U.S. Outlines New Rules for H-1B Working-Visa Holders

The U.S. has outlined plans for new rules for holders of H-1B, or skilled-worker, visas, making the application process more expensive and potentially costing companies millions of dollars.

The draft guidelines say that employers of H-1B visa holders must now file an amended visa application along with a Labor Condition Application if a foreign employee shifts to a work site outside the area covered by the original visa.

An employer will have to pay $325 to file an amended H-1B application with the U.S. Citizenship and Immigration Service. Previously, a skilled-worker visa holder only had to file a Labor Condition Application with the Department of Labor when he or she changed job locations. There is no fee for filing an LCA.

Once the amended visa application is filed, the foreign employee can immediately begin to work at the new location, the immigration agency said in the draft guidelines issued May 27. The immigration agency is seeking comments on the draft guidelines until June 26, after which they are expected to come into effect.

“This is an extremely troubling and expensive development for the IT-consulting firms–both Indian and U.S.,” said Scott J. FitzGerald, a partner with U.S.-based law firm Fragomen, Del Rey, Bernsen & Loewy, LLP.

Mr. FitzGerald said thousands of additional H-1B petitions will need to be filed by such employers. “This represents nothing short of an additional and large tax by the U.S. government on these employers,” he said.

Indian industry officials warned the proposed rule change could ratchet up the cost of keeping workers in the U.S.–analysts estimate roughly 30,000 Indian H-1B visa holders work in the U.S. now and often change sites as they move from one project to the next.

Including the fees paid to immigration attorneys, who file the visa petitions on behalf of employers, the process could cost companies $1,000 or more each time a worker changes location.

The draft guidelines will be applicable retrospectively to all H-1B visa holders who changed their work site before May 21 when USCIS issued a web alert about the change. Visa holders who changed location after May 21 must also submit amended applications. The immigration agency has given employers until August 19 to file fresh applications.

“The retroactive clause is the biggest concern the industry has,” said Gagan Sabharwal, director for trade and development at India’s main software trade body, the National Association of Software and Services Companies.

The industry body is concerned about the lack of clarity on the timings of the implementation of the final guidelines.

“Companies can’t wait for the decision, which will only give them less than a month’s notice to be able to make changes to thousands of petitions,” Mr. Sabharwal said.