The Top 5 Actions for H-1B Cap Employers to Take on October 1, 2024

Once an employee’s H-1B change of status becomes effective on October 1, certain obligations are required of sponsoring employers. Employers, please take note of these reminders today.

1. I-9 Reverification for Certain Student Employees. Employees who were working pursuant to USCIS Cap Gap (see USCIS Cap Gap Guidance) with an expired student Employment Authorization Document (EAD) must reverify their work authorization pursuant to their new H-1B status. Employers should carefully review the I-9 employers’ handbook to ensure they comply with all relevant and current I-9 regulations (see additional I-9 information from USCIS here).
2. Withhold FICA Taxes. On October 1, once a student employee’s H-1B change of status becomes effective, an employer must begin withholding FICA taxes. (IRS Guidance on H-1B Change of Status)
3. Review Name and FEIN Number of Sponsoring Employer. Nearly every year an employer mistakenly believes that they have transferred each sponsored H-1B employee to the correct sponsoring entity as listed on the approved H-1B petition and approved Labor Condition Application, only to later find out (usually at the time of preparing an extension petition), that the employee has been working for the wrong entity all along. An employer should therefore review the approval notice and review their internal systems to ensure the approved employer is, in fact, the employer of record for each sponsored employee.
4. Confirm Terms and Conditions Related to H-1B Salary. Prior to October 1, if an employee is working in F-1, H-4, L-1, L-2, TN, or some certain other status(es)- there is no Department of Labor driven minimum salary requirement. But, once the H-1B cap petition is approved, employers must pay wages equal to or greater than the offered salary pursuant to the certified Labor Condition Application and approved H-1B petition. Some employers may need to “wage up” the H-1B employee on October 1, or later, if the H-1B cap petition is not approved until after October 1.
5. Worksite Location Changes Require Amendment Analysis. Employers must ensure that H-1B employees are reporting to the location(s) listed in the LCA and H-1B Petition. Worksite locations, including home worksites for those who telework, are subject to inspection by the Fraud Detection and National Security Directorate (FDNS). Employers should ensure their employees are working in compliance and inform employees of their rights in the case of inspection. If an H-1B employee has authorization to work from home, the employer will need to ensure that the employee reports any anticipated move in advance so that an amendment assessment may be completed.

For questions about any of these reminders, you may contact Lynn O’Brien, a Partner in our Washington, DC office.

• Lynn O’Brien: (202) 372-9530 / lynn.obrien@quarles.com