On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act ("ARRA"). This legislation allocates over $789 billion in federal funds and tax cuts for a variety of initiatives in an effort to stimulate the U.S. economy. In addition, ARRA requires that any recipient of Troubled Assets Relief Program ("TARP") funds or federal funds under Section 13 of the Federal Reserve Act be considered an "H-1B Dependent Employer" regardless of whether or not they meet the traditional H-1B Dependent Employer qualifications. In effect, receipts of these funds will be severely restricted in their ability to hire new H-1B temporary workers.

Under current U.S. regulations, an H-1B dependent employer is barred from "displacing" a U.S. worker during the 90-day period before and after the filing of an H-1B petition. The H-1B dependent employer is also forbidden from placing an H-1B worker with another employer that had displaced U.S. workers within the 90-day period before and after the placement. In addition, the H-1B dependent employer is required to conduct "good faith" recruitment to find U.S. workers for the job to be filled by the H-1B candidate. If a U.S. worker is found who is at least equally qualified for the position, the H-1B dependent employer must offer the job to the U.S. worker.

Given the limited number of new H-1B visa each fiscal year and the renewed expectation that all available new H-1B visa numbers will be used by April 1, 2009, it is unlikely that employers who have received TARP or Section 13 funds will be able to comply with the H-1B dependent regulations before the April 1, 2009. Consequently, they will not likely be able to successfully petition on behalf of new H-1B employees on April 1, 2009.

Of course, ARRA does not apply to extensions of H-1B status for H-1B employees currently employed by the employer, or to temporary nonimmigrant workers in other visa classifications, such as L, TN, E-1/E-2. Nor does ARRA prohibit, restrict or otherwise adversely affect an H-1B employer's ability to sponsor a current H-1B or other eligible foreign national worker for permanent resident status.

Please do not hesitate to contact our office is you should have questions regarding the above.