September 12, 2014
The United States Court of Appeals, Sixth Circuit has found the owner of a medical clinic personally liable for a $1.1 million award for back pay and fines because H-1B visa and J-1 waiver fees were deducted from the pay of H-1B physicians. The court found these fees are considered business expenses that employers may not deduct. In addition, the physicians were not paid the wages required by the Department of Labor’s Labor Condition Application (LCA), which is an integral part of the H-1B petition.

The case, Kutty v. DOL, serves as a cautionary tale for health care providers who employ foreign nationals, reminding those employers of the related challenges and risks. Certainly, many health care provider employers are very aware of the H-1B requirements and do not have compliance issues, but Kutty is useful in clarifying an employer’s obligations to pay its employees in accordance with the LCA for the position.

For further discussion of the business expense considerations and compensation limits, please click here.