Here is the scenario: An H-1B employee works for Employer A. The employee receives a better off from Employer B, and Employer B files an H-1B transfer for them. When the employee informers Employer A about the new filing, Employer A tells them that, per their employment contract, since they left prior to two years expiring they need to reimburse Employer A for a certain sum of money. Sometimes the employer specifically requires employees to repay H-1B visa fees, sometimes it is a more general liquidated damages clause.
The big question is, Is this Legal?
Before proceeding let me say that I am not an employment law attorney and, in general, I cannot tell you if a specific liquidated damages clause is valid or not. What I can say is that any clause that would require the employer to pay back H-1B fees is, in almost every circumstance, invalid and illegal. As stated in a previous blog post, the Employer is required to pay certain fees, no matter what. This includes the training fee, which is usually $750 or $1500 depending on the size of the employer. There is no doubt that this fee CANNOT be reimbursed to the employer in any way, shape or form. If the clause includes reimbursement for that fee, it would be considered illegal. What about the other H-1B visa fees and the attorney fee? Could the employer get reimbursed for those?
It is good to recall here that the justification given by the DOL for requiring an employer to pay all fees is that such fees are a “cost of doing business” and, therefore, not a legitimate deduction from the employees pay. Therefore, the payment of such fees could bring the salary of the employee below the required wage. Therefore, I think it is clear that if the employees repayment of the fees brings their salary below the prevailing wage (this would be their yearly salary minus the amount they are repaying, not their entire salary for the entire time they worked), it is against the regulations and the DOL would have an action against the employer.
The trickier situation is where the re-payment of such fees would not bring the employees salary below the prevailing wage. First, if the LCA lists just a static wage, and the re-payment of the fees would bring the wage below that level, I again feel that it is clear that the DOL would consider that a violation of the LCA as the employer is no longer paying the promised wage. If the LCA lists a wage range, and the re-payment of the fees would keep the wage in that range, I still believe that the DOL and USCIS would both have issues with the re-payment of the fees. DOL seems to think that there is no situation in which it is ok for the employer to require an employee to pay such wages. It is certainly not worth the risk in my mind to tempt fate and try to enact or enforce such a provision.
As always, remember while blogs are good at disseminating general information, you can only get good legal advice by contacting and discussing your specific case with a qualified attorney.