay 232 foreign workers $2.25 million in back wages and an additional $400,000 fine. The company was also prohibited for the next 18 months from participating in the H-1B visa program. For more information on this case, see the American Bar Association.

As an employer of H-1B workers, it is important to fully understand your obligations and observe the law regarding issues such as nonproductive wages. There are options available to employers if they feel they are unable to pay their H-1B employee the wage specified on their LCA or if there is not enough work to go around, such as filing an H-1B amendment to change their employee’s status to part-time. Another option is to simply terminate the employment if they no longer see a long-term job for their H-1B employee. It is important to keep in mind that USCIS must be informed by the employer of any changes regarding H-1B employees.

Oftentimes H-1B employees are scared to confront their employers when they feel they are being withheld their wages or treated unfairly. Many are worried about losing their job and their legal status in the U.S. H-1B workers might think it is better for them to find a new job and, under the portability rule, have their new employer transfer their H-1B status rather than complain to the DOL. However, it is highly beneficial for the employee to communicate with their employer directly in order to address an issue if it exists. If after leaving their job the employee cannot provide valid pay stubs to prove they have been maintaining their legal H-1B status, then they are not lawfully allowed to stay in the United States and will be deported. This is why it is most likely more beneficial for a benched H-1B employee to take up the issue with their supervisor or employer soon rather than later. In most cases, the employer will probably not want to risk being reported to the DOL and face the repercussions for exploiting their foreign workers, so they will resolve the issue. Employers should be aware of their obligations towards their H-1B employees and ensure that they are paying them the correct wages and are keeping the DOL informed of all relevant information, including maintain accurate LCAs.

If the exploitation continues, we suggest an H-1B employee file a WH-4 complaint to the DOL with sufficient evidence to justify the illegal treatment. In addition to compensating the H-1B employee for back wages, the employer could face a $5,000 fine or be deprived of eligibility to file an H-1B application for at least two years. Additionally, if the H-1B employee can demonstrate he or she was laid off due to the employer’s retaliation for the reporting the illegal actions, he or she will maintain their status until the original approved H-1B status expires. Laid-off H-1B employees can find a new employer to transfer their H-1B visa or transfer to another visa type during this period. The DOL does not have the authority to do spot checks on employers and the only way to ensure they are being investigated, if the employee does decide to take legal action, is to report them. Recently the DOL Administrative Review Board clarified that the statute of limitations on a benching violation claim is one year after termination takes place, not the first benching incident. It is important to remember, however, that sometimes a WH-4 may be denied and that this can have serious effects on the petitioner’s job and legal status in the U.S. We highly recommend consulting with an experienced attorney before making a complaint in order to fully explore your options.

Author:Emily Johnson (emily.johnson@hooyou.com)

For more information on H-1B Visa, please refer to the following topics: