Practice Alert: Three-Fourths Wage Guarantee for H-2 Workers During COVID-19 Outbreak

AILA Doc. No. 20032633 | Dated March 26, 2020

AILA’s DOL Liaison Committee provides information concerning the three-fourths wage requirement under H-2A and H-2B regulations and the guidance currently available on its application. The Committee continues to monitor the impact of COVID-19 on DOL operations and on employers.

In light of the COVID-19 national emergency, many H-2A and H-2B employers may not be able to provide full-time employment pursuant to their filed H-2 petitions. In light of these concerns, AILA’s DOL Liaison Committee provides the following advisory for AILA members concerning the 3/4 wage requirement regulation and the guidance currently available on its application.

The committee continues to monitor the impact of COVID-19 on DOL operations and on employers and are engaging with the DOL to seek further guidance and accommodations.

1. H-2A and H-2B Regulations Require that the Employer Guarantee Three-Fourths of Employment, Unless there Is An Event Outside of the Employer’s Control that Makes Employment Impossible

H-2A and H-2B regulations require that the employer guarantee three-fourths of employment, unless there is an event outside of the employer’s control that makes such employment impossible.

H-2A Temporary Agricultural Worker:

Per 20 CFR 655.122(i), in order to qualify for an H-2A, the employer must guarantee that it will offer employment during three-fourths of the employee’s hours must be fulfilled. However, as stated in DOL Fact Sheet #78E: Job Hours and the Three-Fourths Guarantee under the H-2B Program, if “services of the worker are no longer required for reasons beyond the control of the employer due to fire, weather, or other Act of God that makes the fulfillment of the contract impossible, the employer may terminate the work contract.” See 20 CFR 655.122(o). For procedures as to what is required when the three-fourths guarantee cannot be fulfilled due to contract impossibility, see FAQs from December 2011 and February 2012.

H-2B Temporary Non-Agricultural Worker:

Per 20 CFR 655.20(f), in order to qualify for an H-2B, the employer must guarantee that it will offer employment during at least three-fourths of the time in the 12-week period that it has retained the employee. If, however, fulfillment of the job is impossible for reasons outside the employer’s control, then per 20 CFR 655.20(g) the contract may be terminated:

“[if] the services of the worker are no longer required for reasons beyond the control of the employer due to fire, weather, or other Act of God, or similar unforeseeable man-made catastrophic event (such as an oil spill or controlled flooding) that is wholly outside the employer’s control[.]”

As stated in DOL Fact Sheet #78E, if the Certifying Officer (CO) makes the determination that an event has occurred that makes it impossible for the employer to fulfill the three-fourths requirement, the employer must still fulfill the three-fourths requirement until the date that the contract is terminated due to such event, and make efforts to transfer the employee to a comparable workplace. The three-fourths guarantee obligation begins with the first workday after the arrival of the worker at the place of employment or the advertised first date of need, whichever is later, and ends on the end date indicated in the job order (or its extensions, if any). A workday means the number of hours in a workday as stated in the job order.

Members should note that the Appropriations Act of 2018 prohibits the enforcement of the three-fourths guarantee. Therefore, H-2B employers are legally required to meet the ¾ guarantee requirement, DOL is not allowed to enforce it. Since 2015, Congress has prohibited the use of DOL appropriation funds be used to enforce the three-fourths requirement. See Appropriations Act of 2018, 132 STAT. 712, Sec. 113.

2. Who Decides? The Certifying Officer Has the Discretion to Determine If an Event Has Occurred that Renders the Job Impossible to Complete.

As stated in condition 8 in the DOL Fact Sheet #78: General Requirements for Employers Participating in the H-2B Program, the CO has discretion to determine whether or not the employer must complete the three-fourths requirement, or whether there has been an event outside the employer’s control that relieves the employer of his duty. To have an employment contract cancelled, the employer must apply directly to the CO for such a cancellation.

In Federal Court, exemptions (such as this kind of contract termination) are construed narrowly, and employers seeking exemption must meet a “heightened burden of proof”. See Sejour v. Steven Davis Farms, LLC, 28 F.Supp.3d 1216, 1224-26 (2014), which outlines the exemptions for H-2A employers, and discusses, without applying, the Act of God exception.

3. Is the COVID-19 an Act of God?

Acts of God are construed narrowly. An Act of God is “the result of a direct, immediate and exclusive operation of the forces of nature, uncontrolled or uninfluenced by the power of man and without human intervention”. See American Nat. Red Cross v. Vinton Roofing Co., Inc 269 F.Supp.2d 5 (D. of Washington, DC 2009) and Brown v. Sandals Resorts Intern. 284 F.3d 949, 954 (8th Cir. 2002). It must be unforeseeable as discussed in Brown, v. Sandals Resorts Intern 284 F.3d at 954.

COVID-19 has been classified as a “pandemic” by the WHO, and the CDC has put certain measures in place to mitigate the virus’s spread. All of these facts make COVID-19 more likely to trigger “act of God” language.

Even if COVID-19 is not considered an act of God, it may fall within the list of exceptions laid out in 20 CFR 655.20(g) for H-2B, or 20 CFR 655.122(O) for H-2A. Since the exceptions that terminate a contract go beyond only acts of God, the employer may be able to argue that COVID-19 was an “other” unforeseeable event that made fulfillment of the contract impossible. Examples of these events include fire, weather, other Act of God, or similar, man-made catastrophic events. During these events the employer may terminate the job order with approval of the CO. Even if early termination is approved, the employer still must fulfill the 3/4 guarantee until the time of termination.

Cite as AILA Doc. No. 20032633.