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By David Berry and Eileen Lohmann
Law360 (February 5, 2019, 1:34 PM EST) ‒ While Washington continues to look for a long-term solution on the budget, it has already created a potential long-term problem on immigration.
On Jan. 31, 2019, the Trump administration issued a regulation to reform the H-1B lottery. Despite receiving hundreds of comments urging slower, more thoughtful action. This new rule will only make the challenge of regulating high-skilled immigration worse.
Here is the issue: American companies representing a wide range of industries rely on the H-1B visa to secure desperately needed talent. International students are frequently the most promising individuals studying in science, technology, engineering and math, or STEM, fields at U.S. universities, and they need visa sponsorship to work here. At a time when unemployment is low and key positions remain unfilled, a U.S. company that identifies a talented individual at a U.S. university, and has promised to pay the prevailing wage for the position, should be able to hire that person regardless of country of origin.
Only Congress can increase the number of H-1B visas, but U.S. Citizenship and Immigration Services has introduced changes to the visa program intended to reduce bureaucratic obstacles. Instead, the new regulation threatens the entire program’s integrity.
Because the H-1B program is so important to the U.S. economy, the government has built in multiple safeguards to protect it from fraud and abuse. A company seeking to hire an H-1B professional must make attestations under oath to the U.S. Departments of Labor and Homeland Security about the intended job location, salary, position and the employee’s qualifications. Wages must be prevailing to the local labor market. And employers must provide notice to U.S. workers before filing H-1B petitions. Compliance is assured by frequent government visits to confirm that employees are doing what the employer said they would be doing, and that they are paid the proper wage. The government prosecutes companies for misrepresentations and violations.
Despite the administrative hurdles a company must clear to apply for an H-1B visa, USCIS receives upwards of 200,000 applications each year for 85,000 total visas. To manage the outsized demand, USCIS conducts a random lottery, accepts about 85,000 applications and returns the rest.
The government proposed to reform the lottery process to achieve important goals that companies share: reducing costs for employers, alleviating administrative burdens on USCIS, and bringing the process into the 21st century. The regulation creates a new method of allocating the limited supply of H-1B visas that sounds effective in theory: companies submit online “registrations” containing basic information about the company and each person they seek to sponsor. Then the government selects 85,000 registrations, enabling those companies to file complete applications for each “winner” of the registration lottery.
Good idea, yes. But terrible execution. The regulation changes how the agency distributes visas without putting up a single safeguard to prevent bad actors from manipulating the system. Existing controls would no longer be effective because employers could game the new online lottery before those controls kick in. USCIS even mentioned in its proposal the risk of companies “flooding the system with non-meritorious registrations,” but acknowledged that it does not have a solution.
The community that this rule would affect voiced this concern during the comment period and resoundingly urged the agency to wait to make changes until it is confident it can protect the H-1B program’s integrity. Microsoft Corporation wrote, “One of the primary concerns with the proposed rule’s registration process is the ease with which unscrupulous users would be able to inflate artificially their H-1B lottery selection outcomes by ‘flooding the system’ with as many registrations as possible. The shift of H-1B lottery outcomes would reward — and potentially even incentivize — bad behavior, while suppressing legitimate successful outcomes for good faith users of the system.” The U.S. Small Business Administration expressed the same worry, noting that “[t]his increase of registrations would ‘flood’ the registration pool and it more difficult for small businesses to obtain vital H-1B workers.”
Our firm works with hundreds of companies in addressing employment shortages and securing authorization for exceptional talent to work in the United States. We and our clients, along with all Americans, welcome the government’s efforts to modernize the lottery process and thereby reduce the burdens of administering and participating in the H-1B program. The system can be improved in a thoughtful way that preserves the integrity of this vital program. However, the government’s attempt at reform creates a greater problem than it aimed to solve.
To read the full, original article on Law360’s website, please click here.
David Berry is a founding partner and Eileen Lohmann is an associate at Berry Appleman & Leiden LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
The information contained here is meant to be informational, and while BAL has made every effort to ensure the accuracy of the information, it is not promised or guaranteed to be complete. Readers of this information should not act upon any information contained on this alert/blog without seeking professional counsel. This alert does not constitute legal advice or create an attorney-client relationship. Any reference to prior results, does not imply or guarantee similar future outcomes.
The Trump Administration is expected to propose a regulation that would take away the right to work of H-1B workers’ spouses, which will impact the ability of companies to attract foreign workers to high cost-of-living locations like Silicon Valley.
Currently, spouses of certain H-1B workers who are already in line for a green card are eligible to apply for an employment authorization document, or EAD, that allows them to work legally in the U.S. The regulation, known as the H-4 EAD rule, was promulgated by the Department of Homeland Security (DHS) under President Obama in February 2015 and has since allowed more than 100,000 spouses to gain work authorization. The regulation faced an immediate legal challenge from Save Jobs USA, an organization of tech workers who claimed that their jobs would be displaced by H-4 spouses. Save Jobs USA lost in district court and appealed to a federal appeals court in Washington, D.C. Under President Trump, DHS has successfully held the case in abeyance, arguing that the appeals court should hold the case while the agency works to undo the regulation (in part to carry out President Trump’s 2017 “Buy American and Hire American” executive order).
The ability of a trailing spouse to work in the U.S. is an important factor for H-1B workers in determining whether they will be able to live and work in certain high-tech hubs. Most spouses of H-1B workers are college-educated, have their own careers and aspirations, and are not willing to put their American dreams on hold. The H-4 EAD rule is limited to cases where the H-1B worker has already made significant progress in his or her company-sponsored green card case—considering that some wait times are currently more than 10 years for some Chinese and Indian nationals, losing work eligibility is more than a temporary sabbatical for affected H-4 spouses. And in many cases it’s not a matter of choice—two incomes are required for families to survive in high-cost areas like San Francisco and similar tech hubs. These concerns have prompted two California members of Congress, Democrats Anna Eshoo and Zoe Lofgren, to introduce a bill that would protect the H-4 rule against repeal. The bill is unlikely to stop the rulemaking process, which is already underway, but has a better chance of gaining Congressional momentum after the new Democrat-controlled House is seated in January.
What should employers and H-4 spouses expect in the coming months? We expect a proposed rule to be published in the Federal Register that would remove H-4 spouses from employment-authorization eligibility, and the rule will go through the formal regulatory process, which takes four to six months to go from a proposed rule to a final regulation. If the proposed rule is published this month, the earliest possible date that H-4 work authorization could be terminated is spring 2019. If the new rule is approved, litigation may further delay its implementation. For planning purposes, an important question is whether the proposed rule will include a transition period allowing spouses currently holding H-4 work authorization to wind down their work or renew their employment authorization documents until a specified future date. Employers will also need to plan for the loss of H-4 employees and in the long term may find it more challenging to attract international high-skilled workers and their families to the U.S. as a result of the impending repeal of the H-4 EAD regulation.
The government’s recent decision to suspend premium processing for H-1B cap petitions until February—effectively spelling the end to expedited service for most H-1B cases for the rest of this year and part of next—is more than a small processing tweak. It will exact a substantial toll on businesses and their employees by removing their ability to control an important tool for business planning: the timeline.
Not only will the current suspension on premium processing continue for H-1B cap petitions filed in April, but beginning Sept. 11, the suspension will be expanded to cover all H-1B cases, with only very limited exceptions. The suspension is expected to last until Feb. 19, 2019, and applies to all new H-1B cap-subject petitions as well as H-1B extensions involving a change of employer, or change of job terms or location with the same employer.
Premium processing is a widely used service that allows employers to pay an extra fee to guarantee a response from USCIS within 15 days. Without premium processing, an open-ended timeline creates instability for businesses and their employees. Employers who are understaffed and need to sponsor foreign nationals to fill those jobs may need to wait eight to 10 months for a decision and can no longer pay an extra service fee (currently $1,225) to ensure faster processing. The fee will increase to $1,410 in October, but for the next five months there will be no amount of money an employer can pay to hold USCIS adjudicators to a reasonable and predictable processing time frame in order to keep hiring on track and get a much-needed H-1B employee to start work.
The elimination of premium processing also creates anxiety and uncertainty for H-1B employees. The policy potentially boxes them into their current employment and inhibits their job mobility and ability to travel. Employees are less likely to switch to a better job before having an H-1B approval in hand and employers are unlikely to be able to wait months and months to hire or change the major duties or worksite of an H-1B employee. Many F-1 students on OPT cap-gap employment authorization will not receive a decision on their H-1B petition by Sept. 30, will lose work authorization on that date and will need to stop working until their petition is approved. Workers already in H-1B status who have filed for an H-1B extension may continue to work for the same employer on the basis of the petition, but only for 240 days, and they should not travel abroad while their extension petition is pending, potentially interfering with business and holiday travel.
It is hoped that the government’s stated reasons for the suspension of premium processing—to reduce backlogs and prioritize long-pending cases—prove true. In the meantime, employers and employees will need to work closely with their immigration advisors and plan carefully during this period of uncertainty to minimize disruption to business and to their employees’ careers.
BAL Partner Lynden Melmed testified Monday before the Maryland House of Representatives in support of high-skilled immigration.
The Economic Matters Committee held a hearing in connection with legislation that would impose reporting obligations on Maryland companies that hire H-1B and L-1 workers in the state.
Howard University Professor Ron Hira, a staunch opponent of H-1B visa programs, testified that companies pay H-1B workers below-market wages and thereby exploit the H-1B program to undercut American workers.
Mr. Melmed, who previously served as chief counsel of U.S. Citizenship and Immigration Services (USCIS), testified about the benefits of high-skilled immigration to the Maryland economy. He cited an example of BAL clients who launched their business at the University of Maryland, obtained H-1B status, and are now building their business in the state. Mr. Melmed also testified about the wide range of industries in Maryland that utilize the H-1B category.
“I have no doubt that high-skilled immigrants create jobs in Maryland and contribute to the state’s economy,” Mr. Melmed said. “They are smart, they are entrepreneurial, and they help Maryland companies compete in a global economy.”
States are playing an increasing role in immigration policy. From Deferred Action for Childhood Arrivals (DACA) to the Executive Order to refugee resettlement, states are more engaged than ever. The Maryland hearing represents one of the first efforts by a state legislature to engage on high-skilled immigration policy.
Read a transcript of Mr. Melmed’s full testimony here.
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