Major Changes in H-1B Visa Law

The U.S. Congress has been debating several proposed laws that would have a very significant impact on people planning to work and/or live in the United States. One of these laws, the FY 2005 Omnibus Appropriations Bill (H.R. 4818), has been passed by both the U.S. Senate and House of Representatives. Although it must be signed by President Bush before it is fully enacted, it is expected that the bill will become official law sometime in December.
The FY 2005 Omnibus Appropriations Bill has numerous provisions and touches upon a wide variety of issues. The one section that is particularly relevant for people planning to obtain H-1B work authorization, however, is entitled the H-1B Visa Reform Act of 2004 (the “H-1B Reform Act.”) It is important for both employers and employees who are considering filing an H-1B application to fully understand this legislation because the H-1B Reform Act brings about several significant changes that will greatly affect H-1B applicants.
One of the most significant of these changes is an increase in the number of H-1B visas available per year. The H-1B Reform Act makes an additional 20,000 visas available to foreign nationals who have earned a Master’s or higher degree from a school in the United States. At present, the law limits the number of available H-1B visas to 65,000 per year. Unfortunately, this numerical limit has posed a considerable problem for U.S. employers because the demand for H-1B employees greatly exceeds the 65,000 limit set by the government. In fact, USCIS (formerly INS) announced that on the first day of Fiscal Year 2005, it had received enough H-1B petitions to meet its annual limit of 65,000 new H-1B workers. The H-1B Reform Act, therefore, represents a recognition by Congress that an annual limit of 65,000 H-1B visas is inadequate and that U.S. employers are in desperate need of the invaluable services provided by H-1B foreign workers. The additional 20,000 H-1B visas that the H-1B Reform Act makes available will undoubtedly provide some much needed relief to a great number of such employers in the United States.
Another major change that will be brought about by the H-1B Reform Act is a transformation in the way the “Prevailing Wage” level is determined in H-1B cases. The U.S. Department of Labor provides various governmental surveys containing wage data. At present, the most widely used of these surveys lists two wage amounts (a “Level I” wage and a “Level II” wage) for each of the job classifications in its system. Employers often rely on this governmental survey to help them determine the minimum wage that the government has deemed as required for a particular job. Under the current policy of the Department of Labor, a job offer that is for an “entry-level” position is deemed a Level I occupation; all other offered positions (i.e. anything greater than entry-level work requiring minimal supervision) is generally deemed to be a Level II occupation.
The H-1B Reform Act will change the structure of these governmental surveys by increasing the number of listed wages from two to four levels. In other words, instead of only having a Level I and II wage, there will be a Level I, II, III and IV wage. Although it is difficult to determine the exact effect that this change will have, it should result in greater employer flexibility as well as increased wage accuracy because employers will no longer be limited to categorizing a job as either entry-level (Level I) or greater than entry-level (Level II.)
Unfortunately, not all of the changes contained in the H-1B Reform Act are positive for U.S. employers and foreign workers. The most notable instance of this is the adding of two additional fees. The first of these is a fee that will be required of most H-1B employers. For an employer with 26 or more employees, there will be an additional fee of $1,500. For an employer with 25 or fewer employees, the additional fee will be $750.
The second fee is entitled the “Fraud Prevention and Detection Fee.” This fee will be used to increase the fraud prevention capabilities of the U.S. government. This fee is an additional $500 and will apply to the principal beneficiaries of both H-1B and L visas.
In conclusion, the H-1B Reform Act will bring about numerous changes to the current law regarding H-1B applications. If you should have specific questions regarding the H-1B Reform Act or any other immigration matter, please do not hesitate to contact our offices to discuss your case with one of our attorneys.

By Attorneys Robert L. Reeves and Brian Spalter