H-1B Attorney Fees and Related Expenses

In our previous post we addressed the subject of who can pay for Perm applications. It was fairly straight forward. Now we will take a look at who is to pay for H-1B attorney fee and related expenses, which is not as straight forward as Perm applications.

The governing regulation is in 20 CFR 655.731(c)(9), which regulates what are authorized deductions for the purpose of filing a H-1B petition by an employer. It provides:

"Authorized deductions," for purposes of the employer's satisfaction of the H-1B required wage obligation, means a deduction from wages in complete compliance with one of the following three sets of criteria, . . . . . (ii) Deduction which is authorized by a collective bargaining agreement, or is reasonable and customary in the occupation and/or area of employment (e.g., union dues; contribution to premium for health insurance policy covering all employees; savings or retirement fund contribution for plan(s) in compliance with the Employee Retirement Income Security Act, 29 U.S.C. 1001, et seq.), except that the deduction may not recoup a business expense(s) of the employer (including attorney fees and other costs connected to the performance of H-1B program functions which are required to be performed by the employer, e.g., preparation and filing of LCA and H-1B petition); the deduction must have been revealed to the worker prior to the commencement of employment and, if the deduction was a condition of employment, had been clearly identified as such; and the deduction must be made against wages of U.S. workers as well as H-1B nonimmigrants . . . . "

Based on the above, the employer can deduct "Authorized Deductions" from an H-1B worker's pay, but things such as attorney fees and other costs connected to the performance of H-1B functions are "business expense" of the employer, which is not deductible. That means the employee cannot pay for his H-1B attorney fees, otherwise it is unauthorized deduction of business expense on the employer.

That said, other expenses associated with H-1B petitions may be paid by the employer worker. For example, attorney fees may be spent on an employment contract, or filing H-4 application for H-1B worker's families, etc.

On the other hand, the Department of Labor does not prohibit payment of the fees by a third party, as long as the third party does not get reimbursed by the H-1B employee. In Schorr and Yale-Loehr's paper "Corporate Cuts: reductions in Pay and Hours for Nonimmigrants", it provides:

"The Department agrees that the statute does not prohibit payment of the filing fee by a third party, nor does it require payment only from the employer. However, the Interim Final Rule does prohibit third-party payment if the third party receives or asks for reimbursement from the alien."

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