There are two situations to analyze here: being benched and getting paid a lower salary. Both of them have problematic implications for employers and employees.

Here is what concerns me. As far as I know, it has never been done so far, but the possible consequences of being benched are that the I-485 can be denied and (POSSIBLY, but there are strong arguments against it) I-140 could be revoked if already approved. If I-140 is not approved, USCIS could easily deny the I-140.

Yes, now that the GC is approved, your employer should "permanently" give you the job described (including the title, salary and job duties) in the Labor Certification. This change should take place within a "reasonable time" after the GC approval.

Keep in mind, "permanent" does not mean forever. This term describes a job that has no pre-decided termination date. We see no violation of the law, If the employer, due to economic or other circumstances, can no longer support the job after having offered it to you in good faith.

Quote: (1) If we revoke their H-1, are we still required to pay full wages if our clients say they do not currently have a project for our employees?

Ans. You are not required to pay "bench salaries" for employees whose H-1 are revoked (remember you must inform CIS and offer employee a one-way ticket home). But we then have exposure to the questions, "do you still have a "permanent" job for them?" If the answer is no, then their GC processing can be interrupted unless they use AC21 portability.

Continued payments are required by law for H-1 holder, unless they come under some very limited exceptions for leave for employee's personal reasons. Not paying, exposes the employer to investigation and penalties and may place the employee out of status.

In the green card context, non-payment can lead to problems with demonstrating ability to pay wages.

For both H-1 and GC, nonpayment can lead to an assumption that no genuine job exists. That could lead to cancellation of one or both processes, except for situations where AC21 portability is involved.

A gap of even one day (unless excused by USCIS) puts a person out of status and is not permitted. When you leave a sponsoring employer, it certainly calls into question the continuity of existence the green card job'

1. I don't have a work order or client letter to support my H1B extension which is expiring on 2nd June. Is it legally not allowed to file for H1B extension without this or to avoid RFE one need to support extension with this.

Status, authorized period of stay and unlawful presence are three VERY important concepts in US immigration laws with far reaching implications. The nuances in these concepts are so intricate that they can trip up even my fellow-lawyers. I see issues in this all the time.

Here is a brief primier to enable you to understand the basics. This is by no means an exhaustive analysis.

Status

Quote:

1. If an employee is on a H1 they cannot have a 10% pay cut unless their H1 was amended and refiled.

That depends upon whether or not the conspiracy was in fact in relation to the pending cases. For example, if the fraud/conspiracy involved non-payment of H-1 employees, that should have no affect on pending green card cases. 

 H-1 by Start-up Companies