It is one of the most common frustrations Texas employers face during the H-1B process. The company invests thousands of dollars in filing fees, legal preparation, and government filings. Then, before the process is complete or shortly after approval, the employee resigns. The employer wants to know: can we get that money back?
The short answer is: it depends on which fees you are asking about, and the law draws a clear, non-negotiable line between them.
The Fees You Cannot Recover
Under the American Competitiveness and Workforce Improvement Act (ACWIA) and Department of Labor (DOL) regulations, employers are strictly prohibited from recovering certain mandatory H-1B filing costs from their employees. These include the base I-129 petition filing fee, the ACWIA training fee, and the Fraud Prevention and Detection fee. These fees exist because the H-1B program is an employer-driven system. The DOL takes the position that these costs are a cost of doing business for the sponsoring employer, not an obligation of the foreign national worker.
Attempting to recoup these fees through payroll deductions, even after an employee resigns, crosses into dangerous legal territory. Under the Fair Labor Standards Act (FLSA), deducting these costs from a final paycheck, if the employee performed work, is considered an unlawful deduction. The consequence is not just a refund obligation. The DOL can investigate, assess back wages, and impose civil money penalties. For Texas-based employers already navigating a tight labor market, a DOL investigation is a costly distraction no company needs.
The One Fee That Is Different
Premium Processing, filed via Form I-907, is the exception to this rule and only under a specific condition. If the employee personally requested expedited processing and the employer paid the fee as an accommodation, a written agreement executed in advance may allow the employer to recover that specific cost if the employee breaks the terms of their employment contract.
This is not an automatic right. It requires a documented, signed agreement made before the fee was paid. Without that paper trail, even Premium Processing recovery becomes legally uncertain.
What Texas Employers Should Do Before Filing
The time to address fee recovery is before the H-1B petition is filed, not after an employee walks out the door. A well-drafted employment agreement, reviewed by immigration counsel, can clarify which costs, if any, an employee agrees to bear under specific circumstances.
It is equally important that any such agreement does not attempt to shift the costs of mandatory government fees onto the employee, since that provision would be unenforceable and could expose the employer to DOL scrutiny regardless of the broader contract language.
At Ahluwalia Law Offices, we work closely with Texas employers to structure H-1B sponsorship arrangements that protect the business, stay fully compliant with ACWIA and FLSA requirements, and set clear expectations with employees from the start.
FAQ: H-1B Fee Recovery
Can an employer deduct H-1B filing fees from an employee’s final paycheck?
No. Under the FLSA and DOL regulations, deducting mandatory H-1B filing fees such as the I-129 fee, ACWIA training fee, or Fraud Prevention fee from a final paycheck is prohibited if the employee performed work during their employment.
Which H-1B fees can an employer legally recover from an employee?
Only the Premium Processing fee (Form I-907) may be recoverable, and only if the employee personally requested it and a written repayment agreement was signed before the fee was paid.
What happens if an employer illegally deducts H-1B fees?
The employer may face a DOL investigation, be required to pay back wages to the employee, and face civil money penalties under the FLSA.
Does it matter if the employee voluntarily resigned versus was terminated?
For mandatory filing fees, the outcome is the same. Neither resignation nor termination allows an employer to recover prohibited fees under ACWIA and DOL rules.
What should employers do to protect themselves before sponsoring an H-1B employee?
Work with immigration counsel to draft a compliant employment agreement before filing that clearly outlines any permissible cost-sharing arrangement, specifically around discretionary fees like Premium Processing, without attempting to shift mandatory government fees onto the employee.
