Covid-19 has changed the rules for travel, engagement and employment. Many companies have started to reduce wages and put staff on leave, and some companies have terminated employees.
For companies with H-1B employees that are taking the approach of decreasing employee salaries, it is possible to reduce the salaries of your H-1B employees if you meet certain requirements as described below.
If the change in the employee’s salary is substantial, it is always a good practice to file a new Labor Condition Application (“LCA”) and to file an amended H-B petition with USCIS. However, if the salary change is not substantial, it may be acceptable to decrease the H-1B employee’s salary without filing a new LCA and an amended H-1B petition with USCIS as long as the decreased wage is still the higher of either the actual wage or the prevailing wage.
What is the actual wage?
The actual wage is the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment. If there are no other employees with similar experience and qualifications for that specific employment, the actual wage is the wage paid to the H-1B employee.
What is the prevailing wage?
The prevailing wage is the wage set for the particular occupational classification in the geographic area of employment by:
- Union contract, or
- the weighted average of wages paid to similarly employed workers (i.e., workers having substantially comparable jobs in the occupational classification) in the geographic area of employment
What is the required wage?
The required wage to be paid to the H-1B employee is the higher of either the actual wage or the prevailing wage.
Do I have to file a new LCA? Do I have to file an amended H-1B petition if I decrease the H-1B employee’s salary?
If the wage you are planning to pay to the H-B employee is still higher than the higher of the actual or prevailing wage, you do not need to file a new LCA and you do not have to file an amended petition with USCIS.
The prevailing wage for a Level I accountant in NYC is $59,634. There are no other employees with similar experience and qualifications in your NYC office, and you are paying the H-1B employee $68,000 per year. In this case, you could decrease the H-1B employee’s salary, as long as the decreased wage is still the higher of the actual or the prevailing wage ($59,634). For example, if you decrease the employee’s salary to $60,000 per year and appropriately document the adjustments to the pay scale, $60,000 would be considered the new actual wage and the decrease would be permitted, as the H-1B employee is still being paid the higher of the prevailing or actual wage. In this scenario, the employer would not have to file a new LCA and would not need to file an amended H-1B petition.
The prevailing wage for a Level I accountant in NYC is $59,634. There is one other accountant (Accountant X) in your NYC office, and you are paying Accountant X and your H-1B employee $70,000 per year. You now want to decrease the H-1B employee’s salary to $60,000, but you decreased Accountant X’s salary to $65,000. This would not work. The H-1B employee would have to be paid the higher of the actual ($65,000) or prevailing wage ($59,634). Therefore, you would have to pay the H-1B employee at least $65,000 per year.
Is there anything else I have to do to comply with the Department of Labor/USCIS requirements?
Yes. You will have to disclose the wage change in the next H-1B petition filed for this employee with USCIS. It is also extremely important to document any wage change in your Public Access File.
Please click here if you want to read more how Covid-19 impacts your visa.
Please click here if you want to find out how Covid-19 impacts the obligations of an H-1B or E-3 employee.
You can find key immigration information related to the Corona Virus below.
- Top 10 Covid-19 Immigration Questions
- Implications of Layoffs for employers who have employees on H-1B and/or E-3 Visas
- USCIS announces flexibility for request for evidence (RFE) and Notice of Intent to Deny (NOID)
- Information on Consular closures during Covid-19
- USCIS issues guidance on Remote 1-9 verification during Covid-19
- USCIS office closures due to Covid-19
- Can I apply for Unemployment Insurance Benefits while on a Visa?
- Canada/U.S. Border Closures
- USCIS announces temporary suspension of premium processing
- What can you do if your ESTA is running out?
- Travel Ban for Europe
- Stimulus Bill (All 800 pages)
- Information on Small Business Loans related to the Stimulus package
- USCIS to accept scanned/reproduced signatures instead of “wet” signatures on immigration petitions and forms
- Implications of furlough or termination if you are on a TN visa
- Does the Stimulus Bill impact my immigration status? Is there a public charge concern?
- Understanding the Stimulus Package for Small Businesses and the Paycheck Protection Program
- Small Business Administration COVID-19 Loans
- USCIS to Reuse Previously Submitted Biometrics to Process Work Permit Applications
- USCIS Temporary Office Closure Extended Until at least May 3
- SBA Loans and Public Charge Rules – Paychecks Loan Program and Economic Injury Disaster Relief Loan Program
- I am in the U.S. on H-1B visa and my employment was terminated due to the Corona virus outbreak.
- I am in the U.S. on an E-2 visa, can I apply for loans under the Stimulus Bill?
- Does Covid-19 impact my obligations as an H-1B or E-3 Employer?
- I am in the U.S. on E-2 employee visa. Can I apply for unemployment benefits due to the Coronavirus?
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