| The H-1B Law - A Brief Analysis |
by: Carl Shusterman, Attorney-At-Law
Starting on December 1, 1998, employers of H-1B professionals need to pay $610 instead of the previous $110 every time that they (1) submit an initial petition for an H-1B worker; (2) submit the first application for an extension for an H-1B worker; (3) petition for concurrent employment for an H-1B worker. University (and affiliated entities), non-profit and governmental research centers are exempted from the additional $500 fee.
These fees are earmarked largely to finance job training for U.S. workers, university scholarship for low-income student in the math, engineering and computer science, and math and science training in elementary and secondary schools. A small percentage of the fees will be given to DOL and INS to, among other things, reduce LCA processing to the legally-required 7 days, and to process H-1B petitions within one month.
As soon as the Labor Department issues final regulations, the law requires "H-1B dependent employers", generally those with 15% or more H-1B employees in the workforce to attest to two additional requirements on their LCA's. These employers will have to comply with both the (1) recruitment attestation and the (2) displacement ("no lay-off") attestation. The recruitment attestation requires these employers to use good faith efforts to recruit U.S. workers if they are equally qualified with H-1B employees for a particular job opening. Both objective and subjective factors may be considered in determining who is better qualified. The displacement attestation requires these employers to promise that they will not submit a petition for an H-1B worker for a position where a U.S. worker has been laid-off within the past 90 days or where a U.S. worker will be laid-off within the next 90 days.
Additional attestations and increased enforcement and penalties are provided for all employers of H-1B workers. Basic fees start at $1,000 per violations plus at least one year debarment. Willful violations begin at $5,000 per violation and at least two years debarment. Certain severe violations are punishable by $35,000 per violations plus at least three years debarment.
For the first time, the Labor Department is given the authority to initiate investigations on LCA violations in the absence of a complaint filed an aggrieved party. Where an employer has been found to have willfully violated an LCA, the DOL is allowed to initiate random investigations against the employer for the next five years. More importantly, where the DOL receives "specific, credible information" that an LCA violation has occurred, given the approval of the Secretary of Labor, the DOL may, if there is "reasonable cause", initiate a 30-day investigation against the employer. Such information need not be provided by a complainant, but may even be developed in the course of a routine audit by one of DOL's operating divisions.
Despite the increased numbers, all in all, the new law is, at best, a mixed blessing for employers of H-1B professionals. The only group of employers which emerge as clear winners are colleges and universities (and affiliated entities), and nonprofit and governmental research organizations. Not only are these organizations exempt from the new fees, they are no longer required to match the wages of for-profit organizations in order to petition for H-1B workers. They are permitted to pay a "prevailing wage" which is comparable to other similar organizations in their geographical area. This method for determining the prevailing wage is valid for both H-1B status and for permanent residence. In addition, the rules for "academic honoraria" for professors entering the U.S. as visitors have been amended to provide universities with greater flexibility.
H-1B professionals who have not yet applied for permanent residence should consider doing so immediately. With no increase in the number of green cards, and with an additional 142,500 H-1B slots opening up over the next three years, employment-based preference categories for India, PRC, and possibly the worldwide category are sure to become increasingly backlogged. The name of the game is to obtain the earliest possible priority date.
Apply for permanent residence now!