Employers of foreign nationals must understand how workforce reductions will affect these visa holders. This could be a particularly challenging issue for CIOs who are grappling with spending cuts and the need to reduce staff, including H-1B visa holders. 

Before you send a downsized H-1B visa employee to the HR department, here's what you need to know to avoid future problems for both your company and your employee.

Sponsoring employees for a visa does not obligate you to continue to retain them.

Just because you may have petitioned for or "sponsored" work-based non-immigrant visa classification for a foreign national employee does not obligate you to hire or continue to employ the foreign national. There is
nothing about the visa sponsorship or approval process that changes the usual "at-will" arrangement of most employment relationships.  Any obligation to employ that might arise would do so from some source other than visa sponsorship, such as an employment contract.

Simply said, employers are free to terminate foreign national visa holders for any lawful reason, just as they are free to terminate other employees. Although the H-1B visa allows you to terminate an employee and does not impose any obligation for continued employment, it does impose specific obligations on employers if these workers are terminated early.
•  Employers must notify U.S. Citizenship and Immigration Services (USCIS) of the employee's termination and should also withdraw the Labor Condition Application (LCA) that was certified by the Department of Labor as
a prerequisite to filing the H-1B petition.

• When an H-1B employee is terminated early, the employer must pay a reasonable cost for transportation to return the employee to his or her last country of residence. Of course, this obligation only applies if the terminated employee actually leaves the United States. It is a good practice to include information about how this will be handled in the H-1B employee's separation package. This allows the employer to establish a uniform mechanism for complying with the requirement and also documents that the offer was made in the event that the employee does not leave the United States upon termination.

Failure to meet either of these obligations can result in a determination that the employer has not effected a bona fide termination. The H-1B program mandates that the employee be paid a required wage rate and provided benefits comparable to those provided to others, so unless and until the H-1B employment relationship terminates, the obligation to pay the employee and provide benefits continues. This issue most commonly arises in the context of a complaint filed with the Department of Labor's Wage and Hour Division, and recent cases have found the employer liable for back wages and benefits where the employer has not notified USCIS of the termination or paid for the employee's transportation abroad.

Additional penalties for failure to comply with the terms of the LCA include civil fines and debarment from utilizing immigration benefits, although these penalties tend to be limited to violations more egregious than simply failing to meet the termination requirements discussed above. Nevertheless, back wages and benefits can be substantial, especially if multiple H-1B workers are involved.

These obligations apply only where the employee is terminated before his or her H-1B visa authorization ends. Additionally, the obligation to notify USCIS of the terminated employment attaches whether the employee is laid-off, terminated for cause, or leaves voluntarily. However, if the employee leaves voluntarily, the employer is not obligated to provide transportation costs.

Employees who are terminated at the end of their H-1B authorizations trigger no obligations for the employer.