Should Your Company Bear Immigration Costs?
As any HR professional knows, recruiting suitable employees for your organization can often be a costly and time-consuming business; according to a recent report issued by the Society for Human Resource Management, the average cost-per-hire is more than $4,000. When your workforce includes foreign nationals requiring immigration sponsorship, there is an additional layer of legal compliance that, while perfectly attainable with the right tools at your disposal, nevertheless may present logistics that require further negotiation with your employee. Chief among these: who pays for this?
As a starting point, it is helpful to identify the various filing fees that accompany some of the more common employment-based immigration processes. As the United States Citizenship and Immigration Services (USCIS) is an agency whose operations are financed entirely by the filing fees it collects, these are both plentiful and significant.
However, the precise amount of fees owed depends on several factors, such as the visa category being sought, the size of the petitioning employer, whether an initial granting or renewal is being sought, and whether expedited processing is requested. Furthermore, payment of certain fees and expenses are required by regulations to be incurred by the employer, and therefore off the table as far as negotiations with a prospective employee.
Even when the fee in question may be paid by either employer or employee, making the employer pay these upfront or through gradual paycheck reimbursements may adversely affect other aspects of the application process, such as satisfying any prevailing wage requirements. This is because such payments would constitute “unauthorized” deductions from an employee’s pay, and will therefore be deducted from the annual salary amount when being compared with the prevailing wage for the proffered position.
Follow all that? Well, if not, bear with us. The following is a more in-depth discussion of some of the fees associated with common types of employment-based immigration matters.
Nonimmigrant (Temporary) Petitions
The base filing fee for the I-129 Petition for Nonimmigrant worker (currently $460) is required for all types of petitions covered by this form, and may be paid by either the petitioning employer or the beneficiary. The same applies to the optional $1,225 fee for petitions eligible for Premium Processing, as well as any attorney fees owed in connection with the preparation of the I-129 petition and its accompanying documents. However, in the case of a petition seeking H-1B classification, federal regulations provide that the amount paid or reimbursed by the employee for any of these fees or costs cannot bring the annual wage to an amount that is below the required prevailing wage.
This restriction is in place because these are considered to be business expenses of the employer that, if passed on to an employee, serves to reduce the actual amount of compensation being paid in return for the performance of the job duties. In fact, the only types of payroll deductions that can bring the employee’s take-home pay to an amount below the prevailing wage are:
- Those required by law, such as FICA and income taxes;
- Those considered “reasonable and customary” such as union dues, insurance premiums or retirement contributions; or
- Expenses for the primary benefit of the employee, such as personal travel or relocation costs, and even then only with a written agreement in place.
There may be other ancillary fees that are required in addition to the I-129 base filing fee, depending on the immigration classification being sought. A $500 Fraud Prevention and Detection Fee is owed for all initial H-1B visa or L-1 visa filings, as well as transfers from another employer, but not for petitions seeking extensions with the same employer. For H-2B filings, this fee is $150.
In addition, under the American Competitiveness and Workforce Improvement Act of 1998, companies with 25 or fewer full-time equivalent employees in the United States face a fee (known as the “ACWIA fee”) of $750 on all H-1B initial filings, transfers, and the first request to extend an employee’s H-1B status; for companies with more than 25 employees the fee is $1,500. Most types of educational institutions (and their affiliated nonprofits) as well as nonprofit research organizations are exempt from this fee entirely.
Payment of both the Fraud Prevention and Detection and ACWIA fees must be made entirely by the employer; these fees may not be passed on to an employee under any circumstances.
Immigrant (Permanent) Petitions
For petitions through which employers are seeking to secure permanent residence for an employee, the regulations with regards to the payment of application fees and other associated costs is much more straightforward. In these types of matters, the time when employers must be especially careful not to be seen as attempting to pass on an expense to the employee takes place several months prior to the actual filing of the I-140 petition.
Specifically, federal regulations provide that an employer must bear all costs associated with the submission of an Application for Permanent Labor Certification (“PERM”) with the Department of Labor. This is one of the important steps that must be completed in advance of the immigrant visa petition.
Although the Department of Labor does not currently impose any filing fee for submission of the ETA 9089 form, applicable expenses could include attorney fees, or those incurred during the required recruitment steps, such as the placement of classified newspaper advertisements or the use of a recruitment service.
Other filing fees, such as the I-140 and I-485 fees which currently amount to $700 and $1,225 respectively, may be paid by either the employee or the employer with no penalties attached in either scenario.
The same would apply to a visa application fee, whether nonimmigrant or immigrant, paid in connection with consular processing when the employee is located outside of the United States during the application process.
In conclusion, employers should tread carefully when seeking to share responsibility for immigration costs with a desired employee. Be mindful of what fees are required by law to be borne by employers, and ensure any costs passed on to an employee does not push his or her salary below the minimum required threshold.
And if in doubt, pay them all! While the amounts involved can seem substantial at first glance, they form only a portion of the overall cost to fill key positions within your organization. And finding the right candidate? Worth its weight in gold (or immigration filing fees)!