New Provisions for H-1B and L-1 Visa Categories for Fiscal Year 2005 For fiscal year 2005

By Keil Hackley

December 2004 – For fiscal year 2005, U.S. employers intending to file petitions for H-1B non-immigrant alien workers and L-1 intra-company transferees will face a rise in governmental fees and amendments to the H-1B and L-1 visa categories.

On December 8, 2004 President Bush signed the Omnibus Appropriations Act into law with certain provisions taking effect on the same day, such as higher filing fees for H-1B petitions. H-1B employers will now have to pay an added fee to train U.S. workers. Companies whose employee base is 25 or less will pay between $500 and $750 in additional training fees, whereas bigger companies will have to pay between $1,000 and $1,500.

Exempt from the training fee are universities and affiliated non-profit organizations, non-profit and governmental research organizations, employers who are filing a second H-1B petition for extension of stay, elementary and high schools, and non-profit organizations providing “established curriculum-related clinical training of students”.

Going into effect 3 months from now on March 8, 2005, the existing numerical limitation of 65,000 H-1B visas per fiscal year will be extended to include an additional allotment of 20,000 H-1B visas for beneficiaries who graduated from U.S. universities with a master’s or higher degree. However, the law does not stipulate that the job being offered to the H-1B beneficiary must require an advanced degree.

Effective as well on March 8, 2005, all employers of H-1B workers will face an added $500 fraud fee, applicable to initial petitions, change to H-1B status or change of employer petitions. The government will deposit this money into the “H-1B Fraud, Prevention, and Detection Account”, which in turn will be equally distributed among Department of Statistics, Department of Labor, and Department of Homeland Security. This fee is imposed only on principal aliens.

Good news for H-1B beneficiaries’ wallets is the provision going into effect in March 2005 as well that increases the salary paid by H-1B employers from 95% to 100% of the prevailing wage. Instead of the existing two-level compensation system, governmental surveys are now required to include four-tiered salary levels based on experience, education, and amount of supervision.

As to the provisions for the L-1 visa category, the same $500 fraud fee applies to L-1 filings effective on the same date.

Other L-1 provisions address permissible work locations and oversight of L-1B specialty workers, requiring L-1B visa holders not to work for third party employers if either the L-1B worker will be supervised by an unaffiliated employer, meaning not under the direct control of the petitioning employer or if working for a third party consists of providing labor instead of providing a product or service that requires specialized knowledge.

This provision will take effect in June 2005 and apply to initial, extended, and amended petitions.

Another L-1 visa amendment re-imposes a one year prior foreign experience requirement for L-1 blanket petition beneficiaries. Said beneficiaries will need to show a prior one-year employment with the petitioning company or commonly controlled entity abroad. Coming into effect in June of next year, this provision will only apply to new L-1 blanket petitions.

M. Keil Hackley is a partner at the Weston law firm Hackley & Robertson, P.A. (www.hackleyserrone.com) and can be reached at kh@hackleyserrone.com or at 954-349-4994.