As the new fiscal year begins on October 1, 2024, employers with H-1B cap employees must ensure they are meeting compliance obligations. Here are the top five steps employers should take to stay compliant with U.S. immigration and employment regulations.
Update I-9 for Employees Transitioning from Student Status
Employees transitioning from Cap Gap F-1 status to H-1B need their Form I-9 updated to reflect their new work authorization. This applies to those who were working under Cap Gap provisions with expired student employment authorization documents (EADs). Employers must verify the new status and complete I-9 updates according to current USCIS guidelines. Checking the latest I-9 instructions will ensure compliance.
Start FICA Tax Deductions
Once an employee’s H-1B status is active on October 1, it is essential to begin FICA (Social Security and Medicare) tax withholdings, as employees under F-1 status are exempt but lose this exemption when they switch to H-1B. Employers should make necessary payroll adjustments and follow IRS guidelines to comply with tax requirements.
Verify the Sponsoring Entity Information
Employers must ensure the entity listed as the sponsor on the approved H-1B petition and Labor Condition Application (LCA) matches the actual entity employing the H-1B worker. Mistakes in assigning employees to the wrong entity can lead to issues during audits or when filing extension applications. Employers should confirm that all records accurately reflect the correct employer.
Ensure Compliance with H-1B Salary Requirements
After the H-1B petition is approved and the employee’s status becomes effective, employers must pay the wage rate specified in the certified LCA. This is different from some other visa statuses where Department of Labor wage requirements may not apply. Employers must review and adjust salaries if necessary to meet the minimum wage obligations once the H-1B status begins.
Check and Monitor Worksite Locations
Employers must confirm that H-1B employees are working at the locations approved in their H-1B petitions and LCAs, including remote work sites. The U.S. government may inspect these locations to ensure compliance, so it’s important that employees are informed of their rights and responsibilities. If an H-1B employee plans to move or work from a different location, an amendment may be required to update the worksite details.
Conclusion
By following these steps, H-1B employers can remain compliant and support their employees effectively as the new fiscal year begins. Staying proactive with these actions helps avoid complications and ensures a smooth transition for both employers and employees.
For assistance with H-1B compliance and other immigration-related matters, NPZ Law Group is here to help. Contact us for tailored guidance on managing your H-1B workforce.