You Are Sponsoring a Foreign National Employee for Permanent Residency, Can You Clawback Some of the Fees?

Companies usually hire a foreign national who requires visa sponsorship because they cannot find a U.S. worker with those skill sets, which is frequently in the STEM fields. However, visa sponsorship comes with significant costs to the employer. Employers may be able to recover a portion of the immigration sponsorship fees by implementing what are called “clawback” provisions into their employment agreements. Clawback provisions are terms in the employment agreements that, in the event of a resignation by the employee before a certain date, require the employee to reimburse the employer for a portion of the costs or fees associated with his or her visa sponsorship.

Not All Visa Fees Can Be Clawed Back

But first, it’s important to understand which sponsorship fees and costs are potentially recoverable and which are prohibited from being “clawed back.”

  • H-1B Petition: Because these visas have a prevailing wage set by the U.S. Department of Labor (DOL) a H-1B employer may not clawback any attorney fees or government filing fees used to obtain the H-1B petition approval by U.S. Citizenship & Immigration Services (USCIS).
  • Other Visas: The same restriction applies to the Australian E-3 visa and the Singapore/Chile H-1B1 visas as well as the H-2A, H-2B, and J-1 visas.
  • PERM Labor Certification Sponsorship for Permanent Residency: PERM Is the most common method for an employer to sponsor a foreign national employee for permanent residency (green card). It is done by conducting recruitment and proving to DOL that no qualified U.S. worker applied for the position. An employer is required to pay for all of the fees and costs associated with the PERM process.
  • I-140 Immigrant Petition: After DOL certifies the PERM application and agrees that no qualified U.S. worker is available, the employer must file an I-140 immigrant petition with USCIS. The attorney fees and costs for the I-140 may be clawed back. The purpose of the I-140 immigrant petition is for the employer to prove to USCIS that the foreign national has the required education, experience and special skills outlined in the PERM filing with DOL. In addition, the I-140 includes financial documents showing that the employer has the ability to pay the offered wage.
  • I-485 Adjustment of Status to Permanent Resident filing: The employer may clawback the fees and costs associated with the I-485 adjustment of status application (green card).

Practice Pointers

  • Still At Will: The clawback provisions should be in writing. It should also indicate that the employment is still at will, if applicable.
  • Final Paycheck: The majority of states, including California, do not allow an employer to deduct anything from a final paycheck without the express consent of the employee. This includes fees and costs pursuant to the clawback provision.
  • Deterrence: Given that an employer cannot clawback from the final paycheck and suing a former employee to collect the amount in controversy is not always practical, a clawback provision can be used as a deterrence for early departure.

Listen to this post 

Copyright © 2024, Sheppard Mullin Richter & Hampton LLP.

  • Related Posts

    Senate Subcommittee Holds Hearing on Public Health Impacts of PFAS Exposures

    On December 5, 2024, the Senate Environment and Public Works (EPW) Subcommittee on Chemical Safety, Waste Management, Environmental Justice, and Regulatory Oversight held a hearing on “Examining the Public Health…

    Corporate Transparency Act— Nationwide Injunction Update and Key Considerations

    On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction halting enforcement of the Corporate Transparency Act (“CTA”).1 In response, the U.S. Department…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Dow Jones Today: Stocks Rise in Early Trading as Chipmakers Surge; Broadcom Market Value Surpasses $1 Trillion

    • By admin
    • December 13, 2024
    • 2 views
    Dow Jones Today: Stocks Rise in Early Trading as Chipmakers Surge; Broadcom Market Value Surpasses $1 Trillion

    Colon Cancer Is Driven by Inflammation, Poor Diet — Here’s What to Eat Instead

    • By admin
    • December 13, 2024
    • 2 views
    Colon Cancer Is Driven by Inflammation, Poor Diet — Here’s What to Eat Instead

    Can TikTok’s Viral 12-3-30 Treadmill Workout Really Help You Lose Weight?

    • By admin
    • December 13, 2024
    • 2 views
    Can TikTok’s Viral 12-3-30 Treadmill Workout Really Help You Lose Weight?

    Senate Subcommittee Holds Hearing on Public Health Impacts of PFAS Exposures

    • By admin
    • December 13, 2024
    • 4 views

    Best Jumbo CD Rates for December 2024: Up to 4.85%

    • By admin
    • December 13, 2024
    • 4 views

    Best 1-Year CD Rates for December 2024: Up to 4.65%

    • By admin
    • December 13, 2024
    • 3 views