The concept of a “dependent position” in the H-1B specialty occupation visa program refers not to a specific job title, but to the employer sponsoring the worker. This designation, known as an H-1B Dependent Employer, triggers a heightened set of regulatory and compliance obligations designed to protect the U.S. labor market. Understanding this classification is important for any company utilizing the H-1B program, as dependency status directly influences the complexity and legal scrutiny of the visa application process. It places additional requirements on the employer regarding recruitment practices and limitations on the displacement of U.S. workers.
Defining H-1B Dependent Employers
The legal status of H-1B dependency is applied to an entire organization based on the ratio of its H-1B workers to its total full-time equivalent workforce in the United States. This regulatory framework is rooted in the Immigration and Nationality Act (INA) and uses specific numerical thresholds set by the Department of Labor (DOL) to categorize employers who rely heavily on H-1B nonimmigrant labor.
An employer must determine its H-1B dependency status each time it files a Labor Condition Application (LCA), an initial H-1B petition, or requests an extension of status based on an LCA. This status is not permanent and must be re-evaluated as the company’s workforce fluctuates or undergoes corporate restructuring. Falling into the dependent category subjects the employer to additional attestations on the LCA, significantly increasing the compliance burden.
Calculating Dependent Status Thresholds
Determining H-1B dependency involves calculating the ratio of H-1B workers to the total number of full-time equivalent (FTE) employees. The thresholds are divided into three tiers corresponding to the size of the employer’s workforce. These tiers establish a clear metric for what constitutes a high reliance on H-1B staff.
For the smallest employers (25 or fewer FTE employees), a company is deemed dependent if it employs more than seven H-1B nonimmigrant workers. For mid-sized employers (26 to 50 FTE employees), the threshold is met if the company employs more than 12 H-1B nonimmigrants.
The largest tier applies to employers with 51 or more FTE employees. A company in this category is classified as H-1B dependent if H-1B nonimmigrant workers make up 15 percent or more of its total U.S. workforce. For example, a company with 100 FTE employees would become dependent upon hiring its 16th H-1B worker. The calculation of FTE employees must account for both full-time and part-time staff, and the DOL defers to the Internal Revenue Code definition of a “single employer” for related entities to prevent evasion of the rules.
Increased Compliance Obligations for Dependent Employers
Designation as an H-1B Dependent Employer requires the company to undertake additional steps within the Labor Condition Application (LCA) process. This status necessitates the inclusion of extra attestations on the ETA Form 9035, confirming the employer’s commitment to protecting the U.S. labor pool. These obligations are intended to counteract the potential for dependent employers to hire H-1B workers at lower wages, which could displace U.S. workers.
The DOL subjects dependent employers to greater scrutiny and potential liability. These companies must certify that they have met the heightened requirements before the government will approve the H-1B petition. Failure to comply with these additional rules can lead to severe penalties, including government investigations and civil fines.
Required Attestations for Labor Condition Applications
H-1B dependent employers must make three primary attestations on the LCA for any non-exempt H-1B worker they intend to hire. These requirements go beyond the standard LCA obligations, which cover wage, working conditions, and notification requirements. The attestations are designed to prevent the hiring of foreign workers from negatively impacting U.S. employment.
Non-Displacement of U.S. Workers
The first attestation is a promise not to displace any similarly employed U.S. worker within a specific 180-day window. This period begins 90 days before and ends 90 days after the filing of the H-1B petition with U.S. Citizenship and Immigration Services (USCIS). Displacement is defined as the laying off of a U.S. worker from an essentially equivalent job within the employer’s own workforce or at the worksite of a second employer where the H-1B worker is placed. The employer must maintain comprehensive documentation regarding the departure of any U.S. employees during this period to demonstrate that any terminations were for legitimate, non-displacement-related reasons, such as performance issues.
Good Faith Recruitment Efforts
The second attestation requires the dependent employer to demonstrate good faith efforts to recruit U.S. workers for the position offered to the H-1B nonimmigrant. These recruitment efforts must follow industry-standard practices and include offering the job at a wage rate at least equal to the required prevailing wage. The intent is to show that the employer could not find a qualified U.S. worker before seeking to hire a foreign national.
If an equally or better qualified U.S. worker applies for the position, the employer must offer the job to that individual. Employers must maintain detailed records of their recruitment activities, including advertisements, job postings, and the terms of compensation offered to applicants. This documentation is important for demonstrating compliance in the event of a Department of Labor audit.
Defining Exempt H-1B Workers
An exception exists that can relieve H-1B dependent employers from the non-displacement and recruitment attestations: the hiring of “exempt” H-1B workers. An H-1B worker is considered exempt if they meet one of two specific criteria. The first is receiving an annual wage of at least $60,000, which can include cash bonuses but excludes benefits like health insurance or pension contributions.
The second criterion is possessing a master’s degree or a higher degree, or its foreign equivalent, in a field directly related to the intended H-1B employment. If a dependent employer hires only H-1B workers who qualify as exempt, the additional compliance burdens related to recruitment and non-displacement are waived. This provision allows companies to streamline the visa process.
Penalties and Enforcement for Non-Compliance
Failure to adhere to the attestation requirements for H-1B dependent employers can result in financial and operational penalties imposed by the Department of Labor (DOL). The DOL’s Wage and Hour Division conducts investigations that can lead to findings of violations, which are categorized by severity. Penalties include orders to pay back wages to affected workers and the assessment of civil monetary fines.
For a failure to meet the recruitment or record-keeping rules, a company can face fines of up to $1,000 per violation. A willful violation of the non-displacement attestation, especially if it involves the layoff of a U.S. worker, can lead to a maximum fine of $35,000 per violation. Beyond monetary penalties, the DOL also has the authority to debar an employer from filing any future H-1B petitions or other employment-based immigration applications for a period of up to two years.
Strategies for Managing and Mitigating Dependent Status
Companies classified as H-1B dependent must implement proactive strategies to manage compliance and potentially mitigate the status. A foundational strategy involves carefully tracking the ratio of H-1B employees to the total workforce at all times, not just at the moment of filing an LCA. Regular internal audits of the workforce data can provide early warnings and allow for strategic adjustments to avoid crossing the dependency thresholds.
A key mitigation strategy is to prioritize the hiring of H-1B workers who meet the criteria for exempt status. By focusing on candidates with a master’s degree or those offered a salary of $60,000 or more, the employer can bypass the non-displacement and recruitment attestations, even while remaining technically H-1B dependent. Furthermore, maintaining documentation of all recruitment efforts for non-exempt positions is important for defending against potential DOL audits and demonstrating good faith compliance with the attestations.