28 October 2010

Court rules temporary US Visa holders unable to recover visa expenses from employer

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The US Court of Appeals for the Fifth Circuit has ruled that H-2B temporary workers are not entitled to recover costs associated with their US visa from sponsoring employers under the Fair Labor Standards Act (FLSA).

US Visa

Temporary workers under the H-2B US Visa program are not entitled to recover costs involved with their visa, the US Court of Appeals have ruled.

In Castellanos-Contreras v. Decatur Hotels LLC, the court indicated that the FLSA does not require such foreign workers’ US visa costs to be considered in calculating whether the employer has satisfied its FLSA wage obligations.
The H-2B worker visa program permits US employers to hire temporary foreign workers to perform nonagricultural work for a seasonal need. The visa program is commonly used by employers in construction, landscaping and hospitality industries, and as the workers are commonly sourced from distant locations it has become commonplace for recruiting companies to assist in locating qualified workers. In the past couple of years, H-2B workers have brought actions under the FLSA seeking reimbursement of travel and visa expenses as costs are “primarily for the benefit of the employer.”

While the US Department of Labor (DOL) recently changed its interpretation of the FLSA to take the position that travel, US visa and recruitment expenses are to be deducted when calculating the FLSA wage of H-2B workers, the Fifth Circuit declined to follow the DOL interpretation, in part because the interpretation was not adopted until 2009, years after the relevant pay periods in this case.

Therefore, employers still need to be aware of the potential liability faced when not covering such expenses on behalf of affected H-2B workers.

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