Nonimmigrant workers in the United States have various rights and protections afforded to them under immigration law and Department of Labor (DOL) regulations. One of the most important issues for a nonimmigrant worker with H-1B status to be aware of is an employer practice commonly referred to as “benching.”

Benching occurs when an employer fails to pay an H-1B employee, as when business is slow, for example. However, by law, the only way an employer can stop paying an H-1B employee his or her wages is by bona fide termination. Benching is illegal.

To help understand when benching might occur, consider the following example.

Elfie Jones, an H-1B beneficiary, is employed at a workshop manufacturing high-tech toys. His sponsoring employer is Santo Nicholas. Because these toys are only needed for one month of the year (December), Santo tries to save some money and stops paying Elfie his wages for the other 11 months of the year. In this case, Santo is being naughty by engaging in the illegal practice of benching.

Employer’s Obligations

Before delving into the practice of benching in greater detail, a basic rundown of an employer’s responsibilities is in order.

An employer has more obligations to its H-1B workers than simply ensuring they are being paid their wages. DOL has clearly outlined the specific legal requirements employers have to fulfill, a full list of which can be found here. These obligations include:

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

   - The actual wage rate it pays to other employees with similar experience and qualifications as specified in the H-1B visa application, or

   -The prevailing wage for their position in the area of intended employment.

2. The employer will guarantee that employment of the H-1B worker will not adversely affect the working conditions of workers similarly employed.

3. The employer will guarantee that there is no strike or lockout involving the prospective H-1B worker’s position at his or her workplace.

4. The employer will provide notice of filing of the Labor Condition Application (LCA) to its employees’ collective bargaining representative for the H-1B occupation. Alternatively, if no such person exists, then the employer will conspicuously post such notice at the worksite on or within 30 days before filing the LCA.

5. The employer will maintain the following documents for public examination:

   - A copy of the LCA 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.

6. The employer must agree to pay the alien the return costs to his or her home country if employment is terminated by the employer prior to the end of the authorized employment period.

Employers failing to adhere to these basic requirements face potential penalties. Depending on the type of violation committed, civil penalties range from $1,000 to $35,000 per violation. In some cases, employers may even be prohibited from participating in the H-1B or other programs for at least one year.

An In-Depth Review of Benching

Let’s first consider what benching is.

According to DOL, “H-1B workers must be paid the required wage rate for all nonproductive time caused by conditions related to employment, such as lack of assigned work, lack of a permit, or studying for a licensing exam.” Accordingly, at any point when an H-1B employee is not performing work or not in productive status due to a decision of the employer, the employee must still continue to receive the wage listed in the LCA filed for the H-1B petition. In other words, even in instances of plant closures, holidays, or other periods of nonproductive time, which affect both U.S. and H-1B workers, H-1B employees must be paid their wages. The requirement stands even if U.S. workers aren’t paid during such times. Failure to do so on the employer’s part may result in an investigation by DOL and monetary compensation to the employee. As noted, an employer’s obligation to pay its H-1B employees, even for nonproductive time, ends only with bona fide termination.

Some practices, however, do not fall under benching. If an employer fails to pay wages for nonproductive time “due to reasons not related to employment, such as a worker’s voluntary absence from work or a hospitalization, etc.,” said employer is not benching its H-1B employee. As such, the employer can’t be held legally accountable for lost wages. (For more information on benching, see DOL’s Wage and Hour Division Fact Sheet #621 here.)

The purpose of prohibiting benching is twofold. First, DOL seeks to protect foreign workers from unfair treatment by their employers. The underlying concern is that employers will regularly underpay or bench foreign workers in order to cut costs. Second, DOL wants to ensure that the job opportunities and wages of U.S. workers are being protected. If employers feel they can pay their H-1B employees less than the prevailing wage for their assigned job, for example, it could be detrimental to the job market for U.S. workers in the associated field.

DOL Case Studies

As a resource to employers and foreign workers, DOL highlights examples of real-world occurrences of benching. We review three below.

Avenue Dental Care: Employer’s Responsibility to Report Changes

An H-1B worker employed as a dentist left the clinic he worked at 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 when he moved to the new clinic; rather, he only received a share of the profits as a party of the business arrangement with his employer. The two clinics were not separate legal entities.

Legal action ensued. The employer argued that he wasn’t required to pay the H-1B worker his due wages or back wages because their employer-employee relationship was terminated when the worker moved to the new clinic, resulting in changes in circumstances. Further, the employer argued that by not reporting the changed situation to DOL, the H-1B worker was committing fraud and therefore shouldn’t be entitled to recover his owed wages.

In the end, DOL found that it was the employer’s responsibility alone to inform the proper authorities of the change in circumstances and amend the relevant LCA. According to DOL, since the original clinic was still listed on the LCA as the employer, the employer was in effect benching the H-1B employee and was therefore required to pay back wages.

(For the full Administrator, Wage and Hour Division v. Avenue Dental Care case, click here.)

Lambents Group: Failing to Pay Approved Wage Rate

In another case, an employer, Lambents Group, and its president Venkat Potini, were accused of failing to pay wages to 10 employees. Upon DOL investigation, the company was unable to provide documentation supporting the prevailing wages it attested to in LCAs filed with DOL. In reality, the company was paying its employees less than the appropriate wage rate for their jobs.

DOL determined that “Lambents and Potini willfully failed to pay wages as required, willfully misrepresented a material fact on an 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.” As a result of these infractions, the company was responsible for paying the employees their wages for both productive and nonproductive time, as required by law and prohibitions on benching.

In the end, the employer owed various nonimmigrant workers a total of $185,241.81 in back wages and was additionally assessed civil penalties amounting to of $72,000.

(For the full Administrator, Wage and Hour Division v. The Lambents Group case, click here.)

Computech: Brazen Benching

In 2005, DOL investigated Computech, Inc., a Michigan firm that places computer professionals at locations throughout the United States. The scope of DOL’s probe included the company’s practice of frequently benching workers, as well as its failure to compensate H-1B employees at the prevailing wage rate in their geographic areas of employment.

In the end, DOL ordered Computech to pay 232 foreign workers $2.25 million in back wages and assessed a $400,000 fine. The company was additionally barred from participating in the H-1B visa program for 18 months.

Computech’s violations were so audacious that then-Secretary of Labor Elaine L. Chao publicly commented on the case, stating that her agency “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.”

(For the full Administrator, Wage and Hour Division v. Computech, Inc. case, click here.)

Recommendations

Given the seriousness with which DOL enforces prohibitions on benching, we’ve distilled best practices for both employers and employees.

Employers, practice caution:

As an employer of H-1B workers, it is important to fully understand your obligations and observe the law regarding issues such as making good on requisite payment for nonproductive time.

There are several options available to employers if they feel they are unable to pay their H-1B employee the wage specified in their LCA or if there is not enough work to go around. A viable solution in such a case is filing an H-1B amendment to change their employee’s status to part-time. Another is to simply terminate the employment, particularly if long-term employment of their H-1B employee is not feasible.

It is lastly important to keep in mind that U.S. Citizenship and Immigration Services (USCIS) must be informed by the employer of any changes regarding H-1B employees and the circumstances of their employment. Additionally, employers must keep DOL apprised of all relevant information, including changes to circumstances indicated in LCAs.

Employees, know your rights:

It is often the case that H-1B employees are afraid to confront their employers when they feel their wages are being withheld or when they feel they are being treated unfairly. Many are worried about losing their job and their legal status in the U.S. In many instances, these H-1B workers might prefer to find a new job and have their new employer transfer their H-1B status under the portability rule, rather than complain to DOL.

However, it is abundantly important for H-1B employees to communicate with their employers directly when an issue arises. The potential ramifications of silence are grave. For example, what if, after leaving her job, an H-1B employee cannot provide pay stubs in order to prove she has been maintaining valid H-1B status? She would be determined to be in the U.S. unlawfully and may face deportation.

In most cases, employers will not want to risk being reported to DOL because the consequences of exploiting foreign employees are severe. They’re therefore often eager to resolve issues.

When an employer isn’t amenable to its worker’s complaint, and if the exploitation continues, an H-1B worker should consider filing a WH-4 complaint with DOL, supported by sufficient and detailed evidence of the violations. In addition to compensating the H-1B employee for back wages, the employer could face civil fines and be deprived of eligibility to file H-1B applications for at least two years. (It is important to understand, however, that sometimes a WH-4 may be denied and that this can have serious effects on the worker’s job and legal status in the U.S. We therefore highly recommend consulting with an experienced attorney before making a complaint in order to fully explore your options.)

Additionally, if an H-1B employee can prove that he was laid off merely because he reported his employer’s illegal actions, then the employee will be allowed to maintain legal status for as long as the original approved H-1B permitted. During this time, laid-off H-1B employees can find new employers to which they are able to transfer their H-1B visas. Alternatively, these employees can opt to petition under another visa category.

Finally, employees should note that DOL does not have the authority to conduct spot checks on employers; however, as we noted in an article you can read here, USCIS is taking steps to combat H-1B fraud by warning employers of more frequent site checks it will conduct. Ultimately, the most surefire way to ensure an employer is investigated is if the employee reports the violator. According to DOL’s Administrative Review Board, the statute of limitations on a benching violation claim is one year after a termination takes place, not one year after the first verifiable benching incident.

For more detailed information on the H-1B category, including minimum requirements and USCIS policies, refer to the following links:

General H-1B Topics

H-1B Articles

H-1B Visa: Temporary Workers in "Specialty" Occupations H-1B Requirements H-1B Services We Provide Applying for an H-1B Visa H-1B Advantages H-1B Limitations H-1B Documentation List Extending H-1B Status Beyond Six Years H-1B1 Subcategory: Free Trade Agreement H-1B2 Subcategory: Department of Defense H-1B3 Subcategory: Fashion Models Guidance on H-1Bs for Nurses H-1B Premium Processing and Related Issues H-4 Visas: Spouses and Children of H-1B Workers Frequently Asked Questions about H-1B Visas Filing Fees Attorney's Fees

The Cap USCIS Guidance on H-1B Cap Exemptions After the Cap Off-site Employees "Recapturing" Unused Time H-1B-Dependent Employers "Benching" H-1B Workers The Portability Rule Maintaining H-1B Status during Corporate Changes H-1B vs. O-1 Issues Relating to F-1 and OPT Issues Relating to Work, Travel, and Adjusting Status Memo: H-1B Status during the I-485 Waiting Period Memo: Be Aware of Abandonment Frequently Asked Questions about I-140 and I-485 Filing

 

Updated 05/08/2017