In late May, hundreds of amendments were proposed to Senate Bill 744, The Border Security, Economic Opportunity, and Immigration Modernization Act, which—if passed—could have a wide-ranging impact on employers and employees. The bill is designed to implement changes in border security, employee verification, visa reform and the legalization process for undocumented immigrants, though additional changes may be incorporated with new proposals and amendments. While the legislation is centered on immigration reform—and not employment generally—it could create a new set of rules and consequences that would apply to all employers. This advisory addresses four key elements of the bill that employers and employees need to be mindful of should the legislation move forward and eventually become law.
Every Employer Could Be Impacted by New Verification Requirements and May Be Subject to Broader Investigatory Powers
The legislation would create an employment verification system that would be used to confirm the work authorization status of all new hires. Rolled out in phases, to be fully implemented within four years and ultimately applying to all employers, the new system would have a number of consequences of which all companies need to be aware. First, employers would be subject to a new set of statutory rules and requirements in verifying the work status of employees. While many parts of the verification process would follow the policies and procedures in place under the E-Verify regime, the legislation would codify the new system in the statute, making any compliance failure a statutory violation rather than a regulatory oversight, increasing potential liability for employers.
Next, the government’s power to investigate employer compliance would be increased under the new system, and government agencies would have greater access to employer and employee data and greater data-sharing abilities. On the investigatory side, Department of Labor (DOL) investigators would have the authority to initiate an investigation without a third-party complaint and without certification by the Secretary of Labor, and would instead be allowed to initiate investigations upon their own prompting. Moreover, investigations would be able to cover a larger period of time (two years, up from one) and would no longer need to be completed within 90 days. On the information-sharing side, the DOL and the Departments of Homeland Security, Justice and Agriculture would all have greater access to the same pools of data gathered about employers and their employees. All of this means that employers would more likely to be bogged down by burdensome and expensive government investigations, even if an employer has committed no violation and no one has made a complaint.
On top of the new verification system and compliance regimes, there are new anti-discrimination provisions being built into the bill that would prohibit consideration of nationality in hiring and promotion decisions, selective or discriminatory use of the verification process for applicants, use of the verification system to screen applicants prior to offering employment and the termination of employment based upon a tentative non-confirmation of work authorizations. Education about and compliance with these requirements will be key in avoiding what could be a new source of contentious investigations and litigation should the proposed legislation pass.
Finally, under the bill, there are new and significant civil penalties for noncompliance and harsher criminal penalties for knowingly employing unauthorized workers. Indeed, employers and management who underpay or abuse undocumented workers could face enforced back-pay compensation and prison sentences of up to 10 years.
More than 10 Million Employees (and Their Employers) May Face New Employment Issues
There are more than 10 million undocumented workers presently in this country, and the bill would create a legalization program for certain categories of qualified, undocumented immigrants and their families. Individuals would qualify for a six-year conditional nonimmigrant visa, upon the payment of an application fee and $500 fine, if they arrived in the United States prior to December 31, 2011, and maintained continuous physical presence since then, as well as show that they have made contributions to the country through employment, education, military service or other community service (e.g., been enrolled in college for two years, graduated from college or served in the military for at least four years), and have not been convicted of a felony or three or more misdemeanors (except those related to undocumented status, such as using a false social security number, which are waived). These qualified conditional nonimmigrants and their families would then be able to apply for lawful permanent resident status (green card) without weighing against current numerical visa caps. Similarly, the DREAM Act system of legalization would allow undocumented individuals who were brought to the United States before the age of 16 (with no upper age limit) to apply for legal status through the same basic program outlined above. Finally, exploited immigrant workers who blow the whistle on employer abuses will be eligible to apply for special visas.
Employers Would Be Subject to Additional Rules Regarding Employee Visas
The bill contains new H and L visa reforms. For companies employing workers with H visas, there are several new issues about which employers should be aware. On the positive side for employers, the bill would immediately increase the number of H-1B visas available, from 65,000 to 110,000 a year, and could go as high as 180,000 a year, depending on demand. There would also be another 25,000 set aside for people with advanced degrees in science, technology, engineering or math from a U.S. school. The bill would also provide for work authorization for H-4 workers’ spouses. Further, another favorable provision allows H-1B workers 60 days to transition between jobs.
On the other hand, the new rules would establish stricter requirements regarding contracting for the services or placement of H-1B workers and recruitment of H-2B visa workers, including limiting participation to employers who have non-conducted layoffs in the past year and requiring employers to test the U.S. labor market before filing an H-1B application. Additionally, there are new bars in the legislation that would come into effect for companies with more than 50 percent H-1B workers after three years. Finally, there are increased fines/wages for dependent U.S. employers. For example, employers with 50 or more employees would have to pay an additional fine of $5000 per sponsored worker if more than 30 percent of their workforce consists of H-1B/L-1 workers. This fine increases to $10,000 if their workforce consists of more than 50 percent of H-1B/L-1 workers.
The bill would impact the number and placement of visa holders. It places an upper limit on how many H-1B workers a company can ultimately hire and would also impact employers utilizing L visas for workers. The legislation would make it unlawful for an existing employee transferred into the United States on an L-1 visa to be placed or outsourced at another worksite unless the company at the new worksite is a direct affiliate of the original employer. Moreover, there are heightened criteria regarding what would constitute a new office. These reforms could have a profound impact on employee mobility, preventing employers from transferring employees into the United States for projects at a customer, client or supplier worksite, even if the employee is a manager or has essential or specialized knowledge regarding the project.
Employees Themselves Would Be Subject to New Rules
Under the bill, the Diversity Visa program will be replaced with a new merit-based immigration system that will be a third path to permanent residence, alongside family-sponsored and employment-based immigrants. Individuals can self-apply, and they would be able to qualify based on the number of points they accumulate for, among other things, the ability to speak English, their education, their length of residence in the United States, family relations in the United States and length and type of employment. Initially, 120,000 visas will be set aside for merit-based immigrants, but that number could fluctuate up to 250,000 in future years based on demand and the U.S. unemployment rate. The employment visa system would be changed as well. Immigrants included in the current employment first preference category would be exempt from numerical limits. (These include certain immigrants with extraordinary abilities, professors and researchers, certain multinational executives and managers, doctorate degree holders and certain physicians.) Certain foreign students who graduate from U.S. universities with advanced degrees and job offers in a STEM field would also be exempt from numerical limits.
On top of that, numerically limited employment-based visas allocations would change. Specifically, such limited visas would follow the following the preference system: members of the professions holding advanced degrees in non-STEM fields or from non-U.S. universities and foreign medical graduates (40 percent); skilled workers, professionals and other workers (40 percent); certain special immigrants (10 percent); and investor/job creation immigrants (10 percent). Restrictions on the “other worker” subcategory will be removed (currently, limited to a maximum of 5,000 per year out of the third preference category). A new sixth preference category would be created for immigrant entrepreneurs. The cap for this category is 10,000 annually.
The legislation also provides for a mandatory exit data system for noncitizens leaving by air or sea ports of entry. New grounds of inadmissibility and removal are created for gang participation; three or more convictions related to drinking and driving; and domestic violence.
If passed, Senate Bill 744 would undoubtedly have a substantial impact on employers and employees, changing immigration investigation and enforcement protocols, information sharing between government agencies, and the availability and allocation of visas. Employers should be sure to follow the path the legislation takes, and should not hesitate to reach out to a qualified immigration specialist with any concerns.