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H1-B Specialty Occupation Workers

Summary of Process & Employer's Responsibilities

This information sheet is intended to provide you with information both on the applicable regulations and the application procedure for requesting H-1b status on behalf of a foreign professional. The information sheet incorporates the rules under current law, including the Immigration Act of 1990 and the Department of Labor regulations effective January 19, 1995, as well as the American Competitiveness and Workforce Improvement Act of 1998. The new law is a result of compromise legislation that temporarily increases the number of H-1b workers that may be admitted each year and at the same time imposes more stringent requirements on employers, increasing both the enforcement of the law and penalties for violation.


Increase in H-1b Visas

The H-1b Act increases the current visa cap of 65,000 to 115,000 for fiscal years 1999 and 2000; then to 107,500 in 2001; and returns to 65,000 in 2002 (the fiscal year runs October-September). Even with these increased numbers, it is not certain that the current demand will be satisfied.

New Employer-Paid Fee for Scholarships & Training

A new $500 fee (over and above the current filing fee) is imposed on petitioning employers to fund scholarship and training programs and to fund enforcement activities. The fee must be paid by the employer at the time of filing an initial petition to grant a foreign national H-1b status or upon a petition for new or concurrent employment, and also upon the first petition to extend the stay of an H-1b nonimmigrant (for a maximum of $1,000). The H-1b Act specifically requires that this fee be paid by the employer. Employers may not require the H-1b employee to reimburse or otherwise compensate the employer for the cost of this fee. A $1,000 fine will be imposed for each violation of this section.

New `No Benching' Rule

The `no benching' rule requires that the employer pay the H-1b nonimmigrant the required wage (as specified in the petition) even during periods of temporary layoff or nonproductive status due to the employer's decision.

Qualification for an H-1b Visa

H-1b specialty worker visa petitions are filed with the INS by U.S. organizations which seek the temporary services of persons whose work requires a bachelors or higher degree in a specific occupational specialty. These fields of endeavor include most computer science jobs, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, the arts, and many teaching positions. H-1b status usually is granted initially for three years, and extensions can be obtained for up to a total of six years. However, an employer can request an H-1b visa for less than three years, and employment may be part-time.

General Procedure & Processing Time

The H-1b petition process involves two steps: (1) requesting that the Department of Labor (DOL) certify the Labor Condition Application (LCA), and (2) submittal of the H-1b petition to INS.

  • Request That DOL Certify the LCA
    The LCA is submitted to the DOL, and request is made that it be certified. This step is mainly to ensure that H-1b applicants are not paid less than U.S. workers and that U.S. workers are not adversely affected by H-1b workers. The original signed LCA and a copy must be filed with the DOL regional office with jurisdiction over the work site listed on the LCA (when work sites are listed in areas under the jurisdiction of different DOL regional offices, the LCA needs to be filed only with the first work site). DOL will certify and return the LCA in about 20 working days. Only after the LCA is certified may a petition be filed with the INS to obtain permission to hire the H-1b worker.
  • Submittal of the H-1b Petition to INS
    The H-1b petition (form I-129H plus the DOL-certified LCA) is filed with the regional INS service center. The petition must be accompanied by evidence that the H-1b worker has the necessary credentials to fill the position. If the worker has a foreign degree, that degree must be evaluated by a recognized degree evaluation service. If the worker is lacking the degree usually required to enter the occupation, his/her education and experience must be evaluated to determine whether the overall credentials are the U.S. equivalent of the usually-required degree. Credential evaluations are usually time-consuming and expensive, but they are absolutely required in cases in which the normal university degree is lacking.
  • Approval after submission of the petition takes about 8-12 weeks. Please bear in mind that the time frame given is approximate; processing time can vary significantly depending on the current workload of INS and the specific circumstances of each case.

How Soon the Employee Can Work

Persons already in the U.S. who have not worked without authorization or who have not otherwise violated their current immigration status can change their visa classification to H-1b in the United States and work immediately after the INS approval notice. However, persons who have violated the terms of their current immigration status (so long as they have not violated it for more than six months) and persons outside the U.S. must obtain their H-1b visa stamp abroad at a U.S. consulate (either in the country of birth or country of last residency).

It should be noted that individuals who are in the U.S. on a 'WT' (waiver treaty) classification must return to the U.S. consulate abroad to obtain the visa stamp.

Also, if the H-1b employee needs to travel abroad at any time during the validity of the H-1b, he or she must have a valid visa stamp prior to re-entering the United States to resume employment. At present, it is possible to obtain a visa stamp (for travel purposes) by returning to the alien's place of last residency or through a U.S. consulate post in Mexico or Canada. An appointment for an interview can be scheduled via telephone.


The Wage Attestation

One of the central issues on the LCA is the wage the employer proposes to pay. The employer must attest on the LCA that the H-1b worker will be paid a wage that is equal to or more than one of the following:

    • The "actual wage" for the particular occupation in the area of employment: The "actual wage" means the wage rate paid by the employer to individuals with experience and qualifications similar to the H-1b employee for the specific occupation in question. The company must be prepared to explain the formula or methodology it used to calculate the wage.

OR


  • Within five percent of the "prevailing wage": The "prevailing wage" means the average rate of wages for the specific occupation in the geographical area of included employment. We routinely obtain a prevailing wage determination from the Employment Development Department; however, wage surveys from other sources may be used as well.

When the wage offered equals or exceeds the wage from the Employment Development Department, no further wage surveys will be required.

Other Employer Attestations

The employer also attests to the following by signing the LCA:

  • The employer will provide "working conditions" for H-1B nonimmigrants which will not adversely affect the working conditions of similarly employed workers in the geographical area. Working conditions refer to hours, shifts, vacation periods, and fringe benefits. In practice, this means that such conditions should not be inferior to those offered by other companies to persons who are similarly employed.
  • There is not a strike, lockout or work stoppage in the course of a labor dispute in the relevant occupation at the place of employment on the date the LCA is signed. If a strike occurs after filing the LCA, you have three days to notify DOL.
  • The employer is providing a copy of the LCA to the H-1b worker, is keeping a signed receipt in his or her file, and has posted the LCA as required. On or before the date the LCA is filed, a notice of the application must be posted at two conspicuous locations at the work sites; or, if there is a collective bargaining representative in the occupational classification in which the alien is to be employed, notice must be provided to the bargaining representative. The employer must keep a record of the dates and locations the notice was posted, and must keep a copy of the notice in its files.
  • The new H-1b Act allows the posting of LCA notice by electronic posting to the workforce where there is no bargaining representative.

Which Documents to Keep

As part of the LCA process, employers are required to document that they have complied with the attestations listed on the LCA. None of this documentation needs to be submitted to DOL with the LCA; however, some must be available for public inspection (the public access file), and some must be maintained for review in the event of a DOL investigation (the DOL file).

The public access file and DOL file should be separate from each other and separate from the personnel file for the specific H-1b worker in order to avoid a confidentiality breach and an unnecessary disclosure of compensation data. They may be located at the employer's principal place of business in the U.S. or at the location where the H-1b worker will be employed. Both the public access file and the DOL file must be assembled and available for viewing within one day after filing the LCA with DOL.

The public access file must include the following:

  • Copy of the LCA (form 9035), signed by the employer
  • Statement of the current rate of pay for each H-1b worker admitted under the LCA
  • Copy of the prevailing wage determination for each area of employment
  • Memo explaining how the employer calculated the actual wage (without identifying the H-1b worker or the other workers similarly employed to the H-1b worker for purposes of determining the actual wage)
  • Evidence of either: (1) notification to the bargaining representative, (2) posting of notice of the LCA filing, including the dates and locations of the posting, or (3) electronic posting.

The DOL file must include:

  • Payroll records regarding all of the employer's employees in the same occupation at the place of employment
  • A calculation of the actual wage rate paid to the H-1b worker making use of the employer's pay system described in the actual wage memorandum included in the public access file
  • The raw data backing up the evidence that the H-1b worker has been given a copy of the LCA, which must be done on the date that employment commences
  • The employer must provide a copy of the public access file to any requestor (whether "aggrieved" or not) and provide all documentation to DOL upon its request. DOL may investigate the employer's LCA based either on a complaint from an "aggrieved" party or on its own initiative. The public access file and the DOL file must be maintained for at least one year after the end of the period of employment indicated on the LCA (or if a timely complaint is filed, until the complaint is resolved).

New Petition Required for "Material Changes" in:

H-1b Worker's Employment
Any material changes in the employment described in the H-1b petition must be approved by the INS through the filing of an amended petition. If the new work site is within an area of employment listed on the original LCA, the employer must only make a new posting at the additional work site. If the new work site is outside the area of employment listed on the original LCA, a new LCA must be filed (with a new prevailing wage determination, actual wage calculation, and posting) and an amended H-1b petition must be filed. If the H-1b employee receives a promotion or is being transferred to different job sites, please keep our office informed so that we can advise whether a new wage determination and labor condition application must be prepared.

Liability for Transportation Costs
If the H-1b employee leaves of his or her own accord, the employee also bears the transportation costs. If, on the other hand, the employer dismisses an H-1b worker before the end of the authorized period, then the employer is liable for the worker's return transportation abroad. This provision is complaint-driven, and no penalty is contained in the regulations. There is also no express prohibition against the foreign worker indemnifying the employer for this cost.

Risks in Filing an LCA & H-1b Petition
The employer is only at risk in filing an H-1b petition (and supporting LCA) if the employer has not complied with the above-noted regulations. A DOL finding that the employer has violated the LCA requirements, such as through "willful" failure to pay the required wage rate or "substantial" failure to post a notice of the LCA filing, are subject to the following penalties:

  • Basic Penalties: $1,000 fine and not less than one-year debarment for failure to meet the no-strike or lockout or layoff attestations (if required), a substantial failure to meet the working conditions, posting or recruitment attestations, or misrepresentation of a material fact in an application.
  • Willful Penalties: $5,000 fine and not less than two-year debarment for any willful failure to meet any attestation condition, or willful misrepresentation of a material fact, or violation of the whistleblower clause.
  • Whistleblower protection: An employer may not intimidate, threaten, restrain, coerce, blacklist, discharge or otherwise discriminate against an employee (including a former employee or applicant for employment) because such individual has disclosed information to the employer or anyone else regarding a potential violation, or for cooperating in an investigation or proceeding. The Attorney General and Secretary of Labor will devise a process by which H-1b nonimmigrants that file complaints may be allowed to remain and work in the U.S. for another employer.

H-1b Dependent Employers
The H-1b Act for the first time creates a special category for employers who by definition are "dependent employers". Dependent employers have additional attestation requirements.

Employers are termed "H-1b dependent" if they have total FTE's (full-time equivalent employees) as follows:

Total No. of FTE Employees:
Total H-1Bs:

  • -25 >7
  • 25-50 >12
  • 50+ 15% or more of total FTE

The definition of "employer" includes any group treated as a single employer under the Internal Revenue Code.

H-1b dependent employers must attest to the following:

  • That they have not displaced, and will not displace, any U.S. worker employed by them within the period of 90 days before and 90 days after the filing of a visa petition.
  • Must attest that they will not place the H-1b nonimmigrant with another employer (where there are "indicia" of an employment relationship between the nonimmigrant and the other employer) unless the petitioning employer has inquired and has no knowledge of the fact that the other employer has displaced or will displace a U.S. worker within the 90 days before and the 90 days after the H-1b nonimmigrant is placed with the other employer.
  • Must attest that they have taken good-faith steps to recruit in the United States using industry-wide standards, offer the prevailing wage, and that they have offered the position to any U.S. worker who applies who is equally or better qualified than the H-1b nonimmigrant.
  • Contractors must note that the new LCA provides that if they place a nonimmigrant at another employer's worksite and the other employer displaces a U.S. worker, they may be held liable and subject to penalties.
  • There is a $35,000 fine and no less than three-year debarment for willful failure or willful misrepresentation of a material fact in the course of which an employer displaces a U.S. worker within the 90 days before and 90 days after the filing of a visa petition based on the application.

Effective Date and Exceptions
The new attestation requirement for H-1b dependent employers becomes effective only after INS issues the final regulation. There is an exception from the attestation requirement if the employer is petitioning for an H-1b nonimmigrant who holds a masters degree or a higher degree (or its equivalent) in a field related to the intended employment, or received wages (including cash bonuses and similar compensation) at an annual rate of at least $60,000.

KMH Assistance & Support
While the document and record keeping may initially appear to be burdensome, please be assured that our office will work with you to provide assistance and information to facilitate compliance with current regulations. Please feel free to contact my office to discuss any aspect relating to processing or the new regulations.

Commonly Asked Questions for H-1B Dependent Employers
The American Competitiveness and Workforce Improvement Act of 1998 has created a good deal of confusion among both employers and foreign nationals. The following questions/answers will provide you with additional information.

Q. Who has to make new attestations? How long must they continue to make the attestations?

A. H-1B "dependent" employers and employers that have been found to have committed willful violations (willful violators) must make the new attestation. These employers must include the new attestations on Labor Condition Applications filed between the date final regulations are promulgated and October 1, 2001 (The new attestations sunset on October 1, 2001.) H-1B dependent employers must make the new attestations as long as they are considered "dependent" (see the definition below), and before October 1, 2001. Willful violators must make the new attestations for a period of five years from the date of the willful violation, or until October 1, 2001, whichever is shorter.

Q. When do new attestations go into effect?

A. The new attestation provisions do not go into effect until after the Department of Labor, and the INS, have issued final regulations to implement them. The statute specifically provides that the agencies may reduce the comment period on proposed regulations to not less than 30 days. This seems to indicate that the Department cannot simply promulgate interim final regulations, but must first promulgate proposed regulations for comment.

Q. What is the new recruitment attestation?
A. The employer must attest that it has taken good faith steps to recruit for the position in the United States using industry-wide standard practices, and has offered the job to any U.S. worker who applies and is equally or better qualified than the H-1B worker.

Q. What is the new "displacement" or no lay-off attestation?
A. There are actually two new "displacement" attestations. The first requires the employer to attest that it did not displace and will not displace a U.S. worker employed by the employer within the period beginning 90 days before and ending 90 days after the filing of an H-1B petition based on the LCA. The second requires the employer to attest that it will not place the H-1B worker with another employer where: (1) the H-1B worker performs duties in whole or in part at one or more worksites owned, operated and controlled by the other employer and (2) there are indicia of an employment relationship with the other employer, UNLESS the petitioning employer has inquired of the other employer and has no knowledge that the other employer has displaced or intends to displace another U.S. worker.










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