A client pays all employees on an hourly basis. This includes U.S. Citizens, Permanent Residents and Non immigrants in H-1B status. The Employer honors the minimum salary (required wage) commitment as specified on Form I-129.
Earlier this week, this employer received an email from an employee which ran thus:
I am not sure I can be paid on an hourly basis as an H-1B employee. H-1B status is linked to my salary. I don’t believe you can stop paying me while I am on vacation. This would result in my going out of status. Kindly withhold a portion of my salary to be paid when I travel abroad (on vacation) to my native country. Kindly check with your Attorney and let me know.
Firstly, paying an H-1B employee an hourly salary is perfectly acceptable under the DOL regulations. In discussing “Satisfaction of required wage obligation”, the regulation at 20 CFR § 655.731(C)(5) states:
For hourly-wage employees, the required wages will be due for all hours worked and/or for any nonproductive time…
The important thing to note here is that an hourly wage is acceptable and an employee must be paid “for all hours worked.” However, I think the confusion is in the subsequent part of the sentence where the regulation qualifies this statement by adding, “and/or for any nonproductive time.”
One could assume that this also includes vacation time. Clearly, this would be inaccurate and contrary to subsequent guidance provided at 20 CFR § 655.731(C)(7)(ii). Vacation and voluntary time off are covered under, “Circumstances where wages need not be paid.”
The regulation specifically states,
If an H-1B non immigrant experiences a period of nonproductive status due to conditions unrelated to employment which take the non immigrant away from his/her duties at his/her voluntary request and convenience (e.g., touring the U.S., caring for ill relative) or render the non immigrant unable to work (e.g., maternity leave, automobile accident which temporarily incapacitates the non immigrant), then the employer shall not be obligated to pay the required wage rate during that period.
The examples provided here would cover voluntary “travel abroad” by the employee, where he/she is unavailable to engage in productive employment.
This matter is also covered under the Department of Labor’s Fact Sheet #62G. The relevant Q&A is as follows:
Q: Can the H-1B worker’s wage be either hourly or salaried?
A: Yes
Q: Must the employer pay the guaranteed minimum hours if no work is provided?
A: Yes. The employer must pay the guaranteed minimum hours unless the H-1B worker is unavailable for work because of non-work related factors, such as the worker’s own voluntary request for time off, or in other circumstances where the worker is unable to work.
It is important that the employer remember that payment obligations may continue where the absence is related to the Family and Medical Leave Act, or the Americans with Disabilities Act.
Finally, payment of salary is not required where there is a bona fide termination of the employment relationship