Last Call for H-1B Petitions - April 1, 2009 Filing Window is Quickly Approaching
On March 31, 2009, U.S. employers may begin to file H-1B (specialty occupational professional) work visa petitions so that U.S. Citizenship and Immigration Services ("CIS") receives them on April 1, 2009, the first day of the filing program for the next federal year. In recent years, CIS has received many more H-1B petitions on the first day (last year redefined as the first week) of April than it had slots for the entire federal year. Statistically speaking, graduates of U.S. advanced degree programs had approximately a 70 percent chance of snagging a coveted H-1B approval last year, and undergraduates (or the equivalent) had an approximately 50 percent chance.
H-1B petitions can request an October 1, 2009 start date of employment. Employers that employ workers in statuses such as F-1 (student), J-1 (exchange visitor), L-1B (intracompany transferee with specialized knowledge) and some other temporary visa statuses may need to file an H-1B petition to retain a foreign national employee without a gap in employment authorization.
Now is the time to scour your employee roster and determine if your workforce includes foreign national workers who are on a time-limited work authorization. If so, and if your organization wants to keep the employee on board, you might need to file an H-1B petition in the first week of April. Further, it is also time to alert your recruiters that if they wish to extend offers to any foreign nationals who are abroad (or in the U.S. and not in H-1B status but need to transition to such status) they should consult with you as soon as possible. Please note that those who already hold H-1B status are not subject to the H-1B limit.
It is critical to engage in adequate planning in the H-1B sponsorship context, including accounting for issues such as any impact on foreign travel, strategies to bridge any gap in employment authorization through a STEM employment card or a "cap gap" H-1B filing.
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Selected Labor Certification Statistics for the First Quarter of Federal Year 2009
The U.S. Department of Labor ("DOL") has released statistics about PERM labor certification applications received in the first quarter of (fiscal year) 2009, spanning October 1, 2008 through December 31, 2008. DOL completed 4,571 cases during that period. It approved 3,074 cases, denied 1,328 (somewhat over 25%), and permitted employers to withdraw 169.
DOL commented that as of December 31, 2008, 67 percent of all cases were at the final review stage, and 26 percent of all cases were under audit. DOL indicated that it was deciding regular PERM cases not in audit that were filed in June 2008, and was reviewing cases under audit that were filed in August 2007.
DOL created the PERM process with the stated mission of reducing excessive processing delays that existed with the decentralized pre-PERM labor certification model, and now the PERM-based process is beginning to edge past an eight month delay even for non-audited cases.
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Things to Come - the New Labor Department iCERT System
The U.S. Department of Labor ("DOL") has created a new Labor Condition Application ("LCA") form and process for the H-1B, H-1B1, and E-3 temporary work visas, and will roll out the new LCA on April 15, 2009. The new LCA will become mandatory on May 15, 2009. Further, DOL is instituting a new PERM application form on July 1, 2009. All PERM cases filed on or after August 1, 2009 must be filed on the new PERM application. To better coordinate these kinds of LCA and PERM application filings DOL has created a new portal known as iCERT.
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US·VISIT Extended to Lawful Permanent Residents
The U.S. government previously instituted a system known as the
United States Visitor and Immigrant Status Technology (US•VISIT) to verify the identity and travel documents of certain non-U.S. citizen travelers to the United States. The US•VISIT system correlates biometric identifiers with information drawn from intelligence and law enforcement watch lists. Incoming foreign nationals may be required to provide fingerprints, photographs and other identifiers when they enter or depart from the United States. The U.S. government has now expanded the scope of US•VISIT to include U.S. lawful permanent residents. For more information about this expansion, please click
here.
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Stimulus Bill Creates Extra H-1B Visa Sponsorship Requirements for U.S. Employers Receiving TARP Funds
The just-enacted American Recovery and Reinvestment Act ("ARRA"), otherwise known as the “Stimulus Bill,” places new restrictions on U.S. employers that received funding under title I of the Emergency Economic Stabilization Act of 2008, otherwise known as the "TARP Bill," and that wish to file certain H-1B petitions during the next two years.
The new law does not bar such TARP recipient employers from filing H-1B petitions, but it does require them to ensure they meet additional pre-conditions previously applicable to only "H-1B dependent" employers, before they can file H-1B petitions. Please note that the law applies only to banks and other entities receiving TARP money or credit directly from the Federal Reserve System, rather than, for example, an engineering company that contracts with a state agency to build an infrastructure project that indirectly may have a connection to seminal TARP money. If your organization believes that this provision may apply to you and you wish to explore whether you can proceed with an H-1B case, please contact our team so we can help you work through whether this new law applies to you, and, if so, whether your organization can satisfy the requirements for still filing an H-1B case.
In their most basic form, the extra pre-filing requirements mandate: (1) that employers engage in a good faith effort to recruit qualified U.S. workers and to offer the job to any U.S. workers who has applied for the job and is at least as qualified as the foreign national the organization wishes to sponsor, and (2) that employers have not laid off workers in that occupation in the area of the intended employment of the H-1B worker within a 180 day window straddling the date the H-1B petition was filed.
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Tax Law Changes and Potential Impact on Expatriates
The 2008 enactment of the Heroes Earnings Assistance and Relief Tax Act (the "HEART Act") carries revised tax implications for certain individuals who relinquish United States citizenship or lawful permanent resident status after the law’s effective date. Along with the purpose of providing tax relief for military personnel and their families, the HEART Act is intended to deter high-net worth U.S. citizens and long-term residents from avoiding the payment of U.S. taxes by imposing an immediate exit tax on both the U.S. and foreign assets of these individuals.
Who is Covered by the HEART Act?
An individual who meets the definition of a "covered expatriate" is subject to the provisions of the HEART Act. An expatriate is any U.S. citizen who relinquishes his citizenship and any long-term resident of the U.S. who ceases to be a lawful permanent resident of the U.S. An expatriate is "covered" under the HEART Act if he (1) has an average annual U.S. income tax liability of at least $139,000 (in 2008 and as adjusted annually) for five years prior to expatriation; (2) has a net worth of at least $2 million; or (3) is unable or fails to certify that he met his U.S. tax obligations for the five years preceding expatriation or fails to submit such evidence of compliance as the IRS may require.
What Effect does the HEART Act have on Expatriates?
Before enactment of the HEART Act, there was no immediate tax effect on expatriates. Under the HEART Act, the taxable effect of expatriation is immediate and ongoing. An expatriate is deemed to sell all of his worldwide property on the day before his expatriation date, and he must recognize gain on this constructive sale (the "mark-to-market" rule). While certain items are excluded from the mark-to-market rule, distributions from these items are generally taxable even if they occur more than 10 years after expatriation. In addition, covered expatriates are subject to a reporting requirement and must provide an information statement to the Internal Revenue Service for any year in which the individual has any obligations under the HEART Act. Failure to provide the statement may result in a $10,000 penalty.
For a more detailed discussion please click
here.