Substantially Increased Fees for Certain H1Bs/L-1s

President Barack Obama signed a law on August 13, 2010, that increases funding for U.S. border security by $600 million. The funding for this increase in security will be paid for, in part, by substantially increasing the fees that some employers must pay when filing H1B and L-1 petitions. The increases, $2,000 for each H1B filing and $2,250 for each L-1 filing, apply to employers with 50 or more employees if more than 50 percent of the company workforce is comprised of H1B and/or L-1s workers.

Funding to Increase Federal Agents and Support Courts

The bill, formally known as the Emergency Border Security Supplemental Appropriations Act of 2010, will provide funding for retention of current border security staff, as well as the hiring of 1,000 federal officers and agents for the U.S. Border Patrol, U.S. Customs and Border Protection (CBP), and additional U.S. Immigration and Customs Enforcement (ICE) personnel. The funding will also provide $196 million to the U.S. Department of Justice to pay for U.S. marshals, Federal Bureau of Investigations (FBI), Drug Enforcement Administration (DEA), and Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) agents to be stationed along U.S. borders. Another $10 million is allocated to the Courts of Appeals, District Courts, and related services to meet the increased workload created by additional immigration enforcement.

Largest Indian IT Companies Face Brunt of Increase

The bill increases the fees for filing and for fraud prevention and detection required with petitions for nonimmigrants in the H1B ($2,000) and L-1 ($2,250) categories. These increases only apply to companies that employ 50 or more employees in the United States and whose U.S. workforce is made up of more than 50 percent L-1 and H1B workers.

Several different media outlets have reported that employees of the U.S. Senate have stated that these increased fees would primarily affect four Indian-based companies: Tata Consultancy, Wipro Ltd., Infosys Technologies Ltd., and Mahindra Satyam.

Other Industries / Employers Affected

Based on the criteria set forth in this bill, it is expected to also affect large and medium-sized IT consulting companies and other firms in the United States, with a primary focus on technology companies. It should be noted that the impact on these companies will not occur in a vacuum. The services of these companies, and the workers they provide, are utilized by major U.S. companies in most industry segments, as well as federal, state, and local governments. Thus, the increased financial burden is likely to send deep reverberations well beyond a handful of large non-U.S. based companies.

Details of Fee Increase Unclear

The wording in the bill regarding the fee increase is unclear. It references both the filing fee and fraud prevention and detection fee. However, there is not a specification as to the amount that either or both would be raised. That is, the language requires an increase of $2,000 in these fees for H1B petitions and $2,250 for L-1 petitions, but is not specific regarding how the increase will be allocated between the two types of fees at issue. Typically, standard filing fees are increased by the U.S. Citizenship and Immigration Services (USCIS) by regulation.

The fraud prevention and detection fee was created by Congress and is contained within the Immigration and Nationality Act (INA). Changes of this nature in a fee generally would be brought about through an amendment to that law. The procedure followed in designating this fee increase, therefore, is not standard and has prompted many questions regarding implementation. As of this writing, the USCIS is reportedly studying the matter. A USCIS teleconference on the topic is scheduled. MurthyDotCom and MurthyBulletin readers will be updated, as reliable information on the subject is made available.

Fee Increase to Sunset September 30, 2014

The increases in H1B and L-1 filing and fraud detection and prevention fees are set to remain in effect until September 30, 2014, unless otherwise extended.

Indian Government Registers Protest

The Indian government protested the law prior to its passage as being highly discriminatory. India’s Commerce and Industry Minister Anand Sharma sent written correspondence to U.S. Trade Representative Ron Kirk, expressing the Indian government’s concerns over the proposed increases in filing fees for H1B and L-1 petitions. Major Indian industry representatives have also voiced opposition and outrage.

Conclusion

This is likely to be an evolving issue, as the targeted employers may rush to file cases prior to implementation of the fee changes. This date has not been determined, as of this writing. Other affected employers may make adaptations in efforts to avoid the steep increases in H1B and L-1 filing fees. U.S. employers who rely upon the workers of the impacted companies are likely to face higher costs and other difficulties. This matter will be monitored closely and timely updates will be posted on MurthyDotCom, as this topic of international concern with widespread ramification continues to unfold.