On April 23, 2009 Assistant Senator Majority Leader Dick Durbin (D-IL) and Senator Chuck Grassley (R-IA) introduced the H-1B and L-1 Visa Reform Act. This bill seeks to drastically reform both the H-1B and L-1 guest-worker programs. The bill would impose significant new obligations and limitations on employers of H-1B and L-1 workers. It would also increase the authority of the Department of Labor (DOL) and DHS to conduct investigations and audits of H-1B and L-1 employers and increase penalties for violations. Senators Durbin and Grassley introduced a similar bill last year that never came to the full Senate for a vote. While the overall prospects for the current form of this bill passing and becoming law are unknown, employers should take note that certain provisions may find their way into more comprehensive immigration legislation as a result of political compromise.  

H-1B Provisions in the Bill

  • Labor market test and non-displacement requirements. The bill would require employers seeking to hire H-1B workers to first make a good-faith effort to recruit qualified US workers. The bill would also prohibit employers from displacing a US worker with an H-1B worker for the time period beginning 180 days before and ending 180 days after the filing of an H-1B petition. Currently, these requirements exist only for "H-1B dependent" employers, but the bill would expand the requirement to all employers.
  • Increased wage requirements. The bill would require employers to pay H-1B workers the highest of: (1) the local prevailing wage for the occupation; (2) the median average wage for all workers in the occupation in the area of employment; or (3) the median wage for the occupation for individuals working at Occupational Employment Statistics Skill Level 2. In effect, the bill would prohibit employers from paying entry-level wages to H-1B workers, even if entry-level wages were paid to similarly qualified US workers.
  • Limitations on secondary placement of H-1B workers. The bill would prohibit employers from placing H-1B workers at the worksites of other employers unless the employer first obtained a waiver from the DOL, subject to criteria set forth in the bill.
  • Recruitment and advertising limits. The bill would require employers to post jobs for which H-1B workers are sought on the DOL website. Further, it would prohibit employers from advertising for H-1B workers only and from giving preference to H-1B workers.
  • Limits on the number of H-1B and L-1 workers in an employer's workforce. The bill would prohibit employers with 50 or more US employees from filing new H-1B petitions if more than 50 percent of their workforce is in H-1B or L-1 status.

L-1 Provisions in the Bill

  • Limitations on secondary placement of L-1 workers. Similar to the provisions restricting secondary placement of H-1B workers, the bill would prohibit employers from placing certain L-1 specialized knowledge workers at the worksites of other employers unless the employer first obtained a waiver from the DOL, subject to criteria set forth in the bill.
  • Increased wage requirements. The bill would impose the same wage requirements for L-1 workers as those described above for H-1B workers. Further, employers would be required to provide working conditions that do not adversely affect the working conditions of other employees in similar positions.
  • Requirements for L-1 workers at new offices. The bill would impose obligations on employers seeking to transfer managers, executives or specialized knowledge workers to a new US office including requiring detailed business plans and a demonstration of sufficient physical facilities and financial resources to do business in the new office. Overall, this will make it more difficult for non-US companies to establish new businesses in the United States. Additionally, the L-1 petition would only be valid for an initial period of 12 months and an extension would only be granted if the employer can demonstrate that the new office followed the business plan and was regularly, systematically and continuously providing goods and services through the new office.

Expanded Authority of DOL and DHS

  • Increased audit power. The bill would permit both DHS and DOL to audit H-1B and L-1 employers without cause. Further, the agencies would be required to annually audit at least 1 percent of all H-1B and L-1 employers and any employer with more than 100 employees if more than 15 percent of the employer's workforce held H-1B or L-1 status.
  • Increased investigatory authority. The bill would give DHS and DOL the authority to investigate any complaint, including anonymous complaints, without reasonable cause. Further, complainants would have 24 months to file a complaint, up from the current 12-month limitation. Finally, there would be no time limit on investigations.
  • Increased penalty provisions. The bill would double monetary penalties for violations and material misrepresentations. It would also require employers to pay lost wages and benefits to workers who were harmed by the employers' violations. The bill would also permit the government to bar employers from seeking H-1B or L-1 workers for at least a year after a violation.