Are You an H-1B Worker Promised a Percentage-Based Wage Higher Than the Prevailing Wage? Get Documentation

On behalf of Peterson, Berk & Cross, S.C.

Has your H-1B employer promised you a wage that is based on a percentage of project work? If so, read on, as this article discusses some common issues and important considerations for H-1B workers offered percentage-based pay. This includes the importance of having documentation of what the employer promised.

The attorney-authors encounter many H-1B workers whose H-1B sponsor employers promised them percentage-based wages for work projects, such as receiving 70-80% of the end-client’s payment for that work, with the H-1B employer getting the remaining 20-30%. Often, the percentage the employers promise would pay wages higher than the H-1B workers’ prevailing wage or required wage as stated in their Labor Condition Application (LCA). (If an H-1B employer offers a wage LESS than the prevailing wage or that is not a guaranteed wage meeting the prevailing wage minimum, then the employer would violate H-1B regulations which require at least the prevailing wage rate be paid).

When an H-1B employer offers percentage-based pay, it is also common for such an employer to do some or all of the following: (1) to make this percentage-promise orally, and not put it in writing; (2) to later fail to pay the worker the agreed percentage or amount, instead paying a lesser amount after the work is done; (3) to make it a secret (or in some cases lie) about how much money the end-client actually paid the employer, so the worker doesn’t know the original amount to which the percentage should be applied.

Do these actions sound familiar? If you were promised to be paid a percentage, and you turned out to be underpaid- especially if you were paid less than the prevailing wage- feel free to let us know. We could tell you (at no charge) potential legal claims and options you may have. For example, if the H-1B employer paid less than the prevailing wage or required LCA wage, this would violate H-1B regulations. If the employer paid more than the required LCA wage, but less than the promised percentage of end-client revenue actually received, then the employer could be in violation of certain State laws, depending on the circumstances.

If you were promised a salary that involved percentage pay, here is a quick tip for you to consider: get documentation of that promised percentage arrangement. For example, if the employer sent you an email making reference to the percentage, save it. It could be important proof later, if the employer turns out to underpay you or deny you were promised that percentage.

If the employer refuses to put the percentage in writing- the most common scenario- this is a red flag. You should be very careful in relying on such an employer’s spoken promises, as if they intend to live up to the promise, there is no good reason not to put it in writing. A worker could potentially respond to this scenario by referring to the percentage (politely and casually) in an email he sends to the employer. For example, a worker could send an email stating something like this: “Hi [Owner]: Thanks for talking to me last night about the 80/20 split. One quick question I forgot to ask- it that split based on the client’s first payment, or only to the money you get, after the payroll vendor takes its portion? Please let me know. Thanks again.”

This type of documentation may or may not work- it is an example of a possible way to document the percentage arrangement the employer has stated. Before you communicate with your employer or take action on any specific situation like those above that you are involved with, you should consider speaking with an H-1B rights attorney beforehand. Each situation is different. An attorney could best help you identify the options and plans for your specific situation, and try to get you paid all wages that the employer is required to pay while mitigating risks and problems.