What's New with H-1Bs and L-1s?

On December 8, 2004, President Bush signed into law the L-1 Visa and H-1B Visa Reform Act. This Act makes significant changes to the H-1B visas.

1. The Act imposes a $500.00 fraud fee which must be paid with the initial filing for either H-1B or L-1 visas. This fee will go into effect on March 8, 2005.
2. The Act re-imposes the training fee on H-1B filings and raises that fee to $1,500.00 (Employers who employ 25 or fewer full-time equivalent¹ employees pay only $750.00. The Act requires that all employees be counted, including those working at any affiliate or subsidiary of the petitioning employer.). This fee is effective immediately.
3. The Act also changes the prevailing wage requirements for H-1B visas. Employers will now be required to pay 100% of the prevailing wage as determined by the Department of Labor. This requirement goes into effect on March 8, 2005.
4. The Act restores the concept of H-1B dependent employers and consequently restores the "non-displacement" requirement on those employers. Generally, an employer is H-1B dependent if H-1B workers comprise 15% or more of its workforce. These employers are prohibited from displacing US workers with H-1B workers for 90 days before and after the filing of the H-1B petition.
5. The Act gives the Department of Labor additional investigative authority.
6. The Act exempts from the H-1B quota 20,000 visas for individuals who have a minimum of a Master's degree from a US college or university.
7. The Act prohibits L-1s from being placed at worksites of employers other than the petitioning employer, if they will be controlled and supervised principally by the nonpetitioning employer, or the placement is essentially an arrangement to provide labor for hire. This change applies to all L-1s, including those filed before December 8, 2004.
8. The Act restores the 1-year employment requirement to L-1s. This change applies only to petitions for initial L-1 filed on or after December 8, 2004.

¹ A determination of “full-time equivalent” requires that the weekly hours of all part-time employees be added up. That sum must then be divided by 40, and the result added to the total number of full-time employees.