Grassley

The H-1B program as we know it may be changing in the near future but just how quickly those changes occur will depend largely on how quickly Congress can review and vote on the bills.  As of today, four bills have been introduced (and reintroduced) by various congress-people.  As a reminder, a bill has no immediate impact on existing visa programs until the bill has been signed into law.  That, is inherently the challenge with our government.  (Click here for details on how bills become law.)

Bill #1: H.R.170 Protect and Grow American Jobs Act

Introduced on January 3, 2017 by Rep. Darrell Issa (R – CA)

The bill has a limited scope applicable only to H-1B dependent employers.  H-1B dependent employers employ

• ≤ 25 full-time employees, of whom 8 or more are H-1B workers; or
• 26 – 50 full-time employees, of whom 13 or more are H-1B workers; or
• 51 or more full-time employees of whom 15% or more are H-1B workers.

(Full-time employees are individuals who work 35 or more hours per week according to the rules set by the U.S. Department of Labor.)  Currently, employers who are dependent on H-1B workers must undergo additional recruitment of U.S. workers and attestations in order to continue to hire H-1B workers.  In order to bypass those additional requirements, H-1B dependent employers may attest to paying their H-1B workers $60,000 per year or more, or hire individuals who hold a master’s degree or a higher degree.  Under H.R. 170, the bill would raise the $60,000 minimum to $100,000 and eliminate the master’s degree option entirely.  The impact of the bill is aimed squarely at H-1B dependent employers and would have little impact on most U.S. employers generally.

Bill#2: H.R. 392 Fairness for High-Skilled Immigrants Act of 2017

Introduced on January 10, 2017 by Rep. Jason Chaffetz (R – UT) and 24 other co-sponsors with a total of 66 co-sponsors to date (as of February 12, 2017).

Current immigration quotas (as set by Congress) dictate that no more than 140,000 greencard (visas) be issued per fiscal year for those being sponsored through employment, and no more than 226,000 greencards be issued for those being sponsored by family.  In addition, no country may be issued more than 7% of the quota total per fiscal year (this additional rule is called the per country limitation rule).  In practice, the per country limitation rule has created significant backlogs in the “greencard line” for many individuals emigrating to the U.S. from countries like China, India, Mexico and Philippines.  In fact, its not uncommon for a Canadian to be instantly eligible to apply for a greencard whilst their Indian counterparts must wait 8 years or greater for the same employment category.

H.R. 392 seeks to remove entirely the per country limitations for individuals seeking a greencard based on employment sponsorship.  This would help to speed up the waiting periods for those immigrants who have been waiting for years.  Their ability to obtain greencards would also promote greater job portability.

For individuals being sponsored by family members, the bill seeks to raise the per country limitation from 7% to 15%, which would also alleviate some of the waiting periods for individuals.

The bill also removes caps for Chinese Students seeking to immigrate to the U.S.

Although the bill does not directly seek to change the H-1B program, if passed, its impact would trickle over to H-1B visa holders.  It levels the playing field for all immigrants waiting for their greencards to be approved, regardless of which country they were born.  Rather than having to rely on one employer to sponsor an H-1B for multiple years (8+ years for Indian nationals), workers may have a much shorter waiting period for their greencards.  Faster greencard processing times means greater job mobility for workers means greater competition for skilled labor.

Bill #3: S.180 H-1B and L-1 Visa Reform Act of 2017

Introduced on January 20, 2017 by Sen. Chuck Grassley (R – IA), Sen. Dick Durbin (D – IL), Sen. Sherrod Brown (D – OH), Sen. Richard Blumenthal (D – CT)

S.180, as introduced, would revise the H-1B program in many ways.

1. It would impose priorities on how the H-1B visa is allocated with priority given to advanced degree holders in STEM fields.
2. All H-1B workers would be required to obtain a U.S. degree (or a foreign equivalent).
3. Employers would be required to pay a fee to submit a Labor Condition Application to the U.S. Department of Labor. (There is currently no fee.)
4. The U.S. Department of Labor would be empowered to demand employers comply with the rules (or face penalties) and conduct investigations based on fraud or non-compliance (for both H-1B and L-1 workers) and provide U.S. Citizenship & Immigration Service with any documentation necessary to investigate employer non-compliance.
5. The U.S. Department of Labor would be required to conduct annual audits of companies with 100 or more employees if more than 15% of those employees are H-1B workers.
6. The U.S. Department of Labor may hire additional 200 employees to administer its H-1B program.
7. The H-1B program would be reduced from 6 to 3 years. A 3-year extension would only be allowed for workers who can demonstrate extraordinary ability or have advanced degrees or who are professors.
8. Consulting companies are specifically excluded from utilizing the H-1B visas for its workers.
9. Employers would face stiffer penalties for displacing U.S. workers with H-1B workers and face additional penalties for employee lost wages and benefits.
10. Employers would no longer be able to hire L-1B workers based on specialized knowledge for more than one year, if the worker will be placed at a third-party site rather than the employer’s worksite, unless a waiver has been obtained from the U.S. Department of Labor.
11. Employers may not replace a U.S. worker with an L-1 worker.
12. Additional rules will be imposed for L-1 workers, including work location, minimum salary rates, working conditions and employer penalties.

Of the four bills indicated in our article today, this bill is the most ambitious in revising the H-1B program.  It imposes lots of penalties and changes to both the H-1B program and the L-1 program and seeks to eliminate an entire industry (consulting companies) from existence in the U.S.  Moreover, the attempts to remove as many business operating decisions from the discretion of employers.

The bill, if enacted into law, would be prospective, but it doesn’t clarify what would happen to the hundreds of thousands of H-1B workers in the U.S. who had previously qualified for H-1B status based on years of experience in the field (or a combination of experience and education).  Moreover, it leaves open as to how foreign degrees would be determined to be the equivalent of a U.S. degree, when many countries operate on a three-year university degree whilst the U.S. uses the four-year standard.

We’ll dig deeper into some additional questions this bill raises (more than it answers) so stay tuned to this blog.  If you have questions, feel free to leave us a comment.

Bill #4: H.R.670 High Skilled Integrity and Fairness Act of 2017

Introduced on January 25, 2017 by Rep. Zoe Lofgren (D – CA)

H.R. 670 also attempts to raise the bar for employers seeking H-1B visas for their workers.  Unlike S.180, which whacks all business necessity rationale out of the H-1B and L-1 programs and imposes heavy-handed rules, H.R. 670 uses a market-based approach. If employers really want to hire a skilled worker, they must pay for it!

1. Wages for H-1B workers will go up but a lot! Rather than use the 4-tiered system currently in place, the U.S. Department of Labor will be required to conduct a new survey using three tiers.  Based on those three tiers, employers who pay the most (i.e. X% of Tier 3 wages) will receive priority for hiring H-1B workers.  (I’m oversimplifying the math for brevity’s sake.)
2. The bill also factors in much of what H.R. 170 (above) proposes, by raising the H-1B dependent-employers exemption from $60,000 to almost $130,000 and also eliminating the master’s degree allowance.
3. The bill also factors in H.R. 392 (above) by removing the per-country limitations as well for employment-based immigrants.
4. Sets aside 20% of the annually allocated H-1B visas for small and start-up employers (50 or fewer employees) to ensure small businesses have a chance to compete for high-skilled workers.
5. Removes hurdles to allow F-1 students to apply for a greencard.
6. Requires employers to legally make available copies of the H-1B petitions to their workers as well as all approval notices.

It will take a long time for Congress to convene and the bills to traverse its way through committees, subcommittees and debates.  In other words, it will be a while before the bills have any actual impact on H-1B workers or U.S. employers but don’t be surprised by surprises.  This year is proving to be very eventful.

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Some of you might also be pondering the big question of what would happen if President Trump issues an Executive Order that impacts that the H-1B program.  How quickly would the program be revised?  Would salaries be impacted?  Would it impact this year’s H-1B lottery?  Want to learn more?  Stay tuned for an update by subscribing to our blog.