The H1B Dependent Employer:

Introduction

Employers who hire ‘too many’ H1B workers are labeled H1B Dependent Employers.

H1B dependent employer is subject to additional attestation and paperwork requirements when filing for an H1B in an effort to protect U.S. workers.

H1B Dependent Employers – Who Are They?

Whether or not an employer is H1B dependent is mainly determined by the size of the company:

1. 1-25 full-time employees of which at least 8 are H1B workers.
2. 26 to 50 full-time employees of which at least 13 are H1B workers.
3. 51 or more full-time employees of which 15% or more are H1B workers.

‘Regular H1B Employer’ and ‘H1B Dependent Employer’ – How do they differ?

1. H1B Dependent Employers Must Advertise Job Vacancies:

Unlike regular H1B employers, the H-1B dependent employer is required to advertise job vacancies in the United States before petitioning for H1B workers to fill the job vacancies unless the worker is an ‘exempt’ H1B employee.

The employer must document the recruitment and must also offer the job to any U.S. worker that is equally or better qualified.

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2. Additional Attestation And Documentation Is Required For H1B Dependent Employer:

The H1B dependent employer is subject to special attestation and documentation requirements under the rules.

Among the required attestations is that the employer has taken good faith steps to recruit U.S. workers, the employer has offered compensation that is at least as great as the required wage to be paid to H1B nonimmigrants (i.e., the higher of the local prevailing wage or the employer’s actual wage) and that the employer will not displace any US employee that is similarly situated as the H1B worker for 90 days before and 90 days after the H1B petition is filed.

The attestations are made when preparing the Labor Condition Application.

The H1B dependent employer must document any recruitment steps and may be required to document the calculation for determining H1B dependent status.

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My Case Scenario
Felix

FountainHead LLC is an IT consulting company based in San Francisco, CA. Because they can’t find talent in the US they rely heavily on the H1B program. They currently have 127 consultants and 6 administrative staff. Of the consultants 20 are on H1B visas.

Is FountainHead LLC an H-1B dependent employer?

For more information keep reading.

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When Should Employers Determine Their H1B Dependency?

Employers have to determine their H1B dependency when filing:

• A Labor Condition Application (LCA); or
• A petition for a nonimmigrant worker (Forms I-129/I-129W) based on a previously approved LCA; or
• A request for an extension of H1B status for a nonimmigrant worker based on a previously approved LCA

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How Is An Employer’s H1B Dependency Status Shown On An LCA?

The employer filing an LCA is obliged to select its status by marking the applicable boxes on ETA Form 9035/9035E in Part I.

If the employer selects the designation of “H1B-Dependent”, the employer must then designate whether the LCA is for an exempt H1B worker or must agree to the additional attestations regarding the recruitment and displacement of US workers.

IMPORTANT
Whenever an employer’s H1B dependency status changes, the employer is not allowed to re-use the relevant LCA for any future cases, including extensions and/or amendments.

For example, an employer who was H1B dependent files a 3-year LCA but the H1B is approved for 1 year. A year later, the employer is no longer H1B dependent. That employer must file a new LCA for the H1B extension regardless of the fact that the previous LCA is still valid.

In such situations, the employer must file a new LCA precisely designating its new status and shall use that new LCA for supporting new petitions or requests for extensions of status.

Who Is An ‘Exempt’ H1B Worker?

An H1B nonimmigrant worker is ‘exempt’ if he or she:

• Will receive wages (including cash bonuses and similar compensation) at an annual rate of $60,000 or higher; or
• Has a master’s degree or higher or its equivalent in a specialty related to the intended employment.

DID YOU KNOW?
Employers who either commit a willful failure or a misrepresentation of a material fact in relation to LCA attestations are called ‘Willful Violators’. These employers are generally required to comply with all additional attestations for a period of 5 years after the willful finding violation, regardless of their H1B dependent status.

Is There A Simple Way To Determine Dependency?

Yes. If an employer’s dependency is not readily visible or is borderline, the employer can use the ‘snap-shot’ test.

The Snap-shot Test:

• Requires a comparison of the total number of all H1B workers with the number of the total workforce (including H1B workers)
• If a small employer’s snap-shot computation shows that the employer is dependent or if a large employer’s calculation exceeds 15% of its workforce, the employer must then fully calculate its dependency status.

IMPORTANT
The full calculation must take into account the total number of H1B workers (including the full-time and part-time workers) and the total workforce of the employer in the United States (including both U.S. workers and H1B workers) and must be assessed according to full-time equivalent employees.

If it is readily apparent that the employer is or is not dependent, no further documentation is required. For example, if an employer has 30 employees and 18 are H1B workers, it is readily apparent that the employer is H1B dependent.

My Case Scenario
Felix

Using the snapshot method as a starting point we find that with 133 employees, they can have no more than 19.95 H1Bs. Since they have 20 H1B employees they are over the threshold and have to make complete calculations based on FTEs (full time employees) and taking into account any ‘exempt’ H1B employees. Just over half of the H1B consultants (12) make over $60,000 per year. When they are taken out of the equation FountainHead LLC is not H1B dependent and does not have to take the additional steps required of dependent employers.

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Conclusion

The Department of Labor takes the matter of H1B dependency very seriously, and H1B dependent employers are likely to land in serious trouble if they merely check boxes on the forms or sign factually incorrect forms without a clear understanding of the regulations.

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