Section-by-Section Summary


Section-by-Section Summary of the

“American Competitiveness and Workforce Improvement Act of 1998”


(Included in the Omnibus Appropriations Act)


Enacted: October 21, 1998


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H-1B ACWIA Law</br> Section-by-Section Summary 1

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Prepared by: The American Immigration Lawyers Association

Section 401: Short Title; Table of Contents

Section 411: Temporary Increase in Access to Temporary Skilled Personnel Under H-1B Program

  • Increases cap on H-1B visas from current 65,000 to 115,000 for Fiscal Year 1999; 115,000 in Fiscal Year 2000; and 107,500 in Fiscal Year 2001.
  • Returns Cap to 65,000 for Fiscal Year 2002 and thereafter.


Section 412 Protection Against Displacement of United States Workers In Case of H-1B Dependent Employees


(a) New Attestations – ACWIA

Required of: H-1B dependent employers (defined in subsection (b), below) and employers found, on or after the date of enactment, to have committed a willful violation within the five years preceding the filing of the LCA.

Exception: No new attestations are required if employer is petitioning for an H-1B nonimmigrant who holds a master’s or higher degree (or its equivalent) in a field related to the intended employment or receives wages (including cash bonuses and similar compensation) at an annual rate of at least $60,000 (“exempt H-1B nonimmigrant”).

Effective Dates: New attestations only required on LCAs filed after final regulations issued and until 10/1/2001.

Displacement Attestations: Required employers (see above) must attest that they have not “displaced” – defined in subsection (b) – and will not displace any U.S. worker employed by them within the period 90 days before and 90 days after the filing of a visa petition based on that LCA. Must also attest that they will not place the H-1B nonimmigrant with another employer (where there are “indicia” of an employment relationship between the nonimmigrant and the other employer) unless the petitioning employer has inquired and has no knowledge of the fact that the other employer has displaced or will displace a U.S. worker within the 90 days before and 90 days after the H-1B nonimmigrant is placed with the other employer.

Notice to Contractors: New notice on LCA informing H-1B dependent employers that if they place a nonimmigrant at another employer’s worksite and the other employer displaces a U.S. worker during the period described in the attestation, they are still liable and may be subject to penalties (see Penalties section below).

Recruitment Attestation: Required employers also must attest that they have taken good-faith steps to recruit in the United States using industry-wide standards and offering prevailing wages and that they have offered the position to any U.S. worker who applies and is equally or better qualified than the H-1B nonimmigrant. However, employers are not prohibited from using selection standards normal or customary to the type of job involved, as long as they do not apply the standards in a discriminatory manner. Exception: Recruitment attestation is not required if the H-1B nonimmigrant would otherwise qualify as an EB-1 nonimmigrant (extraordinary ability, outstanding professor or researcher, or multinational manager or executive).

(b) H-1B dependent employer and other definitions:

  • “H-1B Dependent Employer”: determined according to the following scale:

–1-25 full time equivalent employees in the U.S.: more than 7 H-1Bs

–26-50 FTE employees in the U.S.: more than 12 H-1Bs

–More than 50 FTE employees in the U.S.: 15% or more H-1Bs.

  • Dependent calculations: In calculating whether an employer is H-1B dependent, exempt H-1B nonimmigrants are not counted during the first six months after the date of enactment or until final regulations are issued, whichever is longer.
  • “Exempt H-1B nonimmigrant” is as described in the summary for Section 102, supra.
  • Corporate Families: For purposes of determining whether an employer is an H-1B dependent employer, any group which is treated as a single employer under Section 414 (b), (c), (m), or (o) of the Internal Revenue Code is considered a single employer.
  • “Displace”: for purposes of the layoff attestation defined as the laying off a U.S. worker from a job that is essentially the equivalent of the job for which the H-1B nonimmigrant is sought. A job is not “essentially equivalent” unless it has essentially the same responsibilities, was held by a U.S. worker with substantially equivalent qualifications and experience, and is located in the same area of intended employment.
  • “Lay off”: defined as a worker’s loss of employment other than through discharge for inadequate performance, violation of workplace rules, cause, voluntary departure or retirement, or the expiration of a grant or contract (other than a temporary employment contract entered into in order to evade the layoff attestation). It does not include any situation in which the worker is offered similar employment with the same employer (or in the case of third-party placement, with the other employer), at equivalent or higher compensation and benefits, regardless of whether such offer is accepted. (However, this provision does not limit an employee’s rights to other remedies under a collective bargaining agreement or other employment contract.)
  • U.S. worker: defined as: (a) A citizen or national of the United States; (b) a lawful permanent resident; (c) a person admitted as a refugee under Section 207; (d) a person granted asylum under Section 208; or (e) an “immigrant otherwise authorized” to be employed (not a nonimmigrant).

(c) Electronic Posting: Where there is no bargaining representative, the LCA notice may be posted through electronic notification to employees in the occupational classification in which H-1B nonimmigrants are sought.

(d) Effective Dates:

  • The new attestation provisions are effective upon issuance of final regulations to carry them out.
  • The new electronic posting requirement is effective upon enactment.
  • The definitions in this section are effective upon enactment.

(e)Regulatory Comments –The Secretary of Labor and the Attorney General may shorten the required period of public comment to not less than 30 days on proposed regulations.


Section 413: Changes in Enforcement and Penalties – ACWIA


(a) Enforcement and Penalties:

  • Basic Penalties: $1,000 fine and not less than 1 year debarment for failure to meet the no strike or lockout or layoff attestations (if required), a substantial failure to meet the working conditions, posting or recruitment attestations, or misrepresentation of a material fact in an application.
  • Willful Penalties: $5,000 fine and not less than 2 year debarment for any willful failure to meet any attestation condition, or willful misrepresentation of a material fact, or violation of the whistleblower clause.
  • Heightened Penalties for Severe Violations: $35,000 fine and no less than 3 year debarment for willful failure or willful misrepresentation of a material fact in the course of which an employer displaced a U.S. worker within the 90 days before and 90 days after the filing of a visa petition based on the application.
  • Whistleblower protection: An employer may not intimidate, threaten, restrain, coerce, blacklist, discharge or otherwise discriminate against an employee (including a former employee or applicant for employment) because such individual has disclosed information to the employer or anyone else regarding a potential violation, or for cooperating in an investigation or proceeding. The Attorney General and Secretary of Labor will devise a process by which H-1B nonimmigrants that file complaints may be allowed to remain and work in the U.S. for another employer.
  • New penalty for “unconscionable contract provisions”: Employer may be fined $1000 per violation for requiring an H-1B nonimmigrant to pay a penalty for leaving the employer’s employ prior to a date agreed to by the nonimmigrant and the employer. The Department of Labor shall determine whether a required payment is a penalty pursuant to relevant State law, but it shall not include lawful liquidated damages. The employer also would be required to return such amount to the nonimmigrant.
  • No “benching” rule: Employers must pay H-1B nonimmigrants the required wage for the full hours specified on the H-1B visa petition even if the beneficiary is in nonproductive status due to a decision by the employer, or based on the nonimmigrant’s lack of a permit of license, i.e., full-time employees must be paid full-time wages, and part-time employees must be paid for the minimum hours stated on the petition. Further, employers must pay H-1B nonimmigrants the required wage beginning no later than 30 days after the date the nonimmigrant is admitted to the United States pursuant to the petition, or 60 days after the nonimmigrant becomes eligible to work for the employer. However, this provision does not apply for nonproductive time due to non-work-related factors, such as voluntary absence (at the request of the nonimmigrant) or circumstances rendering the individual unable to work. Schools or other educational institutions may apply established salary practices to H-1B nonimmigrants, including payment for less than 12 months, as long as such payment schedule is agreed to by the H-1B nonimmigrant. Violation of this provision is considered a violation of the wage requirement and subject to the same penalties.
  • New Benefits Requirement: Employers must offer H-1B nonimmigrants benefits and eligibility for benefits (including participation in health, life, disability, and other insurance plans, retirement and savings plans, bonuses and stock options) on the same basis, and in accordance with the same criteria as are offered to U.S. workers. Violations of this provision are treated as violations of the wage requirement and subject to the same penalties. Allows the Department of Labor to order an employer found in violation of this paragraph to provide such benefits or eligibility for benefits as an administrative remedy.

(b) Arbitration for Disputes Involving the Qualification of U.S. Workers:

  • The Attorney General will establish a process for the receipt and review of complaints regarding an employer’s failure to offer a job opportunity to a qualified U.S. worker (if required to so attest) or misrepresentation of material facts with regard to such condition. Any aggrieved individual who has applied for the position may file complaints. Complaints must be filed within 12 months of the date of the failure or misrepresentation.
  • The AG will determine from the complaint whether there is reasonable cause to believe that a violation occurred. If so, the Attorney General will initiate a binding arbitration proceeding with an arbitrator from the Federal Mediation and Conciliation Service, with proceedings under the rules of that Service. The Attorney General will pay the fees for the proceedings.
  • The arbitrator cannot find a failure or misrepresentation unless the complainant demonstrates such failure by clear and convincing evidence.
  • The Attorney General may review and reverse or modify the findings of the arbitrator.
  • A Federal Appeals Court may only review the review of the AG and not the underlying arbitrator’s findings.
  • The AG may impose a penalty of $1,000 per violation (or $5,000 per violation for willful violations) and at least a 1 year debarment (2 years for willful violations).
  • The AG may not delegate this authority to any other employee of the Department of Justice until 60 days after the AG has submitted a plan regarding the delegation to the Judiciary Committees of the House and Senate.

(c) Liability of Petitioning Employer in Case of Placement with Another Employer: As stated above, if an H-1B dependent employer places an H-1B nonimmigrant with another employer and the other employer displaces a U.S. worker within the relevant time period, the petitioning employer may be fined $1,000 per violation, regardless of whether or not the petitioning employer had knowledge of the action or made the required inquiries. A debarment penalty also may be assessed only if the petitioning employer knew or had reason to know of the displacement at the time the H-1B nonimmigrant was placed with the other employer or if the petitioning employer had been previously subject to sanctions based on placement with the same other employer.

(d) Spot Investigations:

An employer who is found, on or after the date of enactment of this Act, to have committed a willful violation may be subject to random DOL investigations for a period of up to 5 years from the date of such finding. (Even if the violation took place before the date of enactment.)

(e) New Investigative Authority:

  • DOL may investigate an employer without a complaint if it receives “specific, credible information” from a source likely to have knowledge of the employer’s practices, employment conditions or compliance. Such information must provide “reasonable cause” to believe that a violation of the LCA requirements (excepting the posting requirement) has been committed. DOL may conduct a 30-day investigation upon obtaining the personal signature of the Secretary of Labor (or the Acting Secretary).
  • Any individual providing such information must complete a form developed by DOL (to ensure compliance with False Statements Act).
  • The Secretary shall provide notice to an employer of the allegations and an opportunity to respond before the investigation commences unless the Secretary judges that such notice would interfere with efforts to secure compliance. There is no judicial review of the Secretary’s decision not to provide notice.
  • The Secretary cannot initiate an investigation based on information submitted by an employer in order to obtain an H-1B visa, including the H-1B petition and the LCA. The information cannot come from an employee of the Department of Labor unless the information is obtained in the course of a lawful investigation authorized under the INA or any other law.
  • The Secretary must receive the information no later than 12 months after the alleged violation in order to launch an investigation.
  • The employer has the right to request a hearing on a finding by the Secretary under this section within 60 days of the date of the determination, and the final determination must be issued within 60 days of the date of the hearing.


Effective Dates: ACWIA


Since there is no separate provision for the effective dates of this section, these changes are effective upon enactment, subject to the effective dates within each provision. Therefore, the new penalty provisions, no-benching rule, and benefits requirements are effective immediately upon enactment. However, penalties for violations of the new layoff and recruitment attestations cannot be found until those provisions are effective, e.g. after final regulations are issued.

Section 414: New Fee for Scholarships and Training

  • Imposes a new $500 fee (over and above the current filing fee) on petitioning employers to fund scholarship and training programs, and to fund DOL administration and enforcement activities under the H-1B program. Colleges, universities and non-profit research institutions are exempt from the fee.
  • The fee is to be collected by the Attorney General at the time of filing an initial petition to grant a foreign national H-1B status, upon the first petition to extend the stay of an H-1B nonimmigrant, and upon a petition by a different employer for concurrent or new employment. It is not required when filing for extensions of stay after the initial extension by the same employer, nor for amended petitions that do not request extension of stay.
  • Employers may not require an alien to reimburse or otherwise compensate the employer for the cost of this fee or they are subject to a $1,000 fine per violation.

Section 415: Hathaway Prevailing Wage Fix; Athletic Prevailing Wages

For institutions of higher education, related or affiliated nonprofit entities or nonprofit or governmental research organizations, the prevailing wage (for both LCAs and Permanent Labor Certifications) shall only take into account employees at such institutions and organizations in the area of employment. The prevailing wage for professional athletes in professional sports leagues is that set forth in the league regulations. Both changes are effective as of the date of enactment.

Section 416: INS Counting of H-1B and H-2B numbers and Reports to Congress

INS is required to maintain accurate counts of the numbers of H-1B and H-2B nonimmigrants who are issued visas or otherwise provided status, including revising petition forms, and shall make quarterly reports to Congress on the numbers. In addition, an annual report to Congress (beginning in Fiscal Year 2000) must include the countries of origin, occupations, educational levels, and compensation of H-1Bs in the last year. Also requires a sub-count of number of petitions filed by higher educational institutes, affiliated nonprofits, and nonprofit and governmental research organizations.

Section 417: Report on Age Discrimination in the Information Technology Field

The Director of the National Science Foundation shall contract with the National Academy of Sciences to conduct a study on the age discrimination in the information technology field. Report is due to the House and Senate Judiciary Committees by 10/1/2000.

Section 418: Reports on H-1B Usage

  • High Tech Worker Needs: Requires the National Science Foundation to conduct a study to assess labor market needs for workers with high technology skills during the next 10 years. Report is due to House and Senate Judiciary Committees by 10/1/2000. Study shall be conducted in a manner that assures participation of individuals representing a variety of points of view.
  • Economic Impact of H-1B Increase: Requires any member of the Cabinet, the Chairman of the Federal Reserve, the Director of the Office of Management and Budget, or the Chair of the Council of Economic Advisors to promptly report to Congress the results of any reliable study that suggests that the increase in H-1B visas has had an impact on any national economic indicator (such as inflation or unemployment) that warrants action by Congress.

Section 421: Special Immigrant Status for Certain NATO Civilian Employees

Provides for special immigrant status for NATO civilian employees with long-term service in the United States and allows for nonimmigrant status for the parents of children who qualify as special immigrants under this section.

Section 431: Academic Honoraria

Allows payment of honoraria and associated incidental expenses to B-1 or B-2 visitors for “usual academic activity” lasting not longer than 9 days at a single academic institution, if offered by an institution of higher education or affiliated nonprofit entity or a nonprofit or governmental research organization. Foreign nationals cannot accept honoraria from more than five institutions or organizations within a six-month period. This provision is effective on the date of enactment.

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