6.     Attorney’s Fees, Labor Condition Applications,

and the H-1B Process

One of the most difficult aspects in processing the H-1B Petition is the Labor Condition Application process.  The American Competitive and Workforce Improvement Act of 1998 (ACWIA), which was published on December 20, 2000, made a burdensome procedure even more burdensome and unclear.

This memo will hopefully clarify one aspect of ACWIA, namely, the attestation as to wages, and the payment of attorney’s fees pertaining to the H-1B Petition and the Labor Condition Application segments of the H-1B visa process.

As explained in the Labor Condition Application memo contained in this pamphlet, it is a violation of federal regulations, specifically the wage provisions of the Labor Condition Application, if the H-1B worker is required to reimburse, or pay for the attorney’s fees, or other costs related to the preparation and filing of the H-1B petition, if after deducting these fees or costs from the employees wage, the employee’s wage would be below the wage required by the LCA.  The reason for this is as follows.

As stated on the Labor Condition Application, an employer is required to pay the higher of: the actual wage that is paid to similarly qualified and experienced workers in the position, or the prevailing wage of the occupational classification of a year of employment.  Any deductions that bring the wage being paid to the employee below the required wage is deemed to be in violation of the provisions of the Labor Condition Application and regulations as set forth by the Department of Labor. 

Federal regulations state that the attorney’s fees and filing fees relating to preparing the H-1B petition and Labor Condition Application are the legal responsibility of the employer which cannot be “imposed” on a prospective employee, if it would reduce the required wage rate. 20 C.F.R.  §655.731(c)(10)(ii).   Based upon  case law, this includes the attorney’s fees for preparing a J-1 waiver application and all related expenses thereto. 

Generally, all attorney’s fees, especially in post graduate training positions, bring the required wage rate below the rate listed on the LCA.  For example, if a physician is in a first year post graduate training position with an annual salary of $42,000, and the attorney’s fees allocated to preparing the H-1B Petition and Labor Condition Application are $3,000.00, the Department of Labor would determine that the actual wage rate being paid to the physician is $39,000.  Accordingly, the employer is in violation of the representation on the Labor Condition Application that the individual would be paid the prevailing wage for the position.

However, if the employer/prospective employer refuses to pay the attorney’s fees and expenses, but the beneficiary/employee is able to secure payment from a third party on their behalf and the beneficiary/employee does not reimburse the third party, then the employer may be in compliance with federal regulations.  This interpretation of the law is based on  20 C.F.R.  §655.731(c)(10)(ii)  which states the following:

 “If the filing fee is paid by a third party, and the H-1B Non Immigrant reimburses all or part of the fee to such third party, the employer shall be considered to be in violation of this provision, as the employer would in such circumstances have been spared the expense of the fee which the H-1B Non Immigrant paid.”

This regulation appears to imply that third party payment of these filing fees is acceptable,  as long as the H-1B Non Immigrant does not reimburse the third party. Based upon this reading, as well as the statute which imposes the attorney’s fees on the employer, an argument can be made that a third party is allowed to pay the attorney’s fees as well as the filing fees on the H-1B petition, as long as the H-1B Non Immigrant does not reimburse the third party.

This interpretation is consistent with an article published in Bender’s Immigration Bulletin Volume 7  Number 8, April 15, 2002,  which cited an anonymous Department of Labor spokesman who stated that payments on H-1B cases, including filing fees, can come from a third party, as long as the third party is not reimbursed by the H-1B beneficiary.

If an employer is not paying the attorney’s fees and expenses on the H-1b petition but is relying on third party payments they are doing so at their risk.  There is no guarantee or assurance that the Department of Labor will deem this as acceptable.  However, it is certainly a better alternative then having the H-1b beneficiary/employee/future employee pay these fees and expenses.  The best alternative is to have the employer pay the attorneys fees,  filing fees and expenses related to the H-1b process.

 An employer, upon receiving an H-1B Petition and Labor Condition Application package from an attorney, should verify with the attorney as to who is paying the attorney’s fee for that segment of the case, because if the fee is being paid by the beneficiary, the employer is in violation of the Labor Condition Application laws.

To summarize, as long as that part of the H-1B Petition and filing fees allocable to preparing and submitting the H-1B Petition and the Labor Condition Application are paid for by a third party, other than the beneficiary, or by the employer, and as long as the beneficiary does not reimburse the individual making said payment, the employer may be able to avoid  paying the attorney’s fees on a Labor Condition Application and H-1b petition.  However, there is no guarantee that the Department of Labor will accept the argument that a third party paid.  The best solution is for the employer to pay attorneys fees.

Last update:          November 24, 2005