Federal Court of Appeals Limits DOL Use of Law to Collect Back Wages

On September 30, 2021, the Second Circuit Court of Appeals overturned a New York federal district court decision and its own 1993 ruling that allowed the Department of Labor (DOL) to collect back wages for H-1B visa workers.

DOL was using the Fair Debt Collections Practices Act (FDCPA) to stand in for H-1B visa workers to collect back wages. In United States v. Bedi, the appeals court ruled the plain language of the statute and the legislative history make clear that DOL could only use this law if the debt was owed to the United States, not to an individual.

Datalink Computer Products Inc. and its President Vickram Bedi appealed the District Court for the Northern District of New York ruling that allowed DOL to proceed with collection of a $341,000 administrative back pay award in favor of the employee. The district court held that the wages could constitute a debt to the U.S. if the agency was acting in the public interest to prevent unfair labor practices. The Court of Appeals rejected the federal court and the government’s position,

“Thus, while we acknowledge the Government’s strong interest in promoting compliance with the H-1B visa program, we conclude that the Government may not use the procedures of the FDCPA to collect the Administrative Order on [the employee’s] behalf.”

The reversed decision is NLRB v. E.D.P Medical Computer Systems, Inc. (2d Circuit, 1993).