What is a Dependent Employer?
During times of economic growth, many employers, especially in the high technology sector, find it difficult to hire enough skilled U.S. workers to fill all their job openings. Companies can hire skilled foreign workers to fill these positions by applying for H-1B visas on their behalf. The H-1B category is designed to attract highly skilled professionals in a specialty occupation to work in the U.S. on a temporary basis. The employer in the H-1B application process is the petitioner while the alien is the beneficiary.
The employer risks becoming an "H-1B dependent" employer if an employer hires too many H-1B employees.
Employers are considered to be H-1B dependent if they fall into any one of the following three categories (please see 20 C.F.R. § 655.736(a)):
An employer has 25 or fewer full-time employees of which more than seven are H-1B employees;
An employer has between 26 to 50 full-time employees of whom more than 12 are H-1B employees; or
An employer has more than 50 full-time employees of which 15% or more are H-1B employees.
What are the Attestation Requirements of an H-1B Dependent Employer?
If an employer is H-1B dependent or has been found to have willfully violated their H-1B obligations within a certain five-year period, the employer has additional attestation obligations regarding the displacement of U.S. workers and its recruitment efforts, in addition to the general employer requirements for H-1B visa petitions. (For more information regarding general H-1B employer requirements, please click here.)
Employers are required to indicate their H-1B dependency status each time the employer files an LCA to support an H-1B petition, for either a new employment application or for an extension of a current employee's H-1B status.
H-1B dependent employers who are hiring a non-exempt H-1B employee must declare that they have not and will not displace or lay-off a U.S. worker "in an equivalent job" either within its own workforce or that of another employer (e.g. contractor). The employer may not displace a U.S. worker within its own workforce by hiring an H-1B worker in an equivalent job during a period beginning 90 days before the H-1B petition filing date and lasting 90 days after the filing date.
Furthermore, the H-1B dependent employer is also prohibited from placing the H-1B employee with another employer (e.g. in a contracting position) to perform work, either in whole or in part, if this would also result in displacing a similarly situated U.S. worker.
The H-1B dependent employer must also make a good faith effort to recruit U.S. workers for the position using industry-wide standards before hiring an H-1B worker. The employer must recruit potential U.S. workers for the position through advertising, job fairs, and other forms of industry-wide recruitment. Furthermore, the employer must offer the job to any equally or better qualified U.S. worker who applies for the position. The employer must also not favor current nonimmigrant employees who have not yet obtained H-1B status, e.g. students currently working under an occupational practical training program.
These additional attestation requirements apply only to certain labor condition applications (LCAs) filed by the employer. It does not apply to LCAs filed by the employer solely for the employment of an "exempt" H-1B nonimmigrant. Employers must indicate on the LCA that although they are H-1B dependent, they are hiring an "exempt H-1B nonimmigrant".
An "exempt H-1B nonimmigrant" is an H-1B worker who earns at least $60,000 per year or holds a Master's degree or higher in a field related to the intended area of employment.
Frequently Asked Questions
Q: In determining whether an employer is H-1B dependent, do you count part-time H-1B's as part of the equation?
A: Yes. To determine the number of H-1B employees an employer has, both full-time and part-time H-1B employees must be counted.
Q: In determining whether an employer is H-1B dependent, do you count "exempt" H-1B's in determining H-1B dependency status?
A: Yes. Although there are no additional attestation requirements for the hiring of "exempt" H-1B employees, they must still be counted in determining how many H-1B workers are employed.
Q: In determining whether or not I am an "exempt H-1B nonimmigrant" worker, can my bonuses be counted to show that I am making more than $60,000 per year?
A: Yes. Bonuses and similar compensation can be used to show that the annual wages are at least $60,000 per year.
Q: In determining whether or not I am an "exempt H-1B nonimmigrant" worker, can my pension plan or health insurance benefits be counted to show that I am making more than $60,000 per year?
A: No. Employer contributions or costs for benefits such as health insurance, life insurance, and pension plans cannot be counted toward the $60,000 compensation minimum.
Q: I have an MBA, but I am applying for a computer programming position at my company that pays $55,000 annually. Am I considered an "exempt" H-1B employee?
A: No. Your Master's degree must be "in a specialty related to the intended employment," which means that your degree must be in a specialty that is generally accepted in the industry or occupation as an appropriate or necessary credential or skill for the job. Since an MBA is not generally considered to be a degree necessary for computer programming, it does not meet the higher degree exemption.
Q: I don't have a Master's degree, but may I use my work experience to show that I have the equivalent knowledge and background of a Master's graduate in order to qualify as an "exempt H-1B nonimmigrant" worker?
A: No. The equivalence to the degree cannot be established through experience. You must have been awarded a Master's degree or higher in a field related to the intended area of employment.
Q: I'm an H-1B dependent employer and I am not allowed to displace a U.S. worker for an H-1B employee. Does that mean I can't fire any U.S. workers?
A: No. You may still fire an employee for a cause such as inadequate performance or a violation of workplace rules.
Q: I'm an H-1B dependent employer. What kind of documents will I need to show that I have not displaced any U.S. workers?
A: You should maintain thorough payroll information and keep all records regarding the termination of an employee covering at least 90 days before and after the filing date of the H-1B petition.
Q: I'm an H-1B dependent employer. What kind of documents will I need to show that I have actively tried to recruit U.S. workers?
A: The employer should maintain records regarding the recruiting process to show that it has actively used industry-wide standards to solicit qualified U.S. workers to apply for the job position. Copies of the advertised job posting, applicant submitted resumes, as well as records of interviews conducted should be kept on file. Information such as where and when the job postings were advertised, salary offered, actual job offers and acceptances should also be recorded and maintained.
(Updated 10/4/2012 by AD)