H-1B Visa Reform Bill Targets Heavy Users

Legislation would raise minimum salaries for certain H-1B workers

Roy Maurer By Roy Maurer November 30, 2017
H-1B Visa Reform Bill Targets Heavy Users

Employers with one-fifth or more of their U.S. workforce holding H-1B visas and the companies with which they do business will have more legal compliance obligations if legislation that recently passed the House Judiciary Committee is enacted into law.

The Protect and Grow American Jobs Act (H.R. 170), sponsored by Rep. Darrell Issa, R-Calif., would make several substantive changes to existing rules for H-1B-dependent employers, including establishing new wage and nondisplacement requirements, eliminating exemptions, and increasing enforcement.

Currently, an employer is considered H-1B-dependent if it has at least 51 full-time equivalent employees and 15 percent or more of its U.S. employees hold an H-1B visa, but the bill would raise the threshold to 20 percent of the company's U.S. workforce. The Trump administration has highlighted allegations that H-1B-dependent employers—typically foreign outsourcing companies, whose U.S. operations receive an oversized portion of the annual allotment of H-1Bs—are replacing U.S. workers with foreign workers.

President Donald Trump has promised to reform the H-1B visa program, and Issa's bill is the first such legislative effort that has passed committee. "Though subject to amendments that may take place during the legislative process, Issa's bill does appear to be gaining steam," said Joshua Rolf, an immigration attorney in the Philadelphia office of law firm Green and Spiegel.

Issa said that his proposal will close loopholes that outsourcing companies use to hire cheap workers from overseas and prevent outsourcers from beating out other H-1B employers in the application process for the coveted visas.

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"Highly skilled individuals that come to America through the H-1B visa program add tremendous value to the U.S. economy," Issa said. "Unfortunately, loopholes in the program have allowed a small handful of employers to game the system to displace American workers and crowd out others who legitimately need the limited slots available to recruit individuals with unique skill sets not available here at home."

House leadership may choose to bring the bill up for a vote, but there is no clear path forward for it in the Senate unless it were linked to must-move legislation, said Rebecca Peters, director of government affairs at the Council for Global Immigration, a Washington, D.C.-area advocacy organization supporting workforce mobility and employment-based immigration and a Society for Human Resource Management affiliate.

Mareza "Rez" Estevez, a corporate global migration attorney based in the New York City area, marked its chances for passage as "possible, but hard to tell," especially as lawmakers face a long list of looming legislative tasks, from a major tax overhaul to an end-of-year spending deal. It could get caught up in all the horse trading around relief for the DACA (Deferred Action for Childhood Arrivals) program and the Trump administration's efforts to radically reform green card allocation with the RAISE Act, she said.

Changes to Exemptions

In 1998, Congress required H-1B-dependent employers to file attestations regarding the nondisplacement of U.S. workers and good-faith efforts to recruit and hire U.S. workers before obtaining additional H-1B workers. But lawmakers also created exemptions for these employers. Dependent employers do not have to attest nondisplacement if the visa holder has a master's degree or foreign equivalent or earns at least $60,000 annually. Critics of the program say these loopholes are being abused.

"Because master's degrees are often easily obtained by foreign workers and the $60,000 salary requirement was never indexed for inflation, these two exemptions have allowed dependent companies to flood the H-1B lottery with applications and take up a disproportionate amount of the visas," Issa said.

The bill eliminates the master's degree exemption and adopts a new formula for salary exemptions. "Updates to the H-1B-dependent exempt worker wage are overdue as there have been no updates since 1998," Peters said. She explained that in the first year after enactment of H.R. 170, for an H-1B worker to qualify as exempt, his or her salary must be the lesser of $90,000 or the mean wage for the occupation in the geographic area of employment. By the second year after enactment of the bill, H-1B workers would need to receive the lesser of $135,000 or the greater of $90,000 and the mean wage. The dollar amounts would be adjusted every three years based on the Consumer Price Index. 

"Even more, if an H-1B-dependent employer places workers at a third-party site, that worker's salary will need to meet or exceed the mean wage for the occupational classification in the specific metropolitan statistical area," Rolf said.

The bill would eliminate the exemption from the H-1B nondisplacement attestation if hiring an exempt H-1B worker. This means H-1B-dependent employers would have to make the attestation regardless of the salary paid to the worker and whether he or she is considered exempt or nonexempt.

Prohibitions on Layoffs

Current law requires H-1B-dependent employers to attest that they will not displace a similarly situated U.S. worker within the 90 days prior to the filing of the H-1B petition and 90 days after filing. The new bill extends this provision to cover the entire period of H-1B employment.

Third-party client employers that receive H-1B workers on temporary assignments from dependent employers will also be held accountable under Issa's legislation.

There can be no placement at third-party sites unless the client employer provides written assurances that no layoffs of essentially equivalent workers will occur for the duration of the H-1B assignment. If layoffs of U.S. employees at client locations do occur in similar positions as that of the H-1B worker, the dependent employer must remove the H-1B worker from that assignment.

New Recruitment Requirement

The provision allowing H-1B-dependent employers that hire exempt workers to bypass attestation about recruitment efforts would remain, however, dependent employers hiring nonexempt workers would be required to not only attest to recruitment of U.S. workers but also file a recruitment report summarizing:

  • The steps they have taken to recruit U.S. workers.
  • The number of U.S. workers who applied for the job.
  • The number of such workers who were offered the job; whether the workers accepted the offer; and for each worker who was not offered the job, the reason why the job was not offered.

Increased Enforcement

The bill would authorize more-frequent site visits to ensure compliance, consistent with the Trump administration's emphasis on worksite enforcement. The legislation authorizes the Department of Labor (DOL) to conduct random, periodic investigations of H-1B-dependent employers and requires the DOL to review at least 5 percent of such employers annually. 

"To fund these visits, the U.S. Department of Homeland Security would levy an additional $495 fee for all H-1B-dependent employers filing new H-1B petitions," Rolf said.

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