Appeals Court Finds Employer Personally Liable for Expenses of Obtaining H-1B Visas and J-1 Waivers Plus Back Wages

The U.S. Court of Appeals for the Sixth Circuit has ruled that the owner of a Florida corporation is personally liable for paying $1.4 million in back wages and repayment of expenses in obtaining H-1B visas and J-1 waivers for foreign physicians he hired to staff medical clinics in Florida and Tennessee.

The case– Kutty v. United States Department of Labor — involved Dr. Mohan Kutty, the owner and director of the Center for Internal Medicine, Inc., a Florida corporation. Kutty opened five clinics in rural Tennessee and staffed them with foreign physicians who entered the U.S. on J-1 nonimmigrant foreign medical graduate visas. The visas allowed the physicians to complete their medical training in the U.S., but required them to return to their home countries for two years following the expiration of their J-1 visas. Following the two-year period, the physicians would be eligible to apply for H-1B visas.

However, that two-year period could be waived upon application for a J-1 waiver and the payment of a fee if it could be proved that the physicians had a three-year commitment of employment in an underserved area, as designated by the Secretary of Health and Human Services.

Kutty filed for J-1 waivers and subsequent H-1B visas for the physicians, and deducted the relevant fees from the physicians’ pay. Kutty’s clinics also failed to pay the physicians the wages stated on the H-1B petitions as required by the U.S. Department of Labor. The physicians filed a complaint with the Department of Labor for back wages and reimbursement of the visa and waiver fees. Kutty then fired seven of the ten physicians who filed complaints. The Department of Labor found that Kutty had violated several immigration provisions and ordered him to pay the back wages and fees, and to reinstate the physicians.

In its decision, the Sixth Circuit agreed with the Department of Labor’s decisions that Kutty had: (1) failed to adhere to regulations requiring J-1 waiver and H-1B petition expenses to be treated as employer business expenses; (2) failed to pay the wages stated in the H-1B petition; and (3) unlawfully retaliated against the employees for filing a complaint with the Department of Labor.

In addition, the Court found that because Kutty and his wife were the sole owners and investors of the corporation and had set up various undercapitalized subsidiaries to protect themselves from liability, Kutty was personally liable for the violations.

A Florida immigration lawyer can help employers understand the process for obtaining permanent resident status in the U.S. Contact one of the experienced Florida immigration attorneys at Jurado & Farshchian, P.L., at (305) 921-0440, or email us at info@jflawfirm.com.

Business & Immigration Lawyer to Entrepreneurs, Start-ups, Small Business and Foreign Investors. Romy Jurado grew up with the entrepreneurial dream of becoming an attorney and starting her own business. And today, she is living proof that dreams really do come true. As a founder of Jurado & Farshchian, P.L., a reputable business, real estate, and immigration law firm, Romy’s practice is centered primarily around domestic and international business transactions – with a strong emphasis on corporate formation, stock and asset sales, contract drafting, and business immigration. In 2011, Romy earned her Juris Doctor degree from the Florida International University College of Law. She is fluent in two languages (English and Spanish) and is the proud author of Starting a Business in the US as a Foreigner, an online entrepreneurial guide. Call for a Consultation 305-921-0440.