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Sunday, March 18, 2012

Duration of H1B Visas in terms Business Contracts

Interesting contract drafting exercise today. I was working with business contracts -- specifically, an employment agreement between an employer and an employee. During the course of writing the document, we hit both business law and immigration law -- It made me think it might be useful to discuss foreign workers and their impact on employment agreements in my blog. It certainly applied to today's contract, and it seems to be a growing trend. To address this problem, you really need a business lawyer who also specializes in immigration law. Look no further!

The frustration for many employers is the cost of the H1B visa -- and the omnipresent risk that once an employee obtains a visa, they will "jump ship" and work for another company who pays more because they did not have to "foot the bill" for the visa expenses. For those of you who are not aware, an H1B visa costs about $1500 in legal fees to pursue, and that does NOT include the cost of filing with the USCIS.

The employer with whom I was working wanted to create an employment agreement that locked an employee in for a term of no less than the full three years that an H1B would be valid (i.e. the foreign worker is awarded the H1B and is locked into working for this employer for three years.....or else!). This sounds reasonable, but in fact, it is non-defensible. Might work if it's never challenged, however, there are laws against involuntary servitude, and locking a person into a contract where the only recourse for leaving is a tremendous fine ($15,000 for example) acts as a defacto massive limitation on the average worker's ability to do anything but continue working for the company...and then leave the country (3 years are up...good-bye!).

So how does an employer even the playing field? Bluntly, they can't ensure the employee will not leave before the three years. But an employer can share the risk! That means an agreement that locks the employee in for a year with penalties for terminating early will be enforceable; and additional one year extensions after that can be equally enforceable. It's possible to push for up to a year-and-a-half, but that's probably really eeking the limit.

Ultimately, the employer protects his/her investment by paying a fair wage, and vetting an employee before embarking on the H1B adventure. Passing the cost of the H1B on to the employee is not only illegal from an immigration standpoint (that creates a situation where the employee is buying their visa), but also smacks of poor business sense. Conversely, it is both reasonable and prudent to protect your investment by requiring that a highly trained employee (H1B candidate) not simply quit immediately after you hire them. Employment for term is still the way to equal and balanced employment contract is key.

Need help determining how to negotiate the H1B framework, as well as building a powerful employment agreement that protects the employer while being fair and straightforward with the employee? Come to talk to the business contracts experts!

You may reach us at 703-402-2723. We're happy to help, and your first call is always free.

Sean R. Hanover, Esq
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