What is an employer's responsibility when an employee with an H-1B visa is terminated?

H-1B visas are nonimmigrant visas that allow foreign workers in specialized occupations to reside and work in the United States for a limited time period. To qualify, a foreign worker must be sponsored by a U.S. employer. Employers can terminate an H-1B visa worker without penalty; however, doing so causes the employee to lose status to live and work in the U.S., which triggers obligations for the employer. Effective January 2017, H-1B workers have a 60-day grace period during which they can legally remain in the United States and seek sponsorship by a new employer.

When terminating, the employer must begin by providing clear, unequivocal notification of a "bona-fide termination" to the employee. It must be done in writing and clearly indicate that the employment relationship has been terminated.

Employers are required to notify the U.S. Citizenship and Immigration Services (USCIS) by letter when there has been any "material change" to the terms and conditions of an approved H-1B petition, such as when the employment of an H-1B employee has been terminated. Recommended procedure includes a certified letter to the USCIS service center that approved the H-1B, providing the date of termination and a request to revoke the H-1B petition. Employers should notify the USCIS immediately to limit any claims for unpaid wages for the period after the employee's termination until the end of the contract. In addition, it is recommended to inform the antifraud section of the U.S. consulate in which the visa stamp was originally issued that the H-1B petition has been withdrawn. Finally, the employer must notify the U.S. Department of Labor that it is withdrawing the labor condition application (LCA).

Due to the employee's loss of status to remain in the U.S., the employer has an obligation to provide "reasonable costs of transportation" for the employee back to his or her last place of foreign residence. The obligation does not extend to family members or for personal items such as furniture and belongings. (It should be noted that if the employee voluntarily terminates employment, the employer is not obligated to provide the cost of return transportation.) The employer can offer either a direct purchase of a plane ticket or cash payment. However, an employer cannot force an employee to accept the ticket. If the employee refuses to accept a ticket or cash payment for a ticket, the employer should request that the employee sign a statement, with independent witnesses if possible, indicating that the employee declines acceptance of the ticket or cash.

Historically, employers often found it necessary to explore other options before terminating an H-1B worker due the prior requirement for the employee to return home immediately when no longer employed. Effective January 2017, an H-1B worker has a 60-day grace period from the date of termination to locate a new employer before being required to return to his or her home country, which makes it easier for employers to manage their workforce and allows an H-1B worker the opportunity to locate a new sponsoring employer.

The employer should document all steps it has taken to comply with immigration law. If there is a layoff or furlough, an employer may have compensatory obligations under the LCA. In addition, there are risks of being sued under state contract law if, for example, offer letters and other writings constitute an implied contract. There are risks of discrimination claims if H-1B employees are not treated as other similar employees in such situations. Employers need to be mindful of the special requirements affecting H-1B workers to avoid additional liability, and are advised to consult with legal counsel on issues involving H-1B workers.