H-1B update

President Clinton has signed both S. 2045, the H-1B bill and H.R. 5362, the H-1B fee increase bill. The H-1B legislation is now law and is in effect. The H-1B fee increase will go into effect in a few months and we will provide specific instructions as time goes on.

Both houses of Congress have passed the bill to raise the H-1B "tax" from $500 to $1000. The President has indicated his support for the measure already and he is expected to sign this bill as well as the H-1B bill itself shortly.

While the H-1B bill is still expected to be signed by President Clinton, the President is still grumbling over the bill. First, the President was hoping that the "H-1B tax" of $500 for worker retraining would be increased. He may get his wish. Shortly after the H-1B bill passed, a separate bill, H.R. 5362, was introduced in the House which would, in fact raise the fee to $1000. Whether that measure will pass at this late hour is still uncertain. Clinton also worried about the provisions in the bill allowing for H-1B extensions beyond six years for people with outstanding green card applications. The President is concerned that employers will be more prone to exploiting workers.

MAJOR NEWS! At 7:13 pm this evening, the House surprised observers and without warning passed S.2045, the Senate's version of the H-1B legislation. The text of the bill is at GPO's PDF. This is a major defeat for Lamar Smith and anti-H-1B forces since the House's less business-friendly bill was totally bypassed.

Section 1. Title of the Act is the “American Competitiveness in the Twenty-First Century Act of 2000.”

Section 2. In addition to the numbers of H-1Bs already authorized, the bill raises the H-1B visa cap as follows:

An amendment agreed to late in the process also raises the H-1B cap for Fiscal Year 1999 to whatever is necessary to ensure that there were enough visas allocated to match the actual number of visas allocated. Readers may recall that the INS claims it may have accidentally issued up to 20,000 to many visas last year. The agency threatened to pull numbers from a later year, but now will not need to do so.

Also, all cases filed BEFORE September 1, 2000 are to be counted against the FY 2000 cap regardless of when the case is adjudicated. The cap for FY 2000 is also retroactively raised to meet whatever demand for visas existed for the year.

Section 3. Creates new rules for universities, research institutions and graduate degree recipients.

First, the H-1B cap will not apply to anyone employed (or who has an offer of employment) at a college or university or a related nonprofit entity. It will also not apply to a nonprofit research organization or a government research organization. If someone leaves this job, then they will be become re-subject to the H-1B cap unless the next employer is also exempt.

Late in the process, an amendment was agreed to eliminating the section of the law that said that the cap will not apply to anyone for whom a petition is filed not more than 90 days before or not more than 180 days after the person has attained a master's degree or higher degree.

An amendment agreed to late in the process now exempts former J-1 physicians from the cap who are applying for a waiver of the home residency requirement under the Conrad State 20 program. This is the section of the Immigration Act that allows physicians to pursue waivers if they get an interested government agency to support the waiver.

Another amendment agreed to now states that one cannot be held to be subject to the cap if they had H-1B status within the last six years unless they have left the US for a year and are entitled to six more years of H-1B status.

Section 4. Changes rules on per country quotas for employment-based green card applicants.

If the total number of visas available in the five employment-based green card categories is more than the number of applications submitted, then requirements that prevent countries from having more than 7% of the allotment of employment-based green cards will not apply. That way, immigrant visas will not go unused if there are applications pending that would otherwise be subject to the per country limit.

This section also contains a provision that says that notwithstanding the H-1B visa cap, if an H-1B visa holder is the beneficiary of an employment-based immigrant visa petition and would be subject to the per country limit, the applicant may apply for an extension of their H-1B status until the applicant’s adjustment of status case is completed.

Under this section, an H-1B visa holder is allowed to begin work for a new employer at the time of submitting an H-1B petition. The INS currently holds that the change of status must be approved before work can begin for a new employer. If the change of status is denied, employment authorization will end. This rule only applies to applicants who have non-frivolous applications pending and who has not otherwise been employed illegally before or while the petition is pending.

This section of the bill becomes effective immediately and applies to cases already filed. That means that anyone with a pending H-1B transfer case can legally work for the new employer right away after the President signs the bill and do not have to wait for an H-1B approval.

Section 6. Extension of stay when applications are delayed by the INS; Portability of Green Card Applications

The H-1B visa six year time limit is not applicable to people with I-140 employment-based immigration applications or adjustment of status applications if a year or more has passed since the labor certification was filed or the I-140 was filed. H-1B visas may be extended pursuant to this section in one year increments until the final decision comes in on the green card petition.

In addition, individuals who filed for adjustment of status and whose cases have been pending for more than six months, may continue on with their adjustment application if they switch employers or jobs as long as the new job is in the same or a similar occupational classification as the job for which the petition was filed.

Any unused employment-based immigrant visas for Fiscal Years 1999 and 2000 will be "banked" for use in future fiscal years.

The attestation requirements for H-1B dependent employers are extended from October 1, 2001 to October 1, 2003. The new $500 retraining fee for H-1B visa petitions is extended from October 1, 2001 to October 1, 2003. And Department of Labor investigation provisions in the 1998 law are extended for an additional year to September 30, 2003.

If an alien issued a visa subject to the H-1B visa cap is found to have gotten the visa by fraud or willful misrepresentation and the visa is then revoked, then a visa shall be added back to the H-1B visa quota for the year in which the visa is revoked. It does not matter if the visa was originally counted for an earlier fiscal year.

The NSF is required to conduct a study on the “digital divide.” This is the term used to define the gap in access to high technology between the haves and the have nots in society. The study is due no later than a year and a half after this bill passes.

The bill also incorporates Senator Diane Feinstein's Immigration Services and Infrastructure Improvements Act of 2000. This provision calls for the creation of a new fund designed to reduce INS processing times for all cases to less than 180 days and eliminate backlogs of pending cases. The INS must provide Congress with a Backlog Elimination Plan within 90 days of passage of the law. The plan must review data systems, quality controls, estimates of the amount of money needed in the Backlog Fund and detailed plans on how the money will be used. The INS must then report annually on progress being made.

By an overwhelming 96-1 margin, the Senate voted this morning to pass S. 2045, the H-1B bill. Now the measure must be passed by the House of Representatives where the measure has had a more contentious history. Many are predicting the measure will end up being included in an appropriations bill given that there are only a few days left in the legislative session. Stay tuned...

The Senate this week moved closer to a final vote on H-1B legislation by formally defeating a Democratic effort to force a vote on legislation to ease the situation for illegal aliens in the US. Voting on largely partisan lines, the Senate voted 55 to 43 not to require a vote on the proposal. However, President Clinton has announced that he will now veto an important appropriations bill if the illegal alien measures are not included in that piece of legislation.

A vote in the Senate is now expected by Tuesday. For a rough summary of that legislation, go to our February 10th entry. In the meantime, many experts now doubt the House of Representatives can get a vote out by the end of the session and will have to include the H-1B measures in an appropriations bill.

The Senate today voted by a 97-1 margin to approve a cloture motion that will force the H-1B bill to be heard on the Senate floor. Observers believe the vote could come as early as this week.

Today is the day the Senate is set to vote on cloture for the H-1B bill. In essence, this is a vote to force a floor vote on the H-1B bill. If the cloture motion passes today, then a final vote on the H-1B bill in the Senate is expected by week's end or early next week. The House is still the trouble spot so we'll have to wait to see what happens there.

One positive sign was a statement made this weekend by President Clinton. Clinton predicted that Congress would pass H-1B legislation and that he would sign the bill if presented to him. Clinton told reporters on a trip to India "There's no question that we're going to increase the visas." He also mentioned nothing about linkage to other immigration issues of interest to Democrats, a clear sign that the Democrats have backed down on this strategy.

Finally! There is news to report on the H-1B legislative front. Congress was out of session for most of August and the bills have been stalled since Congress returned after Labor Day. However, this week Senate Majority Leader Trent Lott announced that he was negotiating a deal with his Democratic counterpart that should get the bill moving again. Lott indicated that each side could be allowed four or five amendments. The issue of amendments has been the one that has caused the legislation to stall since the Democrats wanted to introduce legislation in the bill on other types of immigration matters like an amnesty and restoring Section 245i.

Unfortunately, the attempt to negotiate this deal failed and Lott filed cloture on a motion to proceed with the legislation. Actually, in this case the Democrats were probably willing to accept Lott's deal, but Republicans balked and Lott was forced to proceed in a different direction.

Lott has indicated that barring an intervening agreement, the motion would be a brought to a vote Tuesday after a vote on Chinese-US trade relations. Later in the week, Lott will again seek a deal with the Democrats to proceed to a final vote on the bill. The Democrats are expected to agree to the cloture motion on Tuesday basically meaning that they now agree to move a "clean" bill without unrelated immigration issues included. The Democrats will press, however, for those issues to be allowed to be voted on in separate bills.

Congressman Dreier, who has introduced H-1B legislation in the House, has commented that he hopes that a resolution of the H-1B issue in the Senate will spur the House on to pass the legislation as well.

The INS has announced that it has stopped processing FY 2000 applications and begun adjudicating FY 2001 cases. FY 2001 begins October 1, 2000 and all cases being processed now will have start dates no earlier than October 1st.. The INS previously had indicated that it would try and recapture some H-1B numbers for FY 2000 in order to correct egregious errors made by the agency that resulted in an applicant not making the FY 2000 cutoff. The INS has backed out of that pledge and now will only process these cases with October 1st start dates.

Also, the Labor Department is reporting ongoing problems with its LCA Faxback system in both the western and eastern regions of the country. The agency believes it has fixed the problems, but it now has to clear through a large backlog of filings.

The INS has announced that it has issued the 115,000 H-1B visas available for use in fiscal year 2000. Only cases filed on March 17, 2000 and earlier were given visas for this fiscal year. According to the INS, it has almost 30,000 H-1B applications that count toward the cap in fiscal year 2001, which will begin on October 1, 2000. Without an amendment to the H-1B program, only 107,500 H-1B visas will be available that year. The number of applications already pending means that there are fewer than 80,000 visas available for next year. Without congressional action we could see the cap be hit even earlier than March next year.

On March 21, 2000 the INS announced that it would no longer accept cases to count against the 2000 cap, so while it was close in predicting the cut off date, some applications were filed that requested a starting date before October 1, 2000. Cases filed between March 17 and March 21 will be adjudicated with an October 1 start date. If the employer will not accept an October 1 start date, they should notify the INS and withdraw the petition, which can be done by fax. The withdrawal notice should be used to the INS Immigrant Services Division, H-1B Withdrawal Section, 202-514-2093.

As was the case last year, the INS will be extending the status of F and J nonimmigrants who timely filed an application for an H-1B visa. Their status will be extended until October 1 or until the INS adjudicates their application, whichever is later. During the period when the F or J nonimmigrant’s status is extended, they cannot work, but they can accept signing bonuses.

In August, the INS will be adjudicating applications for fiscal year 2001. Because H-1B applications may be filed up to six months before the proposed start date, applications for work to begin on October 1 may be filed immediately.

NAFSA - The Association of International Educators (this is the organization of foreign student advisors and others dealing with international educational programs) is vocally speaking out in favor of passage of H-1B legislation this session. To view a copy of a release press release and statement from NAFSA on the matter, go to http://www.nafsa.org/advo/presscenter/H1Brelease700.html and http://www.nafsa.org/advo/presscenter/H1Bremarks700.html.

House Immigration Subcommittee Chairman Lamar Smith has written an editorial in the current issue of Roll Call explaining his H-1B bill. The bill is not being supported by American industry and is competing for support with another bipartisan bill being sponsored by Democrat Zoe Lofgren and Republican David Dreier. Lofgren has also written an op-ed piece for this issue of Roll Call. The opinion pieces are at http://www.rollcall.com/pages/pb/00/07/pb10e.html and http://www.rollcall.com/pages/pb/00/07/pb10f.html.

The INS has announced that it has worked through cases subject to the H-1B cap for this year up to March 17th. The agency is expected to announce soon that the entire allotment of 115,000 visas has been used up.

The American Immigration Lawyers Association is reporting that the Federation for American Immigration Reform has launched a campaign to pressure members of Congress to vote against H-1B legislation. According to AILA, FAIR has placed advertisements in key districts around the US targeting a number of Congressmen and Senators who have spoken out in favor of raising the H-1B cap.

AILA is urging American employers in these districts and states to contact their representatives to let them know that their businesses depend on access to the best workers in the world, particularly in light of the persistent labor shortages around the US. The phone numbers for these members of Congress are listed above.

Many of you may be wondering why this page has had so few updates recently. It is because there has been virtually no progress in moving H-1B legislation forward recently. There has been some recent activity, however, and we have this most recent update.

At the start of this past week, the Senate finally began addressing the issue of when S. 2045, the H-1B bill, will be voted on. On Monday, an exchange between Senators Lott (R-MS), the Senate Majority Leader, and Reid (D-NV) illuminated many of the issues that are holding up the process.

Sen. Lott began his remarks by saying that he would like for the Senate to vote on the measure as quickly as possible. He then sought unanimous consent that the Senate proceed to a vote immediately. Unanimous consent is required whenever a matter will be considered in a way contrary to standard procedures. Unanimous consent was not granted. Sen. Reid began to speak, saying that he believed that the H-1B bill needed to be fully considered on the Senate floor. The primary dispute between the two sides was the desire to attach amendments to the bill. Many Democratic senators would like to make some amendments to the bill.

It is primarily the issue of amendments that is holding up a vote on the bill. While Sen. Lott does not want many amendments, because the Senate must pass a number of appropriations bills before the August recess, and amendments, even when only proposed and not made part of the legislation, take up a large amount of time.

There then followed a dispute about the number of amendments that had previously been discussed. Sen. Lott said that he had attempted to offer an agreement in which no more than 20 amendments would be made. Sen. Reid jumped on this, saying Sen. Lott must have meant at total of 10 amendments, with each side providing a maximum of five. There was no resolution of the issue that morning.

The next day Sen. Daschle (D-SD), the Senate Minority Leader, expressed his desire to have the H-1B legislation considered. He proposed that each side be allowed to introduce 10 amendments, and that debate on each amendment should be limited to 30 minutes. His suggestion was immediately countered by Sen. Gregg (R-NH), who accused the Democrats of not wanting to address the H-1B issue, but of wanting to introduce a completely unrelated agenda. Sen. Daschle responded that all of the Democrats proposed amendments were relevant to the H-1B issue. The debate then descended into an argument over the meaning of the word relevant. Sen. Daschle argued that any immigration related amendment would be relevant.

Again, no agreement was reached, either as to when the H-1B legislation will be taken up, or as to the procedures that will be used when it is addressed.

These brief exchanges make it clear that partisan disputes are holding up this legislation that seriously needs consideration. It is equally as clear that it is not solely the desire of the Democrats to add additional amendments that is delaying consideration of the bill. It seems that the Republican majority is completely unwilling to extend courtesies to the minority that have traditionally been part of the way the Senate works.

Even as the Senate fights over when and under what circumstances it will address the H-1B bill, the anti H-1B media campaign has picked up steam. The campaign, headed by the Federation for American Immigration Reform and the Coalition for the Future of the American Worker, has spent many months attacking Sen. Spencer Abraham (R-MI) for his support of increasing the number of H-1B visas available each year. It has now expanded to attack other lawmakers who are seen as supporting such legislation. The most recent targets are Reps. Tom DeLay and Dick Armey, both Republicans from Texas. It is expected that other members of Congress can expect to be targeted by the ads in the future.

If you are an employer whose business depends on H-1B workers, and you see any of these ads, please contact us at gsiskind@visalaw.com and we will be happy to offer our assistance in helping you reach your congressional representatives.

Leaders in the House and Senate have still been unable to resolve behind the scenes wrangling over amending the H-1B legislation and floor votes in each house remain unscheduled.

The INS has announced that it is up to cases filed on or before March 10th that are subject to the H-1B cap. Cases not subject to the cap have advanced further. The California Service Center, for example, says that it is processing non-cap cases filed before April 10th. The CSC believes it will soon have 45 day turnarounds on these cases.

The INS has announced that it is processing H-1B cases with receipt dates up to March 10, 2000 at each of the four INS Service Centers.

As expected, the House marked up the Smith H-1B bill and passed it largely on party lines by a margin of 18 to 11. The bill would contain most of the same provisions we mentioned in our May 11th report. One apparent difference in the bill over last week's version is the removal of language that would make H-1B visas only available to firms that increase the hiring of American workers.

Congresswoman Zoe Lofgren, the Democratic sponsor of an alternative H-1B bill that is generally favored by industry, told reporters after the vote that the bill was approved solely in deference to the powerful Lamar Smith, the Chairman of the House Immigration Subcommittee. She also noted that many technology companies have told her that they would rather have no bill than the Smith bill.

Lofgren still hopes to get her bill introduced to the full House. The head of the House Rules Committee would have an important say in this and that position happens to be held by David Dreier, Lofgren's primary co-sponsor on her bill. Whether Dreier wants to cross Lamar Smith is another question, however. Lofgren also reportedly wants to add new proposals to extend amnesty provisions available to Nicaraguans and Cubans to other Central Americans. She also wants to add language to create a broad amnesty for people in the US longer than 14 years. These are provisions favored by President Clinton and were outlined in his proposal which we summarized last week. That proposal has also been endorsed by 1996 Republican Vice Presidential candidate Jack Kemp.

Pundits are now predicting a June full vote in the House while the China trade debate continues.

The House Judiciary Committee is expected to resume markup on H.R. 4227 tomorrow. In the meantime, active lobbying on the H-1B bill continues.

We are posting two documents today written by our friend immigration lawyer Jan Pederson. Jan practices in Washington, DC. One document is a sample letter to Congressman on the H-1B issue. The other is a point sheet reviewing key issues in the legislation. Go to our Documents Collection to view.

We also expect that the Senate will delay a floor vote on S. 2045, its version of the H-1B bill, until June. Arguments over amending the bill to include unrelated provisions continue.

The compromise hammered out earlier in the week in the House Judiciary Committee is still being held up by Chairman Henry Hyde, though a vote is expected soon.

In the mean time, the American Immigration Lawyers Association is urging its members to oppose the Smith Bill and support the bipartisan Lofgren-Dreier bill. Specifically, they state that Smith's H.R. 4227 does not go far enough to address the needs of employers and its provisions will make the program unworkable for many. The Lofgren-Dreier bill, according to AILA, meets the needs of businesses, schools, nonprofit and research institutions to attract vitally-needed temporary foreign professionals.

President Clinton is now weighing in on the H-1B bill. Today, the White House released a letter to House Judiciary Committee Chairman Henry Hyde setting out the President's own preferences for a revised H-1B program. The letter states that the President's aim is to come up with a plan that will be truly bipartisan and propel the H-1B bill to passage. Among the measures in the proposal -

May 11, 2000

The Honorable Henry J. Hyde Chairman Committee on the Judiciary U.S. House of Representatives Washington, DC 20515

House Republican leader Dick Armey predicted at a press conference on the Republican's technology legislative agenda that the H-1B bill will pass this month.

The movement to increase the H-1B quota overcame another major hurdle yesterday as the House Judiciary Committee reached consensus on passage of an H-1B bill. The committee lacked a quorum yesterday and could not vote on the bill, but a compromise has been reached and approval is expected today.

The bill will end the H-1B quota all together for the next three years as reflected in Lamar Smith's H.R. 4227. A number of the provisions in H.R. 4227 that most worried industry were removed, however. Among the provisions in the bill that will pass today:

- H-1B employers will have to review salaries annually for US workers to ensure they remain level or increase

- a new $150 anti-fraud fee will be due and the funds will be evenly divided between the State Department and the INS

- a General Accounting Office study of minority hiring in the high tech sector would be mandated

Lamar Smith originally opposed implementing an increase or elimination of the H-1B quota until Department of Labor regulations for the 1998 H-1B legislation are issued. He dropped that demand yesterday.

Not everyone was happy about the compromise and many are still awaiting details of some of the changes before making judgments. Representative Lofgren, the sponsor of one of the original bills, was not happy that her proposal to raise the worker retraining fee from $500 to $1000 was not in the final version. And many employers are concerned about what will be required to document the salary review measure.

The next hurdle is passage of the bill by the entire House of Representatives. We will alert readers when we receive information on a possible date for this action. We will also have a complete summary of the legislation shortly as well as the full text of the latest version of the bill.

The House Judiciary Committee is expected to take up H.R. 4227, Lamar Smith's H-1B bill, tomorrow. The competing bipartisan bill, which is favored by industry, may be offered as a substitute by the bill's sponsor, California Silicon Valley Democrat Zoe Lofgren. Lofgren's bill has more than 60 co-sponsors from both parties as opposed to Smith's two Republican co-sponsors. Even though the bipartisan bill enjoys much greater support, many believe that Republican leaders fear Lamar Smith and are reluctant to confront him on this issue. Other observers believe that the more controversial provisions in the Smith bill will not survive and that a compromise bill will pass. Even in this case, however, most expect that some of the anti-fraud worker protection measures would remain.

The two-week pause in processing H-1B cap cases ended this week, according to the Director of INS Service Center Operations. The Service Centers are being told to process cases with filing dates up to February 18, 2000. This limit on processing is being imposed so that the California and Vermont Service Centers can catch up with the Texas and Nebraska Service Centers, which were processing cases filed on that date when the pause was instituted.

Several leaders of high-tech firms have written an open letter to Congress urging a reform of the current employment based immigration system. The Immigration Reform Coalition is led by many US employers, industry group leaders, and an immigrant, Linus Torvals, who has been waiting several years for a green card. Torvals is the creator of Linux, the revolutionary operating system

The group is closely tied to IEEE-USA which has been a vocal opponent of increasing the H-1B cap. Not surprising, the group is calling for a cutback in the number of H-1B temporary visas that are issued annually. What is surprising, however, is the support the group is giving for making it much easier and faster to get a permanent visas. According to the letter, “Immigration status-legal permanent residency, the path to citizenship-is what the overwhelming majority of H1-B visa holders want. It is what employers, too, say that they want. Major employers like Hewlett- Packard and Cisco insist that they only use H1-B visas for new hires because it takes so long to get green cards, and point out that if green cards were provided as quickly, demand for the H1-B would drop. Yet the more H1-B visas are issued, the more backlogged the Department of Labor and INS gets.”

Because of processing issues, many employment based immigrant visas go unused each year - almost 80,000 in 1999 alone. However, for two countries, India and China, employment-based immigrant visa numbers are backlogged, meaning they wait years to even become eligible to apply to file for permanent residency, a process which itself currently takes about two years.

The crux of the proposals laid forth in the letter is that intending immigrants who have a job offer be allowed to come to the US and work, during which time the paperwork would be processed. The letter also advocates that this time spent in the US be counted toward the five years of permanent residency necessary to apply for citizenship.

The position taken in the letter, shared by both immigrants and high-tech employers, contradicts the claims of many H1-B opponents. Opponents of the program claim that employers only want H-1B visas because they can pay workers a lower wage without having to commit to the green card process.

Despite industry support, it is not likely that such legislation will be introduced in Congress.

We have received word that despite a 16-2 vote for the Hatch Bill in committee in the Senate, the bill is in real danger of being killed by a group of Democrats seeking to load the bill down with amendments that will be unpalatable to Republicans.

The bill, S. 2045, is up for a floor vote very soon. We believed the bill would come up for a floor vote this week. However, last week Senator Hatch and Senator Lott, the majority leader, proposed that in order to maximize the chances for passage of the bill, a limit of five relevant amendments for each party should be permitted. The Democrats are said to be stalling and Senate Minority Leader Tom Daschle has not responded to the request for a limit on amendments. The Democrats are said to be considering introducing as many as twenty amendments, most of which have nothing to do with H-1B visas. Tomorrow, at a Democratic policy lunch, the bill is supposed to be taken up. Supporters of the bill are urging people to contact Democratic Senators and ask that they support a limit on amendments on the H-1B bill.

The H-1B Hall of Shame web site has gone online. The site, as its name implies, is anti-H-1B in its focus.

Silicon India Magazine reports on recent protests against raising the H-1B cap by US labor organizations.

There have also been two important studies on H-1B visas released. The Employment Policy Foundation has released a report entitled "The H-1B Cap Will Move Jobs Overseas" which can be found at http://www.epf.org/documents/sf20000412.html. The Institute for the Study of International Migration at Georgetown University has published a report entitled "H-1B Temporary Workers: Estimating the Population." It is online at http://www.ieeeusa.org/grassroots/immreform/h1breport.pdf.

The INS pause on H-1B processing that we described on April 18th continues. The INS is now concentrating on cases not subject to the H-1B cap. The American Immigration Lawyers Association is reporting that the California Service Center should finally start processing cases filed in 2000 sometime this week.

Also, S. 2045, the Hatch bill, should be coming up for a vote on the full floor of the Senate this week or next.

According to the American Immigration Lawyers Association, the INS has temporarily stopped adjudicating H-1B cases subject to the cap. The pause is expected to last at least eight days. According to AILA, the INS believes the pause will enable the agency to achieve "better management control" of the H-1B count and "better inventory control at the slower Service Centers." KPMG, the same firm that recently conducted an audit the INS claims shows an overcount from last year in the 20,000+ range, will be checking the current system to make sure a repeat of 1999 does not occur. According to AILA, the INS will shift resources during the pause to "other priorities." Non-cap H-1B cases are presumably the main target.

Also, readers interested in learning more about the bill that passed in the House last week can read about it in our latest newsletter at http://www.visalaw.com/00apr3/3apr300.html.

The revised Smith Bill described yesterday passed the House Immigration Subcommittee by a voice vote. Industry representatives complained that while the bill solves the problem with H-1B numbers, new restrictions placed on the H-1B program may make the program useless. Committee Democrats appeared to agree and voted across the board to reject the measure. Now the bill goes to the House Judiciary Committee. Many hope that the Lofgren/Dreier bill will either be substituted for the Smith bill or that the bill will be amended to include many of the Lofgren/Dreier bill and delete the more onerous provisions of the Smith bill.

On the Senate side, the scheduled vote this week on S. 2045 has been postponed until after the Easter recess. Now the vote is expected during the week of April 25th.

MAJOR NEWS TODAY. Lamar Smith has introduced another piece of H-1B legislation that would now remove all limits on the number of H-1B visas for the next three years. The bill still contains a number of onerous provisions that would make H-1Bs basically only available to large companies and highly paid workers. The complete text of the legislation is in our Documents Collection. Smith's introduction of his bill is as follows:

A month ago, my colleagues, Bob Goodlatte, Chris Cannon, Tom Campbell, and I introduced the Technology Worker Temporary Relief Act that increased the number of skilled temporary foreign H-1b workers by 45,000.

Today there is still no objective, credible study that documents a shortage of American high-tech workers. The Department of Commerce says it does not know if there is a shortage. The study that Congress commissioned by the National Science Foundation is not scheduled to be completed until after we adjourn this year. In the private sector, two substantive non-profit studies concluded that it is unclear whether there is a shortage.

What is new is that two weeks ago the INS informed us that demand for these visas is running 50,000 ahead of last year. In addition, the INS reported that the number of visas the INS approved last year above what the law allowed was more than 21,000.

So, there is obviously a significant growth in demand for foreign high-tech workers.

Such demand can indicate any of the following: An actual shortage, a spot shortage, a preference for cheap labor or replacement workers, or something else.

Given the importance of the high-tech industry to our economy, I think we should give the industry the benefit of the doubt and accommodate the current level of demand.

The new Temporary Worker Temporary Relief Act I am introducing today will set no limits on the number of skilled temporary foreign workers we admit during the next three years. Let the market determine how many foreign skilled workers we need rather than have Congress set limits based on arbitrary numbers.

This bill responds generously to the immediate temporary needs of the high-tech industry and also includes provisions that are good for American workers.

It will require companies applying for these visas to show they have increased their number of American employees and increased compensation to American employees.

This bill requires employers to file public reports on skilled temporary foreign workers they have hired, what jobs they’ve been assigned to do, and the wages they are paid.

Since these are foreign workers who are filling what could otherwise be Americans’ jobs, it is appropriate the American public knows what the industry is doing.

This legislation also sets a floor on wages for these workers--$40,000 per year. The industry has said that it uses these workers to fill critical positions in their workforce. This wage is a good starting point for any high-tech professional.

This bill also requires full implementation of the 1998 American Competitiveness and Workforce Improvement Act before the additional visas are available in 2001 and 2002.

Strong anti-fraud measures are necessary to address known abuses. This bill requires skilled temporary foreign workers to be full-time employees, requires employers to have assets of at least $250,000, eliminates the substitution of work experience for a degree, and provides for checks of foreign educational institutions that award degrees to these workers.

These common sense provisions that benefit American workers and reduce fraud are essential to any workable H-1b visa bill.

Finally, this legislation addresses only a small part of America’s future workforce. Ninety percent of all future jobs will require more than a high school education. Tragically, 35 percent of legal immigrants, more than 300,000 annually, lack this essential qualification.

If we have learned anything from the debate over the demand for more skilled temporary foreign workers, it is that our current legal immigration system is failing us. It provides large numbers of workers with no skills but does not provide the high-tech workers we do need.

Every day that Congress debates temporary foreign workers is a warning that we need a legal immigration system that better serves America’s interests.

Smith's summary of his bill is as follows (our own summary of the bill will be available soon):

The Technology Worker Temporary Relief Act of 2000

The State Department, and not the Immigration and Naturalization Service, will keep records of the issuance of H-1B visas.

The number of visas available under this legislation will be sufficient to meet demand, since even at last year’s peak, the INS only approved 9,000 visas per month or 108,000 on an annual basis.Conditionality of Visa Allotment Exceeding Current Law

Previous predictions on this page that the INS would announce a massive visa overcount of H-1B visas from the 1999 fiscal year have proven true. The following is the INS announcement on the subject.

U.S. Department of Justice

IMMIGRATION AND NATURALIZATION SERVICE

STATEMENT 4/6/00

KPMG's Report on H-1B Processing

Federal law imposes a ceiling or "cap" on the number of aliens who may be
issued visas or otherwise provided H-lB status in a particular fiscal year.
In the summer of 1999, the Immigration and Naturalization Service (INS)
discovered that there were discrepancies in the number of petitions recorded
against the Fiscal Year (FY) 1999 H-lB cap, which was set at 115,000 by the
American Competitiveness and Workforce Improvement Act. Upon further
analysis, it was determined that INS may have exceeded the statutory cap for
FY 1999. Last fall, INS contracted with the consulting firm of KPMG to
review the counting methodology and H-lB petition process. This review was
to complement preliminary agency efforts to determine the amount of the H-lB
discrepancy in FY 1999, identify the systems problems that led to this
discrepancy, and recommend corrective actions.

KPMG has delivered the results of its initial review on the extent of the
H-lB discrepancy. Based on analysis of INS data, business rules and a random
sampling of petitions, KPMG reported that INS approved between 136,888 and
138,385 H-lB cap petitions in FY 99. This means that INS approved between
21,888 and 23,385 petitions in excess of the FY 1999 cap of 115,000.

Based on a careful review of the KPMG report, INS determined that it
approved 21,888 H-lB petitions in excess of the FY 1999 cap. INS will be
consulting closely with Congress before making a final determination on how
to treat the excess.

As many suspected, the INS has announced that the fiscal year 2000 cap was reached on March 21, 2000. Despite there being more visas available than in any other year, the cap was reached quicker than ever before. As announced in the Federal Register on March 21, 2000, the INS will follow procedures similar to those announced last year in dealing with the cap.

There are some important things to note in approaching the H-1B cap issue. First are the things that are not true. Right away, people should be aware that this announcement does not mean that no more H-1B visas will be issued. Visas will still be available in non-cap cases (those involving amendments, extensions, and transfers), and H-1B petitions already filed should not be denied because of the cap. When the INS says in this announcement that the cap has been reached, it does not mean that all 115,000 visas available this year have been issued. Rather, it means that combining the visas that have been issued (74,300 as of February 29, 2000) with the cap cases that have been filed and are in the pipeline (an estimated 45,000 as of February 29, 2000) will reach the cap. Therefore, people with pending H-1B applications should not necessarily be worried that it will be denied because of the cap.

Even though it may be possible that the INS is mistaken and does not have enough cases to account for all available visas, it will no longer accept H-1B petitions requesting an employment start date before October 1, 2000. Nor will the INS hold these cases pending the start of the 2001 fiscal year. Instead, it will reject these cases, and return them, along with the fee, to the petitioner. However, it will accept and begin processing cases that request a starting employment date on or after October 1, 2000. Those cases that have already been submitted that request a start date before October 1 will not be rejected, although if they do run up against the cap they will be approved with a start date of October 1 and counted toward the 2001 cap.

If an employer is not willing to wait until October 1 for employment to begin, they should notify the INS in writing that they want the petition withdrawn. The notice should be faxed to the following:

Immigration and Naturalization Service
H-1B Withdrawal Section
Washington, D.C.
Fax number 202/514-2093

This fax should be signed by the petitioner of their authorized representative and should include both the filing receipt number and the names of the petitioner and beneficiary.

If the petition has already been approved with an October 1 start date, the employer should notify the INS in writing that it wants the petition revoked. In neither of these cases will the INS be able to refund the fee.

Of much interest to many is how the INS will deal with those in F or J status who are the beneficiaries of an H-1B petition, and fortunately, the INS will take the same approach it did last year. F and J nonimmigrants who are the beneficiaries of timely filed H-1B applications will have their status extended until October 1, 2000, or until the H-1B petition is adjudicated. Dependents in F-2 and J-2 status will also have their status extended. Note however, that while such people are in valid nonimmigrant status, they are not work authorized. However, the INS will allow such people to receive signing bonuses, as those are not payment for services rendered.

Finally, none of the 2000 visas have been used to address the claimed overissuance of H-1B visas is 1999. According to the item in the Federal Register, “the Service has not yet determined the exact amount of that discrepancy. The Service will publish a future notice in the Federal Register addressing how these cases will be treated once the exact amount of the H-1B discrepancy in Fiscal Year 1999 has been determined.” Of course, many believe that when that determination is made it will be discovered that not all the available visas were issued.

The INS has also issued a question and answer document on the lottery. Click here to see it in PDF format.

We have gotten word on H-1B usage and where the INS is in counting H-1B numbers. The INS will announce the cap tomorrow. Approximately 74,300 visas have been issued for the current fiscal year. More than 45,000 petitions are pending. Even though this total is more than 115,000 (the quota for this year), the INS expects that a percentage of these cases will be denied. This means that cases already filed and pending should be adjudicated this year. The INS will stop accepting cases tomorrow asking for start dates prior to October 1, 2000.

We have created a detailed section by section summary of the new Lofgren H-1B bill in the House.

THE INS IS ADVISING IMMIGRATION LAWYERS THAT THE H-1B CAP WILL BE ANNOUNCED IN THE FEDERAL REGISTER ON MARCH 21ST. NO FURTHER DETAILS ARE AVAILABLE. INFORMATION ON HOW PENDING CASES ARE TO BE HANDLED WILL BE REVEALED ON THAT DAY. THE INS ALSO ANNOUNCED THAT THEY WILL NOT COUNT OVERISSUANCES OF VISAS FROM LAST YEAR TOWARD THIS YEAR'S NUMBERS.

We've got it! Today Congresswoman Zoe Lofgren introduced an H-1B that is a lot more business-friendly and economically sound than the Smith H-1B restriction bill. Click here to view the document in Adobe Acrobat format (please note that the document is 32 pages and is nearly 1 MB in size).

The Justice Department has also responded to Senator Abraham on problems with the H-1B count. The memo raises a number of significant points. The INS is planning on revising the I-129 to better track cap cases and it will soon issue a proposed regulation governing the H-1B cap.

On March 13th, we told you that a bill closely resembling the Hatch Bill would be introduced in the house today. While we have not seen the bill yet, IEEE-USA is posting a summary of the bill's expected provisions.

We have received reports from informed sources that the Hatch H-1B bill in the Senate (see our February 10th entry for a summary) will be brought up for a vote on the Senate floor as early as the second week in April. That means that it is possible that if the schedule is kept, a matching bill is passed in the House and the two parties can agree on provisions, AND President Clinton signs it, the bill could become law before next month is over.

We have also learned that Representatives Dreier and Lofgren in the House of Representatives will be introducing a bill expected to match the Hatch bill on Wednesday of this week.

INS Commissioner Doris Meissner has responded to Senator Abraham's criticism of the H-1B counting methods. We now have the letter in our Documents Collection.

Good news on the Hatch bill. The Senate Judiciary Committee met today and marked up the bill, defeating an amendment to weaken the legislation and passing the bill by an overwhelming margin of 16 to 2. Massachusetts Senator Edward Kennedy proposed an amendment to cut the raising of the cap from 200,000 to 145,000. His amendment would also have raised the H-1B fee to as much as $3000. Kennedy's amendment would have earmarked the increased funding for job training and education. Instead, an amendment sponsored by California Democrat Diane Feinstein and Immigration Subcommittee Chairman Spencer Abraham that will allocate H-1B application fees to fund National Science Foundation projects (but will not raise H-1B application fees) passed.

The bill next heads for a vote on the floor of the Senate. According to the American Immigration Lawyers Association, the chances are now excellent that the Senate will pass an H-1B bill. Issues that remain unresolved include increased fees, labor protections and the final size of the increase in the visa numbers.

The Nebraska Service Center has announced that as of March 8, 2000, it was adjudicating cases with notice dates before January 11, 2000.

The Senate Judiciary Committee is scheduled to mark up the Hatch H-1B bill today. It is vital that Senators on that committee hear from people in support of the bill (which SSHD strongly endorses). Readers - particularly employers - are urged to contact the following members of the committee:

Sen. Orrin Hatch (R-Utah): Chairman -- primary sponsor of S. 2045
Sen. Strom Thurmond (R-SC): Not co-sponsor
Sen. Charles E. Grassley (R-IA): Not co-sponsor
Sen. Arlen Specter (R-PA): co-sponsor
Sen. Jon L. Kyl (R-AZ): not co-sponsor
Sen. Mike DeWine (R-OH): co-sponsor
Sen. John Ashcroft (R-MO): co-sponsor
Sen. Spencer Abraham (R-MI): co-sponsor
Sen. Jeff Sessions (R-AL): not co-sponsor
Sen. Robert C. Smith (R-NH): not co-sponsor
Sen. Patrick J. Leahy (D-VT): not co-sponsor
Sen. Edward M. Kennedy (D-MA): not co-sponsor
Sen. Joseph R. Biden (D-DE): not co-sponsor
Sen. Herbert H. Kohl (D-WI): not co-sponsor
Sen. Dianne Feinstein (D-CA): co-sponsor
Sen. Russ Feingold (D-WI): not co-sponsor
Sen. Robert G. Torricelli (D-NJ): not co-sponsor
Sen. Charles E. Schumer (D-NY): not co-sponsor

According to the American Immigration Lawyers Association, "S. 2045 will keep our economy growing... Federal Reserve Chairman Alan Greenspan has said this professional worker shortage poses a threat to our continued economic boom, and that one solution may be to increase the cap on H-1B workers. S. 2045 does just that, and is a short-term solution to the nation’s shortage of skilled professional workers."

The INS has announced that through February 15, 2000, about 67,000 cases had been counted toward the annual limit on H-1B visas, which, this year is 115,000. There were also 44,000 cases in the pipeline, although the INS has no way of knowing how many of these are subject to the annual cap. The announcement in which this news was revealed made no mention of the INS' position on the alleged over-issuance of visas last year, nor whether, if the INS does decide it issued too many, it would apply those wrongly issued to this year's cap.

The INS does say that when it determines the cap is about to be reached, it will follow the notification procedures it developed last year.

- AILF, the American Immigration Law Foundation, is actively planning to file a lawsuit against the INS over the INS' serious flaws in its methods for determining whether the annual cap on H-1B visas has been met.

- The American Immigration Lawyers Association is reporting that the Nebraska Service Center's H-1B examiners now have worked or are working on all cases that have a notice date of 12/30/99 or earlier. Cases with a notice date of 01/03/00 or higher are being held in abeyance until further instructions are given by INS headquarters. NOTE: This does not mean the cap has been hit (though we still believe that will happen soon).

- In the March 1st Democratic primary debate in Los Angeles, both Al Gore and Bill Bradley endorsed the concept of raising the H-1B cap. Both Republican candidates as well as Federal Reserve Chairman Alan Greenspan have also previously announced their support for such a move.

Lamar Smith, chairman of the House Immigration Subcommittee, has proposed a bill to raise the H-1B cap. Smith, known for years as being the leader of the anti-immigrant wing of the Republican Party, is introducing a bill that raises the cap only modestly (45,000) and for just one year. Smith has a history of proposing bills that on their surface seem to be pro-immigration but have provisions that would dramatically tighten the rules. Smith's bill would dramatically cut down on the number of employers eligible to sponsor H-1B visas and would make many - perhaps thousands - of otherwise eligible H-1B applicants from applying. Among the more worrying provisions -

- Employers must have gross assets of at least $5,000,000. This would effectively eliminate most small firms from applying.

- To have access to the 45,000 new visas, employers must show that they have increased the number of full time equivalent American workers employed by that employer, increased the total wages paid to American workers and increased the average wages paid to American workers.

- Only applicants with bachelors degrees in the actual field where they are working are permitted. Currently, many people get H-1B visas by showing equivalent work experience.

- The worker retraining fee of $500 imposed in the 1998 bill would be increased to $1000.

- The one year cap increase is only available after the Labor Department issues regulations implementing the 1998 Act (something that seems close but which has been delayed since last summer).

If Smith's bill slams small business with the minimum revenue provision, it clearly panders to large businesses with a "fast track" provision that requires the INS to approve certain H-1B visas within 30 days or automatically approves them. To be eligible, employers must pay a $250 expedite fee and must:

An interesting provision in light of the current controversy over H-1B counting procedures is the transfer of responsibility for counting H-1B visas from the INS to the State Department. That may be the one part of this proposal that gets widespread support.

This bill is not likely to gather much support from business both because it will do little to alleviate the labor crunch and because it could devastate the economy of Silicon Valley by preventing startup firms from having full access to the labor market.

We're including in our Documents Collection the press release from Smith describing the bill. We will provide the full contents of the bill as soon as we have them available.

Senator Spenser Abraham, the Chair of the Senate Immigration Subcommittee and one of the principle supporters of the 1998 law that raised the H-1B cap, has followed up on an earlier letter to the INS criticizing the agency’s seemingly perpetual problems in counting the number of H-1B visas issued each year. The text of the recent Abraham letter is included in our Documents Collection.

One of the most shocking parts of the letter indicates that while most people had assumed the INS dropped its plan to deduct visas it claims to have issued in error last year from this year’s total, the INS may still have plans to do so. The letter, dated February 25, 2000, begins with Abraham’s statement that “My position remains that the INS does not have the statutory authority to subtract numbers from the FY 2000 H-1B cap and that attempted to do so would be unacceptable.”

Members of Abraham’s staff have been meeting with the INS, particularly to discuss the ongoing audit of H-1B numbers being conducted by KPMG. Three areas were of enough concern that Abraham is again writing to the INS. First, it seems the INS told KPMG to count as cap cases all those in which the Form I-129 is marked for new employment and requests consular processing. As Abraham points out, some petition so marked are not for initial applications. His staff pointed this out to the INS, and received assurances that the INS would provide KPMG with new instructions. In the letter, Abraham requests details of these instructions, and what KPMG did in response.

A second issue concerns the multiple counting of the same beneficiary. The INS instructed KPMG to match these files by using five pieces of information – receipt number, last name, first name, date of birth, country of birth and approval date. Given the multiple variations in name spelling, Abraham suggested that all cases in which there are identical birthdates be screened to ensure multiple visas for the same beneficiary have not been counted toward the cap. Abraham has not yet received a response to this suggestion, and requests one in this letter.

Third, Abraham expressed his basic disapproval of the fact that the INS counts toward the cap visas that were issued but never used because it has no way of determining whether the visa is used. He asks what the INS is doing about this issue.

He finishes his letter with a statement that all concerned with counting H-1B visas can agree: “It remains my view that INS counting procedures, including, quite disturbingly, the directions provided to date to KPMG, do not conform to the law and are artificially inflating the annual count of H-1B usage to the detriment of employers, employees, and the American economy.”

The US Senate takes the first step to move the Hatch H-1B bill (S. 2045) forward this coming Thursday when they begin markup of the bill.

The INS has finally released a final rule implementing the American Competitiveness and Workforce Improvement Act of 1998, commonly known as the ACWIA or just the H-1B bill. The rule in question does not deal with must of the statute. In fact, it addresses only the additional $500 fee it created. While the rule does not cover much, it does provide much needed guidance on when the fee must be paid. We discussed the interim rule, which was released on November 30, 1998, in a prior issue of Siskind’s Immigration Bulletin. This article is available at http://www.visalaw.com/98dec/15dec98.html.

The final rule adopts most of the interim rule, but does include some changes that make determining whether an H-1B application must include the $500 fee easier.

One important change is that the final rule makes it clear that the $500 fee is employer dependent. Thus, if the alien worked for Company A, which paid the $500 fee, and then wanted to switch employers, in all situations Company B would also have to pay the $500 fee.

The rule also clarifies the methods of payment the INS will accept. The interim rule indicated that the Service required the entire fee of $610 to be paid in one check. The final rule clarifies that the INS will accept two checks, one for $110 (the base filing fee) and one for $500. The Service must receive both of these checks at the same time. The check for $500 must come either from the employer or its representative of record.

The rule provides further definitions of research organizations that are exempt from the $500 fee. It clarifies that the research organization does not have to be affiliated with an institution of higher learning.

Perhaps most importantly, the rule provides concrete situations in which the $500 fee is not required. These are:

The rule creates a new requirement that Form I-129W must be filed with all applications for H-1B visas. If the employer claims to be exempt from the fee, it must submit evidence to that effect, and must also provide a statement detailing why the fee is not required. The Form I-129W has been revised, and its name has been changed from “Petition for Nonimmigrant Worker, Filing Fee Exemption” to “H-1B Data Collection and Filing Exemption.”

In our January 3, 2000 entry to this column, we told you about serious questions that have arisen over the way the INS is counting H-1B visas subject to the annual cap. We have yet to hear a credible response from the INS on the serious issues raised. The subject was also discussed in a letter from Daryl R. Buffenstein, General Counsel to the American Immigration Lawyers Association which we are not including in our Documents Collection.

In our February 2, 2000 entry, we described a raid on 40+ H-1B computer programmers at a San Antonio, Texas Air Force Base. We described the extraordinary excesses taken by INS enforcement officers, the potential illegality of the raid and the widespread condemnation of the INS over the action. Readers will be interested in knowing that the INS has now dropped its deportation proceedings against the arrested workers. The INS is, however, still considering revoking the worker's H-1B visas. Such a revocation would still be a potential violation of the court order in the National Association of Manufacturers case and the INS will no doubt have to defend its actions in a federal court if it carries through with any revocations.

More information on the new H-1b bill. We've linked to the Congressional Record entry for the bill in our Documents Collection and now have an easier to read PDF version of the bill (also in our Documents Collection).

The INS has suddenly reversed itself and now says that the reaching of the H-1B cap is imminent and that it will NOT provide the 30 days notice that the cap will be reached that we reported in our February 11, 2000 update to this page. According to the American Immigration Lawyers Association, the INS will simply make an announcement that as of the date of the announcement only cases already received will be adjudicated under the cap and later filed cases will be adjudicated under the FY 2001 cap.

The INS has told AILA that it will use procedures similar to last year in dealing with cases filed around the cap date. If an application is received before the cap announcement, but numbers nonetheless run out, the case will be given an October 1st start date. If a Labor Condition Application has not yet been received, the INS will take the case anyway and issue a request for evidence that will allow the LCA to be submitted later. But it is possible that the cap could be hit between the RFE being issued and the receiving of the LCA and that such cases would be given October 1st start dates. While it is acceptable to submit cases without LCAs, the INS did caution that it would not accept "skeletal" filings - those filings with just a signed I-129 form but no supporting documents.

The INS is also expected to have a similar rule allowing F-1s and J-1s with "duration of status" I-94 cards who file H-1B change of status cases before the announcement date to remain legally in the US (but without work authorization) while they wait for October 1st start dates. But no official word on this is yet available.

One additional disturbing piece of news came from the INS today as well. On December 7th, we reported that the INS believed it may have undercounted H-1B visas from last year by as many as 20,000. The INS was considering deducting the number from this year's quota. We later reported on serious flaws in the H-1B counting system that may mean that the INS may have actually overstated H-1B usage by as much as a third for the last several years. (See our January 3, 2000 entry). It was commonly believed that the INS would not dare try and deduct numbers from this year until it could prove that it had accurately counted last year's approvals. The INS is now saying it is again deducting the supposed overage from this year's numbers. If this happens, many cases still in the pipeline at INS would not be adjudicated under this year's cap and would instead get October start dates. The move would be highly controversial and is likely to be challenged in court as well as by angry members of Congress who have warned the agency against such a move.

The INS is reporting to the American Immigration lawyers Association that as of January 27th, H-1B applications with receipt dates of November 5th and November 7th were being adjudicated. That means that cases filed in mid to late November should now be coming up for adjudication. The INS further stated that they are trying to stick to a 60 day turnaround on cases.

The American Immigration Lawyers Association has issued a press release praising the new Hatch bill.

INS officials have informed the American Immigration Lawyers Association that as of January 31, 2000, there were still H-1B visa numbers available for this year. That means cases filed before January 31st will not be subject to the H-1B cap. The INS also let AILA know that when it believes they are about 30 days from reaching the cap, an announcement will be placed in the Federal Register.

We have now prepared a section by section summary of the proposed H-1B legislation.

Section 1. Title of the Act is the “American Competitiveness in the Twenty-First Century Act of 2000.”

Section 2. In addition to the numbers of H-1Bs already authorized, the bill raises the H-1B visa cap as follows:

Section 3. Creates new rules for universities, research institutions and graduate degree recipients.

Second, the cap will not apply to anyone who has received a master’s or higher degree from a college or university in the six months prior to the application being submitted.

Section 4. Changes rules on per country quotas for employment-based green card applicants.

The attestation requirements for H-1B dependent employers are extended from October 1, 2001 to October 1, 2002. The new $500 retraining fee for H-1B visa petitions is extended from October 1, 2001 to October 1, 2002. And Department of Labor investigation provisions in the 1998 law are extended for an additional year to September 30, 2002.

Senator Orrin Hatch, lead sponsor of the American Competitiveness in the 21st Century Act of 2000, has issued a press release on the need for the legislation.

Though the bill has not been publicly released, we've managed to get a copy faxed to us. Click here to download in PDF format (sorry for the poor quality of the copy).

The American Competitiveness in the 21st Century Act - Senator Hatch's 2000 H-1B bill - will be introduced today. Supporters of the bill will hold a press conference at 2 pm eastern time. Later today, we will post the bill on the site.

Details of the Hatch-Gramm-Abraham H-1B bill in the Senate have been obtained by Siskind, Susser, Haas & Devine. The quick assessment is that the bill will have a major long term impact in alleviating not only the H-1B cap, but problems with per country limits for permanent residency as well as difficulties individuals suffer when the INS acts slowly in adjudicating petitions. The important provisions of the bill are as follows:

Unfortunately, previously mentioned proposals to exempt from the cap all advance degree workers or those that are highly paid are not included in the bill (there is a lesser provision to exempt people who have recently received masters or Ph.D.s, but, curiously, not people who have had such degrees for a while). But the portable H-1B provisions are an unexpected addition as well as the provision to allow the extension of non-immigrant work visas when the INS delays processing green cards.

The bill will be introduced this week. The bill's sponsors are already circulating a letter in the Senate to drum up support. The letter is now included in our Documents Collection.

The INS and the Department of Labor recently collaborated in a potentially unlawful (and shocking) raid on H-1B workers at a US Air Force Base in San Antonio. Read the article in our current issue of Siskind's Immigration Bulletin.

The National Journal is reporting that Senate Judiciary Committee Orrin Hatch (who dropped out of the presidential race recently), Senate Immigration Subcommittee Chairman Spencer Abraham and Senate Banking Committee Chairman Phil Gramm met last week to discuss H-1B legislation for this coming session of Congress. Each have introduced bills to raise the limit on H-1B visas.

A legislative package to raise the cap is expected to be introduced in the Senate next week in the Judiciary Committee. But the bill would be drafted jointly with the Banking Committee. The bill is said to be a compromise between Gramm's dramatic liberalization of the H-1B program and the more modest bills supported by Hatch and Abraham. Gramm had favored raising the H-1B cap to 200,000 and creating a number of exemptions from the cap. Hatch and Abraham favored an increase of 40,000 to 50,000 for two years. There are no details yet on what the terms of the compromise include.

The American Immigration Lawyers Association has released statistics obtained from the Immigration and Naturalization Service for H-1B processing backlogs at the four INS Service Centers. According to the data, the service centers were processing cases on January 19, 2000 with the following notice dates:

Nebraska Service Center: November 3, 1999
Vermont Service Center: November 17, 1999
California Service Center: November 12, 1999
Texas Service Center: November 10, 1999

A case has just been published denying a nursing contracting firm H-1B visas for its nurses based on the fact that it could not document that the contractor's clients needed nurses with bachelors degrees. The case means mixed news for nurses seeking H-1B visas. We'll report on all the details on the case shortly in Siskind's Immigration Bulletin.

The American Immigration Lawyers Association is telling its members that the H-1B cap has not been reached and that a reliable source at the Immigration and Naturalization Service says the cap may not be hit until March (i.e. cases filed by March, not just finished by then). AILA cautions, however, that the INS is still analyzing the numbers and it remains possible the cap could be reached sooner.

AILA is also reporting that the Nebraska Service Center is now working "cap" cases with receipt notices of November 2, 1999 and non-cap cases receipted November 1st.

Last week we reported that the Department of Labor's Philadelphia Faxback system for Labor Condition Applications filed in the eastern half of the US was having major problems. We are told the system is working again and that the DOL now has to work through 2,500 LCAs that have piled up since the system went down. The DOL promises to be caught up early in the week.

According to the American Immigration Lawyers Association, the INS Nebraska Service Center reported that the last H-1B "cap" cases worked were receipted on October 18, 1999. Non-cap H-1B cases being worked were receipted on October 18, 1999. While H-1B cases will again be ordered up for adjudication this week, the NSC is warning that it does not have the resources to process all the cases currently pending. This also raises the question of whether the INS has yet to figure out which cases are cap cases and which ones are not. See the Abraham letter discussed in the most recent issue of Siskind's Immigration Bulletin for more on this.

TechWeek's current issue contains an article discussing various immigration issues affecting Silicon Valley firms including the H-1B cap.

Richard Panati, the Certifying Officer of the Philadelphia DOL region advised sent the following message to the American Immigration Lawyers Association late last week:

"The Faxback System went down early this morning and is currently not operational. We expect the system to be down until early next week. We will immediately notify you when service is restored.

LCAs that were faxed in on January 3rd and thereafter are in the system but cannot be processed until operations are resumed. AILA members who believe that they faxed in an approvable application from December 24th through January 1st, but received nothing back from our office, are advised to refax their applications."

The first word on the legislative strategy for dealing with the H-1B cap is emerging. According to sources, the Senate is considering a quick remedy. A bill is hoped to be voted on by the Judiciary Committee next month and then up for a vote on the Senate floor in the early spring.

The bill would increase the cap by a further 40,000 to 50,000 visas over the 115,000 visas approved for this year and the 107,500 in Fiscal Year 2001.

It would also exempt certain visas from being included at all in the H-1B cap. These would include H-1B beneficiaries working for colleges and universities and affiliated research and non-profit institutions.

The bill would additionally allow fraudulently obtained visas to be added back to the H-1B count after they are discovered.

And what will no doubt interest many is a proposed abolition of per country limits for employment-based immigration cases. This will be of great benefit to Indian and Chinese nationals though it may mean shorter across the board backlogs for everyone else.

The fast track strategy is needed because the H-1B cap is expected to be announced in the near future and the Senate has a short legislative calendar.

The American Immigration Lawyers Association is reporting the following statement from Richard Panati, Certifying Officer of DOL's Philadelphia region:

"The Faxback System is now processing LCAs that were faxed in on 12/27/99. There has been an unprecedented increase in the number of LCAs being filed and we are projecting that it will take us another 5 working days to catch up.

The above pertains to LCAs that are approved. We have been unable to send out any LCA denials since 12/18/99. We are unable to determine the reason for this glitch. Also, it appears that some data has been lost over the past couple of weeks. We would advise AILA members who have received nothing in response to LCAs faxed in from 12/8 thru 12/18 to refax them."

Is the INS massively overcounting the number of H-1B visas subject to the H-1B cap?

Senator Spencer Abraham (R-MI), the chairman of the Senate's Immigration Subcommittee has sent an eight page letter to Attorney General Janet Reno outlining what may be a pattern of serious overcounting of H-1B visas credited toward the annual visa cap. The information contained in the letter is extremely important and we will discuss them at length in the next issue of Siskind's Immigration Bulletin.

Senator Abraham also expressed concern that the current audit of the H-1B process being conducted by consulting firm KPMG may be ignoring systematic over-counting and instead is only focusing on the computer system at INS.

The good news is that if Senator Abraham's conclusions are correct, there may be substantially more visas available than the INS would otherwise conclude on its own. Hopefully, the INS will make substantive adjustments to the way it counts H-1Bs and that the cap will be stretched further into the fiscal year.

We will, of course, report on this critical development as news is available. For readers interested in reading the letter, it is now available in our Documents Collection.

Several INS statements regarding H-1B visas were released today by the INS (even though the statements were dated 12/17/99). The first is an INS statement commenting on H-1B numbers for this year as well as the serious overcount from last year about which we have previously reported. The INS will not release data on H-1B usage until KPMG, an international consulting firm hired to help INS fix its counting problems, issues a preliminary report early in 2000. No word yet on whether the INS will apply the overage to this year's numbers.

On November 10, 1999, the Department of Justice’s Justice Management Division, with funding by the INS, amended an existing contract and authorized the consulting firm of KPMG to audit the H-1B program. The audit will complement preliminary agency efforts to determine the amount of the H-1B overage in FY 1999, identify the systems problems that led to the overage, and recommend corrective actions necessary to eliminate those problems in FY 2000 and the future. INS expects KPMG to deliver its preliminary findings early next year, with final recommendations due shortly thereafter, at which time INS will determine the next appropriate steps.

INS will continue to adjudicate FY 2000 H-1B petitions while the audit and other agency efforts to identify problems with the program are ongoing. Data on the H-1B program will not be released until INS is certain of its accuracy.

INS Retracts Information on H-1B Usage by Top 20 Firms

Since June 1999, the Immigration and Naturalization Service (INS) has specified to the public, upon request, the top 20 companies that had H-1B petitions filed and approved in FY 1998. Unfortunately, this information is not accurate and should be disregarded. INS apologizes for this error and is working to resolve data reporting issues in the H-1B program for future data requests.

Presumably, the foul up is tied to the overall problems in counting visas used. The INS issued one more statement today that indicates that it will continue to freeze processing on a periodic basis to ensure that visas are being issued at a similar pace from one INS service center to another.

H-1B Processing

The Immigration and Naturalization Service (INS) is committed to ensuring that the H-1B program is administered on a consistent basis nationwide and that H-1B visas are issued fairly, regardless of an employer’s geographic location. To that end, INS has developed a policy to continuously monitor and review the productivity at its four Service Centers to guarantee that the Service Centers process applications at a similar pace. If during this review, any of the Service Centers are found to be processing far ahead or behind the others, INS may take corrective actions. These actions may include increasing or decreasing processing at a particular Service Center to maintain an equal pace.

Note: This policy only pertains to those petitions recorded against the cap. All other H-1B petitions, including those for extension of stay and change of employer, will not be effected by processing adjustments.

With experts widely predicting a reaching of the H-1B cap shortly after the new year begins, Congress no doubt will be pressured in the coming months to once again address the H-1B issue. There are already a number of bills pending which would affect H-1B processing. Watch for these bills in this coming session of Congress:

In the months to come, we will be following these bills as they work there way through Congress and provide information on advocating on this issue.

INS MEMORANDUM ON “NEW EMPLOYMENT” FOR H-1B WORKERS MAY AFFECT CAP CALCULATIONS

On December 9, 1999, the INS sent a memorandum to the four Service Centers outlining the proper procedure for filing in Part 2 of Form I-129. The procedures stated in this memo differ in some substantial ways from the practice of most immigration attorneys, so the memo may have a significant impact.

Form I-129 is used for most temporary work visas, including the H-1B. Part 2 of the form allows the petitioner to list the basis upon which the requested classification is sought. It is the section of the form that the INS uses to track the number of H-1B visas issued each year, so it is not surprising that the agency wants to clarify procedures for completing this section.

Only cases involving new employment count toward the annual cap, and not all of those are counted. Cases involving new employment where the employee already holds an H-1B visa are not counted against the cap.

The INS says it is working on the creation of a new version of Form I-129 that will make keeping track of the number of visas issued easier, but until then it will use the current version.

This announcement also raises questions of whether the confusing form has led to the INS over counting H-1B usage for years. It is widely agreed that many immigration lawyers and HR professionals have routinely been incorrectly completing the form to indicate an application is subject to the cap. The INS’ need to review all of these cases may also explain why the agency is unable to release any statistics on H-1B usage.

The American Immigration Lawyers Association has released the following information statement on the H-1B program as the business immigration advocacy community gears up for another battle on the H-1B visa front.

THE ISSUE: The H-1B program is a prompt, lawful way for U.S. employers to hire foreign-born professionals on a temporary basis. This program allows U.S. business to recruit and hire the best-qualified candidates from around the world, and compete on a level playing field with foreign companies in such key industries as high-tech, manufacturing, pharmaceuticals, biotechnology, and education.

BACKGROUND: Who are H-1Bs? H-1Bs are temporary foreign professionals hired by U.S. employers. They can only be hired for “specialty occupations,” which are defined under the law as jobs that require a professional who has the equivalent of a bachelor’s degree in their field of specialty. Examples are doctors, engineers, professors, accountants, researchers, medical personnel and computer professionals.

What does the Employer Need to Do? A U.S. employer using this program must guarantee that 1) the foreign professional will be paid at or above the rate paid for a similar position at the employer’s own offices, or at those of their local competitors; 2) the foreign professional will not adversely affect the working conditions of U.S. colleagues; 3) U.S. colleagues will be given notice of the professional’s presence among them; and 4) there is no strike or lockout at the worksite. The employer also must demonstrate that the position requires a professional in a specialty occupation and that the intended employee has the required qualifications.

The American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) increased the number of H-1B visas (no more than 115,000 new admissions each year for FY99 and 2000, 107,500 in 2001, and 65,000 after that). ACWIA also added new requirements for employers who use a higher percentage of H-1B workers (including that companies first recruit in the United States, and not lay off American workers, before using the H-1B program). ACWIA stiffens the punishments for companies that violate the law. The new punishments include fines of up to $35,000, a three-year bar from participating in visa programs, and repaying salaries of under-paid foreign professionals. ACWIA further requires employers to pay a fee of $500 per visa to fund education and training of U.S. workers.

Why is the H-1B program essential? U.S. employers use the H-1B program to hire foreign professionals with highly needed skills. Employers typically hire H-1B professionals for three reasons:

No employer would go through the extra burdens, costs and delays of hiring a foreign professional worker unless they could not find the skills they need among U.S. workers. But if American companies are prevented from hiring essential people to fill critical positions, an increasing number of jobs dependent upon these slots will go unfilled each year, resulting in American jobs being lost and American projects losing out to foreign competition. As the U.S. economy becomes increasingly global, H-1B professionals become even more essential to America’s continued economic growth.

CURRENT STATUS: ACWIA increased the available number of these temporary visas through Fiscal Year 2001, while making significant changes to the program to enhance domestic workforce protections. However, the increases mandated in ACWIA were insufficient; the H-1B visa cap was reached well before the end of the last fiscal year.

As a result, Senator Phil Gramm (R-TX) and Representative David Dreier (R-CA) have introduced S. 1440 and H.R. 2698. These companion measures call for an increase in H-1B visas to 200,000 for fiscal years 2000, 2001 and 2002 (in succeeding fiscal years, the cap would revert to 65,000). Both measures also would exempt from the cap H-1B professionals with at least a master’s degree who receive total compensation of at least $60,000, and people with at least a bachelor’s degree who work at colleges and universities. Finally, H-1B professionals working at universities would be exempt from ACWIA’s attestation requirements, provided they have at least a bachelor’s degree.

On October 27, 1999, Senator John McCain introduced S.1804, the “21^st Century Act” which, while primarily focused on Commerce Department initiatives to encourage science, math and technology education, would suspend the H-1B cap through FY2006.

A related measure, H.R. 2687, was also introduced by Representative Zoe Lofgren (D-CA). H.R. 2687 would create a new "T-visa" for certain highly skilled, temporary workers who have completed degrees in American universities in the sciences. H.R. 2687 would charge a $1,000 fee for a T-visa (and $500 for an extension), and user fees would go into a high-tech education fund providing science-related scholarships for American school children. Senator Charles Robb (D-VA) has introduced S. 1645 which also would create a new “T” visa, but includes strict labor attestations that would restrict the usefulness of the program.

Finally, on November 18, 1999, Representative David Wu (D-OR) introduced H.R. 3508, which would allow up to 65,000 H-1B visas each year (not counted under the normal cap) for advanced-degree professionals if their employers make scholarship contributions for each year of their employment.

AILA’s POSITION: AILA believes that the H-1B cap is a cap on U.S. economic expansion. If U.S. employers cannot quickly and efficiently hire the workers they need to develop new products, create ground-breaking research, implement new projects, and expand their operations, they will be at a competitive disadvantage with foreign companies which have less restrictive immigration policies. The European Union and Asia are becoming America’s largest competitors in global markets, in part because their policies allow companies to hire foreign professionals with exceptional talents and abilities. All U.S. industrial sectors face increasing competition from abroad. Further restrictions on the H-1B program would only encourage America’s competitors. Now more than ever America needs the ability to hire highly skilled employees. AILA strongly supports S. 1440 and H.R. 2698. AILA also supports H.R. 2687, but is concerned about the impact of the high fees on small employers and start-up firms.

The Department of Labor’s Bureau of Labor Statistics has released a report indicating that the US will need a dramatically greater number of computer workers in the next decade than projected in earlier reports. According to the report, nearly two million new jobs will be created in the computer sector. However, only 46,000 Americans are expected to graduate each year with technology degrees. The report can be found at http://www.bls.gov/empmlr99.htm.

According to the National Software Alliance, a coalition of industry, government, academia, and foundations monitoring the technology labor market, “The US must take action now to eliminate the education and training bottlenecks exacerbating the labor shortage. Otherwise, given the reliance of every US industry on software workers, overall US competitiveness will certainly suffer.”

The report could have an important impact on what is expected to be a heated debate over the lack of visas currently available for professional workers. Under the Immigration and Nationality Act, H-1B workers for professional workers are limited to 65,000 annually. In 1998, Congress raised the limit to 115,000 for a three year period largely in response an early reaching of the H-1B cap earlier that year. Even with the temporary raising of the cap, the frenetic pace of H-1B petitioning has continued. All 115,000 visas for the current fiscal year are expected to be used up within the next month or so. That means there will be no visas available again until October 1, 2000.

Critics of raising the H-1B cap in 1998 tried to claim that reports of a labor shortage in the software sector were overblown and that the problem could be addressed with some retraining efforts. The new BLS report suggests that the shortage is indeed real and will only get worse. Furthermore, the shortage will be so severe, that drastic measures will be needed to deal with the problem.

· The top five of the 10 fastest growing occupations, 1998-2000 (by % growth) are software occupations;

· Two of these five occupations are expected to grow by more than 100% over this period, while national employment is expected to increase by only 14.4%:

· The occupation computer engineers will grow 108%, from 299,000 (in '98) to 622,000 (in '08);

· Of the 10 occupations with the largest job growth, 1998-2008 (numerical increase) systems analysts' rank first, and computer support specialists rank seventh;

· The software/computer and data processing services industry leads all industries in fastest wage and salary employment growth, increasing 117% (from 1,599,000 to 3,472,000). The next fastest growing industry, health services, will increase only 67%.

What is happening at the INS? American employers and would be H-1B employees are now trying to make critical decisions on how to handle the soon to be reached H-1B cap. But the INS has yet to issue any statistics on H-1B usage and still insists the reaching of the cap is not imminent. Then why are most observers warning employers to get going now to get their petitions filed. Some of these observers include groups like the American Immigration Lawyers Association and the National Association of Foreign Student Advisors. They also include some of the better known law firm sites like this one and Carl Shusterman's site.

It seems unbelievable that after three straight years of the H-1B cap being hit early, the INS would not have a handle on counting H-1B visas. But this is apparently the case. We understand that the INS has hired the large internationally respected consulting firm Peat Marwick to review the INS' current methods of counting and to recommend ways to improve the counting. A draft of the recommended reforms is being used now as the basis for counting this year's numbers. A final report is due in March. The INS is saying privately that they will not release numbers until the agency works through all the numbers using the Peat Marwick recommendations. It may very well be that the INS takes many months to officially announce the cap is reached. They will deal with the crisis by simply stopping all processing and no visas will be issued even though the cap has not been announced. The INS is also expected to continue implementing the rolling freezes described below.

What can you do? In the days and weeks to come, watch this column and Siskind's Immigration Bulletin for the latest on bills pending in Congress and how you can advocate to make your voices heard on this issue.

The INS has resumed H-1B processing. Processing had been halted to ensure that the four INS service centers were issuing H-1B visas at a similar rate. The INS is also warning that it will likely halt processing again. When? Probably in the week following Christmas.

The Bergen County (NJ) Register has an article in today's edition discussing why American high tech company's will source out work to overseas facilities if there are not enough H-1B workers available. Click here to see the article.

To compound the problems of trying to get applications filed ahead of the cap, the LCA Faxback system in Philadelphia is not currently functioning. An approved LCA is required before the INS can approve an H-1B application. LCAs faxed in after December 1st will now sit in limbo until the system is running again. The Department of Labor says they will try to have the system up again by the end of the week.

There are several important developments to report on H-1B processing for the current fiscal year.

First, there is a growing concern that the H-1B cap will be hit in the very near future. Though Congress raised the H-1B cap from 65,000 to 115,000 for the government year which runs from October 1, 1999 to September 30, 2000, it is generally believed that the H-1B cap will be hit earlier this year than in any year since caps were imposed on H-1B visas under the 1990 Immigration Act.

The INS has maintained an unprecedented stance of silence regarding H-1B usage for the current fiscal year. In previous years, the INS would release H-1B numbers on a monthly basis to help the public make appropriate plans. According to a report issued by the American Immigration Lawyers Association ("AILA"), the only thing the INS will say is that the H-1B situation at the agency is basically "a mess." The silence of the agency comes despite pressure from Congress to publicize H-1B usage. What is most worrisome is an AILA warning to its members that they "should arrange their strategies on the assumption that H-1B numbers will cease to be available for this fiscal year in the next few weeks." AILA based its warning on the INS' silence and emphasized that it was not based on any other information.

AILA's warning runs counter to a statement made in late November by the INS. According to Gary Bradford of the INS Immigration Services Division, "we are not in danger of running out of H-1Bs in the immediate future." Bradford made the statement during an interview in which the question was raised about rumors the cap would be hit before December ends.

If the cap is hit soon, it is still not clear whether that will be due to an INS miscount last year on H-1B usage. In our October 1999 issue, we reported that the INS had confirmed that it "miscalculated" the number of H-1B visas it issued during fiscal year 1999 and may have issued as many as 20,000 more than the 115,000 allotted for the year. This came after the agency has been repeatedly criticized for its failures to properly track the number of H-1B visas it issues. For example, in 1997 Sen. Spencer Abraham (R-MI) asked the agency to re-check the number issued, and was told thousands of visas were double counted, meaning the agency announced the annual cap was reached when in fact it was not.

The INS’ response to its theory that 20,000 additional visas were issued was to suggest that 20,000 fewer visas be issued this year. This proposal was severely criticized by Sen. Abraham. In a letter to INS Commissioner Doris Meissner, he questioned the Service’s claims, pointing out that the agency stopped accepting new H-1B applications in June, over two months before the end of fiscal year 1999. He also reported that several companies whose H-1B usage was made public said the INS inflated their numbers by two to four times, arguing that the numbers used had never been accurately counted. Finally, the Senator expressed doubt that it was within the statutory authority of the INS to make the decision to compensate for one year’s mistake by removing available visas allocated to the next year. He added that if such authority existed, it would be as appropriate to take visas from years when the cap was not reached and use them against any over-issuance that may have occurred in 1999.

The INS has confirmed that at this time it would not seek to rescind any of the visas given last year and that an audit would be conducted to determine how many H-1B visas were improperly issued. To date, the INS has not indicated how it would treat the overcount.

In a related development, INS Headquarters has ordered the four regional service centers to halt H-1B processing for cases subject to the H-1B cap that were filed after October 25, 1999. The INS has indicated that they are doing this to bring the four service centers closer to being even in the number of H-1B approvals issued. Also, the INS believes this will give the agency's data contractor a chance to get a handle on overall H-1B usage. The INS has emphasized that this does not mean the cap is being reached and they will halt processing on a monthly basis if necessary.

Over the past two years, SSHD has posted an H-1B Emergency Update to keep the public informed on the latest developments in H-1B processing. We are reviving this page again and it can be accessed at http//www.visalaw.com/h1bpage.html. We will post the latest information on H-1B usage, how to determine if your case is subject to the H-1B cap, what your options are if the cap is hit and what is going on in Washington to deal with the problem.

Disclaimer: This newsletter is provided as a public service and not intended to establish an attorney client relationship. Any reliance on information contained herein is taken at your own risk.