The H-1B visa program has been a contentious issue in Washington’s debate on immigration reform. Over the past year, Representative Zoe Lofgren has attempted to gain bipartisan support for the High-Skilled Integrity and Fairness Act of 2015. The bill contains many proposals that would radically overhaul employment-based immigration. Many of the provisions are helpful, and would potentially expand eligibility for employment-based permanent residence and grant additional protections to H-1B workers, including:
- Elimination of “per country” caps for employment-based immigrant visas, or green cards, reducing the backlog of employment-based immigrant visa processing and ensure that employers can permanently hire the most skilled workers based on their skills and qualifications, rather than national origin. Currently, employment-based immigrant visas are capped at 140,000 a year, with no more than 7% from any one country, which has resulted in a huge backlog for applicants from India and China.
- Expanding “dual intent” to F-1 students, O-1 workers with extraordinary ability, and free trade visa holders (E-3, TN, and H-1B1), so they are not denied visas based on perceived intent that they may pursue permanent residency.
- Requiring employers to provide H-1B workers with copies of their immigration paperwork within three years of filing with the government, and prohibiting liquidated damages against H-1B workers who cease employment with a current employer prior to an agreed-upon date.
- Splitting the current H-1B cap process in two, creating two start dates for new H-1B visas in a fiscal year, instead of one per year on October 1. This would allow employers to petition for employees based on more current workforce needs, rather than 6 to 18 months in the future.
- Reserving 20% of new H-1B visas per year for small and start-up employers, or those with 50 or fewer employees, ensuring that emerging businesses can retain their most skilled employees.
However, two proposals specific to the H-1B program, while seemingly well-intentioned, could have a harmful effect on all employers hoping to employ skilled foreign nationals. Rep. Lofgren’s bill proposes to redefine H-1B dependency and drastically change employer exemptions. Currently, employers are defined as H-1B dependent based on the amount of H-1B workers in proportion to their total employees (Defined here by the Department of Labor). Employers who are found to be H-1B dependent are subject to additional attestation requirements and filing fees. However, H-1B workers are considered “exempt” from the dependency calculation if the worker holds a master’s degree or higher, earns annual wages of at least $60,000, or both.
Rep. Lofgren’s bill would set the threshold for H-1B dependency at 15% of the employer’s workforce. Also, instead of $60,000, the new H-1B dependent wage exemption level would be set at the 35th percentile above the median for the most recent national annual wage for the Department of Labor Occupational Employment’s Computer and Mathematical Occupations category, which is approximately $130,000. H-1B workers with Master’s degrees will no longer be exempt from calculating H-1B dependency. Under this new proposal, unless an employee is paid $130,000 or more, they will count toward an employer’s H-1B dependency. Although most employers are non-dependent because of the current exemptions, this change could render them H-1B dependent.
The bill also proposes to prioritize allocation of H-1B visas each fiscal year, with preference first to employers that hire mainly U.S. workers, and then to H-1B dependent employers, with further preference based on payment of wages at 150 to 200% of each prevailing wage level (click here for more about prevailing wage levels). For example, if a company attempted to file an H-1B cap petition for a Software Developer in Boston, they would need to pay an entry-level (Level I) employee between $111,603 and $148,804 to receive preference for their petition. However, coupled with the new H-1B dependency rules, many small to mid-sized companies could be branded dependent and subject to this wage requirement, unless they could afford a $130,000 salary for an exemption.
In the wake of highly-publicized abuse of the H-1B program, citizens and members of Congress alike are rightly asking questions aimed at companies that use H-1Bs to pay low wages and undercut American workers. However, according to a USCIS report to Congress, the average annual compensation for H-1B workers is $84,000, and the median salary continues to increase from $72,000 in FY 2013 to $75,000 in FY 2014. According to the U.S. Census Bureau, this is on par with the average American annual income of $72,824 for workers with advanced degrees, and exceeds the median household income of $63,813 for the general population. Additionally, the majority of H-1B workers exceed the educational requirement of a Bachelor’s degree, with 55% of applicants holding a Master’s degree or higher. Most new H-1B visa petitions are for foreign-born graduates of U.S. educational institutions, not “outsourced” labor.
The uncertainty of the H-1B lottery process has resulted in some employers, mainly smaller and mid-sized American companies, abandoning their attempts at hiring H-1B workers. The low H-1B cap and resulting lottery have reduced attempts by American companies to employ the “best and brightest” in the world to chance. While Rep. Lofgren’s bill contains many provisions that are indeed helpful, the provisions regarding allocation of H-1B visas and redefinition of H-1B dependency, coupled with the current H-1B visa cap, will only serve to make employment-based immigration more difficult for American employers, and could have the effect of making the U.S. increasingly unattractive for talented and highly-skilled foreign nationals. We at the Law Offices of Leslie Creedy believe that real change will come when the H-1B visa cap is raised.