New non-immigrant sponsorship agreement at workplace

[simple_tree]

Hi,

I am an employee at a firm under H1-B, my H1 expires in Nov and my company can no go ahead with my extension process (6 month gap). Yesterday I got a mail from the HR stating that there is a new policy that asks the employee to pay a significant portion of the 'immigration related costs' if the employee decides to leave the company within 1 year from the filing date. The amount that the employee has to pay reduces every  month and by the end of the 12 month period it gets waived off completely. They also mention that I have to sign an agreement that I agree to the terms and they will go ahead with my extension only If I sign this agreement.

There are a few things i wanted to understand:

1. Is this legal ? I do understand that its a loss for the company if an employee leaves immediately after his H1B extends, but this just feels exploitative to a degree. The companies know that a H1B holder will bow down to any demands related to H1B extension.
2. Is there something that I can do ? Considering the Covid situation I realize that this is not the best time to butt heads with the HR as I am not sure how the management will take my response. 

I checked around and few people did say that this practice is seen in few other companies as well. I would just like more information about this practice as I just feel this is a bit exploitative. Maybe with more context my mind can change about the situation.

 

[JoeF]

It is not allowed for the company to ask for a penalty to pay when leaving before an agreed-upon date. The company can ask for liquidated damages, but that's can't be a predetermined value.

And the company can never ask for lawyer costs or costs of filing the H1.

20 CFR 355.731:

"(i) A penalty paid by the H-1B nonimmigrant for ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer.
    (A) The employer is not permitted to require (directly or indirectly) that the nonimmigrant pay a penalty for ceasing employment with the employer prior to an agreed date. Therefore, the employer shall not make any deduction from or reduction in the payment of the required wage to collect such a penalty.
    (B) The employer is permitted to receive bona fide liquidated damages from the H-1B nonimmigrant who ceases employment with the employer prior to an agreed date. However, the requirements of paragraph (c)(9)(iii) of this section must be fully satisfied, if such damages are to be received by the employer via deduction from or reduction in the payment of the required wage.

    (C) The distinction between liquidated damages (which are permissible) and a penalty (which is prohibited) is to be made on the basis of the applicable State law. In general, the laws of the various States recognize that liquidated damages are amounts which are fixed or stipulated by the parties at the inception of the contract, and which are reasonable approximations or estimates of the anticipated or actual damage caused to one party by the other party's breach of the contract. On the other hand, the laws of the various States, in general, consider that penalties are amounts which (although fixed or stipulated in the contract by the parties) are not reasonable approximations or estimates of such damage. The laws of the various States, in general, require that the relation or circumstances of the parties, and the purpose(s) of the agreement, are to be taken into account, so that, for example, an agreement to a payment would be considered to be a prohibited penalty where it is the result of fraud or where it cloaks oppression. Furthermore, as a general matter, the sum stipulated must take into account whether the contract breach is total or partial (i.e., the percentage of the employment contract completed). ... In an enforcement proceeding under subpart I of this part, the Administrator shall determine, applying relevant State law (including consideration where appropriate to actions by the employer, if any, contributing to the early cessation, such as the employer's constructive discharge of the nonimmigrant or non-compliance with its obligations under the INA and its regulations) whether the payment in question constitutes liquidated damages or a penalty.

(C): The $500/$1,000 filing fee, if any, under section 214(c) of the INA can never be included in any liquidated damages received by the employer. See paragraph (c)(10)(ii), which follows.)
    (ii) A rebate of the $500/$1,000 filing fee paid by the employer, if any, under section 214(c) of the INA. The employer may not receive, and the H-1B nonimmigrant may not pay, any part of the $500 additional filing fee (for a petition filed prior to December 18, 2000) or $1,000 additional filing fee (for a petition filed on or subsequent to December 18, 2000), whether directly or indirectly, voluntarily or involuntarily. Thus, no deduction from or reduction in wages for purposes of a rebate of any part of this fee is permitted. Further, if liquidated damages are received by the employer from the H-1B nonimmigrant upon the nonimmigrant's ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer, such liquidated damages shall not include any part of the $500/$1,000 filing fee (see paragraph (c)(10)(i) of this section). If the filing fee is paid by a third party and the H-1B nonimmigrant reimburses all or part of the fee to such third party, the employer shall be considered to be in violation of this prohibition since the employer would in such circumstances have been spared the expense of the fee which the H-1B nonimmigrant paid."

[LeaveMessageH1B]

18 hours ago, simple_tree said:

Is this legal ?

No

 

18 hours ago, simple_tree said:

Is there something that I can do ? Considering the Covid situation

Find an actual employer. 

 

18 hours ago, simple_tree said:

I checked around and few people did say that this practice is seen in few other companies as well

Mostly Indian MNC (they'll try to charge you one way or another) or consulting companies have this type of practice

[User099]

What do they call as 'immigration related costs' ? They can't ask you to pay for H1, but they can ask you to pay for H4, PP or H4 EAD's. Some companies pay for everything some don't. They make up the costs by paying you peanuts.

Company is investing in you and are expecting you to stay for 12 months to recover that cost. Most of the time this is done for new employees and not that often for employees who have been with them for years. 

You can negotiate the 12 month period if you think its too long or ask for a pay raise. Maybe they will agree to one of the two. If you like the job and the people you work with then belive me 12 months is not a lot. 

[gopalakrishnach]

Look like desi consultancy...

[simple_tree]

Thank you this is good information. After the initial Email there were no additional emails from the HR. I am buying this time to understand more and gather more information. I will ask them about specific costs if they circle back. This certainly feels like a malpractice and should be discouraged.

Thanks again and I hope I can get more information from folks here, its always helpful.

 

[simple_tree]

Thanks for the response. This is a US based company which has been here for years and not a consultancy. I am a full time employee and not on contract. Yes this looks like tactics used by consultancy, never expected such tactics would be used. I no longer have interest in continuing here, will buy time and try not to sign the agreement and get out from here asap once the H1-B extension goes through. If they press more I will ask for more details about the exact 'cost for immigration', 25k sees inflated. I might not end up taking the legal route considering the current situation but I would definitely do something about this once I find a better employer. Sadly if I do sign the agreement then I might not be legally able to do much but will definitely found out what I can do at least for the people still employed. This company has heavily invested in Indian employees both here as well as in India, they should be ashamed to pull out such tactics.