This article aims to provide valuable information regarding H-1B employers and H-1B-dependent employers under the H-1B program, highlighting the perspectives of both the United States Citizenship and Immigration Services (USCIS) and the Department of Labor (DOL) Wage and Hour Division.

 

Definition of an H-1B Employer:  

 

An H-1B employer refers to any entity, including individuals, firms, corporations, contractors, or other associations or organizations, that files a Labor Condition Application (LCA) (Forms ETA 9035 and/or ETA 9035E) with the Department of Labor's Employment and Training Administration. Additionally, they must file a Petition for a Nonimmigrant Worker (Forms I-129/I-129W) on behalf of an H-1B nonimmigrant with the USCIS. This definition applies universally, irrespective of whether the H-1B employer is considered H-1B-dependent (refer to WH Fact Sheet #62C).  

 

Alternative Definition of an Employer:  The Immigration and Nationality Act introduces an alternative definition of an employer specifically for determining H-1B dependency status. According to this definition, an employer is an entity or multiple entities treated as a "single employer" under the Internal Revenue Code. This includes "controlled groups of corporations," "partnerships, proprietorships, etc., under common control," and "affiliated service groups."  United States Employer Defined in 8 CFR Part 214.2 (h):  Title 8 of the Code of Federal Regulations (8 CFR), Part 214.2 (h), defines a United States employer as a person, firm, corporation, contractor, or other association or organization within the United States that: Engages individuals to work within the United States. Has an employer-employee relationship, demonstrated by the authority to hire, pay, terminate, supervise, or control the work of such employees and possesses an Internal Revenue Service Tax identification number. 

 

It is crucial to note that the Code explicitly states that the employer-employee relationship is determined based on the employer's authority to hire, fire, supervise, or control the work of the employee.  Role of USCIS and Common Law Principles:  USCIS also considers common law principles, such as the conventional master-servant relationship, which emphasizes various factors to assess the "totality of the circumstances." USCIS determines the validity of an employer-employee relationship by examining the petitioner's right of control over the beneficiary and the scope of their work.  

 

LCA Filing During Corporate Entity Changes:  In general, if an H-1B employer undergoes a corporate entity change, a new LCA is not required, provided that the successor entity agrees in writing to assume the obligations and liabilities of the predecessor entity under the existing LCA. The successor entity must comply with the conditions stipulated in the LCA, including wage requirements, place(s) of employment, strike/lockout notifications, exempt H-1B workers (refer to WH Fact Sheet #62Q), and dependency status. Any new paperwork filed with the DOL or USCIS must reflect the legal name of the successor entity.  However, a successor entity must file a new LCA in the following scenarios:  The H-1B worker is assigned to a different occupation than originally adjudicated by USCIS. The H-1B worker is placed at a job site not covered by the existing LCA. All the aforementioned requirements can be found in 20 CFR § 655 Subparts H & I and the Immigration and Nationality Act § 212(n).  

 

Understanding H-1B-Dependent Employers:  This section provides general information about H-1B-dependent employers within the H-1B program. An employer is considered H-1B-dependent if:  They have 25 or fewer full-time equivalent employees and employ at least eight H-1B nonimmigrant workers. They have 26-50 full-time equivalent employees and employ at least 13 H-1B nonimmigrant workers. They have 51 or more full-time equivalent employees, of whom 15% or more are H-1B nonimmigrant workers. Determining Dependency Status:  An employer must determine whether they are H-1B-dependent when filing:  A Labor Condition Application (LCA) A Petition for a Nonimmigrant Worker (Forms I-129/I-129W) based on an LCA A request for an extension of H-1B status for a nonimmigrant worker based on an LCA. Employers with apparent H-1B-dependent status need not calculate their dependency status.  

 

Calculating Dependency Status:  For employers with non-apparent or borderline H-1B dependency, a "snap-shot" test can be used for initial comparison. This test involves comparing the total number of H-1B workers to the total workforce (including H-1B workers). If a small employer's snap-shot calculation indicates dependency, a comprehensive calculation must be performed. Large employers must fully calculate their dependency status if the percentage of H-1B workers exceeds 15% of their total workforce.  

 

Determining Dependency for Employers Using the Internal Revenue Code (IRC) "Single Employer" Definition:  Employers classified as IRC "single employers" should follow the snap-shot test and/or full calculation (if applicable) as described above to determine their H-1B dependency. It is important to note that the DOL Wage and Hour Division will not penalize employers for failing to perform the snap-shot test if all entities constituting the single employer are readily determined to have non-dependent status. However, this enforcement policy does not affect the right of aggrieved parties to challenge an employer's failure to perform the snap-shot test.