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Companies wrestling with the economic effects of COVID-19 are facing difficult choices regarding furloughs, layoffs and reductions in employee pay and hours. Employers should carefully consider all H-1B requirements to ensure they remain in compliance with regulations and to help minimize negative consequences for their H-1B employees’ immigration status.
H-1B employers are obligated to pay the “required wage” for H-1B employees for the duration of their authorized employment. The required wage means either the “prevailing wage” for the occupational classification in the area of employment or the “actual wage” the employer pays to similar employees—whichever is greater. A company that reduces an H-1B employee’s pay cannot generally reduce it below the required wage, unless the employer completes a “bona fide” termination of the H-1B employee.
Employers who terminate H-1B employees before the end of their period of authorized employment must fulfill certain legal requirements for it to be considered “bona fide.” The employer must notify both the employee and U.S. Citizenship and Immigration Services of the termination so that the H-1B petition will be withdrawn, and offer to pay the reasonable costs of the employee’s return transportation abroad. A company that does not carry out a bona fide termination may be liable for back wages and payment for the employee’s return transportation.
Companies seeking to reduce the hours of H-1B employees should be mindful of regulations that prevent employers from “benching” H-1B employees during times of slow production. Under these regulations, employers must continue to pay H-1B employees the required wage if their nonproductive status is related to a decision by the employer. This includes the lack of assigned work or waiting for a new project. There are limited circumstances where an employer need not pay the required wage because of conditions that are unrelated to employment, such as an employee’s voluntary request for leave or incapacitation.
In general, full-time H-1B employees must be paid the full-time required wage even if their number of productive hours drops below full-time; part-time workers must be paid for the number of hours stated on the H-1B petition. If the H-1B petition lists a range of hours for a part-time worker, the employer must pay the required wage for the average number of hours normally worked by the worker (but not below the minimum hours listed on the H-1B petition).
Employers may also want to consider how the timing of terminations may affect an H-1B employee’s immigration status and ability to remain in the country. H-1B employees who are terminated may have a grace period of up to 60 days for a new employer to file an H-1B petition on their behalf or to file for change of status to another nonimmigrant category, otherwise they will fall out of status. Foreign nationals who fall out of status may begin to accrue unlawful presence, which can prevent them from returning to the U.S.
Terminations may also impact a company’s recruitment, green card sponsorship and talent retention down the road. This includes the costs of losing global talent after having invested in an H-1B process that has become increasingly challenging. Employers pursuing terminations and layoffs should weigh the numerous immigration considerations and consult with counsel to make sure that they are meeting all compliance obligations and protecting their employees and the company’s long-term interests.
BAL has formed a COVID-19 task force to help clients navigate compliance and immigration strategies during this time.
Steven Plastrik is a Senior Associate in the Washington, D.C., office of Berry Appleman & Leiden LLP.
As employers implement social distancing in the workplace, work-from-home policies have raised questions about how companies can meet compliance requirements for H-1B employees, in particular how changes to an employee’s work location affects Labor Condition Application (LCA) requirements.
It was hoped that the Department of Labor would provide temporary measures allowing flexibility in LCA compliance for employers who are operating remotely during the COVID-19 crisis. But the agency’s latest guidance on April 9 not only fails to offer any new flexibility to current rules—its wording may create more confusion about employer compliance obligations.
In general, when an H-1B worker changes job sites to a new location outside the normal commuting distance, the employer must obtain a new LCA and file an amended H-1B petition. Under the “short-term placement” provision, employers may be eligible to place an H-1B worker at a new worksite outside the area of intended employment for up to 30 days per year, and in some cases 60 days, without obtaining a new LCA.
The DOL guidance may lead employers to misinterpret the rules, as it makes no mention of some key restrictions on the short-term placement option under the regulations. Companies may inaccurately assume that they do not need to obtain a new LCA for H-1B employees working from home and later be found to have violated their LCA obligations. Notably, the short-term placement rules do not apply to new worksites in an area of employment where the employer already has a certified LCA for the job classification. They also do not apply to initial H-1B placements. Since companies commonly employ more than one H-1B employee in the same area of employment, most H-1B employers will not be able to take advantage of the short-term placement provision during the COVID-19 national emergency. Additionally, employers whose new H-1B hires were unable to start work at the intended location because of social distancing policies would also not be able to avail themselves of the short-term placement rules.
Given the risks of noncompliance in these unusual times and the heightened enforcement environment in recent years that is likely to resume after the COVID-19 emergency, companies are encouraged to conduct a careful review of their H-1B employees’ place of employment, consult with counsel, and take steps to ensure that they are in compliance with all LCA conditions and requirements.
Eileen Lohmann is a Senior Associate in the Washington, D.C. office of Berry Appleman & Leiden LLP.
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.
One of the government’s recent attacks on business immigration is the whittling away of the H-1B status validity period for certain employees. When an H-1B worker is changing job locations, and therefore requires an amended petition to be filed, U.S. Citizenship and Immigration Services is taking that opportunity to shorten the worker’s H-1B status—even where the worker already holds an approved petition for a longer period.
This change in longstanding policy is especially affecting companies whose foreign national employees often move around the country from one project to the next.
H-1B workers are eligible for a maximum six years in H-1B status (with some exceptions), which is typically granted in two three-year increments. However, USCIS has recently taken the position that H-1B workers are no longer eligible for their current duration of H-1B stay when they intend to provide services to a third-party for a shorter period of time.
When an H-1B worker needs to change work locations, the petitioning company must first file an H-1B amendment, reflecting the worker’s new location. When the change in work site is pursuant to a contract between the petitioner and the petitioner’s client (a third party), the contract (or “statement of work”) is typically submitted as supporting evidence with the H-1B filing. If the contract indicates that the work assignment is shorter than the worker’s current H-1B status, USCIS is now only approving the status until the contract’s end date.
These shortened validity periods have created new challenges with some odd results. By the time USCIS approves the H-1B petition and notifies the petitioner of the approval, the worker’s H-1B status is typically soon to expire within months or even weeks. There have also been instances where the H-1B worker’s status had already expired by the time the petitioner received the approval notice.
As a result of this trend, companies are bearing increased costs in legal and government filing fees because they must now file extensions of stay requests for their employees more frequently. In addition to financial costs, companies are more at risk of losing talent, either to a competitor whose business model is less reliant on the worker’s immigration status or because the employee must leave the country when his or her status expires earlier than anticipated.
Now more than ever, foreign national employees are on edge about their immigration status, and companies are increasingly going to the courts to resolve these issues. A lawsuit filed in 2018 that challenges USCIS for shortening the normal three-year validity period of H-1B status has now reached a federal appeals court. While the legal case may provide relief in the long-term, in the meantime, companies are encouraged to work with their BAL professional to consider strategies to overcome shortened H-1B approvals.
Melissa Salvador is an Associate Attorney in the Dallas, Tex. office of Berry Appleman & Leiden LLP.
Once again—for the seventh straight year—the H-1B quota was reached in five days, triggering U.S. Citizenship and Immigration Services to embark on what has become an annual ritual: the random selection of petitions via lottery to fill the Congressionally mandated cap of 65,000 H-1B visas (plus an additional 20,000 for master’s degree candidates). This year, 201,011 petitions were filed, exceeding the totals in the past two years. The odds of being selected remain well below 50 percent, leaving roughly 100,000 eager, educated, innovative workers each year to find jobs elsewhere and contribute their talents in countries that have more efficient and welcoming immigration policies.
What could break this annual cycle of events that costs U.S. business considerable lost investment in time, money and talent-hunting? Congress could modernize our immigration laws so that visa issuance correlates with economic need.
Coinciding with the start of H-1B cap filing season on April 1, former Senator Orrin Hatch, with the support of some of the largest tech and other companies, released a report1 urging Congress to raise the caps on H-1B visas and provide other incentives to retain foreign graduates of U.S. universities, including a fast track to citizenship without needing to first obtain temporary H-1B status.
The H-1B system is long overdue for an adjustment. The cap of 65,000 visas was set when the H-1B category was established nearly 30 years ago, in 1990. Think about it. Before the Internet. Before the global economy. Before The Simpsons. Today’s tech industry that relies on H-1B workers was in its infancy in 1990. Since the H-1B was introduced, U.S. GDP has doubled, per capita GDP has risen 67 percent, and the number of businesses in the U.S. has increased by at least 28 percent.
There is precedence for increasing the number of visas during periods of strong economic growth. In 1999 and 2000, Congress raised the ceiling on H-1B visas to 115,000 to accommodate the demand for high-skilled workers, and from 2001 through 2003 Congress temporarily tripled the cap to 195,000 to meet labor needs resulting from an economic boom that was largely fueled by the tech industry. In 2004, however, the quota reverted to 65,000 and an additional 20,000 visas were added for H-1B candidates holding master’s degrees or higher from U.S. universities. For the last 15 years, these caps have remained unchanged.
Hatch, who as a senator repeatedly but unsuccessfully sponsored bipartisan legislation to raise the H-1B caps, asserts in the introduction to the report that choosing between more H-1B workers and protecting American workers is a “false choice” because the two are linked. “We must continue to attract overseas talent to sustain the very innovation that has made our nation the most prosperous in the world,” he says. Today, about 7.5 million jobs remain unfilled and 83 percent of U.S. companies report difficulty in filling open positions, while H-1B holders and U.S. employers, increasingly frustrated by the system, are looking to set up shop in other countries. The report calls for doubling the H-1B cap and opening up other routes for high-skilled workers to relieve chronic oversubscription of the H-1B program.
It’s time to modernize our system. In fact, it’s seven years overdue. The current business environment—economic growth, low unemployment, labor shortages, and intense competition for global talent—provides a perfect recipe for expanding the pool of high-skilled workers available to U.S. businesses. The only ingredient missing is political will.
Delya Ghosh is a Partner in the San Francisco office of Berry Appleman & Leiden LLP.
1 “Barriers to Recruiting and Retaining Global Talent in the U.S.,” Orrin G. Hatch Foundation and FWD.us, April 1, 2019, https://36shgf3jsufe2xojr925ehv6-wpengine.netdna-ssl.com/wp-content/uploads/2019/03/19-03-29-high-skilled-report.pdf
With another busy H-1B cap filing season completed, U.S. companies are reminded that current policies toward high-skilled immigration remain both challenging and unpredictable. Recent changes this cap season continue to demonstrate a hard line toward the H-1B visa program. Yet, in recent months there has been talk of a possible softening of the administration’s position on high-skilled immigration.
President Trump and his advisors have prompted the speculation by sending mixed messages, frequently arguing that abuse of the H-1B program and use of foreign workers undercut American jobs, but more recently suggesting that the economy demands more skilled labor. During the State of the Union address, Trump said that he wanted legal immigrants to come to the U.S. “in the largest numbers ever.” Asked the next day to clarify this statement, he said that American companies moving production back to the U.S. will need to fill those jobs. Moreover, during a tour of the southern border in January to promote funding for additional border wall construction, Trump tweeted that reforms were in the works that would bring “simplicity and certainty” to H-1B workers and he also suggested expanded paths to citizenship. Furthermore, media reports following these comments have indicated1 that Trump’s senior advisor and son-in-law, Jared Kushner, is spearheading talks with businesses aimed at reforming corporate immigration and possibly increasing the number of foreign workers.
On April 5, at the end of the first week of filing, H-1B petitions once again exceeded the caps—for the seventh year in a row. At a time when the need for the H-1B cap to be raised is more apparent than ever, is an era of more business-friendly immigration policy about to begin? While businesses certainly hope this is the case, let’s look at the record.
In the past two years, policy changes have made the H-1B category more cumbersome and less predictable. Since January alone, U.S. Citizenship and Immigration Services pushed through a regulation that alters the H-1B cap selection process, introduced new biometrics procedures for H-1B dependents, suspended premium processing for many cap cases until June or later, and unveiled a data hub that will put employers’ use of H-1B visas within public purview. Other changes include tightening standards for H-1B “specialty occupation” eligibility, increasing anti-fraud investigations of H-1B employers, sharing information among government agencies about H-1B employers, expanding adjudicators’ discretion to deny petitions outright without first requesting additional evidence, raising the burden of proof for nonimmigrants (including H-1B workers) who seek to extend their visas, and requiring additional documentation for H-1B third-party placements.
The result of these policies is in the numbers. Approval rates declined significantly for H-1B visas, according to the most recent statistics by USCIS.2 H-1B approvals, which exceeded 95% in 2015, fell to 84.5% in 2018 and further sank to 75% in the first quarter of fiscal year 2019. The number of requests for evidence, issued in less than 25% of H-1B cases in 2015, rose to 38% in 2018 and 60% in the first quarter of fiscal 2019. Approvals of H-1B cases that were subject to RFEs also dropped more than 20 percentage points, from an 83.2% approval rate in fiscal 2015 to 62.3% in fiscal 2018.
One closely watched litmus test of the administration’s position on high-skilled immigration is the “H-4 EAD rule,” which allows certain H-4 spouses of H-1B workers to obtain employment authorization to work legally in the U.S. For some time, the Department of Homeland Security has indicated that it plans to rescind this Obama-era rule but has repeatedly delayed issuing a new regulation. Immigration observers have said that if the administration intends to change policy direction, it might rethink rescinding this popular regulation, which has benefitted about 100,000 individuals, mostly college-educated women who are spouses of high-skilled workers from India. In late February, however, the agency signaled that it has no intention of changing course, sending the proposal to the Office of Management and Budget for review – the last step before a proposed regulation is officially published. Then, on April 1, DHS confirmed in a court filing that a regulation to remove H-4 spouses from those eligible for employment authorization is “expected to shortly be issued.” A rescission rule is imminent.
And now, in an apparent effort to further the administration’s restrictive agenda, a shake-up in the leadership ranks at DHS is underway. Vowing to take the agency in a “tougher direction,” Trump last week withdrew the nomination of Ronald Vitiello for the role of director of Immigration and Customs Enforcement. (Vitiello had been serving as acting director.) Then, over the weekend, DHS Secretary Kirstjen Nielsen resigned. The administration is reportedly considering the removal of other key DHS leaders, including Lee Francis Cissna, director of USCIS.
What should U.S. companies make of recent statements that conflict with the administration’s track record? While Trump and his advisors may be opening up a new debate and consulting U.S. companies in the decision-making process, there is currently no evidence that more welcoming policies are on the way. The policies of the past two years have purposefully targeted high-skilled immigrants and the employers who need them. Actions speak louder than words, so until the administration takes concrete steps in a new direction, U.S. companies should expect more of the same.
Susan Wehrer is a Partner in the Walnut Creek office of Berry Appleman & Leiden LLP.
1 “Jared Kushner privately working on reshaping legal immigration,” McClatchy, Feb. 20, 2019,https://www.mcclatchydc.com/news/politics-government/white-house/article226462025.html 2 Immigration and Citizenship Data, U.S. Citizenship and Immigration Services, https://www.uscis.gov/tools/reports-studies/immigration-forms-data
Over the past two years, opponents of high-skilled immigration have put a bull’s-eye on H-1B visas. They have successfully advocated for policy changes that restrict the ability of U.S. companies to apply for the category, premised on the perception that high-skilled foreign workers are taking jobs away from Americans and that companies are abusing the system by importing “cheap” foreign labor to undercut American wages.
The fact is that H-1Bs are regulated to protect American workers through wage requirements and rigid numerical quotas, making the H-1B category one of the strictest programs for high-skilled workers in the world.
American companies do not choose H-1B visas to save money by hiring foreign workers. H-1Bs are not cheap, and employers spend thousands of dollars on legal fees and government filing fees to sponsor employees for an H-1B worker’s initial petition, as well as on renewals and visas for family dependents. By law, companies must fulfill multiple requirements to ensure they are paying foreign workers appropriately — by paying not just a threshold minimum salary, but the prevailing wage for the particular job. These requirements include certifying with the U.S. Department of Labor that the wages paid to a foreign job candidate are on par with those paid to American workers in the same job and location; attesting the foreign worker’s salary, job details, work location, and qualifications; and posting a notice to U.S. workers that the company is seeking to sponsor an H-1B worker. According to several studies, H-1B employees earn significantly higher wages than Americans in the same field.1
Capped at 85,000 visas per year, H-1B visas are extremely limited when compared with demand that has risen sharply since the cap was introduced in the 1990s. The odds of selection in the lottery have been well below 50 percent for the past several years, creating huge uncertainty for business planning. Even if selected for adjudication, the intense scrutiny on H-1B petitions creates additional hurdles with no guarantee of success. Requests for evidence shot up by more than 40 percent shortly after Trump issued the “Buy American and Hire American” executive order and the rate of H-1B denials2 continues to climb. In the end, H-1B workers hold only 0.6 to 0.7 percent of U.S. jobs, a proverbial drop in the bucket for the U.S. labor force.3
What’s more, H-1Bs are inconvenient, and companies incur indirect business costs because H-1B visas are tied to a specific job and work location. Foreign employees sponsored on H-1Bs are not as mobile as American workers. If an H-1B worker changes job locations, the company must file an amended H-1B petition with the government at additional cost. Unlike U.S. workers, H-1B workers cannot be hired on a contractual basis and companies are prohibited from “benching” H-1B employees during periods of slow productivity. Therefore, they must continue to pay them even if they are not performing billable work.
Inevitably, H-1Bs add to companies’ administrative hassles. Employers must keep meticulous records of H-1B employees and be prepared for inspection without notice. USCIS operates a Fraud and Detection and National Security (FDNS) unit that conducts unannounced visits to investigate employers for fraud and abuse. The Labor Department also conducts audits of H-1B employers to make sure they are in compliance with the wage requirements and documents related to the labor condition application. Both agencies have stepped up the number of audits and opened tip lines for reporting fraud and abuse. The audit process and potential liability for noncompliance requires H-1B employers to understand the record-retention requirements for each type of document, put in place separate policies and protocols for their HR personnel for each type of inspection, and train staff regarding how to receive inspectors and which documents they are permitted to turn over.
So why would employers hire workers on H-1B visas in the face of increasing wage requirements, decreasing odds of success, and added compliance burdens? Companies turn to foreign job candidates, many of whom are graduates of top U.S. universities, because they have skills that employers need, especially in the IT and STEM fields. In fiscal year 2017, 69 percent of H-1B petitions were filed in the STEM and IT fields, according to USCIS.4 In these and other fields, demand remains high and American workers are often not available, either because they are not graduating in numbers that meet demand or because they have moved on to better opportunities outside those fields.
Opponents of high-skilled immigration aren’t worried about U.S. companies and their ability to compete in a global economy. Their goal is to reduce immigration, and restricting the H-1B visa category is a means to that end. But the facts refute their rationale for restricting high-skilled immigration, as there is no evidence of widespread abuse. The vast majority of employers follow the rules and comply with wage safeguards aimed at protecting U.S. workers. The reality is that opponents of high-skilled immigration who continue to push for further restrictions to H-1B access are trying to solve a problem that doesn’t exist — and hurting U.S. companies in the process.
Kortney Gibson is a Partner in the Dallas office of Berry Appleman & Leiden LLP.
1“H-1Bs: How do they stack up against US-born workers?” Public Policy Institute of California, December 2011, http://ftp.iza.org/dp6259.pdf; “Report: H-1Bs and the STEM shortage,” The Brookings Institution, May 10, 2013, https://www.brookings.edu/research/h-1b-visas-and-the-stem-shortage/. See also Glass Door, “Dispelling Myths: What H-1B visa workers are really paid,” April 3, 2017, https://www.glassdoor.com/research/h1b-workers/ 2“H-1B Denial and RFE Increase,” National Foundation for American Policy, July 2018, https://nfap.com/wp-content/uploads/2018/07/H-1B-Denial-and-RFE-Increase.NFAP-Policy-Brief.July-2018.pdf 3“The H-1B Visa Debate Explained,” Harvard Business Review, May 4, 2017, https://hbr.org/2017/05/the-h-1b-visa-debate-explained 4“Characteristics of H-1B Specialty Occupation Workers, Report to Congress,” U.S. Citizenship and Immigration Services, April 6, 2018, https://www.uscis.gov/sites/default/files/files/nativedocuments/Characteristics_of_H-1B_Specialty_Occupation_Workers_FY17.pdf
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 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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