Legal Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Consult a qualified immigration attorney for guidance specific to your company's situation.
An employer is H-1B dependent if H-1B workers make up 15% or more of its full-time equivalent workforce (for employers with 51 or more US employees), or if it meets lower thresholds applicable to smaller employers. H-1B dependent employers must make additional attestations on every LCA — including non-displacement and good-faith recruitment obligations — that non-dependent employers do not face. Many mid-market IT staffing companies are dependent and do not realize it until they are audited.
What Is an H-1B Dependent Employer?
The H-1B dependency rules were established under the American Competitiveness and Workforce Improvement Act (ACWIA) and are enforced through the LCA process. An employer's dependency status is determined by comparing the number of H-1B workers employed against the total US workforce.
The dependency thresholds vary by company size:
| Employer Size (US FTE Employees) | H-1B Dependent If... | |---|---| | 25 or fewer full-time equivalent employees | 8 or more H-1B workers | | 26–50 full-time equivalent employees | 13 or more H-1B workers | | 51 or more full-time equivalent employees | H-1B workers = 15% or more of workforce |
For a company with 100 employees, dependency kicks in at 15 H-1B workers. For a company with 200 employees, the threshold is 30. IT staffing companies with a high concentration of technology workers on H-1B status frequently cross these thresholds.
The determination is made at the time each LCA is filed. It is not a one-time designation — your dependency status can change from filing to filing as your workforce composition changes.
How to Calculate Your H-1B Dependency Ratio
Follow these steps to determine whether your company is currently H-1B dependent.
Step 1: Count your total US full-time equivalent (FTE) employees.
Include all employees who work at US worksites: full-time, part-time (converted to FTE), and H-1B workers themselves. Use the full-time equivalent count, not just headcount. A part-time employee working 20 hours per week counts as 0.5 FTE.
Do not include independent contractors, workers employed through a separate entity, or workers based entirely outside the United States.
Step 2: Count your current H-1B workers employed in the United States.
Include all workers currently in H-1B status — those on initial petitions, extensions, and transfers — who are actively employed at US worksites. Do not include H-1B workers who have resigned, been terminated, or whose status has lapsed.
Step 3: Apply the applicable threshold.
- If total US FTE is 25 or fewer: you are dependent if H-1B count is 8 or more.
- If total US FTE is 26–50: you are dependent if H-1B count is 13 or more.
- If total US FTE is 51 or more: divide H-1B workers by total FTE. If the result is 15% or greater, you are dependent.
Example A: A staffing company with 80 total US FTE employees and 15 H-1B workers. 15 / 80 = 18.75%. This company is H-1B dependent.
Example B: A staffing company with 150 total US FTE employees and 20 H-1B workers. 20 / 150 = 13.3%. This company is H-1B dependent.
Example C: A staffing company with 150 total US FTE employees and 12 H-1B workers. 12 / 150 = 8%. This company is not H-1B dependent.
For Example A and Example B, every future LCA filing will require the additional dependent employer attestations until the ratio changes.
What Additional Obligations Apply to H-1B Dependent Employers?
When an employer checks the "H-1B dependent" box on ETA Form 9035E, two additional attestations become mandatory. These attestations apply to each LCA filed while the employer is in dependent status.
Non-Displacement Attestation
The dependent employer must attest that it has not displaced and will not displace any US worker employed in a job that is essentially equivalent to the H-1B worker's role, at the same worksite, within 90 days before or after placing the H-1B worker.
"Displacement" includes layoffs, termination without cause, and involuntary reductions in hours that effectively eliminate the worker's position. It does not include terminations for cause, voluntary resignations, or retirements.
This attestation extends to secondary employers as well. If you place an H-1B worker at a client site, you must also attest that you have not placed a worker who you knew had been displaced by the client within the prior 90 days. Practically, this means obtaining a representation from each client that they have not displaced US workers in the relevant role before placing an H-1B worker.
Recruitment Attestation
The dependent employer must attest that it has taken and will take good-faith steps to recruit US workers for the job opportunity prior to filing the H-1B petition.
"Good faith" recruitment means using industry-standard recruitment methods — job postings, recruitment platforms, or recruitment firms — that would be used to fill the same role with a non-H-1B worker. The employer does not need to prove that no US worker was available, only that genuine recruitment efforts were made.
Document every recruitment effort. Job posting URLs, dates of posting, number of applicants reviewed, and reasons US worker candidates were not selected should all be preserved. If DOL audits your recruitment attestation, you must be able to show actual recruitment activity — not just a checkbox.
Exemptions from Dependent Employer Rules
Not every H-1B worker employed by a dependent employer triggers the additional attestation obligations. There are two categories of "exempt" H-1B workers for whom the non-displacement and recruitment attestations do not apply.
Wage exemption: An H-1B worker is exempt if they will be paid an annual wage of $60,000 or more. This threshold is statutory and has not been increased since ACWIA was enacted in 1998 — in 2026, it is low enough that many IT workers already exceed it.
Degree exemption: An H-1B worker is also exempt if they hold a master's degree or higher (or its equivalent) in a specialty related to the employment. A foreign degree evaluated as equivalent to a US master's qualifies.
If either exemption applies to a specific worker, the dependent employer checks the exemption box on the LCA for that worker and is not required to make the non-displacement or recruitment attestations for that filing.
In practice, many IT staffing companies find that a significant portion of their H-1B workforce qualifies under the wage or degree exemption, which reduces — but does not eliminate — the compliance burden of dependent status.
The Connection to the $100K Employer Fee Threshold
H-1B dependency is related to but legally distinct from another compliance concept that frequently affects IT staffing companies: the H-1B employer fee surcharge under the Consolidated Appropriations Act.
This separate fee (currently $4,000 per H-1B petition) applies to employers who have more than 50 employees in the US and more than 50% of those employees in H-1B or L-1 status. It is not the same as the ACWIA H-1B dependency calculation.
The key differences:
| | H-1B Dependency | $100K Fee Threshold | |---|---|---| | Governing Law | ACWIA / INA | Consolidated Appropriations Act | | Threshold | 15%+ H-1B of workforce (51+ employees) | 50%+ H-1B or L-1 of workforce (50+ employees) | | Consequence | Additional LCA attestations | Additional $4,000 fee per petition | | Exemptions | Wage ($60K+) or degree (master's+) | None — fee applies to all petitions |
A company can be H-1B dependent without being subject to the $4,000 fee surcharge, and vice versa. Both determinations should be made for every filing cycle. For a full breakdown of the employer fee surcharge, see our guide on the H-1B employer fee for companies with 100K+ H-1B workers.
How IT Staffing Companies Manage Dependency Status
Once a company knows it is H-1B dependent, there are legitimate strategies to manage the compliance obligations without restructuring the business.
Track exempt vs. non-exempt workers precisely. Maintain a current count of which H-1B workers qualify under the wage or degree exemption. This directly determines how many LCAs require the full dependent employer attestations.
Document client non-displacement representations. Create a standard template for clients to confirm they have not displaced US workers in equivalent roles within the prior 90 days. Collect this for every placement of a non-exempt H-1B worker.
Build recruitment documentation into the hiring workflow. Before filing any LCA for a non-exempt worker, run a documented job posting through standard channels. Track the results. Keep the documentation for the life of the LCA plus one year.
Run a dependency calculation before each LCA cycle. Your ratio changes as headcount fluctuates. A company that is dependent in Q1 may fall below the threshold in Q3 if US worker hiring outpaces H-1B growth. Run the calculation fresh for each filing period.
Consider automation for attestation tracking. Dependent employer compliance requires generating and retaining documentation across multiple workflows simultaneously. Platforms like ParaEagle automate the dependency calculation, flag which workers require full attestations, and generate the compliance documentation trails that support audit defense.
Ready to see how ParaEagle handles H-1B dependency compliance at scale? Book a demo to walk through the workflow with your actual filing volume.