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October FAQs and Reminders for H-1B Employers

Labor & Employment Lynn O'Brien, Andrew Kuntz

Generally, new H-1B petitions selected and approved in each year’s H-1B Cap Lottery are effective starting October 1st. Accordingly, prudent employers should take precautions each year to ensure that they can best support their employees and remain in compliance with relevant laws and regulations. Below we have highlighted some frequently asked questions on this subject.

How can employers ensure they are in compliance with regulations after October 1?

Once an employee’s H-1B status becomes effective on October 1, to maintain valid H-1B Status, employees must comply with the specific terms and conditions listed in the H-1B Petition and Labor Condition Application (LCA) including:

  • Wages – Employers must ensure that an employee’s base salary is equal to or greater than the salary listed in the H-1B petition.
  • Worksite Location – Employers must ensure that H-1B employees are reporting to the location(s) listed in the LCA and H-1B Petition. Worksite locations, including home worksites, are subject to inspection by the Fraud Detection and National Security Directorate (FDNS). Employers should ensure that employees are working in compliance and inform employees of their rights in the case of inspection.
  • Sponsoring Legal Entity – Employers (defined as an entity with a unique FEIN) who operate under multiple legal entities should ensure that H-1B employees are on the payroll of the legal entity that filed the H-1B petition.
  • I-9 Verification – Employees who were working pursuant to the USCIS Cap Gap (See USCIS Cap Gap Guidance) with an expired student Employment Authorization Document (EAD) must reverify their work authorization pursuant to their new H-1B status. Employers should carefully review the I-9 employers’ handbook to ensure they comply with all relevant I-9 regulations.

What action should employers take if there are changes to the conditions of employment?

Employers must file an H-1B amendment prior to making any material changes to the terms and conditions of employment for an H-1B employee. Importantly, a change in worksite location outside the metropolitan statistical area, of the worksite locations identified in the H-1B petition and LCA, is considered a material change. See Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015); 8 C.F.R. §§ 214.2(h)(2)(i)(E) and (11)(i)(A).

Accordingly, if employers have listed a home worksite in the H-1B petition and LCA, they must remain vigilant in communication with employees regarding the need for employees to inform human resources or the legal team prior to moving.

Should employers make any changes to tax withholdings for new H-1B employees?

The IRS has noted that, under relevant regulations, employees on certain student non-immigrant statuses (F-1, J-1, M-1, and Q-1) are not subject to FICA tax. However, once those employees’ H-1B change of status becomes effective, an employer must begin withholding FICA taxes. (IRS Guidance on H-1B Change of Status)

What additional steps should employers take to ensure new H-1B employees can maintain seamless work authorization?

Employees may only remain in the United States in H-1B status for 6 years, unless they are eligible for an extension based on a pending PERM application or an approved I-140 immigrant petition. 8 C.F.R. §§ 214.2(h)(15)(ii). Employers should expect to track this six-year period for each H-1B employee to ensure that they are eligible for an extension or have received permanent residency (i.e., a green card) before the six-year period of maximum stay period expires. In light of current Department of Labor processing times, many employees have begun initiating the Green Card process 3 or more years prior to the expiration of the six-year period.

What steps should an employer take for H-1B cap petitions pending after October 1?

As USCIS processing times have increased, new H-1B petitions may still be pending as of October 1. Employers must check to ensure that any employee with a pending petition is still authorized to work as of October 1 even if the cap case has not been adjudicated. Employees who are still authorized to work pursuant to a different non-immigrant status (e.g., E-3, TN, L-1, L-2) or a valid employment authorization document (EAD) may continue to work. However, as noted below, certain students are no longer eligible to work as of October 1.

Can students with an expired EAD who were working through September 30 pursuant to Cap Gap continue to work after October 1?

No. Regulations allow students with an Optional Practical Training EAD that expired after the filing of a new H-1B petition to continue working only until September 30 of that year. If a student does not have a valid EAD, they must stop working as of October 1.

However, under USCIS guidance, those employees may remain in the United States while their H-1B is pending. Employees wishing to remain in the United States after October 1 must be placed on leave to avoid working without valid authorization, which could jeopardize their future immigration status.

To minimize the risk related to these situations, employers may file a premium processing upgrade for a pending H-1B petition. In this case, employers will receive a response within 15 days of filing the premium processing request.

What steps can employers take to support new H-1B employees abroad who need to receive a visa and travel to the U.S.?

An employee who is abroad who is the beneficiary of a new H-1B approval must obtain an H-1B Visa Stamp before traveling to the U.S. to begin employment. Currently, wait times for visa appointments vary, with wait times ranging from several weeks to several months. However, some consulates including the U.S. Embassy in India have indicated that they will be opening a large volume of visa appointments for new H-1B visas in the coming weeks. Employees should continue to check the consulates’ online systems for new appointments.

If an employee’s travel to the U.S. is critical to the operation of an employer’s business, the applicant may file an expedite request with the consulate. The Department of State has indicated that expedite requests will be granted sparingly. To make an expedite request, an employee must first book a visa appointment. Instructions for next steps may vary by consulate.

What steps can employers take for employees who were not selected in the H-1B Cap Lottery?

Employers can explore other paths to work authorization for employees who were not selected for the H-1B Cap Lottery, which our team has previously detailed (Alternatives to H-1B Status for F-1 OPT Employees).

Additionally, employers should begin to identify the candidates who they wish to register for next year’s H-1B Cap Lottery.

What steps should employers take now to forecast immigration spend for the new fiscal year?

As many employers begin their fiscal year on October 1, they should begin to forecast the budget for their foreign national population and recruitment of foreign national talent. The budget should account for costs to file petitions to extend employees’ non-immigrant visa status and green card sponsorship, in addition to costs for H cap registration and filing of selected H cap petitions. Our team can assist employers with forecasting and developing alternative work authorization strategies to ensure their employee population is supported and that employers are able to attract top talent.

For more information on these FAQs or other immigration-related questions, employers may contact your local Quarles & Brady attorney or:

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