Shutdown Threatens Status of Contractor Employees on H-1B Visas

Key Takeaways for Executives

• Federal contractor employees on H-1B visas face potential deportation if they are terminated for lack of work.

• Contractors have to keep paying these employees even if they have no work, terminate them, or face stiff penalties.

• A mass exodus of H-1B workers could constitute a serious “brain drain,” especially in the IT space.

The shutdown, should it resume after the Feb. 15 deadline specified in a Senate-approved bill to temporarily reopen the government, will cause a serious dilemma for federal contract workers in the United States on H-1B and other nonimmigrant visas, according to an immigration attorney.

Like many other people who work for federal contractors, these employees are not being paid during the shutdown if they have used up all of their paid leave. Not only does that present financial difficulties, but it also threatens their immigration status, Holland & Knight attorney Leon Fresco told WashingtonExec.

That’s because under U.S. immigration laws, employers of H-1B workers have to keep paying them at least the “required” wage, i.e. the prevailing wage or the employer’s in-house wage for similarly employed workers, whichever is higher. The employer must pay the guaranteed minimum hours listed on their employees’ H-1B applications, even if there’s nothing for them to do, or face stiff monetary penalties.

The only way for contractors to avoid these fines is to terminate any H-1B employees they can’t afford to pay and cancel their H-1B petitions with U.S. Citizenship and Immigration Services. But this puts the workers in a difficult situation because they can’t stay in the United States unless they remain employed.

H-1B nonimmigrant workers have 60 days after they’re terminated to find another job —a tall order given few other federal contractors are hiring because of the shutdown. Another option is to change to a different immigration status like an F-1 student visa after enrolling in school.

Barring these two less-than-great choices, these workers must leave the country.

While this issue has presented itself in previous government shutdowns, the length and uncertainty of the current shutdown exacerbate the problem, Fresco said.

“Companies are starting to understand that this thing could last two more weeks or another month,” he said. “If that happens, they’re asking, ‘what am I supposed to do?’”

Fesco said “at least hundreds” of federal contractors and at least 15,000 contractor employees currently face this dilemma.

He said he’s hearing from many of his clients that employees who don’t have work will be sent back to their home countries on unpaid leave until the U.S. government reopens. This presents some serious risks.

First, when the government does reopen, workers can only return if their visas haven’t expired. And even if they do come back, they will face tough questions from immigration officials who might consider them to have been terminated rather than on unpaid leave.

“Any time you leave the country, there’s a risk you might not be allowed back in,” Fesco said.

Second, people on H-1B visas have critical skills in IT, engineering and research. Instead of returning to the U.S., they might decide to stay home or emigrate elsewhere.

“These folks are a boatload of talent that companies are going to have to decide what to do with,” Fresco said. “They could send them back to their home countries for a while and hope they come back, but that would be such a brain drain that it would be a shame.”