Effective March 8, 2005, the federal government enacted the Visa Reform Section of the Omnibus Appropriations Bill that imposed an additional $500 Fraud Prevention and Detection Fee on all initial H-1B applications. This fee is mandatory and required to be paid by the employer (i.e., the UW), not the applicant. Previous memos from the Office of Human Resources and Accounting Services have described the required process for payment of this fee.

Several departments have inquired about the appropriateness of charging this fee to Federal and Non-Federal grants. Based on responses from the Federal government, the University believes it is appropriate to consider this fee as a recruiting cost (as described in OMB circular A-21, section J.42). As such, the $500 fee can be charged directly to Federal and Non-Federal grants provided the following conditions are met:

• The University continues its current policy to treat the cost consistently as a direct cost (as opposed to a cost captured in our F&A recovery.)
• The agency guidelines do not include specific prohibitions on such fees or recruiting costs.
• The fee results from a recruitment directly related to the project being charged.
• If within 12 months after hire, the newly hired employee resigns for reasons within his/her control, the institution will be required to refund or credit such costs to the Federal Government or Non-Federal sponsor. It is the responsibility of the department to monitor the status of the employee and initiate any required corrections.

If the above conditions are met, UW reimbursement for mandatory visa fees paid by individuals also may be charged directly to Federal and Non-Federal grants.

Please note that optional fees, such as the expedited processing fee, are not appropriate to charge to grants. If the University chooses to pay such fees, it must do so using discretionary funding.

Please notify your departments as necessary. If you have any questions, please email Bob Andresen at randresen@rsp.wisc.edu.