NewsFlash!
Omnibus Bill Not Yet Passed – H1Bs and L-1s to be Affected
Posted Nov 22, 2004

Many MurthyDotCom and MurthyBulletin readers have been watching for Congressional action to address the H1B cap. There has been an important development in this matter. We at The Law Office of Sheela Murthy, P.C. have learned that the Fiscal Year 2005 Omnibus Appropriations Bill has passed both the House and Senate. It is important to understand that the bill will not be a law unless and until the President signs it into law. Therefore, no provisions of the bill will apply until such time. There is some ongoing wrangling over certain tax provisions in the Bill, H.R. 4818, which may impact the timing of the enactment of this legislation. Additionally, the effective date of most of the H1B provisions is 90 days following the enactment of this law. The H-1 provisions relating to certain filing fees for H1Bs are expected to be effective immediately upon signing. The L-1 provisions are slated to be effective 180 days after the enactment of the Bill.

H1Bs

Additional Exemptions

Many MurthyDotCom and MurthyBulletin readers have been contacting our Office to determine whether 20,000 new H1Bs are available. Some have read news reports to this effect from certain journals and papers circulating in India. The legislation contains provisions that will open up more H1Bs to some applicants. However, at this time no additional H1Bs are available because the Bill has not been signed into law by the President. If it is signed into law, the measure will exempt up to 20,000 foreign nationals with Masters' degrees or higher from U.S. institutions of higher education from the H1B cap. Even if the Bill is signed, this provision is not expected to be effective until 90 days after the date it is signed into law.

Additional H1B Fees

There are other consequences of this H1B relief. Employer attestations will be reinstated. The employer-funded training fee will also be reinstated. This fee, which was previously $1000 per new H1B petition, will increase to $1500 per H1B petition. This is separate from, and in addition to the USCIS filing fees and the optional $1,000 premium-processing fee! Employers with fewer than 25 full-time employees in the United States will only pay half of the standard new fees, so will pay $750 per new H1B petition instead of $1500.

There is also a $500 Fraud Prevention and Detection fee that will be paid for initial H1B and L-1 petitions and for change-of-status petitions. Therefore, filing an H1B petition will be much more expensive after this Bill becomes the law.

Prevailing Wage Requirements

Further, the employer will be required to pay 100% of the prevailing wage. Previously, there was a 95% rule to allow for some flexibility in cases where an employer was allowed to pay 95% of the government-determined prevailing wage. However, the governmental survey will have at least four levels rather than the current two levels. Alternatively, there will be a formula to calculate the additional two levels if the government has only provided a two-level survey.

DOL Investigations

The DOL is also given enhanced investigative authority to initiate investigation of employers where there is reasonable cause to be believe the employer is not in compliance.

L-1s

Contract Placement

The legislation would tighten the L1B requirements with respect to the location of the L1B work. L1Bs would be prevented from being primarily stationed at the worksite of another employer under two circumstances. The first of these prohibited placements is when the L1B visa holder is supervised and controlled by an unaffiliated employer. The second circumstance is if the L1B would be providing labor for the other employer rather than providing a product or service based on the specialized knowledge of the petitioning employer. These provisions would apply to initial, extended, or amended L-1 petitions filed on or after the effective date, which is expected to be 180 days after the Bill is signed into law.

L-1 Blankets

The reduced six-month period of work abroad requirement for certain beneficiaries of L-1 blanket petitions would be eliminated and the one-year requirement for work abroad would be reinstated.

At The Law Office of Sheela Murthy, we are watching the developments in this area very closely and will continue to update MurthyDotCom on this important topic.