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March
16, 2005 - Substantial changes have occurred as a consequence
of legislation passed by Congress in December that directly
impact the H-1B and L-1 visa classifications. In general
the changes include: new H-1B visa numbers; new H-1B and
L-1 rules; and fee increases for both classifications. The
H-1B changes centered on a legislative compromise wherein
20,000 additional yearly visas were granted in exchange for
higher fees, tightened wage rules and enforcement protections.
The L-1 changes represent the culmination of two years of
legislative proposals designed to address perceived abuses
of the L-1 classification by so-called “job shops.”
20,000
New H-1B Visas Yearly
In an abrupt departure from expectations, U.S. Citizenship
and Immigration Services announced on March 8 that the extra
20,000 new H-1B visas for FY 2005 that were approved by Congress
last December and originally earmarked for Master’s or higher
level graduates of US colleges would not be limited to holders
of US advanced degrees. The USCIS announcement indicated that
the filing period for these applications, which was supposed
to start March 8, has been delayed until appropriate governing
regulations are published. As this article is published,
the situation is extremely fluid and clients should consult
this website for the latest updates. It is anticipated
that the extra 20,000 H-1B visas may be used up very quickly.
BAL is working to identify critical cases that could benefit.
Clients should contact their BAL attorney regarding impacted
individuals.
H-1B
and L-1 Filing Fees Skyrocket
In addition to the standard $185 filing fee, employers on
all initial H-1B and L-1 petitions are now required to pay
substantial additional fees for each petition. The new fees
are:
- A one-time $500 Fraud Detection and Prevention fee (FDP
Fee) for the initial H-1B or L-1 petition. Blanket L applications,
which used to carry no filing fee at all, are also subject
to the FDP fee, with the $500 paid at the US Embassy or
Consulate abroad.
- A one-time $1,500 H-1B Education and Training (E&T)
Fee for each initial H-1B petition filed by a new employer,
as well as the first extension petition by that employer
for an existing employee. Employers with fewer than 26
full time employees (including US affiliates and subsidiaries)
will pay a lower $750 E&T fee. Second and subsequent
extensions filed by the same employer are exempt from the
Education and Training fee.
Combining the E&T fee with the FDP fee adds a full $2,000
to the cost of filing for a new H-1B worker.
H-1B
Prevailing Wages – 100% and Four Tiers
The new rules change the way that prevailing wages are determined
for H-1B petitions by eliminating the 5% variance from prevailing
wage for purposes of labor certifications, H-1B and H-1B1
visas, and requiring payment of 100% of the prevailing wage.
While this provision is effective March 8, clarification is
pending on its applicability to applications filed after March
8, relying upon a wage determination secured before the March
8 change.
The Department of Labor is now required to replace its unwieldy
2-tier wage survey system with at least 4 levels of wages
commensurate with the experience, education and the level
of supervision requirements for the position. The 4 tiers
of wages are now available on the DOL’s flcdatacenter.com
website.
H-1B Enforcement
Expanded
The changes to the H-1B visa classification requirements
permanently reinstate the non-displacement and recruitment
attestations for heavy users of H-1B visas, also referred
to as H-1B dependent employers. These attestations heighten
the liability for H-1B dependent employers placing their H-1B
workers at third party sites. H-1B dependent employers can
still avail themselves of the exemption provisions for H-1B
employees with a Master’s degree or receiving an annual base
salary of $60,000 or more.
The new rules also broaden Department of Labor investigatory
authority. It allows DOL to self-start H-1B investigations
without receiving a formal complaint, based only on "reasonable
cause to believe" that an employer has violated the H-1B
rules.
As a counterbalance to the increased investigatory powers,
the law also excuses employers who act in good faith from
minor technical violations of the H-1B compliance rules.
The law affords employers a 10-day period to correct technical
deficiencies.
Six Month
Blanket L’s End in June
L-1 employers garnered no benefits from the new rules, but
the final changes in the bill are far better than earlier
restrictive proposals. On the L front, the law restores the
one-year pre-employment requirement for Blanket L employers,
eliminating the relaxed six-month requirement that has been
in effect since January 2002. Effective June 6, 2005, all
L applicants must have at least one year of continuous employment
with the employer abroad before applying. Blanket L employers
may still file six-month cases up until June 6.
Client
Site Limitations for L-1B Employees Effective in June
Effective June 6, the law will prohibit
the issuance of L-1B "specialized knowledge" visas
to employees primarily performing contract labor at client
sites. The prohibition will apply in either of two situations:
(1) if the employee will be principally controlled and supervised
by the client; or (2) if the work does not involve the provision
of a product or service that requires specialized knowledge
specific to the employer. On the one hand, the rules will
still allow L-1 employees to accomplish work at client sites
when the employees remain under the L-1 employer’s full
control, and when the employer is implementing its own specialized
product or service at that client site. On the other hand,
the rules will prevent companies without a specialized product
or service to offer to place their L-1B workers at client
sites. The increased filing fees and the client worksite
limitations are not expected to severely curtail most multinational
companies from transferring qualified workers.
For additional
information please see our previous news articles reporting
these developments:
Employers interested in further information on the new H
and L rules should contact their attorney at Berry, Appleman
& Leiden.
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