H-1B Visas

The H-1B visa is the most commonly used U.S. work visa for highly skilled foreign-born workers in specialty occupations that requires, at minimum, a Bachelor’s Degree or foreign equivalent in a closely-related field of study.  For many years, U.S. employers have applied for H-1B classification on behalf of professionals such as , IT consultants and developers, medical professionals, engineers, financial analysts , public school teachers, researchers, etc.  Employers may seek H-1B status for foreign nationals on either full-time or part-time basis.

H-1B Petitions Subject to Annual Quota (Cap-Subject H-1Bs)

Under the current law, the annual H-1B quota (H-1B Cap) is 65,000 for each fiscal year beginning October 1.  Under the L1 Visa and H1B Visa Reform Act of 2004, Congress added an additional 20,000 H-1B visas for graduates of advanced degree programs in the U.S. Out of the 65,000 quota, 5,400 visas are set aside for citizens of Singapore and 1,400 H-1B visas for citizens of Chile.  The H-1B cap applies to new petitions filed for foreign workers that have not been counted against the H-1B Cap within the past six years.  The earliest start date for these “new” H-1Bs is October 1 of each year, with the filing period commencing as early as April 1 of the same year.

H-1B Petition Exempted from Annual Quota (Cap-Exempt H-1Bs)

H-1B petitions are exempt from the quota if they are filed by a college or university, a related or affiliated non-profit entity, a non-profit research organization, or governmental research organization.  Cap-Exempt H-1B petitions are generally filed on behalf of researchers by non-profit organizations as well as public and private universities.  Public School systems with critical teacher shortages also utilize this visa option to engage foreign workers.  They They must, however, demonstrate that they maintain certain affiliation with a University (for more details on obtaining an H-1B visa for a public school teacher, please click here).


H-1B Petition Not Subject to Annual Quota

Certain H-1B petitions are not subject to the 65,000 annual quota and allow foreign workers to start employment immediately upon approval.  These petitions include H-1B petitions amending previously approved conditions of the employment, H-1B petitions for Change of Employer or H-1B extension petitions for the same employer (unless he or she is changing employment from a cap-exempt employer to a non-exempt employer, i.e. switching employment from a non-profit or government institutional to a for-profit U.S. employer).

Period of Stay

H-1B status is generally granted for three-year increments, for up to a total of six years.  However, under the American Competitiveness in the 21st Century Act (AC-21 Act), an H-1B worker’s period of stay may be extended in one-year increments if a pending Labor Certification or Form I-140 was filed on the worker's behalf more than 365 days prior to the end of the sixth year of the H status.

Alternatively, an H-1B holder is eligible for extension of status in three-year increment after the six-year period if the foreign national is named as the beneficiary of an approved I-140, but cannot apply for adjustment of status because of country-specific limits.


Filing Fees: The filing fees for an H-1B petition consist of the following:
  • Form I-129 Application Fee: $320
  • ACWIA Fee: $1,500 under ACWIA Act (American Competitiveness and Workforce Improvement Act of 1998)($750 if the employer has less than 25 full-time employees) for
    • New H-1B petition,
    • First H-1B petition for extension by the same employer, or
    • H-1B petition for Change of Employer.

  • The ACWIA fee of $1,500 or $750 is waived if this is the second H-1B Petition for Extension by the same employer

    Alternatively, the ACWIA fee is also waived if the Petitioner is a primary or secondary education institution; an institution of higher education; a nonprofit entity related to or affiliated with an institution of higher education; a nonprofit research organization; or a governmental research organization

  • Fraud-Prevention Fee:$500 for New H-1B petitions and H-1B petitions for Change of Employer.

Alternatives when the H-1B Annual Quota has been exhausted

The demand for skilled foreign nationals has generally been so high and the quota so low that it has created problems for employers each year when the H-1B cap has been prematurely reached.  However, there are still many other temporary work, including TN visas, L-1 intra-company transferee visas, O-1 extraordinary ability worker visas, as well as the E treaty trader/treaty investor visas.


IT Consulting Industry:

Since 2008, H-1B petitions filed through Information Technology firms have been receiving particularly intense scrutiny.  The USCIS appears to be on a mission to eradicate fraud through issuing overly burdensome Requests for Evidence and placing a heightened burden of proof on IT companies.  Immigration practitioners and petitioners in the IT Consulting Industry face increasingly taxing requests for additional documentation, from complete profiles of all IT employees’ names and educational background, a list of all H-1Bs filed with the USCIS, corporate tax returns, quarterly wage reports, W-2 Forms, work orders, client letters detailing the H-1B employee’s job duties and minimum requirements for the position, and images of the company’s business premises.

The nature of the IT Staffing & Consulting business presents some interesting twists to the H-1B petition process:

Employer-Employee Relationship – The Neufeld Memo and H -1B RFEs

Recently, there has been heightened scrutiny of H-1B petitions on the part of the U.S. Citizenship and Immigration Services (USCIS).  On January 8, 2010, the USCIS published a Memorandum which offered an interpretation of the meaning of an employer-employee relationship in the context of third party placement arrangements.  This Memorandum (the “Neufeld Memo.”) was issued by Donald Neufeld, the Associate Director of Service Center Operations at USCIS.  The Neufeld Memo has seemingly imposed new requirements on H-1B petitioners who place their beneficiaries at off-site locations (End-Client sites) to work.

How the Neufeld Memo.  Affects Off-Site Employment in the IT Industry

It is fairly common in the IT industry for Petitioner Companies to place their IT consultants at client sites to work (off-site work) because the service delivery model has become prominent in the industry.  In situations where the IT Consultant is stationed off-site, the USCIS is concerned with the nature of the employment relationship between the Petitioner Company and the IT Consultant and is increasingly insisting that Petitioner Companies demonstrate the existence of an employer-employee relationship between themselves and their IT Consultants.

In the Neufeld Memo, USCIS sought to restrict the use of the H-1B category by by IT Consulting Companies.  Although USCIS has indicated that the Neufeld Memo does not in fact impose new rules on Petitioners, the practical impact of this new guidance offered in the Memo has been that USCIS adjudicators and U.S. Customs and Border Protection officers have been applying the Memo’s new interpretation of what constitutes a lawful employer-employee relationship in the IT industry to their review of petitions.  And USCIS has been requiring H-1B Petitioners to fully demonstrate the existence on an employer-employee relationship between themselves and their beneficiaries.  As a result of this new agency guidance, most IT Consultant companies continue to receive voluminous Requests For Evidence (RFEs) from the USCIS and are experiencing difficulty in successfully responding to the Service in support of their H-1B Petitions.

Our Expertise in Filing H-1B Petitions and Responding Successfully to USCIS RFEs

As a firm experienced in the nuances of H-1B petitions and Agency policy and guidance, Mannam and Associates, LLC has meticulously examined the language of the Neufeld Memo and subsequent agency dialogue surrounding the requirements for establishing an employer-employee relationship, and has been successfully advising our clients on how to respond to these RFEs and to successfully document and file H-1B petitions.  Since January 2010 when the Neufeld Memo was issued, Mannam and Associates, LLC has successfully responded to many RFEs that clients have received that questioned their employment relationship with their beneficiaries, and almost 100% of the RFE responses that we have submitted on behalf of our clients have been approved.  If you are experiencing difficulty with obtaining approval of your H-1B Petitions, please contact us.  We will be happy to help you.


H-1B Dependency Status and "Non-Displacement of U.S. Worker" Requirements:

Most IT Consulting firms are H-1B dependent, i.e. the company has in the U.S.:

  • 25 or fewer full-time equivalent (“FTE”) employees and more than 7 H-1B employees; or
  • Between 26 and 50 FTE employees and more than 12 H-1B employees; or
  • At least 51 FTE employees and a number of H-1B employees equal at least 15% of the employer’s FTE employees.

In counting the number of FTE employees for this purpose, H-1B employees are included.

The H-1B dependency status carries additional attestation requirements before the US Department of Labor.  An H-1B employer must declare its dependency status on the Labor Condition Application (LCA) submitted to the USDOL.  The affected employer must also confirm that it has not displaced/laid off a U.S. worker from a position that is essentially equivalent to the one offered to the H-1B worker (known as "Direct Displacement").  This displacement freeze begins ninety days before and ends ninety days after the affected employer files an H-1B petition. This "non-displacement" obligation also extends to the third-party worksite, where the foreign worker is assigned to provide IT consulting services.  Therefore, an H-1B dependent employer must also confirm with the end-client if any similarly-employed U.S. worker have or will be affected by this staffing arrangement (also known as "Secondary Displacement").  The staffing company can place its H-1B worker with the end-client only after obtaining credible assurance that there is no prohibited displacement within the six-month window.

These additional attestations could be discouraging for many H-1B Dependent employers.  However, an H-1B Dependent employer may be exempted from these requirements if:

  • The H-1B worker's wage (including cash bonuses and similar compensation) equals at least $60,000 per year; OR
  • The H-1B worker holds a U.S. Master’s or higher degree (or its foreign equivalent) in the specialty related to the intended employment.

Failing to document compliance with these requirements could cause serious sanctions by the USDOL and USCIS.  In 2003, an IT Consulting firm was fined $3,400 for failing to make secondary displacement inquiries of its clients' business and vendors prior to placing five H-1B workers at client sites.  The USDOL further referred the finding of this violation to the U.S. Attorney General to impose additional sanctions, including disqualification of filing H-1B petitions.  Therefore, IT staffing companies are advised to consult experienced immigration counsel to protect the company against any potential enforcement action by the government agencies.


Public School System:

Across the country, public school systems face shortages of qualified teachers, particularly in high demand subjects, such as Mathematics, Science, ESL, Foreign Language and Special Education.  Many districts, both rural and urban, have turned to H-1B programs to recruit and engage qualified English-speaking teachers from abroad.  Today, one estimate suggests that as many as 10,000 foreign teachers are working in the United States.

There are several issues that a Public School Employer must consider when recruiting a foreign teacher:

  1. Does he or she have a teacher license?

    The position of a teacher is a professional occupation with licensure requirements.  Therefore, a foreign teacher must show that at the time of the filing, he or she possesses teaching license or certification from the state where the Petitioning School District is located.

  2. If the candidate is currently in the U.S. on J visa, is he or she eligible to change the status to H-1B category?

    The foreign teacher who is on J-1/J-2 status is generally subject to a two-year home-country residence requirement.  Therefore, he or she cannot change the status to H-1B category unless he or she has received the Form I-612 waiver approval from the USCIS prior to the H-1B filing. For details on J-1 waiver, please click here.

  3. H-1B Cap v. H-1B Cap-Exempt

    There are several pitfalls associated with filing H-1B under the annual Cap: First, the school district must be prepared to file the petition as early as possible before the 65,000 quota has been reached.  This filing schedule is usually not feasible because it requires the foreign teachers to meet all the licensure requirements and to obtain the I-612 Waiver approval by April 1.  Furthermore, beneficiaries of Cap-Subject H-1B petitions can only begin employment on October 1, two month behind the usual school year start date in August.  Finally, filing Cap-Subject H-1B petition could create a status gap where the foreign teacher’s nonimmigrant status expires before the October 1 start date.  In that case, the foreign teacher would have to leave the country and apply for an H-1B visa at a U.S. Consular Post.

    Therefore, we highly recommend that public school petitioners pursue H-1B petition under the “Cap-Exempt” category, where the foreign teacher can start working immediately upon approval.

  4. Is my school qualified as an "H-1B Cap-Exempt Employer"?

    In order to qualify as an H-1B Cap-Exempt Employer, a Public School District must show that it is a non-profit organization affiliated with an accredited college or university.  The School District must commit, and the affiliated university must agree, to enrolling the foreign teacher in a jointly-managed program that directly and predominately furthers the essential purposes of the institution of higher education.  For details on meeting the affiliation requirements for H-1B cap-exempt petitions, please contact us.