When there is not a sufficient supply of highly skilled workers in the United States, companies can fulfill demand through sponsoring foreign nationals through the H-1B program. For companies in high tech industries, which require years of advanced training and understanding of complex computers systems, the H-1B program is a vital tool in maintaining a competitive edge in today’s global economy. However, those companies that opt to participate in the H-1B program must be conscious of the proportion of their foreign workforce, or risk becoming labeled as a H-1B Dependent Employer.
What is an H-1B Dependent Employer?
According to federal regulation, an employer is considered dependent on H-1B employees if the following applies:
- 25 or fewer full-time equivalent employees and at least eight H-1B nonimmigrant workers
- 26 – 50 full-time equivalent employees and at least 13 H-1B nonimmigrant workers
- 51 or more full-time equivalent employees of whom 15 percent or more are H-1B nonimmigrant workers.
Every potential H-1B employer must file a Labor Conditions Application, or LCA, which includes a section for employers to identify their H-1B dependency status. Both fulltime and part time employees are included in determining H-1B dependency status.
Special Requirement for H-1B Dependent Employers
Once an employer is identified as H-1B dependent by the LCA, several new conditions apply to any additional H-1B petition. Under the American Competitiveness and Workforce Improvement Act (ACWIA), employers that are H-1B dependent must declare that they have not displaced or fired a U.S. worker in a similar position before hiring an H-1B employee. Moreover, H-1B dependent employers may not displace a U.S. worker, in a similar position, within its own workforce 90 days prior and 90 days after the filing of the H-1B petition. In addition, H-1B dependent employers may not place H-1B employees in a position with a subsidiary or affiliate if the transition would displace a similarly situated U.S. worker. H-1B dependent employers must also continue to make efforts to attract U.S. workers and prioritize U.S. workers when recruiting for new or open positions. According to ACWIA, H-1B employers are exempt from these attestations/conditions only if the potential new H-1B employee receives wages (including cash bonuses and similar compensation) at an annual rate equal to at least $60,000 or the H-1B employee has attained a master’s or higher degree (or its equivalent) in a specialty related to the intended employment.