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Greg Siskind on Immigration Law and Policy

10 IDEAS FOR REFORMING THE H-1B PROGRAM

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It has been eight years since Congress made any major changes to the H-1B program, the visa category available to professional workers employed by American employers. Champions of the program point to statistics showing an astoundingly high percentage of start up technology companies were founded by H-1B workers, a high proportion of patents have been issued to individuals on H-1Bs and H-1B workers are filling critical shortages in medicine, education, high tech, engineering and other critical fields.

Opponents of the program point to examples of fraud, the visas are hogged by so-called "job shops" run by overseas-based contracting firms, and, of course, they question why the program is used when unemployment in the US is soaring.

Proponents of the program argue for its expansion and want to see no changes to the existing rules. Opponents want to see the program cut dramatically and saddled with an array of new restrictions.

In the background are constraints placed on H-1B policy by our being a signatory to the General Agreement on Trade in Services (GATS). The US now is contractually obligated to maintain a minimum of 65,000 H-1B visas and we are limited in the types of new restrictions we can put on the program lest we be hauled into court. Those who would advocate slashing H-1B visas or imposing a labor certification requirement or other new and onerous requirements could end up forcing the US to defend itself in court. And we also need to be careful not to set off a chain reaction of retaliatory measures that could hamper the ability of nearly six million Americans employed overseas who are developing commerce for US companies.

I believe that both sides have valid arguments and that the H-1B program can be reformed in ways that will satisfy the H-1B critics while at the same time opening more visas for professionals that can make a strong case.

Here are a series of ideas for modifications to the H-1B program that will strengthen the US economy and cut down on the number of applications approved for firms that have been the subject of the harshest criticism.

1.    No H-1B cap if an employer can document it is paying 125% of the prevailing wage for similarly employed US workers.

2.    H-1B dependent employers and employers that hire more than 50 workers per year will pay a higher filing fee than occasional users of the program.

3.    No cap on employers who have fewer than three H-1B employees, have filed fewer than ten H-1B petitions in the last five years or employ fewer than 1% of their workforce working in H-1B status.

4.    No cap for doctoral level H-1B positions.

5.    No cap if an employer can show that the occupation has an unemployment rate at least 50% lower than the national average.

6.    No cap if an employer receives a labor certification documenting the lack of availability of American workers to fill the position.

7.    Label as H-1B dependent positions in occupations that the Bureau of Labor Statistics has certified have an unemployment rate that is equal to or higher than the national unemployment rate.

8.    Allocate H-1B visas on a quarterly basis rather than once a year.

9.    Employers that don't use an allocated H-1B visa within six months will pay an additional fee of $5000 for each quarter the H-1B visa is not used of the visa is forfeited.

10.    Charge employers a $7,500 penalty/access fee to bypass the H-1B quota.


The common themes here are to favor employers who are less likely to be accused of trying to displace American workers and to make it harder for any particular employers to "game" the system to hoard H-1B visas at the expense of the vast majority of American employers who use the program sparingly and who often have no access to vital employees.


1.    No H-1B cap if an employer can document it is paying 125% of the prevailing wage for similarly employed US workers.


One of the chief complaints about the H-1B visa is that employers are paying H-1B workers less than Americans. Employers are required by law to document that they are paying their H-1B workers the prevailing wage - the wage paid in the community to similarly employed workers - as well as similarly employed workers at their own company. Critics of the program complain that employers are using wage data that is not accurate or hiring more junior foreign workers to replace more experienced Americans.

There are many employers who desperately need H-1B workers and who are willing to pay far higher than the prevailing wage if they had access to those workers. If an employer is willing to pay a substantially higher salary to an H-1B worker, they are not endangering anyone's job and the employer should have access to the worker (assuming they meet the rest of the H-1B requirements). I've picked 125% as a number that I think people will see is a serious hurdle, but I'd be interested in hearing what others think.


2.    H-1B dependent employers that file more than 50 H-1B petitions per year will pay a higher filing fee than occasional users of the program.


Six of the top ten users of the H-1B program gobbled up nearly 10,000 of the visas. These six companies are all based abroad and they supply contract labor in the information technology sector. While I don't know it for a fact, their business models strongly suggest that they are H-1B dependent employers. If we had no H-1B cap (which is my actual preference), then I would not be so concerned about a few companies filing so many petitions.  But when we are faced with a scarce commodity, I have a problem with a few companies disproportionately using up the visas. The vast majority of American companies wanting to access the system only need to file a few H-1B petitions a year and when they have identified a candidate and need to file, visa numbers are long gone.

 Instead, a few companies that set up an infrastructure to recruit vast numbers of professional workers impose themselves as middlemen by gobbling up visas and then serving as gatekeepers to available workers.  This is blocking access to employers needing visas for workers who are more likely to stay in the US and provide their talent to the country on a long term basis.  I would consider a fee of at least a few thousand dollars as an incentive for job shop employers to choose their best prospects for H-1B filings and consider holding off on filing for others when the H-1B quota is filling up quickly. I would also consider using the funds to underwrite scholarships at public colleges and universities in science, technology, engineering and mathematics programs.

[Note: some readers apparently are not aware that "H-1B dependent" is a defined term in the Immigration and Nationality Act. Employers with more than 50 employees are considered H-1B dependent if more than 15% of employees are in H-1B status. Thus, the only large employers likely to be affected by this provision are the job shops.]


3.    No cap on employers who have fewer than three H-1B employees, have filed fewer than ten H-1B petitions in the last five years or who employ fewer than 1% of their workforce working in H-1B status.


The vast majority of complaints I have seen by H-1B opponents relate to employers who use large numbers of H-1B workers. Employers who use the program sparingly are not the abusers that make the headlines and they should have access to H-1B workers when they need them from time to time. I've tried to come up with a formula for choosing which firms should be considered "light" H-1B users, but others may have additional thoughts.


4.    No cap for doctoral level candidates educated at US institutions.


When I hear H-1B critics complain about the program, I rarely here them tell us that we're accepting too many Ph.D. holders.  59% of engineering and computer science doctoral degrees are going to foreign students here in the US. Forcing those workers to leave is a tremendous waste of our national resources and only subsidizes our competitor nations. Sure I'd like to see Americans using up more of those doctoral program slots. But that's a process that will take a major national commitment of resources and many years to accomplish. In the mean time, we need American-educated  doctoral candidates to stay.


5.    No cap if an employer can show that the occupation has an unemployment rate at least 50% lower than the national average.


There are a number of occupations that even in this severe recession are facing shortages or workers. Teachers and nurses come to mind. When the cold hard data is examined and an employer can document that it is looking to fill a job in one of these severe shortage occupations (as demonstrated by Labor Department figures), they should get a break.


6.    No cap if an employer receives a labor certification documenting the lack of availability of American workers to fill the position

The labor certification process applicable in the green card and H-2B processes is onerous, time consuming and very expensive. Employers must undergo extensive recruitment and must be meticulous in demonstrating that they are only listing the minimum requirements and are fairly considering American workers for the position. Employers willing to undergo that process can document that Americans are not being passed over and they should have access to the H-1B program. While imposing a labor certification requirement might violate GATS (see my introductory remarks), allowing employers to avoid the H-1B cap by supplying a labor certification should be okay because it is not restricting those seeking one of the minimally required 65,000 slots.


7.    Label as H-1B dependent positions in occupations that the Bureau of Labor Statistics has certified have an unemployment rate that is equal to or higher than the national unemployment rate.

This might be considered controversial as it could pull a lot of petitioners into the dependency rules that are currently exempt, but if the H-1B program is largely intended to help employers find workers in difficult to fill occupations, then we should. In my opinion, be tougher on employers hiring workers in occupations that are at or greater than the national unemployment numbers.


8.    Allocate the H-1B visa on a quarterly basis rather than once a year.


This could really go a long way to leveling the playing field for employers that have been regularly shut out of using the program because of the job shop visa hoarding. The big H-1B users leverage the fact that they have a recruiting infrastructure and economic model in place where they can file thousands and thousands of H-1B applications on a single day for undefined positions many months away. If the H-1B cap was divided into quarters and employers could file four times a year rather than just once, this would dramatically help those companies that only hire a few H-1B workers per year or who hire people who are not graduating from their degree programs prior to April 1st each year. For example, physicians don't finish their medical training in US programs until June 30th each year. They are generally not eligible for the H-1B visa until they have completed their training so an application for their H-1B cannot be submitted until July. But by that point each year, the H-1B visas are all used up by the April 1st filers. Quarterly filing would give employers like these a chance.


9.    Employers that don't use an allocated H-1B visa within six months will pay an additional $5000 fee for each quarter the H-1B visa is not used or throw the visa back in to the H-1B quota


Job shop employers file H-1B petitions by the thousands and then often have no actual work for an employee to do. These employers are benched (illegally) by some of the worst companies and other H-1B visa holders simply sit on their suitcases at home waiting for months on end for a job that may or may not happen. In the mean time, American employers who have positions that need someone immediately have to watch those positions remain unfilled because the visas are not available. This is a tremendous waste and is not serving the American public. Employers that file H-1Bs for workers that they don't have real jobs ready to go should pay a penalty if they want to keep an H-1B visa "on reserve."


10.    Charge employers a $7,500 penalty/access fee to bypass the H-1B quota.


Finally, if the chief complaint about H-1B workers is that they drive down wages for Americans, allowing employers to pay a huge fee to access the program is another way to demonstrate that they are not harming US workers and should be able to access the program.  $7500 plus the regular $3000+ filing fees plus lawyer fees plus payment of the prevailing wage would make the hiring of an H-1B worker expensive enough that US workers have nothing about which to worry. I'm not sure if $7500 is the right number and will be interested in hearing what others think.

These proposals are intended to both expand the H-1B program and also further restrict it in order to ensure that employers that have the most worthy claims to using the H-1B visa have ready access to them and employers that have been the subject of the most complaints find the H-1B program no longer nearly as easy to use as in the past.

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Comments

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  1. Ventomarme's Avatar
    Many of the ideas seem to be pretty well thought out though, as can be imagined, the cut offs seem quite arbitrary.
    => Paying 125% of the prevailing wage: it almost seems like a tax on the employer for using H1B. Why isn't the prevailing wage certification from the Dept of Labor (DoL) enough. Is it that DoL doesn't know what it's doing.
    =>No cap for doctoral level candidates educated at US institutions.: why only doctoral? Any education gained in the US institutions can be argued for benefit. In fact, education at the Bachelor's level is quite expensive in the US and it almost seems like a disincentive for someone to do Bachelors in the US under this proposal. On the contrary, most of the PhDs are funded by one grant or another. Removing a cap on any US attained education would boost the educational sector quite a bit
    =>who employ fewer than 1% of their workforce : this idea almost seems like pandering to a partisan view cos in all seriousness it doesn't appears to address any issue, a scratch for no itch if you will
    => Quarterly H1B allocations seems to be like a very creative idea
    => Ratchet up the penalties on abusers and hoarders of the H1B visas and even disbar them for a period of time from participating in the program.
  2. JoeF's Avatar
    People at the doctoral level are probably better served by getting GCs without waiting. Of course, that would expose the white lie inherent in the F1: that the student would return to his or her home country...

    I like the quarterly H1 allocation.

    And enforcement is key. No change matters unless violators are actually penalized. The shady body-shoppers could only do the damage to the H1 reputation that they did because they were allowed to run wild.

  3. George Chell's Avatar
    "No cap for doctoral level candidates educated at US institutions."

    I thought there are no caps for doctoral level candidates, or is it restricted to universities and research institutions?

    "People at the doctoral level are probably better served by getting GCs without waiting. Of course, that would expose the white lie inherent in the F1: that the student would return to his or her home country..."

    They need to do away with Sec 214(b) at least for doctoral students. It is a relic from 1952 and only helps the competition such as Australia and Canada which do not have such restrictions.

  4. George Chell's Avatar
    "Finally, if the chief complaint about H-1B workers is that they drive down wages for Americans, allowing employers to pay a huge fee to access the program is another way to demonstrate that they are not harming US workers and should be able to access the program. $7500 plus the regular $3000+ filing fees plus lawyer fees plus payment of the prevailing wage would make the hiring of an H-1B worker expensive enough that US workers have nothing about which to worry. I'm not sure if $7500 is the right number and will be interested in hearing what others think."

    If it is a strictly US corporation with no foreign branches this will work. However, a corporation such as Microsoft or HP will increase hiring in Singapore or Australia and reduce hiring in the US. They would not be interested in bypassing any quota as long as other countries have smaller fees or give migration status without a job offer, ie., Canada.
  5. JoeF's Avatar
    "I thought there are no caps for doctoral level candidates, or is it restricted to universities and research institutions?"

    Currently, only H1s for universities, non-profit research organizations affiliated with universities (e.g., university hospitals) and government research organizations are cap-exempt.
  6. hmm's Avatar
    Lots of great ideas. In #2 it seems better to restrict percentage of H-1B employees rather than the absolute of petitions per year. For example a large state university or a company like Microsoft might file more than 50 H-1B petitions per year simply due to its size. Is it fair to make them pay more?

  7. Greg Siskind's Avatar
    I've added a clarification since some don't seem to understand what an H-1B dependent employer is.

    "Note: some readers apparently are not aware that "H-1B dependent" is a defined term in the Immigration and Nationality Act. Employers with more than 50 employees are considered H-1B dependent if more than 15% of employees are in H-1B status. Thus, the only large employers likely to be affected by this provision are the job shops."
  8. George Chell's Avatar
    Joef, thanks. A substatial majority of folks from India and China at some of the top Universities are on O Visa. How are the rules different for those folks? Some say that they switched from H1-B to O after publications in top to mid-level journals. They tell me that they can eventually get green cards but can work on O Visa (something I dont understand talks about a prison code called parollee!) indefinitely till they get EMB. Is that right or am I misunderstanding somethin?.

    As far as No.10 is concerned we need a maximum fee that would induce the corporation to keep the H1B in the country, beyond which the corporation would move that job to Alberta, Canada or elsewhere in the world. It is like figuring out the value of Bank toxic assets, but has to be done!
  9. George Chell's Avatar
    "Is it fair to make them pay more?"

    They probably will take it out of the paycheck of the employee anyway. If an Assistant Prof is starting at $85,000, those fees are essentially peanuts!
  10. Greg Siskind's Avatar
    George and others - keep in mind that the existing exemptions for universities would remain and that some of the other exemptions above - such as for those that are very highly compensated compared to others or who are in very low unemployment occupations would likely qualify under other exemption categories and would not need to pay the $7500 fee. That was just an additional option if others were not available and the employer was really, really interested in a particular employee.
  11. George Chell's Avatar
    Greg:

    You are famous....

    http://money.cnn.com/2009/03/04/smallbusiness/foreign_worker_visas_applications_down.smb/index.htm?postversion=2009030515

    However, I would like you address my query on the O visa that some university professors have attained, almost all I know with significant publications. Can one work in the country with an O visa indefinitely?
  12. George Chell's Avatar
    "It's frustrating because it's not easy to find bright kids," says Ivanovic. His company has unusually high standards when it comes to recruiting, even for internships; he requires at least a 3.9 GPA."

    http://money.cnn.com/2009/03/04/smallbusiness/foreign_worker_visas_applications_down.smb/index.htm?postversion=2009030515

    Pretty telling. If the antis can show me that a 3.0 GPA foreign student was hired over a 3.9 GPA American, I will definitely side with them.
  13. Greg Siskind's Avatar
    Thanks George. You're the first to tell me about this article coming out. As for the O-1 question, there is no time limit in the category.
  14. good guy's Avatar
    Hi Greg,

    How about automatic GC after working on H1B for 3yrs ?

    GG..
  15. George Chell's Avatar
    TARP H1B restrictions..consequences...

    http://economictimes.indiatimes.com/News/News-By-Industry/Jobs/Citibank-to-continue-recruitment-in-India-despite-slowdown/articleshow/4229043.cms
  16. George Chell's Avatar
    Interesting piece..something I have been hammering away...

    http://detnews.com/apps/pbcs.dll/article?AID=/20090220/OPINION01/902200304
  17. No2H1B's Avatar
    All these ideas are worthless without any enforcement. There are so many loopholes in these suggestions that they are essentially just lip service.

    Who is going to audit these companies? Doesn't the IL lobby already have plenty of ways to dodge existing rules? Won't a few accounting tricks technically make employers of H-1Bs compliant?

    Come on, this is all a canard, just like equating programming to ditch-digging, which is a ploy used by the H-1B lobby to denigrate the skills of American programmers and rationalize their displacement at the hands of low-skill, low-wage imports, almost exclusively from Indian.

    This lobby talks out of both sides of its mouth. One side says H-1Bs are needed because they provide rare skill-sets that are in demand. The other side says that they provide cheap commodity-type labor and that Americans should go retrain to be nurses.

    Now which was is it? Or does it not matter at all, because the goal is to make money, regardless of the harm done (ie, Imm. Lawyers, bodyshops, and corporations) and to escape Indian (ie, H-1Bs), L-1s, H-4s)?
  18. JoeF's Avatar
    George,

    For what "Parole" means in the immigration context, look here: http://www.visalaw.com/03aug5/2aug503.html
  19. JoeF's Avatar
    No2H1B: If you had watched the news in the last couple of months, you would have noticed that enforcement has been increased.
    The only "loophole" was lack of enforcement, and that "loophole" is getting plugged.
    Seems to be something that you anti-H1s don't quite like, eh? Takes away your main argument, eh?
  20. George Chell's Avatar
    "Come on, this is all a canard, just like equating programming to ditch-digging, which is a ploy used by the H-1B lobby to denigrate the skills of American programmers and rationalize their displacement at the hands of low-skill, low-wage imports, almost exclusively from Indian."

    Typical argument that I hear when folks debate affirmative action. Unless you are blonde, blue-eyed and white you cannot be better qualified. It has to be due to low wages.

    "This lobby talks out of both sides of its mouth. One side says H-1Bs are needed because they provide rare skill-sets that are in demand. The other side says that they provide cheap commodity-type labor and that Americans should go retrain to be nurses."

    Pretty much what Obama is saying, that we need to train or retrain for getting more American nurses. Look either the job is done by an Indian programmer here in the US or it goes to an Indian programmer in Singapore or back in India. Keeping an Indian programmer out will not hand that job to an American at a higher wage. End of Story. You can scream and shout all you want. Unless US and other countries renegotiate Uruguay Round, the game is over.

    "Now which was is it? Or does it not matter at all, because the goal is to make money, regardless of the harm done (ie, Imm. Lawyers, bodyshops, and corporations) and to escape Indian (ie, H-1Bs), L-1s, H-4s)?"

    More likely jobs moving abroad and driving the wages down even further than otherwise would be the case! Sorry.

    Let this be a lesson for all those folks who think that jobs will go to nationals if there are no immigrants. Germany is a living example..R&D jobs moving abroad and unemployment soaring to 12% in 2005...

    http://www.dw-world.de/dw/article/0,,1696379,00.html

    Perhaps that is what Grassley and Durbin want..I definitely dont want it. Because I want my social security payments and so I want the jobs to stay here!






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