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Statement of Need: Statutory amendments to the Immigration and Nationality Act relating to the H-1B visa program were enacted in 1998 and again in 2000. Under the H-1B visa program, employers may temporarily employ nonimmigrants admitted into the U.S. under H-1B visas in specialty occupations and as fashion models, provided certain conditions are met. Section 412(d) of the American Competitiveness and Workforce Improvement Act of 1998 (Title IV of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Public Law 105-277), provides that some of the amendments made by the 1998 legislation (those relating to "H-1B-dependent" employers and willful violators) do not take effect until the Department of Labor issues implementing regulations, which are the subject of this rulemaking.

Summary of the Legal Basis: This rule is issued pursuant to provisions of the Immigration and Nationality Act, as amended, and the American Competitiveness and Workforce Improvement Act of 1998, 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184; sec. 303(a)(8), Pub. L. 102-232 (8 U.S.C. 1182 note); and secs. 412(d) and (e), Pub. L. 105-277. The objectives of the rule are to enable employers to understand and comply with applicable requirements of the amended H-1B visa program, and to advise employees and applicants for employment of the protections afforded by the amendments to U.S. and H-1B workers.

Alternatives: Various regulatory alternatives were considered during the notice-and-comment period for implementing the statutory provisions, as discussed in the preamble to the December 2000 interim final rule. Alternatives considered included, among others, various approaches to the manner and timing for determining H-1B dependency status (and the meaning of "full-time equivalent employees" (FTEs) in the employer's work force), documentation of the dependency determination and designation of such status on the Labor Condition Application, and implementing the requirements for no "displacement" and recruitment of U.S. workers, payment of required wages and benefits to H-1B and U.S. workers, and determining short-term placement options.

Anticipated Costs and Benefits: The Department concluded that the anticipated costs and benefits of this rule were not economically significant. This conclusion was based on the analysis that the direct, incremental costs that employers would incur because of the rule that were above customary business expenses associated with recruiting qualified job applicants and retaining qualified employees in specialized jobs would not exceed $100 million per year or otherwise trigger "economic significance" under Executive Order 12866. However, because of the importance of the rule to the public, it was treated as a significant regulatory action and was, therefore, reviewed by the Office of Management and Budget under Executive Order 12866.

Risks: This action does not directly affect public health, safety, or the environment.