A Look At The High Fees Making Hiring H-1B Visa Holders Challenging

Hiring and retaining foreign-born scientists and engineers is expensive for employers in the United States. The U.S. Citizenship and Immigration Services fee rule represents the latest federal action making it more costly to employ H-1B visa holders. Analysts say assertions about “cheap labor” ignore the significant fees employers pay and the law requiring employers to pay H-1B professionals as much as comparable U.S. workers. The registration process for the FY 2025 H-1B cap starts on March 6, 2024. Higher Fees On January 31, 2024, USCIS published a final rule that would raise many government fees. Employers will pay 70% more for beneficiaries on H-1B petitions, 201% more for employees on L-1 petitions and 129% more for individuals on O-1 petitions. USCIS will also enact a new $600 Asylum Program Fee when filing a Form I-129, Petition for a Nonimmigrant Worker, or Form I-140, Immigrant Petition for Alien Worker, and increase the H-1B Electronic Registration Fee for each beneficiary by 2,050%. “We project our larger clients could see an increase of anywhere from 115% to 175% in filing fee costs in the first year of the new fee schedule,” according to Lynden Melmed of BAL. (The USCIS website contains a complete list of the new fees.) PROMOTED Breaking Down The Costs For Employers Overall, legal and government fees for filing an initial H-1B petition and an extension could cost an employer over $33,000, according to an NFAP analysis. That does not include sponsoring an employee for permanent residence (an additional $10,000 to $15,000 or more). MORE FOR YOU Samsung Galaxy Ring Leak Reveals Surprise New Abilities The Latest F-15 Eagle Variant Can Go Almost Mach 3 - With Caveats Toyota Recalls 280,000 Vehicles Over Transmission Issue Most companies will spend approximately $9,400 to petition for a first-time H-1B visa holder under the new fee structure with average attorney fees and premium processing, according to a National Foundation for American Policy analysis. CEO: C-suite news, analysis, and advice for top decision makers right to your inbox. Email address Sign Up By signing up, you accept and agree to our Terms of Service (including the class action waiver and arbitration provisions), and Privacy Statement. Forbes is protected by reCAPTCHA, and the Google Privacy Policy and Terms of Service apply. Filing an extension for an H-1B professional would raise the typical costs for employers to about $18,000. (Extensions may be required for H-1B employees who change locations, creating higher costs.) A Request for Evidence from USCIS would increase processing time and add $2,000 to $4,500 in attorney fees to each initial application or extension. An employer with more than 50% of its workforce in H-1B and L-1 status must pay an additional $4,000 for a petition for initial employment. A small employer, with the lowest likely attorney fees and no premium processing, could pay about $4,500 to file an H-1B petition without an extension. Over the past two decades, employers have paid more than $6 billion in H-1B fees to fund approximately 100,000 scholarships for U.S. students in science and technology fields and also job training for U.S. workers, according to an NFAP analysis of government data. Employers have spent an additional $2 billion in mandated government anti-fraud fees, funding government investigations. Given the lack of a nexus between asylum and employment-based immigration, the $600 asylum fee is “baffling” and may lead to litigation, according to Noah Klug of the Klug Law Firm. Attorneys believe the high costs demonstrate the demand for the skills of foreign-born professionals in the United States. “Employers would not incur these costs if the U.S. labor market didn’t force them to do so,” said Dagmar Butte of Parker Butte and Lane. “If costs keep rising, they will offshore many of these jobs, which will benefit the economies of other countries to the detriment of our own.” Below is a look at employer costs to petition for foreign-born scientists and engineers. H-1B Petition Fee: $780. H-1B Registration Fee: $215. Paid when entering the H-1B “lottery.” (Like other fee increases under the new rule, this fee will take effect on April 1, 2024.) Asylum Fee: $600 (and an additional $600 for extensions). Scholarship and Training Fee: $1,500 ($750 for employers with 25 or fewer employees). The fee is also paid on extensions. Anti-Fraud Fee: $500 on initial petition. “50-50” Fee: $4,000 on an initial petition. The fee is paid by employers with a U.S.-based workforce of over 50% H-1B and L-1 visa holders. Premium Processing: $2,805. Premium processing is not required but is often necessary to avoid processing delays that may harm employees. The higher fee of $2,805 is in effect as of February 26, 2024. Visa Application: $190. The cost is based on reciprocity. Attorney Fees: $1,500 to $4,000. Attorney Fees for Requests for Evidence: $2,000 to $4,500 Additional Costs to Sponsor an Employee for Permanent Residence: $10,000 to $15,000 or more. Paying An H-1B Visa Holder The Same As A Comparable U.S. Worker Beyond government and legal fees, to gain approval of an H-1B petition, an employer must pay “at least- (I) the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question, or (II) the prevailing wage level for the occupational classification in the area of employment, whichever is greater.” Attorneys note prevailing wage determinations represent the minimum an employer must pay. Under the law, employers pay the higher of the prevailing wage or the “actual wage level paid…to all other individuals with similar experience and qualifications.” Some argue employers should pay the average wage for everyone in the occupation in an area. That would likely require paying people fresh out of school the same as people with ten years or more experience, which would run contrary to standard labor market practices. Employers likely would be compelled to forgo hiring promising international students or pay them significantly higher salaries than many U.S.-born employees. Britta Glennon, an assistant professor at the Wharton School of Business at the University of Pennsylvania, concluded in a study that restrictions on H-1B visas result in more jobs leaving the United States: “[A]ny policies that are motivated by concerns about the loss of native jobs should consider that policies aimed at reducing immigration have the unintended consequence of encouraging firms to offshore jobs abroad.” Employers would consider mandating pay well above market wages to individuals with little experience a restriction. Several economists have published studies concluding H-1B visa holders earn the same or more than comparable U.S. professionals and do not harm U.S. workers. For example, an analysis by Glassdoor found, “Across the 10 cities and roughly 100 jobs we examined, salaries for foreign H-1B workers are about 2.8% higher than comparable U.S. salaries on Glassdoor.” After analyzing skills and compensation for over 50,000 IT professionals in the United States, University of Maryland researchers Sunil Mithas and Henry C. Lucas, Jr. concluded, “[C]ontrary to popular belief, non-U.S. citizen IT professionals are not paid less compared to American IT professionals.” A May 2020 NFAP study by University of North Florida economics professor Madeline Zavodny found, “[T]he evidence points to the presence of H-1B visa holders being associated with lower unemployment rates and faster earnings growth among college graduates, including recent college graduates.” In another study, Zavodny examined government data and found that U.S.-born professionals in computer-related jobs do far better than Americans in other fields, indicating H-1B visa holders are not damaging their job prospects. The median earnings of U.S. IT professionals were 40% higher than the median earnings of other professionals in the United States. U.S.-born college graduates with a computer-related major have median earnings 83% higher than non-STEM majors. High Salaries For H-1B Visa Holders The average annual salary for an H-1B visa holder in computer-related occupations in 2022 was $129,000, and the median salary was $123,000, according to USCIS statistics. The median salary for H-1B professionals in computer-related occupations increased by 26% between 2018 and 2022, and the average salary rose by 23%. The Wall Street Journal reports many immigrants prosper in the United States and earn more than U.S.-born individuals. Research by economist Brandon Hawkins for the Federal Reserve Bank of Minneapolis concluded that foreign-born individuals represent almost 20% of the top 1% of wage earners in the United States. “The pay gap between the top 1% of foreign- and U.S.-born workers also widened,” writes Bob Fernandez. “The top 1% of foreign-born workers made at least $376,320 in 2019; for U.S.-born workers the figure was $279,079.” Commenting on the research, Pierre Azoulay, an MIT Sloan School of Management professor, pointed to the ambition of immigrants and the “gumption” it takes to leave their home for the United States. “It’s not the random person from the sending country.” The substantial legal and government fees employers pay when hiring foreign-born scientists and engineers in the United States indicate they view these individuals as not “random” but valued. For more information, visit us at https://www.beverlyhillsimmigrationlaw.com/.