Employers may consider other cost-saving options that require special attention in the H-1B context. For instance, salary reductions and reductions of hours may trigger special treatment. In both cases, the issue at hand is whether the reduction results in violations of the employer's obligation to pay the wage specified in the LCA.

Keep in mind that the employer is required to pay H-1B workers the higher of the "actual wage" (i.e. the wage paid to similarly situated workers) or the "prevailing wage" as determined by the state or other appropriate wage survey source. If a salary reduction is company-wide so that all individuals similarly employed also have their salaries reduced, it is likely that the H-1B worker's salary would remain at the (new) actual wage level.

The new reduced salary also needs to be assessed against the prevailing wage at the time of the salary reduction. If the new reduced salary continues to meet both the actual wage and prevailing wage requirements, then the reduction in salary should pose no problem with respect to the H-1B employee. As a practical matter, it is good practice to append the LCA documentation files with materials showing that the new salary continues to meet the wage
requirements.

Reductions in an H-1B employee's hours-coupled with a corresponding reduction in pay-do pose a special problem, as this situation is considered "benching" (suspending pay during unproductive periods), a prohibited practice under the H-1B program.  Employers needing to reduce an H-1B employee's hours may be able to do so, however, by filing an amended H-1B petition that reflects the reduced hours. The rate of pay, on an hourly basis, still needs to meet the actual wage and prevailing wage requirements, but assuming that the wage is reduced pro rata with the hours, the wage rate itself should remain the same and continue to meet the wage requirements.

Nevertheless, the change in hours is a material change to the terms of employment, triggering an obligation to document and file a new LCA and to file an amended H-1B petition with USCIS detailing the changes.

Immigration-related downsizing issues vary from case to case and are often complicated, so it is wise to consult an immigration attorney for situation-specific guidance. If you're like the many CIOs who have found themselves taking on additional responsibilities as a result of these tough economic times, it is critical that you understand these issues and obligations to effectively manage layoffs and reduce your company's exposure
to liability.

Maryanne Kline is an associate in the Immigration Group of Sullivan & Worcester LLP, which has offices in Boston, New York and Washington.