Articles Posted in H-1B

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.

Continue reading

Foreign Workers Boost Our Economy

Each year, the U.S. turns away many thousands of highly-skilled and educated foreign workers, many of them with advanced degrees, because of an arbitrary visa cap set back in 1990. With demand far exceeding the limited supply of only 85,000 H-1B visas allowed per year, we are missing out on a valuable opportunity to recruit the best and the brightest minds from all over the world.

Time and time again, studies show that these foreign workers provide a tremendous boost to the U.S. economy, and that easing H-1B visa restrictions would send our economy into overdrive by filling key labor shortages and increasing economic efficiency and growth.

Contrary to popular misconceptions, foreign workers do not reduce wages or take jobs from American workers – in fact, they actually create jobs, raise wages, and boost the national economy.

U.S. Turns Away Tens of Thousands of Highly-skilled Foreign Workers Every Year In April of 2013, the United States Citizenship and Immigration Services (USCIS) halted the H-1B filing process only four days after accepting over 124,000 petitions, because the yearly 85,000 H-1B visa cap had already been met. That means that for 2014, we turned away over 39,000 highly-skilled workers based on a random lottery, in addition to the many thousands who never even had a chance to apply because the cap was met so soon. It’s much the same every year with our current overly-restrictive policy on H-1B visas.

Continue reading

gavel-952313-m.jpgIntroduced in a separate article, the new standard for avoiding wage liability to H-1B employees (without terminating them) created in Gupta vs. Compunnel raises a serious question. Now, to escape liability in this way, employers must first have “work assigned” to the employees in question. Because, the reasoning goes, the employees must be nonproductive due to “conditions unrelated to the employment,” and if there is no work assigned it could be true that the lack of assigned work is the true cause of their nonproductive status. If it is, then the employer’s case for escaping wage liability cannot be accepted (and the burden of proof for such a case is on the employer).

Thus, what may count as “work assigned” in this context becomes of consequence. Indeed, it was a central focus in a case recently argued by Attorney Gus Shihab on behalf of an affected employer: Administrator vs. Parsetek. Parsetek is a tech consulting agency in Virginia. Employee S.M. was hired by Parsetek with an effective and prevailing wage of $51,376 per year–but was never placed on work assignment due to her being unavailable for such, but was only given a bona fide termination many months afterwards. The case revolved around Parsetek’s wage liability in light of the Gupta standard despite her never having completed any work on its behalf.

In the first two months of her being with Parsetek as an H-1B, S.M. was interviewed for a three-year assignment that would have resulted in significant profit for Parsetek. However, nothing came of it. Parsetek claims that it was because she continuously asked to delay the start date of the assignment. Not long after that, S.M. informed Parsetek that she would be leaving Virginia to join her boyfriend in Chicago. This alone did not cause serious alarm because companies like Parsetek can place workers virtually all over the nation. So, it continued to market her to several end-client employers. This went on for seven months, with S.M. seeming to cooperate. However, her responses grew less and less frequent.

ring-the-bell-pictogram-1383851-m.jpgIn a February blog article, we covered the case of an H-1B employee who had “absconded.” Specifically, she made herself patently unavailable for work by fleeing the area and being unresponsive to attempts to assign work to her. In normal circumstances, there are easy solutions to this kind of problem. But with the Department of Labor’s (DOL) support, the former employee was able to construct a somewhat persuasive case that the employer owed her a great deal of money. Luckily, however, the judge disagreed. He instead agreed with the employer–represented by Attorney Gus Shihab. To explain the case, the situation that led to the government’s coming to side with the employee must first be presented.

To hire an H-1B worker, an employer must demonstrate (through a Labor Condition Application) that the foreign worker’s presence displaces no American workers. The goal is to limit the incentive one has in hiring H-1B workers to their skills and qualifications. Nonetheless, some groups are blaming H-1B workers for certain economic woes. Perhaps because of this, the government appears to be attempting to make the hiring of H-1B workers less and less attractive.

One consequence of Labor Condition Application requirements is that hiring H-1B workers comes with a high standard for avoiding wage payment liability. In order to be released from this liability, an employer must effectuate a “bona fide” termination (which is more complicated than a normal termination) or show that the employee was unavailable for work (or in “nonproductive status”) due to “factors unrelated the employment.” If neither of these are done for any period of time (and the employee has not resigned or forfeited H-1B status), an employer is obligated to pay the employee as if he or she had been regularly working (even if this is not the case). This pay must be at least the prevailing wage of people with the H-1B worker’s same occupation in his or her area.

compass.jpgUSCIS has issued guidance describing some situations where it is required to file an amended H-1B petition. This guidance follows a ruling out of its Administrative Appeals Office on a case that we covered several weeks ago: Matter of Simeio solutions. In a blog article, we went through USCIS’ investigation and the resulting conclusion: that certain liberties taken by Simeio led, perhaps unknowingly, to violations of the H-1B program. Though the company later gave effort to correct their errors and begin compliance, USCIS revoked the concerned aliens’ H-1B visas. It seems reasonable to conclude that the guidance is intended to prevent confusion that may have led to Simeio’s violations.

In the referenced case, USCIS and State Department investigators discovered discrepancies between information provided on petitions, obtained in consular interviews, and received from direct communication with Simeio employees. These discrepancies eventually led the investigators to find that some Simeio H-1B employees were working in locations not specified in their most recent petitions–and that this fact caused them to be paid less than was required. H-1B employees must be paid no lower than their assigned “prevailing wage,” and there may be a different prevailing wage for each class of occupation in each Metropolitan Statistical Area (MSA). The MSAs from which these H-1B employees were in fact working had higher prevailing wages for their occupations than the MSAs described on their most recent H-1B petitions. Because they were paid near or at their old MSA’s prevailing wages, their switches in worksite were not allowed without certain minimum increases in pay. However, the switches happened without sufficient increases.

The new guidance has been issued in part to prevent situations like above. It can be considered a reminder of current policy along with a clarification of USCIS’ interpretation of it. The logic of the guidance is as follows:

  1. Regulations already state that when an H-1B employee’s employment situation significantly or “materially” changes, his or her employer is required to submit an amended H-1B petition (or an altogether new petition if preferred).

rejected-865417-m.jpgMany companies are pushing to increase the annual cap on H-1B visas, but this effort has found opposition. Some say the program is riddled with fraud, while others oppose the program altogether. Perhaps because of this, USCIS goes to great lengths to enforce its regulations. A recent case reveals insights into how it does so.

The case, Matter of Simeio Solutions, involves an H-1B beneficiary who was ostensibly (according to the I-129 petition) hired to complete “in-house projects” for clients at the company’s home office in Long Beach, CA. The beneficiary would thus not be sent to other worksites and would only work under the petitioner. The Labor Condition Application (LCA) and included Prevailing Wage Determination (PWD) reflected this. However, if USCIS was convinced that these circumstances would not change, it wasn’t for very long.

The beneficiary began working for Simeio as an F-1 student during OPT (which is a short-term work authorization that alien college students can take advantage of after graduation). During this time, an H-1B petition was filed on behalf of the immigrant by this same company, which was approved. The beneficiary then went home to undergo a consular interview to receive the visa. As usual, the consular officers wanted to verify some things on the petition. It is not public information what the officer said in the interview, but it is known that as a result, the petitioner was made to submit some additional evidence.

visas.bmpThe H-1B visa program is very successful. Since its launch in 1990, it rose in usage until hitting its statutory cap of 65,000 new temporary workers annually seven years later. At the time, it was raised temporarily to accommodate the tech boom, but this higher cap was allowed to expire. Since 2003, it has sat at the original 65,000 with an additional 20,000 set aside for those with master’s degrees.

Congress may raise the cap as part of a comprehensive immigration reform bill, but this does not appear likely to occur for at least another few years. Despite the increased chance of failure due to being capped out, the amount of H-1B petitions received by the government continues to rise each year. It has thus become necessary to seek alternatives. Many employers will likely be unable to take advantage of these alternatives, but it is worth investigating.

Most of these visas are in some way superior to the H-1B (in that those eligible for both would likely be wiser to opt for the alternative). Unsurprisingly though, qualifying is a significant hurdle. But it is likely true that several employers who desire to use the H-1B program could just easily enough convert their foreign hiring for it to make sense to use one of these alternatives.

jobz.jpgCongress is at an impasse on the question of how to fix our often dysfunction–and never ideal–immigration system. There has been debate, and bipartisan solutions have been put forth, but none of this has resulted in any actual reforms. The last time the immigration system was updated was 1990. Since then, the partisan divide–and political distrust–has been on an upward trend. As needed as it is, immigration reform seems to just be too great of a political risk for too little reward. Even comparatively small reforms, such as increasing the H-1B cap (which technically isn’t an immigration issue), cannot escape controversy any longer. We have argued in another article that the cap, which demand exceeds threefold, should be raised as soon as possible. However, others are beginning to make it known that they do not share this view.

Some of the biggest supporters of raising the cap are tech industry giants who say that doing so will increase their global competitiveness. At least a plurality of H-1Bs go into the IT field. Nonetheless, there has been an increasing prevalence in the tech community of the view that the current H-1B system harms American workers and is bad for the country. Several technology publications have claimed that the H-1B system’s built-in protections for the American worker are simply not working. They are referring to the Labor Certification process, the effect of which is to ensure that no H-1B worker is taking a job that Americans are actively seeking–or working for less than the “prevailing wage” for that job. (The prevailing wage can be thought of as the “going rate” or fair pay for the job, when all things are considered. The U.S. Department of Labor calculates this amount.) The issue is that H-1B workers are increasingly getting IT jobs, while the apparent threat of layoffs among American IT workers is also on the rise.

Technology publications, and recently conservative media, have pointed out that H-1B workers are in some instances replacing American staff, being paid less to do the same work. Critics believe that this is (or at least ought to count as) a violation of Labor Certification requirements. There are several problems with this view. To begin with, nothing in the regulations say that H-1Bs cannot replace American workers. There are only two (major) types of violation. The first is when there is an equally or better qualified candidate seeking a job that is instead given to an H-1B, and the second is when an H-1B works for less than the assigned prevailing wage.

compu.jpgTechnology companies have been pushing Congress to raise the cap on H-1B visas, which provide foreign nationals a three-year stay in the country to work in a specialty occupation. The unified industry support indicates that the major players think they can take advantage of the surge in talent that would accompany the additional visas. Unless these large companies are mistaken, this small reform would give American technology companies an edge over their overseas counterparts. Bipartisan support for this reform had been growing due to the fact that no one was challenging it, until now. Southern California Edison (SCE), a large utility provider in its region, recently laid off a significant amount of tech staff and instead brought in the tech solutions company Infosys for staffing. One of the laid off employees, J. Palmer, recently went before Congress to argue against raising the H-1B cap. Most of the Infosys employees that have been assigned to SCE are apparently H-1B workers.

Palmer argued that not only was SCE mistreating its loyal employees, the situation also constituted an abuse of the H-1B visa program. Specifically, he says tech companies are using it to get cheap labor, and in doing so, are displacing American workers. The program has minimum salary and qualification requirements to prevent a “race to the bottom” in American labor circumstances. Palmer says that these requirements, which are manifest in the H-1B Labor Certification process, are failing American workers–or at least the SCE employees that were laid off. The process’ immediate purpose is ensuring that the presence of H-1B workers doesn’t lower the average wage paid to Americans–or prevent equally-or-better qualified Americans from getting jobs (that H-1Bs are seeking). By making these claims, Palmer is implying that what happened at SCE goes against what the H-1B program is meant for–and is in general a bad thing for the country.

Being laid off is a sad situation, but it is a fact of life in a free market. SCE came to the opinion that its decision to use Infosys for IT staffing instead of retaining its current staff would allow it to cut costs, increase efficiency, or both. This will allow it to offer lower rates to its customers and/or return dividends to its investors. But, this is precisely the problem, according to Ron Hira, public policy professor at Howard University. “[T]he average [salary] for an H-1B employee at Infosys in FY13 was $70,882” but “the average [salary] of a Computer Systems Analyst in Rosemead, CA (where SCE is located), [was] $91,990 (according to the U.S. Department of Labor).” These numbers, along with the fact that Infosys doesn’t sponsor very many of its employees for permanent immigration, led Hira to conclude that “the H-1B workers Infosys [hires] are being used as temporary, cheaper, disposable labor, not as a way to permanently introduce talent and innovation into the American labor market.” The tech news site ComputerWorld calls this situation an “injustice.”

sv.jpgA recent case before a U.S. District Court illustrates the restrictiveness of USCIS regulations and its interpretation of statutes. Nonetheless, the judge reversed an H-1B denial, thereby validating as effective a few methods of supporting H-1B petitions. The judge in Washington State ordered USCIS to reverse its decision in denying an H-1B visa to a South Korean national wishing to work as a healthcare manager at an acupuncture and Eastern Medicine clinic in Lynwood, WA.

Upon review of the plaintiff’s petition, the agency denied it on two grounds: that the position did not qualify as an H-1B-worthy “specialty occupation”–and that the foreign national (FN) was not qualified for it, even if it were. Regardless of the evidence for or against this point, the core of this argument appears to trip over itself, because few occupations are both too general for H-1B workers while also excluding most working adults from qualifying. One would think that only one of these claims would be made. Either way, the court examined and rejected the government’s position on both of these counts.

It its denial of the petition, USCIS acknowledged that “most” of those who occupy the position of healthcare manager do have a bachelor’s degree, but some apparently don’t. Specifically, the agency held that a degree “isn’t a requirement to enter the field.” The response continued by saying that for those employers that do require a degree, it need not be in anything specific. USCIS seemed to be saying that a specialty occupation needs a special degree as a requirement for the job. The plaintiffs had argued that the job has special requirements that are fulfilled by the FN beneficiary’s credentials. USCIS instead decided that the job did not have those requirements and that the beneficiary did not have those credentials.