Is salary reduction possible/legal?

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1. If an employee is on a H1 they cannot have a 10% pay cut unless their H1 was amended and refiled.

Ans. Probably yes. That is the safest thing to do. The rule of thumb is, you can never pay an H-1 holder below the prevailing wage. You can also not pay them below what you pay other similarly employed professionals in the geographical location of the employment. So, if the 10% pay cut does not violate these two principles, the only other issue in immigration compliance is whether 10% cut in salary is a "substantial" change in the job. An H-1 amendment is always necessary when there is a substantial change. To be safe, I would recommend you amend.

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2. If an employee is on a GC processing (I140 or I485) they can have a reduction but need to be paid the amount equal to or greater that was listed on the GC petition on the day their GC is approved.

Ans. Basically, yes.

The main issue here is, if the salary being paid is below that expressed in the GC application, does the employer still have the ability to pay wages. This issue is usually not raised past the I-140 approval, but I see no law that says it cannot be raised after the I-140 approval. And in all cases before 140 approval, the salary shortfall must be balanced by showing an equal amount of taxable income or net current assets for each GC beneficiary (employee) still in the process.

For example, you have to give a pay reduction to an employee on H-1. Assuming you have not violated the H-1 requirements we have discussed above, you will need to show continued ability to pay the GC salary. Let us say the salary stated on the GC application in $80,000. The employee is now making $75,000 after the pay cut.

For GC, we will have to show $5,000 taxable income/current assets (or the proportion of salary that falls in that tax year). If there are 5 employees in the same situation, that amount would rise to $25,000.

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3. If an employee is on a GC processing and has a H1 they need to have their H1 revoked and work on their EAD for the #2 above to be accepted.

Ans. You can do that as long as that employee is getting paid the same as others.

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4. Benefits that were listed as a part of an employees immigration processing cannot be decreased.

Ans. There is no place where we commit to benefits or state them in the GC application as far as I know. The law does not require benefits.

 

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