How Trump Officials Tried to end the H-1B Visa Program

For those interested in the difficulties that companies and individuals went through over the past 4 years in terms of getting and renewing H-1Bs, a good article has come out on Forbes Magazine and on its website (link here).

First, why are H-1Bs important and how do they help the US. According to the article:

Research has concluded high-skilled foreign nationals on H-1B temporary visas contribute to America in many ways, including by increasing productivity, which is essential to improving the standard of living. “When we aggregate at the national level, inflows of foreign STEM [science, technology, engineering and math] workers explain between 30% and 50% of the aggregate productivity growth that took place in the United States between 1990 and 2010,” according to economists Giovanni Peri (UC, Davis), Kevin Shih (RPI) and Chad Sparber (Colgate University). Research by economist Britta Glennon found rather than saving jobs, H-1B restrictions “have the unintended consequence of encouraging firms to offshore jobs abroad.”

Stuart Anderson, Forbes Magazine

The article then turns to the “memos” released by USCIS purportedly just “clarifying” existing standards. This includes the memo released on March 31, 2017 that rescinded the previous memo on Computer related positions, the memo on March 23, 2017 changing the standards and when and when not to issue RFE’s for H-1Bs and the July 17, 2017 memo revising the denial standards for H-1bs. According to the article:

“What the documents do not say is more important than what they say,” Jonathan Wasden, a partner with Wasden Banias LLC, said in an interview when the USCIS material became public in September 2019. “You see that the noncontroversial matters are all supported by citation to statute and regulation. However, their most controversial policies lack any such support. It appears that the agency made dramatic changes to H-1B policy without grounding those changes in any law. Attorneys have known this is happening in practice, but to see they don’t even attempt to create a facade of statutory support is shocking.

Stuart Anderson, Forbes Magazine

After these memos, another memo was released that basically stated that USCIS would no longer give deference to previously approved applications when adjudicating extensions or status. These changes lead to increased RFEs – the rate climbed from 17% in August of 2017 to 38% in September to 56% in December to 66% by November 2018. That is a huge increase and leads to delays for companies to get people here, delays for those seeking to renew applications and continue working, and hurts our economy.

In terms of the denial rates the article also discusses how those skyrocketed during the last administration – and how their argument that they were weeding out fraud does not hold water. All the above, in addition to other policies they pushed forward such as trying to reduce approvals for some cases to just one year, etc. were all aimed not at weeding out fraud (which does exist and should be weeded out, but is actually not as rampant as claimed) but at halting the use of the H-1B program and halting those immigrants from being able to work and live in the US. The whole idea was that it would open up more jobs for US workers, which, as shown via much research, is exactly the opposite of what happens when you close off immigration. It should be noted that many of these policies were ultimately overturned by the Courts because of the way they were pushed through without proper rule-making. However, there is still a lot of work that needs to be done to fix these systems and ensure that they are serving the purpose they were intended to serve – to help US employers and to spur the creation of more jobs for US workers.

Any one interested in what happened with a part of the immigration process during the last administration should read this whole article – it is very interesting.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

USCIS and DOL re-issue new H-1B selection process and new Prevailing Wage calculations as Final Rules

Just this week, USICS and DOL issued new final rules that will take effect in 60 days. Before getting into the details of the rules, it is important to note that the new Biden administration has stated that it will halt implementation of new rules for at least 60 days (we do not know if this is added onto the already established start date or is from the date of the order – we will have to see) and may or may not revoke or revise the rules during that period. Also, the rules will probably face lawsuits as well so whether they are actually implemented or not remains to be seen.

A post describing the new laws in detail is here (for DOL Rule) and here (for USCIS rule) if you are interested in a more in-depth explanation. As a summary:

(1) the New H-1B registration policy would allow USICS to select cases based upon the salary being offered (favoring those with higher salaries) instead of purely a random lottery.

(2) the new DOL Prevailing Wage Regulations would raise the salaries at all levels of prevailing wage. However, DOL did amend the regulation a little so the current level 1 (which is at the 17th percentile of the wages) would be raised to the 35th percentile, level 2 (currently at 34th percentile) would be raised to the 53rd percentile, level 3, currently at the 50th percentile) would be raised to the 72nd percentile, and level 4, currently at the 67th percentile) would be raised to the 90th percentile. This means, basically, the new level 1 is almost equal to the old level 2 – that is going to be how much higher wages required under this new scheme will be across the board.

As soon as hear anything in terms of lawsuits or the new administration putting these new rules on hold, we will certainly let you know.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

New USCIS H-1B Regulation Changing the H-1B Registration Policy

Recently USCIS issued a new proposed regulation seeking to change how the H-1B registration and selection process is carried out for H-1B Cap Cases. Currently, USCIS accepts registrations through a certain date and performs a random selection process to determine which applications will be selected and not accepted.

The proposed regulation would change this selection process. Instead of a random process, USCIS would make the selection process based upon the wages offered to the foreigners. Before explaining the system, it is important to understand the Prevailing Wage system. The DOL (and USCIS) has an occupation classification system (SOC (Specific Occupational Classifications) Codes). Each code has four wages assigned to it – Level 1, Level 2, Level 3, and Level 4. The wage levels are based upon the skill level needed to carry out the position. So Level 1 would be entry-level, etc. This is the wage system that USCIS is proposing to use to select which H-1Bs will be accepted towards the 85,000 cap.

USCIS’s proposal is that first, it will select those applications that qualify for the Master’s cap in which the persons are being paid at a Level 4 wage or higher. If all 20,000 Master’s cap cases are filled, the selection process will stop there. If there are still spots open, then it would take those being paid at a Level 3 wage level or higher. And so on. The same would then be done for the regular 65,000 cap.

There are several issues with this proposal. First, USCIS’s stated goal here is to ensure that US Workers are being protected. The “hope” of USCIS is that employers will use the H-1B process to fill high paid positions instead of lower-paid positions. What is the logical outcome of this? That there will be more low paying positions for US Workers and less higher-paying positions. I am not quite sure how this is actually helping US Workers. This is a major issue.

The second issue is that nowhere in the statute does it allow USCIS to set up a selection process based upon ANY factors. In other words, the Statute demands a randomized process. USCIS actually took this position just last year (2019) when it implemented the current selection process. Specifically USCIS Stated in response to a comment: “DHS believes, however, that prioritization of selection on other bases such as those suggested by the commenters would require statutory changes. DHS believes that implementing a quota would be inconsistent with the existing statute, as Congress has implemented quotas in other contexts when it has intended to do so.” 4 Fed. Reg. 888 at 913 (January 31, 2019).

At this point, the new regulation is still in the proposal stage (comment stage). We will update you as to what happens to this regulation – if it is withdrawn when the new administration comes in, if it is amended, or finalized and published.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

Big Win: Court Overturns latest USCIS and DOL rules regarding H-1Bs

Recently both the DOL and USCIS adopted new rules regarding H-1bs. We reported on them here. Just this week a US District Court in California found that USCIS and DOL violated the Administrative Procedures Act in promulgating these rules without allowing time for the public to comment on the rules before they went into effect.

In general, under the APA, government agencies must give the public a reasonable period of time to review, and comment on proposed rules. Once that period has elapsed, the agency then needs to consider the responses and only then can they issue the final rule and put it into effect (although it is usually only in effect 30 days after the final rule has been published. There are exceptions to this rule that allow agencies to publish final rules and then conduct the comment period, where the agency can show that emergency circumstances would require such an act. In the case at bar, both USCIS and DOL claimed that, because of the Corona Virus pandemic and its effects on the Economy, that it created the need for the rules to be implements as soon as possible and that this justified forging the usual rules. The District Court disagreed.

In a strongly worded opinion, the Court stated that, without even considering other factors, the fact that the President issued the Executive order telling the agencies to review such provisions over six months ago, and the fact that the agency has stated that they have been considering such provisions for well over 1 year, clearly shows that, in fact, the agencies do not consider such things “emergencies”. The court granted the Plaintiff’s motion for Summary Judgement and found that USCIS and the DOL violated the APA and the rules were unenforceable. The Court applied this ruling nationwide and to all persons, even those not a direct party to the action.

For those unfamiliar with the rules that were overturned, the DOL rule changed the way in which the DOL was calculating prevailing wages. It use to look at the average range of salaries for a position, and set 4 levels corresponding to approximately the 19th percentile, the 34th percentile the 45th percentile and the 68th percentile. The new rule had the level one wage starting at the 50th percentile, and the other 3 levels went up from there. This significantly raised the wages that companies would have to pay for foreign workers. The USCIS rules changed the definition of what a “specialty occupation” was, making it harder for employers to show that certain positions, especially computer based ones, actually qualified for an H-1B visa. It also limited agencies that contract out their employees to one year H-1Bs (and placed certain other requirements on them). The Court overturned these rules and they are no longer in effect (assuming that there is no appeal, and the Appeals court does not stay the decision). The DOL is in the process of changing back its database to the previous levels.

If you have any questions about this important ruling, please do not hesitate in contacting our office.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

New H-1B and Prevailing Wage Regulations

As you may know, USCIS implemented new regulations on the H-1B process, and the DOL implemented new regulations on the Prevailing Wage process. While there is at least one Court Case pending seeking an injunction on both of these regulations, it is still worthwhile going through the major changed made by both these regulations

Prevailing Wage Regulations

First, in terms of the Prevailing Wage regulations, the simple result is that the prevailing wage will be going up quite a bit. The old system used the 17th percentile for level one. The new one uses the 45th percentile – quite a difference and resulting in higher wages for low-level workers. It should be noted that private wage surveys can still be used to show that the DOL Prevailing Wage is incorrect.

It is interesting to note that in justifying this increase, USCIS cites only one report – and that one report sites to only one instance where the current prevailing wage model MAY provide a wage lower than that actually prevailing in a given geographic area (and I say may because the example is not very clear nor does it seem to actually provide the correct information).

H-1B Regulations

For the H-1B regulations, there are several major changes.

  1. There will now have to be a direct relationship between the field of the degrees and the duties: While this may not sound restrictive, it is. This is USCIS’s way of trying to require sub-specialization. In other words, for example, you cannot say that a position would require an engineering degree – you would need to specify the specific engineering degree (mechanical, electrical, etc.) and show how that relates to the duties – same if you say that more than one such specialization would be ok – you need to show how each degree relates to the duties. General degrees are no longer acceptable as well
  2. Bachelor’s degree is always required: No longer can just show that it is usually required for the occupation/position, but you must show that it is always required for entry into the occupation or position. So positions that are listed as “usually” or “normally” requiring a bachelor’s will no longer be sufficient. Likewise,
  3. Provides a new definition of US Employer: This definition, among other things, will define the employer-employee relationship. It will allow USCIS to weigh the various factors as they will actually be in the position – in other words, the question is not whether the employer has the “right” to control the employee or the “right” to provide the instruments or tools for the employee to work, but whether the employer does or will actually do such things in the real world. It also lists additional factors they will look at to show that the person is actually being supervised by the sponsor and not another party.
  4. Contracts: Third-party placement will require contracts and will only be good for 1 year or the length of the contract – whichever is shorter. Also, the contract needs to list the requirements of the position as imposed by the third-party.
  5. Site Visits: If the third party refuses to allow a site visit, USICS can (and most likely will) deny or revoke the H-1B.

The above are the major, but by no means all, the changes made by the regulations. Many of the above changes were attempted by USCIS through various policy memorandum. However the Courts clearly stated that they could not make such changes via memo, so now USCIS is seeking to make those changes via regulations.

Lastly, it should be noted that both these regulations are currently in effect. USCIS and the DOL felt that they were of such importance that they required immediate implementation, forgoing the usual comment and revision period.

If you are affected by any of these changes, please set up a time to talk with me via the links on this webpage. We are happy to discuss how these regulations may impact you and ways to prevent such impacts.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

Possible new H-1B Regulations to Limit H-1Bs

It appears that the current administration will soon have USCIS issue a new regulation regarding H-1Bs.  There are three elements of the new regulation that are the most significant: 

1) The regulation will be published as an “interim final rule,” which would allow it to go into effect immediately without public input but also makes the rule more vulnerable to legal challenge;

2) The regulation will impose a new, restrictive definition of a “specialty occupation” for H-1B visa holders; and

3) The rule will make it more difficult for H-1B professionals to conduct work at third-party customer locations. 

The first part is making it an “interim” final rule.  The purpose for this is that it allows the rule to go into effect BEFORE comments are received, meaning that it will go into effect immediately upon being published.  The only real silver lining is that this also makes it more susceptible to challenge in the courts as the administration would have to justify skipping public comment (while the argument is it is not skipping it, just allowing the rule to go into effect first, in my mind it is the same as skipping public comment). 

The second part, the new definition of “specialty occupation” was not spelled out in the summary provided to the news sources.  However, most likely, it will be in line with the recent court cases that USICS lost in which it tried to limit the scope of specialty occupation to only occupations that ALWAYS require a bachelors degree, as opposed to those that USUALLY require a bachelors degree.  In addition the administration has also tried to limit H-1Bs to positions that only require a specific degree, as opposed to several degrees.  There are two situations that this comes into play:  First, when a so called “general” degree is required when there are specialty degrees in that area (for example, requiring an engineering degree as opposed to a mechanical engineering degree); The second is if the position could be filled by someone with, for example, a degree in Computer Science or Information technology.  USCIS has tried to limit both types by saying that they are not specialty occupations (but they have lost in Court in all those cases). 

Lastly, USCIS will most likely be trying to limit placement of H-1B employees of IT firms at other locations, as those have been the big cases in the news with H-1B violations.  However this could affect more than just IT companies, depending on the exact regulation.  USCIS has, in the past, tried to get itineraries and firm contracts for the entire period of the H-1B, which can be difficult for some companies that have the need for the person, but they are working on various contracts, etc. as needed.  USCIS may not accept them if the person is not specifically mentioned (something they attempted to do on some occasions as well). 

We will have to see what the final rule states, but it seems as though the current administration is going to try to ensure that the H-1B program has limited use in the near future.  We will update you as we learn more.

H-1B Grace Period: What is it?

H1B-Grace-Period-1We have received a good number of questions about the grace period afforded to H-1B visa holders recently, so I thought I would go through the grace period and what it covers.  We discussed this previously in this blog post but this post will clarify and expand on exactly how the grace period works.

Who is Eligible for the Grace Period?

First, the grace period we are talking about is for those currently in the US in H-1B status who, for one reason or another, are unable to continue working for the employer that sponsored them, and have not yet filed an H-1B application to switch to a new employer. (technically it also applies to those in H-1B1, L-1, O-1, E-3 and TN status as well).   Prior to the change in rules (about 3 years ago) people who fell into this category would be considered to be out of status and, if they filed a new H-1B application, it was really up to the individual officer if they would excuse a certain number of days out of status when adjudicating the extension of status application.  USCIS decided to standardize the grace period and provide guidance on how it worked.

How Long is the Grace Period?

The grace period is for a MAXIMUM of 60 days.  This means that it is not necessarily going to be the same length of period for each person.  The reason for this is that the grace period cannnot extend your ability to stay in the US past the date listed on your I-94.  So, if today is December 1, 2019, and your H-1B is set to expire on December 3, 2019, you would only get 2 days in your grace period.  Someone else whose I-94 is not set to expire until June 1, 2020, would get the full 60 days if needed, as they have more than 60 days left on their I-94.

What Can you Do During the Grace Period?

During the grace period, you are able to file a change of status application, file a new H-1B application for another employer or even file an adjustment of status application.  It is as though you are still in H-1B status during that period and you are able to do anything (immigration wise) that you could do if you were still working pursuant to your H-1B.

What About Dependents?

Any dependents in H-4 status are also authorized to stay during the grace period.  In addition, as you are still considered to be in H-1B status, any EAD granted to an H-4 holder will also remain valid during the grace period.

How Many Times Can I use the Grace Period?

You are only eligible for one grace period per authorized validity period.  This means that if you are with Employer A and are fired, use 10 days of the Grace period and then are rehired by Employer A under the previous H-1B, you CANNOT use the grace period again during that H-1B, even if Employer A fires you again.  Conversely, if, instead of going back to work for Employer A, you work for Employer B instead, and Employer B then fires you, you would have a new 60 day grace period.

Do I have to File an Application with USCIS in order to use the Grace Period?

No, the grace period works as a matter of law – the day after your last day of work it automatically begins.  This also means that USCIS cannot deny the grace period to a given person as it applies in ALL cases that meet the criteria listed.

What if I am not fired, but, instead I quit my job?

The grace period is available for any H-1B holder who stops working during the validity period of their H-1B regardless if it is because they are fired or because they quit.

I have tried to answer most of the questions that we have seen in relation to the H-1B grace period.  If you have any additional questions, please do not hesitate to contact us.

Remember, if you need legal advice talk with an attorney, not a blog post.

Do Workers Hired on the H-1B Visa Displace US Workers?

OUTSOURCE2When looking specifically at the H-1B visa, there have been many news stories over the last two years – some claiming that the H-1B is primarily used to displace US workers (especially in the IT area), and that it is used to artificially keep wages lower.  Others claim the exact opposite, that the H-1B compliments US workers, and does not depress wages (and may even help expand the number of jobs available to US workers).  So who is right?  What is accurate?

While not an easy question, the evidence clearly shows that, in most cases, the H-1B is not used to displace US workers.  A study by the Kellogg School of Management at Northwestern University looked at this issue and found that, in the majority of cases, H-1B workers are taking jobs that US workers do NOT want.  In addition, because of the increased costs associated with getting an H-1B visa, most employers only use the H-1B route when they are unable to find US workers to fill the jobs.  However, there are a subset of H-1Bs that are harder to explain.  Specifically companies such as Walt Disney, etc. who have outsourced their IT work to companies that primarily hire H-1B workers and, in general, pay them less than US Workers would make working at these companies directly.

While we certainly cannot dispute that this is happening, I think the flaw in the argument that this is displacing US workers is that these companies could have just as easily outsourced these jobs overseas, so no one in the US is getting these jobs, and no US taxes are being paid.  Would that be a better outcome?  Is it really the H-1B that is displacing the US workers, or is it the desire of these companies to pay as little as possible?  I can guarantee that Disney is NOT hiring new IT workers in droves and is mostly outsourcing those jobs overseas at this time.

An article in “Daily Caller” discusses this and talks with industry experts.  Basically, those companies in the US who hire H-1B tech workers are NOT the end source of outsourcing. Usually they are hired and brought in as an intermediary step – have those companies take over parts of the IT business, then send it ALL overseas.  In fact, most experts agree that if you got rid of the H-1B program today, that would not slow down or affect outsourcing overseas.  For most companies, the push to outsource is to stop doing things in-house that have nothing to do with the core competency of the company.  If they company is producing media, do you really need to hire people to maintain your website in-house?  Most companies answer that as a no – and outsource to save time and money.

As can be seen above, the H-1B visa program mostly helps US companies fill jobs that would otherwise remain unfilled.  It does not displace US workers, nor does it depress wages.  While those issues do exist, it is because companies are outsourcing overseas, not because they are outsourcing using the H-1B visa program.  In fact, the increased visa scrutiny, according to this article, is actually leading MORE companies to outsource overseas, not less.  Hopefully Congress and the current administration will see this and act accordingly.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

ALERT: USCIS has submitted H-4 EAD Recission Regulation to OMB

color-me-happy-game-over-red_a-G-15238156-0USCIS has submitted its proposed regulation to rescind the H-4 EAD regulations that have been in place since February 25, 2015.  While this is not a huge surprise, as USCIS has had this on their agenda since the new Administration has been in power, it is still somewhat of a surprise as it has taken them a long time to actually put this together and submit it.

From what we know, the rule was sent to the Office of Management and Budget (OMB) on February 20, 2019, and is currently pending review. Once OMB completes its review, a notice of proposed rulemaking will be published in the Federal Register and will be open to the public for notice and comment. The proposed regulation will not take effect until finalized by DHS, a process that typically takes several months.

Please note that the text of the proposed rule has not yet been made available to the public. We will update you as soon as we have more information.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

USCIS Proposes a New H-1B Employer Registration System

imagesUSCIS released a copy of a proposed rule that will be published on December 3, 2018. This proposed Rule, which will have a 30 day comment period, will set up a system that requires employers to pre-register in order to file an H-1B against the H-1B cap and would also change the way that USCIS carries out the lottery for H-1Bs. We will examine the varying aspects of this proposed rule below.

H-1B Registration System

The registration system would require employers to complete a registration PRIOR to the filing of any H-1B applications towards the H-1B cap. The registration period will open up 14 days prior the first day that H-1Bs can be filed (April 1).  It will remain open for a period of at least 14 calendar days at which time, if sufficient registrations have been received, USCIS will begin the lottery system (which we will talk about below).  What we do not know at this time is:

1) What information will be required in the registration;

2) Will each employer just list the number of H-1Bs they will be filing or is a registration needed for each application you intend to file;

3) Will the system be in effect starting this year, or will they wait until the following fiscal year to begin using the system (there is a provision that allows them to not use the system if there are technical issues).

Lottery System

Under the previous system, USCIS would first select sufficient applications to meet the H-1B Master’s Cap (20,000).  USCIS would then take the remaining applications submitted under the Master’s Cap and put those together with applications filed under the regular cap, and then, USCIS would select the regular cap cases (64,0000).   While this system gave those with a Master’s two lottery chances, in some ways it also increased the odds for those without a Master’s degree to be selected in the regular cap lottery by automatically ensuring at least 20,000 Masters cases were removed from that lottery.

Under the new system, the Regular Cap lottery will be conducted FIRST.  After this lottery is conducted, USCIS will see if there are still sufficient numbers of H-1B Master’s Cap Cases left to fill that cap.  If there are, it will conduct that lottery.  If not, it will re-open registration just for Master’s Cap Cases and will wait until it has sufficient registrations, then close registration and conduct the lottery.  In this way, the administration is hoping that it increases the number of cases selected in which the beneficiary has a higher level degree.

To understand why this change was made, USCIS did indicate that it was to comply with the Buy America initiative signed into law via an executive order by the President.   Part of that order required H-1B visas to be made available to those with more education and who are receiving higher salaries.  While USCIS cannot change the statutory requirements, this is one easy way for them to comply with this mandate.

Conclusion

At this point, we do not know if USCIS will change the process at all once it receives the comments, or if it will implement it as written.  We also do not know if there is sufficient time, or if the system is sufficiently far along, that USCIS will be able to implement the system this fiscal year, or if they will have to wait until the next fiscal year.  We will certainly update you once these issues become clear and we know what the final process and timelines will be.  In the meantime, please do let us know if you have any questions.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.