Department of Labor investigation reminds employers to comply with H-1B wage laws

Aug. 28, 2014 – Companies employing H-1B workers are subject to investigation by the Department of Labor for prevailing wage violations, and risk legal action, civil penalties, back wages and taxes, and suspension from the H-1B program for non-compliance.

Employers are also subject to random, unannounced inspections by U.S. Citizenship and Immigration Services officials to verify the job details of H-1B nonimmigrant workers in specialty occupations.

In one recent case, the Department of Labor’s Wage and Hour Division alleged that an employer in Indianapolis misrepresented facts in its H-1B petitions and failed to pay prevailing wages to several H-1B workers.

An Administrative Law Judge found the employer liable for back wages because it did not pay H-1B employees the prevailing wage for pre-assignment and post-assignment time. The employer was ordered to pay $121,400 in back wages and civil fines to six workers, plus taxes, interest and penalties to federal and state authorities.

The court also prohibited the employer from participating in the H-1B program for one year and imposed enhanced compliance procedures on the employer, including opening its records to inspection by the Department of Labor for two years.

“The rules governing the employment of nonimmigrant workers in specialty occupations are specific and must be followed completely,” said Thomas Gauza, district director for the Wage and Hour Division in Chicago. “This case shows that the Department [of Labor] will not hesitate to bring legal action against employers that continue to short their employees and violate the law.”

BAL Analysis: Employers are encouraged to conduct internal compliance checks in light of the increased scrutiny and inspections of worksites for potential violations of labor and immigration regulations covering H-1B, L-1 and other nonimmigrant categories.

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