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H-1B Filing Season has Come and Gone : The Economics of Immigration

female scientistThis is becoming a terrible annual ritual. That is, April 1 has once again come and gone, a new H-1B filing season was upon us, and on April 7, 2017, U.S. Citizenship and Immigration Services (“USCIS”) once again announced that it had reached the congressionally mandated H-1B cap for Fiscal Year 2018. So the H-1B filing season, after only five (5) days (because USCIS did not start accepting petitions until Monday, April 3, 2017), is over for employers who are not eligible to file cap-exempt petitions.

The H-1B program was created so that employers can fill specialty occupation positions in their companies on a temporary basis. These are positions that typically require a Bachelor’s Degree for entry into the field. Look around today’s Capital Region, or Tech Valley as it has come to be known. These positions are vital to local employers, allowing them to be more competitive, increase growth, and yes, even create jobs for U.S. workers here.

Unfortunately, employers are being stymied by these ridiculous artificial limits which were established when I wasn’t even practicing law! And, as USCIS has done in prior years when it received well over 200,000 petitions for these coveted H-1B visas, USCIS randomly selects petitions to determine those that will have a chance at the 85,000 visas available. (Imagine telling your clients, after they’ve paid you your fees for your professional services, that a “lottery” will dictate whether their petition will be selected.)

Benjamin Johnson, Executive Director of the American Immigration Lawyer’s Association (“AILA”) was recently quoted as saying the following:

“With unemployment below 5% and an economy hungry for skilled, educated workers, why are we hampered by the arbitrary limits on this program? Instead of a lottery to funnel only 85,000 of the petitions through the process, this entire operation should be driven by market demand so that the program meets the legitimate needs of our country. Each year that we limit these visas with an artificial cap, we stifle economic growth and all of us lose out. It is an irrational system. Our immigration laws were written more than a generation ago, when Google and Amazon weren’t household names, before Twitter, Facebook, and social media itself existed. Every year that goes by without action on this and other necessary legal immigration reforms means countless opportunities lost.”

I could not agree more. The simple fact is that U.S. employers are not able to find enough, and in some cases any, highly skilled workers to fill essential positions in their businesses. There are not enough U.S. workers with advanced skills in science, technology, engineering and mathematical occupations (i.e., STEM fields) to perform the work that many high-tech companies need. Indeed, this shortage of skilled labor has forced many companies to out-source their operations abroad, something I see clients of mine struggling with every day.

I think that the arguments as to why we need to limit the amount of H-1B’s (e.g., to protect U.S. workers, wages, etc.) are generally without merit (there are some companies that endeavor to abuse the program, but in my opinion they are outliers), and the current regulations implementing the H-1B worker program protect U.S. workers, wages and so on. 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.

For example, between 1990 and 2010, the increase in STEM workers in the United States under the H-1B program were associated with a significant increase in wages for college-educated U.S. born workers in 219 cities in the United States. 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.

What about arguments that the H-1B worker program negatively affects employment rates? Not true. 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, compared to, according to the Bureau of Labor Statistics, the overall national unemployment rate. This means that the demand for labor 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? Again, not true. 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. 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.

There are exemptions to the H-1B cap that some employers are eligible for (e.g., institutions of higher education, related or affiliated non-profit entities, nonprofit research organizations, or governmental research organizations), and it’s great 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]  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).

[1] 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).

[1] Id.

[1] 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.

[1] 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.

[1] Id.

 

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.”

Obama’s Immigration Executive Action: Some Lawful Immigration Changes

So of course the centerpiece of President Obama’s administrative “fix” of our “broken immigration system” are his initiatives to grant “deferred action” to some aliens who are unlawfully present in the United States, and who were brought to the United States as children and raised here.  But the President did much more when he announced on November 20, 2014 several other initiatives which affect lawful immigration, and which are supposed to assist our country’s high-skilled businesses and workers.  Here’s a brief overview.

 1.  Immigrant Visa Issuance.  The President wants to ensure that all available immigrant visas (basically, “Green Cards”) are used each year, and the President has created a new interagency task force to modernize and streamline the immigrant visa system.  Because of delays in processing applications for immigrant visas, some visas going unused each fiscal year.  Given the unbelievable backlogs in some of the family- and employment-based immigrant visa categories, this is clearly unacceptable.  The President’s action is an attempt to ensure that all immigrant visas available for issuance in a year are used.

 2.  Optional Practical Training.  The President announced that he would expand the duration of any “optional practical training” (commonly known as “OPT”) engaged in by foreign national students who studied science, technology, engineering, and mathematics (commonly known as “STEM” fields) at institutions of higher education in the United States on F-1 nonimmigrant student visas.  The President also proposed to expand the degree programs eligible for OPT.

Presently, foreign national students studying in the United States on F-1 nonimmigrant visas may request 12 months of post degree temporary employment, or OPT, in their field of study.  In 2008, regulations were promulgated which permitted students in STEM fields to request an additional 17 months of OPT, for a total of 29 months of OPT.  However, only students in STEM fields are eligible for this 17 month extension, and these students can participate in OPT for no more than 29 months.

3Aliens Whose Admission to the United States is in the National Interest.  The President proposes to expand the use of the immigrant visa category which allows aliens with advanced degrees or “exceptional ability” to obtain an immigrant visa without a sponsoring employer if their admission to the United States is in the “national interest.”

 4.  Inventors, Researchers, and Founders of Start-up Enterprises.  The President proposes to use the authority granted to the executive branch in the Immigration and Nationality Act (“INA”) to “parole” foreign nationals into the United States when there is a “significant public benefit” to allow some inventors, researchers, and founders of start-up enterprises to enter and lawfully remain in the United States without a visa.

5.  L-1B Specialized Knowledge Aliens.  For companies who wish to hire foreign nationals as “intra-company transferees” using the L-1B nonimmigrant visa program, the President’s proposal seeks to clarify and standardize the meaning of “specialized knowledge” for purposes of the L-1B visa program.  The L-1B nonimmigrant visa allows companies to transfer certain employees who are executives or managers, or have “specialized knowledge” of the company or its processes, to the United States from the company’s foreign operations.

 6.  I-140 Portability under AC21 §106(c).  The President seeks to clarify what is meant by the “same or similar job” for purposes of INA §204(j), which provides that employment-based immigrant visa petitions remain valid when the foreign national employee changes jobs or employers so long as the new job is in the “same or similar occupational classification” as the job for which the original petition was filed.

 7.  Labor Certification (“PERM”) Modernization.  The President seeks to review the Labor Certification program (commonly called “PERM”), whereby the U.S. Department of Labor (“USDOL”) certifies that the issuance of an employment-based immigrant visa will not displace U.S. workers, or adversely affect the wages or working conditions of similarly employed U.S. workers.  More particularly, the President wants to identify methods for aligning domestic worker recruitment requirements under the PERM regulations with demonstrated occupational shortages and surpluses.

 8.  Human Trafficking and Crime Victims.  The President announced that the USDOL will certify (a) applications for T nonimmigrant visas for foreign nationals who have been victims of human trafficking, as well as (b) applications for U nonimmigrant visas for eligible victims of extortion, forced labor, and fraud in foreign labor contracting that the USDOL detects in the course of its workplace investigations.

The President announced other initiatives too (which I will write about at a later time).  As you can see from the above, not everything the President announced was controversial (even though some feel how he went about it was).  It seems clear to me, however, that what he announced was very necessary and very welcome (by most, anyway).

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