H-1B Alternatives Archives

Issues & Insights (May 18, 2019) – Under the banner of protecting U.S. workers, the Trump administration is working to rescind a regulation that allows certain spouses of high-skilled foreign workers – referred to as H-4 visa holders – to apply for work authorization while they are waiting for their green cards.

But why? There is no evidence that allowing those spouses to work hurts U.S. workers. That isn’t just my view; it is the position of government lawyers who have the impossible job of defending the White House initiative. In fact, prohibiting H-4 visa holders from working will cost our economy more than a billion dollars annually in lost revenue.

Due to a shortage of U.S. green cards for high-skilled immigrants, many foreign professionals live in limbo for a decade or even longer. To put the United States on equal footing with other countries in the global competition for skilled workers, the Obama administration published a regulation that allows H-4 spouses of high-skilled workers to apply for work authorization while they wait for a green card. Before the policy change, many couples abandoned plans to settle in the United States and took their talents to countries like Canada and Australia which have long permitted both spouses to work.

Approximately 91,000 H-4 visa holders have obtained work authorization under the Obama rule, and they contribute to the country’s economy. A recent study by two economists found that rescinding the H-4 regulation would cost the federal government $1.9 billion and state and local governments $530 million in lost tax revenue annually, with no employment or income gains by domestic workers to offset those losses. The study estimated that rescinding the rule could reduce U.S. GDP by approximately $7.5 billion per year.

Rescinding the rule would result in U.S. workers losing their jobs. Consider, for example, Alpa Gajera, whose husband is on an H-1B visa and has been in line for a green card since 2012. Using her work authorization under the H-4 rule, Gajera has invested thousands of dollars in opening two cafés in Atlanta, where she employs six U.S. citizens. She plans to open two more locations.

Another example is Hiral Sanghavi, an H-4 visa holder and founder and CEO of a company in Redmond, Washington that employs U.S. workers and has brought in more than $20 million in sales. Taking away these entrepreneurs’ ability to work in the United States will force them to fire U.S. workers.

Not everyone supports the policy of allowing H-4 visa holders to work. A small union called Save Jobs USA asked a federal court to invalidate the regulation on the basis that the foreign workers would take their members’ jobs. In 2015, the court sided with the Obama administration and held that the union “failed to demonstrate more than a possibility that DHS’s H-4 Rule might introduce new competitors into the market for tech jobs.” The union appealed the ruling and the lawsuit has continued to progress.

Following the 2016 election, the Trump administration issued the “Buy American and Hire American” Executive Order and wasted no time in seeking to reverse President Obama’s policy. That did not surprise anyone, but what did come as a surprise – perhaps to the White House itself – was the fact that the Department of Justice has continued to argue in federal court that there is no evidence that the U.S. workers challenging the regulation will be harmed.

Just weeks ago, government lawyers argued in the appeals case that the union has presented “no evidence” that H-4 workers would seek employment in the same industry as its members. To say the least, this argument undercuts the administration’s claim that rescinding the rule would give U.S. workers “a better chance at obtaining jobs” that H-4 workers currently hold. With the Department of Justice conceding that H-4 workers do not harm U.S. workers, and with overwhelming evidence that their employment creates over a billion dollars in revenue, where does that leave the White House? That remains to be seen.

Members of the business community and immigration advocates across the country are prepared to fight the administration’s efforts to eliminate H-4 work authorization. If the administration does proceed down the path of rescinding the regulation, we can be certain that the statements of the government’s own lawyers will come back to haunt them. And worse, our economy will suffer unnecessarily from the rescission of a policy that is working to keep America competitive for the high-skilled workers it needs.

To read the full, original article on Issues & Insights website, please click here.

Eileen Lohmann is an Associate in the Washington, D.C. office of 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 , 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.

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An increasingly competitive talent market and heightened scrutiny in traditional visa categories such as the H-1B, have compelled many employers to consider alternative strategies to recruit and retain foreign talent in the United States. One frequently overlooked option is the E-2 “Treaty Investor” visa. Though traditionally used for individual investors or smaller companies branching into the U.S., the E-2 also provides an important route for large employers to move managers and other essential talent into the U.S. and retain them while avoiding the unpredictable adjudication trends occurring in other visa categories.

E-2s are limited to employers and employees who are nationals of a country holding a treaty with the U.S. The primary challenge for larger employers is establishing the qualifying nationality of the corporate entity making the investment, which requires documentation of majority ownership by nationals of the treaty country. Publicly traded companies are generally presumed to hold the nationality of the country where they are listed. According to Forbes’ Global 2000 ranking, 70% of the largest 2,000 public companies are listed or majority-owned outside the U.S. Many of these companies are listed in treaty countries, such as Japan, the U.K. and South Korea, and would likely benefit from E-2 visas for a large percentage of their workforces. In other words, the E-2 category not only lends itself well to organizations in the early stages of operating in the U.S.—it also offers flexibility to some large organizations that other visa categories do not.

The basic E-2 criteria are: 1) the petitioning employer or investor must be a national of a treaty country, 2) the employer or investor must have made or be actively in the process of making a qualifying investment in the U.S., 3) the sponsored employee must share the nationality of the treaty country, and 4) the position offered to the employee must be an executive (supervisory) role or for providing essential services.

Here’s an example of how the E-2 could be leveraged: a large Japanese electronics company that is expanding into the U.S. may need executive leadership and essential employees from headquarters to steward the newly opened U.S. entity (or entities) through important early-stage activities. As business needs evolve, the parent may then need to move specialized engineering staff into the U.S. to train local hires on the company’s products, manufacturing processes, research goals, or other critical business needs. The E-2 visa category would enable the corporate parent to leverage its talent quickly, adapting to these market needs in the U.S. in real time, without the delays or challenges of categories like the H-1B or L-1. Unlike the L-1, a more familiar alternative to H-1Bs, the E-2 does not require the employee to have been previously employed with the petitioning employer abroad. What makes this category challenging for many companies is the nationality criteria—in addition to proving the corporate entity’s qualifying nationality, employees must share the nationality of the employer to be eligible for E-2 visas. In our example, only Japanese nationals would be eligible as E-2 employees. The typical process for pursuing an E-2 is to file directly with a U.S. consulate, and although the process varies by location, generally a company files an initial registration and, once registered, enjoys an expedited process for subsequent employees.

In an increasingly challenging U.S. immigration climate, BAL encourages all employers to engage proactively with counsel to assess all options. While the oft-overlooked E-2 may not be a solution for all, it does provide a critical route for many employers.