The day following President Obama signing Public Law 111-230, the fee increase on H-1B and L-1 visas became effective (August 14, 2010) through September 30, 2014.

What exactly is this law and what does it stipulate? It requires the submission of an additional fee of $2,000 for certain H-1B petitions and $2,250 for certain L-1A and L-1B petitions postmarked on or after August 14, 2010.  We were surprised that this announcement  which our office just saw posted today, is retroactive and being implemented before USCIS revises the I-129 Petition.  The fees apply to initial H-1B or L-1 employment – change of status and change of employer cases, in the same instances that require the Fraud Prevention Fee.  It is not required if an employer is filing to extend an H-1B or L-1 employee’s status.

What employers are subject to the new fee increase? The fee increase apply to employers who employ 50 or more employees in the USA with more than 50% of its employees in the USAS in H-1B or L (including L-1A, L-1B and L-2) nonimmigrant status. Petitioners meeting these criteria must submit the fee with an H-1B or L-1 petition filed.  It is noted that L-2 dependents of L-1 employees, are eligible for employment authorization documetns (EADs).  The USCIS recognized the difficulty for employers in adding such individuals into the count, but concluded that it is required under the law.  We are interpreting that this means that an employer who hires an L-2 dependent that has work authorization will be required to pay an additional fee of $2,250 to continue to employ them where an EAD is required for authorized employment.

USCIS will issue RFE’s: According to the August 19, 2010 public teleconference that USCIS held, cases filed without the new fee will not be rejected.  USCIS will issue Requests for Evidence (RFEs) on the cases that the new fee appears to be required.  Where USCIS does not any notation or attached evidence with the initial filing, it may issue an RFE to determine whether the petition is covered by the  Public Law. An RFE may be required even if such evidence is submitted, they advise, if questions arise.

Recommendations: USCIS encourages employers to include the additional fee as a separate check rather than adding this amount to the other filing fee checks, making it easy to simply return a check rather than reject an entire case filing for an incorrect filing fee.  Until such time as the form is revised, it has been recommended that the petitioner include a notation of whether the fee is required in bold capital letters at the top of the cover letter and, if it is required, pertinent documentation.

Issues: There are questions pertaining to L-1 petitions under the L-1 blanket program and how to work this out abroad at the US Consulates.  We will continue to keep you informed on this issue.

An interesting sidebar that came to light yesterday on the fee increase had to do with the fact that since it is common knowledge that the law targets Indian staffing agencies and consulting companies as well as medium to large IT employers, that it is probably a violation of the General Agreement on Trade and Services, an agreement that is vital to ensuring US companies are able to employ many of the 6,000,000 Americans working around the world.

Further, reported by Computerworld, the Department of State revealed this week that the U.S. is reviewing whether a law that increases some visa fees is compliant with World Trade Organization (WTO) rules and are also talking to Indian officials about the law and its implications.  India’s Commerce Secretary Rahul Khullar told reporters in Delhi on Tuesday that the visa fee hike is incompatible with the WTO.

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Immigration Solutions provides US and global visa services to individuals and employers throughout the USA and abroad.  We specialize in business immigration and have a depth of experience in the IT, healthcare, arts, entertainment, and sports industries, amongst others.  Our services include complex business visas for investors, multinational managers, skilled professionals and outstanding individuals in science, business, education, athletics and entertainment.  We additionally provide employer compliance consulting services on proper I-9 (Employment Eligibility Verification) auditing, training, and work with our clients to develop compliant immigration policies and procedures.  We offer these services, as well, to government contractors and advise on FAR E-Verify enrollment and compliance issues.

We have been advised that USCIS will hold a 2nd in-person and teleconferenced meeting on the above topic on Friday, March 26th at 3:00 (Eastern). We link to a copy of the Meeting Invitation that contains the RSVP information.

The American Immigration Lawyers Association (AILA) sent a letter to USCIS, requesting that the January 8th “Neufeld memo” on the “employer-employee relationship” be withdrawn listing four key problems.

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Here’s an update with some new developments in re the H-1B Memo:

1. The memo is a new policy that is inconsistent with current regulations: The regulations already define “employer” for H-1B context and indicates control when the employer “may hire, pay, fire, supervise, or otherwise control the work of any such employee.” The Memo adds additional requirements beyond what the regulations state.

2. The position taken by USCIS imposes significant economic burdens on business, at a time when the government should be trying to encourage business growth, in that employers will be required to spend considerable time and money gathering additional evidence to file their H-1B petitions and/or respond to RFE’s. Also, AILA pointed to several studies of the positive economic impact of H-1B employment, including a study that found that “U.S. technology companies increase their employment by an average of five U.S. workers for each H-1B worker they hire.”

3. The memo will have serious adverse affects on employers and individuals: AILA pointed to state restrictions on physicians being employed directly by hospitals and to locum tenens and other temporary staffing arrangements in the health care arena (including therapists) where it will be difficult to satisfy the new standards of the memo. AILA also pointed to government contracts as not being able to meet the standards. The memo will also negatively affect H-1B workers who change employers or extend status, and may have adverse effects on permanent residence petitions. AILA noted that it is not just the H-1B petitioner and the H-1B visa holder that are impacted — the end-users are also affected as they may experience a disruption in work for an H-1B worker that is not able to timely extend status or when additional staffing is needed.

4. The policy is spreading to other non-immigrant and immigrant petitions: AILA noted that USCIS has been adjudicating L-1 petitions and I-140 petitions based upon this new, heightened standard of the employer-employee relationship.

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For those of you who might have missed the Immigration Solutions teleconference that we had on “Tougher Standards for H-1B’s”, you can access the audio recording here.

If you would like to share with us any recent experiences you’ve had or your input as to how this Memo has impacted your business, please feel free to do so.

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Lastly, we are available to assist you with your H-1B filings and have developed some smart approaches as to how to deal with these new regulations and document requirements. Contact us today. If you file your own H-1B cases and require consultation or a skilled attorney to review your petitions, we also offer these services.