USA: Increased fees for high-volume H-1B and L-1 employers take effect

As part of the FY 2016 appropriations legislation, Congress has reauthorized and expanded the fees that certain high-volume H-1B and L-1 employers must pay.  All employers with 50 or more employees in the United States, more than 50 percent of whom are in H-1B or L-1 status, are required to pay an additional $4,000 fee with each H-1B petition and extension, and an additional $4,500 fee with each individual L-1 petition, extension and blanket L application.  

The fee was signed into law on December 18, 2015 and took effect immediately.  It will remain in place until September 30, 2025.  The fee will be used in part to fund a biometric entry-exit data system.

U.S. Citizenship and Immigration Services, the State Department and U.S. Customs and Border Protection are expected to implement the fee starting this week for all covered petitions and blanket L applications at U.S. consulates and the border.  DOS began notifying foreign nationals with pending blanket L visa applicants of the fee by email today.  USCIS is expected to apply the fee to covered H-1B and L-1 petitions postmarked December 19 or later.  

The following are Fragomen’s answers to frequently asked questions about the expanded fee. These FAQs will be updated when the government agencies issue their official implementation guidance.

Which employers are subject to the expanded fees?

Employers who have 50 or more employees in the United States, 50 percent of whom are in H-1B, L-1A or L-1B status at the time a covered petition or application is filed, are subject to the new fee, in addition to all other applicable fees.  Employers who do not meet the “50/50” test are not subject to the new fee but remain subject to all other H-1B and L-1 fees.

How does the new fee differ from the H-1B and L-1 Border Security Fee that expired on September 30, 2015?

Congress has doubled the fees that high-volume H-1B and L-1 employers must pay, and applied them to extensions of stay in addition to initial petitions and blanket L applications.  The critical difference is that the previous fee of $2,000 per H-1B petition and $2,250 per individual L-1 petition and blanket L application did not apply to USCIS extensions.

Though the new and old fees were both structured as add-ons to the $500 anti-fraud fee that all employers must pay with each initial H-1B and L-1 petition and with blanket L applications, the new fee is applied more broadly than the anti-fraud fee.  Covered employers must pay the new fee with every covered petition and extension and with every blanket L application, but pay the anti-fraud fee with blanket L visa applications and initial USCIS petitions only.

How do USCIS and DOS define “employer” for purposes of the fee? Which employees are counted in the 50/50 calculation?

The agencies are expected to apply the same definition of employer used to implement the prior H-1B and L-1 Border Security Fee.  An employer would be defined as the entity that has an employer-employee relationship with the beneficiary of an H-1B or L-1 non-immigrant petition or application.

All individuals who are employed by the entity filing the petition or application and who are physically located in the United States would be included in the calculation, whether they are full-time or part-time and regardless of whether they are paid on U.S. or foreign payroll.

Only foreign nationals in H-1B, L-1A or L-1B status would be counted against the 50 percent calculation.  Employees in L-2, H-4 or any other non-immigrant status would not be included in this figure.

Which petitions and applications are subject to the increased fee?

Employers who meet the 50/50 calculation must pay the fee with:

  • All initial H-1B and L-1 petitions filed with USCIS;
  • All H-1B and L-1 extensions filed with USCIS;
  • All changes of status to H-1B or L-1;
  • All change of employer petitions for H-1B or L-1 beneficiaries;
  • All H-1B and L-1 petition amendments requesting an extension of stay;
  • All blanket L applications, including a beneficiary’s initial and every subsequent blanket L application.

The fee is not expected to apply to petition amendments that do not include an extension request, but forthcoming USCIS guidance should clarify this issue.  Applications filed on behalf of dependent family members are not subject to the fee.

How should employers address the fee in H-1B and L-1 petitions and applications that are pending or will be filed before USCIS and the State Department issue their guidance?

Covered employers who will file H-1B or L-1 petitions with USCIS in the coming days should include the fee in their filing package to minimize the risk of rejection.  When the prior Border Security Fee was first introduced in 2010, USCIS issued requests for evidence (RFEs) to employers who did not include the fee during the early days of its implementation, but it is not yet known whether the agency will do so with respect to the new fee or for how long. Petitions that have already arrived at USCIS and were postmarked December 19, 2015 or later should be RFE’d for the new fee.  

Applicants for blanket L visas at U.S. consulates are expected to submit the fee beginning today.

WHAT THE NEW FEE MEANS FOR COVERED EMPLOYERS

Employers who meet the 50/50 calculation are now liable for significantly higher fees for each H-1B and L-1 employee they sponsor.  The total fee for an H-1B petition will rise to $6,325 per initial filing, $5,825 for a first extension, and $4,315 for each subsequent extension, not including the premium processing fee or filing fees for dependants, if applicable.  The fee for an L-1 will rise to $5,325 per initial individual USCIS petition, $4,825 for each individual L-1 extension, and $5,195 per blanket L visa application.

Stuart Beaty

Celsium, Birmingham, UK