Commentary: Shared Office Arrangements May Trigger H-1B Compliance Concerns

With the shift to remote work caused by COVID-19, employers of H-1B workers have largely focused on compliance for employees working from home. As offices reopen, some employers are also considering flexible arrangements, such as co-working spaces like WeWork. Office shares may be an attractive option for companies looking to give workers flexibility in returning to an office environment, but they also present compliance concerns. Depending on the circumstances, these flexible arrangements may qualify as a “place of employment” for H-1B workers and trigger compliance obligations. Should employers treat flexible office spaces like a traditional worksite or like a work-from-home arrangement?

In general, before an H-1B worker may begin working at a new or different worksite, the employer must obtain a certified Labor Condition Application (LCA) from the U.S. Department of Labor (DOL) that covers the intended area of employment. Employers must give notice of the LCA by posting required information physically or electronically on or within 30 days before filing with DOL. If the employee changes worksites within the same area of employment, employers must complete posting before the H-1B worker starts at the worksite. The notice is meant to inform affected U.S. workers about the H-1B worker’s employment. While there are limited exceptions to the LCA requirement, regulations and policy guidance largely predate the rise of flexible office spaces and have not been updated to address or exempt them.

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Under statute, employers must provide notice to “employees in the occupational classification for which H-1B nonimmigrants are sought.” Regulations from 2000 specify this includes “both employees of the H-1B employer and employees of another person or entity which owns or operates the place of employment.” The preamble to that regulation describes this more broadly: notice must be given to workers in the occupational classification “including employees of a third-party employer.” Guidance from 2019 confirms that DOL applies the more expansive definition from the preamble: notice must be given to “all affected employees” including those employed by a “third-party company.” Whereas the regulation focuses on the H-1B petitioner and the owner or operator of the worksite, the contemporaneous preamble and subsequent DOL guidance broaden that to employees of “a third-party employer,” which would include more than just the owner or operator of the worksite.

For work-from-home arrangements, DOL has stated informally at a meeting with stakeholders that it does not expect H-1B workers to post notices at their homes if they will also be working at an employer’s office location. However, DOL has not issued formal guidance on this, nor has it extended its informal statement to other types of worksites.

The potentially expansive definition of affected workers may create compliance issues for employers placing H-1B workers at flexible office locations. First, an employer may not know whether there are any affected workers at a shared office, such as workers in the same job classification as the H-1B worker who are employed by an unrelated company.

Second, the employer’s existing methods of LCA notification may not effectively reach all affected workers at the shared office space. If a company electronically posts its LCA notices on a company intranet, affected workers at a shared space who work for a different company would not have access to the posting. Similarly, even posting LCA notices electronically on a public website may not be legally sufficient if affected workers at the shared office space are not aware of the notice or are unable to identify which worksite it covers.

Third, the flexible office provider’s policies may prohibit the employer from posting hardcopy notices in a shared office. DOL guidance makes clear that it is the employer’s duty to comply with the notice requirement and that the employer remains liable for failures to do so, even if a third-party (such as the owner of the work location) prevents it from posting physical notices.

DOL should clarify LCA notice obligations for shared office spaces and home offices and should treat them similarly to streamline compliance processes. Requiring employers to notify individuals whose work is wholly unrelated to the employment of an H-1B worker aside from occasionally sharing a rented office space or home office out of convenience does not provide additional meaningful protection for U.S. workers. Meanwhile, employers should consider whether additional compliance processes are needed and work with office share providers to identify the options that work best in their circumstances.

Steven Plastrik is a Senior Associate in the Washington, D.C., office of Berry Appleman & Leiden LLP, and is a member of the firm’s Government Strategies team.