Summary
The Second Circuit held that H-1B employers must pay wages in prorated monthly installments under 20 C.F.R. § 655.731(c)(4); underpayment in any month violates the required wage obligation even if annual compensation exceeds the LCA wage, precluding self-remedy through later overpayments. The court also ruled that DOL may award back wages for violations predating the one-year limitations period when a complaint is timely filed, and that DOL's investigatory authority extends to other H-1B employees of the same employer when investigating alleged wage payment practices, as such inquiry is reasonably within the scope of the complaint.
Topics
Practice areas
Questions Presented
- Whether the H-1B Program's required wage obligation is satisfied on an annual basis or requires monthly prorated payments.
- Whether DOL can award back wages for violations occurring more than one year before the complaint was filed.
- Whether DOL exceeded its authority by investigating Horn's employment when the complaint only alleged violations regarding Gangjee.
Holdings
- The required wage obligation requires monthly prorated payments; an employer cannot offset underpayments in some months with overpayments in other months.
- DOL can award back wages for violations occurring prior to the one-year limitations period for filing complaints.
- DOL acted within its authority when it investigated Horn's employment because the complaint alleged an impermissible wage payment practice, and it was reasonable to investigate whether that practice applied to other H-1B employees.
Key quotations
“The plain text of the regulation requires wages to be paid on time ('when due'), and 'no less often than monthly,' 'in prorated installments.' An employer violates both the regulation's timing and the pro-rata installment requirements when it makes a monthly payment that is less than one-twelfth of the established annual wage—even if the employer has not fallen behind in, or is ahead of, its obligation to pay, pro rata, the annual amount owed to an employee.” (at 15-16)
“We therefore conclude that, where a complaint gives the Secretary 'reasonable cause to believe' that an employer has failed to meet its obligations under the H-1B Program in a particular manner, 8 U.S.C. § 1182(n)(2)(A) and 20 C.F.R. § 655.800(b) permit the agency to investigate the full scope of that potential failure, including victims and circumstances that were not the subject of any specific allegation.” (at 23)
Factual background
Aleutian employed two H-1B workers: Gangjee and Horn. Gangjee was underpaid in several months but overpaid in others, resulting in total annual compensation exceeding the required wage. Horn was underpaid in December 2012. DOL ordered back wages for underpaid months.
Procedural history
Aleutian filed a complaint with DOL on January 14, 2013, alleging H-1B Program violations. DOL investigated and issued a notice of determination. Aleutian appealed to an ALJ, who granted summary decision for DOL. The ARB affirmed. Aleutian then sued in district court under the APA, and the district court affirmed. Aleutian appealed to the Second Circuit.