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U.S.C.I.S. Proposes the International Entrepreneur Rule

imm_2I originally wrote about this last Fall, but given the current events in Washington, the general chaotic environment that my colleagues and I are practicing in, and the great concern that clients are showing about their future prospects of remaining in the United States (whether they are here lawfully or not), I thought it appropriate to provide a positive update for the alien entrepreneurs out there.

On January 17, 2017, the Department of Homeland Security (“DHS”) published a final rule to improve the ability of certain alien start-up founders to begin growing their companies within the United States and help improve our nation’s economy through increased capital spending, innovation and job creation.

Under the new rule, effective July 17, 2017, DHS may use its “parole” authority to grant a foreign national a period of authorized stay (that is, temporary permission to be in the United States), on a case-by-case basis, to those alien entrepreneurs who demonstrate that their stay in the United States would provide a significant public benefit through the potential for rapid business growth and job creation. Those who are eligible may be granted a stay in the United States for up to 30 months, with the possibility to extend the period for an additional 30 months if they meet certain criteria, and in the discretion of DHS.

Here are the specifics. An applicant for parole would need to demonstrate that he or she meets the following criteria.

1. First, that the applicant possesses a substantial ownership interest in a start-up entity created within the past five years in the United States that has substantial potential for rapid growth and job creation.

2. Second, that the applicant has a central and active role in the start-up entity such that the applicant is well-positioned to substantially assist with the growth and success of the business.

3. Third, that the applicant can prove that his or her stay will provide a significant public benefit to the United States based on the applicant’s role as an entrepreneur of the start-up entity by:

A. showing that the start-up entity has received a significant investment of capital from certain qualified U.S. investors with established records of successful investments;

B. showing that the start-up entity has received significant awards or grants for economic development, research and development, or job creation (or other types of grants or awards typically given to start-up entities) from federal, state or local government entities that regularly provide such awards or grants to start-up entities; or

C. showing that they partially meet either or both of the previous two requirements and providing additional reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.

Under the rule, parole eligibility may be extended to up to three entrepreneurs per start-up entity, as well as their spouses and children. It is important to note that alien entrepreneurs will be only be eligible to work for their start-up business.

This recently published final rule is a legacy of former President Obama. Some of you will recall that back in 2014, because of Congressional inaction, former President Obama vowed to take whatever steps he could, short of legislation, to advance his immigration agenda, and in this case, to make it easier for alien entrepreneurs to start up or scale up their businesses. Well, he made good on his promise. (Let’s hope our current president keeps this in place, or even improves upon it. There has been a smattering of news that suggests that he may try to kill it.)

A few other important points related to all of this. First, and significantly, there is no required wage obligation for the alien entrepreneur parole beneficiary. However, to maintain parolee status, the alien entrepreneur must maintain a household income that is greater than 400 percent of the federal poverty line for his or her household size as defined by the U.S. Department of Health and Human Services (“HHS”). HHS revises these guidelines annually.

The new rule also requires the alien entrepreneurs to immediately notify U.S. Citizenship and Immigration Services (“USCIS”) of any material changes that could reasonably affect USCIS’s determination that the alien entrepreneur provides, or continues to provide, a significant public benefit to the U.S.
Finally, USCIS has indicated that the required investment and revenue amounts will be automatically adjusted every three (3) years by the Consumer Price Index and USCIS will post the required amounts on its website.

As I have previously mentioned, the investment thresholds appear not to be overly-burdensome. The rule also seems to recognize that new businesses are not all funded the same way, and provides flexibility for entrepreneurs using new or novel funding models.

So that’s the good news. The bad news continues to be that there’s no “next step” for when the entrepreneur’s parole period comes to an end. That is, unless a foreign national has a vehicle in place to become a lawful permanent resident (i.e., a Green Card holder), under the rule, they will not be allowed to change their status from their parole status to some other type of lawful nonimmigrant status while they’re in the United States. That means the entrepreneur would have to leave the United States, try to apply for a temporary visa abroad, and then re-enter the United States (assuming that’s even a viable option).

So, progress? Yes. Panacea for foreign national entrepreneurs? Not totally, but it is for sure a step in the right direction. Let’s hope it stays in place and Congress and our President improve upon it.

It’s H-1B Visa Filing Season, but is it “Cheap Labor”?

????????????????????????????????????????????????????????????????????????????????????????????????????Here we go again. The start of the H-1B nonimmigrant visa filing season is once again upon us. And once again, immigration practitioners around the country are having difficult conversations with their clients who wish to hire foreign nationals into what are called “specialty occupation” positions. But this year, with President Trump in office, will the conversations be different than in previous years?

As always, a (reminder) primer is in order. The H-1B nonimmigrant visa is a temporary visa that allows employers to petition for highly educated foreign professionals to work in “specialty occupations” (e.g., architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts). These positions typically require at least a bachelor’s degree or the equivalent for entry into the field. Typically, a foreign worker with an H-1B visa is admitted to the United States for a period of up to three years, and his or her visa may be extended for a maximum of six years. (There are some exceptions to this.)

Notwithstanding what you read in the news, before an employer can file an H-1B petition with U.S. Citizenship and Immigration Services (“USCIS”), the employer must first take steps to ensure that hiring the foreign worker will not harm U.S. workers. First, employers must attest, on a Labor Condition Application (“LCA”) filed with and certified by the U.S. Department of Labor (“DOL”), that employment of the H-1B worker will not adversely affect the wages and working conditions of similarly employed U.S. workers. (More on this below.) Employers must also provide existing workers with notice of their intention to hire an H-1B worker.

Since the H-1B category was created in 1990, Congress has limited the number of H-1B visas made available during each government fiscal year. The current annual cap is 65,000 visas, with 20,000 additional visas for foreign professionals who have graduated with a Master’s or Doctoral degree from a U.S. university. As I have indicated in previous articles, in recent years, the H-1B cap has been reached only a few days after the visas were made available.

Over the past year or so, now President Trump has spoken a lot about our immigration system, his theme being that we need to protect American workers. Although a lot of attention was placed on “building a wall” on our Southern Border, and making “Mexico pay for it”, a good deal was also said about overhauling other aspects of our immigration system, including the H-1B program.

During his campaign for president, then candidate Trump said the H-1B visa program was a “cheap labor program” that takes jobs from Americans workers.

Megyn Kelly asked about highly-skilled immigration. The H-1B program is neither high-skilled nor immigration: these are temporary foreign workers, imported from abroad, for the explicit purpose of substituting for American workers at lower pay. I remain totally committed to eliminating rampant, widespread H-1B abuse and ending outrageous practices such as those that occurred at Disney in Florida when Americans were forced to train their foreign replacements. I will end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers first for every visa and immigration program. No exceptions.”

“Cheap labor program”? Reality or myth?

I’ve written so much about this in the past couple of years my head is about to spin. There is a plethora (yes, a plethora) of evidence that foreign workers fill a critical need in our labor market, particularly in the STEM fields (i.e., Science, Technology, Engineering and Math). Foreign workers, including skilled foreign workers, help create new jobs and new opportunities for economic expansion.

So how do H-1B workers impact wages? Well, for starters, here are a few things to consider. As I noted above, prior to filing an H-1B petition with USCIS on behalf of a foreign worker, the employer must first file and have certified an LCA with the DOL. The LCA contains several attestations that the employer is required by law to make before the DOL may certify the LCA.

These attestations include, among others, that the employer will pay the required wage rate to the H-1B workers employed pursuant to the LCA. The required wage rate must be the greater of (1) the actual wage level paid by the employer to all other individuals at the job site “with similar experience and qualifications for the specific employment in question,” or (2) the prevailing wage level for the occupation in the area of intended employment. Cheap labor program? I think not.

Another attestation the employer must make is that it will offer the same benefits package on the same basis to similarly employed U.S. workers and H-1B workers. Eligibility and participation criteria must be the same for all workers. H-1B workers cannot be denied benefits because they are “temporary employees.” The employer must also attest that employment of H-1B workers will not adversely affect the working conditions of workers similarly employed in the area of intended employment.

A violation of any one or more of these attestation can result in serious penalties to the employer, and ultimately in debarment from participating in the H-1B program.

So, what is the empirical evidence as to wages? According to one study, H-1B-driven increases in STEM workers were associated with a significant increase in wages for college-educated, U.S.-born workers in 219 U.S. cities. In fact, a one percentage point increase in foreign STEM workers’ share of a city’s total employment was associated with increases in wages of 7 to 8 percentage points paid to both STEM and non-STEM college-educated natives, while non-college educated workers saw an increase of 3 to 4 percentage points.

What else you ask? According to another study, from 2009 to 2011, wage growth for U.S.-born workers with at least a bachelor’s degree was nominal, but wage growth for workers in occupations with large numbers of H-1B petitions was substantially higher.

There is other data as well. And not only do H-1B workers positively impact wages, they positively impact employment rates as well.

Bottom line, there are too many myths (dare I say “fake news”) perpetuated about the H-1B visa category, and not enough focus on the important contributions H-1B workers make to the U.S. economy.

Creative Lawyering for Colleges, Universities and Entrepreneurs

droopy flagI saw an interesting article the other day in the Connecticut Law Tribune.  The premise of the article related to institutions of higher education using “creative solutions” to deal with the lack of available H-1B nonimmigrant worker visas for their graduates who wish to remain in the United States as entrepreneurs.  A little background (or refresher for some of you) is probably in order.

The H-1B nonimmigrant visa (or status) may be granted to foreign nationals who will perform services in a “specialty occupation.”  A specialty occupation requires the theoretical and practical application of a body of highly specialized knowledge and the attainment of a bachelor’s or higher degree, or its equivalent, as a minimum requirement for entry into the occupation in the United States.  Examples of speciality occupations include architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts.

The U.S. government operates on a fiscal year basis that begins each year on October 1 and runs through the following September 30.  For those employers who wish to hire foreign nationals as H-1B workers, unless the position is “exempt”, a key concept here, there is an annual cap of 65,000 nonimmigrant visas that are available in each fiscal year (and an additional 20,000 H-1B nonimmigrant visas for foreign nationals who have earned a master’s degree or higher from a U.S. institution of higher education).  In recent years, the H-1B cap has been reached within days of April 1 (which is the first day that cap-subject employers can file a petition with USCIS for the non-exempt H-1B visa numbers).  Because of the incredible popularity of the H-1B worker program, which has resulted in the H-1B cap being reached within days of April 1 each and every year in recent memory, not every cap-subject employer is able participate in the H-1B program in a given fiscal year.

Consequently, employers, and yes, now even institutions of higher education, are trying to think outside the box so they can retain some of the best and brightest minds from having to leave the United States after they’re educated in the United States.  In doing so, these institutions of higher education are partnering with states and cities across the country to create programs that take advantage of an exemption to the H-1B cap for foreign nationals that are employed (or have received an offer of employment) by or from an institution of higher education or a related or affiliated nonprofit entity, or a nonprofit research organization or a governmental research organization.

Being employed by an institution of higher education is a wonderful exemption, and I am able to use it in my practice for clients every day.  But in addition to that, entities affiliated or related to institutions of higher education and nonprofit and governmental research organizations (that is, not the actual institutions of higher education themselves) are also eligible to petition for eligible foreign nationals.  According to the Adjudicator’s Field Manual (which is what USCIS examiners use as a reference when they are adjudicating H-1B petitions):

Congress deemed certain institutions worthy of an H-1B cap exemption because of the direct benefits they provide to the United States. Congressional intent was to exempt from the H-1B cap certain alien workers who could provide direct contributions to the United States through their work on behalf of institutions of higher education and related nonprofit entities, or nonprofit research organizations, or governmental research organizations. In effect, this statutory measure ensures that qualifying institutions have access to a continuous supply of H-1B workers without numerical limitation. … Congress chose to exempt from the numerical limitations… aliens who are employed ‘at’ a qualifying institution, which is a broader category than aliens employed ‘by’ a qualifying institution. This broader category may allow certain aliens who are not employed directly by a qualifying institution to be treated as cap exempt when needed to further the essential purposes of the qualifying institution.”

AFM ch. 31.3(g) (13), H-1B Classification and Documentary Requirements.

So, one scenario that employers can consider to use this exemption is by having a “third-party petitioner” file the H-1B petition to employ a foreign national who will perform all or a portion of his or her job duties “at” a qualifying institution of higher education (e.g., basically, a private company sponsors a foreign national, and some of the job duties are performed “at” the institution of higher education).  There are other possibilities as well.  The third-party petitioner must establish that there is a logical nexus between the work predominately performed by the foreign national and the normal mission of the qualifying sponsoring entity.  Specifically, the third-party petitioner must demonstrate how the foreign national’s duties are directly and predominately related to, and in furtherance of, the normal, primary or essential purpose, mission, objectives or function of the qualifying institution, namely, higher education or nonprofit or governmental research.  There are plenty of ways to accomplish this.

Also important for this creative lawyering example, and highlighted by the article in the Connecticut Law Tribune, is that once the foreign national is employed by the cap-exempt employer, a cap-subject employer can then concurrently file their own H-1B petition on behalf of the same foreign national to allow them to also work for the cap-subject employer part-time. Because these foreign nationals are already working at least part-time for a qualified institution, this concurrent petition is also exempt from the H-1B cap (despite being filed by an employer that is otherwise subject to the cap).

Until there is an expansion of the H-1B program specifically, and reform to our immigration system in general, immigration lawyers are being forced to be more creative to accomplish the goals of their clients.  This is just one example of what’s possible.

 

U.S.C.I.S. Proposes the International Entrepreneur Rule

imm_3I think my colleagues in the immigration bar will agree that in order to achieve your client’s immigration goal, whatever it may be (e.g., a “Green Card,” citizenship, or whatever), sometimes you need to take baby-steps (e.g., enter the U.S. on a temporary visa before you try to obtain a Green Card). I’ve over-simplified the example, but the point remains the same. And sometimes, unfortunately, there are a lot of baby-steps that need to be taken during the process.

Here’s another issue. I recently had a conversation with a client about how to get a prospective hire into the United States to he could work for the client (in the absence of any immediately available H-1B nonimmigrant worker visa numbers). I told my client he had two (2) options. First, he could wait until Spring, 2017, file a petition with to U.S. Citizenship and Immigration Services (“USCIS”) to qualify his prospective hire as an H-1B nonimmigrant worker, hope that petition would be one of the lucky 65,000 petitions selected by USCIS, and then wait for an October 1, 2017 start date. His second option would be to engage in what I described as some “creative lawyering” and hope for the best. His immediate response to the latter was, “that sounds expensive.” And it would be, with no assurances that it would work.

Alas this is often what my colleagues and I would have to explain to foreign national entrepreneurs when they want to be part of a “start-up” company, either as an investor-owner and/or as an employee. The path to permanent residence (i.e., a Green Card) is not easy, usually time-consuming (i.e., years and years and years), often expensive, and unfortunately, never a sure thing.

Well that may soon be changing, at least in terms of getting away from “creative lawyering.” On August 26, 2016, USCIS announced the proposal of a new rule, which would
allow certain international entrepreneurs to be considered for “parole” (that is, temporary permission to be in the United States) so that they may start-up or scale their businesses in the United States.

The new rule would allow DHS to use its existing discretionary statutory parole authority for entrepreneurs of startup entities whose stay in the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation. Under the rule, DHS may parole, on a case-by-case basis, eligible entrepreneurs of startup enterprises: (a) who have a significant ownership interest in the startup (at least 15 percent) and have an active and central role to its operations; (b) whose startup was formed in the United States within the past three (3) years; and (c) whose startup has substantial and demonstrated potential for rapid business growth and job creation, as evidenced by: (1) receiving significant investment of capital (i.e., at least $345,000.00) from certain qualified U.S. investors with established records of successful investments; (2) receiving significant awards or grants (i.e., at least $100,000.00) from certain federal, state or local government entities; or (3) partially satisfying one or both of the prior two criteria in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation.

Under the rule, foreign national entrepreneurs may be granted an initial stay of up to two (2) years to oversee and grow their startup entity in the United States. In addition, USCIS would entertain a later request for re-parole (for up to three [3] additional years) if the foreign national entrepreneur and the startup entity continue to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue or job creation.

In general, most commentators agree that the proposed parole period is very reasonable, and the investment thresholds appear not to be overly burdensome. Indeed, the proposed rule seems to recognize that new businesses are not all funded the same way, and provides flexibility for entrepreneurs using new or novel funding models.

While the rule is not yet final, my primary concern is next steps once an entrepreneur’s parole period comes to an end. That is, unless a foreign national has a vehicle in place to become a permanent resident, under the proposed rule, they will not be allowed to change their status from their parole status to some other type of lawful nonimmigrant status while they’re in the United States. That means the entrepreneur would have to leave the United States, try to apply for a temporary visa abroad, and then re-enter the United States (assuming this is even a viable option).

While this is not the panacea perhaps foreign national entrepreneurs would hope for, it’s definitely a step in the right direction. Stay tuned for the final rule.

Proposed STEM OPT Extension and “Cap Gap” Relief

female scientistOn October 19, 2015, the Department of Homeland Security (“DHS”) published a notice of proposed rulemaking in the Federal Register seeking to improve and expand training opportunities for F-1 nonimmigrant students with science, technology, engineering or math degrees (commonly referred to as “STEM” degrees). The rule also proposes to expand what is called “cap-gap” relief for all eligible F-1 nonimmigrant students.

While this is a welcome regulation, and there’s a litigation aspect to it that I will not get into here (but probably should given my audience), the fact that we need this regulation at all is just another example that our immigration system is broken.

A brief primer on “practical training.”  Practical training may generally be defined as experiential learning, including paid employment or an unpaid internship, directly related to a student’s major area of study.  It may be authorized for F-1 nonimmigrant students who have been enrolled in a DHS-approved college, school, university, conservatory, or seminary for one full academic year.  There are two kinds of practical training available: (1) curricular practical training; and (2) optional practical training (“OPT”). OPT is the subject of this article.

Generally, students may be authorized for up to 12 months of OPT at each higher level of postsecondary education.  For example, a student may take 12 months of OPT during his or her bachelor’s level, an additional 12 months at his or her master’s level, and an additional 12 months at his or her doctoral level.

It is typically during OPT that a student identifies an employer that may wish to sponsor him or her for longer term temporary or permanent employment.  That requires the employer to sponsor the student, more often than not by filing a petition with U.S. Citizenship and Immigration Services (“USCIS”) to change the student’s nonimmigrant status, usually to an H-1B nonimmigrant worker status.  The problem is, there are more employers wishing to petition for their workers than there are H-1B visas available, and often both employer and student are shut out of the H-1B program as a result.

A related and important issue is that typically a student’s post-completion OPT will run out months before he or she will be eligible for H-1B nonimmigrant worker status, assuming they were one of the lucky ones to be selected.  This brings in the concept of the “cap-gap.”

Spring postsecondary school graduates often face a gap in their period of authorized stay in the United States.  Typically it is the period between the end of their OPT and the beginning of their H-1B nonimmigrant worker status (which is generally October 1, the first day of the government’s fiscal year).  To deal with this, DHS issued an interim final rule in April, 2008 (the same rule that created the STEM extension and which is the subject of the litigation that I am not writing about), commonly referred to as the “cap gap rule.”  It offers an “automatic” extension of the student’s F-1 nonimmigrant status, including any OPT employment authorization that may have been authorized, until October 1 of the fiscal year for which a student is the beneficiary of a timely filed H-1B petition requesting a change of status to H-1B nonimmigrant worker status.  This regulation essentially provides continuing work authorization during the “cap gap” for students engaged in post-completion OPT who are also the beneficiaries of such H-1B petitions.

Under the 2008 interim final rule, F-1 nonimmigrant students who earn a degree in a STEM field may be eligible for an extension of their post-completion OPT for up to 17 months, for a total of 29 months of OPT.  U.S. Immigration and Customs Enforcement’s (“ICE”) Student and Exchange Visitor Program (“SEVP”) has designated certain Classification of Instruction Programs (“CIP”) codes assigned to major fields of study to constitute the eligible “STEM fields.”  While a student may be eligible for additional periods of OPT at each higher level of study, the STEM extension is a one-time benefit, and may be granted only if a student is currently engaged in OPT based on a STEM degree.  (To be eligible for a STEM extension, a student must also have an employer who is enrolled in the E-Verify program.)

The new rule would, among other things, extend the STEM OPT period to 24 months, allow an additional period of OPT for subsequent degrees, and even provide STEM OPT eligibility for a prior degree.  Very importantly for practitioners in this area, the rule also clarifies which occupations qualify.  The new rules also leaves open the possibility of adding eligible fields in the future.  Finally, and importantly, the new rule provides continued “cap gap” relief.

These changes are critical to attracting foreign students to our colleges and universities, and to encourage the pursuit of practical training from leading, innovative businesses in the United States. U.S. businesses that provide STEM OPT training opportunities benefit from this program through employee retention and a strengthened market position both domestically and abroad.
Once again, however, I will stand on my soap box and say our country still needs comprehensive immigration reform.  For the time being, however, we’ll once again need to satisfy ourselves with these regulatory “baby steps.”

The Visa Bulletin : What is it and How is it Used?

boydadimmigrationrallySomething a little different, but if you’re advising a client who is waiting in line for an employment-based or family-based immigrant visa (e.g., basically, a Green Card), it’s critical that you know what the Visa Bulletin is, and how to use it.

So what’s the Visa Bulletin?  The Immigration and Nationality Act (“INA”) creates annual limits on the number of immigrant visas that the U.S. Department of State (“DOS”) may issue to applicants worldwide in each government fiscal year.  For family-based immigrant petitions, the limit is 226,000 immigrant visas per year.  For employment-based immigrant petitions, the limit is 140,000 immigrant visas per year.[1]

The INA has also established an “immigrant numerical allotment and control system” which, as the phrase suggests, controls how these annual immigrant visas are allocated within the groups referenced above.

The immigrant numerical allotment control system is administered by the DOS, and specifically the DOS’s Visa Office.  Each month, the DOS publishes the Visa Bulletin, which summarizes the availability of immigrant visas as allocated among the various family- and employment-based immigrant “preference” categories in light of the numerical limitations noted above.  Every month, the Visa Office determines the number of immigrant visas used thus far in the fiscal year, and then estimates future use and demand.  In doing so, it is able to report which categories are “current” (i.e., immigrant visas are available), and which categories are “oversubscribed” (i.e., there is a backlog).

By reviewing the Visa Bulletin, you can (very) generally advise your client when he or she may be able to apply for an immigrant visa (if they are currently outside the United States) or for their Green Card (if they are currently inside the United States) in light of what your client’s “priority date” is.[2]

Recently, U.S. Citizenship and Immigration Services (“USCIS”), in coordination with the DOS, reported that they were revising the procedures for determining immigrant visa availability for applicants who were in “oversubscribed” family- and employment-based preference categories.  As reported, the revised process is intended to enhance DOS’s ability to more accurately predict overall immigrant visa demand and determine the cut-off dates for immigrant visa issuance published in the Visa Bulletin.  This was really good news.

In reporting this good news, the DOS revised the Visa Bulletin to now include “Application Final Action Dates”, which are the dates when immigrant visas may finally be issued, and “Dates for Filing Applications”, which are the earliest dates when applicants may be able to apply for their immigrant visas (or their Green Cards, if they are presently in the United States).

Under this new process, if an intending immigrant is presently in the United States, and has a “priority date” earlier than the listed “filing date” for their particular immigrant visa category in the Visa Bulletin, they will now be able to file their applications for their Green Card earlier than they would have been allowed under the old process. (However, they still have to wait for the “final action” date to become current before their permanent residence can be approved.)

For those intending immigrants who are in the United States and are stuck in a category that is substantially oversubscribed, this means they will be able to receive employment authorization and travel documents earlier than they would have under the old system (still while they await final action on their cases).  Again, this is a really big deal (in a time when comprehensive immigration reform has been stymied at every turn).

Our country still needs comprehensive immigration reform.  Without it, however, I suppose we’ll have satisfy ourselves for the time being with these regulatory “baby steps.”

[1] There is actually a third category, for what are referred to as “Diversity” immigrants, and the annual limit in this category is 55,000 immigrant visas year.

[2] A priority date is generally the date when the applicant’s relative or employer properly filed the immigrant visa petition on the applicant’s behalf with USCIS. If a labor certification is required to be filed with the applicant’s immigrant visa petition, then the priority date is when the labor certification application was accepted for processing by the U.S. Department of Labor.

H-1B Filing Season Comes and Goes: Why the Cap Should be Raised

????????????????????????????????????????????????????????????????????????????????????????????????????So, a little more than a year has passed since I wrote about the 2015 – 2016 H-1B filing season being upon us, and here we are again.  April 1 has now come and gone, a new H-1B filing season was upon us, because on April 7, 2015, U.S. Citizenship and Immigration Services (“USCIS”) announced that it had reached the congressionally mandated H-1B cap for Fiscal Year 2016. So the H-1B filing season, after only seven (7) days, is over for employers who are not eligible to file cap-exempt petitions. What am I talking about?

A little reminder about the H-1B nonimmigrant worker program.  An H-1B nonimmigrant visa (or status) is a temporary visa (or, as noted, a status) that may be granted to a foreign national who will perform services in a “specialty occupation.”  A specialty occupation requires the theoretical and practical application of a body of highly specialized knowledge and the attainment of a bachelor’s or higher degree, or its equivalent, as a minimum requirement for entry into the occupation in the United States.  Representative examples of specialty occupations include architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts.

Since 1990 (which was the start of the H-1B program), Congress has placed a statutory limit on the number of H-1B nonimmigrant visas made available during each government fiscal year (unless an exemption applies to a petitioning employer). The current statutory cap is 65,000 visas per year, with an additional 20,000 visas for foreign national professionals who have graduated with a Masters or higher degree from a United States college or university.  In recent years, the statutory limit has been reached within days of April 1, which is the first day that H-1B visas are made available for the fiscal year that starts on October 1.

So what does U.S. Citizenship and Immigration Services (“USCIS”) do when there are more employers filing petitions than there are H-1B visas available?  They employ a lottery to choose whose petition will be adjudicated and whose will be rejected.  Imagine telling your client, after they’ve paid your fees to get their case prepared and filed, the USCIS may not select their case to be adjudicated!

That’s right, due to incredibly high demand, USCIS uses a random selection process for all cap-subject petitions received within the first five business days available for filing H-1B petitions in a given fiscal year. (It’s a little more complicated than that with the inclusion of the U.S. Master’s or higher degree exemption limit being factored into the mix, but the point remains the same.)

Which of course begs the question whether the cap makes sense.  According to USCIS, in the last ten years, six times the cap has been reached in less than ninety days.[1] In four of those years, the cap was reached in six days or less.  This year it was seven (7) days.

I’ve heard (probably) all of the arguments as to why we need the cap (e.g., to protect U.S. workers, wages, etc.).  In my opinion, the current regulations implementing the H-1B worker program do that just fine.  The simple fact is, and the evidence and literature amply supports the proposition, that the H-1B worker program impacts our economy and employment opportunities of U.S. born workers in a very positive manner.[2]

For example, between 1990 and 2010, the increase in STEM workers in the United States under the H-1B program (i.e., those working in the science, technology, engineering or math fields) were associated with a significant increase in wages for college-educated U.S. born workers in 219 cities in the United States.[3]  In addition, H-1B-driven increases in STEM workers in a city were associated with an increase in wages of 7 to 8 percentage points paid to both STEM and non-STEM college educated U.S. workers, while non-college educated workers saw an increase of 3 to 4 percentage points.[4]

What about arguments that the H-1B worker program negatively affects employment rates?  Bologna. (I haven’t seen, let alone written, that word in 30 years!)  The simple fact is that H-1B workers complement U.S. workers, fill employment gaps in many STEM fields, and expand job opportunities for everyone.

The evidence shows that unemployment rates are low for occupations that use large numbers of H-1B visas.  For example, many STEM occupations have very low unemployment,[5] compared to, according to the Bureau of Labor Statistics, the overall national unemployment rate. This means that the demand for labor that exceeds supply.

Finally, what about those that argue that the benefits of the H-1B program are limited to those involved in technology fields?  Some even argue that H-1B visas are all taken by Silicon Valley companies.  Some even say Microsoft and Google take them all by themselves?  Wrong!  According to data published by the Brookings Institution, in the 2010 – 2011 fiscal year, there were 106 metropolitan statistical areas across the United States that had at least 250 requests for H-1B workers.[6]  And while there are admittedly a lot of H-1B workers that are filling STEM occupations, there is also a significant amount of demand for H-1B workers in healthcare, business, finance, and life science fields.[7]

There are exemptions to the H-1B cap that some employers are eligible for (e.g., institutions of higher education, a related or affiliated non-profit entity, a nonprofit research organization, or a governmental research organization), and it’s a pleasure to represent entities that have an exemption available to them.  But the simple fact is, the cap should be raised, significantly, or even eliminated.  The evidence is clear that the H-1B visa program enhances our economy in so many important ways.

 

[1] U.S. Citizenship and Immigration Services, “USCIS Reaches H-1B Cap,” 2005; see also U.S. Citizenship and Immigration Services, “USCIS Reaches H-1B Cap,” 2006 – 2014.

[2]  See, e.g., Nicole Kreisberg, “H-1B Visas: No Impact on Wages” (Great Barrington, MA: American Institute for Economic Research, 2014); Giovanni Peri, Kevin Y. Shih, Chad Sparber, and Angie Marek Zeitlin, Closing Economic Windows: How H-1B Visa Denials Cost U.S.-Born Tech Workers Jobs and Wages During the Great Recession (New York, NY: Partnership for a New American Economy, 2014); Giovanni Peri, Kevin Y. Shih, and Chad Sparber, “Foreign STEM Workers and Native Wages and Unemployment in U.S. Cities,” NBER Working Paper No. 20093 (Cambridge, MA: National Bureau of Economic Research, 2014).

[3] Giovanni Peri, Kevin Shih, and Chad Sparber, “Foreign STEM Workers and Native Wages and Employment in U.S. Cities” (Cambridge, MA: The National Bureau of Economic Research, 2014).

[4] Id.

[5] Information Technology Industry Council, the Partnership for a New American Economy, and the U.S. Chamber of Commerce, Help Wanted: The Role of Foreign Workers in the Innovation Economy (Washington, DC: December 2012), pp. 2-3.

[6] Neil G. Ruiz, Jill H. Wilson, and Shyamali Choudhury, “The Search for Skills: Demand for H-1B Immigrant Workers in U.S. Metropolitan Areas” (Washington, DC: The Brookings Institution, 2012), p. 1.

[7] Id.

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