On Thursday, November 20th, coinciding with President Obama’s announcement regarding his forthcoming executive action on immigration, Department of Homeland Security (DHS) Secretary Jeh Johnson issued a memo to the directors of US Citizenship and Immigration Services (USCIS) and Immigration and Customs Enforcement (ICE) directing the agencies to take action on the president’s announcements. The DHS memo provides a framework for changes the government wishes to make, relating to skilled immigration, to alleviate some longstanding problems in our business immigration system.

Many of the suggested changes are laudable but regulatory rulemaking will be required for most of these changes to take effect. Unfortunately, whereas President Obama was very clear in his announcement about timelines for the changes he is taking to protect certain undocumented immigrants, timeframes for producing regulations or for most of the business immigration changes are lacking in the secretary’s memo. The business community is left to wonder when these announced changes will materialize and what specific forms they will take.

Modernize the Employment-Based Immigrant Visa System

There are caps (quotas) on various types of immigrant visas (green cards) that result in extremely long backlogs and delays for people born in certain countries such as India and China.  If two software engineers at the same company are sponsored for green cards at the same time, and one of them is from Germany and the other is from India, the German applicant will get his green card in about two years while it will likely take his Indian colleague ten years to conclude the process. During this excruciatingly long waiting period, the Indian software engineer is supposed to remain in the same position for which he was originally sponsored. This benefits neither the employer nor the software engineer.

The existing visa distribution is deeply flawed beyond the backlog problem. Every year tens of thousands of visas in some categories go unused. These unused visas go to waste because they don’t roll over from one fiscal year to the next. It’s like vacation days at a company – in many companies if you don’t use them, you lose them. Secretary Johnson directed USCIS to work with the Department of State to better understand immigrant visa availability over the course of the fiscal year and to rationalize the visa distribution system so available visas do not go unused.  Secretary Johnson also ordered the Department of State to modernize the currently unwieldy visa bulletin.

Reform “Optional Practical Training” for Foreign Students and Graduates from US Universities

Most foreign students on F-1 student visas are eligible for a year of post-graduate optional practical training (OPT) as long as the work experience that they gain is in a field that relates to their degree program. But 12 months of authorized OPT frequently is not enough time to bridge the time between the foreign student’s authorization to work on OPT and the granting of a temporary work visa status. The H-1B quota opens every year on April 1st, and the H-1B visas do not become effective until the following October 1st, at the beginning of the government’s new fiscal year. The quota has been exhausted immediately in the last several years, leaving no H-1B visas available until the next government fiscal year – resulting in a 17-month period with no H-1B visa availability.

This problem is less severe for F-1 foreign students who major in STEM (Science, Technology, Engineering or Math) fields. These students are eligible to apply to extend their OPT work authorization for an additional 17 months, as long as they are employed by US employers participating in the government’s E-Verify program. (E-Verify is a program that any employer can participate in, if it is willing to check its employees’ documents through a government database to ensure the employees are legally authorized to work in the United States. Some employers don’t have a choice: if they have certain federal government contracts, or operate in certain states, they must sign up for E-Verify.) Qualified foreign students who graduate with US STEM degrees are able to continue to work legally through multiple government fiscal years, increasing their chances of “winning” an H-1B visa before their OPT period expires.

The list of STEM “majors” that qualify a foreign student for a STEM OPT extension is limited, however, and the focus until now has been on the US degree program that the foreign student has just completed. It would be much more useful if the government would expand the program to allow for STEM-based OPT extensions for F-1 students who either graduate with a US STEM degree OR complete a STEM degree prior to studying in the United States. For example, many of our MBA students come to the United States with a STEM undergraduate degree. Furthermore, the list of STEM “degrees” should be expanded to be much more robust.

Accordingly, Secretary Johnson directed USCIS and ICE to “develop regulations for notice and comment to expand the degree programs eligible for OPT and extend the time period and use of OPT for foreign STEM students and graduates.”  The business community would like to see a significant expansion of STEM eligibility in the new rules. But the business community may not appreciate some OPT restrictions that the Secretary has suggested might be paired with expanded STEM eligibility. Currently there is great flexibility associated with OPT. F-1 graduates on OPT can be self-employed or work as independent contractors, and if they work as employees on a W-2, there is no prevailing wage requirement associated with their employment. The flexibility associated with OPT has proven extremely helpful to foreign entrepreneurs and inventors who use the post-graduation period to refine their inventions, products and business ideas, form companies, and find investors.

Promote Research and Development in the United States

In his announcement regarding executive immigration reform, the president emphasized the importance to the United States of the contributions of foreign entrepreneurs, researchers, start-up company founders and investors. Secretary Johnson’s memo recognizes that the existing immigration law does not meet the needs of these creative individuals who contribute to the vitality of the United States. In his memo, he directs the agencies to expand two existing immigration law provisions. The first, the National Interest Waiver provision, provides a pathway for a permanent immigration status. The second, the “parole” authority in the law, provides a temporary status.

The National Interest Waiver application allows people with “exceptional ability” to bypass the labor market test required for most employment-based green card applicants if the individual can demonstrate that his or her work is in the national interest. USCIS takes a narrow view of who can qualify in this immigration category and therefore its usefulness as an immigration vehicle has been extremely limited. Secretary Johnson recognized this in his memo and directed USCIS to “issue guidance or regulations to clarify the standard by which a national interest waiver can be granted, with the aim of promoting its greater use for the benefit of the U.S. economy.”  Hopefully we will see a significant expansion for eligibility, including for people who found companies and are stimulating the economy, even if it is a local economy. Stimulating the local economy is certainly in the national interest. Asking someone who founds a start-up company to demonstrate an immediate and obvious “national” impact across the entire United States would not be realistic and would run counter to the desire expressed in the memo to expand the reach and usefulness of the national interest waiver green card option.

The government’s parole authority in immigration law, which authorizes certain individuals to enter the United States without a visa, would be expanded by Secretary Johnson’s directive to accommodate entrepreneurs, inventors, and researchers. We have no viable visa option in the United States for entrepreneurs, researchers, and inventors. Over the past years, multiple “Start-up Visa” bills were introduced into Congress, only to languish and die there. Consequently, many of these brilliant individuals leave the United States and set up their businesses or engage in their research in more welcoming countries. This is a creative approach to solving the problem in the short term. It will be interesting to see the criteria that will be applied and the mechanism for implementing this change, especially for the applicants who may already be in the United States. In terms of eligibility criteria, we already know that applicants will understandably have to demonstrate that they have sufficient financial means to ensure that they will not become a burden on the US government. 

Bring Greater Consistency to the L-1B Visa Program

Multinational companies in the United States use the L-1 visa program to transfer personnel to the United States from overseas offices. These transferees can either be “managers or executives” or individuals with “specialized knowledge” needed by the US employer. The Obama administration has heard the repeated outcries from the business community that the government’s interpretations of what constitutes “specialized knowledge” for L-1 intracompany transferee purposes are inconsistent, flawed, unreasonable, and unduly protectionist. Employers filing these petitions over the last many years have not been able to expect that a strong petition will be approved and have had to expend inordinate legal fees to fight and appeal incorrect government decisions and unjust denials. This has had a material negative impact on multinational US businesses.

Recognizing “vague guidance and inconsistent interpretation” of the term “specialized knowledge,” Secretary Johnson directed USCIS to “issue a policy memorandum that provides clear, consolidated guidance” for this visa category with the goal to “improve consistency in adjudications, and enhance companies’ confidence in the program.” Over the years, USCIS has issued plenty of policy memoranda regarding “specialized knowledge” but the accumulated guidance has been confusing. This time around the guidance must be crystal clear, reasonable, and consistent with the real-world business practices of multinational companies. But regardless of what the memo says, the guidance will be worthless if it is not actually implemented by the adjudicators in the field. At the end of the day, DHS must demonstrate a commitment to enforce the terms of the memo and USCIS officers who apply an inappropriate standard to their adjudications must be held to account by the US government.

Increase Worker Portability

It can take a decade for certain skilled immigrants’ green card applications to be approved.   These skilled workers find themselves “stuck” for years in the same position and with the same sponsoring employer. Their career development and job mobility are terribly hampered by the visa backlogs. Under current law, a green card applicant can only “port” his or her green card application to a new employer or accept a promotion with the same employer towards the very end of this lengthy green card process, which can take 10 years. In order for an applicant to take advantage of the green card “portability” provisions, he or she has to jump through many hoops: the first two (out of three) steps in the green card process have to be filed and approved, the third and final application must be lodged with the government, and on top of that, the new job must be “the same or similar” to the one for which the original employer tested the labor market. This “portability” rule has been particularly unhelpful, precisely because many of the affected green card applicants cannot take advantage of it. They can’t benefit from “portability” because of the ridiculously long backlogs: it takes them 8-10 years to reach the third and final step of the green card process, so effectively it does not help them at all.

Cognizant of the current limitations of green card “portability,” Secretary Johnson has directed USCIS to issue a policy memorandum clarifying the meaning of “same or similar” for this purpose. It remains to be seen how much flexibility will be built into the memo. The guidance in the memo should be designed to serve the needs of the business marketplace to facilitate career development and labor mobility.

Preregistration for Adjustment of Status

This development is quite radical. Dovetailing with the emphasis on facilitating worker portability, USCIS is expected to develop regulations to allow foreign nationals with an approved employment-based immigrant petition who are caught in the immigrant visa quota backlogs to preregister for adjustment of status in order to obtain the benefits of a pending application. This is expected to impact approximately 410,000 people. This is a marked departure from anything in the current business immigration regulations. It would not only benefit the employee who is the principal green card applicant, but would enable his or her dependents to obtain employment authorization and immediately enter the US labor market.  These impacted foreign nationals will be thrilled with this change.

Proposed Rule to Extend Work Authorization to Certain H-1B Spouses

The proposed rule published in May 2014 to extend work authorization to the spouses of H-1B employees with approved I-140 employment-based immigrant visa petitions is still outstanding, but is expected to be finalized in the next few months.

Summary

The Obama administration’s proposals to streamline and modernize key aspects of the country’s skilled immigration provisions are laudable and reflect that the administration has heard the lamentations and complaints from the users of these programs (employers and employees alike) that the current system is unworkable and archaic. Ultimately legislation must be passed to address the shortcomings in the US immigration system on a more fundamental and permanent basis. But no one knows how many more years it will take for the law to be changed.  Accordingly, the administration’s proposals for executive, administrative improvements may result in some significant temporary solutions and benefits for the business community in the United States. Now we must wait and see (a) what shape the concrete solutions will take, and (b) how long it will take to roll them out.