Immigration Reform legislation was passed out of the Senate Judiciary Committee on May 21st by a bipartisan vote of 13-5. The Senators comprising the “Gang of 8” fended off amendments and pledged to do the same when the bill arrives on the Senate floor in early June. It is expected that the bill will be debated on the floor for the entire month of June. Senate passage is not assured and hundreds of amendments may be offered that, if adopted, could change the details noted below. We anticipate that most amendments will focus on eligibility of immigrants for benefits and border security.
The path forward in the House of Representatives is less certain. A large segment of the House majority stridently opposes a path to citizenship, and any bill is likely to need a significant number of Democratic votes from the minority to pass. Nevertheless, many predict that by late Fall, a unified immigration bill could emerge and be enacted into law.
This alert is intended to serve as an advanced information piece to help clients predict and prepare for potential changes in labor, Human Resources, and immigration law that may come. It focuses on select provisions in the draft legislation of particular importance to employers and does not address every aspect of the proposed legislation.
The proposed legislation includes several provisions that would facilitate the immigration application process for employers.
- Visa Revalidation: Visa revalidation in the United States would be reinstated. Currently, applicants applying for a new visa stamp after receiving an extension of their current nonimmigrant status must attend a visa interview at a U.S. consular post outside of the United States. Under the proposed change, applicants seeking to renew E-, H-, L-, O-, P- and other visa categories would be permitted to do so without departing the United States. Qualified applicants must be “low-risk” and eligible for an interview waiver.
- Premium Processing: The Premium Processing program, now limited to specific visa categories, would become available for all employment-based immigrant petitions.
The provisions concerning H-1B visas make the visa category more accessible to employers while also providing new and additional safeguards intended to protect workers.
- Increased H-1B Cap with Possible Market-Based Adjustments: The annual quota for H-1B visas would be increased from 65,000 to 115,000 visas in the first year. Market-based adjustments would be made that raise or lower the annual limit in future years. However, the base cap could never be lower than 115,000 or higher than 180,000.
- U.S. Master’s Cap Changes: The previous system set aside an additional 20,000 H-1B visas each year for foreign nationals with advanced degrees from U.S. institutions. The Senate’s bill will increase that number to 25,000, but limit the benefit to science, technology, engineering, and math (“STEM”) graduates.
- Employment Authorization for Spouses of H-1B Holders: Dependent spouses of H-1B visa holders are given H-4 visa status. Under the current system, individuals in H-4 visa status are not offered employment authorization while in the United States, unlike the spouses of L-1 visa holders. This creates a challenge for H-1B employees, whose families must depend on only one source of income for their needs. This new provision would allow H-4 spouses to apply for work authorization. The provision would allow the Secretary of Homeland Security to suspend these benefits for persons from countries where reciprocal benefits are not offered.
- Grace Period After Termination of Employment: Currently, when an H-1B employee’s employment is terminated before the visa’s end date, there is no statutory grace period during which an employee may remain in the United States. The proposed legislation creates a 60-day grace period so H-1B employees may remain in the United States to look for new employment, change to a different visa status, or prepare to leave the United States. This would benefit employers who may hire terminated H-1B employees in the United States looking for work without having to apply through the cap.
- New Wage Methodology: The current Department of Labor (“DOL”) wage system has four tiers. The new legislation would reduce the system to three tiers. A Level 1 wage will be the mean of the lowest 2/3 of wages surveyed in a Metropolitan Statistical Area. A Level 2 wage will be the mean of all wages in that area. A Level 3 Wage will be the mean of the highest 2/3 of wages surveyed in the area. Ultimately, this transition would effectively raise prevailing wages that must be paid to H-1B employees. H-1B dependent employers will be required to pay H-1B employees at least a Level 2 wage.
- New H-1B and L-1 Visa Fees: The Department of Homeland security would collect an additional $1,250 fee for each H-1B or L-1 petition filed by employers with up to 25 employees. An additional $2,500 will be collected from employers with more than 25 full-time employees.
- New Recruitment and Advertising Requirements: The Senate’s proposed bill will require employers to post H-1B positions on a DOL website for 30 days before filing the H-1B petition. The posting will have to include wage ranges, job requirements, and how to apply for the position. The employer will be required to offer the H-1B position to any U.S. worker who applies that is equally or more qualified than the intended H-1B beneficiary. H-1B dependent employers would be required to engage in additional recruiting efforts commensurate with industry-wide standards and offer compensation at least equal to that offered to the H-1B employee.
- Non-Displacement Requirement: An employer that is not H-1B dependent must attest that for 90 days before and after filing a Labor Condition Application (“LCA”), it has not and will not displace a U.S. worker. H-1B dependent employers will have to make the same attestation, but for an extended period of time—180 days before and after the LCA filing.
- Outplacement: The proposed bill prohibits employers from outplacing, outsourcing, or leasing H-1B employees. Non-dependent H-1B employers will have to pay $500 per H-1B outplacement.
Increased Department of Labor Enforcement Authority: The amended bill will increase and expand DOL’s power to investigate, enforce, and punish H-1B violations. This includes:
- Fines for failure to meet LCA conditions and misrepresentations will increase to $2,000 and violations for willful failure to meet LCA violations will increase to $10,000. The legislation also adds to current provisions additional sources of liability, such as the whistleblower provision.
- DOL may initiate investigations without “reasonable cause to initiate,” which is the current standard.
- DOL may conduct voluntary surveys about the degree to which employers comply with LCA requirements.
- Increased Limitations Period for LCA Violation Complaints: The statute of limitations will be expanded from 12 to 24 months.
In general, the Senate bill’s provisions concerning the L-visa category place new limits and burdens on the program:
- Prohibition of Outplacement: The placement of L-1 employees at off-site locations would be further restricted by the proposed legislation. Employers would not be allowed to outsource or outplace L-1 employees unless the employee is controlled or supervised by the employer, the placement is not essentially a “labor for hire” arrangement, and a $500 fee is paid. Employers with more than 15% of their workforce on L-1B visas may not outplace.
- Amended Requirements for New-Office L-1 Petitions: The amendments to L-1 new office petitions provide some relaxation of the current rules. An L-1 employee would be permitted to work in a new office as long as the employee was not the beneficiary of two or more new office petitions in the preceding two years. The employer would have to show that the there is an adequate business plan, premises for the new office, and ability to capitalize the new office. Extension of the new office petition will look at compliance with the business plan, as the rules currently state. However, the Secretary of Homeland Security would have the discretion to extend petitions that do not strictly meet the goals of the business plan.
- Limitations on Employment of L-1 Employees: Heavy users of L-1 visas would be subject to restriction. Employers whose workforce is comprised of at least 50% H-1B or L-1B workers would be subject to certain restrictions on future filings and additional filing fees.
- Filing Fees Increased: A new $2,500 fee would be imposed for all L-1B petitions.
- Department of Labor Investigations, Enforcement, and Penalties: DOL would have increased power to investigate violations of the L-1 visa program. DOL would have the power to impose penalties and to establish a system for receiving complaints. The proposed legislation does not provide for judicial review of investigatory decisions rendered by DOL.
The F-1 student visa category would permit such visa holders to enter the United states with “dual intent” (i.e., for the purpose of remaining in the United States permanently).
Individuals in the United States on O-1 visas would be able to “port” to different employers upon the filing of a new O-1 petition.
E-visas would be available to professionals from countries with which the United States has free trade agreements.
The New Invest Nonimmigrant Visa Category
The proposed legislation creates the INVEST nonimmigrant category for qualified entrepreneurs. The visa may be issued where in the three years prior to the visa application, a nonimmigrant has had venture capital or other investors devote $100,000 to his/her business, or his/her business has created at least three jobs and generated $250,000 in annual revenue in business conducted in the United States. Extensions may be available if the business creates a minimum of three qualified jobs and investors devote no less than $250,000 to the business during the initial visa’s validity. Shorter extensions may also be available where the nonimmigrant has shown progress toward reaching the stricter criteria for the full visa renewal.
The Senate’s proposed bill also creates a new immigrant visa category for “qualified entrepreneur” aliens. Visas in this category will be capped at 10,000 per year. To qualify, the applicant must in the three years before applying have a significant ownership in a U.S. business, be employed as a senior executive in the business, and have a significant role in the founding or early-stage growth of the enterprise. The alien must have lived in the United States in legal status for the prior two years, and the business must have created at least five jobs and has received $500,000 in venture capital or other investments, or created five jobs and generated $750,000 in annual revenue in the United States during the two years prior to filing an application. This visa specifically attracts aliens with advanced STEM degrees.
E-Verify And Employment Authorization
Under this bill, E-Verify will become mandatory for all employers with more than 500 employees in the four years after the bill’s enactment. Employers will be prohibited from hiring, recruiting, or referring employees for a fee without complying document verification and other E-Verify system requirements. However, employers may rely on a state employment agency’s referral if the employer retained appropriate documentation certifying that the agency complied with document verification requirements.
If and when the bill is enacted, employers required to use E-Verify that fail to do so will be presumed to be “acting with knowledge” in hiring any worker who lacks work authorization. Employers that act in good-faith reliance on information provided by E-Verify will not be liable for employment-related action taken with respect to a job applicant or employee.
Excluding agricultural employees, employers with more than 5,000 employees will be required to use the system for all new hires and employees no later than two years after regulations are published, and employers with more than 500 employees will be required to use the system no later than three years after publication. Employers of agricultural labor or service employees are required to use the system not later than four years after the date regulations are published. In sum, all employers with over 500 employees will be required to participate in the E-Verify system no later than four years after the legislation is enacted.
Employers with fewer than 500 employees generally will not be required to use the system, but may do so on a voluntary basis. The Secretary of Homeland Security may, however, compel an employer with fewer than 500 employees to use the system if the employer has demonstrated a pattern or practice of immigration law violations.