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Omnibus Appropriations Act for FY 2005 Impacts Programs for Temporary Foreign Workers


The Employment and Labor Law Alert

December 23, 2004

The H-1B specialty occupation temporary work visa is often associated with computer professionals, but holders of the visa include doctors, lawyers, nurses, economists, educators, and engineers, among others. The visa category has a Congressionally mandated limit of 65,000 H-1B visas per fiscal year, with 6,800 of those visas set aside for H-1B programs under the terms of the U.S.-Chile and U.S.-Singapore free trade agreements. In recent years, the 65,000 cap has been reached earlier and earlier in the fiscal year. For fiscal year 2005, which began on October 1, 2004, the U.S. Citizenship and Immigration Services (“USCIS”) announced on the first day of the fiscal year that it would no longer accept visa petitions for this category. That announcement left prospective employers scrambling to seek alternative visa strategies or be faced with waiting until the start of the new fiscal year in October 2005.

In the Omnibus Appropriations Act for FY 2005, signed on December 8, 2004, Congress added 20,000 additional H-1B visas that would not be counted toward the H-1B cap. These visas are limited to aliens who have earned a masters degree or higher from a U.S. institution of higher education. However, after those 20,000 slots are filled, any new cases meeting that criteria would be counted against the cap for the remainder of the fiscal year. Since the cap for fiscal year 2005 has already been met, USCIS announced that it would accept new petitions on behalf of up to 20,000 beneficiaries meeting this advanced degree requirement, but these petitions cannot be filed until March 8, 2005. USCIS will provide additional guidance on the eligibility and process at a later date.

The quid pro quo for these additional H-1B slots are increases in filing fees and reinstatement of the American Competitiveness and Workforce Improvement Act of 1998 (“ACWIA”) training fee. These fees are as follows:

  • ACWIA fee reinstated on December 8, 2004 but raised to $1,500. However, employers with no more than 25 full-time equivalent employees (including any affiliate or subsidiary) may submit a reduced fee of $750. Certain types of petitions, for nonprofits and universities, were previously exempt and continue to be exempt from the ACWIA fees.
  • A new fraud prevention and detection fee of $500 which must be paid by petitioners seeking an initial grant of H-1B or L nonimmigrant classification or seeking to change a beneficiary’s employer within those classifications. The new $500 fee will apply to petitions filed with USCIS on or after March 8, 2005.

The Omnibus Appropriations Act also contained provisions relating to the L-1 visa program by the addition of fees and restrictions. The L-1B nonimmigrant visa is available to an alien who has been employed overseas by a firm with an affiliated entity in the U.S. and who comes to the U.S. to perform services for the international entity involving specialized knowledge. Because of alleged abuses of this program by employers outsourcing their specialized knowledge employees, L-1B temporary workers can no longer work primarily at a worksite other than their petitioning employer if the work will be controlled or supervised by a different employer or if the offsite arrangement is essentially to provide labor for hire rather than service related to the specialized knowledge of the petitioning employer. This limitation is specifically aimed at job shop situations. The limitation will apply to all L-1B petitions filed with USCIS on or after June 6, 2005, including extensions and amendments involving individuals already in L-1 status.

Additional limitations on the L-1 temporary workers relate to the participants in the blanket L-1 program. Previously, prospective L-1 transferees qualified for participation in a blanket L-1 if they had worked for the petitioner in the overseas affiliate for as little as six months prior to the transfer. For petitions for an initial L-1 classification filed on or after June 6, 2005, the qualifying period will increase to one year of overseas employment.

As noted above, the L-1 petitions are also subject to the new Fraud Prevention and Detection fee of $500, which will be imposed on petitions seeking an initial grant of L-1 classification or change of employers within the classification. The $500 fee applies to petitions filed after March 8, 2005.