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Health Care Employers of H-1B Aliens Must Notify Government of Terminations

March 13, 2007

A recent decision by the U.S. Department of Labor's Administrative Review Board highlights the importance of an employer giving notice to the U.S. Citizenship and Immigration Services when the services of the H-1B alien employee is terminated. Health care organizations often use H-1B visas to bring alien physicians to their areas where the recruitment and/or retention of U.S. physicians has proven challenging. H-1B status is specifically tailored for alien professionals with at least a bachelor's degree who are filling a specialty (professional) occupation. Physicians certainly meet those criteria.

Notice of Employment Termination Requirements
When employers terminate an individual employee who is in H-1B status prior to the expiration of the individual's authorized status, they likely will follow the company's established termination policies and procedures to the letter. However, employers will sometimes forget an important step that applies to individuals in H-1B status--notice to United States Citizenship and Immigration Services (USCIS) that the approved employment relationship no longer exists. A recent case from the Department of Labor's Administrative Review Board makes clear that the failure to notify the USCIS of the end of the employment relationship can lead to additional costs for the employer. Federal regulations (8 C.F.R. B'214.2(h)(11)(i)(A)) require that the petitioner (employer) must notify the USCIS if it no longer employs the beneficiary (alien) under the approved H-1B petition prior to the expiration of the approved status. 20 C.F.R. B'655.731(c)(7)(ii) states that "INS (now the Department of Homeland Security) regulations require the employer to notify the INS (now USCIS, part of DHS) that the employment relationship has been terminated so that the petition is canceled." Despite the stated obligation, many employers fail to notify the USCIS.

Back Pay Damages for Failure to Effect Bona Fide Termination
In a recent case, Amtel Group of Florida v. Rungvichit Yongmahapakorn, ARB Case No.04-087, 2006, which was decided by the Department of Labor's Administrative Review Board, the Board ruled that an employer had not effected a bona fide termination as required by H-1B regulations. In that case, Amtel had provided the employee with a dated memorandum of termination notifying her of her firing, which the alien read and signed. However, as the Board stated, "even though Amtel terminated its employment relationship with Rung, the issue in this case is whether Amtel ultimately effected a bona fide termination." The Board stated that notice to the alien is necessary, but not enough. The Board then ruled that to effectuate a bona fide termination, the employer must notify the USCIS that it has terminated the employment relationship with the individual, which ends its obligations to pay the required wages. Amtel's failure to notify USCIS led the Board to require it to pay the alien for back wages from the date of termination until the end of her approved H-1B status.

The Amtel case underscores the importance of notifying the USCIS whenever an H-1B employment relationship is ended. If you have further questions about your obligations under H-1B regulations, please contact Gene Schaeffer (608 284-2655 or gschaeffer@gklaw.com) or another member of our Godfrey & Kahn Healthcare Team.

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