Last week, we asked what would happen when the $100,000 H-1B fee reached its September 20 expiration date. The administration answered that question on September 18 with two separate actions. The first is a presidential proclamation extending the $100,000 payment requirement for another 12 months, through September 21, 2027. The second is a new Executive Order that directs federal agencies to consider an employer’s recent and planned layoffs when reviewing H-1B petitions.
While it is presently unclear as to whether the administration will attempt to implement the fee extension, as its virtually identical predecessor remains blocked by the courts, it preserves the fee should the courts eventually rule in its favor.
The Executive Order is likely to have a greater near-term impact on employers’ day-to-day H-1B programs as its layoff review applies across all H-1B filings, including extensions for workers already here.
The $100,000 Fee Extension
- The fee has been extended on paper through September 21, 2027. The new proclamation continues the restriction imposed by the prior proclamation. It applies to H-1B workers who must enter the United States to act on an approved petition, through consular notification, port-of-entry notification, pre-flight inspection or pre-clearance.
- The fee is likely unenforceable. On June 8th, a federal court vacated the agency policies implementing the prior fee proclamation and on July 24th, the appellate court declined to reinstate the fee while the government’s appeal proceeds. To collect the fee through this proclamation, the administration needs new implementing guidance, which would face a similar legal challenge.
The Executive Order: Layoffs Are Now a Factor in H-1B Decisions.
- Agencies must consider layoffs at every stage. The Departments of Labor, Homeland Security and State are directed to consider, in any H-1B labor condition application (LCA), petition, visa or entry decision, whether the sponsoring employer directly or indirectly conducted layoffs in the previous year, or plans future layoffs, that negatively affect similarly situated U.S. workers.
- The order is not limited to new hires. The order applies to “any” labor condition application, petition, visa or entry. As written, that covers extensions, amendments and changes of employer for workers already in the United States, not only new petitions for workers abroad.
- The Department of Labor (DOL) will review past LCAs. Within 30 days of the order, DOL’s Wage and Hour Division must begin reviewing previously filed LCAs to determine whether enforcement action against sponsoring employers is warranted. Employers should expect closer attention to LCA compliance and public access files.
- More agencies will have a role in H-1B review. The Department of Commerce, the Department of Education and the Small Business Administration will now provide wage, employment, academic and industry data for use by H-1B adjudicators.
- Key questions remain unanswered. The order does not define what counts as a layoff, what an “indirect” layoff is, who is “similarly situated,” or what significance a layoff should have on current H-1B workers. Until agency guidance is issued, employers should assume that all recent workforce reductions will be reviewed.
What Employers Should Consider
- Compare recent reductions in force with your H-1B workforce. Identify any layoffs in the past 12 months that affected positions similar to those held by H-1B workers, whether by job title, occupation or worksite. This review should include workers seeking H-1B extensions.
- Document how sponsored roles differ from eliminated roles. Be prepared to explain the occupations, locations, timing and business reasons behind any recent layoffs. Clear records demonstrating that H-1B positions differ from eliminated positions in duties, skills, location or business unit will be critically important.
- Make sure layoff decisions are documented on neutral criteria. The order cites the immigration-related anti-discrimination provision of law enforced by the Department of Justice. Selection decisions in any reduction in force should rest on documented, legitimate business criteria.
- Involve immigration counsel in advance of layoff discussions. Planned layoffs are expressly within the scope of the order. HR, legal and global mobility teams should coordinate early so upcoming H-1B petition filings address any planned restructuring.
- Review LCA compliance. With the Wage and Hour Division reviewing previously filed LCAs, confirm that public access files, wage records and worksite information are complete and accurate.
- Do not assume a layoff disqualifies an H-1B filing. The order directs agencies to consider layoffs, but it does not prohibit sponsorship by employers that have reduced their workforce.
Our Perspective
The fee extension largely preserves the administration’s position while the litigation continues. The Executive Order links an employer’s broader workforce decisions to its ability to sponsor H-1B talent, and it asks agencies to consider factors that do not appear in the H-1B statute’s traditional requirements. While we anticipate legal challenges to the Executive Order and any implementing guidance, employers with recent or planned layoffs should review their H-1B programs with counsel before filing any new, extended or amended H-1B petitions.
Meltzer Hellrung will continue to monitor both actions and provide updates as the agencies issue implementing guidance. If you have questions about how these developments could affect your H-1B program or workforce planning, or require assistance in developing H-1B layoff analysis protocols, please contact your Meltzer Hellrung professional.
