Worker in non-productive status

The DOL does not recognize "nonproductive work status", such as periods during the employee is between work assignments , as a basis for not paying the employee a pro-rated portion of the required wage rate during specific pay periods. This practice is know as "benching" and it often happens with employee of job contractors, who are " benched" in between work assignments if a new assignments is not immediately available. If the employer has not paid the employee a pro-rated portion of the required wage rate during the specific period, the employer will be considered in violation of its obligation for that pay period and will be liable for back pay.

The 1998 statute provides that payment for non-productive time is not required when the reasons that the worker is nonproductive are not attributable to the employer ,e.g.,. the worker requests a leave of absence or circumstances render the nonimmigrant unable to work such as hospitalization. The statute makes clear, however, that if the employer has s policy of paying wages pr providing benefits during periods of such absences or illnesses such benefits must be provided to the H-1B worker to maintain compliance with the working conditions attestation. Further more, the DOL takes the position that the employer must continue to pay the worker the required wage rate in these situations if failure to do so  would violate INS requirements for maintenance of status, or some other law such as Family and Medical Leave Act.

The DOL ,also makes clear that the required wage rate must continue to be paid during a temporary reduction in the employer's work force affecting the H-1B worker, or during a temporary shut-down of the employer's operation, even if U.S. workers also affected by the reduction or shut-down are not paid as a matter of employer policy. Thus, ironically, if the employer has a regular two -week shut-down during the Christmas holiday, for example, the h_1B workers would have to be paid while the U.S. workers can seek other employment in these situations, while the H-1B worker may not. Also, U.S. worker are eligible for government benefits for which H-1B workers are not eligible. Finally, the DOL points out that the employer has the option to terminate the H-1B worker's employment if it lacks sufficient work for the H-1B worker ,as long as the employer pays for the worker's return trip home as required by the INA.

The H-1B Act establishes an exception to the benching rule for schools or other educational institutions which often have policies under which workers are in "unpaid" status for part of the calendar year. In reality, these workers receive their salaries over the period of the school year, usually nine or ten months. The statute provides that a school or other education institute may apply an established salary practice under which the employer pays to H-1B workers and U.S. worker an annual salary in disbursements over fewer than twelve months provided.

The DOL policy regarding the "benching practice" has particularly affected computer consulting firms that employ computer professionals who are hourly wage employees, and are paid higher than the required wage on an annual basis, but who do not receive a salary on bi-weekly installments. Experience with DOL enforcement in these cases has shown that a failure to pay pro-rated portion of the required wage in one pay period will not be offset by payments above the pro-rated portion of the required wage rate in other pay periods. In such cases, employers have been found liable for back pay even though the worker's compensation for the entire period of employment is higher than the required wage rate. These back pay awards may be substantial if the employee was not paid a pro-rated portion of the required wage rate for several pay records.

Remember ,however, that the employer may make deductions in some pay periods for loans or advances against salary paid to the employee in other pay periods, provided the conditions for an "authorized deduction" are met. DOL rules permit the employer to make deductions to which the H-1B worker has agreed in writing and which are principally for the benefits of the employee, as long as such deductions are not  recoupment of the employer's business expenses. As a result, the employer and its employees may enter into a voluntary agreement such as for advances on wages ( in such cases, the advances must be reported as earnings in the employer's payroll records, the payments ,just be reported to the Internal Revenue Services, and all appropriate taxes must be withheld and paid, including income, FICA, and applicable state and Local taxes). Such advances may then be deducted in a subsequent pay period. One Limitation in this strategy is that deductions for earlier advances on wages cannot exceeds 25% of an employee's disposable earning for a workweek. In practice, this arrangements has been closely scrutinized by the WHD to ensure that the arrangements meets the regulatory requirements for authorized deductions, particularly in situations in which the deduction for an earlier wage advance brings the H-1B worker's salary below the required wage rate for a given period.

For further issues, click on
Requirement that wages be paid as of date of employee arrival

For further information, send your query to Aparna Davé.