H-1B-dependent employer

The following are the thresholds for determining whether an employer is classified as H-1B-dependent. Note that for the first column below, only employees in the United States should be counted, but this can include other employees on H-1B or another temporary worker status, as well as United States citizens and lawful permanent residents.[1][4][5]

Even for a H-1B-dependent employer, a nonimmigrant is considered exempt from the additional H-1B attestations if either of these two conditions is satisfied:[6][7]

• The worker is being paid $60,000 or more in annual compensation.
• The worker holds a master's or higher degree or its equivalent in a specialty related to the intended employment. Equivalent foreign degrees are allowed.

All currently employed H-1B employees count toward the number of H-1B employees when used to determine H-1B-dependence, regardless of whether they were themselves exempted from the attestations.

For exemption based on compensation, only salary and cash bonuses can be counted towards compensation. Non-cash benefits (such as stock) cannot be included.[6][7]

This criterion differs somewhat from the conditions of the attestation on wages needed for all LCAs. The wage attestation in the LCA says that the wage paid to the worker is greater than or equal to both the prevailing wage for that occupation and area of intended employment, and to the actual wage paid to other workers at the company.[8] In many cases (such as highly skilled professions and/or jobs in expensive urban areas) the minimum annual compensation needed to satisfy these attestations is in excess of $60,000. However, this is not always the case.

The exemption threshold of $60,000 is not automatically adjusted for inflation and has not been changed since the rule was introduced.[6]

The educational criterion is intermediate between two other educational criteria used in the context of H-1B petitions:[6][7]

• It is stricter than the educational criterion used to establish that one is a skilled worker in the Form I-129 petition for H-1B status. That petition allows for the use of work experience in lieu of educational credentials, whereas a nonimmigrant can be exempted only in the presence of an actual master's degree.
• It is weaker than the criterion used to determine eligibility for the 20,000 cap-exempt slots every fiscal year. Those cap-exempt slots are available only to people who acquired master's degree at United States universities, whereas a nonimmigrant can be exempted based on a master's degree from a United States university or foreign university.

DOL uses guidelines published by the American Association of Collegiate Registrars and Admissions Officers to determine degree equivalency. Note that the DOL regulation does not have a direct bearing on how USCIS evaluates degree equivalency when evaluating Form I-129 petitions based on an approved LCA.

The following attestations are needed for LCAs filed by a H-1B-dependent employer filing for a non-exempt H-1B nonimmigrant. Even though H-1B-dependence is a global designation applied to the company, the assertion made by the attestations differs based on the specific position in which the worker is being employed. Therefore, an employer who can truthfully make the attestations for one type of worker (such as software engineer) may be unable to do so for another type of worker (such as manager). For positions where no H-1B workers are being hired, there is no need to meet the criteria for these attestations even if the employer is H-1B-dependent.[9][10]

Moreover, since the attestations are time-bound (insofar as they refer to activity between 90 days before and 90 days after the Form I-129 filing) they may not remain true forever.

The employer promises not to displace any similarly employed US worker within the period beginning 90 days before and ending 90 days after the date of filing the H-1B nonimmigrant petition; this is not the date of the LCA filing.

The employer promises not to place the employee at another employer's worksite unless the employer has made a bona fide inquiry as to whether the other employer has displaced or intends to displace a US worker any time between 90 days before and 90 days after the placement, and has no contrary knowledge. If the other employer makes such a displacement, the employer applicant may be subject to civil money penalties and disbarment.

Prior to filing any petition for a H-1B nonimmigrant pursuant to the application, the employer took or will take good faith steps to meet industry-wide standards to recruit US workers for the job for which the nonimmigrant is sought, offering compensation at least as great as that required to be offered to the non-immigrant. The employer will (has) offer(ed) the job to an equally or better qualified US worker.

Ordinary LCAs do not require any attestation to demonstrate good-faith effort to hire a United States. In this respect, ordinary LCAs differ from labor certification, which requires evidence of good-faith effort to recruit US workers. However, even with these additional attestations, the requirements faced by LCA are less onerous than those for labor certification. One key difference is that whereas labor certification requires waiting for several months to try to hire for the specific position, the attestations on LCAs only require one to meet industry-wide general hiring standards.

There are two variants of the H-1B status that also require the filing of a Labor Condition Application: the H-1B1 status for nationals of Singapore and Chile, and the E-3 status for nationals of Australia. The concept of H-1B-dependence does not matter for LCAs of employees for these classifications. Moreover, employees in these categories do not count toward the thresholds for determining H-1B-dependence.

Since being classified as H-1B-dependent requires employers to incur additional cost and complexity, and the threshold for H-1Bs generally increases with the number of full-time equivalent employees reported (with the exception of the downward jump from 50 to 51) employers are incentivized to make their count of full-time-equivalent employees as large as possible. The regulations are therefore geared to restricting employers from overcounting the number of FTEs.

The 2000 Interim Final Rule from the U.S. Department of Labor provided the following guidance regarding the definition of full-time equivalent employee for the purpose of determining H-1B-dependence.

To count as a United States employee, the person must be employed in the United States. United States employees include United States citizens and lawful permanent residents, as well as H-1B employees in the United States. For multinational firms, employees in other countries cannot be counted. In particular, this is important for multinationals because the ability to count employees outside the United States in the denominator could mean the difference between being classified as H-1B-non-dependent and H-1B-dependent. According to the official rules, the list of employees should be determined from the most recent quarterly tax statements unless these fail to include all employees.[1]

Any employee who works 40 or more hours a week is treated as one full-time equivalent. An employee who works less than 35 hours a week cannot be treated as a full-time equivalent. Employees who work between 35 and 40 hours may be treated as full-time equivalent if this is accepted in the employer's regular course of business.

For employees who are less than full-time, the employer can choose one of these two methods:

1. Count each such employee as 1/2 of a full-time equivalent.
2. Total the hours worked by each employee and divide by the employer's standard hours of full-time employment (which must be at least 35 hours).

An employee who works more than 40 hours a week cannot be counted as more than one full-time equivalent.[1]

The number of hours worked per employee should be computed based on the employer's most recent payroll record.[1]

Independent contractors and consultants are not counted as employees. The U.S. Department of Labor will count somebody as an employee only if that person is treated as an employee for all tax and legal purposes, including FICA contributions, as per United States labor law.[5]

Related entities need to also be included when computing the total number of FTE employees for the purpose of determining H-1B-dependency (although they are not relevant to the rest of the LCA). In particular, the following are all included as the "single employer":[1][5]

1. Controlled groups of corporations: such as a parent-subsidiary controlled group, a brother-sister-controlled group, or a combined group;
2. Trades or businesses under common control: which can include sole proprietorships, partnerships, estates, trusts, and corporations; or
3. Affiliated service groups: such as a service organization (health care organization, law firm, accounting firm) and other organizations that regularly perform services for the first organization and either are shareholders or partners in the first organization or the interest in the second organization is held by highly-paid employees of the first organization.

An employer must determine H-1B-dependency status every time the employer files a Labor Condition Application. Further, if an employer who did not file as H-1B-dependent at the time of filing the LCA becomes H-1B-dependent when filing Form I-129, the employer cannot use the LCA and must obtain a new one.

Since H-1B-dependent status requires additional attestations, employers have incentives to be classified as non-dependent. Therefore, there is a stronger burden of proof to maintain and submit documentation in cases where an employer who prima facie appears H-1B-dependent (or borderline) files as a non-dependent.

As part of the exercise of filling an LCA, an employer can use a "snap shot" test: do a headcount of the workforce and of the current H-1B employees, and then compare against the thresholds. This snap shot should be conducted using the records of the most recent payroll.[5]

An employer who comes out as clearly H-1B-non-dependent or H-1B-dependent may file the LCA accordingly without submitting any additional documentation. If, however, an employer who comes out as H-1B-dependent based on the snap shot then files as non-dependent, the employer must have documentation showing this. Typical complicating factors that make an employer's status ambiguous include the extensive use of part-time workers, existence of multiple entities that need to be grouped as a "single employer", and significant employee churn.

The U.S. Department of Labor does not require all petitions to be in the public access file, but it does require the public access file to contain the list of all exempt nonimmigrants. However, if all petitions filed by the employer are for exempt nonimmigrants, then this list need not be maintained.[11]

Additional documentation of employee lists and payroll, that was used to determine H-1B-dependency, should be maintained by the employer, but does not need to be part of the public access file.[11]

Section 402 of Public Law 111–230, signed by then-United States President Barack Obama on August 13, 2010, imposed an additional fee of $2,000 on certain H-1B nonimmigrant petitions and $2,250 on certain L-1A and L-1B petitions. All the petitions involved are filed using Form I-129, and these fees apply over and above any applicable fees for those forms. As mentioned above, an employer was required to pay the additional H-1B fees only in the case that the employer had 51 or more employees and H-1B and L-1 employees together comprised over 50% of the workforce.[12]

The fee would apply only to petitions on postmarked on or after August 14, 2010, and until September 30, 2014.[13] Public Law 111-347 extended these fees till September 30, 2015. Petitions filed October 1, 2015 onward were no longer subject to these fees.[14]

Public Law 114–113, part of the Consolidated Appropriations Act, 2016, imposed a fee of $4,000 on H-1B petitions and $4,500 on L-1A and L-1B petitions. The additional H-1B fees would apply to all petitions postmarked on or after December 18, 2015, and until September 30, 2025.[15][16]

The American Competitiveness and Workforce Improvement Act temporarily increased the annual caps for the H-1B status, since the cap was getting oversubscribed. Some interest groups, including some legislators, labor unions, and the White House, were concerned about the effects of these cap increases on native wages in the technology sector. The ACWIA included some concessions intended to address these concerns. The introduction of the concept of H-1B-dependency, intended to prevent employers from using this visa to facilitate large-scale offshoring, was one such concession. The Labor Condition Application was changed accordingly.[17][18]

An Interim Final Rule published by the United States Department of Labor published in December 2000 provided more clarity on how employers should determine whether they are H-1B-dependent and what documentation they need to maintain. This rule remains the main guideline to this date.

When the H-1B1 visa (for Singapore and Chile) and E-3 visa (for Australia) were added (between 2003 and 2005), and the Labor Condition Application was modified to include them, it was updated to reflect that employees in these categories would not necessitate additional attestations, and that these employees would not count towards the number of H-1B employees. Specifically Section 1a (subsection 1) of the LCA explicitly states that the Additional Employer Labor Condition Statements are for the H-1B only.[4]

One of the ways employers responded to the generally increased regulations surrounding the H-1B, as well as the strict caps on the category, was to more liberally use the L-1 visa for intracompany transfers. In response, additional fees were levied for H-1B and L-1 applicants for employers with more than 50 employees for whom the total of H-1B and L-1 employees exceeded 50% of the United States workforce, as discussed in the additional fees section of this page. The fees have widely been viewed as a way for more high-paying technology firms (such as the technology firms in the San Francisco Bay Area), that generally have relatively small fractions of their workforce in H-1B status and pay higher wages, to reduce competition for a limited H-1B quota from offshoring and outsourcing firms that currently dominate H-1B usage.[3][16]