Navigating Uncertain Times: Friday Roundup

Navigating Uncertain Times:  Friday Roundup

Friday March 24, 2017

Bored yet?

With multiple significant issues simultaneously taking stage, one can be excused for not knowing how to prioritize your concerns.  In the midst of efforts to repeal existing healthcare law, (“will they or won’t they?”), nominating a new Supreme Court Justice to replace Antonin Scalia, (the specter of a filibuster is being raised), and wondering how far and deep the Russian connection goes, one can be excused for overlooking ‘yesterday’s news’ – immigration.  And yet, out of sight does not mean out of mind – or inactive.  Things are still happening, and we will continue to search for and provide insight into issues that may affect you.

And this week, clients were buzzing about the ’60 Minutes’ segment this past Sunday characterizing the H-1B program as an ill-advised program for bringing ‘cheap labor’ into the country to replace U.S. workers.

In other news…

The H-1B Program – Reform?

Yes – but for the right reasons.

This past Sunday, the news program ’60 Minutes’ broadcast an investigative report on the H-1B visa program characterizing it as a means for employers to ‘bring in cheap foreign labor to replace American workers.’

I was astonished to hear that the H-1B visa program – of all visa programs – would be accused of bringing in ‘cheap foreign labor’.

Without making a full response, here are a few facts about the H-1B visa program that gives insight into the credibility of that claim:

·         The filing fees to file a new H-1B visa petition for a foreign employee a U.S. company wants to hire is $2,460.00; if you want the petition expedited, you can pay an additional $1,225.00;

 

·         Federal regulations require the U.S. company to pay the costs relating to the H-1B visa petition; and if the employer terminates the H-1B visa employee early, the employer must pay the transportation costs of the employee’s return overseas;

 

·         To file an H-1B visa, the U.S. company must first apply for certification of a ‘Labor Condition Application’ with the U.S. Department of Labor to establish that the company is paying the foreign worker a wage that is known as the ‘required wage’.  The ‘required wage’ is either the prevailing wage (as determined by the U.S. Dept. of Labor) for any employee at the worksite who is similarly situated or the actual wage of any worker at the worksite who is similarly situated whichever is higher.

 

In other words, to be able to secure an H-1B visa, the U.S. company has to attest to the U.S. Department of Labor that it is paying the foreign worker as much as or more than other U.S. workers at the worksite who are in the same position.

 

Given these additional costs to an employer, it is hard to understand from a business standpoint how it is ‘cheaper’ for a U.S. company to hire a foreign worker under the H-1B visa program than to hire a U.S. worker.

The ’60 Minutes’ segment certainly found some compelling stories of U.S. workers who suffered hardship because they were replaced by persons, at least some of whom were in the U.S. on H-1B visas.  According to the U.S. workers being interviewed, the company they worked for did not pay their replacements a salary as high as theirs.  To add insult to injury, these U.S. workers were forced the indignity of training the very persons who were replacing them.

These are very sympathetic stories.

And if the U.S. company did not comply with federal regulations by paying their H-1B employees the ‘required wage’, then that is a problem.

If the U.S. company hired H-1B employees in one worksite in compliance with the U.S. Dept. of Labor regulations, but then sent them as contract workers to the worksite of another company – where they earned less as contractors than the U.S. employees of the second company - then that is a tough business decision that both companies made.

And if the U.S. company employing H-1B workers made the experienced employees train the new H-1B workers how to do their job before terminating them, then that would seem to be an unnecessary indignity to the loyal employees of the company.

It is not my place to criticize the U.S. companies for their HR management or the economics of their business decisions; I don’t necessarily have all of the facts.  But to place the blame on the H-1B visa program simply because these incidents involved employees who happened to have H-1B visas is misdirected.  And to characterize the H-1B visa program as providing ‘cheap foreign labor’ is a mischaracterization which seems designed to scintillate the already hypersensitive public who generally wouldn’t have the depth of knowledge in immigration law to critically evaluate the validity of such an assertion.

So does the H-1B program need reform?

Yes…but not for those reasons.

At the end of next week, it is likely that over 300,000 H-1B petitions will be filed in the hope of getting one of only 65,000 visas.

One must ask – why would so many U.S. employers go to such great an expense (~$2,500 per petition – not including additional legal fees) just to get a 1 in 3 chance of having its H-1B petition selected at random for processing?  [Because there are more petitions than available visas, the U.S. Citizenship & Immigration Service holds a lottery to randomly choose 65,000 petitions to process.  This is known as the ‘H-1B Lottery’]

Clearly – there is an unmet labor need.

Reform Item #1:  increase the number of H-1B visas available each year so that U.S. companies can secure the workforce they obviously can’t fill with only U.S. workers

But there does seem to be abuse in the H-1B visa program.  There are, in fact, some U.S. companies that hire such a large number of foreign workers, especially for IT positions, that other employers have less of a chance of having their petitions randomly chosen in the H-1B lottery.  These few companies get a disproportionate share of the H-1B visas.  This leaves other, smaller companies who have legitimate needs to find highly-skilled employees in the foreign labor market left without key positions being filled.

I can think of many instances where a client has attempted to bring persons with highly specialized skills and experience to lead important business or service initiatives here in the U.S. – only to have the H-1B petition returned simply because of the ‘luck of the draw’.

Reform Item #2:  Limit the number of H-1B visas a single company can file to secure its workforce.  It may place an unfair burden on some companies, but it might even the playing field for the rest of the employers seeking persons to fill very specialized occupations.

Whether we like it or not, we are part of a larger global economy that requires highly trained and educated individuals to help U.S. companies compete on the world stage… regardless of where they come from.

I think we can come up with a better system to accomplish that.

EAD Alert:

Last week we discussed the unexpected news that USCIS would no longer be accepting ‘Premium Processing’ for H-1B petitions after April 3, 2017.  We discussed the inconvenient consequences of this decision.

To no one’s surprise, USCIS has been inundated with H-1B petitions seeking Premium Processing before the April 3 deadline.  So many, in fact, that it is causing delays in the adjudications… of EADs!

Why EADs?

An ‘EAD’ (Employment Authorization Document) is now available for a spouse of an employee in H-1B status – if the H-1B employee has an approved Immigrant Petition for Alien Worker (Form I-140) and the employee cannot apply for a ‘green card’ yet because their immigrant classification is oversubscribed for his or her country of origin.

This relatively new benefit for the spouses of certain H-1B employees is very popular and helpful for families living in the U.S.  It is common to file the application for an EAD along with the H-1B petition; and if the H-1B is adjudicated using Premium Processing, the EAD is customarily processed in an expedited fashion as well.  But now, because of the overload, USCIS has announced that processing of EAD applications accompanying Premium Processed H-1B petitions are being delayed.

Please plan and anticipate accordingly.

Have a nice weekend,

HS&D Immigration Group

 

[News Flash:  in answer to the question at the beginning of this blog post – the answer is “they won’t”]