In December 2004, the Omnibus Appropriations Act for fiscal year 2005 (the “Act”) was signed by President Bush and contains provisions affecting the H-1B and L non-immigrant visa categories. The implement changes are both procedural as well as substantive. We have prepared this Client Alert as a general summary of the new regulations for your convenience. Please contact us to discuss any specific visa concerns that you may have.
H-1B Visa Reform
Immediate Fee Increases. The Act reinstates the training fee originally imposed by the American Competitiveness and Work Force Improvement Act of 1988 and raises it to $1,500.00. Petitioners (including any affiliate or subsidiary) employing 25 or fewer full-time equivalent employees may pay a reduced fee of $750.00. As was previously the case, certain types of petitions may still be exempt from the reinstated fee. The fee applies to any non-exempt petitions filed for H-1B status after December 8, 2004.
Fraud Fee effective March 8, 2005. In addition to the reinstated H training fee, a fraud prevention and detection fee of $500.00 has been created. This fee must be paid by all H and L employers submitting petitions for an initial grant of H-1B or L non-immigrant classification or to change a beneficiary’s employer within those classifications. The fraud fee will only apply to principal foreign nationals and not to dependent spouses or children. This new fee applies to petitions filed on or after March 8, 2005.
Additional H visa availability for Fiscal Year 2005. As we alerted last fall, the H visa cap was reached for Fiscal Year 2005 in October 2004. The Act has created a new category of petitions not subject to this H cap. Starting on March 8, 2005, CIS will accept petitions for additional H-1B beneficiaries who have earned a master’s degree or higher from a US institution of higher education. The first 20,000 petitions are not subject to the H-1B visa cap and may be approved for employment start dates in this fiscal year. We recommend that employers and foreign nationals act quickly to benefit from this exemption.
Increased Prevailing Wage Requirement. Beginning on March 8, 2005, the wage offered on all H-1B petitions must be 100% of the prevailing wage or the actual wage, whichever is higher. This is a change from the previous requirement that employers need to pay at least 95% of the prevailing wage.
Increased Investigative Authority. The Act reinstates and expands certain investigative authority of the Department of Labor to initiate investigations of employers in the event that it has reasonable cause to believe that the employer is not in compliance.
Conrad 30 Extension. In addition to the Act, Public Law 108-441 was passed on December 3, 2004 and extends the Conrad 30 J-1 program. The Conrad 30 program allows certain medical graduates in the United States on J-1 exchange visa programs to be exempt from the H-1B cap when receiving a waiver of the two-year home residency requirement if requested by a federal or state agency. The new law adds that physicians sponsored by the Department of Veterans Affairs are not required to practice in a health shortage area, and in the case of a waiver request to an interested State agency may qualify if the facility serves patients who live in an underserved area -- even if the facility itself is not located in such an area.
L-1 Visa Reforms
Fraud Fee effective March 8, 2005. As with the H-1B, employers submitting applications for either an initial grant of L-1 classification or an L change of employer petition will be required to submit to CIS a $500.00 fraud prevention and detection fee. This fraud fee will be charged to a foreign national filing a visa application abroad for an L blanket petition as well. The fraud fee will only apply to principal foreign nationals and not to dependent spouses or children. This new fee applies to petitions filed on or after March 8, 2005.
Third party work sites. Foreign nationals in L-1 visa status may only be placed at third party work sites so long as (i) the foreign national continues to be controlled and supervised by the petitioning employer and (ii) placement at the third party site is in connection with the provision of a product or service involving specialized knowledge specific to the petitioning employer and is not part of an arrangement to provide labor for the third party.
Increase in Qualifying Period of Employment under Blanket Petitions. The Act changes the qualifying employment period for certain L-1 inter-company transferees applying for visas under an L-1 blanket petition. Previously, foreign national transferees under a blanket petition were only required to have 6 months of employment with the qualifying entity abroad. This reduction has been deleted. As a result of the Act, all prospective inter-company transferees, whether applying by individual petition or under a blanket application, must have been employed by the qualifying employer abroad for at least one (1) year in the three (3) years prior to the date of filing the petition.
The foregoing is a summary of certain provisions of the Act which amend aspects of the H-1B and L-1 visa categories. Please contact us to discuss your specific personnel needs.