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Deductions from H-1B Nonimmigrant’s Wage

2014-05-21
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The H-1B visa is one of the nonimmigrant work visas that allow US employers to bring aliens professionals to work in “Specialty Occupation.” According to the U.S. Citizenship and Immigration Services (USCIS) regulations, specialty occupation means occupation that requires theoretical and practical application of a body of specialized knowledge along with at least a bachelor’s degree or its equivalent. For example, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts are specialty occupations. In the present article, we will try to highlight what payments a US employer may deduct from H-1B nonimmigrant’s wage while processing his/her H-1B visa.

To prevent the misuse of this most coveted and controversial visa, USCIS has issued various guidelines and rules that are required to be completed by the US employer before and after hiring alien professionals. Omission or overlooking of these rules and guidelines will result in the assessment of fines, back pay, debarment from utilization of the immigration process, and even imprisonment in some extreme cases. The first step in H-1B process is the filing of the Labor Condition Application (LCA) with U.S. Department of Labor (USDOL). The LCA mandates that the US employer pay at least equal to the actual wage paid by the employer to other workers with similar experience and qualifications for the job in question, or the prevailing wage for the occupation in the area of intended employment – whichever is greater. The USDOL has categorically stated that the US employer should bear all the cost incurred including payment of attorney (hired to assist the US employer in filing the H-1B) fee during initiating and processing of H-1B visa as “Business Expenses.” Further, the USDOL prohibited employers/petitioners from deducting any legal/attorney fees or USCIS fees from the H-1B nonimmigrant's wages which will cause their wage level to be below the "required wage" level.

The USDOL regulation defines the actual wage, prevailing wage and required wage. Actual wage is the wage rate paid by the employer to all other individuals with experiences and qualifications which is similar to the H-1B nonimmigrant’s experiences and qualifications for the position to which the H-1B nonimmigrant will be hired. If the H-1B nonimmigrant is the first and only employee for that position then the wage paid to him/her will be the actual wage. Prevailing wage is the average wage paid to similarly employed worker in a specific occupation in the area of intended employment and is set by law for each trade or occupation. Required wage is either the actual wage or the prevailing wage. Sometimes, the US employers unknowingly deduct attorney and filing fees from the H-1B nonimmigrant wage, incurred during processing their H-1B case, which is strictly prohibited by the USDOL regulations. The H-1B nonimmigrant may pay certain fees such as Educational Evaluation, Translation Fees, Attorney Fees for Filing H-4 visa for H-1B nonimmigrant dependents, and other fees including attorney fees for seeking legal advice on H-1B nonimmigrant personal matters.

An H-1B nonimmigrant is statutorily exempted from paying the following fees and expenses:

·         A Penalty (as defined by state law) for the worker’s failure to complete the full employment period;

·         Any part of the statutory training and processing fee imposed by the USCIS;

·         Any part of the statutory $500 fraud protection and detection fee imposed by the USCIS;

·         Any deduction for the employer’s businesses expenses that would reduce an H-1B worker’s pay below the required wage rate, including:

o Any expenses and attorney fees directly related to the filing of the LCA;

o Any expenses, attorney fees and the premium processing fee directly related to the filing of the petitioner for nonimmigrant worker;

o Tools and equipments; and

o Travel expenses while on employer’s business.

The US employer can deduct the fees from the H-1B nonimmigrant’s wage, after satisfying one of the three categories mention below, even if the deduction reduces their wage below the required wage rate.

·         Required by law (e.g., income taxes);

·         Reasonable and customary (e.g. union dues, insurance premiums); or

·         Voluntarily authorized by the H-1B worker, under the following standards:

o There is a voluntary, written authorization by the employee;

o For a matter principally for the benefit of the employee, such as reimbursement for travel to the United States or payment for food and lodging that was not incurred while traveling on the employer’s business;

o For an amount that does not exceed the fair market value or the actual cost (whichever is lower) of the matter covered; and

o The amount does not exceed the limits for garnishments set by the Consumer Credit Protection Act.

Of late, the USDOL and USCIS has increased site visits to inquire whether the employers are collecting attorney and filing fees from H-1B nonimmigrant wage or not. The attorneys should break down their fees for each step involved in the H-1B process and also inform the employer what fees they can deduct from the H-1B nonimmigrant wage. 

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