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Avoiding The Abyss: H-1B Strategies When Facing Reductions in Force (Part II)
by Yoshiko I. Robertson

[For Part I click here]

B. Notification to the INS

INS regulations impose an obligation for an H-1B employer to notify the INS "immediately" of "any changes in the terms and conditions of employment of a beneficiary which may affect [H-1B] eligibility."17 The provision also requires that if the employer no longer employs the H-1B nonimmigrant, the employer "shall send a letter explaining the change(s) to the director who approved the petition."18 The regulations further require the Service to respond with a notice of intent to revoke the H-1B petition if the "beneficiary is no longer employed by the petitioner in the capacity specified in the petition."19 Although the regulation requires immediate written notification when there is a change in the terms of employment, it does not expressly impose any penalty for a failure to make prompt notification.

The INS requirement for notification predates the passage of the American Competitiveness in the 21st Century Act (AC21).20 AC21 created the concept of "H-1B portability,"21 which reflects a legislative intent to allow greater mobility of H-1B workers. Congress was concerned that H-1B workers' inability to transfer to new H-1B employers until the time-consuming LCA and H-1B petition adjudication were completed would create opportunities for exploitation of H-1B nonimmigrants by the employer.22 Thus, one could argue that AC21 has expressed a public policy to allow for free and unimpeded transfer of H-1B workers. The INS requirement for notification of H-1B termination that would result in the agency's revocation of the underlying petition may be seen as inconsistent with the public policy behind AC21.

The notification requirement also pre-dates the DOL's Interim Final Rule implementing ACWIA, which created a "no-benching" requirement.23 The "no-benching" provision requires employers to pay the H-1B nonimmigrant the required H-1B wage rate even while the worker is inactive, or "benched," unless the nonproductive status is at the voluntary request of the H-1B worker, or the obligation to pay the wage is ended by a bona fide termination of the employment relationship.24 As discussed in the above section on costs of return transportation abroad, the DOL indicated in the ACWIA Interim Final Rules that the employer must have satisfied the regulatory requirement regarding notification of termination for the Department to consider it a bona fide termination.25 In a DOL "stakeholders" meeting held on January 16, 2001, a DOL Employment Standards Administration (ESA) representative verbally opined that it would consider revocation of the H-1B petition as "one indication" of the official termination of H-1B employment relationship, but that "failure to revoke may not be entirely dispositive" of whether termination of employment has really occurred.26 The DOL concluded that "the real issue is whether it is clear to the employee that the employment relationship has been severed. In this regard, a termination letter from the HR Director is the best evidence."27 However, the Department has yet to issue a written clarification of its position, other than what has been published in the Preamble to its ACWIA regulations. 28

The current INS regulation requiring employers to notify the Service of H-1B termination creates tension between the employer and the employee, and raises conflict of interest concerns for immigration practitioners. As discussed above, the expression of congressional intent to allow greater freedom of movement for H-1B workers suggest that the INS should consider a policy that clarifies what would be a reasonable period of time for an H-1B worker to maintain status between employment. In addition to public policy considerations, there are also fundamental equity and fairness concerns where employers are required to "pull the rug out" from under the H-1B employee. To be sure, the INS may desire an employer's notice of a termination as a means to monitor and maintain accurate count of H-1B visa numbers each fiscal year. It does not follow, however, that the Service must immediately revoke the approved H-1B petition. An H-1B visa number has already been allocated to that alien, and he or she retains the statutory privilege of "porting" that number to another H-1B employer under AC21. If there were a reasonable time period for retention of lawful status after the employer notifies the INS of employment termination, the alien would not be harmed and lawful status would not be impaired. Perhaps the INS will discern the important public policy that led to the creation of the portability principle, as well as fundamental considerations of equity and fairness.

In the meantime, given that INS notification is mandated by regulation, employers should be advised to comply with the requirement and notify the Service upon termination of an H-1B employee. However, employers should also be informed of the serious consequences revocation of the H-1B petition may have on the H-1B nonimmigrant. Employers may wish to inform the H-1B nonimmigrant that they are required to notify the INS of employment termination and that they intend to comply with this requirement, so that the nonimmigrant is made aware of the likely consequences. It would be helpful for the H-1B nonimmigrant to be provided this information before the employer takes such action, although employment law and business concerns may make advance notice impossible. The INS typically issues responses to notices of termination of H-1B employment within approximately 30 to 45 days. By regulation, the Service is required to issue a notice of intent to revoke and an opportunity to respond.29 However, the INS has sometimes revoked the approved petition without first issuing a notice of intent. Thus, employers may wish to reference in their notification letters the operative regulation and specifically request the procedure mandated by regulation. This process may also provide the H-1B nonimmigrant additional time to take appropriate action to avoid unlawful status by invoking the H-1B portability provision through another employer, filing a nonfrivolous application to change to another nonimmigrant status, or leaving the United States.

© Copyright 2001 Paparelli & Partners LLP. Published with permission.

17 8 CFR 214.2(h)(11)(i)(A).
198 CFR 214.2(h)(11)(iii)(A)(1).
20Pub. L. No. 106-313 (hereinafter AC21).
21AC21 105(a) (adding INA 214(m)).
22S. Rep. No. 106-260, 106th Cong., 2d Sess., 22-23 (2000) ("[the provision] responds to concerns raised about the potential for exploitation of H-1B visa holders as a result of a specific employer's control over the employee's legal status."). For a thorough analysis of AC21's H-1B portability provision, see A. Paparelli & J. Lee, "'A Moveable Feast': New and Old Portability Under AC21 105," 6 Bender's Immigr. Bull. 126 (Feb. 1, 2001).
23See supra note 14.
25See supra text accompanying note 15.
26 Remarks made at the H-1B/LCA Stakeholders' Meeting on January 16, 2001, summary provided by Eleanor Pelta, Chair, DOL/ETA Liaison Committee, via AILA InfoNet.
27Id. Note, however, that in response to a comment that employers often wish to delay notifying the INS of termination in order to allow the H-1B nonimmigrant an opportunity to have a prospective H-1B employer file a new petition on his or her behalf, the DOL-ESA responded that such practice is "dangerous," and "may open an employer to back pay liability." Id.
28See supra note 15.
298 CFR 214.2(h)(11)(i)(B) provides: "[t]he notice of intent to revoke shall contain a detailed statement of the grounds for the revocation and the time period allowed for the petitioner's rebuttal. The petitioner may submit evidence in rebuttal within 30 days of receipt of the notice. The director shall consider all relevant evidence presented in deciding whether to revoke the petition in whole or in part."

About The Author

Yoshiko I. Robertson is an associate at Paparelli & Partners LLP in Irvine, California. Ms. Robertson received her Bachelor's degree from the University of California, Santa Barbara, and her J.D. from Loyola Law School, Los Angeles. Ms. Robertson practices in all areas of employment- and business-based immigration law, with strong focus on H-1B and labor certification matters. Ms. Robertson has authored or co-authored several articles on H-1B related issues.

The author thanks Angelo A. Paparelli, partner at Paparelli & Partners LLP, for his valuable comments and insights, and Bobby C. Chung, associate at Paparelli & Partners LLP, for his helpful research on selected topics.

Angelo A. Paparelli ( has been practicing business-sponsored immigration law for over 20 years, and is the managing partner of Paparelli & Partners LLP in Irvine, California. He is a nationally recognized speaker, published author and leading expert on cutting-edge business-related immigration issues, including the immigration consequences of mergers, acquisitions, reorganizations and other business changes, consular visa practice, audits of employers' compliance with immigration and labor regulations, and employment-based work visas. Mr. Paparelli is certified as a Specialist in Immigration and Nationality Law by the State Bar of California, Board of Legal Specialization.

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