Overview of H-1B Dependent Employer Requirements

Hiring global talent is strategic and essential in today’s world. But if your company relies heavily on H-1B visa holders, you might fall into the “H-1B dependent employer” category—bringing extra scrutiny, compliance burdens, and costs.

An H-1B dependent employer is a company with a certain percentage of employees on an H-1B visa. If your company falls into this category, the government requires additional steps to ensure U.S. workers aren’t overlooked or underpaid. These include stricter wage obligations, mandatory recruitment efforts, and potential audits. 

These rules can complicate hiring and visa sponsorship for startups and growing tech companies.

So, how do you know if your company qualifies as an H-1B dependent? If it does, what extra steps do you need to take? Let’s break it down.

Who is a H-1B Dependent Employer?

An H-1B-dependent employer is a company that hires a significant number of H-1B workers compared to its total workforce. The classification depends on company size:

• 25 or fewer employees: 8+ H-1B workers
• 26-50 employees: 13+ H-1B workers
• 51+ employees: 15% or more are H-1B workers

This matters because H-1B-dependent employers must follow extra compliance steps. They must determine their dependency status when filing a Labor Condition Application (LCA) or H-1B petition (Forms I-129/I-129W), including extension requests. 

Staying compliant helps founders and hiring teams avoid penalties and keep operations running smoothly. Understanding these requirements upfront can prevent legal hiccups and secure the talent pipeline.

Now that we know who is considered dependent, let’s look at how you can determine if your company falls into this category.

Criteria for H-1B Dependency

U.S. employers hiring H-1B workers must check if a large part of their workforce is on H-1B visas, making them "H-1B dependent." If they qualify as dependent, they have extra compliance requirements, like proving they didn’t displace U.S. workers. Here’s how dependency is determined:

When Does an Employer Need to Check for H-1B Dependency?

Employers must calculate dependency when filing:

• A Labor Condition Application (LCA) (required for all H-1B hires)
• A Petition for a Nonimmigrant Worker (Form I-129/I-129W) based on an LCA
• An H-1B extension request

No formal calculation is needed if an employer’s dependency status is obvious (e.g., only a few or mostly H-1B workers).

How Is H-1B Dependency Calculated?

H-1B dependency is based on the ratio of H-1B employees to total U.S. employees:

• Quick Check – The Snap-shot Test:
  
  • Compare the total number of H-1B workers to total employees (including H-1B workers).
  • If a small employer’s ratio suggests dependency, they must run a full calculation.
  • If a large employer’s H-1B workforce exceeds 15%, they must fully calculate dependency.
• Full Calculation:
  
  • Includes both full-time and part-time H-1B employees.
  • Uses full-time equivalent (FTE) employees rather than just headcount.
• Single Employer Rule:
  
  • If multiple entities are considered a “single employer” under the IRS definition, they must apply the snap-shot test collectively.
  • The Wage and Hour Division won’t penalize single employers who skip the snap-shot test if their non-dependency is obvious.

Failing to assess dependency correctly can lead to compliance risks. Employers unsure of their status should calculate carefully to avoid penalties.

Being an H-1 B-dependent employer comes with its fair share of responsibilities. Let’s break down some of the key obligations you’ll need to be aware of.

What are Some Obligations of H-1B Dependent Employers?

H-1B-dependent employers—those who hire a high percentage of H-1B workers—have extra obligations under U.S. law. If a company falls into this category, it must meet stricter requirements to ensure that hiring H-1B workers doesn’t negatively impact U.S. workers.

1. Recruitment Efforts for U.S. Workers

Unlike regular H-1B employers, H-1B-dependent companies must actively recruit U.S. workers before hiring H-1B employees. This means taking “good faith” steps to advertise job openings and fairly evaluate U.S. applicants. If a U.S. worker is equally or better qualified than an H-1B candidate, they must be offered the job.

2. Additional Disclosures and Safeguards

These employers must disclose extra to the Department of Labor, confirming that hiring H-1B workers won’t displace U.S. employees. They also need to document their recruitment efforts in case of audits.

3. Non-Displacement of U.S. Workers

H-1B-dependent employers cannot lay off U.S. workers in similar roles 90 days before or after hiring an H-1B worker. This safeguard prevents companies from using H-1B visas as a workaround to replace existing staff with cheaper foreign labor.

Once you understand the obligations, the next major consideration is the LCA. Here’s what you need to know about the process and requirements.

Labor Condition Application (LCA) Requirements

If you're filing for an H-1B visa, understanding the Labor Condition Application (LCA) is key to complying with U.S. labor laws. Let’s understand them. 

• Additional Requirements for Dependent Employers: Employers dependent on H-1B workers must meet extra LCA conditions. This includes confirming they won’t displace U.S. workers or pay lower wages to foreign workers than their U.S. counterparts.
• Time of Filing and Attestations: Employers must file the LCA before submitting an H-1B petition. They must also attest that they have avoided displacing U.S. workers and will provide fair wages and working conditions for their H-1B employees.
• Form ETA 9035/9035E: This form is used for filing the LCA. It outlines the employer’s wage and working condition standards and serves as a declaration of compliance. Employers hiring exempt H-1B workers (those with a master’s degree or making $60,000 or more) have fewer obligations, making it easier to navigate the process.

Following these LCA requirements helps smooth the process and ensures fair treatment for your H-1B employees.

H-1B Penalties & Violations

Violating Labor Condition Application (LCA) regulations can lead to serious consequences for companies. If a company undergoes an LCA or H-1B visa audit, the U.S. Department of Labor (USDOL) Administrator will review the company's visa procedures and LCA record-keeping practices. If violations are found, companies may face several penalties, such as:

1. Civil monetary fines for noncompliance.
2. Restricted access to additional H-1B workers for future hiring.
3. Payment of back wages to affected employees.

In some cases, criminal penalties may apply, particularly if the company is found to have lied or presented false information to federal investigators. 

To avoid these penalties, companies should ensure they fully comply with LCA requirements and maintain accurate records. Seeking professional guidance can help prevent costly mistakes and ensure adherence to all legal obligations.

Considering all these compliance details, it's important to understand how to manage H-1B dependency effectively to stay on track.

Strategies for Managing H-1B Dependency

Managing H-1B dependency is important for employers to ensure a balanced and compliant workforce. 

• Mitigation Techniques for Employers: Reduce dependency on H-1B workers and maintain a balance between U.S. employees and foreign workers. This helps ensure compliance and limits potential risks of overreliance on nonimmigrant workers.
• Ensuring Fair Employment Practices: Employers should proactively create fair, non-discriminatory recruitment processes. The H-1 B program requires employers to show they’ve tried to hire U.S. workers before bringing in H-1B workers. This ensures that U.S. workers are equally considered for positions and helps meet the program's requirements.
• Documentation and Record-Keeping Best Practices: Keep thorough records to demonstrate compliance with LCA requirements and attestations. This includes tracking wages, job descriptions, and employment conditions, protecting employers from legal issues and ensuring they meet Department of Labor standards.

By following these practices, employers can stay on the right track and create a fair working environment for both U.S. and H-1B employees.

While managing dependency is important, it’s also essential to understand how it can impact business operations. Let’s explore this.

Impact of H-1B Dependency on Employer Operations

The H-1B visa program is vital in helping U.S. employers access foreign talent, particularly in STEM fields. Still, it also brings challenges that affect hiring, workforce planning, and legal compliance.

1. Effects on Hiring and Recruitment

With a limited number of H-1B visas each year, competition for these spots is fierce. For employers in STEM fields, this means relying on a small pool of candidates, potentially delaying hiring or causing issues in filling critical roles if visas aren’t secured in time.

2. Workforce Planning and Management

H-1B dependency forces employers to plan ahead. They need to anticipate talent needs months in advance and account for possible visa delays or denials. This can disrupt project timelines and make workforce management more complex.

3. Legal and Regulatory Considerations

The petition process and compliance with labor regulations (like LCA certifications) add layers of complexity. Changes in policies, such as shifting denial rates or new visa limits, require employers to stay adaptable to avoid operational disruptions.

Some recent updates in H-1B legislation will affect how you handle dependency moving forward. Let’s understand them better. 

Read more on the Impact of H-1B Visa Program on U.S. Economy and Immigration Law here. 

Recent Changes and Updates in H-1B Legislation

Recent changes in H-1B legislation are set to impact both employers and workers in significant ways. Here’s a quick breakdown of the latest updates.

Latest Amendments Affecting H-1B Dependency

• The Department of Homeland Security's new H-1B and H-2 rules took effect on January 17, 2025.
• Key changes include a streamlined approval process, better flexibility for employers to retain workers, and stronger oversight for the H-1B program.
• The revised Form I-129, essential for these updates, will also be required from January 17, 2025. Petitions filed with the old edition of Form I-129 (04/01/24) will be rejected after that date.

Impact of Policy Changes on Employers

Employers will have more flexibility in managing H-1B employees, making it easier to retain skilled talent. The changes focus on improving integrity and oversight, ensuring that companies follow the rules more strictly, which may include penalties for violations.

With the revised Form I-129, employers will need to adjust their filing process to ensure compliance and avoid delays.

These policy changes can be complex, but Alma is here to help you make the process as smooth as possible.

Simplify Your H-1B Journey with Alma

Let Alma be your partner on the path to immigration success. At Alma, we specialize in simplifying the process, from eligibility evaluation to preparing a strong petition. Whether you're a startup founder or a tech professional, we tailor solutions to meet your needs, ensuring a smoother and faster visa process. Don’t navigate it alone.

Here's how Alma can help you:

• Accelerate Document Processing: We prioritize the rapid handling of your essential documents without sacrificing thoroughness, keeping your petitions moving forward without delay.
• Benefit from an Average Two-Week Turnaround: Use our commitment to efficiency with a two-week turnaround time, enabling confident and faster workforce planning.
• Access Top-Tier Legal Expertise: Our team of seasoned immigration attorneys offers unparalleled proficiency in employment-based visas, increasing your chances of approval and ensuring strict compliance at every stage.
• Rely on Dedicated, Personalized Support: We recognize each employer's unique challenges, so we provide individualized attention and support tailored to your specific organizational needs and circumstances. 

Get started with a free consultation and see how we can guide you every step of the way.

Conclusion

As the landscape of H-1B dependency evolves, employers must stay informed about compliance and eligibility. This blog discusses how H-1B dependency impacts hiring practices, compliance requirements, and overall business operations. 

Now is the time to take action. Understanding and managing H-1B dependency early can help prevent legal issues, streamline hiring processes, and ensure that your company remains compliant. Implementing the strategies outlined here can also help you avoid penalties and build a more balanced workforce.

To make sure you're on the right path, Get started with a free consultation and let Alma guide you through the complexities of the H-1B visa process.

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