In this post, we aim to discuss about a decision of U.S. Department of Labor’s Office of Administrative Law Judges (OALJ). In Administrator, Wage and Hour Division v. New York Global Consultants, Inc., decided on August 28, 2024, the ALJ held that an H-1B employer remained liable for wages until it formally notified USCIS of the petition withdrawal—not merely when it ended the employee’s assignment or stopped paying wages.
The ruling—focused on unpaid bench periods involving three H-1B workers—resulted in more than $102,000 in back wages, plus interest. It offers important guidance on what constitutes a bona fide termination under the H-1B program, and highlights critical compliance steps that must be taken to legally end the wage obligation.
🧾 Background: The Case Against New York Global Consultants, Inc.
The Wage and Hour Division (WHD) investigated New York Global Consultants, Inc. (NYGCI), an IT staffing company, after receiving complaints from three H-1B workers: Aafreen Karim, Hemin Panchal, and Santhosh Bobbili. All three employees had been benched after their client projects ended in 2020, and the employer ceased wage payments.
However, NYGCI:
- Continued marketing the workers’ resumes to prospective clients;
- Did not notify USCIS of the terminations until weeks or months later;
- Did not offer return transportation, as required by H-1B regulations.
The DOL found that NYGCI failed to lawfully terminate these workers and remained liable for their wages during each respective bench period.
Judge Theresa C. Timlin of the OALJ upheld the WHD’s findings and ordered NYGCI to pay the following amounts:
| Employee | Bench Period | Back Wages Awarded |
|---|---|---|
| Aafreen Karim | Sept 1, 2020 – Jan 18, 2021 | $31,536.00 |
| Hemin Panchal | Oct 1, 2020 – Feb 17, 2021 | $38,796.16 |
| Santhosh Bobbili | May 2, 2020 – Aug 1, 2020 | $32,000.80 |
Total ordered back wages: $102,332.96, with interest and potential fringe benefits to be calculated.
⚖️ Legal Framework: What Constitutes a Bona Fide Termination?
Under 20 C.F.R. § 655.731(c)(7)(ii), an employer’s H-1B wage obligation continues unless:
- The approved employment period ends;
- The worker voluntarily becomes unavailable (e.g., resigns or requests leave); or
- The employer executes a bona fide termination.
The DOL and Administrative Review Board (ARB) interpret “bona fide termination” to require all three of the following steps:
- ✅ Clear, written notice of termination to the H-1B employee;
- ✅ Written notification to USCIS (e.g., letter to the Service Center withdrawing the I-129 petition);
- ✅ Offer to pay for return transportation to the worker’s home country (if dismissed early).
Failure to complete any one of these steps means the employer must continue paying the required wage—even if the employee is benched or not providing services.
🧠 The Judge’s Analysis: Marketing Resumes = Continued Employment
In this case, the employer had informed each worker via email that their project had ended, but the company:
- Did not notify USCIS until January or February 2021;
- Continued submitting the employees’ resumes for new project roles;
- Never offered to pay for return airfare.
The ALJ held that marketing a benched employee’s profile while failing to notify USCIS was clear evidence of an ongoing employment relationship, not a lawful termination. Because no bona fide termination occurred, the employer was liable for wages during the entire unpaid period.
❌ Common Mistakes That Trigger Liability
| Mistake | Why It’s a Problem |
|---|---|
| Ending payroll but delaying USCIS notice | Wage obligation continues without petition withdrawal |
| Not offering return transportation | Required under 8 C.F.R. § 214.2(h)(4)(iii)(E) |
| Marketing benched employees | Indicates employment is still active |
| Confusing project end with employment end | H-1B regulations view benching as noncompliant unless properly terminated |
✅ How to Properly Terminate an H-1B Employee
To stop paying wages without violating the H-1B program rules, employers must:
- Notify the employee in writing that their employment is ending.
- Send a withdrawal notice to USCIS, referencing the petition receipt number. Keep proof of the dispatch like airbill.
- Offer to pay return airfare if the termination occurs before the visa ends. This offer should be in writing to be on safer side.
Skipping any of these steps exposes the employer to back wage claims—often for several months of unpaid wages, as this case illustrates.
🏢 Implications for IT Staffing and Consulting Firms
This case is especially instructive for staffing agencies that rely on placing H-1B workers in short-term projects. Benching an employee without pay and continuing to shop their resume can lead to wage liability, DOL audits, and potential debarment from the H-1B program.
Even if a worker is not actively billing a client, the employer must continue paying the prevailing wage unless a bona fide termination has been completed.
📎 Final Takeaway
Administrator v. New York Global Consultants, Inc. is a compelling example of how regulatory noncompliance can lead to six-figure liability—even in situations where the employer believed the employment had ended.
The decision confirms that USCIS notification is not optional. Employers must follow the full termination process to end the employment relationship under H-1B law.
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