What is a Dependent Employer for the H1B Visa?
Employers in the United States who employ a large number of H1B visa holders relative to the size of their business are considered to be an “H1B dependent employer” by the United States Department of Labor (DOL). The DOL can heavily scrutinize U.S. employers with a disproportionate number of H1B visa holding employees due to the apparent displacement of U.S. workers who may otherwise hold the employment position that the H1B nonimmigrant employees hold.
What Employers are Required to Determine H1B Dependency?
Every employer that intends to file a Labor Condition Application (LCA) regarding H1B nonimmigrants or to file H1B petition(s) or request(s) for extension(s) of H1B status is required to determine whether it is an H1B dependent employer.
What if an Employer is Clearly Not H1B Dependent?
Oftentimes, it is readily apparent to an employer that it is not dependent on H1B nonimmigrant workers because it has so few H1B nonimmigrant employees relative to its total number of employees.
For example, an employer who only employs one (1) H1B nonimmigrant employee among twenty (20) total employees is not required to conduct a calculation for the purposes of determining H1B dependency because it is clear that the employer hires so few H1B nonimmigrants that is could not possibly be determined to be H1B dependent.
Such employers are required to mark on their LCA that they do not qualify as H1B dependent, but are not required to make or maintain particular documentation.
How to Calculate H1B Dependent Employers?
Employers must be mindful of the “H1B dependent employer” label and corresponding definition, according to the DOL. The DOL calculates whether an employer is H1B dependent based on the number of total employees and the number of H1B nonimmigrant visa holders the business employs.
An employer is H1B dependent if:
- It has 25 or fewer full-time equivalent employees and at least eight (8) H1B nonimmigrant workers or;
- It has 26-50 full-time equivalent employees and at least 13 H1B nonimmigrant workers; or
- It has 51 or more full-time equivalent employees and 15% or more of said employees are H1B nonimmigrant workers.
Determining Dependency: The “Snap-Shot” Test
If an employer is unsure whether or not it meets the definition of dependent employer, the DOL suggests employers use what is called the “snap-shot” test, which simply compares the total number of all H1B nonimmigrant workers to the number of the total workforce, including H1B nonimmigrant workers.
Employers who conduct a snap-shot test are not required to maintain documentation of their snap-shot calculations.
Full Calculation of H1B Dependency
Small and large employers who determine they are H1B dependent under the snapshot test and according to the dependency calculations above, the employer must conduct a full calculation.
A full calculation takes into consideration the total number of H1B nonimmigrant workers using a “head count” of both full and part-time H1B nonimmigrant workers and the employer’s total workforce in the United States, including both U.S. and H1B nonimmigrant workers, measured according to full-time equivalent employees.
Employers who conduct a full calculation of their H1B dependency are required to maintain documentation of their calculation.
Important Definitions to Keep in Mind
When calculating whether an employer is H1B dependent, employers should keep in mind some important definitions that can affect the outcome of the calculations.
Any worker who performs services for the employer and the employer controls what will be done and how it will be done. This definition does not include independent contractors.
Employees are U.S. employees if they are United States citizens or lawful permanent residents (i.e. green card holders).
Full time employee:
Generally, a full time employee is one who works 40 hours per week, which includes breaks. An employee who works between 35-40 hours per week may qualify as being full time, if it is typical for the business.
Generally, a part-time employee is one who works fewer than 35 hours per week. Part-time H1B visa employees will be counted toward their employer’s calculation of H1B dependency as one-half (½) of a full time employee. Additionally, an employer may add all of the hours worked by each part-time employee and then divide that number by the number of full time hours.
Exempt H1B employee:
An H1B nonimmigrant worker is considered exempt from LCA attestation requirements if the H1B nonimmigrant worker earns at least $60,000 annually or those who hold a master’s degree or higher in their particular field of employment.
When Should an Employer Calculate H1B Dependency?
Employers must determine whether or not they qualify as H1B dependent based on the number of H1B nonimmigrant employees they employ relative to the total number of employees they employ.
Employers should make this determination when filing:
- The Labor Condition Application (LCA); or
- The Form I-129, Petition for a Nonimmigrant Worker; or
- A request for an extension of H1B status for a nonimmigrant worker based on an LCA
What is a Willful Violator of H1B Dependency?
A willful violator is an employer who has committed either a willful failure or a misrepresentation of a material fact during the five-year period preceding the filing of the LCA and this violation is found upon the conclusion of either a Department of Labor or Department of Justice enforcement proceeding.
Are H1B1 Workers or E3 Workers Calculated in an Employers H1B Dependency?
No. H1B1 visa holding employees, also known as Chile-Singapore nonimmigrant specialty workers, are not part of the H1B dependency calculations. Similarly, E3 nonimmigrant specialty workers from Australia are not part of the H1B dependency calculations.
Why Does Having Too Many H1B Visa Employees Matter?
When an employer seeks to hire an H1B visa employee, it must submit a Labor Condition Application (LCA) to the U.S. government, attesting that it will treat the H1B visa holder the same as other qualified workers in its same geographic area with regard to wage, and that other employees will be unaffected by the H1B visa holder’s working conditions.
When an employer is deemed to be H1B dependent, it must mark the box entitled “H1B Dependent” on the LCA. Additionally, the employer must make additional attestations due to the disproportionate amount of H1B workers relative to U.S. workers. These attestations include:
- The employer will attempt to recruit U.S. workers for the petition first, before filing an H1B visa petition (similar to attestations made in PERM Labor certification;
- The employer will not displace any U.S. employee 90 days prior to or 90 days following the filing of the H1B petition;
- The H1B nonimmigrant worker will not be placed with another employer unless the sponsoring employer makes a thorough inquiry into whether or not the receiving employer intends to displace any U.S. worker within 90 days prior to or 90 days following the filing of the H1B petition.
Job Advertising Requirements
In conjunction with the additional attestations required of H1B dependent employers, they must prove they are advertising job vacancies in the United States to U.S. workers before petitioning for an H1B nonimmigrant worker, unless the H1B worker is considered exempt.
Is There a Cost Associated with Being an H1B Dependent Employer?
Yes. Employers that employ more than 50 workers and over half of said workers are on H1B or L1 visa status will be charged a $4,000 fee. This is known as the Public Law 114-113 Fee. It is possible that the USCIS may exempt this fee.