22 October 2024
As the new fiscal year kicks off on October 1, 2024, employers hiring H-1B visa holders need to ensure they’re meeting all compliance requirements to avoid legal issues and maintain smooth operations. Staying ahead of these key compliance obligations is critical to keeping your business and your H-1B employees on the right track.
Here are five essential actions H-1B employers must take this October to remain compliant with U.S. immigration and employment regulations.
1. Update Form I-9 for H-1B Employees Transitioning from F-1 Status
For employees transitioning from Cap Gap F-1 status to H-1B, it’s crucial to update their Form I-9 to reflect their new work authorization. These employees may have been working under expired Employment Authorization Documents (EADs) during the Cap Gap period. As an employer, you need to verify their new H-1B status and follow USCIS guidelines to complete I-9 updates correctly.
Staying current on the latest I-9 requirements will help you avoid fines and keep your employment records up to date.
2. Begin FICA Tax Withholdings
With the switch from F-1 to H-1B status, your employees are no longer exempt from FICA taxes (Social Security and Medicare). This means you must start withholding these taxes from their paychecks as of October 1, 2024. Adjusting your payroll system to reflect these new tax requirements is a critical step in staying compliant with IRS regulations.
Failing to withhold FICA taxes could result in penalties, so it’s essential to make these adjustments as soon as the H-1B status takes effect.
3. Confirm Sponsoring Entity Details
One common mistake employers make is failing to verify that the entity listed as the H-1B petition sponsor matches the actual employer. Ensuring consistency between the sponsor details on the Labor Condition Application (LCA) and the entity that employs the H-1B worker is vital. Inconsistencies can cause issues during audits or when filing extensions or amendments.
Double-check all records and applications to confirm the correct employer is listed and aligned with the sponsoring entity on the LCA.
4. Review H-1B Salary Compliance
Once an H-1B petition is approved, employers are legally required to pay the employee the wage rate specified in the certified LCA. This differs from other visa categories, where wage requirements may vary. Ensure that you’re meeting the Department of Labor’s wage requirements to avoid any legal complications. A review of salaries at the start of the H-1B employment term ensures you’re compliant and reduces the risk of penalties.
It’s crucial to periodically reassess your wage offerings to stay in line with current LCA commitments and immigration law.
5. Monitor Worksite Locations and Compliance
Another key area of H-1B compliance is ensuring that employees are working at the locations listed in their H-1B petitions and LCAs. If employees are working remotely or moving to a new site, you may need to file an amendment to reflect these changes. Employers should regularly confirm that worksite details are accurate and comply with government regulations, as random inspections can occur.
Be proactive in monitoring any changes in work locations to avoid non-compliance and ensure all worksite details are properly documented.
Conclusion
H-1B employers must stay vigilant with compliance to navigate the changing landscape of U.S. immigration laws. By updating I-9s, starting FICA withholdings, verifying sponsorship details, maintaining wage compliance, and monitoring worksites, employers can avoid potential legal pitfalls and ensure a smooth transition into the new fiscal year.
Taking these five proactive steps will protect your organization and support your H-1B employees effectively as the new fiscal year begins. Stay compliant and keep your business running smoothly by addressing these critical requirements.