H-1B, L-1 Visas In Danger

Responding to growing concerns about immigrants displacing U.S. workers, assistant Senate Majority Leader Dick Durbin (D-Ill.) and Sen. Chuck Grassley (R-Iowa) have introduced the H-1B and L-1 Visa Reform Act, designed to preserve the controversial H-1B program that allows U.S. companies to hire foreign workers, but to limit its abuse.

• The Durbin-Grassley bill would require that before an employer may submit an H-1B application, the employer must first advertise the job opening for 30 days on a Department of Labor (DOL) website.  DOL would also be required to post summaries of all H-1B applications on its website.
• The Durbin-Grassley bill would give DOL authority to review employers’ H-1B applications for “clear indicators of fraud or misrepresentation of material fact.”

Currently, the H-1B and L-1 visa programs are criticized for making it possible for companies to hire foreign workers at lower wages and with fewer rights than Americans, in turn creating incentives for companies to avoid hiring Americans.

• The Durbin-Grassley bill would require H-1B and L-1 employers to pay employees the prevailing wage to ensure employers are not undercutting American workers by paying substandard wages to foreign workers.
• The Durbin-Grassley bill would limit issuance of L-1 visas for employees of a “new facility” to an initial period of 12 months, which can be extended after the employer demonstrates that the new facility is legitimate.
• The Durbin-Grassley bill would establish a process for DOL to investigate, audit and penalize L-1 employers.

COMMENTARY

I will address different provisions of this proposed bill.

1. INTENT OF THE H-1B PROGRAM: “Congress created the H-1B visa program so an employer could hire a foreign guest-worker when a qualified American worker could not be found,” said Durbin in a statement released today (Washington Independent: By Daphne Eviatar 04/23/09).

COMMENT: I have looked through legislative history. I personally have not seen this statement in the legislative notes for H-1Bs. When Congress enacted the Immigration and Nationality Act of 1952, the H-1 nonimmigrants were described as aliens of “distinguished merit and ability” who were filling positions that were temporary. The Immigration Act of 1990 (P.L. 101-649) established the main features of H-1B visa as it is known today.   Foremost, §205 of P.L. 101-649 replaced “distinguished merit and ability” with the “specialty occupation” definition. The purpose of the H-1B visa, as I read it, was to allow highly skilled workers, many of whom received U.S. educations to contribute their specialized skills to the U.S. economy.

2. PREVAILING WAGE ISSUE: “The Durbin-Grassley bill would require H-1B and L-1 employers to pay employees the prevailing wage to ensure employers are not undercutting American workers by paying substandard wages to foreign workers.”

COMMENT: for H-1Bs, this is already the law. The employer must pay the H-1B employee the “required wage,” which is defined as: the greater of the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment at the place of employment or the prevailing wage for the occupation in the area of employment based on the best information available. Do the senators know this? As to an L-1 visa holder, this would be an impossible standard to meet. The L-1 visa holder must be employed continuously abroad for 1 of the past 3 years by parent, branch, affiliate or subsidiary of U.S. company preceding his application for admission. Such an employee transfers over to the United States and typically makes what he made at the parent company in the country of origin with a bump-up for relocations fees, etc… Are the Senators proposing that the salary made by the prospective L-1 visa holder in the country of origin conform to prevailing wage in the United States? I do not see how legislation could require a foreign executive working outside the United States to make the prevailing wage for an equivalent position inside the United States.

3. NEW BUSINESSES: The Durbin-Grassley bill would limit issuance of L-1 visas for employees of a “new facility” to an initial period of 12 months, which can be extended after the employer demonstrates that the new facility is legitimate.

COMMENT: This already is the law. Do the Senators know this? If a new office, USCIS can only approve an L-1 Visa for one year, 8 C.F.R. §214.2(l)(7)(i)(A)(3), and thereafter petitioner must show compliance with managerial/ executive standards.

The Senators have not done their homework with this bill. In my opinion, they are seeking to eliminate the L and H visa categories, and not to improve upon them. I concede that the H-1B visa program has had its problems. The large software contractors have abused the system. Many, although asserting on the forms that they would pay prevailing wage, would not pay that level once the employee was here on the H-1B. The visa holders were often in weak positions with regard to their employers.

One also has to consider the number of people affected by this measure.  The numerical limitation on H-1B petitions for fiscal year 2010 is a maximum of 85,000.  85,000 workers is a very small percentage of our economy.  This legislation would affect very few employees in the United States.   However, those affected have specialized knowledge in their individual fields and make important contributions to the American economy.   Can the United States afford to lose out on these valuable employees? The United States in aggregate could face a significant brain drain if bills such as these become law in the United States.