H-1B employers have certain obligations upon termination of an H-1B worker. Termination occurs when wages and benefits, as reflected in the H-1B employee’s Labor Condition Application (“LCA”), are no longer being paid or offered. Typically, this would be the day the employee is taken off payroll or, in some cases, when he/she ceases rendering services as described in the LCA and H-1B petition. An H-1B employee who receives severance benefits, which may include salary for a period of time after termination, does not remain in valid nonimmigrant status. Once the H-1B worker ceases to provide services to the employer, he/she is no longer in status.
The U.S. Citizenship and Immigration Services (USCIS) regulations require that “the petitioner shall send a letter explaining the change(s) to the director who approved the petition.” The employer is not required to explicitly request withdrawal of the H-1B petition for the terminated employee, which would lead to automatic revocation of the underlying petition. However, USCIS treats employers’ letters notifying them of termination as requests for withdrawal, thereby leading to revocation of the petition. Notice of termination and subsequent petition revocation are irrevocable.
Upon USCIS revocation of the H-1B petition, the foreign national can no longer return to the employer as an employee based on the same petition, such as in the wake of a temporary layoff. Under limited circumstances provided in a January 2017 rule change, terminated H-1B workers can port to new employers following gaps in employment.
H-1B regulations do not provide a deadline by which notification of employment termination must be sent. Nonetheless, employers are required to notify USCIS “immediately” of “any material changes in the terms and conditions of employment” of an H-1B employee. Termination constitutes such a material change. Therefore, notification to USCIS should technically be made upon termination. As a practical matter, employers are advised to notify USCIS within 30 days of termination.
The employer should make all reasonable efforts to notify the employee of the termination and maintain documentation that the employee received the notification and an offer to pay return transportation.
The employer is liable for the reasonable costs of return transportation abroad of any H-1B employee who has been dismissed from employment before the end of his or her authorized period of stay. USCIS has long taken the position that it considers the return transportation requirement to be a private contractual matter between employer and employee, and it will not enforce it. Nonetheless, the U.S. Department of Labor (USDOL) has made it clear that fulfilling the return transportation obligation is necessary in order to effect a bona fide termination of an H-1B worker. Note that an offer of return transportation is sufficient. The H-1B worker does not need to accept the offer.
In recent years, USCIS has not affirmatively enforced its notice requirements, but the failure to comply with these requirements has had growing significance for employers, including financial liability for back wages imposed by USDOL under the LCA regulations and in the aftermath of worksite inspections by USCIS’s Fraud Detection and National Security officers.