Hiring highly skilled foreign workers is sometimes the only way for companies to fill critical roles, especially in fields like technology, engineering, and science. However, the cost of sponsoring these employees for work visas and permanent residency can add up quickly. So, what happens if the employee resigns shortly after the company has invested in their visa sponsorship? Can the employer recover some of these costs? The answer lies in what are known as “Repayment Agreements.”
What Is a Repayment Agreement?
A repayment agreement is an arrangement between the employer and the employee that allows the company to recover certain expenses if the employee leaves the company before a specified period. This can apply to visa sponsorship costs, but there are important restrictions on what fees can and cannot be recouped.
The Breakdown: Which Costs Are Recoverable?
Not all visa-related expenses can be repaid through a repayment agreement. U.S. labor and immigration laws set specific boundaries, and companies must navigate these carefully to avoid penalties.
H-1B Visa Sponsorship
For companies sponsoring workers through the H-1B visa, the law is clear: any costs related to government filing fees and attorney fees for the H-1B cannot be recovered from the employee. This is due to the wage requirements set by the Department of Labor (DOL), which ensures that employers bear the cost burden and not the worker.
Other Visa Types
The same restriction applies to other visa categories like the E-3 (for Australian citizens), H-1B1 (for citizens of Singapore and Chile), J-1, and H-2B programs. Employers are prohibited from recouping any government or legal fees associated with these visas.
PERM Labor Certification
If the company is sponsoring an employee for permanent residency through the PERM labor certification process, the employer must cover all recruitment-related costs. These costs cannot be passed on to the employee, as they are tied to proving that no qualified U.S. workers are available for the job.
I-140 Immigrant Petition
After the PERM certification is approved, the company files an I-140 petition to confirm that the employee meets the qualifications. In this case, repayment agreements can apply, and the company can recover attorney fees and filing costs if the employee leaves the job early.
I-485 Adjustment of Status
The final step for the employee is the I-485 adjustment of status to permanent residency. Costs related to this process, including legal and government fees, can also be recovered by the employer under specific repayment agreements.
Crafting a Solid Repayment Agreement
To ensure repayment agreements are enforceable, companies need to include them in their employment contracts from the start. Here are some tips:
Get It in Writing: The agreement should clearly outline the conditions under which costs will be recouped, such as how long the employee must stay with the company.
At-Will Employment: Even with a repayment agreement, it’s crucial to specify that the employment remains at will. This means that both the employer and the employee can end the relationship at any time.
Final Paycheck Rules: In many states, employers cannot simply deduct repayment amounts from an employee’s final paycheck unless the employee provides written consent. Make sure you’re aware of your state’s laws before attempting to recover costs this way.
Deterring Early Departures: Even if it’s challenging to legally enforce repayment agreements, they can act as a deterrent. Employees may think twice about leaving a company if they know they will be liable for significant sponsorship-related fees.
Conclusion: Protecting Your Business
For companies that invest significant resources in sponsoring foreign employees, repayment agreements can be an essential tool for protecting their investment. However, it’s important to implement these agreements carefully to comply with labor and immigration laws. By understanding what costs can and cannot be recovered, businesses can better manage the financial risks of sponsorship while fostering a positive relationship with their employees.
Contact Information
If you or your family members have any questions about how immigration and nationality laws in the United States may affect you, or if you want to access additional information about immigration and nationality laws in the United States or Canada, please do not hesitate to contact the immigration and nationality lawyers at NPZ Law Group. You can reach us by emailing info@visaserve.com or by calling us at 201-670-0006 extension 104. We also invite you to visit our website at www.visaserve.com for more information.