IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-30942

DANIEL CASTELLANOS-CONTRERAS; OSCAR RICARDO DEHEZAORTEGA; RODOLFO ANTONIO VALDEZ-BAEZ

Plaintiffs - Appellees

v.

DECATUR HOTELS LLC; F PATRICK QUINN, III

Defendants - Appellants

Appeal from the United States District Court

for the Eastern District of Louisiana

Before JONES, Chief Judge, and JOLLY and HAYNES, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

The petition for panel rehearing is GRANTED. The prior opinion is

WITHDRAWN, and the following opinion replaces it.

The aftermath of Hurricane Katrina required New Orleans hotelier

Decatur Hotels, L.L.C. (“Decatur”) to look to foreign sources of labor. A group

of these employees (collectively, the “guest workers”), who held H-2B visas while

working for Decatur, contend that Decatur violated the Fair Labor Standards

Act (“FLSA”) by paying them less than minimum wage, free and clear, when

Decatur refused to reimburse them for recruitment, transportation, and visa

United States Court of Appeals

Fifth Circuit

F I L E D

July 21, 2009

Charles R. Fulbruge III

Clerk
No. 07-30942

 The term “H-2B visa” refers to a visa authorized by 8 U.S.C. § 1101(a)(15)(H)(ii)(b). 1

2

expenses that they incurred before relocating to the United States to work for

Decatur. 

Decatur filed a motion to dismiss and/or for summary judgment, and the

guest workers filed a cross-motion for summary judgment. The district court

denied Decatur’s motion, granted the guest workers’ motion in part, and certified

its order for interlocutory appeal. A motions panel of this court authorized

Decatur to file an interlocutory appeal. In this interlocutory appeal under 28

U.S.C. § 1292(b), Decatur raises three issues of first impression for this court:

whether, under the FLSA, an employer must reimburse guest workers for (1)

recruitment expenses, (2) transportation expenses, or (3) visa expenses, which

the guest workers incurred before relocating to the employer’s location. We

conclude that the FLSA does not require an employer to reimburse any of these

expenses. We therefore reverse the district court’s order, and we render

judgment in favor of Decatur. 

I.

Decatur operates luxury hotels in the New Orleans area. Before

Hurricane Katrina struck New Orleans, Decatur employed between 600 and 650

workers. After Hurricane Katrina struck New Orleans, the size of Decatur’s

staff dropped to between 90 and 110 workers. Decatur attempted to recruit local

residents to join its staff, but its efforts were largely unsuccessful. Decatur

urgently needed to hire maintenance, housekeeping, and front-desk employees.

Virginia Pickering, a Baton Rouge businesswoman, read a news article

that mentioned Decatur’s staff shortage. Pickering owned and operated Accent

Personnel Services, Inc., a company that guided U.S. employers through the

process of becoming H-2B visa sponsors. As H-2B visa sponsors, the employers 1

legally could hire foreign workers to fill temporary job positions. 
No. 07-30942

3

Pickering advertised Accent Personnel’s services to Decatur’s chief

executive officer, F. Patrick Quinn III. Pickering offered to guide Decatur

through the H-2B application process, to oversee the recruitment of H-2B

workers, and to coordinate the workers’ arrival times in the United States. If

Decatur were to use Pickering’s services, it would need only to supply Pickering

with information that she would need to complete Decatur’s H-2B sponsorship

application, to pay H-2B sponsorship-application fees, and to meet its new

employees when they arrived in New Orleans. Pickering would do everything

else necessary to secure the temporary workers for Decatur. For these services,

Pickering would charge Decatur $300 per job position filled. 

Quinn agreed that Decatur would use Pickering’s services to hire

housekeepers, maintenance workers, and front-desk clerks; and Pickering went

to work. She identified the wage rate at which Decatur would need to pay the

housekeepers, maintenance workers, and front-desk clerks to comply with

Department of Labor regulations. She ensured that Decatur recruited U.S.

citizens to fill its open job positions before offering the same positions to foreign

workers. She prepared Decatur’s application to sponsor H-2B visas. She also

prepared, and a Decatur manager signed, a blank job offer for each open job

position. 

Unbeknownst to Decatur, Pickering also owned and operated a second

company: VP Consultants, LLC. Through VP Consultants, Pickering offered a

service that connected with her services at Accent Personnel: after identifying

U.S. employers (such as Decatur) that were sponsoring H-2B visas, she provided

this information, for a fee, to recruitment companies that represented foreign

workers seeking temporary U.S. employment. In exchange for $900 per Decatur

job position, or “referral,” VP Consultants informed Global Services, Inc., of 70

hotel-clerk positions; EuroUSA, Inc., of 70 housekeeping positions; and

International Jobs & Studies S.A.C. of 130 maintenance positions. 
No. 07-30942

 The parties refer to these fees alternatively as “recruitment expenses” and “hiring 2

expenses.” We will refer to the fees as “recruitment expenses.”

 For brevity, we will refer to the transportation expenses necessary to relocate to the 3

United States as “transportation expenses” or “inbound transportation expenses.” These

shorthand references in no way describe the expenses necessary to travel daily from home to

work. Such expenses are not before us in this case. 

4

Although VP Consultants generated revenue by informing recruitment

companies of Decatur’s job positions, Pickering testified that she also had been

willing to share information about Decatur’s job positions with foreign workers

who contacted VP Consultants directly. However, there is no indication in the

record that such contacts occurred or that, given the foreign workers’

circumstances, such contacts were possible. It also is unclear what fee, if any,

VP Consultants would have charged the workers to receive information about

Decatur’s job positions.

In theory, the guest workers also could have contacted Decatur directly to

learn about Decatur’s job positions; Decatur would have referred such inquiries

to Pickering. No guest worker contacted Decatur directly, and it is unclear

whether such contact would have been feasible. 

Nevertheless, each worker hired a recruitment company to locate H-2B job

opportunities on his or her behalf, to guide him or her through the H-2B visa

application process, and to arrange transportation to the United States. Each

recruitment company charged between $1,700 and $2,000 for its services. In 2

addition to this fee, each recruitment company required workers to pay their

own visa-application fees as well as all transportation expenses necessary to

relocate to the United States. Altogether, each guest worker paid between 3

approximately $3,000 and approximately $5,000 in recruitment, transportation,

and visa expenses before relocating to the United States.

When the guest workers arrived in New Orleans, Decatur conducted a

week-long orientation session, for which it paid the workers; and the guest
No. 07-30942

5

workers began to work. Decatur paid the guest workers whom it hired through

Global Services, Inc., $6.09 per hour, the guest workers whom it hired through

EuroUSA, Inc., $6.02 per hour, and the guest workers whom it hired through

International Jobs & Studies S.A.C. $7.79 per hour. As we have said, Decatur

did not reimburse the guest workers for their recruitment, transportation, or

visa expenses, all of which they incurred before relocating to the United States.

The guest workers, proceeding under the FLSA, filed a complaint in

federal district court seeking to recover these expenses, as well as liquidated

damages, costs, and attorney’s fees. Decatur defended on grounds that the FLSA

does not obligate it to reimburse the guest workers for their recruitment,

transportation, or visa expenses. To this end, Decatur filed a motion to dismiss

and/or for summary judgment; and the guest workers filed a cross-motion for

summary judgment. In a single order, the district court denied Decatur’s motion

and granted the guest workers’ motion in part, insofar as it allowed them to

proceed with their FLSA claim.

Decatur asked the district court to certify its order for interlocutory

appeal. The district court granted Decatur’s motion. It identified, as a

controlling issue of law as to which there is substantial ground for difference of

opinion, the question “whether non-agricultural H-2B guestworkers are entitled

to the protections of the FLSA.” A motions panel of this court then permitted

Decatur to file this interlocutory appeal under 28 U.S.C. § 1292(b). The district

court’s proceedings have not been stayed.

II.

We first must consider our jurisdiction over this interlocutory appeal. The

guest workers contend that we lack jurisdiction—or, in the alternative, that our

jurisdiction is limited to answering the single question identified by the district

court as a controlling issue of law. 
No. 07-30942

6

A motions panel’s decision to allow an interlocutory appeal is not binding

upon the panel that subsequently considers the appeal’s merits; “the merits

panel may conclude that the initial decision to hear the appeal was, or was later

rendered, improvident. If the merits panel reaches that conclusion, it must

vacate the earlier order granting leave to appeal and must remand the case to

the district court.” United States v. Bear Marine Servs., 696 F.2d 1117, 1119

(5th Cir. 1983). We therefore will review the motions panel’s decision for

improvidence.

We initially examine whether our jurisdiction over this appeal, if accepted,

is limited to the single question identified by the district court as controlling.

The Supreme Court has held quite clearly that it is not; 28 U.S.C. § 1292(b)

grants jurisdiction “over any question that is included within the order that

contains the controlling question of law identified by the district court.” Yamaha

Motor Corp. v. Calhoun, 516 U.S. 199, 204 (1996). Here, the order for which the

district court certified interlocutory appeal contains three questions in addition

to the question that the district court identified as controlling: whether the

FLSA requires an employer to reimburse guest workers for: (1) their recruitment

expenses, (2) their transportation expenses, or (3) their visa expenses.

Castellanos-Contreras v. Decatur Hotels, Inc., No. 06-4340, at 2 (E.D. La. July

19, 2007) (order denying motion to alter or amend judgment, granting motion to

certify interlocutory appeal, and denying motion to stay pending interlocutory

appeal). In the light of Yamaha, we may consider these questions as well as the

threshold question whether H-2B guest workers are entitled to the FLSA’s

protections.

Whether the FLSA entitles guest workers to reimbursement for their

recruitment, transportation, or visa expenses are, as we have noted, questions

of first impression for this court. We conclude that these questions are

controlling questions of law in this case, as to which there is substantial ground
No. 07-30942

7

for difference of opinion. The motions panel’s decision to grant interlocutory

review was not improvident. We now will consider the questions before us.

III.

In response to the question identified by the district court, we hold that

guest workers are entitled to FLSA protection. See In re Reyes, 814 F.2d 168,

170 (5th Cir. 1987) (“[T]he protections of the Fair Labor Standards Act are

applicable to citizens and aliens alike and whether the alien is documented or

undocumented is irrelevant.”). Whether the FLSA entitles guest workers to

reimbursement of recruitment, transportation, or visa expenses merits lengthier

discussion. 

A.

The guest workers contend that they are entitled to reimbursement

because, under 29 U.S.C. § 203(m), the expenses they incurred are de facto

deductions from cash wages received for their first week of work, leaving a

balance owed them by Decatur. In other words, they liken these expenses (in an

inverse way) to employer-furnished “facilities,” such as room and board, which

the employer may deduct from an employee’s wages; only here, the guest

workers contend that Decatur must reimburse them for expenses that they

incurred before their first workweek began. 

Section 203(m) defines wages as cash or “the reasonable cost . . . to the

employer of furnishing [the] employee with board, lodging, or other facilities, if

such board, lodging, or other facilities are customarily furnished by such

employer to his employees.” (Emphasis added.) The provision’s plain language

thus permits employers flexibility in the method of paying employees. This

section of the FLSA, contrary to the guest workers’ suggestion, does not impose

liability upon employers for expenses that employees incur. See Donovan v.

Miller Props., Inc., 711 F.2d 49, 50 (5th Cir. 1983) (per curiam) (“[S]ection 3(m)

of the Fair Labor Standards Act, 29 U.S.C. § 203(m), . . . allows an employer to
No. 07-30942

8

credit toward its obligation to pay the minimum wage ‘the reasonable cost . . . of

furnishing [an] employee with board, lodging, or other facilities’ . . . .”) (emphasis

added). Section 203(m) provides no ground for Decatur to have violated the

FLSA by refusing to reimburse the guest workers for recruitment,

transportation, and visa expenses that they incurred.

B.

We thus turn to the argument that Decatur’s failure to pay these preemployment expenses encumbered the guest workers’ wages, so that Decatur did

not pay the wages “finally and unconditionally or ‘free and clear’”:

Whether in cash or in facilities, “wages” cannot be

considered to have been paid by the employer and

received by the employee unless they are paid finally

and unconditionally or “free and clear.” The wage

requirements of the Act will not be met where the

employee “kicks-back” directly or indirectly to the

employer or to another person for the employer’s benefit

the whole or part of the wage delivered to the employee.

This is true whether the “kick-back” is made in cash or

in other than cash. For example, if it is a requirement

of the employer that the employee must provide tools of

the trade which will be used in or are specifically

required for the performance of the employer’s

particular work, there would be a violation of the Act in

any workweek when the cost of such tools purchased by

the employee cuts into the minimum or overtime wages

required to be paid him under the Act.

29 C.F.R. § 531.35.

The above-quoted regulation does not define when an employee-incurred

expense constitutes a kick-back. Our precedents, however, clarify that an

employer-imposed condition of employment is a kick-back if it “tend[s] to shift

part of the employer’s business expense to the employees.” Mayhue’s Super

Liquor Stores, Inc. v. Hodgson, 464 F.2d 1196, 1199 (5th Cir. 1972). 
No. 07-30942

9

We now consider whether, under 29 C.F.R. § 531.35, the guest workers are

entitled to reimbursement of their recruitment, transportation, or visa expenses.

1.

We begin with the visa expenses. Although § 531.35 does not specifically

address employers’ obligation to reimburse guest workers for these expenses,

other regulations clarify that employee-paid expenses to obtain H-2B visas more

properly belong to the guest worker than to the employer. See 22 C.F.R.

§§ 40.1(l)(1) (requiring nonimmigrant visa applicants, such as the guest workers

here, to submit processing fees when they apply for visas). The expense of

applying to become a sponsoring employer of H-2B employees, by contrast, more

properly belongs to the employer. See 8 C.F.R. §§ 103.7(a),

103.7(b)(1), 214.2(h)(2)(i)(A) (requiring, collectively, that a U.S. employer submit

certain forms and filing fees to become an H-2B visa sponsor). These

regulations, which assign H-2B visa processing fees to visa applicants and H-2B

sponsorship-application fees to employers, show that requiring the guest

workers to bear the visa expenses at issue did not tend to shift part of Decatur’s

business expense to the guest workers. We hold that Decatur has no FLSA

responsibility to reimburse the guest workers for the visa expenses that the

employees incurred.

2.

We next consider the transportation expenses. For many years, the

Department of Labor interpreted the FLSA and its implementing regulations as

requiring employers to bear guest workers’ inbound transportation expenses.

See Wage & Hour Div. Op. Ltr., 1990 DOLWH LEXIS 1, at *3 (June 27, 1990)

(“Under the FLSA, it has always been the position of the Department of Labor

that no deduction, that cuts into the minium wage, may be made for

transportation of workers from the point of hire and return to that

point . . . . [S]uch transportation costs [are] primarily for the benefit of the
No. 07-30942

10

employer.”). The agency, however, has called this interpretation into question.

See Labor Certification Process and Enforcement for Temporary Employment in

Occupations Other Than Agriculture or Registered Nursing in the United States

(H–2B Workers), and Other Technical Changes, 73 Fed. Reg. 78020, 78041 (Dec.

19, 2008) (“[T]he cost[] of relocation to the site of the job opportunity generally

is not an ‘incident’ of an H-2B worker’s employment within the meaning of

29 CFR 531.32, and is not primarily for the benefit of the H-2B employer.”);

Withdrawal of Interpretation of the Fair Labor Standards Act Concerning

Relocation Expenses Incurred by H-2A and H-2B Workers, 74 Fed. Reg. 13261,

13262 (Mar. 26, 2009) (“DOL believes that this issue warrants further review.

Consequently . . . DOL withdraws the [December 19, 2008,] FLSA

interpretation . . . for further consideration and the interpretation may not be

relied upon as a statement of agency policy . . . .” (footnote omitted)); see also

De Luna-Guerrero v. N.C. Grower’s Ass’n, 338 F. Supp. 2d 649, 659 (E.D.N.C.

2004) (“[T]he issue [of an employer’s liability for transportation expenses] has

been under review by the DOL. . . . DOL’s policy regarding de facto deductions

[of transportation expenses] is anything but clear.”); Rivera v. Brickman Group,

Ltd., 2008 U.S. Dist. LEXIS 1167, at *37-39 (E.D. Pa. Jan. 7, 2008) (“The

DeLuna-Guerrero court refused to rely on the opinion letters because it believed

the Department of Labor’s position to be too unclear. I agree, and in so doing,

I note that the Department of Labor’s position is not merely unclear, but

untenable. * * * Given the apparent (and now more than thirteen-year-old)

incoherence at the Department of Labor with regard to this issue, I am not

persuaded that I should accord the older opinion letters any significant weight

[under Auer v. Robbins, 519 U.S. 452 (1997), or Skidmore v. Swift & Co., 323

U.S. 134 (1944)].”). 

We agree with the Rivera court that Auer deference to the DOL’s older

interpretation seems inappropriate. Furthermore, inasmuch as the DOL never
No. 07-30942

The guest workers contend, under Rivera, that the Immigration and Nationality Act 4

has no bearing on these FLSA issues. We find Rivera unhelpful for this point. The court there

assumed that the FLSA required employers to reimburse guest workers for inbound

transportation expenses. See 2008 U.S. Dist. LEXIS 1167, at *8-9. From this assumption, it

considered only whether 8 U.S.C. § 1184(c)(5)(A) conflicts with and overrides the FLSA. See

id. at *9-10. We consider the antecedent question whether the FLSA requires an employer to

reimburse guest workers for inbound transportation expenses. Because we conclude that it

does not, we do not reach Rivera’s question and do not find that case helpful in answering the

question before us.

11

fully explained why it adopted that interpretation in the first place, we agree

with the Eleventh Circuit that Skidmore deference seems inappropriate. See

Arriaga v. Fla. Pac. Farms, 305 F.3d 1228, 1239 (11th Cir. 2002) (“Because of

this lack of explanation, it is impossible to weigh the ‘validity of its reasoning’

or the ‘thoroughness [] in its consideration.’” (quoting Skidmore, 323 U.S. at 140)

(alteration in original)). Relying on case law that defers to the interpretation

similarly seems inappropriate, and thus we can accord no weight to the guest

workers’ cited authorities such as Marshall v. Glassboro Service Ass’n, 1979 U.S.

Dist. LEXIS 9053, at *6 (D.N.J. Oct. 19, 1979); and Torreblanca v. Naas Foods,

Inc., 1980 U.S. Dist. LEXIS 13893, at *13 (N.D. Ind. Feb. 25, 1980).

As is the case with visa expenses, the regulation addressing employer kickbacks does not specify whether an H-2B guest worker’s inbound transportation

expenses belong more properly to the employer or to the guest worker. Other

statutory and regulatory provisions may guide this determination. 

Two provisions have some relevance. Under the Immigration and

Nationality Act, an H-2B guest worker’s outbound transportation expenses

sometimes belong to the employer. See 8 U.S.C. § 1184(c)(5)(A). Under U.S. 4 

Citizenship and Immigration Service regulations, an H-2A agricultural guest

worker’s inbound transportation expenses sometimes belong to the employer.

See 20 C.F.R. § 655.102(b)(5)(i). No provision, however, requires an employer to

bear an H-2B guest worker’s inbound transportation expenses. We find silence
No. 07-30942

 Furthermore, Decatur’s circumstances differ substantially from those triggering an 5

employer’s liability under 8 U.S.C. § 1184(c)(5)(A). Section 1184(c)(5)(A) ensures that an earlydismissed guest worker has the means to leave the United States. Such circumstances are not

relevant here.

12

in this context indicative that Congress most likely did not intend for the

employer to bear H-2B guest workers’ inbound transportation expenses.5

The guest workers do cite two cases which, without relying on the DOL’s

now-unclear FLSA interpretation, hold that employers must bear guest workers’

inbound transportation expenses. See Arriaga, 305 F.3d at 1244 (11th Cir.

2002); Rivera, 2008 U.S. Dist. LEXIS 1167, at *42-44. Arriaga involves H-2A

guest workers. It holds that employers must bear guest workers’ inbound

transportation expenses because the expenses are “incident of and necessary to”

the guest workers’ employment. See 305 F.3d at 1241-44. We find Arriaga

distinguishable insofar as its analysis derives from the case’s H-2A, as opposed

to H-2B, origins. Arriaga also is distinguishable because its “incident of and

necessary to” standard originates from 29 C.F.R. § 531.32 instead of § 531.35.

Section 531.32 implements 29 U.S.C. § 203(m); and, as we have said, our

Donovan precedent from 1983 informs us that, under Fifth Circuit law, § 203(m)

imposes no obligation on employers to bear employee-incurred expenses. We will

not follow Arriaga.

Rivera essentially does follow Arriaga, albeit in the H-2B context. Rivera

quotes 29 C.F.R. § 531.35 at length, 2008 U.S. Dist. LEXIS 1167, at *36-37, but

ultimately decides the issue of transportation expenses under 29 U.S.C.

§ 203(m): “point-of-hire transportation is primarily for the employer’s benefit,

both because it is dissimilar to lodging and board, and because the expense

arises out of Brickman’s decision actively to recruit workers in foreign

countries.” Id. at *43. We do not necessarily agree with Rivera that Arriaga’s

reasoning extends so readily from H-2A guest workers to H-2B guest workers.
No. 07-30942

 Because we hold that the FLSA does not obligate Decatur to reimburse the guest

6

workers for their transportation expenses, we do not consider Decatur’s argument in the

alternative that, even if the FLSA otherwise purports to obligate reimbursement, the Portalto-Portal Act and Immigration and Nationality Act nevertheless bar recovery.

13

In any event, Donovan forecloses us from following Rivera’s § 203(m)-based

analysis. Just as we will not follow Arriaga, we will not follow Rivera.

On the authorities before us, we hold that the FLSA does not obligate

Decatur to reimburse its guest workers for their inbound transportation

expenses.6

3.

Finally, we consider whether the FLSA obligates Decatur to reimburse its

guest workers for the expenses that they incurred with foreign recruitment

companies. The FLSA’s provisions do not require reimbursement of these

employee-incurred expenses. See 29 U.S.C. § 201 et seq. Neither do the FLSA’s

implementing regulations—unless the expenses were “kick-backs” to Decatur.

See 29 C.F.R. § 531.35. 

We hold that the recruitment expenses were not kick-backs within the

meaning of § 531.35. The expenses differed in all fundamental characteristics

from the expenses that our court has labeled kick-backs. See Mayhue’s Super

Liquor Stores, Inc. v. Hodgson, 464 F.2d 1196, 1199 (5th Cir. 1972) (deduction

from cashiers’ wages to pay for every shortage in employer cash-register

accounts, regardless of the reason for the shortage); Brennan v. Veterans

Cleaning Serv., Inc., 482 F.2d 1362, 1370 (5th Cir. 1973) (employee’s wage

deduction in favor of employer to recover the cost of a wrecked company truck).

The expenses were not treated as an employer obligation by custom or practice

of Decatur’s industry. In sum, there is no basis in custom, practice, or law to

include the recruitment expenses as part of Decatur’s business expense. 
No. 07-30942

 This regulation does not prohibit an H-2B visa sponsor from requiring guest workers 7

to pay for transportation and visa expenses. See 8 C.F.R. § 214.2(h)(6)(i)(B) (excepting from

its prohibition of worker-incurred expenses “the lower of the actual cost or fair market value

of transportation to such employment and any government-mandated passport, visa, or

inspection fees, to the extent that the passing of such costs to the beneficiary [guest worker]

is not prohibited by statute, unless the employer, agent, facilitator, recruiter, or similar

employment service has agreed with the beneficiary that it will pay such costs and fees”).

14

Our attention, however, has been brought to two relatively new

regulations that for the first time address unscrupulous practices in recruiting

workers to participate in the H-2B visa program. Effective January 18, 2009,

the Department of Labor requires an employer seeking H-2B labor certification

to attest that “[t]he employer has contractually forbidden any foreign labor

contractor or recruiter whom the employer engages in international recruitment

of H-2B workers to seek or receive payments from prospective employees, except

as provided for in DHS regulations at 8 CFR 214.2(h)(5)(xi)(A).” 20 C.F.R.

§ 655.22(g)(2). Also effective January 18, 2009, the Department of Homeland

Security forbids an employer, employer’s agent, recruiter, or similar employment

service from collecting any “job placement fee or other compensation (either

direct or indirect)” from a foreign worker as a condition of an H-2B job offer or

as a condition of H-2B employment. 8 C.F.R. § 214.2(h)(6)(i)(B). These 7

regulations ultimately may influence whether H-2B employers will reimburse

the recruitment expenses of future guest workers, but they do not affect

Decatur’s obligations here. See, e.g., Sierra Med. Ctr. v. Sullivan, 902 F.2d 388,

392 (5th Cir. 1997) (“Generally, courts will not apply regulations retroactively

unless their language so requires.”); 20 C.F.R. § 655.5 (indicating, by creating a

transition period for implementing the Department of Labor’s January 2009

changes to 20 C.F.R. part 655, that the changes do not apply retroactively); 73

Fed. Reg. 78103, 78127-30 (Dec. 19, 2008) (giving no indication that the

Department of Labor’s January 2009 changes to 8 C.F.R. part 214 apply

retroactively). Furthermore, because the regulations for the first time forbid an
No. 07-30942

15

H-2B employer from permitting guest workers to bear such recruitment

expenses, they strongly suggest that the guest workers’ recruitment expenses

incurred long before the regulations became effective were not part of Decatur’s

business expense. 

Finally, our conclusion is not disturbed by the one case that the guest

workers cite holding recruitment expenses can be part of an employer’s business

expense. See Rivera, 2008 U.S. Dist. LEXIS 1167, at *47-*50. The employer

there, Brickman, required guest workers to hire a particular recruitment

company, which charged them fees. See id. at *48-*49. Because the employer

required the guest workers to use the recruitment company, the court concluded

“that fees associated with Brickman-designated workers’ representatives [we]re

costs ‘primarily for the benefit of the employer,’ and that Brickman, therefore,

was not allowed to pass those costs along [to the guest workers] to the extent

that doing so reduced their wages below the FLSA minimum.” Id. at *50.

Assuming the correctness and continued validity of that case’s reasoning,

the case is distinguishable. Here, there is no evidence that Decatur even knew

about the foreign recruitment companies, much less that the companies charged

a fee to the guest workers as a condition of receiving an offer of employment.

Decatur paid Pickering $300 per job position filled, which itself was in the

nature of an employer-paid recruitment fee. Although the record does show that

the guest workers knew of no other way to obtain employment with Decatur, the

record also shows that Decatur did not require, or approve, any guest worker to

pay any sum to anyone as a condition of an H-2B job offer or as a condition of

H-2B employment. 

For all of the foregoing reasons, we hold that the FLSA does not obligate

Decatur to reimburse the guest workers for their recruitment expenses. 
No. 07-30942

16

IV.

In sum, we hold that Decatur incurred no FLSA liability to reimburse its

guest workers for the recruitment fees, transportation costs, or visa fees that

they incurred to work in the United States. We REVERSE the summary

judgment, RENDER judgment in favor of Decatur, and REMAND for entry of

same.

REVERSED and RENDERED; REMANDED for entry of judgment.