Executives from companies with technology components and interests often ask if, and when, meaningful changes will be made to the U.S. immigration laws that apply to high-skilled foreign workers, and in particular, to the much discussed H-1B visa program.  While the enactment of such reform is uncertain at the present time, recent developments in the new year suggest that change may be on the way.

Legislators have renewed efforts in this new session of Congress to significantly expand laws for guest-workers in the technology industry against the backdrop of the continued and spirited debate over such immigration issues.  Bipartisan bills just introduced in the United States Senate would, among other things, increase the number of visas and green cards available to high-skilled workers and create an “entrepreneur’s visa” to allow individuals who want to start companies to stay in the country.   Though versions of these bills have been proposed in previous sessions, only to later languish, observers are more optimistic that the legislation, in some form, can now pass both houses.

Sens. Orrin Hatch (R-Utah), Marco Rubio (R-Fla.), Jeff Flake (R-Ariz.), Amy Klobuchar (D-Minn.), Chris Coons (D-Del.) and Richard Blumenthal (D-Conn.) introduced the first bill,  named the Immigration Innovation or “I-Squared” Act of 2015.  I-Squared would increase the annual cap on the number of H-1B visas from 65,000 to 115,000, and possibly even up to 195,000 per year based on demand.  Companies operating in the U.S.—from start-ups to long-established giants—are keenly aware of the fierce competition for an H-1B visa, which can remain valid for six years.  In 2014, the U.S. Citizenship & Immigration Services (USCIS) received roughly 172,500 applications for only 65,000 new H-1Bs, taking about a week for the available visa quotient to be filled.

Further, I-Squared would permit companies to hire an unlimited number of workers with master’s degrees or higher from U.S. institutions in the STEM disciplines (science, technology, engineering and math).  Currently, the first 20,000 H-1B applications for those with advanced degrees are not counted against the 65,000 cap.  Consequently, should the bill become law, certain U.S. universities specializing in those programs could find an influx of foreign students applying to those schools to secure such advanced degrees for eventual U.S. employment.

The legislation would also increase employee mobility by establishing a grace period during which foreign workers can change jobs and not be out of status so long as an employer files a petition to extend, change or adjust the status of that individual within sixty days of the date the worker ended his/her employment.  The bill would further allow foreign students studying in the U.S. to benefit from “dual intent,” which permits a student on a temporary visa to intend to seek permanent residence in the U.S.

Notably, I-Squared would exempt many categories of workers and their family members from the numerical quota imposed on employment-based green cards.  While the bill does not expressly raise the numerical quota, its exemptions would effectively more than double the quota for this type of green card.     More specifically on this point, I-Squared would:

  • Authorize employment for the dependent spouses of H-1B visa holders;
  • Exempt certain categories of individuals, such as those with “extraordinary ability” and “outstanding professors or researchers”, from the cap on such employment-based green cards;
  • Allow for the recapturing of over 200,000 employment-based green cards that were approved by Congress in previous years but were not used; and
  • Eliminate annual per country limits for employment based visa petitioners and adjust per-country caps for family-based immigrant visas.

A second bill, known as The Startup Act, is designed to boost growth in start-up companies through a combination of immigration and tax regulatory modifications.  Also a bipartisan effort, The Startup Act shares similarities with I-Squared (e.g., elimination of per-country caps) but with a more targeted approach.  Highlights of the bill include:

  • Creation of an Entrepreneur’s Visa allowing foreign-born entrepreneurs in the United States to remain in the country to launch businesses.  At this time, the bill proposes 75,000 such visas.  The visas could be revoked during a four year period after it is granted if the U.S. Department of Homeland Security determines that the individual is no longer qualified;
  • Creation of a new “STEM Visa” permitting U.S.-educated foreign students in the United States legally, who graduate with an advanced degree in a STEM program, to stay in the country.  Currently, the bill allows for 50,000 such visas;
  • Permanent exemption of capital gains taxes on the sale of startup stock held for at least five tears; and
  • Creation of a limited research and development tax credit up to $250,000 for young start-ups less than five years old and with less than $5 million in annual receipts.

In short, I-Squared and The Startup Act would generally create a considerably more favorable climate for those technology companies and potential entrepreneurs that plan to employ more foreign nationals or to launch new enterprises in the Unites States.  Yet all stakeholders in the high-skilled guest-worker discussion must be mindful that the current 65,000 H-1B visa cap has not changed in ten years. The prospect that these new pieces of legislation become law in some shape is, despite the much publicized support from Mark Zuckerberg and other titans in the tech industry, very much unsettled.  We will continue to closely monitor and report on the progress of these bills in the interim.

Employers are therefore reminded that the deadline to file new H-1B petitions is April 1, 2015 (for the fiscal year 2016 quota).  Once the H-1B cap has been reached, employers will be unable to file new cap-subject H-1B petitions until April 1, 2016.  Naturally, employers should evaluate their workforce needs, determine what visa petitions they intend to file and also now plan to discuss with counsel concerning what options, if any, are available to those employees whose petitions are not accepted this year.