Proposed H-1B and L-1 Visa Legislation is Regression, Not Reform

In November, federal legislation was once again proposed that would drastically alter the process of employing H-1B and L-1 workers in the U.S.–increasing the burdens, costs, requirements, and penalties for employers–while effectively barring many small and mid-sized employers from hiring any of these highly-skilled and sought after foreign workers.

This new bill, the H-1B and L-1 Visa Reform Act of 2015, is not likely to pass, however it echoes previous attempts to alter these visa category requirements that would impair the ability of employers to hire the H-1B and L-1 visa employees they need.These controversial changes are included in a reform package that also includes a few welcome and promising developments for H-1B and L-1 employers, such as a doubling of the current H-1B visa cap and a transition to a demand-based system.Therefore, it is important to analyze and discuss in advance this proposed legislation and how the proposed changes might affect H-1B and L-1 visa employers if passed.

This proposed legislation, co-sponsored by U.S. Senators Chuck Grassley and Dick Durbin, is motivated by a misguided belief that non-immigrant visa holders displace American jobs and lower wages for domestic workers. As we have mentioned in previous blog entries, this is simply not supported by the research studies and the facts. Foreign workers in the H-1B and L-1 categories constitute some of the best and the brightest talent from around world, they increase our economic efficiency and growth, and they actually create new professional-level jobs for domestic workers.

Proposed Changes Firstly, the H-1B and L-1 Visa Reform Act would require a mandatory 30-day recruitment period seeking qualified U.S. workers prior to filing a labor condition application (LCA) with the Department of Labor (DOL). And, if an equally or better-qualified U.S. is found and applies to the job, the employer must hire that worker instead of pursuing the LCA. In addition for LCAs, there would be a new filing fee, processing time would increase from 7 to 14 days, and the government would review not only for completeness, but would now also begin to review for “indicators of fraud or misrepresentation.”

Secondly, the maximum period of stay for H1-B employees would be reduced from six years to only three, unless a special waiver from DOL was granted.

Next, the proposed bill would ban the third-party placement of H1-B workers, unless a special DOL waiver is applied for and granted. For third-party placement of L-1 visa holders, they would be limited to only one year, absent a waiver.
H-1B and L-1 employers would also be required to comply with stricter requirements for recordkeeping and attestations that there would be no displacement of qualified U.S. workers, from 180 days before until 180 days after the placement of the foreign non-immigrant worker.

Another drastic shift in H-1B policy is that U.S. bachelor’s degrees would now be required of beneficiaries–no longer would experience, training, or the equivalents of U.S. bachelor’s degrees be accepted. The beneficiary’s bachelor’s degree would also be required to be directly related to the job requirements.

In regards to required wages, the proposed law would require employers to use the highest prevailing wage out of three different sources of data on prevailing and median wage rates. It would also completely eliminate the journeyman “Level 1” prevailing wage rate.This means that entry-level positions for H-1B employees would be completely eliminated, and employers would also have to pay more for all other H-1B employees.

In what seems like good news for H-1B employers and beneficiaries, the proposed bill would replace the current 65,000 person H-1B visa cap with an 8-tier preference system. This system would favor F-1 visa students who graduate from U.S. universities with STEM or advanced degrees, and it would also favor employers who are capable of paying foreign workers much more than the required wage.The 20,000 applicant visa cap for Master’s degree holders would remain intact.While removing the H-1B bachelor’s visa cap is a step in the right direction, the new system that replaces it would frustrate employers’ ability to hire all of the H-1B employees they need.

Finally, the proposed legislation would provide for much higher fines and new types of fines for employers that are found to be out of compliance.It would also require mandatory annual compliance audits for employers with over 100 employees and greater than 15% of their workforce comprised of H-1B or L-1 employees.
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These burdensome fines, penalties, and restrictions–taken as a whole–would constitute a serious impairment on the ability of employers to use the H-1B and L-1 programs effectively. A report from the Congressional Budget Office, released in 2013 concerning an earlier, but similar failed attempt at new legislation, estimated that the total number of H-1B workers and dependents within the U.S. would decline by about 200,000 within only a few years of enactment. These highly-skilled foreign workers add to the tax base, domestic revenues, and multicultural diversity of the United States– while filling critical labor shortages and actually creating new jobs for domestic workers. Call your local congressman or Senator to voice your concerns over this proposed legislation and to vote “No” on a bill that would be harmful to the national economy.

If you have questions about H-1B or L-1 non-immigrant visas, please contact our experienced immigration attorneys or call The Law Firm of Shihab & Associates, Co., LPA at the nearest office close to you to consult with an attorney.