Frequently Asked Questions for H-1B Dependent Employers

When should it be determined whether an employer is an H-1B dependent employer?

Such determination occurs when the employer does one of the following three things:

There may be other scenarios in which the employer must determine their status. For example, if, having already determined their status for an LCA, they restructure their business, they will have to start the procedure again for any new LCA.

What is an H-1B dependent employer?

An H-1B employer, according to DOL, is one that employs a certain ratio of nonimmigrant H-1B workers to full-time equivalent employees employed in the United States (including H-1B personnel). Under U.S. regulations, there are three categories to help employers determine whether they are dependent. See the table below for details of the applicable ratios:

Employers who do not fall into one of these 3 categories are considered non-dependent.

What is a “full-time equivalent employee” (FTE)?

Under US regulations, FTEs are defined as people employed by a given company, which means that consultants and contractors should not be considered. To be considered full-time, employees must work a minimum of 40 hours, unless the employer can demonstrate that their full-time employees work less than that on a regular basis – although they cannot work less than 35 hours per week.

Can you count part-time employees? If so, how?

Employers can calculate part-time employees in one of two ways:

1. The employer may count the total hours worked by all part-time employees during the pay period, divide that number by 40, and round to the nearest whole number. If, for example, there are 4 part-time employers who worked a total of 83 hours during the given pay period, the employer would count them as 2 FTEs (83 ÷ 40 = 2.075 rounded to 2).
2. Part-time employees (those working less than 35 hours) can also be counted as half a FTE and the employer must, in this case, round up to the nearest whole number. If, for example, they have 5 part-time employees, they can count that as 3 FTEs (2.5 rounded).

How do the regulations define an employer for H-1B purposes?

The DOL and United States Citizenship and Immigration Services (USCIS) rely on the Internal Revenue Code (IRC) to determine whether a business or group of businesses should be considered a “single employer.” “. This means that a “controlled group of companies” must be considered a single employer. Controlled groups include:

1. Group controlled by a brother and a sister: A group of companies owned by a maximum of 5 people. They must own at least 80 percent of the group.
2. Groups controlled by parent and subsidiary: A chain of companies in which 80% (or more) of at least 1 subsidiary is owned by the parent company. It is also necessary that 80% (or more) of each subsidiary be owned either by another subsidiary or by the parent company.
3. Combined group: When 3 or more companies are related and each of them is a member of either a group controlled by siblings or a group controlled by a parent company and a subsidiary.

If a business is included in one of the three categories above, it may be considered a single employer for H-1B purposes. And if a trade or business is a sole proprietorship, estate, trust, corporation or partnership, it will also be referred to as a sole employer.

How does an employer determine their H-1B dependent status?

The employer can refer to the table in the 2nd question of this article. If, for example, they have a total of 400 FTEs (including H-1Bs) and 61 of them are H-1B employees, then they would be considered H-1B dependent. In fact, they belong to the 3rd category, that is to say they have a minimum of 51 FTEs and at least 15% are H-1B.

What Records Should an H-1B Employer Keep?

H-1B employers must be sure to maintain copies of petitions, LCAs, payroll records, identity information of all H-1B workers, benefit plans, prevailing wage rates , methods for determining wages, documents for posting notices on the site and any request for extension. .

If the business is sold or acquired in any way, it must provide a successor declaration, a list of affected H-1B employees, a breakdown of the new salary system, any relevant changes in dates and measures noted on the previously filed ACV. form and the employer identification number of the acquiring company.

Additional documents will depend on the specific circumstances:

• If, for example, the employer’s H-1B status is “readily apparent” or “borderline,” that status must be included in the relevant LCA – provided it meets the minimum requirements of the LCA. snapshot test. The employer is not required, in this case, to keep other records.
• If the employer claims not to be dependent on the H-1B, performs a “snapshot test” and does not meet the criteria, it must maintain dated records of the snapshot calculations.
• If there are major changes in the composition of the workforce, such as the employer’s designation would change from H-1B dependent to H-1B non-dependent, the employer must recalculate and keep dated copies.
• The employer must recalculate if it restructures or changes its identity in any way.
• If the employer identifies as a “sole employer” (per the IRC) and claims non-H-1B dependent status, they must submit to an instant test. If they do not meet the requirements of this test, they will need to change their status to H-1B. They must also keep records of each business included in the “single employer” entity, in addition to detailed records of the calculation of the determination.

What is an “exempt H-1B employee”?

An H-1B worker is considered exempt if they meet 1 of 2 criteria:

• They earn at least $60,000 per year
• They hold a Master’s degree (or its equivalent) in a related field

Employers claiming to hire only exempt workers must provide a statement attesting to this fact and a list of all H-1B workers related to the ACA. They must also keep all petitions and payment records.

Employers who hire exempt workers may ignore certain certifications on the LCA.

What certifications must the employer provide regarding non-exempt employees?

H-1B dependent employers submitting an LCA on behalf of non-exempt employees must attest to the following:

• The new H-1B recruit would not replace any similarly capable American worker. This must be demonstrated within 90 days before filing the H-1B petition (Form I-129) and 90 days after that date. If a worker is transferred to the site of another employer, the same certification must be made. The H-1B petitioner could be held liable if the new employer displaces U.S. workers.
• Documents were maintained regarding all departing U.S. employees and all associated job offers.
• The Employer has made sincere efforts to hire and recruit U.S. workers of similar abilities. To this end, the employer must keep records relating to the recruitment process.