This alert outlines three recent immigration-related developments of interest to companies and organizations employing foreign nationals. Specifically:

  1. New immigration bill introduced

A bipartisan immigration bill has been introduced in the United States Senate in an effort to address comprehensive reform of the immigration system. This includes a path for legalization of undocumented immigrants and significant changes to certain nonimmigrant visa categories, such as H-1B and L-1, frequently used by employers, as well as changes to the employment- and family-based immigration process.

  1. H-1B cap reached

The annual H-1B quota for fiscal year 2014 has been reached in the first five days after the U.S. immigration service started accepting new petitions, which has not happened since 2008. This will impact employers who want to file new H-1B petitions for persons who do not already hold that status with another non-exempt employer or have been granted that status in the last six years (absent new legislation that would increase the quota, new H-1Bs will not be available until 1 October 2014 unless the employer is exempt from the quota).

  1. Paper I-94 format is being eliminated

Paper I-94 forms will no longer be issued to visa holders arriving to the United States via air or sea ports (as of 30 April, five airports will transition to electronic I-94s and all others are expected to transition by the end of May). Passports will be stamped with the date of arrival and authorized period of stay but if the arriving visa holder needs a paper I-94 (e.g., for employment verification purposes for those who are admitted in work authorized status), he/she will be able to print it out from a new website that will be created.

  1. Senate introduces immigration reform bill

On 17 April 2013, Senate negotiators have introduced a bipartisan immigration bill (S.744), the “Border Security, Economic Opportunity, and Immigration Modernization Act of 2013,” that would significantly overhaul U.S. immigration laws. This 844-page bill covers a wide range of issues, including border security, temporary visas, immigrant visa process, mandatory use of E-Verify by all employers, and legalization of undocumented aliens. Senator Schumer has stated that the goal is to have the Senate Judiciary Committee open the bill for amendments in early May, and move to the Senate floor by early June.

Among many provisions contained in this proposed legislation, below is a high-level summary of certain provisions of interest:  

  1. Mandatory use of E-Verify for employment verification
  • The bill would require all employers to use the E-Verify employment verification system to prevent the hiring of unauthorized aliens over a phase-in period.
    • Employers with more than 5,000 employees will be phased in within two years from the date the regulations are published. Employers with more than 500 employees will be phased in within three years, and all employers, will be phased in within four years.
  • Photo matching – to be approved for employment under the mandatory E-Verify system – every non-citizen would be required to provide a specific document with a photograph (the same photographs would be stored in the E-Verify system). The employer must certify that the photograph presented in person matches the identical photograph in the system.
    • For U.S. citizens with passports, the picture on the passport presented by the employee must match the identical photograph in the E-Verify system.
    • An employee may present a state driver’s license so long as the citizen’s state has agreed to submit a photograph to E-Verify.
  • If the identity of an individual is not able to be adequately verified through photo identification, the Department of Homeland Security (DHS) shall provide additional measures to accurately verify an employee’s identification.
  • Civil and criminal penalties may be imposed, depending on the violation.
    • Between US$3,500 and US$7,500 in civil penalty per each unauthorized alien for those who have hired/continued to employ an unauthorized alien and failed to use E-Verify.
    • If an employer has previously been fined more than once, the employer may have to pay a civil penalty of up to US$25,000 for each unauthorized alien.
    • After E-Verify becomes mandatory, enhanced civil penalties may be established for an employer who: (i) fails to query E-Verify to verify the identity and work authorized status of an individual; and (ii) violates a federal, state, or local law related to the payment of wages, hours worked by employees, or workplace health and safety.
    • The bill includes higher penalties in relation to recordkeeping and verification practices (US$500 to US$2,000 per each violation, escalating up to US$8,000 per violation for repeat offenders).
  1. Highly-skilled temporary workers, investors and retirees
  • Increase in the annual H-1B cap
    • The bill would raise the base H-1B cap from 65,000 to 110,000, with a possibility for the cap eventually reaching 180,000, based a newly created “High Skilled Jobs Demand Index” formula.
    • The fill would increase the current 20,000 cap for U.S. advanced degree holders to 25,000 visas but only for holders of U.S. advanced degrees in science, technology, engineering, and mathematics (STEM).
  • Mandatory recruitment for H-1Bs
    • All employers will be required to advertise for the position for 30 days (recruit for U.S. workers) before filing an H-1B petition for a foreign national.
    • The employers cannot give preference to H-1Bs or F-1 students over U.S. workers.
  • The bill establishes additional requirements for “H-1B dependent employers”
    • H-1B dependent employers will have to offer at least Level 2 wage in the newly recalibrated OES wage system (which will have only three rather than four wage levels).
    • Depending on the size of the company and percentage of H-1B or L-1 workers, employers will have to pay an additional fee of US$5,000 or US$10,000 for new H-1B or L-1 filings.
    • In FY 2015, companies will be prohibited from petitioning for H-1B or L-1 workers if more than 75 percent of their workers are H-1B or L-1 employees, with some limited exceptions (that percentage ultimately drops to 50 percent in subsequent fiscal years).
  • Restrictions on outplacement/outsourcing/leasing of H-1Bs and L-1s
    • H-1B dependent employers will not be allowed to outplace, outsource, lease, or otherwise contract for the services or placement of its H-1B workers to another entity; employers who are not H-1B dependent will have to pay an additional fee per employee who is outsourced.
    • L-1 employees also generally will be subject to restrictions on outplacement/outsourcing, with some exceptions.
  • All H-1B employers will be required to submit an annual report to DHS that includes W-2 forms for each H-1B worker employed during the previous year.
  • Employers of H-1B and L-1 workers will be required to provide them with a brochure outlining the employer’s obligations and the employee’s rights.
  • H-4 spouses will be able to obtain employment authorization (subject to reciprocity).
  • Revalidation of visas (i.e., obtaining a renewal visa in the passport without leaving the United States) would be available for E, H, L, O, P and certain other visa categories.
  • E visa status would be expanded to allow nationals from countries with which the United States has a free trade agreement (subject to a limit of 5,000 such visas per fiscal year for each country).
  • The bill creates a retiree visa (Y visa category) for individuals who purchase residential property in the United States over certain thresholds and meet certain residency requirements (that visa would not allow them to work but would allow them to manage residential property).
  • The bill also creates a temporary visa (X visa category) for certain qualified entrepreneurs who meet certain conditions regarding venture capital or other investments in their business, or who meet the job creation and annual revenue thresholds.
  1. Employment-based and investment-based immigrants
  • The bill would make changes to the annual limits on employment-based immigrants (i.e., those pursuing U.S. permanent resident (green card) status through employment or investment). Those changes are expected to eliminate or significantly reduce the current long waiting periods in certain employment-based green card categories. For example, doctoral degree holders in any field and certain physicians will be exempt from the annual quotas.
  • No labor certification (PERM application) will be required for employment-based green card process if the person holds a United States-issued advanced degree in a STEM field.
  • The bill creates an “EB-6” immigrant investor category for foreign entrepreneurs who seek to immigrate to the United States.
    • The person has to have a significant ownership in the U.S. business, needs to be employed as a senior executive in the business, and has had a significant role in the founding or early-stage growth of the business.
    • The person must have resided in the United States for at least two years in lawful status in the three-year period prior to the filing, and the business must meet certain job creation and venture capital/investment funding thresholds, or job creation and annual revenue thresholds.
  • The bill would eliminate the existing Diversity Visa (DV) program (the so-called green card “lottery”) but persons who were or are selected through the DV lottery for fiscal years 2013 or 2014 will be eligible to receive them.
  • The bill would introduce a merit-based system in the fifth year after enactment, which would represent an alternative path to a green card compared to employment- or investment-based system.
    • This merit-based system would provide two different paths (Tier 1 and Tier 2) to green card status, awarding points to individuals based on their education, employment, and length of residence in the United States as well as other considerations, and would award immigrant visas (green cards) to those individuals with the most points.
    • 120,000 visas will be available per year for this merit-based program, with the number possibly increasing annually if demand exceeds supply in any year where unemployment is under 8.5 percent, with a maximum cap of 250,000 immigrant visas available under this new program.
  1. Legalization of undocumented non-agricultural workers
  • The bill sets forth detailed eligibility criteria for aliens who are unlawfully present in the United States to adjust their status to Registered Provisional Immigrant (RPI) status (essentially providing a path to green card and ultimately United States citizenship).
    • Eligible applicants must have entered the United States prior to 31 December 2011, and must have maintained continuous physical presence since that time.
    • Applicants would be required to pay a penalty fee of US$500 (with some exceptions) as well as back taxes in addition to all applicable fees required to pay for the cost of processing the application (they will also have to pass the national security and law enforcement clearances as part of the application process).
  • Applicants for RPI status will be ineligible if: convicted of a felony or an aggravated felony, convicted of three or more misdemeanors, convicted of an offense under foreign law, unlawfully voted, or otherwise inadmissible for a number of grounds.
  • Individuals in RPI status would receive work authorization and would be authorized to reenter the United States after travel abroad.
    • The spouses and children of individuals in RPI status can be petitioned as derivatives of the principal applicant if in the United States at the time of the petition. Individuals in RPI status are not eligible for any federal means-tested public benefit, are not entitled to have the premium assistance tax credit authorized under section 36B of the Internal Revenue Code, and shall be subject to the rules applicable to individuals not lawfully present that are set forth in section 1402(e) of the Patient Protection and Affordable Care Act.
    • RPI status shall last for a six-year term that is renewable if the immigrant does not commit any acts that would render the alien deportable (upon renewal, a payment of an additional US$500 penalty fee is required).
    • Individuals in RPI status would also be eligible to apply for green card status after a period of 10 years pursuant to a number of conditions (and only if all other currently pending family-based and employment-based immigrants have obtained their green cards—essentially putting RPI applicants at the “back of the line”).
      • The continuous physical presence in the United States
      • The payment of all taxes owed
      • Working in the United States regularly
      • A demonstrated knowledge of Civics and English
      • Payment of an additional US$1000 fine
  1. Legalization of undocumented agricultural workers
  • The bill provides for legalization of undocumented agricultural workers in the United States (and ultimately a path to green card and citizenship) by establishing an “Agricultural Worker Program” that allows undocumented farm workers who have made a “substantial prior commitment” to agricultural work in the United States to obtain legal status through an Agricultural Card (blue card) Program.
  • To obtain a blue card, the agricultural worker must have performed agricultural employment in the United States for not fewer than 575 hours or 100 work days during the two-year period ending on 31 December 2012, submitted the completed application during the one-year period beginning on the date on which the final rule is published in the Federal Register, and passed the national security and law enforcement clearances as part of the application process.
  • An alien (as well as his/her spouse or child) may obtain a blue card, which will authorize the person to be employed in the United States while in such status, to travel outside of the United States, and to be admitted upon returning to the United States without having to obtain a visa.
  • Aliens who are 16 years of age or older may apply for blue card status. Applicants must pay a processing fee (in an amount yet to be determined). In addition to the processing fee, aliens who are 21 years of age or older applying for blue card status shall pay a US$100 penalty.
  • The blue card status is effective for a period of eight years. Following the eight-year period, an alien may apply for an extension of blue card status. But, after a five-year period in blue card status, the alien can also apply for a green card, if conditions are met.
  • After five years, a blue card holder can obtain a green card if DHS determines that:
    • During the preceding eight-year period, the alien performed not less than 100 work days of agricultural employment during each of five years; or
    • During the five-year period beginning on the date of the enactment, the alien performed not less than 150 work days of agricultural employment during each of three years;
    • Also, the alien must pay a fine of US$400 to apply for green card status, and the alien must have satisfied any applicable federal tax liability.
  • An employer who knows an alien employee is an applicant for blue card status or will apply for such status once the application period begins will not be considered in violation of U.S. immigration law if the employer continues to employ the alien pending the adjudication of the employee’s blue card application.
  1. Temporary non-immigrant worker program for lower-skilled positions (W visa)
  • Beginning on 1 April 2015, the bill creates a new W visa for temporary workers (including agricultural and other lower skilled workers).
  • The W-visa holder is an alien having a foreign residence who will come to the United States to perform services or labor for a registered employer in a registered position. The bill would create several categories of the W visa.
    • W-1 visa for lesser-skilled workers.
    • W-2 visa for aliens coming to the United States temporarily to perform agricultural services or labor under a written contract.
    • W-3 visa for “at-will” workers with an offer of full-time employment in an agricultural occupation.
    • The W-2 and W-3 visas would replace the current H-2A agricultural worker program.
  • An alien is not eligible to be admitted to the United States as a non-immigrant worker if the alien: (i) violated a material term of a previous admission as a non-immigrant agricultural worker during the most recent three-year period, (ii) has not obtained successful clearance of any security and criminal background checks; or (iii) departed from the United States while subject to an order of exclusion, deportation, or removal, and is outside of the United States or has reentered the United States after 31 December 2013 without consent.
  • W visas would be subject to an annual cap, which depends on the visa category and has escalation clauses for subsequent years. A certified alien may be granted W visa status for an initial period of three years and may renew his or her status for one additional three-year period.
  • Each employer seeking to employ W-2/3 agricultural workers will have to register and pay a registration fee (in an amount to be determined).
  • W-1 visa program will NOT eliminate the existing H-2B visas for seasonal or temporary workers (non-agricultural).
  1. H-1B quota for fiscal year 2014 already exhausted

On 5 April 2013, the U.S. Citizen and Immigration Services (USCIS) announced that the H-1B cap for the fiscal year 2014 has already been reached (for employment starting as of 1 October 2013). For the first time since 2008, USCIS reached the statutory H-1B cap of 65,000 for the fiscal year within the first week of the filing period (employers are allowed to file cap-subject petitions up to six months in advance of the need, so filings can be made on 1 April for a 1 October start date). USCIS also announced that it received more than 20,000 H-1B petitions filed under the separate cap for holders of U.S. advanced degrees (the so-called “master’s” cap). USCIS received approximately 124,000 H-1B petitions during the filing period, and used a computer-generated random selection process to select a sufficient number of petitions to meet the regular cap of 65,000 and the 20,000 master’s cap. USCIS will reject and return all cap-subject petitions and filing fees for cases that were not randomly selected. To read the USCIS Announcement, please click here.

USCIS will continue to accept and process H-1B petitions that are otherwise exempt from the cap, including petitions to extend the amount of time a current H-1B worker may remain in the United States, change the terms of employment for current H-1B workers, and allow current H-1B workers to change employers or work concurrently in a second H-1B position. Also, employers that are exempt from the cap (e.g., institutions of higher education and nonprofit research organizations) will be able to file new H-1B petitions as their filings are not subject to the annual quota. USCIS started expedited (premium) processing for H-1B cap cases on 15 April 2013.

In the absence of new legislation that would increase the H-1B cap, employers should consider whether other visa options may be available for individuals who are subject to the cap and have not been selected through the lottery (or whom the employers identify later in the fiscal year but cannot file a new H-1B petition due to the cap being exhausted). We would be pleased to assist you in exploring such other visa strategies (to the extent available).

  1. DHS issues final rule for electronic form I-94

On 21 March 2013, DHS issued an interim final rule, with an effective date of 26 April 2013, that will automate the Form I-94 Arrival/Departure Record to streamline the admissions process for individuals visiting the United States (including visa holders who are employed in the United States). The Form I-94 is generally issued by visa holders as evidence that they have been lawfully admitted to the United States in a specific status, with a specific period of authorized stay. The Form I-94 generally is used to verify immigration status and employment authorization (for work authorized visa holders). The revisions to the regulations are intended to enable DHS to transition to an automated process that will eliminate the need for U.S. Customs and Border Protection (CBP) to collect the paper Form I-94 information as a matter of course directly from aliens travelling to the United States by air or sea. The rollout of the electronic Form I-94 is scheduled to begin on 30 April 2013 at five pilot ports of entry (Charlotte, Orlando, Las Vegas, Chicago, and Miami airports), and will continue to expand to the remaining air and sea ports of entry over a total of four weeks.

The Form I-94 is currently a paper form that is issued to international visitors upon arrival in the United States or when changing status in the United States. The paper form consists of two parts - the arrival portion and the departure portion - which must both be filled out by the alien upon arrival in the United States and presented to the CBP Officer. The CBP Officer must then stamp the Form I-94, detach and retain the arrival portion which is to be sent to a CBP data entry facility, and return the departure portion of the Form I-94 to the visiting alien. The interim rule enables CBP to transition to an automated process whereby CBP will create an electronic Form I-94 for aliens arriving by air or sea to the United States, thereby eliminating the need for CBP to collect the paper Form I-94. Once the automated I-94 is implemented, an electronic I-94 record will be created when a traveler arrives in the United States. After the electronic record is created, the traveler will receive an admission stamp in her/his passport at the time of inspection, which will reflect information such as the type of visa status, date of admission, and duration of authorized stay. Travelers will also receive on arrival a flier alerting them to go to www.cbp.gov/I94 for their admission record information, or if they want to print out a paper copy of the electronic I-94 form. Therefore, visa holders arriving to the United States will need to pay particular attention to the entry stamp in their passports, which will provide information related to the expiration of the person’s authorized stay and to ensure that the stamp accurately reflects his/her status.

The electronic Form I-94 record will be created during the inspection process at the time of admission when the CBP Officer retrieves information from various electronic databases and enters any additional data obtained during the inspection process. Any information the CBP Officer would have written or stamped on the paper I-94 form in the past can be entered into the electronic form by the officer. To enable CBP to transition from a paper Form I-94 to a CBP-created electronic Form I-94, the rule adds a valid, unexpired nonimmigrant DHS admission or parole stamp in a foreign passport to the list of documents designated as evidence of alien registration.

The electronic Form I-94 will be made available to the alien through the website: www.cbp.gov/I94 when CBP starts its records automation on 30 April 2013. Aliens to whom an electronic Form I-94 has been issued will be able to go to the website, enter information from the passport and passport entry stamp including name, passport number, date of admission, and port of admission, receive his or her electronic I-94 number, print out a paper version of the electronic I-94, and use the print-out to present to CBP upon arrival in lieu of the departure portion of the paper form, or other benefit-granting agencies, such as USCIS, Social Security Administration Offices, Departments of Motor Vehicles, etc.

The automated process currently only applies to aliens arriving by air or sea; CBP will still need to collect Form I-94 information directly from travelers arriving by other methods of transportation. CBP also intends to continue to provide a paper Form I-94 to certain classes of aliens, such as certain refugees, asylees, and parolees. CBP anticipates expanding the automation of the Form I-94 to other methods of transportation in the future.

Nonimmigrant aliens arriving at air and sea ports will continue to have the option to request a paper Form I-94 to document class and term of admission. Both common carriers and CBP are expected to continue making paper forms available upon request. Those nonimmigrant aliens who will not have easy access to a computer and printer may wish to request a paper Form I-94. CBP officers also may continue to issue the paper I-94 at their discretion. Admission information from paper Forms I-94 will be entered manually into the CBP database.

The automation is expected to save the time and expense associated with lost Forms I-94, as visa holders will simply be able to print out a new copy of the electronic I-94 from the website rather than having to file an I-102, which has a fee of US$330, to obtain a new paper I-94 form.

However, the automated Form I-94 is also expected to present challenges with respect to other programs. For example, many of the petition and application forms promulgated by USCIS that are used to request immigration benefits, such as Forms I-129, I-130, and I-539 ask for a Form I-94 number. It appears that USCIS will expect those seeking such benefits to access the CBP website and print out the Form I-94. At present, it is still unclear whether USCIS will continue to issue Forms I-797, Notice of Action, approving applications for change or extension of status with a Replacement Form I-94 at the bottom, as is current practice.

The employment eligibility and identification process also will be affected by the automation of Form I-94. Currently, USCIS regulations authorize employers to accept a foreign passport and a properly endorsed Form I-94 or Form I-94A as proof of employment eligibility and identification for purposes of completing Form I-9. It appears that CBP anticipates that nonimmigrant alien workers will need to print out a Form I-94 to comply with this requirement. Nonimmigrant alien workers also are likely to need a printed Form I-94 in order to receive a social security number from the Social Security Administration. Finally, those seeking to utilize automatic visa revalidation (after brief trips to Canada or Mexico, when other conditions for that regulatory provision are met), following automation of Form I-94 may seek additional challenges, since CBP will need to override an alien’s automated departure record when an alien seeks re-admission under the automatic visa revalidation provision in the State Department regulations. Under the Interim Final Rule, there will be no paper form to surrender to memorialize departure. Instead, CBP will draw departure information from airline manifests and its electronic database. In addition, CBP reported that, once an alien departs, the electronic Form I-94 record will close and will no longer be available to be viewed by the individual. It remains unclear at this time by what means CBP officers will resurrect such records for automatic visa revalidation when the person wants to avail himself/herself of that regulatory provision for short visits to Mexico or Canada (when other conditions are met). However, it is expected that CBP officers will continue to have access to the electronic Form I-94 record, even though the alien who departs will not.