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The New Law Regarding H-1B Cap

Just days after the H-1B visa legislation was pronounced dead, Congress passed the measure as part of the "1999 Omnibus Appropriations Bill" and it was signed into law by President Clinton on October 21, 1998. The high-tech community, which is a major user of H-1B visas, strongly pushed for the passage of this legislation since last year's annual 65,000 limit of H-1B visas was reached in May 1998, 5 months before the beginning of the 1999 fiscal year which began on October 1, 1998. Without an increase for this fiscal year the cap was expected to be reached as early as December 1998.

This new law temporarily raises the annual cap on H-1B visas, which allow skilled foreign nationals to obtain jobs in the United States to 115,000 for fiscal years 1999 and 2000, and 107,500 for fiscal year 2001. For fiscal years 2002 and thereafter the cap returns to 65,000, unless new legislation is passed.

The new law also imposes a new $500 fee (over and above the current INS filing fee of $110) on employers who sponsor H-1B employees. The fee will be used to fund math, computer science, and engineering scholarships and job training programs for American workers, and to fund Department of Labor administration and enforcement activities. Employers may not require an alien to reimburse or otherwise compensate the employer for the cost of this fee. If they do they are subject to a $1,000 fine per violation. This new fee is required for H-1B applications received by the INS on or after December 1, 1998.

The new law also requires employers to offer H-1B nonimmigrants benefits and eligibility for benefits (including participation in health, life, disability, and other insurance plans, retirement and savings plans, bonuses and stock options) on the same basis, and in accordance with the same criteria as are offered to US workers.

The new law also adds additional requirements for "H-1B dependent employers." H-1B dependent employers include the following: Companies with 1 to 25 employees in the US and more than 7 H-1Bs, companies with 26 to 50 employees in the US and more than 12 H-1Bs, and companies with more than 50 employees in the US and 15% or more H-1Bs. H-1B dependent employers should discuss the new H-1B law with their lawyers since the provisions are much too complicated to discuss in this article.

For additional details regarding this new law it is advised that you contact your US Immigration lawyer.