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President Bush Signs Law Raising Number of H-1B Visas, Hiking Visa Fees, & Limiting L-1B Visas

  • December 9, 2004

Among the many provisions of the FY 2005 Omnibus Appropriations Act, H.R. 4818, signed into law by President Bush on December 8, 2004, are an increase of the annual H-1B visa cap by 20,000 visas, a limitation on the placement of L-1B visa holders at third-party worksites, a new H-1B visa fee of $1,500, and a new "fraud prevention fee" of $500 for H-1B and L-1 visas.

Increase of 20,000 H-1B Visas

The H-1B Visa Reform Act of 2004, and Public Law 118-441 (Dec. 3, 2004), exempt from the annual numerical limitation on H-1B visas 20,000 graduates of U.S. universities or colleges who have earned a master's or higher degree. 

  • USCIS has indicated that in each fiscal year the first 20,000 H-1B visa beneficiaries who have earned a master's or higher degree from a U.S. institution of higher education will not be subject to the Congressionally mandated annual cap of 65,000 H-1B visas.  After these slots have been filled, petitions on behalf of holders of U.S. advanced degrees will be counted against the cap.
  • In FY2005, USCIS will accept an additional 20,000 petitions on behalf of beneficiaries holding a master's or higher degree from a U.S. institution.  Petitions cannot be filed at this time as the provision does not become effective until March 8, 2005.  USCIS will provide additional guidance on eligibility and the petition process at a later date.

Limitation on Assignment of L-1B Visa Holders

The L-1 Visa Reform Act of 2004 prohibits L-1B intracompany transferee specialized knowledge employees from being placed at an unaffiliated third party's worksite if the unaffiliated third party controls and supervises the employee or if such placement is essentially an arrangement to provide labor for hire to the third party rather than a placement in connection with the provision of a product or services for which specialized knowledge specific to the petitioning employer is needed.  This change will apply to all new L-1B visa petitions filed with USCIS on or after June 6, 2005.  It will also apply to extensions and amendments of petitions for persons presently in L-1 status.

The Act also extends the period of prior continuous employment abroad required for blanket L visas from six months to one year. Previously, beneficiaries of "blanket" petitions could obtain L-1 visa after only six months of qualifying employment. This change will apply to initial L-1 visa petitions filed with USCIS on or after June 6, 2005.  USCIS has announced that it will be issuing guidance and regulations on these changes at a later date.

Higher H-1B and L-1 Visa Fees

The Act imposes an additional $1,500 fee on each H-1B visa petition.  Petitioners employing no more than 25 full-time equivalent employees, including employees of any affiliate or subsidiary, are subject to a reduced fee of $750.  Certain types of petitions exempted from the prior $1,000 retraining fee which expired in 2003 will be exempted from the new fee. The new fees apply to any non-exempt H-1B visa petition filed with USCIS after December 8, 2004. The Act also reinstates the special non-displacement attestation for H-1B dependent employers and willful violators

The funds raised by the new H-1B fee are to be applied to the retraining and education of U.S. citizens, lawful permanent residents, and other U.S. workers. The program administered by the National Science Foundation and the Department of Labor provides job training, low-income scholarships, and grants for mathematics, engineering, or science enrichment courses.

In addition, the Act imposes an additional $500 "fraud prevention and detection fee" on each initial H-1B and L-1 visa petition, each H-1B or L-1 petition to change employer, and each visa application under a blanket L petition.  The visa fraud fee applies only to principal aliens and not to spouses or children.  Also exempted are petitions to amend or extend a petition by an existing H-1B or L-1 employer. The new $500 fee applies to petitions filed with USCIS on or after March 8, 2005.  These fees are in addition to the standard $185 filing fee and the optional Premium Processing fee of $1,000.

Employer Required to Pay 100% of Prevailing Wage

The Act requires employers to pay H-1B visa holders at least 100% of the prevailing wage for their positions, rather than 95% of the prevailing wage as previously. On the plus side for employers, the bill directs the Department of Labor to make available prevailing wage surveys with 4 levels of wages, reflecting experience, education, and the level of supervision. The Act provides a formula for calculating the 2 intermediate wage levels if the Department of Labor provides a survey with only 2 levels. This requirement applies to all DOL prevailing wage determinations, including permanent labor certifications.

DOL Investigation Authority for H-1B Cases Reinstated

The Department of Labor's authority to investigate H-1B cases without a complaint is reinstated and broadened, provided that there is reasonable cause for the investigation. The Act gives employers a safe harbor from technical and procedural failures to comply if the employer made a good faith attempt to comply. The employer must correct any deficiencies within ten business days of notification by DOL. An employer may avoid any penalties or fines for failure to pay the prevailing wage if he can establish that the prevailing wage was calculated consistently with recognized industry standards and practices.

J-1 Medical Graduates Exempted from H-1B Cap

Public Law 108-441 extended the "Conrad 30" program exempting medical graduates on J-1 visas from the two year foreign residency requirement, if requested by a federal or state agency. The Act exempts such medical graduates from the annual H-1B visa cap. For FY2005, employers may submit petitions after December 8, 2004.

©2004 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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