Penalties and Sanctions

As an H1-B employer it is important to be aware of the potential penalties that may be set forth in the event that the employer violates laws regarding to their H1-B employee.

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How is an investigation into a violation started?

Whether through a complaint or another avenue, the Wage and Hour Administrator can open an investigation as to whether an H-1B employer has violated their LCA or any additional attestations that might apply. The Administrator is allowed to obtain any information that is deemed relevant to the case to prove whether the employer is or is not compliant. If a complaint is filed, there should be sufficient evidence proving a violation did occur.

How soon after a violation is noticed must a complaint be lodged?

From the day that the violation was alleged to have occurred, a complaint must be lodged no more than 12 months later.

What is the judge looking for, besides the actual violation?

Amongst other variables, a few examples of what the judge is looking for are:

  • Previous history of violation(s) by the employer.
  • The number of workers affected by said violations.
  • The seriousness of said violations.
  • The employer’s explanation of said violations.
  • Good faith efforts made by the employer to comply.
  • The employer’s commitment to future compliance.
  • Whether the employer achieved a financial gain due to the violation; or caused a potential financial loss, injury, or adverse effect with respect to any other party.

What happens when violations are found?

The Administrator of the Wage and Hour Division may assess civil money penalties with maximums ranging from (at the current time [12/27/2018]) $1,811 up to $52,642 per violation, depending on the type and severity of said violation (See Violation Penalty chart). The Administrator may also impose other remedies, including payment of back wages and benefits.

Why are civil money penalties uneven numbers?

In 2015, Congress realized that without correcting for inflation, many of their money penalties would not be punitive enough to deter people from either becoming new violators or repeating violations.  As such, on November 2, 2015, Congress passed the “Federal Civil Penalties Inflation Adjustment Act”. This act annually adjusts all penalties to match with the inflation of that year.

Is there anything else that can happen to an employer who has been found in violation?

Yes, if the employer is found to have committed certain violations, they may be excluded from future participation in the H-1B program (and potentially other immigrant/nonimmigrant programs) for a period of AT LEAST one year and as high as three years, depending on the nature of the violation.

Are there any other penalties that an employer might have to pay for?

Yes. If an employer acts in a wrongful manner against a whistleblower (i.e. intimidate, threaten, blacklist, discharge etc.), they may be subjected to penalties of up to $5,000 and a two-year debarment from the H-1B program.

If found guilty/liable to pay, how quickly must an employer pay the penalty, back wages, and comply with any other remedies ascertained by the Administrator?

All penalties and remedies (back wages, benefits, etc.) must be paid for or performed immediately. If a civil money penalty is decided upon, the employer must pay the amount determined by certified check or money order made out to “Wage and Hour Division, Labor”. The fines must be delivered or mailed to the Wage and Hour Division office closest to where the violation occurred. Everything else must explicitly follow the instructions and/or procedures established by the Administrator or Administrative Law Judge.

What is the process if an employer does not agree with the Wage and Hour Administrator’s findings?

An H-1B employer will be considered in compliance with the DOL if said employer can properly utilize either of two defenses:

  • “Good Faith Compliance Defense” in regards to a technical or procedural failure; or
  • “Recognized Industry Standard and Practices Defense” for a prevailing wage violation.

 

Viable Excuses/Defenses

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