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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. 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.
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. 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? 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, 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. 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, 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.
 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.
 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).
 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).
 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.
 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.
Immigration Reform by Regulations: 97K Spouses Will Be Able To Work!
We are very fortunate to represent many employers who sponsor foreign nationals as H-1B nonimmigrant workers. One of the biggest challenges in working with H-1B nonimmigrant workers is explaining that their dependent spouse cannot also work in the United States. This is about to change for some.
As a reminder, an H-1B nonimmigrant worker is someone who works in a “specialty occupation,” which is an occupation that requires the theoretical or practical application of a body of highly specialized knowledge. Examples of H-1B specialty occupations are scientists, engineers, or computer programmers. H-1B nonimmigrant workers are admitted for an initial three year period, and their employers can extend that up to a maximum limit of six years.
Some H-1B nonimmigrant workers can actually extend their H-1B nonimmigrant status beyond the six years. For example, if their employer (or a prospective employer) filed a permanent residence application prior to the end of their fifth year of H-1B eligibility. Another example would be if the H-1B worker has a Labor Certification Application (commonly known as a PERM application) approved by the U.S. Department of Labor and an I-140, Immigrant Petition for Alien Worker, approved by U.S. Citizenship and Immigration Services.
Under current law, H-4 dependent spouses cannot apply for work authorization (unlike spouses in some other nonimmigrant classifications, e.g., L-1 dependent spouses). That is about to change.
On May 6, 2014, the Department of Homeland Security announced the publication of a propose rule designed to attract and retain highly skilled workers. The rule would allow spouses of certain H-1B nonimmigrant workers to request employment authorization if their H-1B spouse is currently pursuing permanent residence through employment-based sponsorship.
According to this proposed rule, H-4 dependent spouses can apply for work authorization if the H-1B spouse (a) is the beneficiary of an approved Form I-140, Immigrant Petition for Alien Worker or (b) has been granted an extension of his or her authorized period of stay in the United States under the American Competitiveness in the Twenty-first Century Act of 2000 (“AC21”) as amended by the 21st Century Department of Justice Appropriations Authorization Act. AC21 permits H-1B nonimmigrant workers seeking lawful permanent residence to work and remain in the United States beyond the six-year limit (in the situations described above).
Of course, this rule is a welcome change. And while this proposed rule may assist an estimated 97,000 H-4 dependent spouses who will now become eligible to apply for employment authorization, the rule does not assist H-4 dependent spouses whose H-1B spouses are not in the employment-based permanent residence process. By contrast, spouses of L-1 intracompany transferees are eligible to apply for work authorization, without the requirement of having to be in the permanent residence process.
This is not a perfect solution, but it’s a pretty big deal, nevertheless. I cannot tell you how often I have to break the news to an H-1B nonimmigrant worker that their trailing spouse can come to the United States but cannot work him or herself. There are organizations that work with trailing spouses (e.g., Tech Valley Connect works with trailing spouses to assist them with their professional development and assimilation into their new community), but a good portion of their missions are assisting trailing spouses with their professional development. Given the cap limitations associated with the H-1B program, what good does it do to work on professional development when employers are co constrained in terms of their ability to participate in the H-1B program?
From an immigration reform perspective, this, along with several other happenings recently, is interesting. Republicans have repeatedly said that President Obama cannot be trusted to enforce our laws. Here, we have an instance of legislating through regulatory change. This comes on the heals of President Obama directing DHS Secretary Jeh Johnson to conduct a review of immigration policy, including weighing an administrative move to curtail deportations. We shall see if there is any fall out of this in Congress. For now, a little progress.
Capital Region Approved as EB-5 “Regional Center”, Inviting Foreign Investors
OK, now for something completely new and pretty exciting (at least in my world). U.S. Citizenship and Immigration Services (“USCIS”) recently approved an application for an EB-5 Regional Center in the Capital Region which was facilitated by the Center for Economic Growth (“CEG”) and Prime Regional Center, LLC, an affiliate of Prime Companies. The Regional Center will be in an area of Upstate New York that includes eight counties surrounding and including the Capital Region, as well as specific counties in the Southern Tier, Mohawk Valley and Central New York.
So, what’s a Regional Center? Good question! Employment-based immigration is organized in a “preference” system, and one of the preferences is commonly called “EB-5”. The EB-5 employment preference is for immigrant investors (i.e., for employment-creation). In general, this category provides, initially, conditional permanent residence for foreign nationals who invest $1,000,000.00 in a new commercial enterprise that employs at least ten (10) full-time U.S. workers. The foreign national is made a conditional permanent resident for a two (2) year period, at which time he or she may make an application to remove the conditions and grant permanent residence. In order to receive unconditional permanent residence, the foreign national must show that he or she has “substantially met the capital investment requirement.”
A foreign national may also be able to make a smaller investment of $500,000.00 if the investment is in a targeted employment area that includes rural areas with populations of less than 20,000, or locations that have experienced unemployment at 150 percent of the national average.
Certain EB-5 visas also are set aside for investors in what are called Regional Centers, which are designated by USCIS based on public or private proposals for promoting economic growth. A Regional Center is defined as any economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.
The Regional Center program is for generally good for investors who have the means to invest the capital (i.e., not less than $500,000.00), but who do not wish to actively manage the business. Foreign national investors who choose to invest through a Regional Center must demonstrate that a “qualified investment” is being made in a new commercial enterprise located within an approved Regional Center, and show, using reasonable methodologies, that ten (10) or more jobs are actually created either directly or indirectly by the new commercial enterprise through revenues generated from increased exports, improved regional productivity, job creation, or increased domestic capital investment resulting from the Regional Center. The typical investment will be $500,000.00 (plus additional fees and expenses associated with getting into the program, which can range from $20,000 to $70,000, plus or minus, plus professional fees), which may or may not be returned to the investor at the end of the proverbial day.
In a statement about the approval of the Capital Region’s EB-5 Regional Center, New York Governor Andrew Cuomo said, “As the State works to attract businesses and jobs from across the nation, we must also look overseas to lure global investors and entrepreneurs to start and grow their companies in New York. … With this approval, the Capital Region will be more attractive than ever before to businesses from overseas interested in expanding their investments here in the United States.”
We can only hope.
Basically, an EB-5 Regional Center allows wealthy foreign national investors to essentially “buy” a Green Card for themselves and their families (although not without a lot of hoops to jump through and significant financial risks too). The EB-5 program has been around for quite some time now, but not until the Regional Center portion of the EB-5 program gained traction with the immigration bar and the economic development community and their lenders did it start being used as it was intended; that is, to stimulate the U.S. economy through job creation and capital investment by immigrant investors by creating a new commercial enterprise or investing in a troubled business.
This is truly an exciting opportunity for the Capital Region!