The H-1B program has received a lot of attention over the last couple of months. The U.S. Department of Homeland Security (DHS) is focused on the H-1B program with a change about to be effective on Sept. 9, and, if ultimately implemented, two very impactful proposals on the horizon.

DHS Soon To Apply the “50/50 Fee” to H-1B and L-1 Extension Petitions

An employer who (1) employs 50 or more employees in the United States and (2) more than 50% of said employer’s U.S. workforce holds H-1B or L-1 status is subject to payment of an additional fee of $4,000 on H-1B petitions and $4,500 on L-1 petitions. These additional fees, often referred to as “50/50 fees,” are not new. Currently, the 50/50 fee must be paid by a covered employer only the first time they sponsor an employee; the fee is not due on subsequent filings. Effective Sept. 9, the 50/50 fee will be collected from covered employers not just for the initial petition but also for extension petitions. Amendments which do not request an extension of stay will not require the submission of the 50/50 fee.

DHS Proposal To Revise Certain Aspects of the H-1B Program

DHS is taking action to revise certain aspects of the H-1B program. The content of DHS’ proposal remains confidential at this juncture and will be published in the Federal Register following a review by the Office of Management and Budget. DHS’ description of the proposed regulation states that its goal would be to reform the H-1B program by, among other provisions, “revising eligibility for cap exemptions, providing greater scrutiny for employers that have violated program requirements, and increasing oversight over third party placements.”

DHS Proposal for a New Fee for Cap-Subject H-1B Petitions

On Aug. 25 DHS published a proposed rule that would impose a new $103,265 fee on each H-1B cap-subject petition, including petitions for beneficiaries selected under the 20,000 U.S. advanced-degree cap.

What Is the Reason for the Fee Proposal?

DHS states that the fee would generate revenue to cover a portion of the federal government’s broader costs of administering the “lawful immigration system,” including the work performed by DHS, the U.S. Department of Justice, the U.S. Department of State (DOS), and the U.S. Department of Labor (DOL).

Who Would Be Impacted if Implemented?

The proposed rule clearly states that the new fee would apply to cap-subject H-1B petitions. DHS does not intend to impose the fee on petitions “for a cap-exempt H-1B nonimmigrant,” leading to the conclusion that petitions for H-1B non-immigrants who are beneficiaries of other exemptions, and those who have already been counted towards the cap (extension, change of employer, and amendment petitions) will not be subject to the fee. Further, DHS expressly exempts qualifying nonprofit research organizations, governmental research organizations, and educational institutions from the fee, which is in line with the concept of imposing the cost on cap-subject H-1B petitions only.

What Happens Next?

The proposed rule is open for public comments through Sept. 24. Following a review of the comments by DHS, the rule may be published as proposed, revised and published as a final rule, or abandoned.

The Taft Immigration team will monitor the progress of the two proposals and will provide updated alerts to address implementation of any changes and impact on clients.