Immigration Update

Information regarding H-1B dependent employer September 12, 2006

Generally speaking, an H-1B dependent employer is a company that is composed of at least 15% H-1B workers. The non-displacement requirement prevents such employers from displacing U.S. workers with H-1B workers within the period beginning 90 days prior to, or 90 following, a petition for an H-1B worker.

H-1B dependent employer and other definitions (based on “American Competitiveness and Workforce Improvement Act of 1998″)

• “H-1B Dependent Employer”: determined according to the following scale:

           1-25 full time equivalent (FTE) employees in the US: more than 7 H-1Bs

           26-50 FTE employees in the U.S.: more than 12 H-1Bs

           More than 50 FTE employees in the U.S.: 15% or more H-1Bs.

• Dependent calculations: In calculating whether an employer is H-1B dependent, exempt H-1B nonimmigrants are not counted during the first six months after the date of enactment or until final regulations are issued, whichever is longer.

• “Exempt H-1B nonimmigrant” is as described in the summary for Section 102, supra.

• Corporate Families: For purposes of determining whether an employer is an H-1B dependent employer, any group which is treated as a single employer under Section 414 (b), (c), (m), or (o) of the Internal Revenue Code is considered a single employer.

• “Displace”: for purposes of the layoff attestation defined as the laying off a U.S. worker from a job that is essentially the equivalent of the job for which the H-1B nonimmigrant is sought. A job is not “essentially equivalent” unless it has essentially the same responsibilities, was held by a U.S. worker with substantially equivalent qualifications and experience, and is located in the same area of intended employment.

• “Lay off”: defined as a worker’s loss of employment other than through discharge for inadequate performance, violation of workplace rules, cause, voluntary departure or retirement, or the expiration of a grant or contract (other than a temporary employment contract entered into in order to evade the layoff attestation). It does not include any situation in which the worker is offered similar employment with the same employer (or in the case of third-party placement, with the other employer), at equivalent or higher compensation and benefits, regardless of whether such offer is accepted. (However, this provision does not limit an employee’s rights to other remedies under a collective bargaining agreement or other employment contract.)

• U.S. worker: defined as: (a) A citizen or national of the United States; (b) a lawful permanent resident; (c) a person admitted as a refugee under Section 207; (d) a person granted asylum under Section 208; or (e) an “immigrant otherwise authorized” to be employed (not a nonimmigrant).

Displacement Attestations: Required employers must attest that they have not “displaced” – and will not displace any U.S. worker employed by them within the period 90 days before and 90 days after the filing of a visa petition based on that LCA. Must also 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 90 days after the H-1B nonimmigrant is placed with the other employer.

Notice to Contractors: New notice on LCA informing H-1B dependent employers that if they place a nonimmigrant at another employer’s worksite and the other employer displaces a U.S. worker during the period described in the attestation, they are still liable and may be subject to penalties (see Penalties section below).

Recruitment Attestation: Required employers also must attest that they have taken good-faith steps to recruit in the United States using industry-wide standards and offering prevailing wages and that they have offered the position to any U.S. worker who applies and is equally or better qualified than the H-1B nonimmigrant. However, employers are not prohibited from using selection standards normal or customary to the type of job involved, as long as they do not apply the standards in a discriminatory manner.  

Exception: Recruitment attestation is not required if the H-1B nonimmigrant would otherwise qualify as an EB-1 nonimmigrant (extraordinary ability, outstanding professor or researcher, or multinational manager or executive).

Liability of Petitioning Employer in Case of Placement with Another Employer: As stated above, if an H-1B dependent employer places an H-1B nonimmigrant with another employer and the other employer displaces a U.S. worker within the relevant time period, the petitioning employer may be fined $1,000 per violation, regardless of whether or not the petitioning employer had knowledge of the action or made the required inquiries. A debarment penalty also may be assessed only if the petitioning employer knew or had reason to know of the displacement at the time the H-1B nonimmigrant was placed with the other employer or if the petitioning employer had been previously subject to sanctions based on placement with the same other employer.

H-1B visa Part 2: What are H-1B cap exemptions? September 10, 2006

H-1B cap exemptions mostly applies or those employed or seeking employment at an institution of higher education, a related or affiliated non-profit entity, nonprofit research organization, or a governmental research organization.    The petitioners or H-1B employers who are not a qualifying institution could also based the exemption on the fact that the alien will be performing all or part of his/her duties at a qualifying institution. 

The USCIS has determined, based on Congressional intent, aliens that are not employed directly by qualifying institutions are exempt from the H-1B cap, provided that the petitioner (non qualifying institution) could show their employment promotes the purposes of the qualifying institution that they will be working at.  Therefore, petitioners who are not a qualifying institution can be exempt from the H-1B cap if they show that a “connection” exists between the work performed by the alien employee and the work performed by the qualifying institution. 

Here is an example:  ABC Inc. is a for-profit marketing company, which typically is not a qualifying institution.  ABC Inc. filed an H-1B petition on behalf of its employee after the noram cap was reached.  In the petition, ABC Inc. indicated that the alien will be working at GOV LAB, a governmental research organization, which is a qualifying institution, to further the research organizations purpose by performing similar tasks to those that are preformed by the employees of the research organization.  The alien employed by ABC Inc., a non-qualifying institution will be exempt from the H-1B cap, since he or she will be working at GOV LAB, a qualifying institution and performing the same tasks that the workers at the qualifying institution will be performing in the hopes of furthering the organization’s goals. 

The USCIS also defined what is meant by related or affiliated nonprofit entity and nonprofit research organization or governmental organization.  According the USCIS, in order to determine if the related or affiliated nonprofit entity is exempt, the entity must be “connected or associated with an institution of higher education, through shared ownership or control by the same board or federation operated by an institution of higher education, or attached to an institution of higher education as a member, branch, cooperative, or subsidiary.” 

A nonprofit research organization as defined by the USCIS is “an organization that is primarily engaged in basic research and/or applied research.”  A governmental research organization is “a United States Government entity whose primary mission is the performance or promotion of basic research and/or applied research.” 

In addition to theses types exemptions, the USCIS was instructed to set aside 20,000 numbers to aliens who are U.S. graduate with advanced degrees (such as MD, MBA, JD and Ph.D., etc.) on an annual basis.  However, the 20,000 set aside for the current fiscal year been reached already (check out my previous blog post for more information re H-1B cap).