The H-1b is the most widely used nonimmigrant status for employment in the U.S. It is also the nonimmigrant status with the most costly government fees for employers, including a “training fee” of $750 for employers with 25 or fewer employees or $1500 for employers with more than 25 employees. The training fee is designed to fund training and education programs of the Dept. of Labor and National Science Foundation.
Since the H-1b training fee was added to the law more than twelve years ago, some employers have been exempt from the fee: nonprofit research organizations or governmental research organizations, institutions of higher education, and nonprofit entities affiliated or related to an institution of higher education. Some hospitals have been able to claim the fee exemption based upon being “affiliated or related” to institutions of higher education. However, the regulations define an affiliated or related organization as “a non-profit entity (including but not limited to hospitals or medical research institutions) that is connected or associated with an institution of higher education” in one of three ways:
- Through ownership or control by the same board or federation,
- Operated by an institution of higher education; or
- Attached to an institution of higher education as a member, branch, cooperative or subsidiary.
Two years after the H-1b training fee (and fee exemption) was added to the law, Congress expanded the list of exempt organizations to also include primary and secondary educational institutions and nonprofit entities which engage in established curriculum-related clinical training of students at an institution of higher education.
This expansion of exempt organizations to include nonprofit entities that engage in curriculum-related clinical training is especially important to hospitals now because of the recent trend of the USCIS (California Service Center) on H-1b cases for hospitals. Historically, the USCIS has treated hospitals as affiliated or related entities of institutions of higher education (thus cap exempt and H-1b training fee exempt) based upon affiliation agreements between the hospital and a university/college whereby they engaged in a joint program to train students (i.e. nurses, medical technologists, physical therapists, etc.). But recently, the USCIS has been requiring the hospital and university/college to have a tighter connection amounting to joint ownership and/or control among the entities themselves, not just the program.
Nonprofit hospitals who can’t prove affiliation or relation to an institution of higher education for the fee exemption, may nonetheless qualify for the fee exemption if they have an “established curriculum-related training of students at an institution of higher education”.