Immigration

Srinivasa Reddy Kandi: Determining the Necessary Compensation for an H1B Employee

February, 12, 2025-04:24

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Determining the Necessary Compensation for an H1B Employee:

A company that hires an H1B employee is obligated to pay the “necessary compensation,” which is defined as the greater of the actual wage or the prevailing wage. The actual wage represents what the company compensates employees in similar roles within a specific geographic region. The prevailing wage is established through an analysis of the job description, the location of employment, and the minimum qualifications required for the position. This wage information is typically sourced from the Foreign Labor Certification Data Center. After confirming both the actual and prevailing wages, the employer must compensate the H1B employee with the higher amount. 

Compensation Must Be Paid Without Conditions
According to immigration regulations, the necessary compensation must be provided to the H1B employee without any conditions. Non-guaranteed bonuses cannot be counted towards meeting the wage requirements. Furthermore, the employer is prohibited from including the value of benefits, such as health insurance, when calculating compliance with the wage obligations.

Certain Deductions Not Allowed, Including H1B Fee Payments
Only specific deductions are permissible from the wages of H1B employees. These include legally mandated deductions such as income tax, employee contributions to health insurance premiums available to all staff, and contributions to retirement or savings plans. However, employers cannot recover their business expenses, including certain fees associated with filing H1B petitions, from the wages of H1B workers.

Employee Cannot Be Placed on Unpaid Leave
Employers are required to maintain salary payments to H1B workers, even if the employee is placed on unpaid leave—commonly referred to as being "benched"—due to a lack of available work. Typically, these salary payments must continue throughout the validity of the H1B petition unless the employee is unavailable or unable to work, or if there is a legitimate termination of employment. For further information on the necessary steps for terminating an H1B worker's employment, 

Conclusion
U.S. immigration and labor regulations contain various provisions designed to protect H1B workers from potential exploitation by employers. Given the recent uptick in site inspections and investigations by the Department of Labor and other governmental bodies, it is increasingly crucial for employers to adhere to legal requirements and fulfill their responsibilities toward their employees.

Srinivasa Reddy Kandi is an Immigration policies researcher and immigration laws analyst.
Kandi Srinivasa Reddy, Srinivasa Reddy Kandi, #KandiSrinivasaReddy, #SrinivasaReddyKandi
Disclaimer: The information presented here is general in nature and might not be applicable in any given situation. It should not be interpreted as legal advice or taken for granted that it is always current.