All about H-1B Labor Condition Applications

Through the H-1B program, thousands of noncitizens each year win a visa lottery that allows them to pursue their professional ambitions in the United States. Employees aren’t the only ones who benefit—American companies can tap talent that may not be present in the domestic market.

Companies wishing to sponsor noncitizen employees face several hurdles if they wish to hire a worker from abroad, one of which is the H-1B Labor Condition Application (LCA). Below, we explain the LCA process to help guide conversations with your employer as you prepare your H-1B application.

What is the H-1B visa?

The H-1B visa is a nonimmigrant visa that allows individuals from around the world who hold a bachelor’s or master’s degree to temporarily work and live in the U.S. 

American companies must sponsor noncitizen workers for H-1B visas by filing relevant petitions with the U.S. Department of Labor and USCIS. The H-1B visa has an initial term of three years which is extendable by up to three additional years. 

The H-1B is a dual intent visa that allows individuals living in the U.S. on the visa to file for adjustment of status. An H-1B employee has the option to apply for a Green Card and gain permanent residency in the U.S. after they complete their six years on the H-1B visa if their employer agrees to sponsor them.

What is the Labor Condition Application?

An employer must file a Labor Condition Application (LCA) with the U.S. Department of Labor before the H-1B filing deadline if they wish to hire a worker from abroad. It can take several weeks to receive a certified LCA from the Department of Labor (DOL), so employers are encouraged to file relevant forms in February and March prior to the opening of the H-1B lottery in April. 

There are four key attestations an employer must make within the Labor Condition Application, one of which is the agreement to pay the noncitizen the actual wage or the local prevailing wage for the occupation in the area of intended employment, whichever is higher.

The "actual wage is the wage that a company pays employees with similar “qualifications and work experience” who would fulfill the same role.

The prevailing wage is the average salary that employees filling the occupation in question earn within the geographic area where the company wants to hire a noncitizen worker.

A company hiring a software engineer in San Francisco, California, for example, would have a higher prevailing wage compared to another company hiring the same type of worker in Detroit, Michigan.

• The employer attests that hiring a noncitizen for the position in question will not harm the working conditions of U.S. workers in the area. They must also attest the noncitizen worker will enjoy the same working conditions offered to the company’s other U.S. employees. 

• The employer attests there is no strike, lockout, or dispute with one or more workers at the company. By requiring employers to attest to this fact, the DOL aims to ensure companies are not trying to hire H-1B workers to replace striking U.S. workers.

• The employer attests that all its employees are aware of the decision to hire a noncitizen for the position in question.

The DOL uses the LCA to ensure that any nonimmigrant visa issued to a skilled worker will not have a detrimental impact on American workers in those fields and areas.

Other information provided on the LCA form by a sponsoring employer includes:

• Job title

• Duration of position

• Employer and company attorney contact information

The DOL also requires H-1B sponsoring employers to post or display all filed LCAs in a public space. If a company files an LCA for a noncitizen worker, it must post that LCA document at the intended worksite or the head office of the company for at least ten days.

The sponsoring employer must also maintain the LCA in a public access file at their main place of business. Anyone should be able to inspect the file and it must contain:

• Copy of the signed and certified LCA

• Information about the actual wage paid to the H-1B employee

• Details on how that wage was calculated

• Explanation of the benefits the H-1B employee earns and how they are the same as those enjoyed by U.S. workers

• Evidence that the H-1B worker received a copy of the LCA

LCA processing times

Employers who have a history of hiring H-1B workers do not typically need more than seven days to certify their most recent H-1B LCA document. However, employers that have never completed an H-1B LCA filing may wish to allocate an additional week or two for DOL processing.

When a company files an LCA for the first time, the DOL system will not recognize the Federal Employer Identification Number they provide. Verifying the FEIN takes anywhere from five to seven working days.

H-1B LCA process

An employer must file the LCA for an H-1B visa each time they wish to sponsor noncitizen workers for a specific position. For example, a new LCA is not usually necessary if the same employer wishes to hire five software engineers at the same level, but it is necessary if they wish to hire five noncitizens in five different positions.

Employers complete the LCA filing through the iCERT system portal. The employer files and submits Form ETA 9035 electronically to ensure swift reception by the DOL and efficient processing. Information contained within the form includes:

• Job title

• Employer information

• Employer point of contact details

• Attorney information

• Place of employment information

• Actual and prevailing wage details

When there is a denial of the LCA application, the DOL provides details about their reasons for the petition denial. There are no appeals or motions for denied applications, but employers can file a new LCA if there is enough time before the H-1B filing deadline of the relevant fiscal year.

Employers can check the status of their Labor Condition Application at any time by logging into the iCERT platform with their credentials.

H-1B visa application process

An employer that receives a certified LCA from the DOL can continue the process of sponsoring a noncitizen worker for the H-1B visa. The next step involves filing an H-1B petition with the U. S. Citizenship and Immigration Services (USCIS).

H-1B cap

The U.S. has a cap on the number of H-1B visas issued to noncitizens each year. The existing H-1B cap for the 2020 fiscal year is 85,000 visas. 

Out of those 85,000, 20,000 visas are reserved for advanced degree holders, individuals holding a master’s degree. The remaining 65,000 visas are issued to noncitizens with a bachelor’s degree or higher.

H-1B lottery 

USCIS recently revised the procedure for the H-1B lottery. The first step is a lottery of all the H-1B applications into the regular 65,000 visas quota. 

If an individual with an advanced degree is not selected in this lottery, they get a second chance. USCIS conducts a second random lottery with advanced degree holders who are not selected in the first round to fill the remaining 20,000 advanced degree spots.

USCIS then notifies all employers who filed an H-1B petition whether their sponsored noncitizen workers were successful in the lottery. Successful lottery petitions allow companies to continue the H-1B application process.

Filing an H-1B application

Employers file H-1B applications on behalf of the employees they wish to sponsor for the nonimmigrant work visa. They are also responsible for paying all associated fees; the noncitizen worker may elect to pay for optional premium processing or attorney fees if he or she wishes. 

Every H-1B application must include Form I-129, Petition for a Nonimmigrant Worker, which includes details about the noncitizen worker as well as their prospective company and role.

There is a base filing fee of $460 for every H-1B application, along with an AICWA Fee of $750 or $1500. Employers with 26 or more full-time workers usually pay a higher fee.

USCIS charges employers $500 for fraud prevention and detection for each new H-1B application. There is also a $4000 Public Law 114-113 fee for companies that have 50 or more H-1B or L-1 Visa employees, or a workforce that is 50% or more noncitizens.

The H-1B application can be submitted using regular or premium processing; the choice has no impact on visa approval or denial. Regular processing for H-1B applications can take anywhere from a few weeks to a few months. Premium processing costs an additional $1,410 and takes 15 calendar days, but the applicant is responsible for the additional cost rather than the employer. 

The takeaway

If any skilled worker from outside the U.S. wishes to join an American company through the H-1B visa, they must ensure the employer files a Labor Condition Application with the U.S. Department of Labor. Filing the LCA for an H-1B visa ensures the employer is eligible to file an H-1B petition for the noncitizen employee with USCIS. 

 The H-1B visa offers skilled workers from around the world the chance to work and live in the U.S. It also benefits American companies that can hire talented individuals with skills that are scarce among the domestic workforce. You can find more information about this particular visa in our ultimate guide to the H-1B visa.

While the process of applying and obtaining the visa may appear daunting, this guide is intended to help simplify the process of starting your new life in the U.S. After you have been approved for your H1-B visa and are preparing to travel to the U.S., consider how you will live during your stay — especially how you manage your finances from setting up a bank account to managing your credit. In the U.S., credit history is important in securing things necessary for everyday life from credit cards to utilities and even your apartment. 

How Nova Credit can help you establish credit in the U.S.

Nova Credit creates a global Credit Passport that helps people bring their credit history with them when they move to the U.S. While your credit history won’t be transferred to national bureau databases, creditors and lenders can use your Credit Passport to evaluate your application for a loan, apartment, and other services. 

Nova Credit currently connects to international credit bureaus in Australia, Brazil, Canada, India, Mexico, Nigeria, South Korea and the UK. 

More from Nova Credit:

H-1B visa holders in the United States: An overview

H-1B visa stamping: H-1B visa interview documents and more

How does the “Buy American and Hire American” Executive Order affect the H-1B visa?

How to check H-1B visa processing times

The H-1B extension checklist: What you should bring for H-1B renewals 

How to find out if you've been selected in the 2020 H-1B lottery

How to Find H-1B Sponsors in 2020

H-1B to Green Card process: Everything you need to know about changing your status

The ultimate guide to the H-1B visa 

H-4 EAD: How to obtain work authorization when your spouse has an H-1B Visa

How to check the status of your H-1B visa application