• Companies with 25 or fewer full-time equivalent (FTE) employees in the U.S. are considered H1B dependent if they employ eight or more H1B nonimmigrants.

• Companies with 26-50 FTE employees in the U.S. are considered H1B dependent if they employee 13 or more H1B workers.

• Companies with 51 or more FTE employees working in the U.S. are categorized as H1B dependent if 15 percent or more of their total full-time equivalent employees hold H1B status.

Nuances : Full-Time Equivalent and Single Employer
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As can be seen by the basic definition of H1B dependent, there are some nuances with regard to this determination. An FTE employee is determined based upon the employer's records, including the number of hours worked by the individual. The regulations contain instructions regarding this calculation. If this is a concern, the matter should be carefully reviewed with the assistance of a qualified immigration attorney. The consideration includes only persons directly employed by the employer, and excludes bona fide consultants and independent contractors. Full time is considered 40 hours of work per week or more, unless the employer can show that their standard work week is fewer than 40 hours. The minimum allowed is 35 hours per week, for this purpose. The work of part-time employees is aggregated, to determine the number of FTE employees.
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In determining whether a group of companies is to be treated as a single employer for H1B-dependency purposes, the DOL's rules reference the Internal Revenue Code. Groups of companies that are treated as a single employer for IRS purposes will be treated as a single employer for H1B dependency purposes. This should also be reviewed and analyzed, if there is any uncertainty.
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Two Categories of Exempt H1B Employees
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If H1B dependent, an employer is subject to additional requirements, including recruitment of U.S. workers and attestations as to non-displacement of U.S. workers. There is an exception to this for a particular employee if the employee is considered exempt. Exempt H1B employees are those who are either paid an annual salary of at least $60,000, or who have at least a master's degree or equivalent in a field related to the job. Employers should be prepared to document eligibility for any use of the exempt employee exception, should the DOL question the use of these provisions. Employers who have received Troubled Asset Relief Program (TARP) funds are not eligible for this exception for exempt employees, as explained in our April 3, 2009 MurthyBulletin NewsBrief, USCIS Clarification on H1B Requirements for TARP Fund Recipients, available on MurthyDotCom.
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To enjoy the benefits of the salary exemption, the worker must actually receive hourly or annual wages of at least $60,000 during the year/s covered by the LCA. If an employee works less than the full year, s/he must receive at least the pro-rated portion of the $60,000. This would be appropriate when the employment starts after the beginning of the calendar year. Employers must be careful in such cases. While, in general, an employer may not be obligated to pay wages to an H1B worker who travels abroad or takes an unpaid medical leave, the exempt worker must be paid at least $60,000 annually. Thus, even if an exception to the payment obligation might otherwise apply, in order to remain exempt from the H1B-dependent obligations, the employer must pay the exempt worker at least $60,000 for the year.
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The other exemption applies to workers who have masters' or higher degrees (or the equivalent) in specialties related to their respective employment. Equivalency can only be shown by a degree that is equivalent to the U.S. master's degree (or higher). For this purpose, the DOL does not permit the exemption to be claimed based upon experience or expertise in the academic specialty. The degree must be in a specialty that is related to the intended employment. This is defined as a degree generally accepted in the industry or occupation as appropriate or necessary for the employment in question.
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Changes in Workforce and Dependency Status
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There are times when an H1B employer may change from not being considered H1B dependent to becoming H1B dependent. This can occur if there are changes in the size of the total workforce, the number of H1B workers employed, or a combination of these factors. If this arises, it is not necessary to re-file LCAs for existing H1B workers, as long as their LCAs were properly filed. The company simply needs to indicate the H1B dependency on any new LCAs that are filed. The law does not require that the public access file include any explanation for the change. However, employers must always be able to document that their LCAs have been correctly filed.
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Conclusion
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The status of a company as H1B dependent or not must be considered carefully. There are significant additional obligations placed upon H1B-dependent employers. Employers must appreciate the significance of the selections regarding H1B dependency on the LCAs, and must obtain appropriate guidance on these matters. The DOL takes the issue of H1B dependency seriously, and employers are likely to run into problems if they simply check boxes on the forms or sign incorrect forms without giving careful thought to the content. The Murthy Law Firm has worked extensively with issues of H1B dependency, and is ready to help employers understand and comply with H1B requirements for their own protection and the safety and status of their H1B employees. We wish to aid employers in maintaining the integrity and ethics of the legal system within which we all operate and from which we benefit.

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