Caveat Employer: The Risks of Hiring an H-1B

By David North on August 22, 2011

One of the smaller benefits an employer can obtain from hiring resident workers – i.e., citizens or legal immigrants – as opposed to H-1Bs is that the employer can suffer less when he fires the Americans, rather than the H-1Bs.

We are not writing about the worker's suffering, our usual subject, only the employer's suffering.

While that was not the angle used when the August 1 issue of Interpreter Releases covered a Department of Labor decision, one hopes that event will nonetheless remind some employers of the additional risks they assume when hiring H-1B workers over Americans.

In fact, the employer, Ganze & Co., a CPA firm in Napa, Calif., paid $157,925 in back wages and legal fees to an ex-employee with an H-1B contract for firing him without proper notice.

Had Ganze done the right thing in the first place, and hired an unemployed citizen or green card worker for the job, and then fired that American worker, it would be $157,925 richer today.

How did this happen? Well, Ganze had employed Kevin Limanseto, an Indonesian accountant as an F-1 worker and then obtained an H-1B visa to continue to employ him from October 1, 2008, until September 21, 2011, in that status. Then on August 18, 2008, Ganze changed its mind and told Limanseto that it did not need him anymore.

Ganze's expensive mistake was that it did not, as it was supposed to do, tell USCIS immediately of that decision so that the agency could revoke the H-1B visa. Ganze got around to doing that on August 26, 2010. Meanwhile Limanseto could claim that he was not being paid, the H-1B visa being still intact, even though no work was being done.

The Indonesian being reasonably alert, as many H-1B workers are, went to a lawyer and sued and was awarded a total of $157,925 for back wages running more than three years, for interest on the owed money, and $1,500 for a legal fee in connection with the H-1B application that the worker paid that should have been paid by Ganze.

Now if Ganze had decided to reverse a decision about hiring an American worker for the same job, the government would not have noticed, and I suspect that there would have been no grounds to sue.

The moral of this story is that sometimes H-1B workers have more rights than American workers, and cautious employers might bear than in mind in their future hiring decisions.

Not that this situation is fair to the Americans, but it sometimes it is a fact.

For the full text of the sprightly decision by Administrative Law Judge William Dorsey, see here.