Navigating H-1B Filing Fees Post April 1, 2024: When Do Discounts Apply?

On January 31, 2024, the US Citizenship and Immigration Services (USCIS) published a final rule in the Federal Register that adjusts the fees required for most immigration applications and petitions. The new fees went into effect on April 1, 2024. Below please see the Fee Schedule for H-1B I-129 Petitions, reproduced from https://www.uscis.gov/g-1055?form=i-129_h-1b.

Form I-129, Petition for a Nonimmigrant Worker, and in particular H-1B petitions, experienced a great deal of fee changes. USCIS now offers special discounts for certain H-1B employer filers, such as nonprofits and small employers, as well as offering a $50 discount for certain online filings instead of paper mailing. In theory, these changes represent a positive step in recognizing the financial capabilities of non-profit and small companies are different than multinational billion-dollar entities. In practice, however, determining whether an entity is entitled to discounted fees can be problematic.

For purposes of this article, I will focus on full filing fees compared to discounted filing fees for H-1B "large employers", "small employers", and non-profit organizations.¹

Post April 1, 2024, an H-1B employer is required to pay either the full Base Filing Fee, full American Competitiveness and Workforce Improvement Act (ACWIA) fee, and full Asylum Program fee or the discounted filing fee, discounted ACWIA fee, and discounted Asylum Program fee.² An H-1B employer is eligible for the discounted fees if the employer can prove that it is a 'small employer'³ or a non-profit organization. Determining whether an H-1B employer is a "small employer" and therefore eligible for the discounted fees depends on the number of Full Time Equivalent Employees (FTEs) an H-1B employer has in the US.

*Note: If an I-129 Petition is filed electronically by a Large Company, the Large Company is entitled to

a $50 discount of the I-129 Base Filing Fee ($730).

**Note: The ACWIA Fee is necessary for all initial H1B petitions, any change of status to H1B, or any change of H-1B employer (except for certain exempt organizations - see below). The first extension request by the same petitioner for the same beneficiary also requires the ACWIA Fee. However, subsequent extension requests or amendments that do not extend the stay by the same petitioner for the same beneficiary are exempt from paying the ACWIA Fee. If the H-1B employer has 25 or fewerFull-Time Equivalent Employees ("FTEs"), then they are obligated to pay $750 ACWIA Fee. If the H-1B employer has 26 or more Full-Time Equivalent Employees ("FTEs"), then they are obligated to pay $1,500 ACWIA Fee.

Additionally, specific organizations are exempt from the ACWIA fee, including:

• Institutions of higher education as defined by the Higher Education Act of 1965.
• Nonprofit entities affiliated with higher education institutions.
• Nonprofit or governmental research organizations.
• Primary or secondary educational institutions.

• Nonprofits engaged in established curriculum-related clinical training.

***Note: Fraud Detection and Prevention Fee is only applicable if H-1B petitioner (of any size) is:

1. Seeking initial approval of H-1B nonimmigrant status for a beneficiary; or
2. Seeking approval to employ an H-1B nonimmigrant currently working for another petitioner.

****Note: Public Law 114-113 Fee is only applicable if the H-1B Petitioner (of any size):

1. is required to submit the Fraud Prevention and Detection Fee; and
2. employs 50 or more individuals in the United States; and
3. More than 50% of those employees are in H-1B, L-1A, or L-1B nonimmigrant status.

How to Calculate Full-Time Equivalent Employees ("FTEs")

Post April 1, 2024, the new fee rule defines a "small employer" as an employer with 25 or fewer full-time equivalent employees ("FTEs") in the United States. According to the Frequently Asked Questions (FAQs) from the USCIS's website at Frequently Asked Questions on the USCIS Fee Rule | USCIS), the H-1B employer must count all full-time employees at all of their US locations and at all their subsidiaries and affiliates in the US (if any) in determining their "full-time equivalent employees" ("FTEs") number.

This is a new and different requirement than before April 1, 2024. The new rules mean that on an H-1B employer's Corporate Organization Chart, the H-1B employer would count all employees from all entities below it (subsidiaries) and to the side of it (affiliates) in the US, but the H-1B employer would not count the employees working for the parent or higher than the US employer in the US, in determining full-time equivalent employees ("FTEs") in the US.

Additionally, the FAQs confirm that the H-1B employer must add up the number of part-time employees aggregated to full-time equivalents at the time of filing, which means, for example, if Employee A works 20 hours a week and Employee B works 20 hours a week, together they count as 1 Full Time Equivalent Employee ("FTE").

A company would also need to count a current worker they employ at the time of filing, regardless of their immigration status, as an FTE if that employee receives "wages," with applicable taxes deducted, along with Social Security and unemployment deductions, and receives a W-2 reporting their income.

The H-1B beneficiary of a petition does not count as an employee unless they are currently working for the petitioner as an employee at the time of filing.

Finally, a seasonal nonimmigrant worker counts as an FTE if they are paid as an employee, not contractor. The H-1B employer should count all seasonal workers they employ at the time of filing if they are paid as employees.

Documentation Needed to Prove that an H-1B Employer is a "Small Company"

If a US employer claims it is a small employer that is subject to the discounted H-1B fees, the US employer will need to submit evidence of this, such as IRS Form 941 Employer's Quarterly Federal Return, IRS Form 943 Employer' Annual Tax Return for Agricultural Workers, or other relevant evidence that proves the number of FTEs by a preponderance of the evidence. Petitioning employers may submit any relevant evidence to show their actual number of full-time equivalent employees and must establish that number by a preponderance of the evidence. However, as of the time of this article's publication, it is unclear exactly how USCIS interprets "other relevant evidence."

For this reason, if the US employer has a mix of full-time and part-time employees and is approaching 26 FTEs, unless the US employer can clearly show that the aggregate of their part-time employees or the addition of multiple H-1B beneficiaries does not push them to 26 "full-time equivalent employees", it is advisable for the US employer to pay the full filing fees, rather than the discounted fees.

Moreover, many US employers have now entered into agreements with Professional Employer Organizations (PEOs), which are in reality quasi co-employment arrangements whereby the PEO handles all payroll, human resources, and/or accounting of the US employer. The US employer may no longer file IRS Form 941, IRS Form 943, or even their own income tax returns. This may cause even greater confusion for the USCIS officer in determining if the US employer is indeed a small employer for purposes of eligibility for discounted filing fees. In such cases, the US employer should submit some internal payroll information on their letterhead, a copy of the agreement which memorializes the division of responsibilities between themselves and the PEO, and even a letter from the PEO confirming details of the PEO relationship and the employee information that USCIS requires.

If you have any questions about the H-1B petition filing fees, or the documentation that may be submitted to the USCIS to document company size, please contact FGI.

Footnotes

1. Please see https://www.uscis.gov/g-1055?form=i-129_h-1b for complete fee information.

2. The H-1B employer may also be required to pay the Fraud Prevention and Detection Fee and Public Law 114-113 Fee, but these two fees do not change per number of FTEs. Please see chart.

3. I will not discuss H-1B1 Petition fees in this article.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.