The new regulations implemented in January 2009 contained a lengthy preamble. In that preamble, USDOL discussed and stated their opinion on the Arriaga court decision and the issues surrounding it.
This issue does and has affected both H2A & H2B employers across the nation.
In short, the basis of Arriaga-style lawsuits is –the fees that workers incurred in their home country (not limited to but including governmental, transportation and recruiting) resulted in a de facto deduction from their wages in the first week of work. This de facto deduction reduced them below federal minimum wage thereby causing a violation of the Fair Labor Standards Act (FLSA).
When USDOL published the new rules in December 2008 and later implemented them in January 2009, they said that the courts that had ruled that this resulted in a violation of the FLSA were in fact wrong. Various groups argue whether or not USDOL’s opinion carried weight, but the opinion was applied in ongoing court cases.
The results have been mixed but we do know that H2B employer Decatur Hotel was ultimately victorious in their case, Daniel Castellanos-Contreras, et al. v. Decatur Hotels, LLC et al.
But many other H2A & H2B employers have not had that same success.
After Hilda Solis took office as the new Secretary in March she shook things up with an immediate proposed suspension of the “Bush rules” that took over a year to compose. Later she announced on March 26th that the Arriaga opinion included in the preamble would be retracted. USDOL published this withdrawal of the interpretation in the Federal Register saying this,
“The Department of Labor withdraws for further consideration an interpretation of the Fair Labor Standards Act (FLSA) published on December 18 and 19, 2008…articulated an opinion that the FLSA and its implementing regulations do not require employers to reimburse workers under the H–2A and H–2B nonimmigrant visa programs, respectively,for relocation expenses even when such costs result in the workers being paid less than the minimum wage. This interpretation is hereby withdrawn for further consideration by the Department and may not be relied upon as a statement of agency policy.”
Every participant of the H2 guestworker programs should understand that the threat of an Arriaga-style complaint is very real. If you utilize the guestworker program, this type of complaint can be brought against you in court. Know the rules and know how to protect yourself.