Reintroduced Legislation Focuses on H-1B Visa Reforms

Will the visa lottery be scrapped in favor of a preference scheme?

Roy Maurer By Roy Maurer February 1, 2017
Reintroduced Legislation Focuses on H-1B Visa Reforms

Lawmakers from both parties are reintroducing immigration-related bills to limit the use of H-1B visas for skilled foreign guest workers.

Sens. Chuck Grassley, R-Iowa, and Dick Durbin, D-Ill., reintroduced a bill that would eliminate the H-1B visa lottery system in which visa petitions are granted at random and, in its place, create a preference system awarding priority to foreign students who are educated in the U.S.; hold advanced degrees, especially in science, technology, engineering and mathematics (STEM) fields; and who are offered the highest wage for jobs for which they apply.

The highest preference would go to applicants with advanced STEM degrees from U.S. universities paid at the highest wage level before cascading down through lower preference tiers.

The legislation has been proposed in successive sessions of Congress and was last proposed in 2015.

"We need programs dedicated to putting American workers first," Grassley said. "When skilled foreign workers are needed to meet the demands of our labor market, we must also ensure that visa applicants who honed their skills at American colleges and universities are a priority over the importation of more foreign workers."

Kim Thompson, a partner in the Atlanta office of Fisher Phillips and chair of the firm's Global Immigration Practice Group, said the U.S. should "definitely be taking steps to retain those highly educated, highly skilled people that we are training" and would like to see a more fair system for employers than the random lottery. "It's difficult and unfair for employers," she said. "They are required to complete petitions and pay attorneys to prepare the petitions which may just get rejected and returned if not randomly selected. It's a real waste of resources."

[SHRM members-only toolkit: Obtaining U.S. Employment Visas]

The legislation would also:

  • Require all employers who seek to hire H-1B workers to first make a good-faith effort to recruit U.S. workers.
  • Establish a prevailing wage for L-1 intracompany transferees.
  • Prohibit the replacement of U.S. workers by H-1B or L-1 visa holders. 
  • Prohibit companies deemed to be heavy users of the visa program—based on the ratio between the number of workers in the employer's total U.S. workforce and its number of H-1B workers—from hiring additional H-1B or L-1 workers. 
  • Strengthen the enforcement powers of the Department of Labor to investigate employer compliance and collect statistical data about the programs.

Advocates for skilled immigration assert that provisions in the proposal will burden employers. "Sen. Grassley's bill would place H-1B-dependent employer [explained below] and willful violator requirements on all H-1B employers, not just bad actors, making it difficult for employers acting in good faith to access the talent they need given skills gaps today," said Rebecca Peters, director of government affairs at the Council for Global Immigration (CFGI), a nonprofit trade association committed to advancing high-skilled employment-based immigration and an affiliate of the Society for Human Resource Management.

"While at CFGI we believe that the H-1B visa program can be strengthened and improved to meet the needs of employers and employees alike, any changes must maintain the program's use as a valuable tool that allows American employers acting in good faith to access the talent they need to compete, grow and win in the global economy."

Peters said that ultimately the prioritization scheme would make it very difficult for U.S. employers to access foreign talent educated outside of the U.S., including highly educated students from foreign universities such as Oxford or Cambridge for example.

Action in the House

In the House of Representatives, Darrell Issa, R-Calif., reintroduced a smaller-scale proposal aimed at limiting how employers petition for H-1Bs.

Issa's legislation makes changes to the exemptions created in 1998 for H-1B-dependent employers, which are companies that employ more than 50 people and have 15 percent or more of their U.S. workforces on H-1B visas.

Congress required H-1B-dependent employers to file attestations that they couldn't find qualified American workers to fill jobs. But lawmakers also created exemptions for these employers to reduce their regulatory burden. 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 or updated, 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 raises the $60,000 salary minimum to $100,000 and includes an inflation adjustment. It also eliminates the master's degree exemption.

The main criticism of the legislation is that it doesn't go far enough. Rep. Zoe Lofgren, D-Calif., said Issa's proposal wouldn't do a "damn thing" to stop displacement because IT salaries generally already top $100,000.

Lofgren has put forward her own bill which allots visas to employers who offer the highest salaries. She described it as a market-based solution that gives priority to those companies willing to pay the most.

"What the bill does is collapse today's four-tier wage system to a three-tier system, effectively eliminating the entry-level wage and inflating the wage at the other three levels," Peters said. "Then on top of the new three-tier wage system the bill would prioritize H-1Bs for those employers who pay 200 percent of the prevailing wage and then 150 percent of the prevailing wage at each wage level," she continued. "This prioritization will impact employers by making it extremely difficult to ever access an entry-level worker and in a number of instances put employers in a position of paying foreign national workers more than similarly situated U.S. workers—a challenge for employers who must not treat similarly situated U.S. workers and foreign national workers differently."

Lofgren's overhauled wage tiers "will maybe drive employers to put more energy in finding U.S. workers, but if employers can't find that talent, they will be stuck paying the high wages," or outsource the jobs completely, Thompson added. Another unintended consequence of the legislation would negate small and medium-sized employers' ability to hire an H-1B worker.

"All of these bills have been introduced to get at alleged abuse in the H-1B program, but if any of these bills are ever enacted they would have extremely different impacts on employers, often on the tens of thousands of employers using the H-1B in good faith," Peters said. 

President Trump Aims to Reform Visa Allocation  

The White House may also want to scuttle the H-1B visa lottery system in favor of something else, said John Miano, an attorney and expert on foreign labor outsourcing based in the New York City area. "There is some discussion … that President Trump could change the system of visa allocation from one that is purely random to one that takes into account salary," he said. "The beauty of making such a change is that the administration can just do it. There are no regulations or statutes governing the order visa petitions should be processed."

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