Between the day an H-1B employee’s project ends and the day the employer ends the job, federal law usually requires the employer to keep paying full wages. That idle stretch is called benching, and the Immigration and Nationality Act treats failing to pay for it as a violation of the employer’s labor condition application. A Department of Labor investigation can end in back wages and penalties, so the defense depends on the payroll records and on when the job ended.
What does the benching rule require?
Full pay for nonproductive time the employer causes. Under 8 U.S.C. § 1182(n)(2)(C)(vii), it’s a failure to meet the wage condition for an employer to place a full-time H-1B worker “in nonproductive status due to a decision by the employer (based on factors such as lack of work), or due to the nonimmigrant’s lack of a permit or license,” and then “fail to pay the nonimmigrant full-time wages” for that time.
The Labor Department’s rule says the same thing in more detail. Under 20 C.F.R. § 655.731(c)(7)(i), the employer must pay a salaried worker “the full pro-rata amount due,” or pay an hourly worker for a full-time week, “at the required wage for the occupation listed on the LCA.” A part-time designation changes the number of hours owed, not the obligation.
The required wage isn’t just the salary on the offer letter. Section 655.731(a) sets it as “the greater of the actual wage rate” paid to similar employees or “the prevailing wage” for the occupation and area. A company that benches a worker at a reduced rate can owe the difference even if it pays something every period.
When does the obligation start?
When the worker comes under the employer’s control, or on a set date. Section 655.731(c)(6)(i) says a worker “enters into employment” on first becoming available for work or coming under the employer’s control, “such as by waiting for an assignment, reporting for orientation or training,” or meeting with a customer. Waiting for a project counts.
There’s also a backstop. Even if the worker hasn’t entered into employment, the statute and the rule require pay beginning 30 days after the worker is first admitted to the United States under the petition, or 60 days after the worker becomes eligible to work for the employer if already present in the country. Staffing firms that recruit workers before they have a placement should plan for those dates.
What ends the obligation?
A bona fide termination, or an absence that isn’t work-related. Under section 655.731(c)(7)(ii), wages aren’t owed for nonproductive time caused by “conditions unrelated to employment” that take the worker away at the worker’s “voluntary request and convenience” or that leave the worker unable to work, unless the employer’s benefit plan or another statute requires payment. The same paragraph adds that “Payment need not be made if there has been a bona fide termination of the employment relationship.”
The rule ties that termination to two follow-up steps. It notes that immigration regulations require the employer “to notify the DHS that the employment relationship has been terminated so that the petition is canceled,” and to pay for the worker’s transportation home “under certain circumstances.” In practice, an email telling a worker the project is over, without notice to immigration authorities or an offer of return transportation, invites the argument that the job never ended and back pay kept accruing.
| Situation | Is pay owed? | Source |
|---|---|---|
| No project, worker waiting for an assignment | Yes, full-time wages at the required wage | 8 U.S.C. § 1182(n)(2)(C)(vii) and 20 C.F.R. § 655.731(c)(7)(i) |
| Worker lacks a needed license or permit | Yes | Same provisions |
| Worker’s voluntary leave for personal reasons | No, unless a benefit plan or statute requires it | § 655.731(c)(7)(ii) |
| Bona fide termination with notice to immigration authorities | No, after the termination | § 655.731(c)(7)(ii) |
| Unauthorized deduction from wages | Treated as nonpayment | § 655.731(c)(11) |
Can an employer recover costs if the worker leaves early?
Only in limited ways under federal law. The statute at section 1182(n)(2)(C)(vi) makes it a violation to require an H-1B worker “to pay a penalty for ceasing employment with the employer prior to a date agreed to,” and says the Secretary decides “whether a required payment is a penalty (and not liquidated damages) pursuant to relevant State law.” The federal rule at section 655.731(c)(10) permits bona fide liquidated damages but bars collecting any part of the petition filing fee, and paragraph (c)(9) bars any deduction that recoups the employer’s business expenses, including attorney’s fees for the petition and labor condition application.
California adds its own layer. State law limits repayment terms in employment contracts, and those limits have changed more than once in recent sessions, so a clause the federal rule tolerates should be checked against current California law before the company tries to enforce it. A deduction that fails the federal test is treated as unpaid wages under section 655.731(c)(11).
What happens in a Labor Department investigation?
The Wage and Hour Division can order back wages and assess penalties, and a willful violation can bar future petitions. Under 20 C.F.R. § 655.810(a), the Administrator assesses back wages “equal to the difference between the amount that should have been paid and the amount that actually was paid.” Subdivision (b) sets civil money penalties per violation, with a higher cap for a “willful failure pertaining to wages/working conditions,” and subdivision (g) notes that the caps are adjusted for inflation each year.
Willfulness has a second cost. Under section 655.810(d), a willful wage violation leads to disqualification from approval of petitions for “At least two years.” For an employer that depends on foreign talent, that can matter more than the penalty itself.
The employer carries the paperwork burden. Section 655.731(b)(1) requires documentation “sufficient to meet its burden of proving the validity of the wage statement,” including payroll records showing the rate, hours where required, and wages paid each period. Good-faith compliance efforts and the employer’s explanation are among the factors the Administrator may consider in setting a penalty under subdivision (c).
Retaliation is its own violation. The statute at section 1182(n)(2)(C)(iv) bars an employer from taking action against an employee who “has disclosed information to the employer, or to any other person, that the employee reasonably believes evidences a violation,” or who cooperates in an investigation. The post on California False Claims Act retaliation covers a different whistleblower statute with its own remedies.
What should an employer do after an H-1B wage complaint?
- Preserve the labor condition application, the public access file, the petition, payroll records, project and assignment records, and emails and messages about the worker’s status under a litigation hold.
- Calendar every date in the Wage and Hour Division’s letter or the worker’s demand, and check the employment agreement, any arbitration clause, and the EPLI policy for notice requirements.
- Identify who decided to bench or end the worker’s employment, and make sure no one takes action against the worker for filing the complaint.
- Pull the documents the claim depends on, such as the actual-wage and prevailing-wage records, any termination notice to immigration authorities, and proof of an offer of return transportation.
- Talk to a lawyer before responding to the investigator, paying back wages, or seeking repayment from the worker.
Employers in these disputes can find more on H-1B wage complaint defense for California employers on the firm’s employment defense page.
H-1B benching questions from California employers
Can we put an H-1B worker on unpaid leave between projects?
Not if the leave is the company’s decision. The statute and 20 C.F.R. § 655.731(c)(7) require full-time wages for nonproductive time caused by lack of work. Unpaid status is allowed only when the absence is for the worker’s own reasons or the worker can’t work, and the worker’s request should be documented in writing at the time.
Does telling the worker the job is over stop the wage clock?
Not by itself. The rule excuses payment after a “bona fide termination,” and it pairs that with notice to immigration authorities so the petition is canceled and, in some cases, payment for transportation home. Employers that skip those steps risk an argument that the employment continued and back wages kept running.
Can we cut the salary while the worker is benched?
No. The wage owed during nonproductive time is the required wage on the labor condition application, the greater of the actual wage and the prevailing wage. Paying a reduced “bench rate” creates a back-wage claim for the difference, and the employer has to prove what it paid with its own records.
Does the DOL process replace California wage claims?
No. The federal labor condition application rules sit alongside California wage law, which applies to H-1B workers employed in the state. A benched worker may file with the Wage and Hour Division and also bring state claims. Defending both at once means the same payroll records have to answer two sets of rules.
If an H-1B worker has filed a wage complaint against your company
If your company has received a Labor Department inquiry or a demand from an H-1B worker over unpaid time between projects, the payroll records and the termination paperwork usually decide how much is owed. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving H-1B wage obligations. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statute is 8 U.S.C. § 1182(n). The regulations are 20 C.F.R. § 655.731 and § 655.810.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.