“H-1B dependent employers” Lose Millions in Federal Claims Court

By David North on August 17, 2022

The heaviest users of H-1B visas, employers with more than 50 H-1B workers and with more than 50 percent of their staff in that status, just lost an attempt to deprive USCIS of millions in fees in the federal claims court, according to a Law360 report.

These employers had tried to make a distinction between causing the admission of an H-1B worker from overseas, for which they agreed fees were due, and the adjustment of status within the United States of the alien worker, a process that they argued should not involve an application fee. Many of these so-called 50/50 employers had hired — with a fat government subsidy — Optional Practical Training (OPT) program workers after the aliens involved had completed a U.S. college degree. Then, after the employers had won enough slots in the H-1B lottery to convert the OPT workers’ status to that of H-1B, they did so.

Law360 reports this with the following muted terminology:

The suit [sought] a refund of visa fees the companies allege they were illegally charged when they filed petitions to change the status of H-1B foreign national employees already admitted and working in the United States under another category of nonimmigrant status.

Given the editorial tilt of Law360, there is no mention of the fact that most of these adjustments must have been from F-1 visas (used for the OPT workers) to that of H-1Bs; OPT foreign workers, as the media never, never reveals, come with around an 8 percent discount, as the employers do not have to shoulder payroll taxes that fund the Social Security, Medicare, and unemployment insurance trust funds — taxes that they would have to pay had they hired citizen workers.

A number of years ago, Congress raised the H-1B fees for this group of employers that it aptly termed “H-1B dependent employers”, a term avoided by Law360, which prefers to use the employers’ less descriptive phase “50/50 employers”. This fee is now $4,000 and is one of several paid by the employers.

Charging adequate fees to H-1B employers is useful to the public as it tends to discourage the hiring of H-1B workers rather than citizens or green card holders with the same skills, another factor often ignored by the media. The H-1B-dependent employers, critics say, are more likely to exploit their workforce than employers hiring smaller percentages of alien workers.

It is helpful that Federal Claims Court Judge Ryan T. Holte ruled as he did last week, in a case that had been simmering for four years. It is not helpful that what little media coverage there is must be read with a codebook in hand to understand what is really happening.

The Federal Claims Court, where you can sue the government for monetary damages, is a specialized kind of federal court ranking along with the district courts. It sits in Washington, D.C.