(a) An employer that is H-1B-dependent or a willful violator of
the H-1B program requirements (as described in §655.736) is subject to the
attestation obligations regarding displacement of U.S. workers and recruitment
of U.S. workers (as described in §§655.738 and 655.739, respectively)
for all LCAs that are filed during the time period specified in
§655.736(g). However, these additional obligations do not apply to an LCA
filed by such an employer if the LCA is used only for the employment of
"exempt" H-1B nonimmigrants (through petitions and/or extensions of
status) as described in this section.
(b) What is the test or standard for determining an H-1B nonimmigrant's
"exempt" status? An H-1B nonimmigrant is "exempt" for
purposes of this section if the nonimmigrant meets either of the two following
criteria:
(1) Receives wages (including cash bonuses and similar compensation) at an
annual rate equal to at least $60,000; or
(2) Has attained a master's or higher degree (or its equivalent) in a
specialty related to the intended employment.
(c) How is the $60,000 annual wage to be determined? The H-1B
nonimmigrant can be considered to be an "exempt" worker, for purposes
of this section, if the nonimmigrant actually receives hourly wages or annual
salary totaling at least $60,000 in the calendar year. The standards applicable
to the employer's satisfaction of the required wage obligation are applicable
to the determination of whether the $60,000 wages or salary are received (see
§655.731(c)(2) and (3)). Thus, employer contributions or costs for
benefits such as health insurance, life insurance, and pension plans cannot be
counted toward this $60,000. The compensation to be counted or credited for
these purposes could include cash bonuses and similar payments, provided
that such compensation is paid to the worker "cash in hand, free and
clear, when due" (§655.731(c)(1)), meaning that the compensation has
readily determinable market value, is readily convertible to cash tender, and
is actually received by the employee when due (which must be within the year
for which the employer seeks to count or credit the compensation toward the
employee's $60,000 earnings to qualify for exempt status). Cash bonuses and
similar compensation can be counted or credited toward the $60,000 for
"exempt" status only if payment is assured (i.e., if the
payment is contingent or conditional on some event such as the employer's
annual profits, the employer must guarantee payment even if the contingency is
not met). The full $60,000 annual wages or salary must be received by the
employee in order for the employee to have "exempt" status. The wages
or salary required for "exempt" status cannot be decreased or pro
rated based on the employee's part-time work schedule; an H-1B nonimmigrant
working part-time, whose actual annual compensation is less than $60,000, would
not qualify as exempt on the basis of wages, even if the worker's earnings, if
projected to a full-time work schedule, would theoretically exceed $60,000 in a
year. Where an employee works for less than a full year, the employee must
receive at least the appropriate pro rata share of the $60,000 in order
to be "exempt" (e.g., an employee who resigns after three
months must be paid at least $15,000). In the event of an investigation
pursuant to subpart I of this part, the Administrator will determine whether
the employee has received the required $60,000 per year, using the employee's
anniversary date to determine the one-year period; for an employee who had
worked for less than a full year (either at the beginning of employment, or
after his/her last anniversary date), the determination as to the $60,000
annual wages will be on a pro rata basis (i.e., whether the
employee had been paid at a rate of $60,000 per year (or $5,000 per month)
including any unpaid, guaranteed bonuses or similar compensation).
(d) How is the "master's or higher degree (or its equivalent) in a
specialty related to the intended employment" to be determined?
(1) "Master's or higher degree (or its equivalent)," for purposes
of this section means a foreign academic degree from an institution which is
accredited or recognized under the law of the country where the degree was
obtained, and which is equivalent to a master's or higher degree issued by a
U.S. academic institution. The equivalence to a U.S. academic degree cannot be
established through experience or through demonstration of expertise in the
academic specialty (i.e., no "time equivalency" or
"performance equivalency" will be recognized as substituting for a
degree issued by an academic institution). The INS and the Department will
consult appropriate sources of expertise in making the determination of
equivalency between foreign and U.S. academic degrees. Upon the request of the
INS or the Department, the employer shall provide evidence to establish that
the H-1B nonimmigrant has received the degree, that the degree was earned in
the asserted field of study, including an academic transcript of courses, and
that the institution from which the degree was obtained was accredited or
recognized.
(2) "Specialty related to the intended employment," for purposes
of this section, means that the academic degree is in a specialty which is
generally accepted in the industry or occupation as an appropriate or necessary
credential or skill for the person who undertakes the employment in question. A
"specialty" which is not generally accepted as appropriate or
necessary to the employment would not be considered to be sufficiently
"related' to afford the H-1B nonimmigrant status as an "exempt H-1B
nonimmigrant."
(e) When and how is the determination of the H-1B nonimmigrant's
"exempt" status to be made? An employer that is H-1B-dependent or
a willful violator (as described in §655.736) may designate on the LCA
that the LCA will be used only to support H-1B petition(s) and/or request(s)
for extension of status for "exempt" H-1B nonimmigrants.
(1) If the employer makes the designation of "exempt" H-1B
nonimmigrant(s) on the LCA, then the INS -- as part of the adjudication of the
H-1B petition or request for extension of status -- will determine the worker's
"exempt" status, since an H-1B petition must be supported by an LCA
consistent with the petition (i.e., occupation, area of intended
employment, exempt status). The employer shall maintain, in the public access
file maintained in accordance with §755.760, a list of the H-1B
nonimmigrant(s) whose petition(s) and/or request(s) are supported by LCA(s)
which the employer has attested will be used only for exempt H-1B
nonimmigrants. In the event of an investigation under subpart I of this part,
the Administrator will give conclusive effect to an INS determination of
"exempt" status based on the nonimmigrant's educational attainments
(i.e., master's or higher degree (or its equivalent) in a specialty
related to the intended employment) unless the determination was based on false
information. If the INS determination of "exempt" status was based on
the assertion that the nonimmigrant would receive wages (including cash bonuses
and similar compensation) at an annual rate equal to at least $60,000, the
employer shall provide evidence to show that such wages actually were received
by the nonimmigrant (consistent with paragraph (c) of this section and the
regulatory standards for satisfaction or payment of the required wages as
described in §655.731(c)(3)).
(2) If the employer makes the designation of "exempt" H-1B
nonimmigrants on the LCA, but is found in an enforcement action under subpart I
of this part to have used the LCA to employ nonimmigrants who are, in fact, not
exempt, then the employer will be subject to a finding that it failed to comply
with the nondisplacement and recruitment obligations (as described in
§§655.738 and 655.739, respectively) and may be assessed appropriate
penalties and remedies.
(3) If the employer does not make the designation of "exempt" H-1B
nonimmigrants on the LCA, then the employer has waived the option of not being
subject to the additional LCA attestation obligations on the basis of employing
only exempt H-1B nonimmigrants under the LCA. In the event of an investigation
under subpart I of this part, the Administrator will not consider the question
of the nonimmigrant(s)'s "exempt" status in determining whether an
H-1B-dependent employer or willful violator employer has complied with such
additional LCA attestation obligations.
[65 FR 80227, Dec. 20, 2000]