For employers hoping to hire foreign nationals for specialty occupations, the process for a worker to obtain an H1-B visa can be quite a journey. This year, the USCIS published a new regulation changing the former “lottery” system awarding H1-B visas to a wage-based allocation system, instituting new challenges for employers.

Each year, there is a cap maximum of H1-B visas available for specialty occupations that require a bachelor’s degree, and a separate cap for positions requiring a graduate degree from a United States university. Previously, a lottery system distributed additional visas to employers picked at random. On January 7, 2021, a final rule was issued revising the lottery system into a four-tiered list based on wages, with employers offering the highest wages preferred over those offering lower wages.

Specifically, employers must offer H1-B Visa employees a prevailing wage as set by certain salary surveys, most frequently used are those issued by the U.S. Department of Labor (DOL). Employers offering the highest wages (level 4) will have first priority, descending down the wage levels until all 85,000 visas are exhausted.  Employers who do not utilize the DOL surveys will be classified in the lowest tier (level 1) regardless of the wage actually offered.

The final rule was set to go into effect March 9, 2021. However, with the advent of the new White House administration, the rule’s effective date has been extended to December 31, 2021 to give adequate time for implementation and further evaluation of the rule. Continue to look for updates on this topic.

Action Items

In Clark v. AMN Services, the Ninth Circuit Court of Appeal stated that certain per diem benefits were not true business expenses and should be included in the calculation of employees’ regular rate of pay for overtime purposes. There, per diem employees who traveled for work purposes were paid both an hourly wage and a weekly per diem benefit, allegedly to cover the cost of meals, incidentals, and housing while working away from home; however, the benefit payments varied related to the work performed.

The court said that determining whether a per diem must be included in the regular rate of pay is a case-specific inquiry that turns on whether the payments function to reimburse employees for expenses or instead operate to compensate employees for hours worked. To this end, it looked at several factors, including whether payments increase, decrease, or both based on time worked, whether the payments are made regardless of whether any costs are actually incurred, whether the employer requires any attestation that costs were incurred by the employee, and whether the payments are tethered specifically to days or periods spent away from home or instead are paid without regard to whether the employer is away from home.

Ultimately, the tie of the per diem deductions to shifts not worked regardless of the reason for not working; the “banking hours” system; the default payment of per diem on a weekly basis, including for days not worked away from home, without regard to whether any expenses were actually incurred on a given day; and the payment of per diem in the same amount, but as acknowledged wages, to local employees who did not travel indicated to the court that the payments functioned as compensation for hours worked rather than as reimbursement for expenses incurred.

Action Items

The California Department of Industrial Relations (DIR) recently issued an FAQ with updates clarifying the Cal/OSHA Emergency Temporary Standard (ETS). The following is a summary of some of the key points.

Just before the new year, Governor Gretchen Whitmer signed into law SB 1258, which brings Michigan’s employee quarantine laws into alignment with updated Dec 2, 2020 guidance from the federal Centers for Disease Control and Prevention (CDC).  The bill resolves inconsistencies between the original statewide quarantine laws and the updated CDC definition of “close contact,” and also adds definitions for isolation, quarantine, and COVID-19 infection terminology.

On January 12, 2021, Ohio Governor DeWine signed into law the Employment Law Uniformity Act (H.B. 352), implementing major reforms to the statewide employment discrimination statute (Chapter 4112).  These changes impact how employees file charges, the statute of limitations for claims, supervisor liability, and more. Key provisions that impact employers include:

• Administrative Exhaustion Requirement: Employees must file a charge with the Ohio Civil Rights Commission (OCRC) prior to filing a lawsuit under the discrimination statute. The time period to file a charge is two years.
• Statute of Limitations Reduced: Employees have a reduced two-year period to sue under Chapter 4112, though such period is tolled while an employee claim is pending with the OCRC. Other employment-related claims have also had their statute of limitations reduced from six years to two.
• Damage Caps: There is a maximum cap for compensatory and punitive damages in tort actions, which now includes court claims under Chapter 4112.
• Supervisor Liability: Managers or supervisors can no longer be sued under Chapter 4112 unless they are the employer (such as in a sole proprietorship) or acted outside the scope of employment.
• Age Discrimination: The number of remedies for age discrimination claims has been reduced and simplified, and uses the same statute of limitations/administrative exhaustion requirements as other types of discrimination claims.
• Affirmative Defense for Hostile Work Environment: Employers are shielded from liability in hostile work environment claims in cases where the employer took reasonable care to prevent or correct the harassment, and the employee failed to take advantage of the corrective opportunity.

Action Items