H-1B Workers in the Retirement Plan?

H-1B Workers

“What are H-1B workers, and must a plan sponsor include them in the business’ retirement plan?”

ERISA consultants at the Retirement Learning Center Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. We bring Case of the Week to you to highlight the most relevant topics affecting your business.

Highlights of Discussion

• H-1B workers are nonimmigrant aliens in specialty occupations or fashion models of distinguished merit and ability. They are authorized under the Immigration and Nationality Act, section 101(a)(15)(H).
• A specialty occupation for this purpose is one that requires the application of a body of highly specialized knowledge and the attainment of at least a bachelor’s degree or its equivalent. The intent of the H-1B provisions is to help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce by authorizing the temporary employment of qualified individuals who are not otherwise authorized to work in the United States.
• Initial H-1B status may be granted for up to three years.
• H-1B workers are often categorized as resident aliens (as apposed to nonresident aliens) under the substantial presence test.
• Generally, employers must offer benefits to H-1B workers on the same basis, and in accordance with the same criteria, as the benefits they provide to similarly employed U.S. workers (See DOL Fact Sheet #62L: What benefits must be offered to H-1B workers?). This would include participation in a retirement plan, unless by the terms of the plan document such workers are excluded.

Conclusion

Plan sponsors who employ H-1B workers must be aware that they are entitled to participate in workplace retirement plans if they otherwise meet the eligibility requirements as specified in the governing plan documents.