Displacement of US Workers and Civil Penalty to US Employers

This provides general information concerning displacement of U.S. workers by H-1B workers under the H-1B program. Special attestations (e.g., displacement) applicable to H-1B-dependent and willful violator employers sunset on October 1, 2003, but were restored effective March 8, 2005 by the H-1B Visa Reform Act of 2004.

A U.S. worker is displaced from a job under the H-1B program if the employer lays off the U.S. worker from a job that is essentially the equivalent of the job for which the H-1B worker is sought.

Are there special penalties for H-1B employers which displace U.S. workers?

Yes. Any H-1B employer (regardless of whether dependent, nondependent, or a willful violator) can be assessed a civil money penalty up to $35,000 (and can be subject to a three-year debarment) for any willful violation of its attestation obligations, if a U.S. worker was displaced during the period the violation occurred.

Which employers are subject to a "no displacement" provision?

The displacement prohibition generally applies to an H-1B-dependent employer or willful violator employer. It applies both to an employer's own workforce and to the workforce of a secondary employer with which the H-1B-dependent employer or willful violator employer places an H-1B worker.

Are there limits to the protection against displacement by an H-1B-dependent or willful violator employer?

Yes. The displacement protection is limited to the period 90 days before and 90 days after the filing of an H-1B petition, and to 90 days before and 90 days after the placement of an H-1B worker with a secondary employer.

What is an "essentially equivalent" job?

An "essentially equivalent" job is a job that has the same core responsibilities, requires workers with substantially equivalent qualifications and experience, and is located within the same commuting area.

What is a "lay off"?

A "lay off" means to cause the worker's loss of employment, other than through a discharge for inadequate performance, violation of workplace rules, cause, voluntary departure, voluntary retirement, or the expiration of a grant or contract. A "lay off" does not include a situation in which the U.S. worker is offered alternative employment.

What is an alternative employment offer?
An alternative employment offer is an offer to a U.S. worker, as an alternative to loss of employment, of a similar employment opportunity with the same employer at equivalent or higher compensation and benefits than the position in which the employee was previously employed regardless of whether or not the employee accepts the offer.

If employer X contracts with an H-1B-dependent or willful violator employer (employer Y) to utilize employer Y's H-1B workers, do employer X's U.S. workers have protections from being displaced?

Yes. There is limited protection. Employer Y is required to ask Employer X whether Employer X has displaced, or intends to displace, a U.S. worker during the period 90 days before and 90 days after the date that employer Y places an H-1B worker at Employer X's place of business.

Are there other Federal laws which protect U.S. workers from discrimination?

Yes. Agencies that administer such laws include:

1. The Equal Employment Opportunity Commission, which administers laws that prohibit discrimination in employment based on factors such as age, race, color, religion, sex, national origin, or disability;

2. Department of Justice, Civil Rights Division, which administers several statutes concerning employment discrimination based on national origin, citizenship status, and immigration document abuse; and

3. The Department of Labor's Office of Federal Contract Compliance Programs, which administers several laws prohibiting employment discrimination by certain federal contractors and federally-assisted construction contractors and subcontractors on the basis of factors such as race, color, religion, sex, national origin, disability, and veteran status.

All requirements listed above can be found in 20 CFR § 655 Subparts H & I and the Immigration and Nationality Act § 212(n).