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The Lazarus Effect: How Comprehensive Immigration Reform Can Survive the House GOP and Come Back to Life

8/18/2013

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by Cyrus D. Mehta, ABIL Lawyer and Gary Endelman
The Insightful Immigration Blog

“The only true test of leadership is the ability to lead and lead vigorously”
President John F. Kennedy

The Republican National Committee passed a resolution on Friday calling on Congress to pass immigration reform by the end of the year. Unlike the Senate Bill, s. 744, the Border, Security, Economic Opportunity and Immigration Modernization Act, which grants a path way to citizenship, the RNC resolution contemplates legalizing immigrants who came to the US above the age of 18, but only by granting them 2 year renewable work permits. For those who came to the US as minors, they would get a renewable 5 year permit. There is no pathway to citizenship in the RNC’s resolution.

This tepid resolution is completely at odds with BSEOIMA, which will dramatically reform the immigration system. Although the bill does not have everything that everyone wants, S. 744 offers a pathway to legalization for the 10 million undocumented, a new W visa to allow for future flows of lower skilled immigrants and attempts to clear up the backlogs in the employment and family preferences. It also reforms the existing system in many ways by removing the 1 year bars to seeking asylum, creating a startup visa for entrepreneurs, clarifying a contentious provision under the Child Status Protection Act, providing greater discretion to both Immigration and Judges to terminate removal proceedings, among many other beneficial provisions.

Therefore, it remains uncertain whether any measure that the House passes can get reconciled with BSEOIMA, which truly reforms the immigration system. The intransigence in the GOP controlled House, while frustrating the hopes and aspirations of all those who believe that a reformed immigration system will benefit America, also further foreshadows doom for the party in future elections.  What caught our attention was a statement by Senator Rubio on the anniversary of the Deferred Action of Childhood Arrivals (DACA) program, one of the main Republican architects of BSEOIMA, when he warned his party members in Congress that if they did not pass a reform bill then President Obama could extend the administrative relief for young people to everyone through administrative action.

The authors have since 2010 been advocating the ability of the President to ameliorate the plight of non-citizens trapped in a broken system through administrative measures. We have also proposed that the President can resolve the crisis in the backlogs in the employment and family based preferences by not counting derivative family members.  It was thus heartening to know that Rubio also acknowledged the President’s ability to pass an executive order, although he sees this more as a threat for his party.  First, if Obama provides ameliorative relief to millions of immigrants, it will benefit the Democrats in future elections, just as DACA benefited the President in his reelection in November 2012. Second, if the President were to expand DACA to a broader group of undocumented people, and allow them to apply for work authorization and travel permission, this might be better than the GOP immigration reform proposal, if it got passed into law as part of a compromise with the Senate. Such an executive order will not be accompanied by a needless and expensive militarization of the border (which is also a feature of S. 744), along with mandatory E-Verify that will bog down business large and small.  It will not include draconian provisions that the House might likely pass in exchange for legalization, such as authorizing enforcement of immigration law by state police or criminalizing undocumented status.

This is not to say that a Presidential executive order is a substitute for comprehensive immigration legislation. The President will not be able to grant permanent residence to the undocumented, only work authorization and travel permission, and the family and employment based preferences will continue to have a limited supply of visas. Still, in the absence of Congress passing a comprehensive bill to reform the broken system, something is better than nothing. As we have already commented, if we do not count family members, that in itself would dramatically reduce waiting times in the family and employment preferences. Many of the people who will be legalized under an executive order may be able to ultimate get permanent residence through existing pathways.  It is true that the President will not be able to increase badly needed H-1B visas through executive fiat, but it may be possible to give employers greater access to the unlimited O-1 visa by broadening the definition of “extraordinary ability” to allow many more accomplished foreign nationals to work in the US. While an executive order will not include a new start up visa, if the current Entrepreneurs Pathways initiative is implemented faithfully, many entrepreneurs can start companies in the US under existing work visa categories.

While the authors support the passage of  S.744, it is tempting to add that executive action can avoid the economic illiteracy that plagues the H-1B wage provisions embraced by the Senate as the price of passage and avoid the misguided tendency of House Republicans to extend this inflationary regime to other categories such as the TN.  Unlike S. 744, it will not discourage employers from hiring foreign nationals by mandating artificially inflated wages for foreign nationals, a feature of S. 744 that sharply conflicts with expanded H-1B quotas and more generous provisions for employment-based migration. It will not cripple start-up companies who badly desire key foreign personnel but will under the new law be unable to afford them. It will not price American companies out of the green card sponsorship market, divert precious funds that would otherwise be invested in cutting-edge research or  dry up surplus capital that would be better spent on equipment modernization. Executive action will be devoid of the hugely inflationary wage rules adopted by the Senate as part of the deal making that resulted in the passage of S. 744, thereby encouraging more employers to refrain from moving jobs offshore or to low wage labor markets out of the United States. As a result, when compared to S. 744, action now by President Obama might make it more, not less, likely that companies will sponsor foreign workers for green cards.

The President always has this ace up his sleeve, which is the ability to grant relief through an executive order, to force Congress to pass immigration reform. If Congress in fact fails to pass immigration reform, the President can actually bring about immigration reform, which may look better than any of the reform proposals being floated by the GOP in the House. Of course, a future President can get rid of such administrative measures, but this usually does not happen as it would be politically too dangerous to further alienate the Latino vote. It is more likely that a future Congress will bless such administrative measures like the way BSEOIMA did with DACA recipients. So, in light of  all the uncertainty regarding the passage of a comprehensive immigration bill, a Presidential executive order, or the potential for one (as Rubio presciently realized)  may not be such a bad thing.

The invocation of executive action would allow the undocumented to remain in the United States with the opportunity for employment authorization and seek to utilize existing avenues for transition to lawful permanent resident status. It puts them in the same position as everyone else who seeks the green card. From this perspective, executive action would be consistent with the compromise proposal advocated by House Judiciary Committee Chair Robert Goodlatte ( R-Va.).  Many of the undocumented already have, or will, over time, acquire adult US citizen children; others may marry American citizens and still others could attract employer sponsorship. Keep them here, allow them to come in from the shadows, and let the undocumented regularize their status through the disciplined utilization of existing remedies. Not only is this a solution that does not require the House GOP to abandon dysfunctionality as their prime governing philosophy, something they are manifestly loath to do, but, even if Congressional ratification subsequently is felt necessary or desirable, this is precisely the path to legalization that Represenative Goodlatte has already outlined.
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How California's AB 1159 Will Hurt Immigration Lawyers and their Clients: A New York Immigration Lawyer's Perspective

8/9/2013

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by Cyrus D. Mehta, ABIL Lawyer
The Insightful Immigration Blog

The California State Legislature is about to pass a bill to protect its residents from immigration fraud. The bill, which if passed will take effect on January 1, 2014, is also supported by the State Bar of California. While a bill to protect people against immigration fraud is always laudable, California’s Immigration Reform Act, AB 1159, will not meet this objective. Indeed, many of its provisions are so onerous, and interfere so radically with the attorney-client relationship, that it will likely drive away good and ethical attorneys from representing clients in California leaving it to unscrupulous unauthorized and unregulated practitioners to prey upon them.

I write as a New York attorney since AB 1159 may also impact out of state attorneys like me if we choose to represent people in California in immigration matters. As a New York attorney, I will also point out how New York’s Rules of Professional Conduct already govern my ability to provide ethical services to clients and may also be in direct conflict with the requirements under AB 1159.

Although the American Immigration Lawyers Association has justifiably opposed the bill on policy grounds, I focus on some of the specific provisions that target immigration attorneys in order to show how we have been singled out among other lawyers, and how impossible it will be for us to effectively assist immigrants. Many immigration attorneys have chosen this area of practice because it is most noble and gratifying to make a meaningful difference in the lives of people rather than for the money. It is therefore disappointing to see that this bill extends a pre-existing law that has regulated immigration consultants, and unfairly presupposes that immigration attorneys must be more regulated than other attorneys even though all attorneys are already bound by their state bar rules of ethical conduct.   In addition, immigration attorneys can also be sanctioned under the disciplinary rules promulgated by the Department of Homeland Security and Executive Office for Immigration Review at 8 CFR 1003.102.

AB 1159 contemplates that if  the Border, Security, Economic Opportunity, and Immigration Modernization Act, S. 744 (BSEOIMA) becomes law, an attorney who provides “immigration reform act services” will have to register with the State Bar of California and file a bond of $100,000. This bond shall be payable to the State of California, and shall be for the benefit of “any person damaged by any fraud, misstatement, misrepresentation, unlawful act or omission, or failure to provide the immigration reform act services of the attorney or the agents, representatives, or employees of the attorney, while acting within the scope of their employment or agency.” One can only wonder what standards will be set for someone to prove damages, and whether it will be comparable to the malpractice standard in a court of law. Given the underlying complexity in any new immigration law, along with the evolving standards and interpretations, it is hoped that immigration attorneys will not be held needlessly liable for an alleged “failure” to provide services when the denial was due to other extraneous reasons.

AB 1159 impacts California attorneys who will provide immigration reform act services as well as out of state lawyers who are authorized under 8 CFR 1.2 and 8 CFR 1001.1(f) to represent persons before the Department of Homeland Security or the Executive Office for Immigration Review, but only if this out of state attorney is providing immigration reform act services in an office or business in California. While it is clear that AB 1159  will apply to a non-California attorney who works in a law office or is in house counsel in a corporation in California; if interpreted broadly, it could also include an out of state attorney who represents a client at an interview in a USCIS office or Immigration Court in California. It should clearly not be interpreted to apply to an out of state attorney who files an application with a centralized USCIS office in California, such as the California Service Center, while practicing in an office outside California.

Since most immigration attorneys are solo or part of small firms, the $100,000 bond requirement will immediately preclude attorneys from providing competent and diligent services, which they are mandated to do under their professional responsibility obligations. If BSEOIMA becomes law, there will likely be a shortage of competent attorneys who will be required to represent the millions of applicants who may become eligible for Registered Provisional Immigrant status. The $100,000 bond requirement will further exacerbate the shortage. Employees of organizations that are qualified to provide free legal services or of non-profit tax exempt organizations will be exempt from the $100,000 and the other provisions of AB 1511, but many of the legitimate non-profits providing legal services work with private attorneys to provide pro bono services, and this is particularly true upon the implementation of a new immigration benefit, as was the case with the Deferred Action for Childhood Arrivals (DACA) program, where non-profits leveraged off thousands of pro bono lawyers to effectively represent young applicants throughout the country. Such pro bono efforts, which will need to be scaled up upon the passage of BSEOIMA, will not be possible in California under AB 1159. Then, on top of the $100,000 bond, section 6247 authorizes the California State Bar to collect additional fees from attorneys for the reasonable costs of administering and enforcing the statute.

Another provision of AB 1159, section 6246, is particularly problematic as it makes it unlawful for an attorney to accept payment for any immigration reform act services before the enactment of BSEOIMA. While one can understand the concern behind this provision about preventing an unscrupulous attorney to speculatively charge fees for a filing, which does not yet exist, it is clearly part of competent representation for an attorney to advise a client in advance regarding changes in law. For instance, a client may wish to know whether he or she is hypothetically eligible for RPI status with criminal convictions, and the diligent attorney may recommend that a disqualifying felony conviction under the new law be expunged, if at all that is possible. Again, interpreting section 6246 broadly, an attorney may be penalized for legitimately charging a fee for providing such strategic advice. Similarly, a corporate client may wish to know how BSEOIMA may affect its ability to file new H-1B petitions on behalf of its existing employees and new employees. Providing advice in contemplation of a change in law would enable such a company to restructure its personnel prior to the law taking effect so that it is not deemed an H-1B dependent employer under BSEOIMA, as well as file labor certifications on behalf of employees so that they become “intending immigrants,” and are thus not part of the dependency calculation.

It is worth noting that the Connecticut Bar Association’s Professional Ethics Committee addressed a similar question in 2012 when an attorney requested guidance on whether it was ethically appropriate to be retained and perform work for a client in anticipation of the enactment of the federal regulations pertaining to the I-601A Provisional Waiver. Referencing Connecticut Rules of Professional Conduct 1.4 and 1.0 pertaining to client communication and informed consent, this opinion concluded that it was, so long as clients are fully informed of the costs, risks and potential benefits of preparing the case without a guarantee that the law will be enacted. See Informal Opinion 2012-04, Work Performed in Anticipation of New Federal Regulation. Connecticut Bar Association Professional Ethics Committee, May 9, 2012. In contrast, section 6246 prohibits any kind of service that can be provided in advance of a law becoming effective, even if otherwise ethical and which would clearly benefit the client.

In the interests of brevity required in a blog, I will not pick on each and every onerous provision of AB 1159, but must finally note that the bill would require attorneys providing immigration reform act services in California to put all funds received form a client in an attorney trust account, and only withdraw these funds when the services have been completed. Most immigration attorneys charge flat fees and such flat fees if not unreasonable generally benefit the client as they provide certainty at the outset of the representation. An immigration practitioner’s typical retainer agreement defines the various steps required in an immigration case, and the fee pertaining to each step. The initial payment from the client thus is not an advance; rather it is paid for starting work towards the case such as research, strategy, inputting information, and gathering of evidence in preparation of an application. The next payment is made prior to filing the application and the next could be for preparation and appearance at an interview or hearing, and so on.  According to NYC Bar Opinion 1991-3:
A "flat fee" is a stated amount for the representation contemplated, to be paid regardless of the actual hours that are ultimately required. The agreement might provide for an additional fee if the representation extends to an additional phase (e.g., the case goes to trial or there is an appeal). The flat fee reflects a sharing of risks between lawyer and client and generally provides the client with the security or comfort of a known cost for a particular service.
In New York, a lawyer can deposit such a flat fee, or other variations of non-hourly fees such as an advance retainer, in the lawyer’s own account. In fact, according to N.Y. State Bar Op. 816 (2007), if the parties agree to treat advance fees as the lawyer’s own, then a lawyer is required to deposit such fees in the business account and not in the attorney trust account as the latter would “constitute impermissible commingling.” Even if such a flat fee is deposited in the lawyer’s own account, it is seldom considered non-refundable. If the client terminates the lawyer’s services or vice versa prior to the completion of the agreed representation, the lawyer is still required to refund the unearned portion of the fee even if it was deposited in the lawyer’s own account. Whether a fee is considered an advance towards unearned legal fees, and thus required to be deposited in a trust account, or a fee immediately earned by the lawyer, is subject to much ambiguity and varying interpretations in different states. Texas, for example, according to Robert Alcorn may require flat fees to be put in a trust account unless they are non-refundable, although it is not clear whether the Texas ethics opinions cited in the forthcoming article involved unearned fees or fees charged for commencing work on defined steps as in an immigration case.  See A Perfect Storm – CIR and IOLTA by Robert Alcorn, Bender’s Immigration Bulletin, August 15, 2013. Clearly, treating a fee as an advance towards future fees (even when it is not and agreed as such by attorney and client), and thus requiring strict accounting of deposits and withdrawals from the trust account (along with significant additional expenses), will likely force lawyers to engage in hourly billings so as to ensure accounting accuracy, which in turn will result in less predictability and comfort for the client.

It is hard to understand why the State Bar of California is behind such a bill aimed at immigration lawyers. In New York, for example, bar associations such the New York City Bar look to the immigration bar in working jointly together to assist immigrants and to also fill unmet needs through pro bono projects. In addition to immigration lawyers being regulated by their own state bar rules and special immigration rules, they will also be subject to criminal sanctions under BSEOIMA for knowingly filing fraudulent applications. Thus, the new provisions in AB 1159 are totally unnecessary.  Instead of supporting such a pernicious and ill-conceived law targeting immigration lawyers, the California State Bar can better focus its efforts in launching programs that facilitate mentoring, education, and pro bono collaborations among immigration lawyers, which will result in the more effective delivery of legal services to millions of people who will truly need them if immigration reform becomes a reality.

Update - Improved Markup of AB 1159

Since the blog was posted, AILA InfoNet posted an amended version of the bill, which substantially improves some of the provisions. For instance,  pro bono attorneys will no longer be subject to the provisions of the bill. The immigration reform related services provision is limited to preparing applications for undocumented immigrants who will be able to apply under legalization provisions of BSEOIMA or future versions of this law. A certified legal specialist in California who maintains a professional liability policy of $100,000 per occurrence and a general aggregate limit of $350,000 is also exempt. Most important, a non-exempt attorney may maintain a professional liability policy in an amount of not less than $100,000 per occurrence and a general aggregate limit of $350,000 or a bond of $100,000. Hence, a bond of $100,000 is not required if the attorney has the requisite professional liability insurance. It appears that AILA's advocacy efforts have born fruit, but the bill still needs to be further improved before the immigration bar can support it. Notwithstanding these modest improvements, AILA leader Annaluisa Padilla, who is spearheading this effort in California,  asks these pertinent questions: "Is further state regulation of immigration attorneys specifically acceptable to us? In the sense that in addition to to already existing requirements, is further regulation needed in this particular area of the law? Will these regulations actually prevent fraud on immigrants? If so, are not immigrants likely to be defrauded in other areas of the law?"
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Immigration Reform -- A Glossary of Terms as Used by Both Sides

7/11/2013

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Charles Kuck, ABIL President
Musings on Immigration

One of the striking things about reading hundreds of newspaper articles about "immigration reform" with thousands of quotes from politicians is the amazing misuse of words and phrases that form an essential part of the debate.  To aid you in your understanding of the immigration reform debate, here are definitions of the key words and phrases, as used by the different side,s on this very important issue.
Word/Phrase

Immigration Reform






The Senate Immigration Bill















DACA/Deferred Action for Childhood Arrivals







DREAMers








Amnesty








Border Security










“Back of the Line”












E-Verify
Senate Democrat and GOP Meaning

Our current legal immigration system is broken and is in need of a complete review and rewrite to ensure the future competitive economic advantage held by the United States as a nation of immigrants.

The Border Security, Economic Opportunity  and Immigration Modernization Act of 2013 BSEOIMA’s 1,198 pages are a virtual rewrite of thousands of additional pages of one of the most complex immigration systems on earth.  BSEOIMA attempts to enhance border security, hold employers accountable for undocumented hires, fix a terrible legal immigration system, create a future path for immigration, and deal with the 11 million undocumented people and their families humanely and justly.

Program put in place by President Obama in June 2012 to alleviate the political pressure he was receiving from undocumented students, brought here as children through no fault of their own, who seek a future opportunity in the only country they have ever known.

Those brought to the United States under the age of 16, educated here, and who have become American in every sense except for a piece of papers.  These kids will receive an expedited process to permanent residence under a stringent and detailed list of criteria.

Does not exist. Amnesty is complete forgiveness without recompense.  There is no Amensty in BSEOIMA.  Fines, delays, civic and language requirements, high filing fees and and a 10 year wait for full legal status ensure that there is NO forgiveness without recompense.

BSEOIMA increases the effectiveness of the Border Patrol, builds fences to deter illegal crossings, and calls for spending $46 billion dollars just on the border over the next decade.   BSEOIMA will significantly reduce the flow of undocumented immigration to the United States.



What line?  Today some relatives have an 24 year wait for a green card, and employers can wait up to 14 years to immigrate some employees.  BSEOIMA reduces backlogs, increases visa opportunities, creates a new start up visa, increases investment, rewards Masters Degree and PhDs with US Degrees in STEM fields, generally fixes the “line” and creates enormous economic benefit to the US.

A necessary part of immigration reform, requiring all US employers to verify the identity and work authorization of all new employees with an online federal government database run by the USCIS and Social Security Administration.  While error prone and time consuming, it is currently the only effective way to verify employment eligibility.
House GOP Meaning

An attempt by Democrats to create millions of new Democratic voters, and to destroy the foundation of America.



A Democratic attempt to pass an amnesty to reward lawbreakers and create open borders to allow the destruction of America.












President Obama’s attempt to curry favor with Latinos by offering a work permit to kids who should not be in the United States.  This program must be defunded. (NOTE:  There are no public funds used for this program).



“Brazen Self-Professed Illegal Aliens .  . . "







The Senate Immigration Bill.








A complete synthetic bubble around America that does not allow a single person into the United States without a visa, a background check, and a full body cavity search. This must be done before any consideration is given to fixing the broken legal immigration system.  (NOTE:  Ignores the fact that the broken legal immigration system causes illegal immigration).

Where immigrants should be who want to come to the US.  My relatives waited in the line three generations ago, these people can wait too.









The first step to a national ID Card.  Although some House GOP members do LOVE this idea! 
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Meet Our New Friend: Who is an "H-1B Skilled Worker Dependent Employer" in Senate Immigration Bill, S. 744?

6/10/2013

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by Cyrus D. Mehta, ABIL Lawyer and Gary Endelman
The Insightful Immigration Blog

Since we last wrote about the H-1B visa provisions in Senate Immigration Bill, S. 744, Workable Or Unworkable? The H-1B And L-1 Visa Provisions In BSEOIMA, S. 744, there have been several changes to this portion of the bill. The amendment proposed by Senator Hatch (after reaching a compromise with Senator Schumer), which passed the Judiciary Committee, sought to water down some of the restrictions that would otherwise make the H-1B visa program unworkable. Seeking to advance the interests of the many high tech companies that have settled in Utah, an accommodation with Senator Hatch implicitly held out the promise of attracting other GOP Senators to vote for the bill when it reached the Senate floor. A bi-partisan Senate bill that passed with 70 votes might serve to provide political cover for embattled Speaker John Boehner to maneuver around the objections of Republican obstructionists and pass CIR with the aid of Democratic votes.

The main concern of many technology companies in Silicon Valley was that the new recruitment requirement would make it impossible for them to use the H-1B visa program, despite the increase in the H-1B visa cap. Under the bill’s original provision, the employer would first have to offer the job to any US worker who applied, who is equally or better qualified than the nonimmigrant H-1B worker. It was feared that this would allow the Department of Labor (DOL) to micromanage the employer’s recruitment processes, and also determine who an equally or better qualified US worker would be rather than leave it to the employer’s best judgment. To the extent that the Hatch amendment shifted power over the H-1B away from the DOL in favor of more market-oriented forces, it represents a significant attempt to rely upon such influences rather than direct federal regulation as the operating principle of protection for US workers in the immigration context.

As a result of the Hatch amendment, an employer who is not an H-1B Skilled Worker Dependent Employer (SWDE) or a Dependent Employer (DE), which we will explain below,   is required to use recruitment procedures that meet industry wide standards and offer compensation that is at least as great as that required to be offered to H-1B nonimmigrants. It no longer requires such an employer to offer the job to an equally or better qualified US worker. Still, it is hard to determine how this would be interpreted by the DOL  Does the employer need to establish that there were no qualified US workers who applied or does the employer only need to demonstrate that it does normally also recruit US workers for the same position? We believe that the latter interpretation is more consistent with the language of the Hatch amendment. An employer that is not a SWDE and not a DE will not be subject to the  non-displacement  attestation unless it files the petition with the intent or purpose of displacing a specific US worker for the position to be occupied by the beneficiary, or workers are displaced who provide services at worksites owned, operated, or controlled by a Federal, State, or local government entity that directs and controls the work of the H-1B worker, or workers are displaced who are employed as public school kindergarten elementary, middle school or secondary school teachers.

But here’s the catch. The Hatch amendment also creates a new concept – the SWDE. The SWDE is different from the H-1B dependent employer (DE) as we have known it under the existing law. An SWDE is “an employer who  employees H-1B nonimmigrants in the United States in a number that in total is equal to at least 15 percent of the number of its full time equivalent employees in the United States employment in occupations contained within Occupational Information Network Database (O*Net) Job Zones 4 and Job Zones 5.” Under this definition, many employers will be SWDE even if they are not dependent employers. Even if they hire thousands of US workers at lower skill levels, one needs to count how many workers are hired at Job Zone 4 and 5, and if the number of H-1B workers exceed 15% of that number, the employer becomes a SWDE. One can imagine the kind of intricate investigations and calculations that an immigration attorney may need to make on behalf of an employer client to find out how many people it hires at Levels 4 and 5 so as to determine whether the employer is a SWDE or not. As long as an employer employs even one US worker at a Level 4 or 5 positions, the hiring of an H-1B worker will render this employer a SWDE (as the hiring of this one H-1B worker will be more than 15% of the number of employees hired in Level 4 or 5). Once the employer is a SWDE, such an employer would  be required to have offered the job to any US worker who applies and is equally or better qualified for the job than the H-1B worker..

The SWDE is not based on a gradation like the traditional Dependent Employer (DE) as defined in Section 212n)(3) of the Immigration and Nationality Act:

  • An employer is considered H-1B-dependent if it has: 25 or fewer full-time equivalent employees and at least eight H-1B nonimmigrant workers; or
  • 26 - 50 full-time equivalent employees and at least 13 H-1B nonimmigrant workers; or
  • 51 or more full-time equivalent employees of whom 15 percent or more are H-1B.

To qualify as an SWDE, you do not have the less than 25, 12-50 and 50+ to do the calculation.  Under the new SWDE definition where you need 15%, even if you have 1 employee in Job Zone 4 or 5, and hire one H-1B, you become a SWDE. This never happened under the DE definition, as you needed to have 7 H-1Bs if less than 25, or 12 H-1Bs if between 25 and 50, or 15% after that. Unlike the DE category, which was supposed to be the exception rather than the norm, the SWDE is more easily satisfied precisely.

Our colleague David Isaacson properly points out that, because of the different rules for small numbers, it will be relatively easy for a small employer to be a SWDE but not a DE.  If an employer has 20 or 25 full-time equivalent employees (FTEEs), and 5 of them are H-1Bs who are not intending immigrants, then that employer will be a SWDE even if all of its U.S. workers are in Job Zone 4 or 5, because the 5 H-1Bs are necessarily more than 15% of however many of the 20 or 25 total FTEEs are in Job Zones 4 or 5, but that employer won’t be a DE because it has fewer than 7 non-intending-immigrant H-1Bs and one must have more than 7 to be a DE.  It is also possible to be a SWDE and not a dependent employer as a large employer, if your total number of H-1B employees who are not intending immigrants is more than 15% of your total “number that in total is equal to at least 15 percent of the number of its full-time equivalent employees in the United States employed in occupations contained within Occupational Information Network Database (O*NET) Job Zone 4 and Job Zone 5” but is less than 15% of your overall FTEEs, because of your employees in Job Zones 1 through 3 who count towards the denominator of the DE calculation but not the denominator of the SWDE calculation.

Is a dependent employer in a more advantageous position than a SWDE after the Hatch amendment? As a practical matter, it would be very difficult for an employer to be a dependent employer without being a SWDE. So long as an employer hires at least one US worker in a Job Zone 4 or 5 positions, as noted earlier, the hiring of even one H-1B worker would make this employer a SWDE. But there may exist a company that does not hire anyone in a Level 4 or 5 Job Zone. Although Level 4 or 5 Job Zones generally require bachelor’s degrees, or higher, there are many Level 3 occupations in O*Net that may require bachelor’s degrees some times, but not all of the time. For instances, Business and Operations Managers,  Lodging Managers or Food Service Managers are in Zone 3, which can qualify under the H-1B visa,  and one can conceive of a hotel establishment hiring both US workers and  H-1Bs for such positions that are only in Zone 3.

Has the SWDE made the traditional H-1B employer definition redundant? That might be an incautious overstatement for notable differences still remain. The SWDE has to attest that for 90 days before and after the filing of the Labor Condition Application, it has not and will not displace a US worker. By contrast, an employer who is a dependent employer but not a SWDE, will have to attest that for 180 days before and after the filing of the Labor Condition Application, it has not and will not displace a US worker. Also, strangely, the bill as it exists in its current form, does not require a dependent employer to first offer the job to an equally or better qualified US worker. Is this an oversight where a dependent employer is exempt from the more onerous recruitment procedures that SWDE have to go through, but is still subject to a more vigorous anti-displacement attestation?  Both a dependent employer and SWDEs are prohibited from  outplacing H-1B workers to third party sites.

The SWDE definition was introduced to catch US-based tech companies than the Indian IT companies, as the latter are in any event dependent employers.  In a twist of fate, while the Indian IT companies have been most affected by the H-1B provisions in the bill, the SWDE concept may wind up most severely affecting the very IT giants in this country who looked to Senator Hatch for legislative relief. The end result may well be to subject them to recruitment obligations that would otherwise not have applied under the traditional H-1B dependent employer definition. Such are the unintended consequences of a compromise that Senator Hatch had to make with other Gang of 8 members, such as Senator Durbin, who have been vehemently opposed to the H-1B visa program. In exchange for a more liberal recruitment regime, the law will make more employers SWDEs and subject them to the restrictive recruitment procedures. Not only may Facebook and Google, to name but two of many such companies, have to adjust to this unwelcome and rude surprise, but it is likely that many IT start-ups, the very entrepreneurs that the Obama Administration claims to want to encourage, will find their growth stymied by the SWDE recruitment obligations that likely were never intended by Senator Hatch to apply to them at all.

This bring us finally to the definitions of “covered employer” and “intending immigrant.” A SWDE will not be subject to the more onerous recruitment requirement, and a DE as well as an SWDE will not be subject to the anti-displacement attestations if they fall under the definition of “covered employer” and are filing an H-1B visa for an “intending immigrant.” The Hatch amendment slightly modified the definition of a “covered employer,”  in fact making it easier for a SWDE or DE to get out of the more restrictive requirements. An “intending immigrant” is one who intends to live and work permanently in the US as demonstrated by a pending or approved labor certification that was filed by a “covered employer.” An intending immigrant can also be the beneficiary of a pending or approved I-140 petition  A “covered employer,” as amended by Hatch,  is an employer who during the year before filing the labor certification on behalf of the intending immigrant, has filed an immigrant visa petition for 90 percent of current employees who were beneficiaries of approved labor certifications during the one year ending six months before the petition in question is filed.

How does this work? The employer who is filing an H-1B on behalf of an “intending immigrant” (for whom a labor certification or an I-140 petition has been filed or approved) needs to look back six months. If the employer had approved labor certifications during the one year period ending six months prior to filing the H-1B petition,  and filed immigrant visa petitions for 90% of them during that look back period six months prior, the employer qualifies as a covered employer. One can conceivably argue that if the employer did not have any approved labor certifications during that look back period, it might still qualify as a covered employer. The covered employer definition applies only to approved labor certifications, out of which 90% have I-140s filed on their behalf. So, if there are no approved labor certifications or no labor certifications even filed, the employer may still be a covered employer, provided the beneficiary of the H-1B petition currently has an approved or pending labor certification or I-140 petition filed on his/her behalf.

The Senate Judiciary Committee's report on BSEOIMA has some alarming language regarding the "covered employer" definition:
"Intending immigrants are not counted as H-1B or L nonimmigrants for the purposes of determining whether an employer is an H-1B dependent company or a L visa dependent company.  Intending immigrants are defined as persons for whom their employer has started the green card process, including those for whom an Immigrant Petition for Alien Worker (Form I-140) or Application to Register Permanent Residence or Adjust Status (Form I-485) has been filed. However, employers may only take advantage of this counting rule if the employer has actually filed immigrant status petitions for not less than 90 percent of current employees for whom the company filed labor certifications in the previous year."
Despite this language in the report, it can still be argued that Congress has intended that an employer who has approved labor certifications in the "look back" period follow through with the green card process (as opposed to nominally only filing labor certifications), and thus the requirement that the employer has filed I-140 petitions for not less than 90% of the relevant approved labor certifications.  Congress just does not want an employer to push paper and file labor certifications, but to actually carry through with the green card process for its employees.  However, if there is no filed or approved labor certification during the relevant period, an employer should still be treated as a "covered employer."  If interpreted literally, only a covered employer can invoke the "intending immigrant" exception. Because the Hatch-Schumer amendment narrowed the definition of "covered employer" to require a labor certification as a condition precedent to an I-140 submission, the eligibility of any I-140 petition that does not  depend on a labor certification approval is suddenly and surprisingly called into question. Thus, outstanding researchers, persons of extraordinary ability, beneficiaries of approved national interest waivers, multinational managers, and advanced US degree STEM holders,  may never be considered as "intending immigrants" as no labor certifications need to be filed on their behalf.   The very people we need to keep most will not benefit.   At a time when there are more green card routes around PERM, can it possibly be that H-1B status will be withheld, or made more difficult, from those who take advantage of these new options?  Surely this cannot be the intended result of such imprecise drafting.  The most vociferous critics of the H-1B programs, such as the IEEE, claim to favor unlimited green cards for advanced US STEM degree holders.  Will it be necessary for them to forego, or so drastically curtail, the H category entirely in order to arrive the finish line? Despite this, as explained above, we believe that an employer who files no labor certifications can still seek protection under the chimera of "covered employer." Moreover, despite not having to file a labor certification for the priority worker, the employer may have filed labor certifications for other sponsored employees so that the mantle of "covered employer" does not have to be alien centered so long as it applies generally to the employer in question. Doubtless, it may take a technical amendment to simplify the matter and to bring clarity to the perplexed.

Notwithstanding the exception that has been created for employers to get out of the more restrictive H-1B requirements, it would not be easy for an employer to file a labor certification in order to create an intending immigrant. It takes 60+ days of recruitment before an employer can file a PERM labor certification. An employer who wishes to quickly hire an H-1B worker, may not be able to wait for that long to file a labor certification before filing an H-1B petition, and may rather go through the recruitment requirement for an SWDE under the H-1B provision. Moreover, for a permanent labor certification, the employer has to demonstrate that there were no minimally qualified US workers who applied for the job, which is even more onerous than the recruitment requirement for a SWDE, where the standard is equally or better qualified. On the other hand, a SWDE would not have a choice and may be compelled to file a labor certification to establish that the worker is an “intending immigrant.” For instance, an employer whose business model relies on outplacement of employees to client sites will need to first have an “intending immigrant” before it can file an H-1B visa petition.

While an employer may ultimately desire to file for green cards on behalf of their employees,  the H-1B visa, like dating before marriage,  allows time for both the employer and employee to try each other out before making a commitment to sponsor the worker for permanent residence and expend resources, including considerable governmental resources to process and adjudicate a labor certification application. BSEOIMA will turn this logical progression upside down. Employers will be forced to start the green card processing for potential H-1B workers even before they have come on board under the H-1B visa, where they can be tested out first.  BSEOIMA is transformational as it gives more emphasis to green card sponsorship than temporary sponsorship. Employers will look to ways to avoid the H-1B process altogether, as well as the PERM labor certification process. They will be able to directly sponsor STEM advanced degree students on an F-1 visa for a green card without even having to go through the labor certification process. A merits based point system will kick in four years after BSEOIMA takes effect, which will also allow employers to bypass the H-1B and PERM labor certification.  Even for those employers who must resort to the H-1B visa, they may not have to depend on the H-1B visa for too long as one of the provisions in the Hatch amendment will allow a foreign national to apply for adjustment of status even before the priority date becomes current. If the foreign national gets an employment authorization after filing for adjustment of status, it may obviate the need to apply for a renewal of the H-1B status. Finally, BSEOIMA may have unintended consequences for the Indian heritage IT firms, which it seeks to disrupt and put out of business. These firms, besides being forced to file for more green cards, will change their business models and will hire more US workers or will merge with firms that would reduce their dependence on H-1B workers. Thus, in the long run, these firms may be more competitive in the US rather than weakened.

If BSEOIMA does take effect, how will it impact existing H-1B workers? The new recruitment and displacement provisions won’t kick in for existing workers. So, even if an employer files an extension for existing employees, these new provisions will not apply even after enactment. On the other hand, the ban on outplacement will take effect even for existing employees with respect to any application filed after enactment. It would thus be incumbent on employers to start planning in advance and file labor certifications on behalf of H-1B employees they were in any event planning to file in the future. This would allow a SWDE to become a covered employer and thus be able to file H-1B visas under the more liberal provisions. Still, BSEOIMA has made the H-1B visa, which was already complex, even more maddeningly difficult. The whole idea of a temporary visa is to provide employers with flexibility to bring in much needed foreign skilled workers. BSEOIMA utterly and completely fails in this department, and it remains to be seen whether employers will be able to cope with this new temporary visa regime, or whether the drumbeat for further reform will begin soon after the law’s enactment.
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Do We Still Need PERM Labor Certification? An Analysis of the Merits-Based Points System of BSEOIMA

5/13/2013

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by Cyrus D. Mehta, ABIL Lawyer and Gary Endelman
The Insightful Immigration Blog

We continue to analyze the provisions of the Border Security, Economic Opportunity and Immigration Modernization Act of 2013, s. 744 (BSEOIMA), which seeks to bring about dramatic changes to the existing immigration system in the United States.  One of the most  transformative changes that BSEOIMA will bring, if enacted, is a merits-based points system. For previous blogs on BSEOIMA, we refer readers to Workable or Unworkable: The H-1B and L-1 Provisions in BSEOIMA, s. 744 and Some Preliminary Observations Regarding The Proposed Border Security, Economic Opportunity And Immigration Modernization Act.

There will be a two track merits-based system under BSEOIMA.  The first track points-based merits system will have 120,000 to 250,000 merit-based visas. The second track non-points merits system applies to long term residents, and this track does not have a cap. By creating a points system, Congress has voted “No Confidence” in the labor certification program as a way to provide US employers with the talent they and the economy needs. This lack of confidence is also evident in other parts of BSEOIMA where STEM graduates with advanced degrees can be directly sponsored for green cards by employers without going through the arduous labor certification process.

Perhaps, it has also dawned on Congress about the futility of the labor market test that is conducted on behalf of a foreign worker for green card sponsorship who is already hired by the employer.  A good faith test of the labor market even if conducted by a well-intentioned employer will likely fail, at least from the Department of Labor’s (DOL) view, if the foreign worker is already in the position. The statutory basis for labor certifications, which in its current form is known as PERM (Program Electronic Review Management), is provided in INA §212(a)(5) of the Immigration and Nationality Act ("INA"). Under INA §212(a)(5), an alien is deemed "inadmissible unless the Secretary of Labor" certifies, inter alia, that "there are not sufficient workers who are able, willing, qualified…and available at the time of application" among the U.S. workforce. Out of this simple mandate in the INA, the DOL has built a complex regulatory structure that has delegated to the employer to conduct a good faith text of the US labor market. While in the real world an employer selects the best workers based both on an objective and subjective set of criteria, the DOL requires employers to demonstrate that only minimally qualified workers are available for the position. The labor certification process neither compels nor incentivizes an employer to hire the best workers, but it also does not result in the creation of US jobs. If a minimally qualified worker applies for the position, all that happens is that the labor certification cannot be filed.

The first track points-based system moves away radically from the labor certification system as it allows a foreign national to apply for permanent residency without a specific employer’s sponsorship. It  will take effect five years after the enactment of BSEOIMA. During  the first four years from enactment,  visas shall be made available to the backlogged EB-3 preferences. From the fifth year onwards,  50 % of visas shall be allocated to applicants who get the highest number of points under Tier 1. The remaining 50% of visas shall be allocated to applicants who get the highest number of points under Tier 2.

Under Tier 1, points will be assigned as follows:

A. Education
  • 15 points for a doctoral degree
  • 10 points for a master’s degree
  • 5 points for a bachelor’s degree from an institution of higher education in the US

B.    Employment Experience
No more than 20 points can be allocated as follows:
  • 3 points for each year an alien has been lawfully employed in a zone 5 occupation
  • 2 points for each year the alien has been lawfully employed in a zone 4 occupation

C. Employment Related To Education
An alien who is in the US and is employed full time or has an offer of full time employment in a field related to the alien’s education
  • In a zone 5 occupation shall be allocated 10 points
  • In a zone 4 occupation shall be allo0cated 8 points

D. Entrepreneurship
An alien who is an entrepreneur in a business that employs at least 2 employees in a zone 4 or zone 5 occupations shall be allocated 10 points

E. High Demand Occupation
An alien who is employed full-time or has an offer of full-time employment in a high demand 1 shall be allocated 10 points

F. Civic Involvement
An alien who has attested that he or she has engaged in  significant amount of community service shall be allocated 2 points

G. English Language
An alien who received a score of 80 or more on the Test of English as a Foreign Language, or an equivalent score on similar test, shall be allocated 10 points

H. Siblings and Married Sons and Daughters of Citizens
An alien who is the sibling of a citizen of the United States or who is more than 31 years of age and is the married son or married daughter of a citizen of the United States shall be allocated 10 points

I. Age
An alien who is:
  • between 18 and 24 years of age shall be allocated 8 points
  • between 25 and 32 years of age shall be allocated 6 points
  • between 33 and 37 years of age shall be allocated 4 points

J. Country of Origin
An alien who is a national of a country of which fewer than 50,000 nationals were lawfully admitted to permanent residence in the US in the previous 5 years shall be allocated 5 points.

Under Tier 2, points will be assigned as follows:

A. Employment Experience
An alien shall be allocated 2 points for each year the alien has been lawfully employed in the US, for a total of not more than 20 points

B. Special Employment Criteria
An alien who is employed full-time, or has an offer of full-time employment
  • in a high demand tier 2 occupation shall be allocated 10 points
  • in a zone 1 occupation or zone 2 occupation shall be allocated 10 points

C. Caregiver
An alien who is or has been a primary caregiver shall be allocated 10 points

D. Exceptional Employment Record
An alien who has a record of exceptional employment shall be allocated 10 points

E. Civic Involvement
An alien who has demonstrated significant civil involvement shall be allocated 2points

F. English Language
An alien who received a TOEFL score or an equivalent score on a similar test:
  • 75 or more shall be allocated 10 points
  • More than 54 and less than 75 shall be allocated 5 points

G. Siblings and Married Sons and Daughters of Citizens
An alien who is the sibling of a citizen of the US or is over the age of 31 and is the married son or married daughter of a citizen of the US shall be allocated 10 points

H. Age
An alien who is:
  • Between 18 and 24 years of age shall be allocated 8 points
  • Between 25 and 32 years of age shall be allocated 6 points
  • Between 33 and 37 years of age shall be allocated 4 points

I.     Country of Origin
An alien who is a national of a country of which fewer than 50,000 nationals were lawfully admitted to permanent residence in the US in the previous 5 years shall be allocated 5 points.

There is also a second merit based track system that does not depend upon points beginning October 1, 2014. The second merits non-points system cleverly acts as a safety valve to reduce the existing backlogs in the system, and also ensures that we do not experience the same horrendous backlogs as we see under the existing system. People whose employment-based petitions and family-based petitions filed before the Act have been pending for more than 5 years will begin to become eligible for merit-based visas on that basis. Those who have been lawfully present for not less than 10 years will also be eligible for this non-points based side of the merit-based visa system. Registered Provisional Immigrants (RPIs) will be able to adjust status based on 10 years of lawful presence under this second merit non-points track system.

Labor certification will undoubtedly survive even after BSEOIMA as beneficiaries under the EB-2 and EB-3 preferences still need an employer to obtain labor certification. Moreover, not everyone will be able to make it under the merits system, such as ethnic cooks for example, who may not even need to speak English but are still vital for the success of the restaurant.  The merits based points system will compliment labor certification if BSEOIMA is enacted. Congress, and probably DOL itself has realized, as the authors have previously noted in their prior article, that the very notion of a “good faith” recruitment seems oddly out of place when used with reference to a recruitment effort that achieves its desired objective by failing to locate any qualified job applicants. Only in PERM do you win by losing. Unable to utilize real world recruitment standards, compelled to base evaluations upon the entirely artificial concept of “minimal qualifications” that does not exist outside the cordon sanitaire of 20 CFR §656, wedded to an inflexible job description that can never change regardless of an employer’s business needs or a worker’s evolving talents, and effectively prohibited from taking into consideration the very subjective character traits whose presence or absence is the most reliable predictor of effective job performance, the labor certification process is fundamentally at odds with the very economic system it allegedly seeks to serve. Justification of labor certification can extend no further than a test of the relevant job market. The DOL has also failed to provide jobs to U.S. workers even though it forces the employer to conduct elaborate tests of the labor market to retain the foreign national employee. Indeed, as presently conceived and administered by the DOL, labor certification is a job killer, hurting the employment prospects of the domestic work force by artificially preventing US employers, most especially emerging companies who are the engine of job creation, from treating the foreign national as an asset to be maximized in way that promotes job growth and strengthens the very economy on which we all depend. Indeed, no intellectually honest examination of the labor certification system can fail to detect the pervasive distrust of the entrepreneurial spirit and the very ethos of capitalism itself that the DOL brings to each phase of the PERM process.

As the PERM labor certification appears to wither in BSEOIMA, giving way to a merits based points system, one can also learn from the Canadian points system where the points based system first started. A points based system may not necessarily be ideal. It could potentially encourage PhDs to win the highest points only to immigrate and not find jobs that are commensurate to their skills. Moreover, gaining the requisite points under specific criteria  are not an end unto themselves, and  that their effectiveness cannot be measured apart from the overall ability of the new immigrant to integrate into the economy and culture of the receiving nation . It  is this that ultimately will determine if the immigrant will be put into a position to succeed for themselves and their adopted home.

A Maclean’s article on the failure of the Canadian points system is revealing. According to a study conducted by the Organization for Economic Co-Operation and Development (OECD), only 60% of Canadian immigrants found jobs in their chosen areas of specialization compared to an OECD average of 71%; in matching up skills with employment, Canada ranked near the bottom, worse than Estonia, Italy, Spain and Greece.

The labor certification system seeks to  match the employer’s demand with the foreign national’s skills. Even here, however, it seems clear that PERM is not the best way for employers to express their interest in potential new hires. An independent assessment of language and credentials after which applicants can be placed in a pool for employers to draw from may be a promising third way between a free-standing points system (Canada) and immigration linked to specific job offers (USA). This “expression of interest” as applied in Australia and New Zealand avoids the frustrations of the Canadian approach and the economic illiteracy of PERM.

The frustrations of the Canadian model suggest strongly that recruitment of even the most skilled knowledge workers cannot be divorced from domestic demand.  Not only has this produced  long waiting lines in Canada but the bias towards highly educate STEM professionals has deprived those industries which are booming, such as the oil fields in Alberta, of the blue collar talent that they so vitally need. According to a New York Times article that was written when the points based system was first proposed in the failed 2007 bill:

Part of the backlog in Canada can be traced to a provision in the Canadian system that allows highly skilled foreigners to apply to immigrate even if they  do not have a job offer. Similarly, the Senate bill would not require merit system applicants to have job offers in the United States , although it would grant additional points to those who do. Without an employment requirement , Canada has been deluged with applications.

According to a Huffington Post article, the chronic underemployment of advanced degree professionals in Canada underscores the need for employers  to play an active role in the immigration selection process. Since 2004, the Provincial Nominee Program (PNP) where provinces sponsor immigrants to designated job vacancies has expanded six fold. In Australia, 81% of immigrants obtained employment in their chosen disciplines within six months. A pure points system not anchored to what employers are looking for will produce lower income and higher unemployment. Once again, according to the Maclean’s article, a comparison with Canada is instructive:
In contrast to the Canadian experience, immigrants to the US have virtually closed the income gap with American-born workers. In 1980, US immigrants earned about 80 per cent of American-born workers, a gap that was roughly the same in Canada. By 2011, US immigrants earned 93% of native-born workers, while foreign-born college graduates now out-earn their American counterparts. During the last recession, the unemployment rate for foreign-born university grads in Canada topped out at 8.4 per cent in 2010( Among those who lived in the country less than 5 years, it was more than 14 per cent.) By comparison, unemployment among foreign-born graduates in the US was 4.4 per cent.
BSEOIMA  keeps intact the traditional labor certification system under the employment-based second and third preferences, but also introduces a merits based points and non-points system. Within the merits-based points systems, plenty of points will be given to those who have jobs, offers of employment, and even US-based employment in the area of the alien’s education,  but it does not require the employer to file a “pointless” labor certification (no pun intended!). Under the non-points merits based visa system, long term residents waiting in the pipeline for a green card can avail of visas, thus creating a safety valve in case of backlogs. BSEOIMA thus provides several pathways for foreign nationals to obtain permanent residence without obsessively focusing on labor certification.  The goal we seek is not to replace PERM with a points system but to find an alternative to both that is ethical, transparent and realistic providing the economy with the human capital it needs to grow but doing so in a manner that allows immigrants to be productive while respecting the legitimate interests of US workers.

We now have a new world.  The merit based system in the bill provides this missing alternative. BSEOIMA is a transitional document and the number of options to obtain green card status without labor certification is bound to grow in future years.  The virtue of BSEOIMA is that it is hybrid system combining a points system with employer selection. This offers the best of both worlds, and we refer readers to a Migration Policy study that thoughtfully provides models for such hybrid systems. As the global competition for top talent in science and technology intensifies, in order for the United States to attract and retain the best and the brightest, PERM will increasingly be relegated to a less important place, although it may still be important for certain occupations who cannot avail of the new pathways to permanent residency. PERM will not disappear but it will never again enjoy the dominance of old.  It is this third way that will define America’s immigration policy in the 21st century.
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Workable or Unworkable? The H-1B and L-1 Visa Provisions in BSEOIMA, S. 744

5/6/2013

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by Cyrus D. Mehta, ABIL Lawyer and Gary Endelman
The Insightful Immigration Blog

The Senate Immigration Bill, S. 744, entitled the Border Security, Economic Opportunity, and Immigration Modernization Act (BSEOIMA) has been applauded by immigration advocates for bringing much needed changes to the broken immigration system. Although the bill does not have everything that everyone wants, S. 744 offers a pathway to legalization for the 10 million undocumented, a new W visa to allow for future flows of lower skilled immigrants and attempts to clear up the backlogs in the employment and family preferences. It also reforms the existing system in many ways by removing the 1 year bars to seeking asylum, creating a startup visa for entrepreneurs, clarifying a contentious provision under the Child Status Protection Act, providing greater discretion to both Immigration and Judges to terminate removal proceedings,  among many other beneficial provisions. We refer readers to David Isaacson’s insightful blog post, SOME PRELIMINARY OBSERVATIONS REGARDING THE PROPOSED "BORDER SECURITY, ECONOMIC OPPORTUNITY, AND IMMIGRATION MODERNIZATION ACT.

Unfortunately, the H-1B visa, and accompanying L-1 visa proposals in BSEOIMA have not been received with the same jubilation as other parts of S. 744. The main concern on everyone’s mind is how the bill would deal with the shortage of H-1B visa numbers. For FY14, which commences on October 1, the H-1B cap was reached on April 5, 2013. S. 744 increases the H-1B cap undoubtedly, but this increase is accompanied by changes to the H-1B and L visa programs, which may make it more difficult to obtain H-1B and L visas quickly. A nonimmigrant visa ought to provide a quick pathway for a much needed worker to be employed in the US. This BSEOIMA fails to do.

BSEOIMA increases the H-1B ceiling to 110,000, which could go all the way up to 180,000.  However, any increase or decrease in H-1B visa numbers cannot be more than 10,000 visas from the previous year. The market based adjustments from year to year, according to the succinct BAL summary,  will be based on the number of H-1B visa petitions in excess of the cap and the average number of unemployed persons in “management, professional and related occupations” when compared to the previous year.  Moreover, BSEOIMA will also increase the Master’s cap from 20,000 to 25,000, but this new cap will only be applicable to those who have graduated from universities with advanced degrees in STEM (Science, Technology, Engineering and Math) fields. This would be a significant improvement from what we have today, which is a paltry 65,000 H-1B visas plus 20,000 for advanced degree holders, which under current law is not restricted to only STEM degree holders.

The Society of Human Resource Management found in a recent national survey that 2/3 (66%) of employers hiring  full-time staff experienced difficulty in recruiting scientists, engineers, and cutting-edge technical experts, an increase from 52% in 2011. Until this gap between demand and supply is closed, the US economy cannot reach its true potential. The current H-1B base cap dates back to 1990 when the American economy was only 1/3 its current size and when the importance of STEM talent was nowhere as evident as it is today. Our H-1B policy predates the full impact of the Internet and the transition to a knowledge based economy. While we welcome the concept of an H-1B cap escalator, it is overly complex and its lack of precision will not accurately predict or reflect the actual and ever-rising demand for world-class expertise. For this reason, Congress would be well-served to adopt the methodology set forth in the bipartisan Immigration Innovation (I-Squared) Act (S. 169) which simply and elegantly links H-1B annual adjustments to how fast the H cap had been reached that same year.

Unfortunately, in exchange for an increase in H-1B visas to 110,000, with further adjustments based on a market based adjustment formula, BSEOIMA imposes significant restrictions to accessing the H-1B visa for all employers, as well as L-1 visas for some employers,  which will adversely affect corporate immigration practice.

Unlike the 4 level wage system we have today, BSEOIMA will replace it with 3 wage levels, and all non-DOL wage surveys must be specifically sanctioned by DOL.  The new Level 1 wage shall be the mean of the lowest two thirds of wages surveyed but can’t be less than 80% of the mean of the wages surveyed. This is clearly wage inflation with a vengeance. Dependent employers will only be able to pay new Level 2 wages, which is the mean of all wages. The third level shall be the mean of the highest two thirds of wages surveyed.

All employers will have to now attest that they have recruited for the position before filing an H-1B petition via an internet posting for 30 days, including advising where applicants can apply for the job. Dependent employers will have to undergo additional recruitment steps. The employer must offer a job (not just decline to hire the H-1B beneficiary) to any US worker who applies and who is “equally or better qualified.”  One can imagine how this will be interpreted by the DOL when an employer takes the top graduate of Wharton in a Bachelor’s program and turns down a U.S. applicant with an MBA from the University of Podunk.   Or, a law firm employer offers a position to a JD from a national law school over someone with comparable grades and achievements from a local law school. Will an employer dare to take the chance that might not be viewed as legitimate by the DOL?

There is more. The period within which an H-1B complaint can be brought against the H-1B employer is lengthened from 12 to 24 months, even when DOL itself complains or when the source remains anonymous. This can also encourage malicious complaints from restrictionist organizations, and  is bound to result in many more H-1B investigations especially when the bill authorizes annual  H-1B compliance audits for any employer with more than 100 employees if more than 15% are in H-1B status. The advertisement must contain all requirements including the higher than market wage salary. The compelling rationale for all this is the obvious desire to discourage H1B sponsorship by making it more expensive, more invasive, and less concerned with protection of business norms.

Non-dependent employers will also be subject to the non-displacement attestations, which until now have only been applicable to dependent employers or willful violators. Employers will need to attest that they have and will not displace a US worker within the 90 day period before and after filing an H-1B visa petition, but they will not be subject to such a non-displacement attestation if the number of US workers employed in the same O*Net job zone as the H-1B worker have not decreased during the past one year ending on the date of the filing of the labor certification application. Dependent employers will be subject to a longer non-displacement period of 180 days, and they will not be able to take advantage of the non-reduction of workforce in the same job zone exception available to non-dependent employers.

We saw when similar recruitment and non-displacement attestations were imposed on certain financial institutions and other entities that were bailed out by the US government under the Troubled Asset Relief Program (TARP) that they stopped using the H-1B visa program and even rescinded offers to foreign MBAs who were graduating from top business schools.

BSEOIMA seems to abhor the notion of “outplacement” of H-1B workers and L-1 workers, even while assigning workers to third party client sites is part of the business model of certain industries such as IT consulting. Dependent employers may not “place, outsource, lease, or otherwise contract for services or placement of an H-1B nonimmigrant employee.” A non-dependent employer must pay $500 if “outplacing” an H-1B worker. This model has been readily embraced by American companies, and provides efficiency by allowing companies to utilize skilled IT resources whenever needed. Consumers benefit, and it also allows companies to hire US workers higher up in the food chain.

The definition of “Dependent Employer” will remain the same: 1) Employer with 25 or fewer full time employees who hire more than 7 H-1B nonimmigrants; 2) Employer with at least 26 but not more than 50 full time employees who hire more than 12 H-1B nonimmigrants; 3) Employer with at least 51 full time employees who hire at least 15% of H-1B nonimmigrants.

Moreover, BSEOIMA seeks to ultimately bar a category of so called “super dependent” H-1B or L-1 employers by FY 2017 from filing new H or L petitions if more than 50% of their workforce are in H-1B or L status and hire 50 or more employees. For the first time, there will be a restriction on L employment too as a result. There is a sliding scale for this over the next few years: (1) if the employer employs 50 or more employees, and there is no distinction between full or part-time, the number of H-1B and L-1B, but not L1A, employees together cannot exceed 75 % of the total number of employees for FY 2015; (2) 65 %of total number of employees for FY 2016 and (3) 50% of total number of employees after FY 2016 which starts on October 1, 2017 . This does not apply to universities or non-profit research centers.

The filing fees for the H-1B and L go way up in a clear effort to discourage such visa sponsorship.  For FY 2014-FY 2024, the H-1B and L filing fee will be $5000 for an employer that employs 50+ employees in the USA if more than 30% but less than 50% of such employees are in H or L status.  From FY 2014-FY 2017, the filing fee goes up to $10,000 per H-1B or  L petition if the employer employs 50+ employees, again no distinction between full or part time, if more than 50% but less than 75% of such employees are in H1B or L status.

BSEOIMA goes beyond the L-1 Visa Reform Act of 2004 which allowed outplacement of L-1B workers so long as the L1 beneficiary remained under the direction and control of the  petitioner. Here, even if this was the case, such secondment would be limited to an affiliate, subsidiary or parent of the L1 petitioner.  All L employers who place L-1s at third party sites are now subject to a displacement obligation of 90 days before and after the L petition was filed.  For a new office L, the L beneficiary could not have been the beneficiary of 2 or more L petitions in the immediately 2 preceding years. For the first time, BSEOIMA introduces an explicit provision for L investigations that can be based on anonymous sources. In addition, DOL shall conduct annual L compliance audits for each employer with more than 100 employees if more than 15% are in L status. Non-compliance with new L restrictions can lead to fines up to $2000 per violation and a 1 year debarment + an obligation to make the employee whole through payment of lost wages and benefits. A willful misrepresentation of a material fact on an L petition can result in $10,000 fine and 2 year debarment. The DHS Inspector General must prepare a report on fraud and abuse in Blanket L program within six months of enactment. The opponents of immigration have long sought to impose on the L-1 visa many of the same straightjacket restrictions that have suffocated the H-1B.  Now it seems they have a major victory.

While these provisions against dependent employers are designed to put certain industries out of business that rely on H-1B and L workers, BSEOIMA introduces the concept of “intending immigrant” which does provide some respite.  If an employer has an H-1B or L employee who is an “intending immigrant,” that worker is not counted in the employer’s dependency or “super dependency” calculation.  With respect to not counting an alien from the dependent calculation who is the subject of the labor certification, the employer has to qualify first as a "covered employer" who is an employer of an alien, which during the one year period that the employer filed a labor certification application for such alien, has filed I-140 petitions for not less than 90% of the total labor certifications filed during that one year period. However, labor certification applications pending for longer than 1 year may be treated for the calculation as if the employer filed an I-140 petition.

The purpose of this "covered employer" definition is to probably ensure that employers do not file labor certifications without pursuing permanent residency on behalf of their employees. In reality, most employers who take the trouble to file labor certifications will go ahead and file the I-140 petition within the 180 day expiration period. It is clear that Professor Ron Hira, a critic of the H-1B and L visa program, was engaging in sophistry in his testimony before the Senate committee when he said that it would be easy for employers to avoid becoming dependent employers through paper pushing!!

The question is what happens to the "covered employer" status if an I-140 petition (among the 90%) gets denied based on an ability to pay issue or a 3 year degree issue. All that the definition of "covered employer" requires is that the I-140s have been filed for no less than 90 percent of the aliens for whom a labor certification was filed during the 1 year period.

With respect to not counting an alien who is the beneficiary of a pending or approved I-140 petition from the dependency calculation, the employer does not have to establish that it is a "covered employer." A pending or approved I-140 petition on behalf of a foreign national will remove that person from the employer’s dependency calculation.

There is a possibility that an amendment might be proposed during the markup phase to remove the “intending immigrant” concept, and so every attempt must be made to preserve this concept in BSEOIMA, so as to give dependent employers some chance to legitimately do business in the US. H-4 spouses will be able to apply for work authorization, but only if the spouse is a national of a country that permits reciprocal employment. While H-4 spouses who are Indian nationals will benefit from this provision (as Indians have been most affected under the EB-2 and EB-3 backlogs), it is worth noting that India does not currently provide employment authorization to spouses of  those who hold an Indian employment visa. However, unlike the US with many nonimmigrant visa categories that authorize work, there is only one temporary employment visa category in India. The Indian employment visa does not parallel the H-1B visa in any way. It is difficult to understand why this proviso has been inserted in the bill when spouses of L-1 visa holders (as well as E and J-1 visas) can seek employment authorization without regard to whether the spouse’s country permits reciprocal employment.

Regardless of a few bad actors, there has been an unjustified anti-India sentiment in immigration policy for a few years. This is the genesis behind all the adverse provisions against H-1B dependent employers in BSEOIMA, who otherwise try very hard to comply with the existing complex rules in place.  This sentiment was reflected in the Neufeld memo that was specifically aimed against IT consulting, along with the jaundiced way that Indian equivalent degrees have been viewed by the USCIS. Then, even after an H-1B petition is approved, upon responding to a lengthy RFE and FDNS site visit, the visa applicant is delayed at the US consular post in India (although BSEOIMA brings back visa revalidation in the US for certain work visa categories). All this happened only since 2009 when all along before that there was no issue of H-1B workers being placed legitimately at third party sites, which is indeed how the business model works to the benefit of US businesses and consumers.

Clearly, the success of the Indian IT global model has led to a backlash in the same way that Japanese car makers were viewed in the late 1980s. The IT global giants along with the smaller IT firms have been "tainted" by the same brush. There is no doubt that corporations in the US and the western world rely on Indian IT, which keeps them competitive. Spurred on by Senators Durbin and Grassley, the architects of BSEOIMA have unwittingly prepared the way for a massive dislocation of the American economy which will no longer be able to benefit from the steady supply of world class talent that the Indian IT providers most directly harmed by this legislative vendetta have always supplied at prices that American business and its consumers could afford. What has gone unnoticed by the so-called Gang of 8 in the Senate is the fact that the ability of American companies to maintain their competitive edge has been due in no small measure, to the very Indian IT global model that BESEOIMA seeks to destroy.

One can also recall Senator Schumer's infamous slip of tongue when he referred to Indian IT companies as "chop shops" instead of job shops at the time Congress outrageously raised the filing fees for certain L-1 and H-1B employers (to fund a couple of drones on the Mexican border), as if job shops is not enough of a pejorative. Senator Durbin also falsely insinuated this week that highly regarded employees of companies like Infosys pay to come to the US. These sentiments will now become part of the law, and it is not hard to guess the senators who have inspired these provisions, further supported  by the diatribe of Professor Ron Hira, who spew outrageous falsehoods in the guise of academic scholarship. Perhaps, one can look at the other side of the picture and find out how the H-1B visa program has benefitted the US and even creates jobs. It is unfair to assume that an employer who depends on H-1B workers in engaging in fraud. Interestingly, under BSEOIMA even "non-Indian non-dependent non-fraudulent employers" will need to go through more bureaucratic red tape, and will have to actually offer the job to a qualified US worker (unlike a PERM where all that happens is that the application is not filed) before being able to file the H-1B petition. The provisions that were previously enacted to target dependent employers in 1998 have now been expanded to cover all employers.

Unfortunately, the H-1B provisions, in an otherwise good Senate immigration bill, reflect a complete lack of understanding of the role of globalization and free trade in services during the second decade of the 21st century, which can benefit the US, India and the world. We need to draw attention to this fact in the hope that these discriminatory provisions against Indian IT, which are also inconsistent with principles of free trade and in violation of GATS, can be eliminated.  Indeed, BSEOIMA has extended the additional recruitment attestations that have only applied to dependent employers to all employers, along with artificially forcing employers to pay higher than market wages for H-1B workers.

BSEOIMA seems to give more emphasis on green card sponsorship rather than prolonging the temporary visa status of foreign national workers. To some extent, this is a good thing. By allowing foreign nationals to obtain green cards, it gives them mobility and to not be bound to one employer for many years. There is also a good provision that allows an H-1B who has been terminated to be accorded a grace period of 60 days, and an application to extend, change or adjust status during that period shall be deemed to have been lawful H-1B status while that application was pending. Indeed, many employers may be able to avoid the H-1B process altogether by directly sponsoring STEM advanced degree students on an F-1 visa for a green card without even having to go through the labor certification process. BSEOIMA also allows F-1 students to have dual intent, and so their desire to obtain green cards will no longer impede their ability to obtain an F-1 visa at a US consular post overseas. PhDs, regardless of whether they got the degree from a US institution or not, can also avail of this fast track green card and they do not also need to have their PhDs in a STEM field. Still, not all employers can rely on PhDs and students in the US who graduate with STEM advanced degrees. They will need to rely on the H-1B visa, and to some extent on the L-1B visa, and BSEOIMA will clearly not quell the demand of US companies for IT services and expertise through consulting companies. It remains to be seen whether the H-1B and L provisions in BSEOIMA prove to be workable or not. Everyone thought that when the Labor Condition Application was introduced in the Immigration Act of 1990, that the H-1B visa would become unworkable. Yet, H-1Bs have continued to chug along for 22 years, and if the new provisions get enacted, it is hoped that the government agencies administering the new H and L visa programs will interpret the provisions in a way that will allow them to work.

BSEOIMA is a transformational document heralding a fundamental realignment of US immigration policy. The paradigm shifts from family ties to merit-based strategies designed to invigorate the economy. Before, it had been easier to come for temporary work reasons and difficult to stay permanently. Now just the reverse will be true. Years ago, the H-1B was a lightning rod for critics while the L-1 sailed on smoothly in calm seas. No longer. For the first time, the L and the H are fused in the minds of its critics. At a time when our permanent immigration model is more open to STEM talent as never before, our H and L policy reflect a pervasive insularity that will contradict our trade commitments, slow down our innovation, and increase the intrusiveness of government regulators as they audit the legitimacy of immigration sponsorship decisions by those American employers who seek to take advantage of this brave new world.  For this reason, while BSEOIMA has much to commend it, what it gives on the permanent side of the ledger, it takes away on the H and L side. This lack of internal consistency must be resolved before it is born.
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