ABCs of H1Bs: Getting Back to the Basics of the H1B Visa

This article was written by the attorneys of the Murthy Law Firm for our corporate clients. If you are an employer or HR manager, interested in the services offered by our firm, contact our Corporate Services Manager.

This set of A&As address many of the basic questions employers have about the H1B visa program. The H1B is generally the primary immigration option that a business considers when it wishes to hire a foreign national for a position that requires at least a bachelor’s degree (or equivalent). However, U.S. immigration law sets a general limit of 65,000 new H1Bs that can be approved during each U.S. government fiscal year. Since each U.S. government fiscal year starts on October 1st, and the demand exceeds the available limit, employers interested in sponsoring a foreign national employee must time their cases appropriately. This limit, or cap, applies to foreign nationals who previously never held H1B status for H1B cap-subject employers. For these employees, employers must be prepared to file the requests, referred to as H1B petitions, to the U.S. Citizenship & Immigration Services (USCIS) as early as April 1st for a start date of October 1st. The April 1st date is appropriate, as H1B petitions may be filed up to six months in advance of the requested start date. If an employee has had an H1B petition approved previously on his or her behalf, the new company interested in employing that individual usually is not subject to the same restrictions that affected the person’s first H1B employer. During our October 2008 teleconference, Murthy Law Firm attorneys discussed the essential concepts that the USCIS applies when looking at an employer’s request to employ a foreign national using an H1B.

Question 1. What is an H1B?

H1B is a nonimmigrant visa category that allows a foreign worker to come to the U.S. and work in a “specialty occupation,” which includes most professional positions. The H1B gives a foreign national permission to work in the U.S. and a status that allows her/him to lawfully remain in the U.S. on a temporary basis. Generally, the maximum period that a worker can be in the U.S. with the H1B is six (6) years, which can be granted in increments of no more than three (3) years at a time. There are exceptions to this rule that accord USCIS the authority to grant an employer’s request for a worker to be approved for more than six years, but these rely upon the foreign worker’s being sponsored for lawful permanent resident (commonly referred to as “green card”) status.

Question 2. What is a specialty occupation?

If the USCIS is to approve an employer’s request for an H1B for a worker, the job must fit the law’s definition of a “specialty occupation.” This means a job that requires the “theoretical and practical application of a body of highly specialized knowledge to fully perform the occupation AND which requires the attainment of a bachelor’s degree or higher in a specific specialty as a minimum for entry into the occupation in the United States.” This will include many professional positions.

The position must require a bachelor’s (or higher) degree in the specific field. The fact that the foreign national possesses a bachelor’s degree does not make that position a specialty occupation. Also, if a position requires a bachelor’s degree in any field, it is most likely not considered a specialty occupation.

Question 3. Who can sponsor and employ workers using an H1B?

Only a U.S. employer may file an H1B petition with the USCIS for an H1B employee. An employer is defined as an entity that: (1) engages a person to work within the U.S.; (2) has an employer-employee relationship that allows it to hire, pay, fire, supervise or otherwise control the work performed; AND (3) has an Internal Revenue Service Tax Identification Number. This definition includes partnerships and sole proprietorships. The U.S. employer must have and retain control of the employment performed by the H1B worker. The USCIS has been issuing many RFEs and denials of H1B petitions for consulting companies by stating the consulting company is not an employer, as defined by law.

Question 4. What is the H1B cap?

The H1B cap is the short-hand term used to refer to the law’s annual limit on the number of new H1Bs that can be issued each U.S. government fiscal year. While the annual limit is set at 65,000, special programs for nationals of Chile and Singapore reduce this number to 58,500. If a foreign national has not worked using the H1B previously, s/he typically seeks one of these new H1Bs.

There are 20,000 additional slots for individuals who have completed a master’s degree or higher education from an accredited U.S. institution of higher learning.

Question 5. Are there any exceptions to this Cap? Are there people who do not have to compete for a new H1B?

The law has a few built-in exceptions to the H1B cap. First, if one was approved for an H1B at any time previously, s/he is generally treated as having received a new H1B and a new company would only be asking for USCIS to grant permission for the employer to use the balance of time out of the total of six (6) years generally available. Second, in certain instances, the job itself may not be subject to the numerical limitation on H1Bs that can be issued. Employment at universities and their nonprofit affiliates, as well as nonprofit and governmental research organizations, has the benefit of this provision of the law. Finally, some physicians are exempt from the cap if the H1B is requested for them to comply with the requirements of waivers granted by the USCIS so that the physician does not have to return to the home country.

Question 6. Is there a particular salary an employer must pay a worker using the H1B?

Yes. An H1B employee must be paid no less than the greater of the prevailing wage or the actual wage for the position.

A prevailing wage is specific to a position within the local area in which the job is to be performed. The U.S. Department of Labor (DOL) has published guidelines on its website that explain how to determine the prevailing wage. Also, an employer can ask the DOL to determine the prevailing wage. The actual wage is the wage paid to all other employees at the work location with similar experience and qualifications for the position with that particular employer.

Question 7. If an employer does not have end-client work for an H1B employee, can the employee be benched?

If H1B employees are “benched” due to the employer’s business reasons (such as the lack of available work), then they must still be paid for the full hours specified on the H1B petition. If an employee is absent for reasons that are not work related, or if the employer grants personal time off under other laws like the Family Medical Leave Act, then absences for such personal or health reasons, will excuse the employer from paying the H1B-mandated prevailing wage.

Question 8. What is the Labor Condition Application (LCA)?

The LCA filed and certified as part of the H1B program should not to be confused with the labor certification, also known as a PERM application and filed as part of the green card process. An LCA for an H1B petition must be certified by the DOL before filing an H1B petition at the USCIS. The DOL is responsible for ensuring that a foreign worker neither displaces nor adversely affects the wages or working conditions of U.S. workers in the same area where the employer intends to locate the H1B employee.

The LCA requires an employer to make a series of attestations (signed under oath with federal criminal sanctions) regarding the correct wage being offered, the work location, working conditions, and termination of U.S. workers in the same position. The LCA may be submitted and certified electronically. A certified LCA must be filed with the H1B petition to USCIS and the failure to include it will generally result in the denial of the H1B petition. As of October 1, 2008, an employer must register with the DOL and establish an online account before it can submit any LCA online.

Question 9. If a company wishes to hire a foreign national in H1B status, who working for somebody else, when can the individual start with the new company?

Under law, a person who is already in H1B status generally is allowed to start working for a new employer upon the filing of the new H1B petition if s/he was lawfully admitted into the U.S., the employer files a good-faith, timely H1B petition, and the foreign national never worked in the U.S. without USCIS permission.

Question 10. Are there special issues regarding H1Bs that affect the IT consulting industry?

The USCIS requires that all the work sites of the sponsored worker be identified in the H1B petition at the time of filing. If an H1B worker is to be placed at end-client sites, those locations of actual employment must be identified and listed on the H1B petition. Also, there must be LCAs certified for the job locations and qualifying employment when the H1B petition is filed. Changes of locations and new LCAs cannot be submitted in response to a Request for Evidence (RFE), if the RFE is asking for proof of the existence of a proper H1B position at the time of filing.

If an H1B worker will be working on specific projects, there should be evidence of that in the form of contracts, purchase orders, or statements of work with the actual end client. Without proving the existence of the work to be performed through independent evidence, the H1B petition could be denied. The USCIS and DOL are concerned about fraud and misuse of the H1B system and the failure of some employers, particularly consulting companies, to pay the H1B employees the required prevailing wage and sending them to work in location/s other than those listed on the LCA/s.

Question 11. What are options for those who spent one year or more outside of the United States after holding H1B status in the U.S.?

An individual who was previously in H1B status, and did not exhaust the permitted six years prior to his/her tenure outside of the U.S. for a year or more, may choose either one of the following options.

  • opt for another six years and be counted against the annual cap for that fiscal year
  • opt to use the balance of the six years remaining from her/his previous period in H1B status and not be counted against the annual cap

Question 12. Can the H1B status be extended beyond the six-year maximum?

Under certain circumstances, extensions beyond the six-year limitation are possible. Such circumstances are:

  • If an application for Alien Labor Certification was filed on behalf of the employee 365 days prior to the end of the six years, H1B extensions may be obtained in one-year increments.
  • If an I-140 petition was approved on behalf of the employee prior to the expiration of the six years, extensions may be obtained in three-year increments if, at the time of requesting the extension, no permanent residency visas are available for the I-140 priority date, according to the U.S. Department of State’s visa bulletin for that month, specifically. There is no limit to the number of these 1- or 3-year extensions, as long as there is a proper basis for requesting the extension/s.

According to a memorandum issued by the USCIS on December 5, 2006, an H1B petition requesting an extension beyond the six-year maximum may be filed on behalf of a beneficiary, even if the beneficiary is not in H1B status at the time of filing. The beneficiary of a 7th-year extension petition may be in another nonimmigrant status or may even be outside of the United States.

Murthy Law Firm Can Support You and Your Business

Although this overview addresses basic H1B issues, it is obvious that seemingly simple H1Bs can be complex. The U.S. Department of Labor is increasing enforcement efforts aimed at LCA violations. The USCIS is scrutinizing petitions and potential H1B employers in great detail, and issuing increased Requests for Evidence (RFEs) as well as denials. The risk is greater when there is an inconsistency in the documents and flaws in the filings. It is always helpful to have the best legal team on your side! The Murthy Law Firm is experienced in assisting a wide range of businesses, large and small, including consulting companies, with the preparation and filing of H1B petitions. We have successfully obtained approvals of H1B cases for all types of employers and in a wide range of eligible occupations. Our attorneys advise the employers and prospective employees on the legal requirements for obtaining approval of the H1B and the types of documents and information required by the USCIS. Given the complexity and scrutiny associated with the H1B program it is important that each H1B petition be well prepared to facilitate filling the business’s need for a particular worker. By utilizing procedures that emphasize attention to detail and service to our clients, we are able to maximize success in the H1B petitions we file to help your business thrive and succeed in this difficult economy. We look forward to working with you to help you succeed in your business endeavors!

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Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.