New York District Court Finds Employers Must Reimburse H-2B Visa Workers For Expenses

In Teoba v. True Green Landcare, No. 10-cv-6132 (W.D.N.Y., filed Feb. 15, 2011), the U.S. District Court for the Western District of New York has recently held that the Fair Labor Standards Act ("FLSA") requires H-2B visa employers to reimburse those workers for expenses related to the employment, such as travel to the United States, recruitment firm service fees, and visa application fees, if, after deducting the costs of those expenses from their earned wages, the salary they received fell below minimum wage.

The court held that visa, travel and recruitment expenses were primarily to the benefit of the employer, and therefore as per Department of Labor regulations, the employer must reimburse workers for those costs if they would cause the employee's wages to fall below minimum wage compensation.

In addition, the District Court relied on a 2009 Department of Labor Field Assistance Bulletin, which stated that employers must reimburse H-2B visa workers for the cost of transportation, visa fees and recruiter fees. In addition, the District Court in this case emphasized that the employer was the party who had retained the recruiter's services.

This issue has also been reviewed and decided by two circuit courts. In the Eleventh Circuit, the court held that the expenses must be reimbursed if they would cause the worker's effective wage to fall below minimum wage. However, the Fifth Circuit held to the contrary.

Due to the uncertainty of the state of the law in this area, it is wise for employers to take precautions to ensure that wages paid to H-2B workers will not fall below minimum wage levels when the expenses associated with the H-2B visa are considered. It would also be in the employer's best interest to retain and pay for the services of any recruiting firms without requiring those fees to be reimbursed by employees.

Based upon the District Court's strong reliance on the 2009 Department of Labor Field Assistance Bulletin, the most prudent course for employers of H-2B workers would be to reimburse H-2B...