H-1B: who pays the fees?
The Department of Labor (DOL) and the USCIS have recently increased site visits to H-1B employers to determine compliance with immigration regulations. One common line of inquiry pertains to the payment of attorney and filing fees during the application process.
At present, the USCIS filing fee for H-1B visa processing has up to four components.
|1.||I-129 Petition for Nonimmigrant Worker -- $325|
|2.||ACWIA (American Competitiveness and Workforce Improvement Act) fee -- $750 for an employer with 25 or fewer employees, otherwise $1,500|
|3.||Fraud Prevention and Detection fee -- $500|
|4.||Premium Processing fee (optional) for a decision in 15 days -- $1,225|
Fee Payment Regulations
In the past, some employers may have asked the foreign worker to pay the ACWIA fee, or deducted it from the person’s paycheck. However, this practice does not comply with regulations, and a company found to be in violation may face a fine and suspension from the H-1B program.
The USCIS does not have any specific regulations relating to other fee components. However, the DOL’s regulations state that an employer may not deduct its business expenses from a foreign worker’s pay if it causes the employee’s wages to fall below the required wage level. The DOL defines “deduction” to include both payroll deductions and direct payments to an attorney or USCIS by the H-1B employee.
In the past, the common view was that the H-1B employee could pay attorney and filing fees if he or she was paid well above the prevailing wage. However, the regulation states that employers may not deduct filing expenses from the worker’s pay if it will reduce his or her compensation below the required wage.
The prevailing wage is the compensation level that the DOL specifies for a given position in a given area. Employers must actually pay the required wage, defined as the higher of either the prevailing wage or the actual compensation given to similarly situated employees. In many cases, the required wage may be significantly higher than the prevailing wage.
USCIS is now applying the DOL rule very strictly in its adjudications. As a result, the H-1B employer be sure to pay all fees associated with the preparation and filing of H-1B petitions. Several administrative and judicial decisions have recently affirmed this interpretation.
It could be argued that the premium processing fee (for a decision within 15 days) and the fee to process an H-1B visa overseas (if the employee is not already present in the U.S.) are the alien worker’s personal obligations rather than employer business expenses. However, recent DOL decisions have expanded the definition of employer business expenses. As a practical matter, deducting or recovering any fees from an H-1B worker may trigger a DOL inquiry. Even if the final decision favors the employer, the time, money and distraction involved in litigating this issue far exceeds the potential benefit.
Increased H-1B-related Audits
Employers should note that the number of H-1B audits conducted by the USCIS Office of Fraud Detection and National Security (FDNS) continues to rise. An FDNS investigator may arrive unannounced at either the employer’s main place of business or the H-1B employee’s place of work as listed on the H-1B petition. Upon arrival, the investigator will speak with the person who signed the H-1B petition to verify the information submitted.
Next, the investigator may ask to speak with the H-1B worker. One of the questions that may be asked is whether the H-1B employee paid any of the H-1B filing fees or attorney fees. If USCIS believes or suspects that a worker has paid some or all of the fees, this information may be shared with DOL and an inquiry may be launched.
The DOL’s Wage and Hour Division (WHD) conducts inquiries relating to H-1B petitions. DOL investigators generally look for failure to pay the required wage and improper fee payments by the worker. If any wage deduction or payment by the foreign worker is discovered, the DOL the employer may be fined and barred from filing any further requests with the DOL for several years.
Employers must understand the risks and penalties associated with requiring or enabling an H-1B employee to pay for any part of the H-1B processing. In the current environment, the best way to avoid trouble is for the employer to pay all filing and legal fees.