Most lawyers that are versed in the H1B visa process, are getting busier and busier these days. As we are nearing the April 1, 2010 filing deadline for the H1B visa. Many speculations out there as to when will the Cap be reached this year. The economy is still in recovery mode, and employers are careful before hiring. Yet, many Immigration experts feel the Cap will be met early this year, but when is the big question.
With drastic changes to the Labor Condition Application process (now taking more than 7 days to process), as well as unreasonable denials, planning early is the key to a successful H1B case this year. But in this post, I want to go back to the basics, the Cap and the legislative background.
On October 21, 1998 Congress passed, and the President signed into law, the much debated American Competitiveness and Workforce Improvement Act of 1998, Pub. L. No. 105-277 (hereinafter ACWIA). This legislation was first introduced by Senator Spencer Abraham (R-MI), the Chairman of the Senate Subcommittee on Immigration, in response to the inadequate numbers of H-1B visas available in any fiscal year. As part of the Immigration Act of 1990, Congress imposed a 65,000 per year cap on these visas. In 1997, the cap was reached prior to the end of the fiscal year. The situation grew to crisis proportions in fiscal year 1998 when all 65,000 visas numbers were taken in May of 1998.
In early March 1998, Senator Abraham introduced a bill entitled, “The American Competitiveness Act.” The legislation was introduced on the heels of numerous reports and hearings concerning the high tech worker shortage in the United States. The primary goal of the legislation was to address the looming exhaustion of the H-1B professional or specialty occupation worker visa numbers.
The ACWIA went through many different stages before an agreement could be reached. A complete elimination of the cap had originally been proposed by Senator Abraham. The legislation was then modified to increase the number of H-1B visa numbers available during the government fiscal year; provide additional funds for scholarships in the computer science and mathematics areas; increase enforcement of the Department of Labor component of the H-1B visa process; and provide clarification on the prevailing wage requirements of the process. The legislation also addressed permanent residence by providing for an extension of the H-1B visa should a permanent residence petition be pending, and through restructuring the allocation of the employment-based immigrant visa numbers.
This legislative game between conservative isolationists/liberal protectors of the U.S. workforce and moderate Democrats and Republicans supporting business needs and demands, caused chaos among U.S.-based businesses in need of skilled professional workers. From May 11, 1998 until October 1, 1998 U.S. businesses, research institutions and other organizations were unable to recruit foreign workers as temporary professionals. With the U.S. economy still booming and unemployment rates remaining at an all-time low, businesses, especially in the high tech sector, encountered many problems as a result of the cut-off in H-1B visa availability. These problems included, but were not limited to, taking employees off the U.S. payroll, sending employees back to their home country or to sites outside the U.S. as well as the termination of some critical development projects.
Requirements in the Statute
The ACWIA purportedly balances the need for increased professional visas numbers for foreign workers and the desire to protect the U.S. workforce. The following is a summary of the significant changes made by the legislation.
A. Temporary Increase in the Number of Professional Visas Available
There will be an increase from 65,000 to 115,000 visas for fiscal year 1999 and 2000 (through September 30, 2000). In fiscal year 2001, 107,500 visas will be available. Beginning October 1, 2001 the numbers will revert back to 65,000.
B. Electronic Postings
LCA notices may be posted electronically in situations without a bargaining representative. This provision was effective upon date of enactment.
C. Attestations Required for Employers Dependent Upon Foreign Professionals
U.S. employers of 51 or more employees, whose workforce is comprised of 15% or more foreign nationals in the H-1B category are considered dependent employers and must make certain attestations. Employers will also be considered dependent if they employ 26- 50 full time employees and have more than 12 H-1B employees or if they employ 7 -25 employees and have more than 7 H-1B employees.
The dependent employer must attest that it has not and will not displace a U.S. worker within 90 days before and 90 days after filing the visa application. This attestation carries through to employers who place employees at another worksite. The H-1B dependent employer must also attest that it has taken good faith steps to recruit U.S. workers using industry wide standards and has offered the position to any U.S. worker who is equally or better qualified for the job the foreign worker is sought.
H-1B employees with a Master’s degree or a salary of $60,000 or higher are not included in the attestation requirements and for the first 6 months following the implementation will not be included in the dependent employer calculation.
D. Increased Enforcement and Penalties for Violations
The Department of Labor may fine employers between $1,000-$35,000 per violation and preclude participation in the H-1B program for up to three years.
E. Back Benching H-1B Employees
Employers must pay H-1B nonimmigrants the wage stated on the H-1B petition even if the beneficiary is in nonproductive status. This does not apply to non-productive time due to non work related factors.
Employers must offer foreign workers benefits and eligibility for insurance, disability, retirement and savings plans, stock options, etc., on the same basis as offerings made to U.S. workers.
G. Additional Fee for Use of H-1B Program
Beginning December 1, 1998, employers are required to pay an additional fee of $500 for an initial H-1B petition and for the first extension. These fees are to be used to support job training programs and scholarships for U.S. workers.
H. Prevailing Wage Computations
For institutions of higher education, related or affiliated non-profit entities or non profit or governmental research organizations, the prevailing wage shall take into account employees at such institutions in the area of employment.
I. Academic Honoraria
Payments of honoraria may now be made to B-1 and B-2 visitors for usual academic activity lasting 9 days at an academic institution or affiliated non-profit entity or a non-profit governmental research organization. No more than 5 honorarium may be received within a six month period.
Employers based in the U.S. now have a temporary reprieve when hiring foreign professionals. However, it is uncertain whether the 65,000 visas for this fiscal year will be adequate to meet the demand for this year and next. Some government officials estimate that visas will be unavailable as early as the beginning of May 2010. In addition, it is still unclear what is on the legislative horizon, reform or not. Pro Immigrants want to come with a proposal to reform legal immigration. U.S. employers employing foreign nationals in any capacity would be well advised to carefully monitor future legislative and regulatory proposals on the horizon. All I can say is that if you plan on hiring a foreign worker, you better call your lawyer now!!!