GT Alert

H-1B and L Nonimmigrant Provisions Pass House, Senate

November 2004
By Elissa M. McGovern, Greenberg Traurig, Tysons Corner Office

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On Saturday, November 20, 2004, the House and Senate both passed HR 4818, the Consolidated Appropriations Act of 2005. Division J of that bill contains some of the most significant work-related nonimmigrant visa provisions that have been enacted in the recent past. GT attorneys worked closely with Congress in the drafting and negotiating of this legislation.

"It will benefit now and in the future those who have attained a US master’s or higher degree, enabling US employers to reap the benefit of those who obtain advanced degrees here."

The Senate has passed H.R. 4818, but will not present it to the President until the House (which is returning on December 6) passes a technical amendment (which already has been agreed to) fixing an unrelated issue. It will then take a few days for the bill to be sent to the President for his signature. Most provisions become effective 90 days after enactment, although a few have different effective dates (which are noted below).

This bill, if implemented in a timely manner by CIS, has the ability to make available additional H-1B numbers in this fiscal year. This will be of significant benefit to those who were shut out this year or taken by surprise by this year’s early reaching of the 65,000 annual numerical limit. It will benefit now and in the future those who have attained a US master’s or higher degree, enabling US employers to reap the benefit of those who obtain advanced degrees here. In exchange, former fees paid by employers for the privilege of employing H-1Bs have been resurrected and expanded to include new fees and new categories, making the hiring of an H-1B nonimmigrant a more expensive proposition.

The immigration provisions include:

Changes to the L nonimmigrant classification

Intracompany transfers of persons with specialized knowledge (L-1B visa holders) have been the subject of controversy in the last two years. In response to that controversy, Congress has now imposed a limit on the workplace of L-1Bs.

1. Limits on Worksite. L-1B visa holders are prohibited from being stationed at a worksite in the US of an unaffiliated employer (an employer other than the parent, sub, affiliated entity or the petitioner) if either (a) the alien will be controlled or supervised principally by the unaffiliated employer or (b) the placement of the L-1B is part of an arrangement merely to provide labor rather than in connection with the provision of a product or service for which specialized knowledge specific to the petitioner is required. This provision will be effective for applications filed on or after 180 days after the enactment.

Other provisions covering L nonimmigrants include:

1. Time spent in employment abroad. The 6 month requirement of pre-employment for blanket Ls and returns to the one-year requirement of pre-employment. Effective only to initial petitions filed 180 days after enactment.

2. New fee. Ls will be subject to a new, one-time “fraud prevention and detection fee” of $500 on all initial petitions. The fee is paid at the time of the initial petition; for persons applying through blanket Ls, the fee will be paid at the consulate. Effective date: Applies to petitions 90 days after enactment.

3. Statistics. DHS will be asked to keep certain statistics on L visa usage, including the number of L-1B nonimmigrants and the subset of those working primarily at the worksites of unaffiliated employers.

4. Task Force/IG Report. Both an Inspector General report on L visa abuses and the establishment of a task force to implement the recommendations of the IG report are included.

Changes to H-1B Nonimmigrants

1. Exemption of Certain Aliens from the Numerical Limitations. In a provision that will be the most complicated in terms of implementation, Congress required the additional exemption from the annual numerical cap on H-1B visas of graduates of US universities who have earned a master’s or higher degree from an institution of higher learning. That exemption, however, will be limited to 20,000 annually.

This provision becomes effective 90 days after enactment. How it is implemented for this fiscal year, however, is already a subject of significant conjecture. CIS could apply this retroactively for petitions filed in FY2005 (those petitions filed from April 1, 2004 to October 1, 2004, when the cap of 65,000 was reached). It is a two-part process requiring that CIS first recapture any numbers of the already-approved H-1B petitions which count as exempt cases, and then permit filing of new petitions in this fiscal year (for both exempt cases, if any are left over, and of any cases until the cap is again reached). GT will work with CIS to ensure that this provision is implemented in as broad a manner as possible.

"The bill makes permanent the training fee for H-1B petitions that previously sunset, increases the fee, and changes the allocations of the fee as well."

2. Education and Training Fees. These fees, which sunset in 2003, have now returned. The bill makes permanent the training fee for H-1B petitions that previously sunset, increases the fee, and changes the allocations of the fee as well.

The amount of the Education and Training fee will now be $1500 for employers with more than 25 full-time employees; employers with 25 or fewer employees will have to pay a fee of only $750. The determination will be left to include any affiliate or subsidiary of the employer. This section will be effective upon enactment, which will lead to significant confusion at CIS with the intake of petitions after the President signs the bill. Employers are advised to plan to include this check with their petitions.

3. Fraud Detection and Prevention Fee. As with L-1 visa applicants, H-1B petitions will now be subject to an additional, one-time fee of $500 on all initial H-1B and L petitions. The fee will be required in all port cases. It is to go to a fund for DHS, DOS and DOL for anti-fraud activities. This provision is effective 90 days after enactment.

4. Changes to Prevailing Wages. The 5% differential that has been permitted for variation of the required wage and the prevailing wage will be eliminated. To compensate, DOL has been instructed to create a four-tier prevailing wage system commensurate with experience, education and level of supervision.

5. H-1B Dependency. H-1B dependent workers, first added to the lexicon in 1998 and who sunset as a general issue in 2003, are now back - permanently. Section 22 of Subtitle B makes permanent the non-displacement and recruitment attestations for H-1B dependent employers. This will be effective 90 days after enactment.

6. Additional H-1B sections: the bill also makes changes to the DOL investigative authority where the is reasonable cause to believe that the employer has violated the terms of an H-1B visa. In addition, the good-faith defense is now applicable to some H-1B violations, where there is a “technical violation” and the employer will be given a 10-day period to correct technical deficiencies.

Many of these provisions will require some notice from CIS or DOL to be implemented; others will require regulatory language. Others, such as the return of the training fee, become effective upon enactment. GT will keep you informed of the enactment and the implementation of the various provisions as it happens.

© 2004 Greenberg Traurig

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