Senators Chuck Grassely and Dick Durbin recently introduced a bill that would reform the H-1B and L-1 visa programmes in the United States. Specifically, the bill proposes to modify wage requirements, impose requirements when placing workers at third-party locations and limit the usage of the H-1B and L-1 categories by employers. While the bill is not expected to be passed by Congress in its current form, certain provisions are worth noting as they may find their way into future legislation.
The following is a brief summary of some of the bill's provisions:
- The 50% rule – under the bill, if a US employer has 50 or more workers, then no more than 50% of the US employer's workforce may comprise H-1B or L-1 workers.
- Wage rate – the bill attempts to eliminate the Level 1 wage rate for the H-1B and L-1 programmes by requiring US employers to pay the higher of:
- the locally determined prevailing wage;
- the median wage in the area of intended employment; or
- a Level 2 wage rate.
- Third-party placement – under the bill, an employer may not place an H-1B worker at a third-party location unless a waiver has been obtained from the Department of Labour. In order to obtain the waiver, the employer must attest that the placement will not replace or displace a US worker and that the H-1B worker will be principally controlled and supervised by the sponsoring employer. There is also a similar provision for employers that wish to employ an L-1 worker at a third-party location for more than one year.
- Preference system – under the bill, priority will be given to certain types of H-1B petition in the following order:
- F-1 students with an advanced degree in sciences, technology, engineering or mathematics;
- H-1B petitions that reflect Level 4 wages;
- F-1 students with advanced degrees;
- H-1B petitions that reflect Level 3 wages;
- F-1 students who have US bachelor's degrees;
- Department of Labour Schedule A occupations; and
- companies that:
- have had no immigration violations in a prior five-year period;
- have had a high approval rate;
- have enrolled in E-Verify; and
- have filed green card petitions for their H-1B workers.
- No degree equivalency – H-1B workers must have a single source bachelor's degree equivalent to a US bachelor's degree. Experience may not be combined with academic achievement to qualify for the H-1B category.
- Increased Department of Labour penalties for Labour Condition Application (LCA) violations – the maximum fines imposed for violating the attestations in an LCA will increase as follows:
- from $1,000 to $5,000 (for any non-wilful violation);
- from $5,000 to $25,000 (for wilful violations); and
- from $35,000 to $150,000 for the unlawful replacement or displacement of a US worker (these fines would be imposed per each individual violation).
- LCA filing fee – the bill proposes to impose a "reasonable" LCA filing fee in order to pay for enforcement and investigation activities.
- Department of Labour investigations – the bill makes it easier for the Department of Labour to initiate investigations and extends the statute of limitation to initiate an investigation from 12 months to two years. In addition, the bill authorises the Department of Labour to hire 200 additional employees to provide oversight and enforce the H-1B programme. The bill also requires the Department of Labour to conduct annual compliance audits of those employers that are heavy users of the H-1B programme.
- Recruitment – all H-1B employers must demonstrate that they have tried to recruit US workers.
- H-1B duration – the bill reduces the duration of the H-1B category from six years to three years, unless the H-1B employer can show the H-1B worker is the beneficiary of an approved green card petition.
The information provided above reflects only some of the provisions contained in the H-1B and L-1 Visa Reform Act 2015, and these provisions are designed to protect US workers and to ensure compliance with US laws. It is important to note these provisions because it is likely that some form of them may find their way into a future law.
Employers may wish to:
- take steps now in anticipation of these or similar positions being adopted by increasing the number of Permanent Electronic Review Management (PERM) labour applications or immigrant visa petitions that are filed for workers currently in the United States under H-1B or L-1 status;
- implement bi-annual audits of their H-1B public access files and LCAs in order to ensure that they comply with LCA regulations;
- increase their level of US recruitment and focus recruitment activities on recruiting both US workers and foreign nationals who have earned advanced degrees or advanced degrees in a sciences, technology, engineering or mathematics field;
- consider recruiting only overseas workers that have a single source bachelor's degree equivalent to a US bachelor's degree, if they are interested in sponsoring overseas workers for the H-1B category;
- revise their service agreements with their customers to clarify that H-1B or L-1 workers will be employees of the sponsoring employer, and that ultimate control and supervision of the work performed by those workers is the responsibility of the sponsoring employer; and
- plan on budgeting more money toward their participation in the H-1B or L-1 programmes as well, given that an LCA filing fee may be imposed.
Finally, US employers should be advised that the time it takes to complete the H-1B or L-1 process in the future may increase and should plan accordingly.
For further information on this topic please contact Matthew Morse at Fakhoury Law Group PC by telephone (+1 248 643 4900) or email ([email protected]). The Fakhoury Law Group website can be accessed at www.employmentimmigration.com.
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