ACWIA Meaning: H-1B Fee, Exemptions, and Benching Rules

The ACWIA fee is a mandatory training fee that employers pay when filing certain H-1B petitions, created by the American Competitiveness and Workforce Improvement Act of 1998. The current amount is $1,500 for employers with 26 or more full-time equivalent employees and $750 for employers with 25 or fewer, with affiliate and subsidiary headcount included in the count.¹ Revenue from the fee funds U.S. worker training grants through the Department of Labor and scholarship programs through the National Science Foundation.

The fee started at $500 in 1998. Congress raised it to $1,000 in 2000, and the H-1B Visa Reform Act of 2004 set the two-tier amounts that still apply today.

When the ACWIA Fee Is Due

An employer pays the ACWIA fee when it files any of the following:

An initial H-1B petition
A change-of-employer petition
The first extension of stay for a particular worker

It does not apply to amended petitions, and it does not apply to a second or later extension filed by the same employer for the same worker.²

Employers Exempt From the ACWIA Fee

Certain organizations owe no ACWIA fee at all:

Institutions of higher education as defined in the Higher Education Act
Nonprofit entities related to or affiliated with those institutions
Nonprofit and government research organizations
Primary and secondary schools
Nonprofit entities that run established curriculum-related clinical training programs

These are the same categories of employers that are exempt from the H-1B annual cap.²

Other H-1B Fees That Stack on Top

The ACWIA fee is only one piece of what an H-1B petition costs. An employer sponsoring a worker typically owes several other government fees as well:

Fraud Prevention and Detection Fee of $500 on initial petitions and change-of-employer filings, in place since 2004.
Public Law 114-113 fee of $4,000 for employers with 50 or more U.S. employees where more than half hold H-1B or L-1 status. This applies to initial and change-of-employer petitions, not extensions.³
Asylum Program Fee of $600 for most employers, $300 for small employers with 25 or fewer full-time equivalent employees. Nonprofits are exempt.⁴
The base Form I-129 filing fee.
Optional premium processing.

Add attorney fees, which commonly run $3,000 to $7,000, and a single H-1B petition can easily exceed $10,000 for a large employer or one that owes the Pub. L. 114-113 surcharge.

The Dependent-Employer Rules ACWIA Created

ACWIA added compliance requirements for employers whose workforce leans heavily on H-1B labor. These “H-1B dependent” employers are defined by size and ratio:

25 or fewer full-time equivalent employees: dependent if employing at least 8 H-1B workers
26 to 50 full-time equivalent employees: dependent if employing at least 13 H-1B workers
51 or more full-time equivalent employees: dependent if 15 percent or more of the workforce holds H-1B status

Employers found to be “willful violators” of H-1B rules face the same extra obligations no matter their ratio.⁵

Non-Displacement Attestation

A dependent employer must attest on its Labor Condition Application that it has not laid off, and will not lay off, any similarly employed U.S. worker within 90 days before or after filing the H-1B petition. The protection covers the specific worksite where the H-1B worker will be placed, and it extends to third-party client sites where an H-1B worker is assigned.

Recruitment Obligation

The employer must also show it tried to recruit U.S. workers first, at pay and conditions at least as favorable as the H-1B offer. If a U.S. applicant is equally or better qualified than the H-1B candidate, the employer must offer the position to the U.S. worker.

Exempt H-1B Workers

The attestation obligations fall away when the H-1B worker is “exempt.” A worker is exempt if either condition is met:

Annual pay of at least $60,000 in actual cash compensation. Employer contributions to health insurance, retirement, or other benefits do not count. Cash bonuses count only if payment is guaranteed regardless of performance or profits. Part-time workers must actually earn $60,000 per year; projecting a part-time wage to a hypothetical full-time schedule doesn’t qualify.⁶
A master’s degree or higher from an accredited U.S. institution in a specialty related to the H-1B job. Experience cannot substitute for the degree.

The $60,000 threshold has not been adjusted since 1998, so it now sweeps in far more workers than Congress originally intended.⁷

The Ban on Benching

ACWIA also prohibits “benching,” the practice of bringing an H-1B worker into the country and then stopping pay during gaps between projects. Employers must pay the full required wage during any nonproductive time caused by employment-related conditions, including a lack of assigned work, a pending license, or a gap between client placements.⁸

The pay obligation begins at the earliest of three events: when the worker begins employment, within 30 days of the worker’s admission on the H-1B petition, or within 60 days of the petition approval date on Form I-797. Full-time salaried workers must receive their full salary during any bench period. Full-time hourly workers must be paid for at least 40 hours per week. Part-time workers must be paid for at least the number of hours listed on their I-129.

The only exception is voluntary time off. If the worker requests a vacation day or leave of absence and the employer has a bona fide policy for that leave, the required wage need not be paid. Any involuntary gap, including waiting on the next project, falls on the employer.

Whistleblower Protections

Employers cannot retaliate against current employees, former employees, or applicants for reporting potential H-1B noncompliance or cooperating with a government investigation. The protection covers both U.S. workers and H-1B workers, which matters because H-1B employees are often the first to see wage or working-condition problems. Violations carry penalties of up to $5,000 per violation and a two-year debarment from H-1B and other employment-based immigration programs. Workers who suffer retaliation can receive reinstatement, back wages, and other equitable relief through the Wage and Hour Division.⁹

Penalties for Getting It Wrong

The Wage and Hour Division enforces the H-1B attestation requirements once the worker is employed. Civil penalties are adjusted annually for inflation. Effective January 15, 2025, the maximums are:

Willful failure or misrepresentation without displacement of a U.S. worker: up to $9,624 per violation. This covers willful wage and working-condition violations, LCA misrepresentations, strike or lockout situations, and failures to meet recruitment and notification requirements.
Willful violation that results in displacing a U.S. worker: up to $67,367 per violation.¹⁰

The Department of Labor can also bar an employer from filing employment-based immigration petitions. Minimum debarment periods run at least one year for a non-willful LCA violation or material misrepresentation, at least two years for a willful violation without displacement, and at least three years for a willful violation with displacement. Debarment blocks all petitions under INA sections 204 and 214(c), not just H-1B filings, so a debarred employer cannot sponsor green cards or any other nonimmigrant work visa during that period.¹¹ In every case, the Wage and Hour Division can order back wages covering the difference between what the worker received and what the LCA required.¹²

1
U.S. Citizenship and Immigration Services. Definition of Affiliate or Subsidiary for Purposes of Determining ACWIA Fee
2
U.S. Citizenship and Immigration Services. H and L Filing Fees for Form I-129, Petition for a Nonimmigrant Worker
3
U.S. Citizenship and Immigration Services. Fee Increase for Certain H-1B and L-1 Petitions – Public Law 114-113
4
U.S. Citizenship and Immigration Services. Frequently Asked Questions on the USCIS Fee Rule
5
U.S. Department of Labor. Fact Sheet 62C – Who Is an H-1B-Dependent Employer
6
U.S. Department of Labor. Fact Sheet 62Q – What Are Exempt H-1B Nonimmigrants
7
eCFR. 20 CFR 655.737 – What Are Exempt H-1B Nonimmigrants
8
U.S. Department of Labor. Fact Sheet 62I – Must an H-1B Employer Pay for Nonproductive Time
9
U.S. Department of Labor. Fact Sheet 62R – What Protections Are There for Whistleblowers
10
U.S. Department of Labor. Civil Money Penalty Inflation Adjustments
11
U.S. Department of Labor. H-1B Labor Condition Application – INA Section 212(n)
12
U.S. Department of Labor. Fact Sheet 62U – What Is the Wage and Hour Division’s Enforcement Authority Under the H-1B Program