Case of the Week: H-1B Workers

John Carl

The ERISA consultants at the Learning Center Resource Desk, which is available through Columbia Threadneedle Investments, regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. A recent call with an advisor in Maryland is representative of a common inquiry involving H-1B workers and retirement plans. The advisor asked:

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

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.


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.

The Learning Center Resource Desk is staffed by the Retirement Learning Center, LLC (RLC), a third-party industry consultant that is not affiliated with Columbia Threadneedle. Any information provided is for informational purposes only. It cannot be used for the purposes of avoiding penalties and taxes. Columbia Threadneedle does not provide tax or legal advice. Consumers consult with their tax advisor or attorney regarding their specific situation.

Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Columbia Threadneedle.

Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.

©2017 Columbia Management Investment Advisers, LLC. Used with permission.

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