 H-1B UPDATE
The big news this week was the passage of H.R. 3814 in the House Immigration Subcommittee. This is the bill introduced by Representative Lamar Smith and it is the one that business has generally lined up against. The other major H-1B proposal is the Lofgren-Dreier bipartisan bill which has not come up for a vote. Smith's bill did not garner a single vote from committee Democrats and it appears that many Republicans voted for the bill only because they wanted to get ANY H-1B bill out of Smith's committee. Business and immigrant advocates are hopting that most of the anti-business provisions in the bill will be eliminated and the pro-business provisions in the Lofgren-Dreier bill will be substituted. Smith's bill now goes to the House Judiciary Committee.
The other major H-1B news for the week was the failure to have a vote on the floor of the Senate for the Hatch H-1B bill. The vote was scheduled for April 14th, but now appears likely to take place during the week of April 25th.
The original version of Smith's Bill, H.R. 3814, was introduced in April and is summarized on our web site at http://www.visalaw.com/docs/lamar2.html. That bill contained a one year increase of 45,000 in the number of H-1B workers and contained a number of new restrictions on the H-1B program that would basically make the program useless for the vast majority of employers in the US.
Detailed information on all of the developments in the H-1B debate are available on our H-1B Emergency Update page at http://www.visalaw.com/h1bpage.html.
-- What's in the new bill? --
The bill that passed this week was largely similar to the previous version of the bill except that it would potentially eliminate the cap on H-1B visas for the next two years (and then the 65,000 statutory limit would return), but this is subject to some very serious conditions. First, the Department of Labor must implement final regulations for the 1998 H-1B cap legislation. Second, US employers would have to show the following in order to petition for a visa:
- more US workers were on the payroll at the end of the year than at the beginning
- there was a net increase in the total wages paid to US workers, and
- there was a net increase in the median wage paid to US workers
The only exception to this is if the employer sold the business before the end of the tax year.
This section has been roundly criticized by business. H-1B proponents complain that the visa numbers should not be subject to the actions of DOL which has proved over and over again that it cannot produce regulations in a timely manner. Employers also complain that the payroll requirements do not comport with business realities. Companies frequently restructure to survive, but still need key H-1B professionals. The assumption that H-1B workers are fungible and that it is always possible to find an American substitute is not realistic.
Like the earlier version of the bill, Section 102 would move responsibility for counting H-1B visas to the State Department. Certainly the INS' track record on counting H-1B visas has been dreadful. While the question of whether the State Department could do a better job is an open one, few people believe that they could do a worse job.
The new H.R. 3814 contains a provision that would require that all H-1B workers receive a minimum annual salary of ,000 (including cash bonuses and similar compensation). Institutions of higher education, nonprofits and governmental research organizations would be exempt. This is particularly controversial as it would limit the H-1B program to workers in high income positions. A number of occupations could have problems - private school teachers, journalists, etc. Also, workers in start up companies could have problems since there salaries are often tied to stock options and not cash compensation.
Another new provision in the bill is a requirement that employers submit the following information to the Department of Labor for Internet posting:
- name of the H-1B employee
- country of origin
- academic degrees
- job title
- date employment commenced
- salary or wage level
This provision will no doubt send shivers down the spine of privacy advocates. Business advocates argue that the current requirement to submit job title, location and salary goes far enough.
The new bill also contains a new English language requirement for H-1B professors. Universities will no doubt be unhappy that they are having hiring standards dictated to them. Critics of the Smith bill also complain that there is no demonstrated problem to justify imposition of a new, burdensome administrative requirement.
Section 301 of the revised Smith Bill carries over a provision designed to eliminate "B-1 in lieu of H-1B" visa situations. B-1 visas are occasionally used by workers who would normally be eligible for H-1B visas except that their employers are located outside the United States and they are paid outside the United States.
Under current law, H-1B workers can work for several employers simultaneously, each on a part time basis. And H-1B workers can work for a single employer on a part time basis. Section 302 of the Smith Bill contains a provision that would basically eliminate this practice by requiring H-1B employees to work at least 35 hours per week. The only employees exempt from this are those working in a university, nonprofit, or governmental research organization. Smith claims to be protecting the rights of American workers with his bill, but this provision, say some critics, shows that protecting working conditions for immigrant workers, particularly working women, is not a priority for the chairman. Part time work for mothers interested in balancing work and a home life or job sharing arrangements will not be an option anymore.
The common practice of allowing workers without degrees who can show equivalent work experience would go away under section 303 of Smith's bill. The ability to show that a worker has the equivalent of a bachelors degree in the right field would still be available to workers with a university degree in a different field, however. Also, the law would require that a foreign degree be approved by the State Department. The State Department can enter into agreements with private firms to handle this work, however. Currently, employers use a number of credentials firms to provide this type of service directly.
Business groups have attacked this provision as a potential violation of US obligations under the General Agreement on Tariffs and Trade (the "GATT"). They also are concerned about taking a service that has traditionally been handled by the private sector with little criticism and giving it the State Department. Employers can now get credentials evaluations done in relatively short order - in a single day if one is willing to pay for expedited processing. It is hard to envision such speed of service being offered by a government agency, particularly the State Department. The assumption of new J-1 services last year by the State Department, for example has been a disaster with waiver case processing screeching to a virtual halt for more than six months.
The 0 anti-fraud fee from the earlier Smith bill has been retained in the latest version of the bill. This would impose a 0 fee on each new H-1B petition as well as applications to change employers. Part of the money would go to DOS and INS anti-fraud programs. Part would be used to pay for the DOS credentials evaluation work noted above.
The previous version of the Smith bill contained a provision stating that an employer would have to have gross assets of not less than ,000,000 to petition for a visa. The new bill revises this requirement to state that any non-governmental employer must have gross assets of not less than 0,000 as evidenced by recent SEC filings or according to INS regulations. Section 305 of the revised bill also has a requirement that a business must be licensed in the state or locality where the business is operating. While the 0,000 requirement is certainly less imposing than the ,000,000 requirement, most small and start up businesses would find this requirement difficult to meet. Furthermore, this section would create yet another burdensome paperwork requirement for employers.
Section 306 of the Smith Bill creates another requirement that was not included in the earlier version. Employers would now have to file W-2 forms with the Department of Labor for each H-1B employee. Presumably, the provision is intended to keep employers honest about whether they are paying employees what they promised to the government. Critics point out that this requirement would create yet another level of bureaucracy and burden employers with an entirely new administrative headache. This provision is in the Lofgren-Dreier bill and it appears that one of the few sections where that bill was tougher on employers than the Smith Bill was too much for Smith to resist adding.
Smith has backed off an earlier provision that would have raised the H-1B worker retraining fee from 0 to 00, but is would extend the fee through at least 2002.
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