The Department of Labor’s Changing Policies Toward the H-2B Temporary Worker Program: Primarily for the Benefit of Nobody

March 1, 2012

The H-2B guestworker program enables U.S. employers to recruit and employ foreign workers on a temporary basis when domestic workers are unavailable. The program provides much needed assistance to small and seasonal businesses that are unable to recruit sufficient workers to meet their employment needs, while offering protections to domestic workers who have declined those employment opportunities. Though the benefits that the program provides to employers are obvious, the program also confers substantial advantages on the foreign workers who choose to participate.

H-2B employees typically come from impoverished countries with limited access to economic opportunity, and the H-2B program is often the only avenue these workers have to achieve gainful employment. Nevertheless, the Department of Labor (DOL) has concluded that these workers’ pre-employment expenses—those which enable them to access the U.S. labor market, such as visa application fees and transportation costs—are primarily for the benefit of their U.S. employers and therefore must be reimbursed to meet the minimum wage under the Fair Labor Standards Act (FLSA). Though a number of district courts have agreed with the DOL’s interpretation, the Fifth Circuit and at least one district court have concluded that H-2B employees’ pre-employment expenses are not primarily for the benefit of their employer and thus need not be reimbursed.

The DOL responded to these decisions in 2012 by instituting a number of rule changes to the H-2B program designed to better protect H-2B workers. One such change requires H-2B employers to provide, pay for, or reimburse their employees’ pre-employment costs. This Note argues that the DOL incorrectly interprets the FLSA as requiring reimbursement of these expenses. It contends that visa portability, not government-mandated benefits, is a more efficient approach to protecting H-2B employees. This Note ultimately concludes that both H-2B participants and U.S. workers would be better off if payment of these expenses was left to market forces.

March 2012

No. 4