A Department of Labor (DOL) judge clarified that employers can deduct legal filing fees from the paychecks of H-1B workers if the deductions do not cause the worker's wages to dip below requirements as stipulated in the certified Labor Condition Application (LCA).
Administrative Law Judge Jonathan C. Calianos ruled that The Woodmen of the World Life Insurance Society does not have to pay back wages it deducted from an H-1B software engineer's paycheck to pay legal fees to secure his visa. Woodmen deducted $5,800 from the worker's unused vacation pay when he voluntarily resigned.
The DOL's Wage and Hour Division argued that employer expenses such as attorney fees and other costs connected with the performance of the H-1B program are specifically prohibited from recoupment by the employer.
Woodmen Life argued—and Calianos agreed—that it did not violate the regulation on recoupment because the deductions did not cause the worker to fall below the required wage.
An employer attests when filing an LCA with the DOL that it will pay the foreign worker the required wage, which is the greater of the job's actual wage or the prevailing wage, throughout the entire period of authorized employment.
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"An H-1B employer is prohibited from imposing its business expenses on the H-1B worker—including attorney fees and other expenses associated with the filing of an LCA and H-1B petition—only to the extent that the assessment would reduce the H-1B worker's pay below the required wage," Calianos said.
He added that the Wage and Hour Division's "reading of the regulation as prohibiting any deduction of H-1B attorney fees and costs from an employee's pay or benefits is far too broad and not supported by the plain language of the regulation."
H-1B visa workers can never be required to pay:
- A penalty for the worker's failure to complete the full employment period.
- The statutory training, processing and fraud detection fees imposed by U.S. Citizenship and Immigration Services.
- For the employer's business expenses including attorney fees, premium processing fees or travel expenses while on the employer's business that would reduce an H-1B worker's pay below the required wage rate.
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