The Immigration and Nationality Act (INA) prohibits employers from requiring that H-1B nonimmigrant employees pay a penalty for ceasing employment prior to a date agreed to by the nonimmigrant worker and the employer. An employer may, however, receive bona fide liquidated damages when the H-1B nonimmigrant worker ceases employment before the agreed upon date. Liquidated damages are amounts that are fixed or stipulated by contract and that are reasonable approximations or estimates of the anticipated or actual damage caused by the employee's ceasing employment. Penalties may also be fixed amounts but are not reasonable damage approximations or estimates.

The penalties that may be imposed on an employer for violating this prohibition include:

1. A civil money penalty for each such violation ($1,000 per violation);
2. An administrative order requiring the return of the money to the nonimmigrant worker; or
3. If the worker cannot be located, the employer may be required to pay that amount to the U.S. Treasury.

The U.S. Department of Labor (DOL) regulations prohibit an employer from requiring an H-1B nonimmigrant worker to pay, either directly, through repayment or withholding, or disguised as liquidated damages, the U.S. government filing fees associated with an H-1B petition. This includes payment of the filing fee by a third party, where the H-1B Nonimmigrant worker is expected to or actually does repay the third party for the fee amount.