The term employer dependent on H-1B is used by the United States Department of Labor to describe an employer who meets certain thresholds in the fraction of labor comprising workers in H-1B status. An employer who is dependent on H-1B needs to include additional authorization in the Employment Conditions Application used for the application of each H-1B recipient who is offered an annual compensation of less than $ 60,000 and without a master's degree. The idea was introduced by the American Competitiveness and Workforce Improvement Act (ACWIA) adopted in 1998 and operationalized through the United States Department of Labor's Decree H-1B on December 20, 2000. This regulation was found at 20 CFR 655.736 in the Code of Federal Regulations.
One of the main objectives of the H-1B addiction concept is to limit the use of H-1B visas for the replacement of American skilled workers by cheaper labor from other countries. The demarcation of H-1B is intended to achieve a balance between the need to prevent large-scale use of H-1B to facilitate "cheap labor" against the goal of minimizing regulatory burdens on employers using H-1B. sparingly. Entrepreneurs who fulfill a slight variation of criteria for H-1B dependency have been targeted for additional H-1B costs (by Public Law 111-230 and 114-113). The H-1B reform proposal has suggested ways to limit the use of the H-1B program by workers dependent on H-1B, but strict constraints have never been enacted legislatively or administratively.
H-1B dependency is not relevant to the Employment Conditions Application submitted for H-1B1 and E-3 workers.
Video H-1B-dependent employer
Definition and deployment
Section 1a of the LCA attempts to classify companies proposing LCAs into one of three categories:
- The employer does not depend on H-1B
- Employees petitioned are non-immigrant free people
- Employees who are requested not to be excluded, and therefore the employer includes additional authorization
Threshold to define H-1B-dependence
The following is a threshold to determine whether the company is H-1B-dependent. Note that for the first column below, only employees in the United States should be counted, but this may include other employees concerning H-1B or other temporary workers status, as well as citizens of the United States and other legitimate permanent residents.
Unblock nonimmigrant
Even for an employer dependent on H-1B, a non-immigrant is deemed to be free from additional H-1B approval if either good of both conditions is met:
- Workers are paid $ 60,000 or more in annual compensation.
- Workers hold a master's degree or higher or equivalent in a specialization related to the intended occupation. An equivalent foreign degree is allowed.
All current H-1B employees count the number of H-1B employees when used to determine the dependency of H-1B, regardless of whether they themselves are exempted from validation.
Exemption based on compensation
For exemptions based on compensation, only salaries and cash bonuses can be calculated for compensation. Non-cash benefits (such as shares) can not be included.
This criterion is somewhat different from the conditions of endorsement of the wages required for all LCAs. Ratification of wages in the LCA says that wages paid to workers are greater than or equal to the wages applicable to the employment and the intended occupation, and actual wages paid to other workers in the company. In many cases (such as highly skilled professions and/or jobs in expensive urban areas), the minimum annual compensation required to comply with this certification is over $ 60,000. However, this is not always the case.
The $ 60,000 release threshold is not automatically adjusted for inflation and has not changed since the rule was introduced.
Exception based on educational qualification
The educational criteria are the intermediaries between two other educational criteria used in the context of the H-1B petition:
- This is tighter than the educational criteria used to establish which one is a skilled worker in the I-129 petition form for H-1B status. The petition allows the use of work experience as a substitute for educational credentials, whereas non-immigrants can be excluded only in the presence of an actual master's degree.
- It's weaker than the criteria used to determine the eligibility for 20,000 free stamp slots each fiscal year. Such free slots are only available to people who earn a master's degree at a United States university, while non-immigrants may be exempt based on a master's degree from a United States university or a foreign university.
DOL uses guidelines published by the American Association of Collegiate Registrars and Admissions Officers to determine degree equality. Note that DOL regulations do not have a direct relationship on how USCIS evaluates equality of degrees when evaluating I-129 petition forms under an approved LCA.
Endorsement required
The following ratification is required for LCAs submitted by employers dependent on H-1B applying non-immigrant H-1B non-immigrants. Although the dependency of H-1B is a global appellation applied to the firm, statements made by different endorsements are based on the particular position in which the worker is employed. Therefore, an employer who can actually authorize one type of worker (such as a software engineer) may not be able to do so for other types of workers (such as managers). For positions where no H-1B worker is employed, it is not necessary to meet the criteria for this endorsement even if the employer is H-1B-dependent.
Additionally, since their attestation is time-bound (as long as they refer to activities between 90 days before and 90 days after Form I-129 filing) they may not remain forever.
(A) Displacement
The Employer undertakes not to relocate the cooperating US worker in the period beginning 90 days before and ending 90 days after the date of submission of the H-1B non-immigrant application; this is not the date of submission of LCA.
(B) Secondary Switch
Employers promise not to place employees in the workplace of other employers except the employer has investigated bona fide , whether the other employer has evacuated or intends to replace US workers anytime between 90 days before and 90 days after placement, and have no conflicting knowledge. If another employer transfers, the applicant may be subject to fines and civil repeal.
(C) Recruitment and Recruitment
Prior to applying for a non-immigrant H-1B in accordance with the application, employers take or will take good faith measures to comply with industry standards to recruit US workers for jobs sought by non-immigrants, offering compensation at least as great as required to be offered to non-immigrants. The employer will (have) offer (ed) the work to US workers of equal or more quality.
The Ordinary LCA does not require approval to demonstrate good faith efforts to hire the United States. In this case, regular LCAs differ from labor certification, which requires evidence of good faith efforts to recruit US workers. However, even with these additional certifications, the requirements faced by the LCA are less severe than those of labor certification. One major difference is that whereas labor certification requires several months to try to rent for a particular position, the approval of the LCA requires only one to meet general recruitment standards across the industry.
The H-1B1 and E-3 employees are not counted to the threshold
There are two variants of the H-1B status which also require the submission of the Employment Conditions Application: H-1B1 status for Singaporean and Chilean citizens, and E-3 status for Australian citizens. The concept of H-1B dependency is not an issue for LCA employees for this classification. In addition, employees in this category do not count against thresholds to determine the dependency of H-1B.
Maps H-1B-dependent employer
Details about definitions and documentation
Full-time equivalent employee definition
Since being classified as H-1B-dependent requires employers to incur additional costs and complexity, and the threshold for H-1Bs generally increases with the number of reported full-time employees (with the exception of a jump down from 50 to 51) entrepreneurs are given incentives to make the number of full-time employees equates to them as much as possible. Therefore, the regulation is directed to restrict entrepreneurs from counting excessive amounts of FTE.
The Interim 2000 Interim Temporary Rules of the US Department of Labor provide the following guidance on the definition of full-time equivalent employees for the purpose of determining H-1B dependency.
What counts as an employee of the United States
To be counted as an employee of the United States, the person must be employed in the United States. United States employees include US citizens and permanent residents, as well as H-1B employees in the United States. For multinational companies, employees in other countries can not be counted. In particular, this is important for multinational companies because the ability to calculate employees outside the United States in a denominator can mean the difference between being classified as H-1B-independent and dependent on H-1B. According to official rules, the employee list must be determined from the latest quarterly tax report unless it fails to include all employees.
What counts as full time
Every employee who works 40 hours or more a week is treated as a full-time equivalent. An employee who works less than 35 hours a week can not be treated as a full-time equivalent. Employees working between 35 and 40 hours may be treated as a full-time equivalent if this is accepted in the employer's regular business.
For employees who are less than full time, the company may choose one of these two methods:
- Calculate each of these employees as 1/2 of the full-time equivalent.
- The number of hours worked by each employee and divided by the employer's full-time standard hours (which must be at least 35 hours).
An employee who works more than 40 hours a week can not be counted as more than an equivalent full time.
The number of hours worked per employee should be calculated based on the employer's recent payroll note.
What counts as an employee
Independent contractors and consultants are not counted as employees. The US Department of Labor will consider a person an employee only if the person is treated as an employee for all taxes and legal purposes, including FICA's contribution, in accordance with US labor law.
Merge all entities as "one company"
The related entity should also be included when calculating the total number of FTE employees for the purpose of determining the dependency of H-1B (although they are not relevant to the rest of the LCA). Specifically, the following are all included as "sole employer":
- Controlled group of companies: such as parent-child-controlled groups, controlled groups of brothers, or joint groups;
- Trade or business under the same control: which may include sole proprietorships, partnerships, estates, trusts, and corporations; or
- Affiliated service groups: such as service organizations (health care organizations, law firms, accounting firms) and other organizations that regularly perform services for the first and good organization are shareholders or partners in the first organization or who are interested in both organizations by highly paid employees of the first organization.
What triggers the calculation of H-1B-dependency
An employer must determine the dependency status of H-1B each time the employer files the Employment Conditions Application. Furthermore, if an employer who does not file as H-1B-dependent upon submission of LCA becomes H-1B-dependent when filling out Form I-129, the company can not use the LCA and must obtain a new one.
Procedure for determining dependency, and documentation required
Because H-1B-dependent status requires additional authorization, the employer has an incentive to be classified as independent. Therefore, there is a stronger burden of evidence to maintain and submit documentation in cases where prima facie employers appear to be files that depend on H-1B (or boundaries) as independent.
As part of the LCA charging exercise, the company can use the "catapult" test: do the current number of H-1B employees and employees, and then compare with the threshold. This snap shot should be done using the latest payroll records.
An employer who exits clearly H-1B-independent or dependent on H-1B may apply for the appropriate LCA without submitting any additional documentation. However, if an employer who came out as H-1B-hanging based on a snap shot then the file as not dependent, the employer should have documentation showing this. Typical complicating factors that make employers' status ambiguous include extensive use of part-time workers, the presence of multiple entities that need to be classified as "single employers", and significant employees change.
Public access files
The US Department of Labor does not require that all petitions be in public access files, but it does require public access files to include a list of all non-immigrants excluded. However, if all petitions filed by the employer are for non-immigrants, then this list is not necessary to maintain.
Additional documentation of employee lists and payroll, used to determine H-1B dependency, must be maintained by the company, but need not be part of a public access file.
Additional charges
H-1B-dependence itself does not incur additional costs. However, at various points in the history of H-1B law, additional fees have been imposed on entrepreneurs who meet conditions similar to H-1B dependency. This is a company with more than 50 full-time equivalent employees and with non-immigrant H-1B and L-1 numbers currently equal to more than 50% of their current equivalent FTE. The corresponding threshold for H-1B-dependencies is 15%, but one way this threshold is different is a 50% threshold for additional costs requiring companies to count people in H-1B as well as people in L-1 status. Also, unlike additional LCA certification cases, there are no exceptions for people based on how much they produce or their educational qualifications.
While the concept of H-1B dependency is only used by the US Department of Labor, the surcharge here is imposed by the US Citizenship and Immigration Services.
Public Law 111-230 (August 2010 for September 2015): $ 2000 additional charge
Section 402 of Public Law 111-230, signed by US President-Barack Obama on August 13, 2010, imposed a $ 2,000 surcharge on certain H-1B non-immigrant petitions and $ 2,250 on certain L-1A and L-1B petitions. All petitions involved are filed using Form I-129, and these fees apply in excess of the fees applicable to the form. As mentioned above, employers are required to pay H-1B surcharge only if the employer has 51 or more employees and H-1B and L-1 employees together cover more than 50% of the workforce.
Fees will apply only to a postmarked petition on or after August 14, 2010, and until September 30, 2014. Public Law 111-347 extends this fee until September 30, 2015. The petition filed October 1, 2015 and is no longer subject to this fee.
Public Law 114- 113 (December 2015 through September 2025): $ 4000 surcharge
Public Law 114-113, part of the Consolidation Allocation Act, 2016, charges $ 4,000 in H-1B petitions and $ 4,500 on L-1A and L-1B petitions. The H-1B surcharges will apply to all postmarked petitions on or after December 18, 2015 and until September 30, 2025.
List of companies that depend on H-1B
The latest list of companies identified as H-1B-dependent_employers in their LCA submissions can be obtained from DoL "Data disclosure". Ã, In the data file, H-1B_DEPENDENT column will have Y or N Value (Y = Employer is H-1B Dependent; N = Employer not dependent H-1B) indicates company status used in archiving.
H-1B-dependency between the top users of the H-1B program
The top users of the H-1B program and their H-1B dependent status provided by the company of the LCA submitted for the start date of employment by 2016 are:
History
Introduction in ACWIA (1998)
The American Competitiveness and Workforce Improvement Act temporarily increases the annual cap for H-1B status, as the lid is oversubscribed. Several interest groups, including some legislators, unions, and the White House, are concerned about the impact of this hat hike on the original wage in the technology sector. ACWIA incorporates several concessions that are intended to address this issue. The introduction of the concept of H-1B addiction, intended to prevent employers using this visa to facilitate large-scale offshoring, is one such concession. Application of Labor Conditions changed.
Interim 2000 End Rule
The Interim Final Rules issued by the US Department of Labor published in December 2000 provide further clarity on how employers should determine whether they are dependent on H-1B and what documentation they need to maintain. This rule remains the main guideline for this date.
Later introduction of other variants of category H-1B
When the H-1B1 visa (for Singapore and Chile) and E-3 visa (for Australia) were added (between 2003 and 2005), and the Employment Conditions Application was modified to include them, it was updated to reflect that the employees in the category would not require additional authorization , and that this employee will not be accounted for the number of H-1B employees. Particularly Part 1a (paragraph 1) of the LCA explicitly states that the Statement of Additional Company Labor Conditions is for H-1B only.
Introduction of additional charges
One way employers respond to the generally increasing regulations surrounding H-1B, as well as strict limits in categories, is to freely use the L-1 visa for inter-company transfer. In response, additional fees apply to H-1B and L-1 applicants for employers with more than 50 employees for whom the total H-1B and L-1 employees exceed 50% of US workforce, as discussed in additional cost section of this page. Costs have been widely viewed as a way for higher payment technology firms (such as technology companies in the San Francisco Bay Area), who generally have a relatively small fraction of their workforce in H-1B status and pay higher wages, to reduce competition for the limited H-1B quota of offshoring and outsourcing companies that currently dominate the use of H-1B.
References
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