Who pays what? Demystifying H-1B visa fees and wage compliance

Navigating the H-1B visa process can be complex for both employers and foreign workers, especially when it comes to understanding who is responsible for the various costs involved. The U.S. Department of Labor (DOL) and U.S. Citizenship and Immigration Services (USCIS) have clear rules that must be followed. Below is a detailed breakdown of the major cost components and who can — or must — bear the expense.

How much must an employer pay an H-1B foreign worker?
Employers are legally obligated to pay the H-1B worker the “required wage.” This is defined as the greater of the “actual wage” or the “prevailing wage.” This ensures that the foreign worker is not underpaid and that U.S. labor standards are upheld.

What is the “actual wage”?
The actual wage refers to the wage the employer pays to all other employees with similar qualifications and experience who perform the same duties. If the company employs multiple individuals in the same role, the H-1B worker must be paid at least what others earn in that position. If there are no comparable employees, the wage offered becomes the de facto actual wage.

What is the “prevailing wage”?
The prevailing wage is the average wage paid to similarly employed workers in a specific occupation within the area of intended employment. This rate is often obtained through:

• The DOL’s Foreign Labor Certification Data Center (FLCDC) wage database;
• A formal Prevailing Wage Determination (PWD) from the DOL;
• Private wage surveys that meet regulatory standards; or
• A Collective Bargaining Agreement (CBA), if one exists.

This ensures that foreign labor does not adversely affect U.S. workers by undercutting wages.

What H-1B fees must an employer pay?
Employers are strictly responsible for the following mandatory fees:
1. ACWIA Fee (American Competitiveness and Workforce Improvement Act):

• $1,500 for employers with more than 25 employees;
• $750 for small employers (25 or fewer employees).

This fee supports U.S. worker training programs.

2. Fraud Prevention and Detection Fee:

• $500, applicable to initial H-1B petitions or changes of employer.

3. Asylum Program Fee (effective 2024):

• $600 for large employers;
• $300 for small employers.

Introduced to help fund the U.S. asylum system.

These fees must be paid by the employer and cannot be recovered from the employee through any means — including wage deductions or voluntary payment.

Can the employee pay the Premium Processing fee?
Premium Processing currently costs $2,805 and expedites USCIS adjudication within 15 business days. While technically optional and often requested for the benefit of the employee (e.g., faster start date, travel planning), it exists in a gray area.

• If requested solely by the employee, it may be permissible for them to bear the cost. However, the employer should document the employee’s written request.
• If there is any employer benefit (e.g., project deadlines), DOL may determine that the employer is liable for the fee.
• Importantly, if payment of this fee causes the net wage to fall below the required wage, it becomes a compliance issue.

To mitigate risks, many employers choose to pay the Premium Processing fee even when it is ostensibly for the employee’s benefit.

Can employees pay other H-1B-related costs like attorneys’ fees?
The DOL considers most H-1B-related costs as employer business expenses. These include:

• Legal fees for preparing the Labor Condition Application (LCA) and the Form I-129;
• Filing fees for H-1B petitions, including amendments or extensions.

Such costs cannot be passed to the employee — either directly or indirectly — unless they are entirely separate from employer-required immigration services (e.g., green card services unrelated to H-1B status). Any unauthorized deduction that causes the wage to fall below the required level may trigger sanctions.

Even if an employee insists on hiring their own attorney, the employer cannot cede its legal responsibilities to the employee. The employer must still ensure compliance with all legal obligations — including payment.

Can an employer require repayment of H-1B costs if the employee resigns early?
Employers cannot impose penalties on an H-1B worker for leaving the job before a specific date if those penalties would reduce the net wage below the required level.

However, employers may include “bona fide liquidated damages” clauses in contracts, provided:

• They comply with applicable state laws;
• They reflect a reasonable estimate of actual financial loss;
• They are not punitive in nature.

Liquidated damages are distinct from penalties and must be drafted with legal precision.

What are the penalties for unauthorized wage deductions?
Unauthorized deductions can lead to:

• Back wage obligations;
• Civil monetary penalties;
• Debarment from the H-1B program or other immigration benefits.
  

Even if the H-1B worker’s net wage after deductions appears to exceed the required wage, any deduction deemed unauthorized by the DOL could result in a finding of non-compliance.

Final Thoughts
The rules surrounding H-1B wage and fee payments are designed to ensure fairness, protect foreign workers, and uphold U.S. labor standards. Employers must tread carefully and adopt a conservative, compliance-driven approach. When in doubt, assume the responsibility for all costs — particularly when the benefit clearly accrues to the employer.

Employers are strongly advised to consult experienced immigration counsel before entering into any fee-sharing or reimbursement agreements to avoid inadvertent violations.


(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)