H-1Bs exempt from furloughs
H-1Bs exempt from furloughs
Date: Wednesday, August 26, 2009 12:10 AM
<<<<< JOB DESTRUCTION NEWSLETTER No. 2051 -- 8/25/2009 >>>>>
An Atlanta Journal article brought to light a peculiar practice of employers
who impose mandatory furloughs on their American employees to reduce labor
costs, while exempting their H-1B employees from having to do the same.
Specifically the article talks about how employees in the Georgia university
system, with the exception of their H-1B counterparts, are undergoing reduced
working hours and voluntary pay reductions in order to cut the operating
budgets of the state's universities.
The AJC described the situation quite simply:
When employees of the University System of Georgia take their
mandated furlough days, foreign workers with a special visa [H-1B}
will not be joining them.
Exempting H-1Bs from furloughs and/or salary cuts is not unusual. Most
government employers who are going through mandatory furloughs have a stated
policy on their website that explains who must comply to pay cuts and who is
exempted. Employers often call it a voluntary program but there is very little
choice involved because they give employees the option of working their full
hours or being furloughed. Either way they will get less take home pay.
Several examples of their stated policies are copied below.
This excerpt from a recent Arizona Republic article explains what is going on
at their Phoenix location:
Phoenix-based computer-chip maker ON Semiconductor Corp. encountered
the issue when it required employees to take four weeks of unpaid
time off in the first half of the year. "We are not able to ask our
H-1B visa holders to do the same without jeopardizing their visas,"
said Colleen McKeown, senior vice president of human resources and
communications.
The same thing is happening at Microchip:
Like ON Semiconductor, Microchip has taken cost-cutting measures to
weather the global slowdown in semiconductor sales. The company,
which employs about 1,500 workers in Arizona and about 5,000
worldwide, has required all workers in its fabrication plants to
take furloughs. The move has not affected H-1B workers, though,
because those employees mostly are in engineering.
These furlough policies are discriminatory towards American workers because
they are forced to bear the brunt of the pay cuts. H-1B co-workers are
unaffected by the furloughs and pay cuts. It's not fair for Americans but
surprisingly this kind of prejudicial behavior is supported by federal law.
Most employers justify what they are doing on advice from lawyers who are
telling them that furloughing H-1Bs could run afoul of the following
regulation:
http://www.dol.gov/dol/allcfr/title_20/Part_655/20CFR655.731.htm
20 CFR 655.731 - "What is the first LCA requirement, regarding wages?"
Employers prefer to exempt H-1Bs from furloughs for two major reasons, and in
both cases two sections of the regulation are referred to. It's important to
keep in mind that lawyers are interpreting these two sections to give maximum
legal protection for employers without regard to its affect on American
workers. Even lawyers agree that the employers could petition the DOL to get a
change of status for their H-1Bs, but they say it would be too much of a
hassle compared to the ease of squeezing American workers.
20 CFR 655.731 (a) "Establishing the wage requirement."
This section leaves no doubt that the wages of H-1Bs must not drop below the
prevailing wage. Most employers use this one to justify their actions, which
on first blush looks OK, but it raises a big question: One of the key arguing
points the H-1B proponents use to argue that H-1Bs aren't just about cheap
labor is that most employers supposedly pay their H-1Bs far more than the
prevailing wage. If their claim is true then why is it that a 10%-20% drop in
working hours would decrease the wage rate of their H-1Bs below the prevailing
wage? Based on the evidence there are a whole lot of H-1Bs who get the minimum
prevailing salary legally allowed -- no more and no less.
20 CFR 655.731(c)(7)(i) and (ii) "Wage obligation(s) for H-1B nonimmigrant in
nonproductive status".
This section requires that H-1Bs be paid full salary even if they aren't
working. This is often called the "benching" provision. Obviously employers
won't save money if they send their H-1Bs home with a full pay check, so there
is no cost advantage of furloughing them. Employers face another risk if they
bench their H-1Bs because after 30 days of benching the H-1B visa goes out of
status.
Generally speaking there is very little debate when universities and state
governments use these regulations to justify their discrimination against
American workers. You would think that furloughed employees who are having
trouble putting food on the table or who can't make house payments would be
raising a huge stink over the situation but so far rancor just hasn't
happened. Oddly enough this quote is true just about everywhere:
There s been little discord over the exemptions, said Stuart Ivy,
president of the UGA Staff Council, which advocates for the
college s faculty and staff members. "There has been some
discussion, but once the reasons are explained, their decision
makes sense," Ivy said.
Ivy is correct in his assessment that university employees and state and city
employees who are unionized haven't complained about these policies.
It's yet to be seen if there will be ill feelings as more employers use
furloughs to cut labor costs. The lack of dissent would seem to indicate that
Americans remain very accommodating to the huge influx of foreign workers that
come to this country for jobs. It is widely thought that Americans would never
give up their homes or livlihoods to immigrants but that's exactly what they
are doing. We are a very generous nation!
ARTICLES INCLUDED:
http://www.ajc.com/news/university-system-115217.html
University system won't furlough foreign workers
http://www.azcentral.com/community/ahwatukee/articles/2009/06/29/20090629biz-visas0630.html
Foreign-worker laws limit pay cuts at tech firms
----- Examples of furlough policies -----
This list is a random sampling that I found using Google. I will consider
sending out another newsletter with an expanded list if some of the internet
sleuths out there send me links with excerpts.
Please, only send stuff if you find direct quotes from employer websites --
not second hand quotes from news reports, blogs, etc. For me to use your
research you must send me a link and an excerpt of the policy as it pertains
to H-1B or other types of nonimmigrant visas. Please don't expect me to look
all over a website just because you sent me a link with no directions on what
to look for.
Employers will often put furlough policies on their web site in the HR
section. If you are using search engines to look for a specific employer keep
in mind that the terminology of their policies is not standardized so you may
have to spend extra time and effort to find them by using creative keywords or
just crawling through the pages. It's tougher to find the policies for private
employers, although they rarely seem to be reluctant to tell newspapers what
is going on. For some reason federal, state, and city HR departments seem less
reluctant to be forthcoming with this information.
University of Georgia
http://uga.edu/furlough/who_furlough.html
If I have applied for an H-1B visa but have not yet been approved, am I
excluded from the furlough?
Individuals who have applied for an H-1B visa but have not yet been
approved are included in the furlough requirements. Only holders of active,
current H-1B visas are not subject to the furlough.
University of Maryland
http://www.uhr.umd.edu/furlough/Furlough_FAQs_updated_011409.pdf
Who is excluded from the campus furlough plan? Full-time employees whose
annualized salary is less than $30,000 per year, hourly employees, graduate
assistants, employees paid by the course and employees on H-1B visas are all
excluded from having a furlough day(s). Additionally, any appointments that
are "non-standard pay" in the PHR system are not included in gross pay
calculations.
University of Wisconsin System
http://www.uwsa.edu/furloughs/docs/plan.pdf#page=4
reduction, and these employees will not be furloughed per federal law.
Employment agreements entered into beginning July 1, 2009, for new H-1B and
E-3 hires, or for current H-1B or E-3 employees requiring visa extensions,
covering any time during the furlough period will have a reduction of 3.065%
to salary with no furlough days taken just as is done with lump sum payments.
However, no reduction of salary for a new or continuing H-1B or
E-3 employee shall lower the salary below the prevailing wage established for
that employee through the prevailing wage process mandated by the federal
Department of Labor.
University of Wisconsin
http://www.ohr.wisc.edu/ifss/new/ifss_furloughs.html
F-1 and J-1 international students who are enrolled at the University and
hold a student appointment (Teaching Assistants, Resident Assistants, PAs,
Graduate Assistants, and Student Hourly employees) are exempt from the
furloughs. Like USC or LPR students, they will not be expected to take
furlough days and their pay will not be reduced.
Arizona State University
http://www.hr.arizona.edu/furlough_faq#q030
Who is required to participate in a mandatory furlough?
All benefits-eligible UA employees paid by state and locally allocated
funds will participate with the exception of the following: student employees,
graduate teaching and research assistants and associates, ancillary,
postdoctoral scholars who serve under the conditions of Post Doctoral Service
(UHAP Chapter 12, Conditions of Post Doctoral Service), employees on H1-B visa
status, and clinical assistants (medical residents) are exempt from this
process.
Fermilab
http://www.fnal.gov/faw/furlough/policy.html
The purpose of the furlough is to reduce the operating cost of the
laboratory by reducing all employees pay by a roughly equivalent level.
Because of legal considerations applicable to H-1B Temporary Workers,
employees in H-1B visa status cannot be furloughed intermittently.
H-1Bs and E-3s are not affected by the furloughs because of the need for
the University to meet the terms and conditions of the Labor Condition
Application (LCA) that underlies their H-1B and E-3 status. For information
on the LCA, please see:
http://www.dol.gov/dol/allcfr/ETA/Title_20/Part_655/20CFR655.731.htm.
State of South Carolina
http://www.jobs.sc.gov/OHR/employer/OHR-furloughmandatory-faqs.phtm
Q: Can an employee authorized for work through an H-1B visa participate in
a mandatory furlough?
A: The United States Department of Labor Regulations (20 CFR 655.731) do
not allow the wages of these employees to be reduced through a mandatory
furlough. They can, however, participate in a voluntary furlough.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.ajc.com/news/university-system-115217.html
University system won't furlough foreign workers
By Laura Diamond
The Atlanta Journal-Constitution
6:59 p.m. Thursday, August 13, 2009
When employees of the University System of Georgia take their mandated
furlough days, foreign workers with a special visa will not be joining them.
University System officials said placing these employees on unpaid leave would
require approval from the federal government. About 750 of the system s 40,000
employees have an H-1B non-immigrant visa, which allows employers to
temporarily hire foreign workers in specialty areas.
The employees work as research faculty and postdoctoral students at the
University System s research universities, spokesman John Millsaps said
Thursday. According to system data, 110 are at Medical College of Georgia,
113 work at Georgia State University, 227 are employed at University of
Georgia and 302 work for Georgia Institute of Technology.
The system would have to spend about $320 on each application for each
affected employee to seek the waiver for six furlough days, Millsaps said.
The system didn t know how long it would take to get a response or if each
request would be granted, he said.
"We would have to spend money in an attempt to save money, and in the end,
they may say no," he said. "We are pretty much hamstrung by federal law on
this."
According to U.S. Department of Labor rules, an employee with the visa who is
furloughed still must be paid by the employer, who can seek a waiver.
In order to receive an H-1B visa, an employer must show there are no Americans
able to do the work, according to federal rules.
For each visa, the University System entered into a three-way contract with
the employee and federal government and agreed on salary, Millsaps said.
The contract stipulates that the pay will not be reduced, he said.
Millsaps said the system had three choices: pay the application fees to change
the contracts; furlough employees without a waiver and pay a fine; or exempt
them from unpaid leave.
"If the goal is to reduce expenses, the last option is the one that reduces
expenses the most," he said.
There s been little discord over the exemptions, said Stuart Ivy, president of
the UGA Staff Council, which advocates for the college s faculty and staff
members.
"There has been some discussion, but once the reasons are explained, their
decision makes sense," Ivy said.
Gov. Sonny Perdue ordered all state employees to take three furlough days by
the end of 2009 as part of a series of budget cuts to overcome a revenue
shortfall.
Bert Brantley, a spokesman for Perdue, said each agency has the flexibility to
manage furloughs and budget cuts. He said the University System was taking a
reasonable approach.
The Board of Regents has required six furlough days. Employees must take at
least three by the end of the calendar year and the remainder by the end of
the fiscal year, June 2010. Each campus can decide when employees take
furloughs, but local leaders cannot cancel classes.
Another requirement is that the nearly 3,200 employees who make less than
$23,600 a year are exempt.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.azcentral.com/community/ahwatukee/articles/2009/06/29/20090629biz-visas0630.html
Foreign-worker laws limit pay cuts at tech firms
by Andrew Johnson - Jun. 30, 2009 12:00 AM The Arizona Republic
As some technology companies carry out layoffs, furloughs and other pay cuts,
they step into a web of potentially costly legal issues linked to foreign
workers, immigration attorneys say.
Businesses that use the H-1B visa program, which allows U.S. companies to
employ non-immigrant foreign workers for up to six years in specialized
positions, face restrictions when rolling out cost-cutting measures.
Federal regulations require employers to pay H-1B workers the maximum of what
they pay other workers for the same position or the established average wage
for that position in a particular geographic area.
"The companies are very limited," said Tarik Sultan, an immigration-law
attorney in Tucson. "They can't reduce the pay of an employee . . . because
they're tied into the wage requirements."
For an employer to subject H-1B workers to a furlough or pay cut, Sultan said,
it would have to file new paperwork with the U.S. Department of Labor
redefining the workers' position, which can cost thousands of dollars
depending on the number of employees involved.
Phoenix-based computer-chip maker ON Semiconductor Corp. encountered the issue
when it required employees to take four weeks of unpaid time off in the first
half of the year.
"We are not able to ask our H-1B visa holders to do the same without
jeopardizing their visas," said Colleen McKeown, senior vice president of
human resources and communications.
Instead of opting to file new paperwork to redefine their positions, ON
Semiconductor asked H-1B workers to "burn vacation time," McKeown said. ON
currently employs 41 workers with H-1B visas, including 24 in Arizona, where
it has about 1,000 workers, McKeown said.
The H-1B program is run by U.S. Citizenship and Immigration Services, a
division of Homeland Security. The program caps the number of H-1B visas to
65,000 per fiscal year for workers with a bachelor's degree . An additional
20,000 visas are allotted for workers with a master's degree or higher from a
U.S. education institution.
The caps exempt some workers, including those employed by higher-education
institutions, organizations tied to such institutions, and non-profit and
government research groups.
Including exempt categories, USCIS approved 276,252 of the 288,764 H-1B
petitions filed in fiscal 2008, according to the most recent data available.
A company that is deemed dependent on H-1B workers, or whose workforce is
comprised of 15 percent H-1B employees, is required by federal law to make an
effort to hire American workers before applying for the visas.
In prior years, the cap for H-1B petitions was reached within days of the
filing process opening April 1 because companies were still growing.
The 65,000 cap for the upcoming fiscal year beginning Oct. 1 has yet to be
met, the first time it has not been reached within a few days since fiscal
2007.
There still are about 21,000 H-1B visas available under the 65,000 cap for
fiscal 2010, according to USCIS spokeswoman Sharon Rummery.
Businesses, especially those in the tech industry, say the program is needed
to fill technical positions for which they have little success hiring American
workers because of skill requirements.
"It's hard to be in the technology industry without some participation in the
H-1B program," said Lauren Carr, vice president of human resources for
Microchip Technology Inc.
The Chandler-based semiconductor manufacturer received approval for 11 H-1B
visa petitions in fiscal 2008, according to the most recent Homeland Security
figures.
Like ON Semiconductor, Microchip has taken cost-cutting measures to weather
the global slowdown in semiconductor sales. The company, which employs about
1,500 workers in Arizona and about 5,000 worldwide, has required all workers
in its fabrication plants to take furloughs.
The move has not affected H-1B workers, though, because those employees mostly
are in engineering, Carr said.
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