In early August, USCIS released a memorandum defining the terms “affiliate” and “subsidiary” used in determining the American Competitiveness and Workforce Improvement Act (ACWIA) fee amount for H-1B petitions. Under the ACWIA, petitioners with 25 or fewer full-time employees (FTE) must pay a fee of $750 per H-1B petition, while petitioners with more than 25 FTE must pay a fee of $1,500 per H-1B petition. The funds collected provide U.S. citizen workers, permanent resident workers, and others the opportunity to receive job skills training.
Originally, vague guidelines for “subsidiary” and “affiliate” created confusion for both adjudicating officers and petitioners when determining the official number of employees for determining the fee amount. Some companies may have 15 employees as a single entity, but 27 employees with included subsidiaries and affiliates. The memo, which mirrors the L-1 definition, provides the following clarifying definitions for “affiliate” and “subsidiary”:
- Affiliate: “(1) [o]ne of two subsidiaries both of which are owned and controlled by the same parent or individual, or (2) [o]ne of two legal entities owned and controlled by the same group of individuals, each individual owning and controlling approximately the same share or proportion of each entity.
- Subsidiary: “a firm, corporation, or other legal entity of which a parent owns, directly or indirectly, more than half of the entity and controls the entity; or owns, directly or indirectly, half of the entity and controls the entity; or owns, directly or indirectly, 50 percent of a 50-50 joint venture and has equal control and veto power over the entity; or owns, directly or indirectly, less than half of the entity, but in fact controls the entity.”
Going forward, each H-1B petitioner should add all the FTE working directly for them and the FTE working with their subsidiary or affiliates of subsidiary to reach the correct number of FTE to determine the correct ACWIA fee. Case adjudicators will consider the full-time employment numbers based off these newly defined guidelines through the investigation of information provided during the petition (e.g. tax returns, employee records, public information).