Business Struggles Due to COVID: Responsibilities of H-1B Employers

Business Struggles Due to COVID: Responsibilities of H-1B Employers

The COVID-19 outbreak is having a substantial effect on U.S. businesses as operations shutdown or the workforce begins working remotely. In addition, employees affected by the virus may need to self-quarantine. If you missed our previous article on remote employment I-9 compliance, click here to read more. Unfortunately working remotely is not an option for many companies and as business slows down, paying employees can become more challenging. It is important for H-1B employers to understand their responsibilities as they consider options for keeping their business afloat.

Changing Business Conditions

Employers must pay H-1B workers for all “nonproductive time” such as lack of assigned work or time spent on studying or training for an exam. Due to these Department of Labor anti-benching provisions, employers must still pay the full wage or salary listed on the LCA. Workers must be paid according to their status, i.e. full time salaried workers must be paid the full wage rate, full-time hourly workers must be paid for 40 hours (or normal full-time employment for hourly employees), and part-time workers must be paid for at least the number of hours on the I-129 and LCA. If the business must shut down and the employee is nonproductive, the wage would still need to be paid unless employment is terminated.


Change employee’s status from full-time to part-time

To mitigate the reduction in business needs, the employer may amend the H-1B employee to part time status. The employers will need to file an amended petition with a new LCA to update USCIS and DOL of the material changes in employment taking place. The amended petition can be filed with a range of hours, for example, 15-20 hours. The H-1B employee must be paid for the hours worked. If an amended petition is not filed to reflect the updated pay and hours, or if the employee works for more hours than the employee was paid, employers could be held liable for back pay.

Terminating H-1B Employees

If the employer’s reduction in business mandates a reduction in workforce including H-1B employees, the employer must comply with the H-1B regulations on termination.

  1. Withdraw the Labor Condition Application and H-1B petition.
  2. Offer the employee return transportation.


Personal Leave

Employees who are affected by the virus, either directly or on behalf of a family member, may request personal leave. If an employee requests personal leave, the employer does not have to pay the employee salary during the leave period, as long as employers are complying with other immigration and employment regulations (such as the Family and Medical Leave Act) and this practice is applied consistently to all employees regardless of their immigration status.

If terminated or an employee voluntarily leaves his or her job, the employee can remain in the U.S. the earlier of:

  1. 60 days, or
  2. Until the end of the I-94 validity period.

The employee can either search for another job during that time or plan to make a return trip back to his or her home country. If the H-1B employee does depart the country, the employer must offer to pay for the return trip back as outlined above. With travel restrictions in place across the globe, H-1B workers may be unable to return to their home countries immediately.

Some considerations for the 60-day grace period:

  1. For each H-1B petition, the employee is granted a 60-day grace period that must be used consecutively. Any time that is not used is lost. If the employee files an amended petition with a new employer, the new H-1B petition would provide a new 60-day grace period.
  1. Employment is not authorized during the grace period. However, an H-1B worker may begin employment with a new petitioner after the petition has been filed under the portability provisions of the American Competitiveness in the Twenty-First Century Act (AC21), as described below.
  2. The H-1B employee can also change his or her status to another nonimmigrant status, such as F-1, H-4, etc.

It may be possible to rehire an employee prior to the end of the period of authorized stay by filing a new H-1B petition. However, the new petition could leave your business and employee with the risk of denials, shortening authorized stays and creating uncertainty for employees. Check with an attorney to see if this a feasible option for your employees and business.

RISK: The 60-day grace period is a discretionary benefit and therefore the USCIS is not required to grant the grace period benefit. The H-1B employee will know whether the USCIS grants the benefit when it adjudicates the H-1B amended petition for a change in employment.

Employment Authorization Document (EAD) for “Compelling Circumstances”

USCIS may grant employment authorization and issue an Employment Authorization Document (EAD) for up to one year if the USCIS determines that there are compelling circumstances that justify issuing the EAD.

This temporary employment authorization may be provided to certain nonimmigrants who are the beneficiaries of approved employment-based immigrant visa petitions, and who are caught in the continually expanding backlogs for immigrant visas and face compelling circumstances.

  1. Eligible nonimmigrant statuses: E-3, H-1B, H-1B1, L-1, or O-1 nonimmigrant status
  2. Principal beneficiaries must have an approved I-140 petition
  3. Qualifying dependent spouses and children of a principal beneficiary are also granted employment authorization.
  4. Compelling circumstances that mandate the grant of the EAD include the following examples or situations:
    1. Serious Illnesses and Disabilities.
    2. Employer Dispute or Retaliation.
    3. Other Substantial Harm to the Applicant.
    4. Significant Disruption to the Employer.

The USCIS takes the position that “job loss” by itself will not be considered substantial harm to the applicant. However, if the applicant can show “additional circumstances that compound the hardship associated with job loss,” the individual may establish eligibility for a compelling circumstances EAD. Similarly, unemployment alone is not a compelling circumstance, but it may rise to that level in conjunction with other factors.

RISK: If you receive a compelling circumstances EAD, and begin working based on this EAD, you will no longer be maintaining your nonimmigrant status and therefore, would be ineligible to change or adjust status in the U.S. However, you generally will not accrue unlawful presence in the U.S. while the EAD is valid or while your application is pending if you filed a non-frivolous application on time.

Contact us at with your questions about the effect of COVID-19 on your H-1B employees.

Visit our COVID-19 Resource Page for Employers & Foreign Workers to read about other critical immigration updates.