Specialty Occupation Workers (H-1B Visas)

In order to obtain permission to employ a foreign worker in H-1B visa status, an American employer must first submit a Labor Condition Application (“LCA”) to the United States Department of Labor (“DOL”), attesting to certain requirements related to wages and working conditions.  The employer must then file a petition with US Citizenship and Immigration Services (“USCIS”) on behalf of the worker establishing 1) that the position it seeks to fill qualifies as a “specialty occupation” and 2) that the person it wishes to hire in that position possesses the necessary professional qualifications.

 “The H-1B Visa Cap”

H-1B visas are limited by a “cap” on the number of new petitions that may be approved each year.  In Fiscal Year 2013 (“FY 2004”) which started on October 1, 2012, that number continues to be set at a limit of 65,000 LESS a number allocated by law to individuals of Singapore and Chile under recently concluded free trade agreements.  Those limits remain the same for FY 2008 and beyond and, as a result, the number of new H-1B visa approvals for the new fiscal year beginning on October 1, 2012 (FY 2013) will once again be approximately 58,000 unless Congress increases that number by legislation.

Congress passed legislation in March 2005 that allocated an additional 20,000 H-1B visas under a separate annual “cap” to graduates from US colleges and universities holding advanced degrees, i.e., at the Masters level or higher.  In addition, other provisions of the H-1B Reform Act of 2005 increased fees associated with H-1B visa petitions and modified the requirements for meeting the “prevailing wage” for H-1B workers.

Requirements of the H-1B Visa Category

United States Employer

A petitioner seeking to classify an individual as an H‑1B nonimmigrant must qualify as a “United States employer.”  Government regulations define this as “a person, firm, corporation, contractor, or other association, or organization in theUnited   States” which:

  1. permits a person to work within the United States;
  2. has an employer-employee relationship with respect to employees, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee; and
  3. has an IRS Taxpayer Identification Number (“TIN” or “EIN”).

Specialty Occupation

The H-1B nonimmigrant visa category is intended for use by employers in theUnited States who seek to temporarily employ foreign nationals who will perform services in a “specialty occupation.”  Such occupations are strictly defined by statute and regulation as positions which require the theoretical and practical application of a body of highly specialized knowledge, and the attainment of at least a bachelor’s degree in a related academic discipline.

To establish eligibility, an individual must be shown to be a “professional” in his or her chosen field.  A person will be considered to be a professional if that person’s field is one for which a specific baccalaureate or higher-level degree is the usual minimum entry-level requirement and the person possesses qualifications which are equivalent to that minimum requirement.  It is critical to establish the relationship between the stated responsibilities of the position offered and the requirement for an academic degree in a specific field related to the occupation.

Duration of Stay

Classification under the H-1B category may be approved for an initial period of three years, and may be extended for an additional three years.  Limited exceptions to the six-year limit are permitted for H-1B workers who have pending applications for permanent labor certification and/or employment-based immigrant petitions and who are either subject to backlogged per country visa quotas or extended government processing delays.

Procedure for Obtaining an H-1B Visa

Labor Condition Application

The employer must submit a LCA Form, ETA-9035, to the DOL prior to filing an H‑1B visa petition with USCIS.  The LCA may be filed electronically and DOL will only review the application to see if it is complete and signed by the employer or authorized agent or representative and whether the employer had previously been disqualified to employ H-1B workers.

The purpose of the LCA is to ensure that employment of a foreign national in H-IB status will not adversely affect the wages and working conditions of American workers similarly employed.  Thus, the employer must attest that:

  1. it will pay all foreign nationals employed in H-IB status in the same occupational classification at the place of employment the local prevailing wage or the actual wage it pays to other workers in that occupation, whichever is greater;
  2. it will offer H-1B workers the same benefits package offered to  U.S. workers similarly employed;
  3. it will provide working conditions that will not adversely affect the working conditions of U.S. workers similarly employed;
  4. there is no strike or lockout in the course of a labor dispute in the occupational classification at the place of employment; and
  5. it has notified the bargaining representative of its employees in the occupational classification of its intent to employ an H-1B foreign national, or, if there is no bargaining representative, that it has posted notice of its intent at the place of employment.

In addition, the employer must provide specific information requested in the application concerning the number of foreign nationals to be employed; the occupational classification in which they will be employed; the job duties, wage rate and conditions under which they will be employed; the date on which employment will begin and the specific duration of the proposed employment.

H-1B Wage Requirements

Under the regulations, the prevailing wage in the local labor market may be determined by various methods.  If the occupation is covered by certain federal laws, the specific wage established by those laws will be the prevailing wage.  If the occupation is covered by a union contract, negotiated at arms-length, the wage established by the governing collective bargaining agreement will be deemed the prevailing wage.  If neither are applicable, the employer may obtain a prevailing wage determination from either the local state employment service or “state workforce agency” (SWA) or from an independent, authoritative published survey.  The employer must retain documentation on how the prevailing wage was determined, and it must update that determination upon filing a new LCA after three years.

As a condition of employing H-1B workers, employers must document its criteria for compensating other workers with similar experience and qualifications for the “employment in question” and it must apply that system even-handedly.  Its system must be sufficiently detailed to permit DOL investigators to apply it in any given case with results consistent with those of the employer.  Ad hoc salary determinations based upon what the market will bear at the time of each hire — which is often the normal basis for compensating highly-paid professionals and managers — are prohibited for employers using the H-1B program.

Notice and Public Access Files

If the position to be filled is not subject to a collective bargaining agreement, the employer is required to post notice of its intention to employ H-1B nonimmigrant workers at all “places of employment” where such workers will actually “work” within the geographical “area of intended employment” included within its certified LCA.  The notice, which may be a copy of the LCA itself, must specifically state the wage rate (or range) paid to the subject H-1B worker(s) and inform readers of the right to file complaints if they believe the employer has violated any provision of H-1B employment.  See Special Situations:  “Roving Employees” and “Multiple Worksites,” below for further details.

Although no written material need be submitted to DOL with the LCA, the employer must make available certain documentation for public inspection within one working day of filing of the application at either the principle place of business or the actual place of employment.  A copy of the actual LCA must be provided to the H-1B employee.  In addition, actual payroll records on all employees in the foreign national’s occupational classification must be maintained.  These records need not be made available for public inspection, but must be provided to DOL upon request.  All supporting documentation must be maintained for at least one year beyond the conclusion of the period of employment.

Enforcement

DOL will accept complaints from any aggrieved party about an employer’s failure to meet a specified condition or for misrepresentation of a material fact in the application. If DOL determines that a reasonable basis for the complaint exists, it will initiate an investigation during which the employer will be provided an opportunity for a hearing.

DOL is authorized by law to assess substantial penalties if it determines that the employer has committed a violation.  These may include imposition of civil fines and awards of back pay, as well as debarment of the employer from the employment of foreign nationals in any visa category for up to one year if it finds a pattern of “willful violations.”

Visa Petition

 After the LCA is certified by DOL, the employer must file a Petition for Nonimmigrant Worker, Form I-129, with the appropriateUSCISServiceCenter on behalf of the prospective employee.  Information set forth in the petition must be supported by documentary evidence, including a company letter which identifies the employer, describes the nature of the position to be filled, establishes the need for an individual in a specialty occupation, and defines the terms of temporary employment.  The individual’s qualifications must similarly be established by documentary evidence accompanying the employer’s petition, such as educational credentials and letters of experience.

A denial of the petition by the Service Center Director may be appealed to the Administrative Appeals Office (“AAO”) inWashington,D.C.

Cost of Filing

Employers filing H-1B petitions must submit a “base” $ 325 petition filing fee and, unless exempt, an additional fee of either $1500 or $750 (“ACWIA Education & Training Fund” fee reinstated and made permanent by Congress in the “H-1B Visa Reform Act of 2004”).  AU.S. employer with a total of 25 or less full-time equivalent employees in theUnited States (including any affiliate or subsidiary of the employer) is only obligated to pay the $750 fee.

As of March 8, 2005, a petitioner filing an initial H-1B petition or petition for a change of status or change of employer is required to pay a new $500 Fraud Prevention and Detection Fee (established by Congress in the “H-1B Visa Reform Act of 2004”).  This additional fee must be paid with a check or money order that is separate from the base fee and ACWIA Training and Education Fund fee.

The “ACWIA Training & Education Fund” and “Fraud Prevention & Detection” fees must be paid by the employer; reimbursement cannot be requested from the employee under any circumstances.

Finally, pressure resulting from severe government processing delays led USCIS in July 2001 to implement a Premium Processing Service (“PPS”) for petitions accompanied by Form I-907 and an additional fee of $1,225. Under PPS, USCIS guarantees it will adjudicate or request additional evidence on petitions within 15 days of receipt – or refund the added fee.

Visa Issuance

USCIS will send notice of the approved petition to the U.S. Consulate designated as the post abroad where the individual will apply for the actual visa.  The individual must then go to that Consulate in person to apply for the visa at which time an interview may be required.

In the event that the employee is already present in theUnited Statesin lawful status, he or she may be permitted to change status to H-1B while here, without going abroad for a new visa.  However, should the need to travel abroad later arise, the employee must then obtain an H‑1B visa before returning to theUnited States.

Special Situations

Roving Employees and Multiple Worksites

Many employers are required to send H-1B employees on short or long term assignments to other locations such as customer sites or offices.  The rules governing an employer’s LCA obligations in such situations depend in the first instance on whether such locations are considered to be places of employment under detailed criteria set forth in DOL regulations.  This is an extremely complicated area of law and must be carefully assessed on a case-by-case basis.  However, in general, if the new location does not meet the “place of employment” criteria, the employer’s LCA obligations are tied only to the original or primary work site.

The DOL rules cite specific examples of job duties that would be exempt from or subject to the new requirements.  Those described as exempt from the new or multiple worksite requirements include computer engineers who troubleshoot at customer sites; physical therapists making home visits “within an area of employment,” or sales representatives making customer calls.  H-1B employees temporarily visiting a different location for training or other developmental activity are similarly exempt from the rules.

If a new location constitutes a new “place of employment” under the regulations, the employer’s LCA obligations will vary depending on whether the employee’s assignment is covered by DOL’s “short term placement” rule and/or whether such new place of employment is located within the same area as the original or primary worksite covered by the employer’s existing LCA. Again, this is a very complicated area of immigration law and must be analyzed on a case-by-case basis to ensure full compliance with the law.

Examples cited that would not meet the criteria for exemption and would therefore be subject to the new LCA or short term placement requirements include computer engineers who work on projects at new locations for weeks or months at a time; physical therapists who “fill in” for others for extended periods or who are placed by contractor companies; or sales representatives assigned on a continuing basis to a location away from the home office.

Effect of Corporate Reorganization

An important new provision contained in the DOL regulations concerns existing H-1B workers employed at companies affected by corporate reorganizations.  If specific conditions are met, a new LCA will not be required for such workers to continue employment with the new or reorganized entity.  However, the new entity will be required to maintain up-to-date lists of the existing H-1B workers affected as well as the numbers and dates of certification for all relevant LCAs previously filed.  In addition, the new employer must execute and maintain a sworn statement expressly assuming the liabilities and obligations of the existing LCAs.

Early Termination and “Benching.”

The law now requires employers to bear the cost of transportation back to home country any H-1B employee terminated prior to the end of the period of employment authorized by an approved petition. Compliance with this requirement must be documented.

Under the new DOL rules, if an H-1B employee is “benched” or placed in a nonproductive status due to a “decision by the employer,” such as a lack of work assignments, the employee must continue to be paid the full amount due under the LCA wage requirements.  If the nonproductive period is at the employee’s “voluntary request and convenience,” and due to “conditions unrelated to employment,” such as an employee’s wish to care for a sick relative or tour the U.S., or due to circumstances that render the employee unable to work, the employer is not obligated to pay the employee, provided compensation is not mandated by the employer’s benefit plan or by other laws.

H-1B Dependent Employers

Under ACWIA, certain employers defined as “H-1B dependent” or “willful violators” are subject to enhanced scrutiny and additional requirements with respect to the displacement and recruitment of American workers. To demonstrate compliance with these requirements, these employers must make additional attestations during the LCA process.  All employers are compelled to determine and affirmatively declare whether or not they fall into the classification of H-1B dependent or willful violators.  This is another complex area of law that requires sophisticated analysis to ensure compliance.  We have developed a detailed questionnaire to assist employers in this analysis.

Change of Employer or H-1B Portability

Under certain circumstances, employers may be permitted to commence employment of H-1B workers upon filing of a petition rather than upon approval, as had been the case under prior law.  Employers may utilize this provision for aliens already in H-1B visa status for another employer who (a) have been lawfully admitted into the U.S.; (b) are the beneficiary of a “non frivolous” petition filed before their prior authorized stay has expired, and (c) have not been employed without authorization in the U.S. prior to the filing of such a petition.

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