Proposed Restrictive Changes To The Nonimmigrant Visa Programs Under The Senate’s Immigration Reform Bill

Wednesday, May 22, 2013 - 16:42

After years of debate and false starts, a tentative path towards immigration reform has begun to be forged in the form of the Senate’s Border Security, Economic Opportunity and Immigration Modernization Act.  Of particular interest to U.S. employers are the assortment of proposed reforms to employment-based nonimmigrant visa programs, some favorable and many restrictive.

Employment-based nonimmigrant visa categories provide temporary work authorization for foreign professionals and in turn support American competitiveness in the global market. Of such visas, the H-1B and L-1 are the most frequently sought and afford U.S. employers with much-needed highly skilled and specialized labor. 

The H-1B visa allows for temporary employment of educated and skilled foreign professionals in professional occupations. The L-1 visa is designed to provide employment authorization for executive, managerial and specialist intracompany transferees. Despite a universally acknowledged scarcity of such employees in the U.S. workforce, the hurdles to hiring such professionals have been many. Current regulations only allow for a mere 65,000 H-1B visas annually; an additional 20,000 are allocated towards individuals with advanced U.S. degrees.  This year’s H-1B quota was met in the first five days of the filing period. While L-1 visas are not numerically limited, they are currently subject to intense scrutiny in the adjudication process and are often difficult to obtain.

Under the Senate’s bill, the H-1B visa cap would increase to 110,000 for the fiscal year in which the bill is enacted. In subsequent years, the cap could rise as high as 180,000 on the basis of fluctuations in the demand for foreign labor. It would also provide a cap exemption for 25,000 individuals with U.S. advanced degrees in the economy-boosting disciplines of science, technology, engineering and mathematics.

The bill additionally seeks to make the overall provisions of the H-1B visa more attractive to prospective foreign employees. It features work authorization for spouses, so long as the spouse is a national of a foreign country that provides for reciprocal employment for similarly situated U.S. citizens. It would also provide for increased worker mobility, in the form of a 60-day grace period following termination of H-1B employment. The grace period would give H-1B workers temporary legal status and sufficient time to seek alternate H-1B employment or depart the U.S.

Reform of the nonimmigrant visa programs has also happily resulted in a proposal to create a separate visa classification for professional workers from nations maintaining free trade agreements with the U.S.  It has additionally fostered the creation of the W visa category which would provide, for the first time, work authorization for lesser-skilled foreign workers on a more than transient basis.

The matter of immigration reform is a balancing act. Accordingly, many of the bill’s efforts to facilitate ease of immigrant employment in the U.S. have been tempered with limiting and subjective provisions. Such restrictive provisions include recruitment requirements for all H-1B petitioners, similar to what is currently required only for employers that are high-volume users of the H-1B program or have willfully violated H-1B program regulations. Specifically, employers would be required to post an advertisement on the Department of Labor’s website for at least 30 days and make a good faith effort to hire any equally or better qualified U.S. workers that apply for the position. Proposed changes to the H-1B program also include raising the required wage for H-1B workers and imposing hefty filing fees for employers with 30 percent or more of their U.S. workforce in H-1B or L-1 status. Employers would also be banned from employing more than 75 percent of their workers on an H-1B or L-1 visa in 2015, decreasing to 65 percent in 2016 and 50 percent in 2017 and beyond. The bill would effectively incapacitate consulting firms that tend to have large foreign national employee populations, as it prohibits outsourcing for employers with 15 percent or more of their employees in H-1B status. Moreover, subject to certain exceptions, all H-1B employers would be subject to non-displacement provisions, requiring attestations that they have not and will not displace a U.S. worker within a prescribed time period.

In the L-1 context, constraining limitations are similarly plentiful. Employers with 15 percent or more of their U.S. workforce in L-1 status would be prohibited from outsourcing their L-1 employees. Any outplacements would carry a $500 fee and subject the secondary employer to a 90-day non-displacement attestation before and after the date of petition filing. Most troublesome is the proposal to grant the Department of Homeland Security broad new powers to investigate L-1 employers’ compliance, in some cases without revealing the source of a complaint.

In its attempt to provide a balanced bi-partisan approach to immigration reform, the Senate has heavily weighted the already beleaguered H-1B and L-1 visa programs. Many provisions of the nonimmigrant visa reforms are boldly restrictive in their current state.  While the Senate’s bill is a work in progress, if these encumbrances are not ultimately lifted or modified, they will surely dissuade employers from hiring otherwise highly qualified foreign workers.

Michael D. Patrick is a Partner at Fragomen, Del Rey, Bernsen & Loewy, LLP, resident in its New York office. He may be contacted via email at mpatrick@fragomen.com. Neelam Penta, an Associate at the firm, and Nancy Morowitz, Counsel at the firm, assisted in the preparation of this column. To learn more about Fragomen, please visit http://www.fragomen.com.