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Tips for Employers Hiring Individuals with H-1B Status

July 23, 2015
Minsky, McCormick & Hallagan

Beyond the issues employers face with every new hire, employers looking to hire individuals currently in H-1B nonimmigrant status with another employer encounter a number of important issues and questions. Before going through the trouble and expense of filing an H-1B petition, it is important that both the employer and the employee are aware of some common issues in the H-1B change of employer context:

Timing is everything:

Whether the future employee is still working with his or her initial H-1B employer is a key issue. Typically, an H-1B employee who is currently working with his or her H-1B employer in accordance with the terms of the original H-1B petition may begin work with a subsequent H-1B employer upon the filing of a new H-1B petition on his or her behalf. An employee in this situation should not be deemed to be failing to maintain status and should be eligible for a change of employer without incurring the need to travel abroad.

If the employee has already left the current H-1B employer, either because of termination or resignation, the situation is more complicated. There is no ‘grace’ period included in the law to allow an individual to switch employers following termination or resignation, and, once having left, the worker may be deemed to be “failing to maintain” his or her H-1B nonimmigrant status. The effect is that while the H-1B petition may be approved, the employee may be found ineligible to transfer the H1B to the new employer while remaining in the United States, meaning the employee would have to obtain a new H1B visa at a U.S. consulate abroad.

The Six year maximum

An important consideration for employers seeking to hire an H-1B employee is the question of how many years that employee has spent in H-1B status. A person can generally only be in H-1B status for six years before having to depart the country for a year. In addition, time spent in L status, either as an intracompany transferee of specialized knowledge or managerial/executive capacity, counts against the six year maximum. The same is true for persons in other statuses, such as H-3 or H-2B.

It should be noted that only time spent physically inside the United States in H or L status counts against the six years. Time spent outside the country for any reason can be “recaptured” through a petition filed with the government documenting the periods of time outside.

Two exceptions to the six year maximum exist for H-1B employees for whom the green card process has begun. For those H-1B employees who are beneficiaries of a PERM Labor Certification application filed before the end of their fifth year of H-1B status, one-year extensions beyond the six-year maximum are available. H-1B employees who are the beneficiaries of an approved I-140 Immigrant Petition for Alien Worker are eligible for three -year extensions beyond the six year maximum.

As a result of this limitation, some employers may find themselves in the position of having to begin green card sponsorship for an employee soon after hiring the employee just to ensure availability of extensions of H-1B status beyond the individual’s six year maximum. In addition, employers may need to temporarily send their new employees outside the U.S. while the green card process begins to add to the re-capturable time for the H-1B worker.

Who’s paying for this?

In light of all the complications involved in hiring an H-1B worker, it’s no surprise that significant expenses are also involved. An employer might think that these expenses should be passed to the employee; however, the regulations make clear that the employer is responsible for most costs associated with an H-1B petition. See our prior blog on this topic. An exception is the premium processing fee which is currently $1,225. The employee may pay the premium processing fee– if the employer is not legally required to pay it. With premium processing, the government will respond to the H-1B petition within fifteen days or refund the fee. Note that this does not guarantee an approval in fifteen days, as a response includes a possible request for additional evidence (RFE).

Note, however that employers often do require employees to enter into repayment agreements in the event the employee leaves before a certain period of time. Such agreements can be legal, provided that they consist of only bona fide liquidated damages to the employer, based on State law, and are not simply a penalty for ceasing employment with the H-1B employer.

Other issues

Besides the immigration questions surrounding a new hire, issues regarding the potential H-1B employee’s contractual obligations with his or her current employer must also be considered. Issues of at-will employment and non-compete clauses should be discussed with your employment counsel.

If you have questions regarding hiring a new H-1B workers or other immigration issues, the attorneys at Minsky McCormick and Hallagan are ready to answer your questions.

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