An employer classified as H-1B-dependent needs to include additional attestations in the Labor Condition Application used for the petition of any H-1B beneficiary being offered an annual compensation of less than $60,000 and without a master's degree.
The notion was introduced by the American Competitiveness and Workforce Improvement Act (ACWIA) passed in 1998 and operationalized through the United States Department of Labor's Interim Final H-1B Rule of December 20, 2000.
[1] One of the key goals of the concept of H-1B-dependence is to curtail the use of H-1B visas for the replacement of American skilled workers by cheaper labor from other countries.
The demarcation of H-1B-dependency is intended to strike a balance between the need to prevent large-scale use of the H-1B to facilitate "cheap labor" against the goal of minimizing the regulatory burden on employers who use the H-1B sparingly.
[8] In many cases (such as highly skilled professions and/or jobs in expensive urban areas) the minimum annual compensation needed to satisfy these attestations is in excess of $60,000.
Even though H-1B-dependence is a global designation applied to the company, the assertion made by the attestations differs based on the specific position in which the worker is being employed.
Ordinary LCAs do not require any attestation to demonstrate good-faith effort to hire a United States.
In this respect, ordinary LCAs differ from Permanent Labor Certification, which requires evidence of good-faith effort to recruit US workers.
Since being classified as H-1B-dependent requires employers to incur additional cost and complexity, and the threshold for H-1Bs generally increases with the number of full-time equivalent employees reported (with the exception of the downward jump from 50 to 51) employers are incentivized to make their count of full-time-equivalent employees as large as possible.
The 2000 Interim Final Rule from the U.S. Department of Labor provided the following guidance regarding the definition of full-time equivalent employee for the purpose of determining H-1B-dependence.
[5] Related entities need to also be included when computing the total number of FTE employees for the purpose of determining H-1B-dependency (although they are not relevant to the rest of the LCA).
Therefore, there is a stronger burden of proof to maintain and submit documentation in cases where an employer who prima facie appears H-1B-dependent (or borderline) files as a non-dependent.
As part of the exercise of filling an LCA, an employer can use a "snap shot" test: do a headcount of the workforce and of the current H-1B employees, and then compare against the thresholds.
[11] Additional documentation of employee lists and payroll, that was used to determine H-1B-dependency, should be maintained by the employer, but does not need to be part of the public access file.
Also, unlike the case of additional LCA attestations, there is no exemption for people based on how much they are earning or their educational qualifications.
Some interest groups, including some legislators, labor unions, and the White House, were concerned about the effects of these cap increases on native wages in the technology sector.
The introduction of the concept of H-1B-dependency, intended to prevent employers from using this visa to facilitate large-scale offshoring, was one such concession.
Specifically Section 1a (subsection 1) of the LCA explicitly states that the Additional Employer Labor Condition Statements are for the H-1B only.
[4] One of the ways employers responded to the generally increased regulations surrounding the H-1B, as well as the strict caps on the category, was to more liberally use the L-1 visa for intracompany transfers.