Q&A: Pandemic Impacts on Business Q&A

To keep you informed amidst this turbulent time, Jing Feng Law Group is sharing important tips on Pandemic Impacts on Business below. 

Advice for Employers Struggling to Fulfill Labor Conditions under H-1B

Please note that DOL regulations require employers to continue to abide by the labor conditions to which they agreed when filing the H-1B petition. These are the terms set forth in the underlying ETA Form 9035, Labor Condition Application (LCA). More relevantly, these concern payment of the required wage, full-time vs. part-time status of the employee, and notice to employees in the area of intended employment.

1. Does an Employer need to continue to pay the required wage set forth in the LCA?

DOL regulations require employers to pay the wage set forth in the LCA. In response to the ongoing COVID-19 outbreak, many local and state governmental authorities are instituting shelter in place orders. Employers are asking what happens should they decide to suspend, furlough, layoff, reduce hours, or otherwise render their employees unproductive during the crisis.

How employers would be able to place this class of worker in non-productive status while simultaneously maintaining compliance with the applicable DOL regulations requiring provision of the required wage irrespective of non-productive work status.

Non-productive status is defined as any time during the validity of the LCA and H-1B petition where an employee is unable to work. When an employee is in a non-productive status due to a decision of the employer (e.g., due to a lack of work), the employer is still obligated to pay the required wage.

On the other hand, an employer is not required to pay the required wage to an employee in non-productive status, when the employee is non-productive at the employee’s voluntary request and convenience (e.g., touring the U.S. or caring for ill relative) or because they are unable to work (e.g., maternity leave or automobile accident which temporarily incapacitates the nonimmigrant) due to reasons unrelated to work and not required by the employer. Of course, the employer would still have to pay the required wage if the employee’s non-productive period was subject to payment under the employer’s benefit plan or other statutes such as the Family and Medical Leave Act (29 U.S.C. 2601 et seq.) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).

2. Can an employer furlough, bench, or otherwise render an H-1B employee non-productive and stop offering the required wage if the employee is not able to work from home during a COVID-19 pandemic initiated shelter-in-place order from government authorities?

No, this is not permissible given that the conditions are not created by the employee. In this situation, an employer must continue to offer the required wage. Otherwise, an employer could be exposed to liability such as fines, back wage obligations, and in serious cases, debarment from the DOL’s temporary and permanent immigration programs for a period of time. Per 20 CFR 655.810(d), debarment prohibits the USCIS from approving immigrant and non-immigrant petitions filed by the employer.

3. Is an employer required to pay the required wage if the employee is afflicted with COVID-19, consequently unable to work, and is placed into isolation and quarantine during treatment?

The regulations do not require an employer to pay the required wage if an employee is not able to work due to a reason which is not directly work related and required by the employer. That said, if an employer has policies in place where a COVID-19 positive employee would have to remain in quarantine, there is an argument to be made where the employer must continue to pay the employee given that the quarantine rule is created and imposed by the employer.

An employer should also 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. Employers should also keep an eye to any additional federal legislation passed regarding employers’ obligations during this national emergency.

4. What steps does an employer have to take if it wants to convert an H-1B employee from full-time to part-time status?

An employer seeking to convert a full-time H-1B employee to part-time must file a new LCA to reflect this change. Once a new LCA is required, the employer is required to file an amended H-1B petition. The employee is permitted to commence part-time employment upon the receipt of the H-1B petition by the United States Citizenship and Immigration Services (USCIS). In the event of an LCA investigation, DOL looks at H-1B compensation issues pay period by pay period. There is no ability to “true up” an employee’s salary later in 2020.

Reductions in pay may or may not require a new LCA and filing of an amended H-1B petition. DOL regulations allow for changes in pay, possibly reductions, as long as the wages do not drop below the prevailing wage.

5. What steps does the employer have to take to terminate its obligation to pay the required wage?

• A bona fide termination of the employment relationship.
• notify USCIS that the employment relationship has been terminated so that the petition can be canceled.
• Employer provides the employee with payment for transportation home under certain circumstances. Additionally, an employer is responsible for paying for the return transportation cost of the employee if the employer terminates the employee prior to the end of the petition period.

6. If an employee starts to work from home, what does the LCA require in regards to notice?

If an employee works from home, the LCA notice and posting regulations should be followed. If the employee’s home address is within a normal commuting distance as the H-1B work location, a new LCA and H-1B petition are not required. Instead, the employee must post the LCA at their home for 10 consecutive days and complete the posting sheet, which must then be sent to the employer for placement in the employer’s Public Access File.

If the employee’s home is outside the MSA in which their worksite is located, then there might be a “short term” placement option that would allow the employer to place the H-1B worker, for up to 30 work days within a one-year period, at a temporary worksite like at the employee’s home (roughly 6 weeks).

If an LCA posting isn’t compliant with what DOL wants and expects, it is better for employers to risk a fine for an improperly posted LCA and explain the impossibility of the situation, that to not amen an LCA and H-1B for a reduction in pay or work hours. In other words, it is better to do it incorrectly than not to do it at all.

Advice on Unemployment Insurance

7. Is foreign worker eligible for unemployment insurance?

It depends. Each state is different in how it handles unemployment insurance and when someone is considered unemployed and eligible to receive unemployment compensation. Some states, such as Illinois for example, limit unemployment insurance to individuals who are lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law, with some exceptions.

Foreign nationals typically qualify for regular unemployment insurance benefits if they are authorized to work (both at the time they perform qualifying work and when they apply for and receive benefits). States may establish stricter rules. In general, individuals usually qualify for regular unemployment insurance benefits if they:

• In most states, this means an individual must have been separated from their job due to layoff, reduction-in-force, or a lack of available work.
• An individual must meet their state’s requirements for wages earned or time worked during an established period of time referred to as a “base period.”
• As each state sets its own unemployment insurance benefits eligibility guidelines, it is important to evaluate the state specific eligibility requirements for the state in which the foreign national works.

Additionally, in order to be eligible for unemployment insurance, some states require the unemployed individual be able to establish that they are able to work, available for work and actively looking for work.

Many nonimmigrants, such as foreign workers holding H-1B or L-1 status are generally only authorized to work in the United States for a single employer. Thus, if they lose their job with that employer, they generally would not qualify under the case law in some states because they’re not considered “able and available to work” when they are unemployed. Even though H-1B and some other nonimmigrant workers have flexibility to change employers, federal law requires the new employer to file a new visa petition before the employee may work (and for some visa categories, the petition must be approved first). Thus, the analysis goes, if a nonimmigrant worker has lost a job and does not have a new visa petition filed by a new employer, the worker is not “able and available” to work and does not qualify for unemployment insurance benefits.

On the other hand, some foreign workers are employed in the United States pursuant to an employment authorization document (EAD), such as certain H-4 spouses of H-1B workers, adjustment of status applicants, DACA recipients, TPS recipients, applicants for asylum, and refugees, among others. These individuals typically have an unrestricted EAD, so generally these individuals would be “available for work” for another employer other than their current employer. The same holds true for lawful permanent residents, as these individuals are authorized to work for any employer; thus, if they were to lose their job, they generally would be “available for work” for another employer.

Undocumented workers cannot collect unemployment insurance as they were not work authorized during the designated period in which their wages were earned and they cannot demonstrate that they are “available for work” because they are not legally authorized to work in the United States.

8. Are Unemployment Insurance Benefits Taken Into Consideration for Purposes of Public Charge Determinations?

Unemployment insurance payments are not generally taken into consideration by the U.S. Department of Homeland Security (DHS) for purposes of making a public charge determination. DHS announced it would not consider federal and state retirement, Social Security retirement benefits, Social Security Disability, post secondary education, and unemployment benefits as public benefits under the public charge inadmissibility determination as these are considered to be earned benefits through the person’s employment and specific tax deductions.

Advice on Delayed Extension and Transfer

Generally, nonimmigrants must depart the United States before their authorized period of admission expires. However, USCIS recognizes that nonimmigrants may unexpectedly remain in the United States beyond their authorized period of stay due to COVID-19. Should this occur, the following options are available for nonimmigrants: 

9. What will happen I file my extension or transfer after my current status expires?

USCIS reminds petitioners and applicants that it can consider delays caused by the COVID-19 pandemic when deciding whether to excuse delays in filing documents based on extraordinary circumstances. If a petitioner or applicant files an extension of stay or change of status request (on Forms I-129 or I-539) after the authorized period of admission expires, USCIS may excuse the failure to file on time it was due to extraordinary circumstances beyond their control, such as those that may be caused by COVID-19. The length of delay must be commensurate with the circumstances. The petitioner or applicant must submit credible evidence to support their request, which USCIS will evaluate on a case-by-case basis. These special situations have been used at various times in the past, including for natural disasters and similar crises.  It is a case-by-case evaluation. We encourage being precautious on this policy. Otherwise, unlawful presence will be accumulated if the delay filing will not be excused.

10. If I entered U.S. under Visa Waiver Program and could not leave due to COVID-19, what should I do?

Visa Waiver Program (VWP) entrants are not eligible to extend their stay or change status. However, under current regulations, if an emergency (such as COVID-19) prevents the departure of a VWP entrant, USCIS in its discretion may grant a period of satisfactory departure for up to 30 days. For those VWP entrants already granted satisfactory departure and unable to depart within this 30-day period because of COVID-19 related issues, USCIS has the authority to temporarily provide an additional 30-day period of satisfactory departure.

Special Policy on I-9

11. Has USCIS announced any suspension of Form I-9 or E-Verify requirements?

No. As of this date, the mandate to complete a Form I-9 (and E-Verify if applicable) has not been suspended. Thus, 

1. all new hires must complete Section 1 of the Form I-9 on or before the first date of employment for pay
2. the employer must complete Section 2 of the Form I-9 after physically reviewing original documents, and
3. the employer must complete Section 3 of the Form I-9 (or otherwise appropriately update the Form I-9) when re-verification is necessary.

12. What are viable options for completing Form I-9 in remote work scenarios?

Section 1 of the Form I-9 is completed by the employee. Employers should provide the new hire with the Form I-9 and Form I-9 instructions to complete Section 1 on or before the date of hire. Despite the challenges of remote employment, the employer is still legally required to complete Section 2 of the I-9 within three business days of hire (or on the first day of work for pay if the duration of employment will be three days or less). Re-verification is also required to be completed timely (to ensure that the Form I-9 reflects employment authorization covering every day of employment). The agent must review original documents while in the physical presence of the person presenting them.

One strategy for compliance is to authorize an agent to act on the employer’s behalf to complete Section 2 or re-verify employment authorization. Please note that in the Form I-9 instructions, an agent is referred to as an “authorized representative”.

The agent records the document information on the I-9 and signs her name as “agent” for the employer, dating the form and filling in all form fields as appropriate. To document that the agent is acting on the employer’s behalf, the best practice is to send clear written instructions for the agent performing this service. Many employers will designate someone to be on the phone or present via webinar to observe the Form I-9 process and confirm that the agent is acting appropriately. Because the process of verifying employment eligibility must occur in-person, these instructions should include current CDC guidance relating to reduction of the risk of virus transmission. Because the agent is acting on the employer’s behalf, any mistakes made by the agent will be attributed to the employer. The Form I-9 and instructions are available at https://www.uscis.gov/i-9.

13. In order to comply with social distancing recommendations, is it okay to use a family member already in the household as a 3rd party?

In cases of self-isolation and/or quarantine, the only person available to act as agent may be a family member or health care provider. While it is lawful for these people to act as an agent of the employer, special care should be taken to assure that the Form I-9 has been completed correctly and completely.

Employers should consider whether it is preferable to have a family member serve as the employer’s agent or to instead wait to complete Section 2 of the form until the employee is in the office and able to meet with the employer in-person to complete the form. While it is obviously not ideal to have late completed forms, it is also not ideal to have a family member complete Section 2, as the family member may be less reliable than another 3rd party agent, such as a Notary Public, in terms of properly completing the Form and verifying that the documents presented reasonably appear to be genuine and relate to the employee.

In any event when an employer uses an agent to complete Section 2, the employer should review the Form I-9 as soon as possible and take any required corrective action (clearly noting when changes were made and by whom on the face of the document) as quickly as possible.

14. If I cannot find anyone to verify a remotely hired employee, should I verify the documents through Skype or Zoom or some other video communication?

No. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI), the division of ICE charged with worksite compliance enforcement has advised that the law requiring physical inspection of documents for I-9 purposes is still in effect.

15. If the employer normally uses an electronic I-9 system, how should remote I-9s be handled?

First, the use of electronic on-boarding systems does not excuse physical inspection of I-9 documents. A system that fails to confirm physical document inspection may be deficient.

An employer should then consider its options. An employer that uses an electronic system may elect to create paper Forms I-9 paper if the circumstances warrant. For example, an employer may decide to create timely forms using an agent as described above, but the process would need to be all or in part paper-based because the employee and/or agent may be unable to access the electronic system if working from home.

An employer that creates a paper I-9 but otherwise uses an electronic system should maintain that paper I-9 record and flag its existence for future retrieval. If the employer wants to maintain the I-9 electronically going forward, it must comply with the applicable regulations for electronic I-9 retention.

16. What should employers include in the recommended file memo for forms created in this period?

Per 8 CFR §274a.2(b)(2), the Form I-9 must be retained for the entire duration of each individual’s employment plus at least one additional year (three years from the date of hire or one year from the date of termination, whichever is later). The biggest challenge for employers may be building the institutional memory to explain why some Form I-9swere completed late or did not have copies of documents attached in the context of a future investigation. It is critical to instruct them to write explanatory notes in Section 2.

Employers should create and attach a file memo to any Form I-9, print or electronic, that were created during this period that explains the circumstances for creation of the from that resulted in untimely and/or practices that are outside of an employer’s normal Form I-9 creation and retention protocol. This memo should articulate and confirm the employer’s commitment to compliance with the employment verification requirements under the Immigration Reform and Control Act, describe the situation (attaching government advisories or other third-party documents such as, for example, the 3/13/20 Presidential Proclamation of National Emergency), who was affected, what steps were taken and where relevant documentation can be found.

17. Does suspension of employer operations impact the employment verification requirements?

Yes, if a business is closed, then the Form I-9 requirements are tolled because, it is not considered a “business day” for Form I-9 purposes. Again, the employer should note this on the Form I-9 and ideally in an attached memo if it would otherwise appear that the form was not timely completed.

18. What if employers normally keep copies of Section 2 and 3 documents?

If an employer uses an agent to complete the Form I-9 remotely, the best practice would be for the person acting as the employer’s agent to make the copies at the first practical opportunity and deliver them to the employer. Another possible solution would be for the employer to copy the documents when the employee can bring them to the office. This practice has potential pitfalls, however. The employer will need to confirm that the documents presented are the same as those used for Form I-9 completion, which may prove difficult. Moreover, the employee may object to presenting documents again.

We are committed to help our clients in this pandemic. Please contact Attorney Jing Amy Feng (jfeng@fengvisa.com)  if you have any further question.