CIS recently provided updated info on who is allowed to pay the $500.00 fraud fee associated with H-1B filings.
Taken from Vermont Service Center Helpful Filing Tips and cited as AILA InfoNet Doc. No. 10010565, CIS provided infomation on who is allowed to pay the $500.00 fraud fee associated with initial H-1B filings, as well as pointing out some discrepancies in intrepretations between the Department of Labor and Department of State on this issue.
CIS indicates that the petitioner, attorney or beneficiary may submit the Fraud Fee for an I-129 H-1B filing. By way of background, the $500 fraud prevention and detection fee was enacted by the H-1B Visa Reform Act of 2004 (H.R. 4818). In April 2005, the USCIS specifically advised in a Service Center Operations Teleconference that "[t]he $500 fraud fee may be paid by the beneficiary or by a third party". (AILA Doc. No. 05041564)
Members should be cautious that if the beneficiary provides the $500 fraud fee, this cost will be deducted from the total wage paid to the H-1B beneficiary when determining whether s/he has received the required wage. See 20 CFR §655.731(c)(9)(ii). The "required" wage is the higher of the actual or prevailing wage. The "actual" wage is defined as the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question. See 20 CFR §655.7(a)(1).
Furthermore, some consular officers also confuse permissible payors of the fraud fee with the ACWIA training fee, which is the only fee that cannot be paid or reimbursed by the beneficiary. See 20 CFR §655.731(c)(10)(ii). The ACWIA training fee, as originally enacted in 1998 was $500 and may create the confusion with the $500 fraud prevention fee. However, the H-1B Visa Reform Act of 2004 increased the ACWIA training fee to $1500 (or $750 for employers with 25 or less employees). In other words, the "$500 fee" referred to in ACWIA at 20 CFR §655.731(c)(10)(ii), which may not be paid by the beneficiary, is separate and different from the $500 fraud prevention fee, which may be paid by the beneficiary.
We note that some DOL investigators and Administrative Law Judges also confuse the fees noted above. Moreover, at least one DOL official has stated that if there is only one individual in the specific employment at the worksite, that individual's wage is the actual wage. Thus, if the actual wage is higher than the prevailing wage, any deductions of H 1B fees and costs would drop the wage below the required wage and are, therefore, impermissible. This view is, of course, debatable and could be challenged if raised in a DOL enforcement proceeding.