During times of economic growth, many employers, especially those in the high-tech sector, find it difficult to find enough skilled U.S. workers to fill all their job openings. Fortunately for these employers, there are plenty of highly skilled workers abroad seeking to live and work in the United States. These companies can fill their open positions by hiring foreign workers via the H-1B program.
There can be too much of a good thing, however. Employers should seek an appropriate balance between U.S. and H-1B workers or else they risk becoming "H-1B-dependent."
Employers are considered to be H-1B-dependent if they fall into any of the following three categories, as indicated in 20 C.F.R. § 655.736(a):
An employer has 25 or fewer full-time employees of whom 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 whom 15 percent or more are H-1B employees.
All employers are required to indicate their H-1B dependency status each time they file a Labor Condition Application (LCA) to support an H-1B petition, whether for a new employment application or for an extension of a current H-1B employee’s status.
Implications of H-1B Dependence
If an employer is H-1B-dependent or has been found to have willfully violated H-1B obligations within a five-year period, the employer has 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.
H-1B-dependent employers who are hiring a non-exempt (i.e. paid hourly) 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 their own workforce or that of another employer (e.g., a 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 until 90 days after the filing date.
Furthermore, H-1B-dependent employers are 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.
H-1B-dependent employers must also make a good-faith effort to recruit U.S. workers for the position by deploying 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 standard forms of recruitment. Moreover, employers must offer the job to any equally or better qualified U.S. worker who applies for the position, and are prohibited from favoring current nonimmigrant employees who have not yet obtained H-1B status (e.g., students currently working under an Optional Practical Training (OPT) program).
The additional attestation requirements above apply only to certain LCAs filed by the employer. They do not apply to LCAs filed by the employer solely for the employment of 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. In this situation, petitioning employers must indicate on their LCAs that although they are H-1B-dependent, they are hiring an "exempt H-1B nonimmigrant."
Frequently Asked Questions about H-1B Dependence
Q: In determining whether an employer is H-1B dependent, do you count part-time H-1Bs as part of the equation?
A: Yes. Both full- and part-time H-1B employees collectively make up an employer’s total H-1B employees.
Q: In determining whether an employer is H-1B dependent, do you count "exempt" H-1Bs in determining H-1B dependence?
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 your 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, and I am applying for a computer programming position at a 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. Master’s degree equivalence 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 as such, 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 as long as you have cause, e.g., inadequate performance or a violation of workplace rules.
Q: I'm an H-1B-dependent employer. What kind of documents will I need to submit 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 90 days 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 recruitment 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 job posting, 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, and actual job offers and acceptances should similarly be recorded and maintained.
We’re Here to Help
Our experienced immigration attorneys are here to guide professionals through the complicated H-1B application process, and minimize any and all confusion or challenges. We understand how important an H-1B visa is to you, whether as the employer or the prospective employee. Our seasoned staff and years-long track record of success make Zhang & Associates the natural choice to facilitate your H-1B petitions.
For more detailed information on the H-1B category, including minimum requirements and USCIS policies, refer to the following links:
General H-1B Topics