Exploring the Fine Print

From new visa categories to more benefits to work visa holders, a closer look at some lesser-known provisions of the Senate's immigration bill reveals some interesting findings.

Friday, October 4, 2013
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The Border Security, Economic Opportunity, and Immigration Modernization Act that was passed by the U.S. Senate in June is widely known for four much-reported and heavily negotiated components:  1) legalizing approximately 11 million undocumented people; 2) strengthening border security; 3) raising the annual quota on H-1-B professionals; and 4) expanding available visas for unskilled workers.  However, it also contains a number of lesser-known and less controversial provisions that could impact employers of foreign workers in important ways. Although the House of Representatives will likely debate and vote on a number of separate smaller bills, rather than formally take up the Senate bill, many of these lesser known provisions -- safely out of the critical glare of the media lights -- have a good chance of finding their way into any final immigration legislation that Congress passes in the short term.  This article will briefly describe some of these provisions and explain their significance for employers.

Changes to the H-1B Program

The headlines rang out that the Senate bill raises the annual quota for the H-1B visa, the primary visa category for professional, or "specialty occupation," workers from 65,000 to a fluctuating number between 115,000 and 180,000. The intent behind this change is to make it easier for employers to hire H-1B workers when they need them, instead of being bound to the limits of the annual 65,000 quota, which is far exceeded by recent demand for H-1B visas.  However, the Senate bill also includes a number of changes to the H-1B program that make it more difficult for employers to hire foreign talent. 

The first change is cost.  The Bill increases the filing fees for H-1B workers and L-1 workers by imposing an additional fee of $1,250 for employers with up to 25 full time equivalent employees and $2,500 for employers with more than 25 full time equivalent employees.  It also increases the minimum salary that employers must pay H-1B workers by altering the prevailing wage survey to weigh heavily toward the higher end of the positions surveyed.

Outplacement also comes at an additional cost.  Under the Bill, employers that place H-1B workers at client sites are required to pay a fee of $500 per outplaced worker.

In addition, the Senate bill requires employers to publicly recruit, including a posting on a DOL website, for 30 days before filing a Labor Condition Application, the first step in the H-1B petition process.

The Senate bill is particularly harsh on "H-1B dependent" employers.  These employers must pay an additional surcharge of $5,000 or $10,000 per H-1B or L-1 worker.  In addition, following a phase-in process, the Bill bans companies where 50 percent of the workforce are H-1B or L-1 workers from petitioning for H-1B or L-1 workers.  Finally, H-1B dependent employers are barred from out-placing H-1B workers, effectively decimating a large part of the IT consulting industry.

One welcome change is a statutory grace period of 60 days following termination of H-1B employment.  During this period, the employee is permitted to remain in the U.S. and apply to change or adjust his or her status.

New Visa Categories

The Senate bill creates a number of new and useful employment-based visa classifications. For example, the Bill greatly increases the number of individuals who are eligible for the E treaty-based visa. Beyond nationals of countries with which the United States has a treaty of commerce and navigation, the Bill expands the E visa category to nationals of countries with which the United States has a bilateral investment treaty and/or a free trade agreement.  In addition, the Bill allows specialty occupation workers who are nationals of those countries with which the U.S. has a free trade agreement to work in the United States without an H-1B visa, even if the company has not shown international trade with, or substantial investment in, the U.S.  The Bill also permits citizens of certain economically disadvantaged African and Caribbean countries to work in professional or non-professional positions in the U.S.  Finally the Bill amends the E-3 category, which is currently only for specialty occupation workers from Australia, to include nationals of the Republic of Ireland who meets certain educational and experiential requirements and work in professional and non-professional occupations.

Of particular interest is a new non-immigrant visa that affords foreign executives and managers permission to enter the U.S. for up to 90 days to oversee operations at related companies in the U.S.  The Bill also creates a non-immigrant visa to allow foreign employees of multinational corporations to enter the U.S. for up to 180 days to observe operations at related U.S. entities and participate in training.  These new visa classifications would be particularly helpful for companies that transfer employees for what is more than a traditional business visit, but less than a foreign assignment.  These visas would give multinational employers an opportunity to bring certain employees back and forth from the United States without having to choose between a full blown work visa and tip toeing through a gray zone.

Investment Visas

The Senate bill makes the EB-5 investor green card program, which currently is reconsidered and extended every few years, permanent.  In addition, the Senate bill establishes two new investment-based categories.  First, it creates the "X" visa for non-immigrant "qualified entrepreneurs" who have raised at least $100,000 from a qualified investor or establishes three jobs and generated $250,000 in U.S.-based revenue.  The Bill also establishes a "qualified entrepreneur" green card for individuals who have started a business in the U.S., created a certain number of jobs and received $500,000 in qualified investments or generated $750,000 in revenue. 

More Benefits for Work Visa Holders

Since it was introduced as part of the American Competitiveness in the Twenty First Century Act of 2000 (AC21), many employers have become accustomed to the benefits of "H-1B portability" -- the rule that allows H-1B workers to change employers and begin working at the new job upon filing of the new employer's petition.  The Senate bill extends the concept of portability to O-1 (individuals of extraordinary ability) employees to allow them to begin working at a new employer as soon as a petition is filed, without having to wait for a formal approval.  In addition, the Bill directs the Department of Homeland Security to adjudicate all O and P petitions for individuals working in the arts (excluding athletes) within 14 days. This would be an extremely helpful benefit, particularly for the entertainment industry, which often utilizes the O and P visa categories for talent and, due to tight production deadlines, regularly requires employers to start "yesterday." 

The Bill also grants spouses of H-1B visa holders (with certain exceptions) permission to work in the United States, a long awaited development for foreign employees.  Indeed, the inability of a spouse to earn additional income and realize self-fulfillment through employment can impact an H-1B worker's performance and longevity in a U.S. role.

Finally, the Bill brings back in-country visa revalidation after a 12-year hiatus.  The Bill allows many non-immigrants to renew the visa stamp in their passports without having to leave the United States during the process.  This change would be greatly appreciated by employees who often have to impose upon their professional and personal commitments to spend a week or two (and in some cases longer) in a foreign country simply to renew a visa stamp in the passport to allow them to travel internationally. 

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Reduction of the Green Card Quota Backlog

As only a certain number of green cards may be issued annually for each category and each country, many employment-based green applicants must wait years -- and in some cases many years -- on the quota waiting line.  Under the Senate bill, the employment-based quota wait is no longer tied to the employee's country of birth, which means that applicants born in "oversubscribed" countries, such as China and India, will be in the same waiting line as applicants born in countries with fewer immigrants to the U.S.  Further, the Bill implements a number of changes to significantly reduce the backlog in the short term and eliminate the entire backlog within seven years.

A reduced backlog would impact green card planning for employers and employees, as it will provide for a more predictable timetable for the green card application process.  It would also require employers to be prepared to pay the wage offered in the green card petition at a foreseeable time, rather than off in the hard-to-see future.  In addition, while in the current situation employees with long-backlogged green card cases often leave employers rather than wait for such a long time at one employer, shorter quota waits could induce employees to stay at the same employer until the green card process is complete.

Labor Certification Fee

For years, critics have noted that the Application for Employment Certification, the first step in many green card application processes, which is filed with the U.S. Department of Labor, has no filing fee.  Under the Bill, the application comes with a $1,000 filing fee.  This is an additional cost for an employer to consider, but it likely would not dissuade employers from applying, as the application and all associated advertising costs already typically run well in excess of $5,000.

Mandatory e-Verify

E-Verify is a government program that requires participating employers to enter I-9 data for new employees into a government database in order to confirm employment eligibility.  While E-Verify is currently largely a voluntary program and only mandatory for employers who do business in, or with, certain states or employers who contract with the Federal government, the Bill makes E-Verify mandatory for all U.S. employers, following a phase-in period.

In order to participate in E-verify, employers would need to train HR personnel and dedicate additional internal or outsourced resources to managing the input of new hire information into the system and monitoring the government's responses to employer's E-verify queries.

Complementing the mandatory use of E-verify is a significant increase in the fines for non-compliance or hiring an unauthorized worker.

Any final comprehensive immigration legislation in Congress is likely to include a number of the lesser-known and less controversial provisions of the Senate Bill.  Many of these provisions will impact - both positively and negatively -- the way in which employers utilize the U.S. visa system to hire foreign workers.  Prudent employers are advised to consider the potential effect of these proposed changes on their respective immigration programs and stay tuned for further developments.

Avram E. Morell is a partner in Pryor Cashman's business immigration law group in New York.


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