In this case, GMM hired physical and occupational therapists from the Philippines through the H-1B program for temporary foreign workers. In 2006, one of these workers filed a complaint alleging GMM had violated several H-1B requirements by making her pay for the filing fees and attorney fees for her H-1B visa, for not paying her the specified wage during her non-productive period studying for a licensing exam, and for attempting to recover a fee from the employee for breaching her employment contract. The Department of Labor (DOL) treated these allegations as an “aggrieved party” complaint, and subsequently concluded that they had “reasonable cause” to investigate the charge that GMM “required or attempted to require [the H-1B employee to pay] a penalty for ceasing” the employee’s employment early. In accordance with the DOL’s standard practice for all H-1B investigations, the DOL initiated a “full investigation under the H-1B provisions… to see if there were violations to any employee during the time period.” Based on this investigation, the DOL ordered GMM to pay $382,889.87 in back wages to forty-five employees.
The case was appealed and eventually made its way to the Eighth Circuit Court of Appeals, where Chief Justice Riley found that the DOL exceeded its authority to levy this fine. The Chief Justice reprimanded the DOL secretary for using one complaint as justification for a comprehensive investigation of the employer as a whole, including searching for other potential violations that occurred before the twelve month statute of limitations that is clearly articulated in the statute, § 1182(n)(2)(A). The court struck down the fines that were based on the unauthorized investigation.
Beyond statutory interpretation and the mechanics of DOL investigations, this case offers several practical lessons to both H-1B employers and H-1B employees. Both should be aware that the employer must be the one to pay all filing fees and attorney costs. Both should also be aware that employers must be pay the prescribed wages to their H-1B employees during the entire duration of the employment, including when the employee is non-productive because of lack of work, training for a license, or any other reason. Finally, employers should proceed extremely carefully when attempting to collect money from employees for perceived breaches of employment contracts.
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