5 Reasons Why an H-1B Employer Would Want to Reach Settlement With An Underpaid Employee



If your H-1B employer (or former H-1B employer) underpaid your wages, you may be interested in complaining to the employer or pursuing legal action, but worried about what may happen to you. You may be worried that, if you complain about unpaid wages, you may lose your H-1B status, and be subject to deportation.

These are realistic concerns. Pursuing your legal rights indeed is a serious and delicate matter. You should thoroughly educate yourself on your legal rights and options before you take action or assume risks.

However, you should know that an underpaying H-1B employer has its own risks to worry about. The legal and financial consequences that an employer faces if found to have underpaid an H-1B employee’s wages could drive the employer out of business.

Rather than face the risks that result from a worker filing a legal complaint, fraudulent H-1B employers will often prefer to reach a settlement with an underpaid H-1B worker.

Fraudulent H-1B employers may well agree to a settlement that: (a) pays you your unpaid wages (and possibly more, given the possibility of legal penalty monies in addition to wages); (b) fixes any immigration-status problems (e.g. makes sure you receive valid payments and paystubs needed for H-1B transfer); and (c) agrees not to retaliate against you.

Below are 5 reasons why an underpaying H-1B employer should agree to such a settlement.

(Please note: This article is NOT advising you to demand settlement from your employer, to threaten your employer with legal action, or to take legal action. Before trying to negotiate a settlement or filing a legal complaint on your own, it is strongly advised that you talk to an attorney, such as an H-1B rights attorney and immigration attorney, about your own specific circumstances and legal options).


If the H-1B employer does not settle with you, you could go on to file legal complaints that could present serious problems for the employer. (Please note: you could pursue these legal complaints even if you were deported and outside the U.S.-so, the employer could not “fix” its potential problems by trying to get you deported).

There are two types of legal complaints that could be filed against the employer: (a) a Department of Labor (DOL) complaint, which relates to failure to pay the prevailing wage and other immigration law violations; and (b) a federal court complaint, which relates to unpaid wages and various fraud laws.

Here are 5 reasons why an employer would want to avoid these legal complaints and settle with you instead.

#1 If the employer refused to settle with you, and you went on to file one of these legal complaints, the employer would likely have to pay your unpaid prevailing wages.

If an underpaid H-1B worker filed a legal complaint, the chances are the employer would be found in violation of the laws and have to pay the worker the unpaid prevailing wages.

In addition, the employer would have to reimburse the employee for any prohibited payments or wage deductions demanded of the employee such as the petition filing fee or an early termination penalty.

Violations are often clear-cut. In many cases, a legal decision-maker can compare documentation, readily determine a worker has been underpaid, and/or the employer has made unauthorized deductions, and require payment from the employer.

#2 The employer may have to pay back the unpaid wages of other H-1B employees as well.

If a DOL complaint were filed, it is likely that DOL would investigate not only the employer’s underpayment of your wages, but also the wages of other employees, to see if they were underpaid as well.

Say, for example, the employer underpaid you personally by $25,000, and underpaid nine (9) other workers in the same manner.

If the employer refused to reach settlement with you (say, a settlement which paid you the $25,000 you were underpaid), and you go on to file a DOL complaint, the employer could risk the DOL making the employer pay out $250,000 to ten workers.

You may not know exactly how many workers the employer has underpaid, and how much the employer has underpaid them. However, when an H-1B employer has underpaid you and treated you fraudulently, the odds are high that the employer has done the same thing to several other H-1B workers. A fraudulent employer has to worry about all its underpaid workers, not just you, if the employer understands you and your attorneys may file a DOL complaint.

Faced with the prospect of having to pay all of its underpaid H-1B employees, an employer should be more inclined to settle with you to avoid a DOL investigation and being found in violation of the regulations.

#3 The employer could have to pay triple your wages, and additional monies, if the employer lost a fraud claim in federal court.

In addition to a DOL complaint, an underpaid H-1B worker may be able to file a complaint in federal court under various fraud laws.

A federal complaint can also be filed by a worker who has been deported and is no longer in the U.S.

If you win a claim under one of these federal laws, the law requires that the fraudulent H-1B employer pay you triple the amount of your lost wages as well as additional monies.

Further, the employer and its representatives would have to defend the complaint and would probably have to retain an attorney and pay thousands of dollars in legal expenses. (Most employers’ attorneys charge out-of-pocket fees on an hourly basis, as opposed to a contingency, pay-only-if-you-win basis that workers’ attorneys often have).

If you and your attorneys can get the employer to understand these financial risks of a federal complaint, it is all the more likely the employer will want to reach settlement with you rather than face the possible consequences of federal litigation.

#4 The employer, if found in violation of DOL regulations, could be subject to heavy fines.

In addition to requiring payment of back-wages, depending on the nature of the violation, the DOL can impose fines ranging from a maximum of $1,000 to $35,000 per violation committed by an employer. These fines can add up quickly, especially if there are multiple violations pertaining to more than one H-1B worker.

Faced with the prospect of paying both back-wages and fines should serve as a further incentive for an employer to reach settlement rather than risk going to court and losing.

#5 The employer, if found in violation of DOL regulations, could lose its right to employ H-1B or other foreign workers.

Financial liabilities are not the only sanction an employer faces if found in violation of DOL regulations. The employer may also lose its right to petition approval for immigrant and non-immigrant workers for up to three years. For an employer who relies on foreign workers to keep its business running, such a restriction could be devastating. As such, the potential imposition of this sanction should be a factor in an employer’s decision as to whether to settle with you or fight your claim.


Given all these risks that a fraudulent H-1B employer faces, it would likely be a far better decision for the employer to reach a reasonable settlement with an underpaid H-1B worker as opposed to facing the possible severe consequences of legal actions.

Again, it bears mention this article is not advising you to rush to threaten an underpaying H-1B employer with legal action, demand settlement, etc.

How you take action is a delicate matter. You should strongly consider speaking with an H-1B rights attorney and immigration attorney before you take action.

The information above is intended to educate you on the risks the employer faces and the reasons that employers may be inclined to reach settlement if you and your attorneys do decide it is appropriate to communicate with the employer about your right to be paid the prevailing wage.

Additional Information

For more H-1B employee rights information, please visit the blog www.h1blegalrights.com.

To learn more about H-1B rights and options, please see these posts:

For information about H-1B Rights & Immigration Rights Attorneys Michael F. Brown and Vonda K. Vandaveer, please visit here.

This post was jointly authored by attorney Michael Brown, and attorney Vonda K. Vandaveer of the law firm V.K. Vandaveer, P.L.L.C.  Attorney Vandaveer also authors the blog U.S. Business and Immigration Law.


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