Senate Republicans Introduce Bombshell Bill Targeting the H-1B and L-1 Visa Program


A brand-new bill called the H-1B and L-1 Visa Reform Act of 2020 (S. 3770) sponsored by Republican Senator Chuck Grassley has recently surfaced. As you might have already guessed, the bill seeks to make changes to the current H-1B and L visa programs to reduce fraud and abuse within the H-1B and L visa programs, provide protections for American workers, and enforce stricter requirements for the recruitment of foreign workers. The H-1B visa program is aggressively targeted in this new piece of legislation.

Proposed Changes to the H-1B visa program

First, as it relates to the H-1B visa worker program, the bill proposes changes to existing wage requirements.

The law would require employers to pay the highest wage from three categories:

1) the locally determined prevailing wage level for the occupational classification in the area of employment

2) the median average wage for all workers in the occupational classification in the area of employment; or

3) the median wage for skill level 2 in the occupational classification found in the most recent OES survey.

Second, the bill would make changes to current law and require U.S. employers seeking to hire H-1B workers to publish job postings on a website established by the Department of Labor. After filing the labor condition application, the employer would be required to post the job on the website for at least 30 calendar days. The job posting would have to include a detailed description of the position, including the wages and other terms and conditions of employment, minimum education, training, experience, and other requirements for the position, as well as the process for applying for the position.

Third, all H-1B employers would be required to prove that they have tried to recruit American workers for jobs offered to H-1B workers. Under current law, only H-1B dependent employers (those with more than 50 full time employees of which at least 15% are H-1B employees) are required to recruit American workers for H-1B positions. This would be a drastic change in the law creating additional burdens for U.S. employers seeking to hire foreign workers with specialized skills.

Fourth, the bill would expressly prohibit the replacement of American workers with H-1B workers.

Fifth, the bill would change current non-displacement provisions. Under current law, employers may not displace American employees within a 90-day period before or after applying for H-1B visas.  The new bill would increase this period of time to 180 days before and after the date the H-1B worker is placed at the worksite. The purpose of this provision is to prevent outsourcing or leasing of H-1B workers to other employers, but there is a possibility under this bill for employers to seek a waiver of the outsourcing prohibition if they can show that no U.S. workers will be replaced as a result and the worker will not be a de facto employee.

New Application Requirements

The new bill would prohibit employers from placing job advertisements for jobs that recruit only H-1B visa holders or that indicate that H-1B visa holders will be given preference in the hiring process.

In addition, the law would prohibit employers with more than 50 employees in the U.S. from hiring additional H-1B or L-1 workers if the employer’s U.S. workforce is more than 50% H-1B and L-1 nonimmigrants.

Companies petitioning for H-1B workers that have previously employed H-1B visa holders would be required to provide a copy of such earlier workers’ W-2 forms to the Department of Labor to prove that they paid the earlier H-1B workers the appropriate wage. This provision has been added to ensure that proper salaries were paid by the employer before the employer is allowed to bring in more workers under the program.

Anti-Fraud Provision

The bill would allow the Department of Labor to review applications for “indicators of fraud or misrepresentation of material fact,” increasing the agency’s authority to investigate further. The anti-fraud provision also gives the Department of Labor 14 days instead of 7 to certify a labor condition application.

Prioritizing H-1B visas for those of the “Highest National Priority”

The bill would prioritize and give preference to H-1B beneficiaries whose education, training or economic value is considered of the “highest national priority.” Current law would also be changed to give the Secretary of Homeland Security discretionary power to allocate the issuance of H-1B visas “in any manner the Secretary deems appropriate.” This power would grant the Secretary the explicit authority to implement an H-1B lottery or registration system.

Only Workers Employed “by” Institutions of Higher Education Would be Cap-Exempt

Under current law, H-1B aliens who are employed or have received an offer of employment “at” an institution of higher education, or a related or affiliated nonprofit entity, are exempt from the H-1B cap. The bill would change the language of current law to require a nonimmigrant to be employed “by” an institution of higher education or a related or affiliated nonprofit entity in order to be cap exempt. This would prevent the possibility that the H-1B cap exemption could apply to people who physically work “at” an exempt institution, but who are not actually employed “by” the institution.

The New Bill Would Require an Actual Degree to Satisfy the Specialty Occupation Requirement

Perhaps one of the most significant changes proposed by the bill is that it would change current law to require that in all cases—a  college degree directly related to a specific occupation would be a requirement for entry into the occupation in order for that occupation to be considered a “specialty occupation.” This would change current law requiring the attainment of a bachelor’s degree or its equivalent. The law would eliminate all ambiguity and establish that an H-1B worker is required to have a college degree directly related to a specific occupation. No equivalence nor work experience would be allowed in lieu of an actual college degree directly related to the specialty occupation.

This would of course narrow the pool of applicants eligible to apply for the H-1B visa to those with college degrees directly related to the specialty occupation.

Proposal of Labor Condition Application Fees

 The new bill would authorize the Department of Labor to charge a “reasonable” fee for the processing and adjudication of H-1B Labor Condition Applications. The money would be used only for expenses associated with the administration, oversight, investigation, and enforcement of the H-1B nonimmigrant visa program.

Limitation on Extension of H-1B Petition

Three-year extensions of the initial three-year H-1B period of stay would be granted only if the H-1B worker is the beneficiary of an approved employment-based immigrant petition.

Elimination of B-1 in Lieu of H-1B

The law would explicitly prohibit the issuance of B=1 visas to people coming to the U.S. to perform work that should be done in H-1B visa status.

Broad Authority for DOL Investigations

The bill would enhance the DOL’s ability to enforce worker protections by allowing random audits of not less than one percent of H-1B employers during a calendar year. In addition, the bill would allow for delegation of authority to initiate investigations.

If a company has more than 100 employees in the U.S., and more than 15% are H-1Bs, then the Secretary would have the authority to conduct annual compliance audits of these employers. The bill proposes creating a hotline for displaced U.S. workers to report noncompliance of U.S. employers.

Increased Penalties for H-1B violations

Administrative fines per violation would increase from $1,000 to $5,000 and from $5,000 to $25,000 for willful misrepresentation. Additionally, the maximum fine for a willful failure or misrepresentation resulting in the displacement of a U.S. worker would increase from $35,000 to a whopping $150,000.

Increased Information Sharing Between DHS and DOL

The bill would further increase information sharing between the Department of Homeland Security and the Department of Labor. USCIS would be required to share information about H-1B petitions with the Department of Labor, allowing DOL to initiate investigations after receiving information of noncompliance.

Proposed Changes to the L-1 Visa Program

First, the bill would narrow the current definition of “specialized knowledge” so that L visas would be limited and reserved only for truly key personnel.

Prohibition on Outsourcing L employees

U.S. employers would be prohibited from placing, outsourcing, or leasing an L-1 visa holder to another employer. Waivers would be available, provided the employer can show that no U.S. workers will be replaced as a result of the placement and that the worker will not be a de facto employee.

Provision of Non-Displacement of American Workers

Similar to the proposed changes for the H-1B visa program, the law would prohibit the replacement of American workers with L-1 workers and establish a non-displacement policy for L-1 visa holders. For instance, an employer who directly employs L-1 workers, or with whom L-1 workers have been placed, may not lay off or displace any American workers within a 180-day period before or after the L-1 workers start working.

Ensuring Compliance

Those seeking an L-1 visa to open a new U.S. office of an overseas company would be subject to audit to ensure compliance. An L-1 visa would be valid for no more than 12 months if a U.S. branch or affiliate does not already exist.

Furthermore, an extension of an L-1 visa granted for purposes of opening a new office would be authorized only if the visa holder presents certain evidence of business activities that have been undertaken at the new office during its first year of operation.

Information Sharing between DHS and DOS

The bill would authorize the Departments of Homeland Security and State to work together to verify the existence or continued existence of a company or office in the U.S. or in a foreign country that is an L-1 entity or affiliated with the L-1 entity

L-1 Investigations and Audits of Compliance

The bill would allow the Secretary of Homeland Security to initiate an investigation based upon credible evidence and conduct annual compliance audits of not less than one percent of employers who hired L visa workers.

Wage Rates for L-1 Non-immigrants

Employers would be required to pay L visa workers a minimum wage level identical to the requirement outlined above for H-1B workers to discourage employers from using the L visa as a source of cheap labor.

Penalties for L Employers

The bill would increase penalties for employers who violate L visa rules (up to $25,000 per violation and no petitions approved for future workers). Employers would also be liable to employees harmed for lost wages and benefits.

Provision Against Retaliation

L visa employers would be prohibited from engaging in retaliatory acts against L-1 employees who report employer violations of L-1 program rules.

Adjudications of L Visas Handled by DHS

Finally, the bill would require all adjudications of L-1 eligibility to be handled by the Department of Homeland Security, not the Department of State, including L-1 petitions filed on behalf of employees of companies with approved blanket petitions.

What Happens Next?

It is important to note that this bill is not yet law. In order to become law, the Senate and the House of Representatives must pass the bill and the President must sign it into law. We expect that if the bill were to pass at all, significant changes would occur once the bill reaches the House of Representatives currently controlled by the Democrats. The bill however offers a small glimpse into what a future bill targeting the H and L visa programs might look like.

To track the progress of the bill please click here.

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