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


The recent weakening of the economy, particularly in the high-technology sector, is causing many companies across the country to downsize and restructure their workforces to gain efficiency and maintain profitability. "Reductions in force" and "layoffs" are becoming commonplace in an industry that--until recently--could not hire enough skilled professionals.1 Given the large concentration of H-1B workers in the high-technology sector, immigration practitioners today must be prepared to advise corporate clients preparing for reductions in force as well as H-1B nonimmigrants whose jobs have been or may be eliminated.

This article will discuss some of the common issues that arise in connection with termination of H-1B employment, including:

  • Employer's liability for return transportation costs abroad;
  • Employer's obligation to notify the Immigration and Naturalization Service (hereinafter "INS" or "the Service") of the termination; and
  • Timing issues and strategies for maintaining lawful status of H-1B nonimmigrants who are terminated from employment.
The article will discuss relevant regulations and policies, and offer practical tips for advising clients in these circumstances. The reader should recognize, however, that this article does not constitute, and should not be interpreted as, an opinion letter or legal advice of the author. Rather, the article offers general guidance regarding appropriate strategies and procedures to advise to clients, while bearing in mind the specific factual circumstances of the employment relationship and the personal circumstances of the H-1B worker.


A. Costs of Return Transportation Abroad

The Immigration and Nationality Act of 1952 (hereinafter INA) provides that where an H-1B worker "is dismissed from employment by the employer before the end of the period of authorized admission, the employer shall be liable for the reasonable costs of return transportation of the alien abroad."2 The regulation confirms that voluntary termination of employment by the H-1B nonimmigrant prior to the expiration of petition validity does not constitute "dismissal" within the meaning of the provision.3 The provision allows an H-1B nonimmigrant who believes the employer has not complied with the provision to "advise the Service Center which adjudicated the petition in writing" and that the complaint "will be retained in the file relating to the petition."4

Congress has not defined the scope of "reasonable cost of return transportation" in the statute or legislative history. Advisory letters from the INS on the subject have only referred to the costs of transporting the principal H-1B beneficiary to his or her last country of residence, without any mention of the costs of transporting the individual's personal property or family members.5 Although the exact scope of the employer's responsibility is unclear, a plain reading of the Act and regulations suggest that the employer's obligation is limited to reasonable costs of air or ground transportation to return the H-1B nonimmigrant physically to his or her last place of residence abroad, but does not include more extensive relocation costs, such as transportation of family members or of personal property.

The INS has confirmed that the agency disclaims any active role in the determination or enforcement of the employer's liability for an H-1B nonimmigrant's return transportation. Although an aggrieved H-1B nonimmigrant may file a complaint with the INS under the regulations, the Service acknowledges that it is not "provided with any means to determine the validity of the complaint, nor with any authority to investigate the complaint or to mediate or compel a resolution," and that it has no active role in determination and enforcement of liability.6 The Preamble to INS regulations also confirms the lack of a penalty provision for employers violating the statutory requirement.7

Although the Preamble warns that "the Service may consider the fact that an employer has not complied with this provision when adjudicating future nonimmigrant visa petitions,"8 the General Counsel's office has stated that "it is unlikely that the Service could deny a later petition on the basis of the petitioner's failure to pay a prior employee's return transportation costs, in the absence of some statute or regulation authorizing this action."9 Accordingly, the INS concluded that any liability an employer may incur would be to the H-1B nonimmigrant, rather than to the Service or some other agency, and that the INS has no role in the determination or enforcement of this liability.10 Therefore, it appears that a discharged H-1B nonimmigrant would be required to file a civil law suit (or a request for arbitration if the employment agreement committed the parties to arbitrate disputes) in order to enforce the employer's obligation to pay for the cost of his or her return transportation, and the scope of "costs of return transportation" would be for the court or the arbitrator to decide.

The obligation to pay for cost of return transportation abroad is triggered only in the event the H-1B nonimmigrant actually decides to return home. Although the H-1B employer must offer to pay for such transportation cost, if the H-1B nonimmigrant refuses to depart the United States, the employer cannot force the individual to leave. This raises additional questions. If the alien remained in the United States for some period of time and then decided to return home, is the employer still under obligation to pay for the transportation costs? Is there a specific procedure for compliance, such as purchase of a "use-it-or-lose-it" airline ticket that the alien cannot cash in or exchange? In a May 20, 1999 advisory letter, Thomas W. Simmons, Chief, INS Business and Trade Services Branch, declined to advise on this issue, indicating that "[t]he Service views the return transportation provision as a private contractual issue between the petitioner and the beneficiary" and that the Service has not developed policies on the issue.11 However, the regulatory language, which binds "any employer whose offer of employment became the basis for an alien obtaining or continuing H-1B status" to pay for return transportation costs,12 is not inconsistent with a view that the obligation may remain with the employer after the H-1B nonimmigrant moves on to new employment or status in the United States.13 This provision also suggests that where there are multiple H-1B employers, each employer may be jointly and severally liable for the cost of return transportation abroad.

Employers must also bear in mind that payment for return transportation abroad is an essential component of evidencing bona fide termination of employment, according to the Department of Labor (hereinafter "DOL" or "the Department"). This is important in the context of the "no-benching" obligation imposed upon employers by the American Competitiveness and Workforce Improvement Act of 1998.14 In the Preamble to the Interim Final Rule implementing ACWIA, the DOL noted that it "would not likely consider it to be a bona fide termination…unless INS has been notified that the relationship has been terminated pursuant to 8 CFR 241.2 (h)(11)(i)(A) and the petition canceled, and the employee has been provided with payment for transportation home where required by section 214(E)(5)(A) of the INA and INS regulations at 8 CFR 214.2(h)(4)(iii)(E)."15

The DOL's authority to determine what constitutes bona fide termination of H-1B workers is questionable, however, given that H-1B employment authorization and maintenance of status issues--including determination of when H-1B employment is terminated--are properly within the jurisdiction of the INS. Although the Department has the authority to determine whether employers are paying their H-1B workers the required H-1B wages during the period of their INS-authorized employment, it is not within its jurisdiction to decide the duration of such employment. Nevertheless, in order to avoid a potential benching claim where the H-1B nonimmigrant decides to remain in the United States after termination, the wise employer would have in writing an offer made to the H-1B nonimmigrant to pay for reasonable costs of transportation abroad, and obtain the nonimmigrant's acknowledgment that such offer was received and--where appropriate--waived.16

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

1 Despite the softening in some sectors, the industry still faces a critical shortage of qualified high-tech professionals, according to the Information Technology Association of America. See Laurie J. Flynn, "For Workers in Technology Despite Cuts," N.Y. Times, Apr. 2, 2001, at C8.
2Pub. L. No. 82-414, 66 Stat. 163 (codified as amended at 8 USC §§1101 et seq.) §214(c)(5)(A), 8 USC §1184(c)(5)(A), 8 CFR §214.2(h)(4)(iii)(E). The regulation specifies that the term "abroad" refers to "the alien's last place of foreign residence." 8 CFR §214.2(h)(4)(iii)(E). The Preamble to the regulation notes that the term was specifically defined to clarify that employers may not simply provide bus fare to Canada or Mexico to comply with the requirement. 56 Fed. Reg. 61113 (Dec. 2, 1991).
38 CFR §214.2(h)(4)(iii)(E) ("If the beneficiary voluntarily terminates his or her employment prior to the expiration of the validity of the petition, the alien has not been dismissed."). The Preamble to the regulation also states that the term "dismissed" "requires some action by the employer." 56 Fed. Reg. 61113 (Dec. 2, 1991). 48 CFR §214.2(h)(4)(iii)(E).
5See, e.g., Letter from James M. Bailey, then Director, Northern Service Center, to Paul Parsons (Mar. 8, 1993), reprinted in 70 Interpreter Releases 1185-86 (Sept. 3, 1993) ("the provision of law pertaining to the return transportation cost of any H-1B alien terminated prior to the expiration of nonimmigrant status should be the responsibility of all H-1B employers" (emphasis added)).
6 Gen. Couns. Op. 92-44 (Aug. 17, 1992). Jacquelyn A. Bednarz, Chief, Nonimmigrant Branch, INS Office of Adjudication, has acknowledged that the INS does not actively enforce the return transportation requirement, following the guidance from the General Counsel's office. See 70 Interpreter Releases 1172 (Sept. 3, 1993).
756 Fed. Reg. 61113 (Dec. 2, 1991).
8Id. See also Letter from James M. Bailey to Paul Parsons, supra note 5, which states that "the Service will compile information on employers who do not comply with the provision relating to the return transportation. In the event numerous complaints are received about a particular employer, the Service may refer the case for further investigation." 9Gen. Couns. Op. 92-44, supra note 6.
11Letter from Thomas W. Simmons, Chief, INS Business and Trade Services Branch to Robert A. Klipstein (May 20, 1999), reprinted in 70 Interpreter Releases 1140 (July 26, 1999).
128 CFR §214.2(h)(4)(iii)(E).
13The statute, however, only imposes "liability" for the costs of return transportation; it does not require actual payment of costs. Thus, if the employer makes an arrangement for a travel agency to provide a "use-it-or-lose-it" airline ticket that would expire after a reasonable period of time, the employer could argue that the liability for the costs of return transportation has been discharged by the tender of a ticket. If the alien declines to use the ticket within the time specified, the court or an arbitrator may find that the employer had satisfied its obligation for return transportation costs.
14Pub. L. No. 105-277, 112 Stat. 2681 (div. C, title IV) (hereinafter ACWIA). The "no-benching" provision prohibits employers from placing H-1B employees in "nonproductive status" without pay after commencement of employment. 65 Fed. Reg. 80218 (Dec. 20, 2000). The "no-benching" obligation is not triggered, however, where (1) the nonproductive status is at the voluntary request of the H-1B worker, or (2) the obligation to pay the H-1B wage rate is ended by a "bona fide termination of the employment relationship." Id. at 80219.
1565 Fed. Reg. 80171 (Dec. 20, 2000).
16 Note, however, that waivers of or releases from the statutory obligation may be unenforceable as contrary to public policy. For a discussion of enforceability of such waiver or release, as well as of H-1B employers' liability for return transportation cost generally, see R. Banta, "The H-1B Return Transportation Requirement-Protections and Procedures for Employers," 2 Immigration & Nationality Law Handbook 75 (1995-96 ed.).

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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