Last Updated on November 10, 2022 by Anda Malescu
What is the impact of Coronavirus on employees in H-1B, E-2, L-1, O-1, E-1, TN visa status and other visas? Unemployment benefits, furloughs, layoffs, hour and salary reduction and working from home.
Coronavirus impacts temporary employees in the USA differently based on the visa type they hold and their current employment status, with some employee visas being more rigid than others.
The prolonged health emergency caused by COVID-19 pandemic has impacted US companies and employers, who now have to consider laying off employees, furloughs, unpaid leave, reducing salaries or work hours and sending them to work from home, including for those foreign employees who are working in the USA on H-1B, L-1, E-2, E-3, O-1 visa or other type of visas. Aside from issues with liquidity, companies must also remain compliant with US immigration laws and consider the specific visa requirements for their foreign employees. Similarly, employees on visas should seek legal counsel to discuss their legal options to remain in status in the United States if there are changes in their employment circumstances due to Coronavirus.
Certain visas such as H-1B and E-3 visas are subject to strict requirements in terms of wages paid to the foreign employees. As a reminder, H1-B and E-3 visas can be obtained only with an approved Labor Condition Application (LCA) from the US Department of Labor (DOL) that requires the US employer to pay wages at a rate of at least the prevailing wage specified in the LCA for the locality and position. However, holders of other visas such as E-1, E-2, O-2, L-1 or TN visa are not subject to specific wage requirements as they do not require an approved LCA. Below we analyze how different company policies can impact foreign employees on various visa types.
Impact of Layoffs on H1-B, E-3, E-1, E-2, L-1, O-1 or TN visa holders
Layoffs impact foreign employees the same regardless of the visa type – foreign employee loses his or her immigration status and has a 60-day grace period before having to leave the US.
Generally, foreign employees who are not legal permanent residents (green card holders) or have an unrestricted right to work in the US and are on a work visa such as H-1B, E-2, E-3, E-1, L-1, O-1 or TN visa, lose their immigration status when they are laid off by the US. employer. In addition, if the foreign employee on one of these visas has applied and is in the process of obtaining a green card, then termination of their employment terminates eligibility for green card sponsored by a US employer. In other words, if you are a foreign employee on an H-1B, E-1, E-2, E-3, L-1, O-1 or TN visa and your company terminates your employment, then you will lose your immigration status as soon as the grace period is over and you must leave the US or change to another status. Further, if you were in the process of becoming a permanent resident through sponsorship by a US company (EB-1, EB-2, EB-3), then generally when the company terminates you it also terminates your eligibility for green card and you are out of luck. However, you may be able to have another US employer sponsor you if you are at an advanced stage in the green card process.
However, being laid off does not automatically leave the foreign employee out of status. The employee on a H-1B, E-1, E-2, E-3, L-1, O-1 or TN visa has a 60-days grace period to find another employer, get reemployed by the same company or change to a different status, otherwise the employee must leave the US. If you are on an H-1B, E-3 visa or TN status and you were laid off then if you find another employment, the new US employer can file for a new H-1B, E-3 or TN status while you are in the US in the 60-days grace period. It is important to keep in mind that if you are on TN status you cannot work during the grace period and until the new TN petition has been approved. However, if the border with Canada is opened, you can simply go to Canada and reenter and obtain the TN status at the border. Similarly, if you are on an H-1B visa or E-3 visa you cannot work until a petition was filed by the new employer.
However, if you are an employee on an L-1 visa working as a manager, executive or specialized skill employee or you are on the E-2 or E-1 visa, then you cannot simply find a new employer and be transferred to the new employer like with the H-1B or E-3 visas.
For employees on H-1B visa, when the employer terminates the foreign national, the company must meet certain requirements for the termination to be valid including (1) the employer must notify the employee of the termination, (2) the employer must notify USCIS of the termination and (3) the employer must offer to pay for cost of return of the employee to his or her home country. This rule does not apply to E-3 visa.
Unemployment benefits due to Coronavirus for H-1B, E-3, E-1, E-2, L-1, O-1 or TN visa holders
Generally, foreign employees on H-1B, E-1, E-2, E-3, L-1, O-1 or TN visa are not eligible for unemployment benefits but spouse of H-4 visa, E-1, E-2, E-3 and L-2 visas may be able to qualify for unemployment benefits.
With the Coronavirus impacting jobs held by foreign employees on H-1B, E-1, E-2, E-3, L-1, O-1 and TN visas, most are wondering if they can apply for unemployment benefits in their state and if receiving unemployment benefits will be consider a public charge by the government and negatively impact their immigration record. Below, we discuss unemployment benefits for foreign workers on various visas, but please keep in mind that every state has its own requirements for unemployment benefits and you need to check with your state to see if you qualify, irrespective of your immigration visa status.
The general rule to qualify for unemployment benefits in most states is that the employee must be immediately able and available to work at the time of filing the unemployment application. In other words, you must be authorized to work in the US after losing your job and at the time of filing for unemployment benefits. However, foreign employees on H-1B, E-3, E-1, E-2, L-1, O-1 or TN visas do not meet this requirement because they are authorized to work only for one company in the US and not for other employers and as a result if the company terminates you, then you are not immediately able and available to work for another company because these visas allow you to work only for a specific company. In other words, if you do not have permanent residence (green card) or other unrestricted work authorization independent of any one employer, then you are not generally eligible for unemployment benefits. As a result, if you are an employee on an H-1B, E-3, E-1, E-2, L-1, O-1 or TN visa and you become unemployed, you do not qualify for unemployment benefits because you cannot prove that you are able and available to work for any US company.
However, certain visas (H-1B, L-1, E-1, E-2, E-3) allow the spouse of the principal applicant to obtain a visa such as H-4 visa, L-2 visa, E-2 visa, E-1 visa or E-3 visa and apply for work authorization that if approved allows them to work in the US for any company including being self-employed. Consequently, spouses with unrestricted work authorization may be able to apply for unemployment benefits if they lose their jobs because they can prove at the time of filing for unemployment benefits that they are able and available to work for any company in the USA. Please keep in mind that every state has its own requirements for unemployment eligibility and your spouse should inquire with the state to check if he or she meets all the criteria for unemployment benefits aside from the “able and available to work” requirement and has an unexpired work authorization card (EAD).
Regarding the public charge rule which went into effect on February 24, 2020, unemployment benefits were excluded from the rule. In practice this means that receiving unemployment benefits is not considered a public charge and should not affect your immigration record. However, it is possible that when you apply for a visa, immigration officers will ask and take into consideration that you received unemployment benefits when assessing your case and circumstances.
Impact of Furlough on H-1B, E-3, E-1, E-2, L-1, O-1 or TN visa holders
Furloughs affect foreign employees differently based on the visa type, with H-1B and E-3 employees feeling the impact the hardest.
Unlike layoffs, furloughs are temporary measures to remove the financial pressure on a company by reducing payroll for a period of time. It is a temporary arrangement and is not intended to be permanent like in the case of layoffs where employment is permanently terminated and so are the salaries and benefits paid to employees. With furloughs however, the employing company can bring the employees back and maintain the salary and benefits but for the time that the employees are furloughed, the employees are not paid their salaries which can be a major issue especially for the foreign employees on an H-1B or E-3 visa status.
In fact, for H-1B and E-3 visas, employers must pay a certain wage rate for their foreign employees as specified in the LCA, and as a result cannot easily furlough such employees. Furlough for employees on H1-B or E-3 visas is not possible because such employees must be paid the prevailing wage specified in the LCA to remain compliant with US immigration laws or otherwise they lose their legal status. In addition, an employer who furloughs H-1B or E-3 visa holders can also be liable for back wages. If an E-3 or H-1B visa employee has been furloughed, he or she has a 60-day grace period to find another employment, extend or change status or otherwise must leave the US.
Regarding furloughs of employees on TN visa who are citizens of Canada and Mexico, the foreign employee may remain in legal status if there is a reasonable expectation that the employee will return to the same employer. If you are on a TN visa and you have been furloughed due to Coronavirus, you may be able to stay in status if there is an expectation that you will return to work for the same employer in the near future. This is possible for TN visa holders because this visa type does not require an approved LCA and the employer does not have pay the foreign employee a prevailing wage as it is the case with H-1B and E-3 visas. Further, if you want to renew your TN status while in the US, you can file a petition to extend your TN status by 3 years before the expiration of your current status and continue to work for the same employer while your petition is pending approval for a maximum of 240 days.
For other visas types such as E-1, E-2, L-1 and O-1 that do not require an LCA and prevailing wage, furloughs can be problematic because the foreign employee is not performing any work for the employing company and is arguably not maintaining the requirements for its E, L or O status. However, as long as the employees maintain the requirements of the E, L or O visa status and continue to work in the area of expertise and on the same position and for same employer, then the employees are in status. If the L, E or O employees are hired back in the 60-day grace period under the same terms and conditions, then an argument can be made that their petition is still valid. In situations where there are substantive changes to employment conditions, it is important to notify USCIS of the change, seek further guidance from USCIS or file for an amendment or new petition.
Impact of Hour and Salary Reduction on H-1B, E-1, E-2, E-3, L-1, O-1 and TN visa holders
Generally, the impact of hour and salary reduction on foreign employees depends on the visa they hold – for E-1, E-2, L-1, O-1 and TN visa holders, salary and hour reduction is permitted as long as it is not a material change while for H-1B and E-3 employees salary reductions are not permitted.
As discussed above, foreign employees who hold a visa that requires an LCA, such as H-1B or E-3 visa, are subject to stringent employment requirements and changes in their salary or work hours can impact them greatly. For employees in visa categories H-1B and E-3, the US employer must pay the worker the wage specified in the LCA and visa petition and cannot pay them a reduced salary that is below the prevailing wage specified in the LCA. If the employer cannot pay and has to reduce the salary below the prevailing wage, then the company may need to amend the petition with the USCIS and get a new LCA. The same applies when the company wants to reduce working hours for the employee; the foreign employee cannot suddenly become a part-time employee. If the company wants the foreign employees on H-1B and E-3 visa to start working part-time then it must file a new LCA and amend the petition with USCIS. Note the LCA regulations also forbid offering less favorable wages or benefits to H-1B workers than to US workers in comparable positions if this will hurt their working conditions.
In general, salary reduction of employees on TN visa has no impact on the visa status. If you are on an TN visa, this means that the employer can reduce your salary without impacting your legal status in the US. However, if there are significant changes in the employment terms and conditions, including the salary, then filing an amended petition may be warranted under the circumstances. The impact of hour reduction for TN employees depends on the circumstances of each employee, but in general, if the TN NAFTA professional goes from full-time to part-time employee then this is a substantive change in the employment requires an amended petition to be filed.
Similar to employees on TN visa, the employees on E-1 and E-2 visa are not required to work full-time for the US company. However, USCIS provides that if there is a substantive change in the employment terms and conditions, then the E-1 or E-2 employee must obtain prior approval from USCIS. Generally, if the there is a reduction in the hours worked by the E-1 or E-2 employee but the employee continues to perform the job functions described in the application and works on the same position as a manager, executive or specialized knowledge employee, then the reduction in hours does not impact the legal status of the E-1 or E-2 employee as long as it is not material and employee becomes a part-time employee. The same applies for the salary reduction, and such reductions are permitted as long as they are temporary. However, if such changes in salary and work hours become permanent or are material then it is necessary to file an amended petition with USCIS and get a new E visa. The same applies to employees with L-1 and O-1 visa.
Impact of Working from Home (Temporary Remote Work) on H1-B, E-1, E-2, E-3, L-1, O-1 and TN visa employees
For the foreign employees on E-1, E-2, L-1, O-1 and TN visa who are asked by their employers to work remotely from home during the COVID-19 pandemic, the temporary remote work does not impact their immigration status. These types of visas do not require an employee to work at the physical location of the employer and as a result are more flexible with regard to the physical location of the employee while performing his or her duties. If the employees continue working on the same position and performing their job functions for the same employer even if remotely from, then there is likely no material change and there is no need to file an amended petition. For employees in L-1 visa status USCIS will likely be forgiving of any remote work arrangements based on the number of policies the agency has relaxed in an effort to minimize the impact of COVID-19.
Employees in H1-B and E-3 visa status are subject to site visits by USCIS to ensure compliance with the petition and prevailing wage requirements. The visas that involve an LCA, such as H1-B and E-3 visas, are subject to minimum wage and working conditions and the employer must continue to comply with the LCA wage and notice requirements for the working location. Due to COVID-19 pandemic, if an H1-B or E-3 employee works from home or another new unintended location that is in the same metropolitan area as the usual work location, then the employer does not need to file a new LCA to list the new location. Instead of filing a new LCA, the employer must provide an electronic or hard-copy posting notice at the new location, including home location, for 10 calendar days.
However, if the new work location is not in the same metropolitan are as the usual work site, meaning that the H-1B or E-3 employees are now working in another county, then the employer can use the short-term placement rule for maximum 30 days or 60 days if conditions are met. In other words, if the foreign employee works at the new location for 30 or 60 days only then the employer does not need to file a new LCA. If, however, the employee will work at the new location for more than 30 or 60 days then the employer must file a new LCA and an amended petition with USCIS before the 30 or 60-day period has lapsed, or otherwise the employer may be subject to DOL investigations and penalties of more than $7,000 per violation and back wages for the foreign employee with interest among others.
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