Trump, Congress Set Sights on H-1B Visa Reforms

President Donald Trump recently signed a new executive order (EO), “Buy American and Hire American,” that proposes changes to the H-1B Specialty Occupations temporary worker program. The H-1B program allows U.S. employers to hire skilled foreign guest workers in occupations that require expertise in specialized fields and a bachelor’s or higher degree for entry. The new EO calls on the Attorney General and the Departments of Homeland Security and Labor to suggest revised rules and guidance to prevent fraud or abuse in the immigration system, or needed legislative changes. It is unclear what policy changes the agencies will propose, but some of the EO’s suggested changes would require congressional action. Members of Congress have also introduced varying pieces of legislation aimed at reforming the program and addressing concerns over the impact of the program on the employment and wages of U.S. workers.

Economists have generally agreed that cutting the number of H-1B workers would not boost employment among Americans

The H-1B Debate

Critics of current H-1B visa rules have pointed to cases in which U.S. companies have used the program to replace American workers with cheaper foreign workers, notably Disney and the University of California, San Francisco Medical Center. Companies have been accused of requiring American workers to train their foreign replacement before being dismissed. It has also been suggested that H-1B visas are driving down the wages of American workers, particularly those in the tech sector. Supporters of the H-1B visa program have praised the program for its impact on innovation, citing the large numbers of patent filings made by foreign workers. Major tech firms like Facebook, Google, and Microsoft are strong supporters of the program, using it to fill positions with foreign talent when there are domestic skill shortages. Economists have generally agreed that cutting the number of H-1B workers would not boost employment among Americans, suggesting that some economic activity would move overseas and that the number of H-1B visas issued is relatively low, compared to overall immigration levels.

Trump Executive Order and Recent Agency Action

While Trump’s new EO generally calls for agencies to look at the immigration system to prevent fraud and abuse, the only visa program that is specifically mentioned is H-1B. The order calls on regulatory agencies to “suggest reforms to help ensure that H-1B visas are awarded to the most skilled or highest-paid petition beneficiaries.” Current law requires H-1B visas – which are capped at 65,000 annually, with another 20,000 allocated to workers with at least a master’s degree – to be issued in the order that petitions are received, not based on the qualifications of the foreign worker. However, because demand in recent years has been so high that it is nearly impossible to establish the order in which petitions are filed., U.S. Citizenship and Immigration Services (USCIS) use a lottery selection process that randomly determines which H-1B petitions will be processed. The changes proposed in the EO would end this lottery and select petitions based on merit. However, given the current statutory language, it is unclear if USCIS would have the statutory authority to select petitions in this manner without congress passing new law, and any such changes without legislation could lead to litigation.

Even before this EO was signed, regulatory agencies had begun to look more closely at the H-1B program. On April 3, USCIS announced that it would suspend the premium processing of H-1B visa petitions. Premium processing allowed companies petitioning for H-1B workers to have their review expedited for an extra fee. A lengthy backlog of H-1B applications had developed as a result of extremely high demand (in part due to a regulatory decision that required any change in location of work to be approved by the agency in an amended petition), but also because older applications were being passed over to accommodate premium process applications. The suspension is expected to last for at least six months, although the 85,000 visa cap for FY 2018 was hit just four days after the application window opened due to the volume of petitions filed.

In addition to suspending premium processing, USCIS announced that it plans to increase the number of targeted site visits to H-1B dependent employers, (i.e., those employers with a high-percentage of their workforce on H-1B visas).^[i] Lastly, USCIS plans to more closely examine if employers actually made an effort to recruit a U.S. worker before turning to a foreign worker, something critics of the H-1B program claim is not the case and that companies use the program purely as a method to outsource American jobs to cheaper foreign workers. In addition to site visits, USCIS has created an email address for reporting suspected fraud, as well as provided details on what constitutes visa fraud and what protections exist for H-1B employees or others that report fraud.

Current Legislative Proposals

In addition to the enhanced enforcement steps announced by the Trump EO and USCIS, members of Congress have proposed legislation to address some of the major criticisms of H-1Bs, along with other reforms to the program. Below is an overview of some of the major bills introduced on the H-1B visa program:

1. H-1B and L-1 Visa Reform Act of 2017. Introduced by Senators Chuck Grassley (R-IA), Dick Durbin (D-IL), Sherrod Brown (D-OH) and Richard Blumenthal (D-CT), this bill would reform H-1B wage requirements and the conditions levied on employers seeking to hire H-1B workers. Major provisions include:
   • Wages offered to H-1B applicants could not be lower than the highest of:
     • The local prevailing wage for occupational classification;
     • the median wage for all workers in occupational classification in area of employment; or
     • the median wage for skill level 2 for occupational class in most recent Occupational Employment Statistics survey
   • Working conditions for H-1B workers must not adversely affect working conditions of U.S. workers
   • Employer may not displace a US worker 180 days prior to or after hiring of H-1B worker
   • Jobs cannot be offered exclusively to potential H-1B workers
   • H-1B workers cannot receive priority in hiring
   • H-1B workers with STEM degrees from US schools would get priority over other H-1B applicants
   • Work experience could not be used as a degree equivalent
   • The authorized admission period would be reduced from six years to three
   • The Department of Labor would audit businesses with over 100 employees where 15% or more are H-1B visa holders
2. Protect and Grow American Jobs Act. Introduced by Representatives Darrell Issa (R-CA) and Scott Peters (D-CA), this bill would raise the minimum H-1B salary from $60,000 to $100,000 and reduce the total H-1B cap by eliminating the master’s degree exemption that offers an additional 20,000 visas beyond the cap of 65,000.

• High-Skilled Integrity and Fairness Act of 2017. Introduced by Representative Zoe Lofgren (D-CA), this bill would raise the salary requirements for H-1B workers and establish protections for H-1B workers. Major provisions would:
  • Require wages paid to H-1B workers to be at least 35% higher than the national median wage for a given occupation
  • Require employers to provide immigration documents to their H-1B workers
  • Protect H-1B workers who cease work for an employer prior to a previously agreed upon date
  • Replace current US worker wage level system (4 levels) with a 3-level system
  • Prioritize allocation of H-1B visas based on wages as follows:
    • Employers paying prevailing wage level 3 at 200% of prevailing wage, then 150% of prevailing wage (including cash bonuses and similar compensation);
    • Wage levels 2 and 1 follow the same provisions, followed by any remaining petitions
  • Require 20% of visas to be reserved for businesses with less than 50 employees

1. I-Squared Act. This bill was re-introduced by Senator Orrin Hatch (R-UT) during the last congress, along with eight Republican, four Democratic, and one Independent cosponsors, to increase the H-1B cap. Hatch plans to introduce an updated version in the 115^th The previous version of the bill had proposed the following changes:

• • Raise the H-1B visa cap from 65,000 to a level between 115,000 and 195,000 determined by market conditions and existing demand
  • Authorize spouses of H-1B workers to work in the U.S.
  • Provide a 60-day “grace period” for H-1B visa holders who either quit or are fired from their job to find a new sponsor before their period of authorized admission expires

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[i] For businesses with 25 or fewer full time employees, seven or more H-1B employees constitutes dependency. For businesses employing between 26 and 50 full time employees, twelve or more H-1B employees constitutes dependency. For businesses with 51 or more full time employees, 15 percent or more of employees must be H-1B visa holders to establish dependency