Written by attorney William D. Fong

H-1B, what is a full time employee?

Filing Fees For H-1B Petitions

Under the H-1B regulations effective Dec. 8, 2004, thoseU.S. employers with less than 26 full-time equivalent (FTE employees), an additional filing fee of $750 is required. For employers with 26 or more employees, an additional filing fee of $1500 is required. The Department of Labor determines FTE employees as follows:

Full-time equivalent (FTE) employees

The Department of Labor has established a rather complicated approach to the issue of what constitutes “full-time equivalence." Generally, the number of FTEs equals the number of full-time employees plus the number of part-time employees aggregated to full-time equivalents. Note the following guidelines:

  • Both H-1B workers andU.S.employees must be counted in establishing the total number of FTEs employed

  • Only employees are counted. Consultants and independent contractors are not counted. The employer’s designation of a person as an employee will be accepted provided they are considered as such for all purposes including FICA, FLSA, etc.

  • In calculating the number of employees on its payroll, the employer must use its quarterly tax statement or a similar document

  • Each full-time employee counts as one FTE. To be considered full-time, the employee must work 40 or more hours per week, unless the employer can show that less than 40 hours per week is full-time employment in its regular course of business. Under no circumstances, however, would less than 35 hours per week be considered to be full-time employment. Any worker who works the employer’s normal full-time workweek is counted only once, even if the worker puts in many more hours than the norm.

  • Part-time workers are employees who work less than the number of hours that constitutes a full-time work week

  • Part-time employees are counted as FTEs using one of the following formulas:

(1) Formula One. This formula focuses on the number of part-time employees. Under this formula, each part-time is counted as one half of an FTE with the total rounded to the next higher whole number. Using this formula, five part-time employees count as three FTEs since 2.5 is rounded to 3);

(2) Formula Two. This formula emphasizes the number of hours worked by part-time employees. Under this formula, the total number of hours worked by all part-time employees in a representative pay period is divided by the number of hours per week that constitute full-time employment, with the quotient rounded to the nearest whole number. For purposes of this formula, the number of hours of work by part-time employees must be based on the number of hours reported in the last payroll (or the payrolls over the previous quarter, if the last payroll is not representative). When the hours of work records are not maintained, other available information is to be used to make a reasonable approximation of hours of work (such as a standard work schedule). Using this formula, 180 total hours of work by ten part-time employees, divided by 40 hours, yield five FTEs (i.e., 4.5 is rounded to 5).

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