On May 21st, an Immigration Reform legislation was passed out of the Senate Judiciary Committee and is currently under debate. In fact, Amendments are being presented on a weekly or daily basis as the Reform is being analyzed. If passed by the Senate, the Bill will then have to be adopted by the House in the Fall. While there are no guarantees as to whether it will be adopted, it is best to plan and analyze what we could expect. Here is a short analysis of the proposed Bill; note it is not a complete analysis and only takes into consideration certain aspects of it.

Employment-based Visas

The proposed legislation includes beneficial changes for employment-based visas, which currently require an extensive and costly renewal processes. The new provision also includes improvements and simplification of the application process for employers.

Visa Renewals: The proposed changes would allow applicants seeking to renew E-, H-, L-, O-, P- and other visa categories to do so from within the United States. This would replace the current requirement that a visa renewal applicant leave the United States to go to a foreign US consulate after its extension of stay. Note, however, that this option would allow apply to applicants considered “low-risk” and eligible for an interview waiver. The definition of a low-risk applicant still remains unclear.

Premium Processing: Premium processing would also become to all employment-based visa applications. The current Premium processing option only applies to certain visas.

H-1B Provisions

The new H-1B proposed additions would be as follow:

• Increased H-1B Cap with Possible Market-Based Adjustments: The annual quota for H-1B visas would be increased from 65,000 to 115,000 visas in the first year. Market-based adjustments would be made that raise or lower the annual limit in future years. However, the base cap could never be lower than 115,000 or higher than 180,000. This would allow applicants to have a bit more flexibility and would reflect the current need for an increase in the cap.
• U.S. Master’s Cap Changes: The previous system set aside an additional 20,000 H-1B visas each year for foreign nationals with advanced degrees from U.S. institutions. The Senate’s bill will increase that number to 25,000, but limit the benefit to science, technology, engineering, and math (“STEM”) graduates. A majority of new reforms indicate a preference for STEM backgrounds and employments with high potential profits in business deals.
• Employment Authorization for Spouses of H-1B Holders: While current spouses of H-1B visas can obtain an H-4 visa, this type of visa does not currently allow the holder of the H-4 visa. Thus, the option for a dependent spouse to join the H-1B applicant in the U.S. is limited to the situation where the family can survive on the sole income of an H-1B applicant. Under the new provisions, the spouse, just like a current L-1 visa applicant's spouse, would be permitted to work as well. The provision would allow the Secretary of Homeland Security to suspend these benefits for persons from countries where reciprocal benefits are not offered.
• Grace Period After Termination of Employment: The proposed legislation creates a 60-day grace period so H-1B employees may remain in the United States to look for new employment, change to a different visa status, or prepare to leave the United States. This would benefit employers who may hire terminated H-1B employees in the United States looking for work without having to apply through the cap. The current legislation does not provide the holder of the H-1B visa a grace period to find new employment upon termination of its visa or to pack up.
• New Wage Methodology: The current Department of Labor (“DOL”) wage system has four tiers. The new legislation would reduce the system to three tiers. A Level 1 wage will be the mean of the lowest 2/3 of wages surveyed in a Metropolitan Statistical Area. A Level 2 wage will be the mean of all wages in that area. A Level 3 Wage will be the mean of the highest 2/3 of wages surveyed in the area. Ultimately, this transition would effectively raise prevailing wages that must be paid to H-1B employees. H-1B dependent employers will be required to pay H-1B employees at least a Level 2 wage.
• New H-1B and L-1 Visa Fees: An additional $1,250 fee for each H-1B or L-1 petition filed by employers with up to 25 employees and an additional $2,500 would be collected from employers with more than 25 full-time employees under the new legislation.
• New Recruitment and Advertising Requirements: The Senate’s proposed bill will require employers to post H-1B positions on a DOL website for 30 days before filing the H-1B petition. The posting will have to include wage ranges, job requirements, and how to apply for the position. The employer will be required to offer the H-1B position to any U.S. worker who applies that is equally or more qualified than the intended H-1B beneficiary. H-1B dependent employers would be required to engage in additional recruiting efforts commensurate with industry-wide standards and offer compensation at least equal to that offered to the H-1B employee. This may increase the cost of employers for hiring foreign citizens who would require an H-1B visa. It would also result in a more costly hiring procedures and longer time period to obtain the visa. Other countries who have employed similar tactics have seen a decrease in foreign hires as a result of similar requirements, qualified as a protectionism measure. It also remains unclear as to the qualifications and distinctions that will have to be made between the foreign worker and local applicant.
• Non-Displacement Requirement: An employer that is not H-1B dependent would have to attest that for 90 days before and after filing a Labor Condition Application (“LCA”), it has not and will not displace a U.S. worker. H-1B dependent employers would have to make the same attestation, but for 180 days before and after the LCA filing.
• Outplacement: The proposed bill prohibits employers from outplacing, outsourcing, or leasing H-1B employees. Non-dependent H-1B employers will have to pay $500 per H-1B outplacement. Currently, the H-1B visa requires outplacements to be declared and detailed, but does not preclude them.
• Increased Department of Labor Enforcement Authority: The amended bill will increase and expand DOL’s power to investigate, enforce, and punish H-1B violations. The cos of such authority and structure is still unclear as well as the exact timeframe for enforcement and conditions. However, the DOL would have powers that include the impositions:
  • Fines for failure to meet LCA conditions and misrepresentations will increase to $2,000 and violations for willful failure to meet LCA violations will increase to $10,000. The legislation also adds to current provisions additional sources of liability, such as the whistleblower provision.
  • DOL may initiate investigations without “reasonable cause to initiate,” which is the current standard.
  • DOL may conduct voluntary surveys about the degree to which employers comply with LCA requirements.
• Increased Limitations Period for LCA Violation Complaints: The statute of limitations will be expanded from 12 to 24 months.

L-1 Provisions:

It appears that the new legislation would impose additional limits and burdens on L-1 visa applicants, thereby making it even harder to obtain.

• Prohibition of Outplacement: Employers would not be allowed to outsource or outplace L-1 employees unless the employee is controlled or supervised by the employer, the placement is not essentially a “labor for hire” arrangement, and a $500 fee is paid, similarly to the H-1B visa. Employers with more than 15% of their workforce on L-1B visas would not be permitted to outplace.
• Amended Requirements for New-Office L-1 Petitions: Under the new requirements, an L-1 employee would be permitted to work in a new office as long as the employee was not the beneficiary of two or more new office petitions in the preceding two years. The employer would have to show that the there is an adequate business plan, premises for the new office, and ability to capitalize the new office. Extension of the new office petition will look at compliance with the business plan, as the rules currently state. However, the Secretary of Homeland Security would have the discretion to extend petitions that do not strictly meet the goals of the business plan. This would provide the agent reviewing the application with additional discretion and would making obtaining an L-1 visa even less certain.
• Limitations on Employment of L-1 Employees: Heavy users of L-1 visas would be subject to restriction. Employers whose workforce is comprised of at least 50% H-1B or L-1B workers would be subject to certain restrictions on future filings and additional filing fees.
• Filing Fees Increased: A new $2,500 fee would be imposed for all L-1B petitions no matter how many L-1 visa the employer has or may have requested.
• Department of Labor Investigations, Enforcement, and Penalties: DOL would have increased power to investigate violations of the L-1 visa program. DOL would have the power to impose penalties and to establish a system for receiving complaints. The proposed legislation does not provide for judicial review of investigatory decisions rendered by DOL.

F-1 Provisions

The F-1 student visa category would permit such visa holders to enter the United states with “dual intent,” meaning with the purpose of remaining in the United States permanently or temporarily.

O-1 Provisions

Individuals in the United States on O-1 visas would be able to “port” to different employers upon the filing of a new O-1 petition.

E-Visa Provisions

E-visas would be available to professionals from countries with which the United States has free trade agreements, thereby opening up the options for E visas.

The New Invest Nonimmigrant Visa Category

INVEST visa

The new INVEST nonimmigrant category for qualified entrepreneurs would be issued where in the three years prior to the visa application, a nonimmigrant has had venture capital or other investors devote $100,000 to his/her business, or his/her business has created at least three jobs and generated $250,000 in annual revenue in business conducted in the United States. Part of the issue with such a visa is that it limits the type of investment and the type of business who will have access to such visas to large investors. Additionally, it fails to take into consideration the situation where a great start up requires a small investments due to the nature of the business. Extensions may be available if the business creates a minimum of three qualified jobs and investors devote no less than $250,000 to the business during the initial visa’s validity. Shorter extensions may also be available where the nonimmigrant has shown progress toward reaching the stricter criteria for the full visa renewal.

Entrepreneur visa

The Senate’s proposed bill also creates a new immigrant visa category for “qualified entrepreneur” aliens. Visas in this category will be capped at 10,000 per year and seem to apply mostly to large investments and specific entrepreneur ideas. To qualify, the applicant must in the three years before applying have a significant ownership in a U.S. business, be employed as a senior executive in the business, and have a significant role in the founding or early-stage growth of the enterprise. The alien must have lived in the United States in legal status for the prior two years, and the business must have created at least five jobs and has received $500,000 in venture capital or other investments, or created five jobs and generated $750,000 in annual revenue in the United States during the two years prior to filing an application. This visa specifically attracts aliens with advanced STEM degrees.

E-Verify And Employment Authorization

Generally

E-Verify would become mandatory under the new bill for all employers with more than 500 employees in the four years after the bill’s enactment. Employers will be prohibited from hiring, recruiting, or referring employees for a fee without complying document verification and other E-Verify system requirements. However, employers may rely on a state employment agency’s referral if the employer retained appropriate documentation certifying that the agency complied with document verification requirements.

If and when the bill is enacted, employers required to use E-Verify that fail to do so will be presumed to be “acting with knowledge” in hiring any worker who lacks work authorization. Employers that act in good-faith reliance on information provided by E-Verify will not be liable for employment-related action taken with respect to a job applicant or employee.

Employers with fewer than 500 employees generally will not be required to use the system, but may do so on a voluntary basis. The Secretary of Homeland Security may, however, compel an employer with fewer than 500 employees to use the system if the employer has demonstrated a pattern or practice of immigration law violations.

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* This article is intended as general information and not legal advice. Every situation requires individual attention and analysis. It does not create a client-attorney relationship or privilege. Call us directly so we may answer your specific needs. We hope to have the pleasure of speaking with you