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To Pay or Not to Pay: A User Fee Comparison of Employment-Based Visa System in the United States and Canada

The Brief

The author would like to thank Ruth Wasem, Professor of Policy Practice, Lyndon B. Johnson School of Public Affairs, and Robert Falconer, Research Associate, Immigration and Refugee Policy, The School of Public Policy, University of Calgary for their assistance with resources for this blog.

 

The United States’ immigration system has required immigrants to pay user fees to recover costs for the services related to immigration inspection or admission since at least 1903. Currently, the agency responsible for processing applications and petitions for immigration benefits and citizenship, U.S. Citizenship and Immigration Services within the Department of Homeland Security, is funded entirely by application and petition fees that account for around 97% of the USCIS budget each year. Due to its dependency on user fees, the employer sponsorship petition model used to hire foreign workers can be expensive for employers and foreign employees alike. DHS has implemented three scheduled fee changes since 2010, which have significantly increased the costs of employment-based visa sponsorship. DHS’ argument for each fee change has consistently been to recover its costs for adjudicating these applications. However, some charge that the fee-recovery model in fact incentivizes the agency to delay applications and require additional filings, which begs the question of whether another mechanism may be possible. In this post, we will consider the Canadian fee system, which is based on a self-sponsorship model and has significantly lower costs for an employment-based visa, may be helpful. But first, we’ll look at how user fees have developed over time in the U.S. model.

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The Origins of User Fees in the United States Immigration System

Congress passed the Department of Justice Appropriations Act of 1989 which helped establish the Immigration Examination Fee Account; making user fees a mandatory part of the then-Immigration and Naturalization Service’s budget and no longer subject to congressional approval. Current application fees, such as the ones used to petition for a nonimmigrant worker, employment authorization, and other applications associated with immigration adjudication were established by INS in 1991 based on estimated costs to process the application. INS relied on the “user fee statute,” which provides authority for a government agency to set charges for a service to stay self-sustainable to the greatest possible extent. The rule also gives authority to the head of the agency to establish charges for a service or thing of value.

The Homeland Security Act of 2002 established the Department of Homeland Security and United States Citizenship and Immigration Services, which took over the immigration adjudication and processing responsibilities from INS while retaining the “user fee model.”1 USCIS inherited the IEFA when INS was abolished. Since then, USCIS has also been dependent on user fee accounts to support all its immigration adjudication and processing operations. USCIS’ user fee structure model, just like its predecessor, has continued to ensure that the fees for adjudication and processing would recover the full costs of providing immigration and naturalization services, including recoupment of fees for similar services to those people who are unable to pay, such as asylum applicants. Additionally, user fees are also set to cover administration costs related to fee collection.

Employer-Sponsored Petitioning Model Fee Structure

Petitioning for foreign workers to obtain temporary and permanent employment in the United States is an expensive process, both for employers and employees. In June 2020, after announcing a budget shortfall, USCIS increased its fees for a range of immigration services, including applications for temporary worker visas and applications for adjustment of status to permanent residency, by a weighted average of 20%, further increasing the price of an already expensive sponsorship process.

Employers filing a petition for a nonimmigrant worker must also pay an additional filing and fraud fee under the 1998 American Competitiveness and Workforce Improvement Act and the H-1B Visa Reform Act of 2004. These fees are deposited into the H-1B Nonimmigrant Petitioner Fee Account and the Fraud Prevention and Detection Account respectively. The H-1B Petitioner Fee Account is divided between the Department of Labor and the National Science Foundation, at 55% and 40% respectively, for training and education programs for U.S. workers. USCIS receives only 5% of the remaining fees paid into the account by employers, and in fiscal year 2019 the Fraud Prevention and Detection Account represented only 1% of USCIS’ total budget.2

The USCIS fee hike in October 2020 increased application fees for some employment-based petitions by up to 75%, making the sponsorship process significantly costlier for employers, especially small and midsized employers with smaller budgets that may need foreign workers to fill specific labor shortages. Furthermore, the two laws passed in 1998 and 2004, while adding extra costs to employers looking to sponsor foreign workers, increased USCIS’ overall budget by only a negligible amount.

Previously, DHS adjusted USCIS fees in 2007, 2010, and 2016, stating that the updated fee schedules were necessary to recover costs and maintain services. Moreover, under the “user fee statute,” DHS may increase user fees again to recover costs at any time, leaving employers and employees vulnerable to an even more expensive process.

As noted in a previous article, the current employer-sponsored process places most of the cost for sponsorship on employers, which can disincentivize some to do so and can put immigrant workers at a disadvantage in negotiating employment. As consideration of other models for the immigration system, including points systems that allow for self-petitioning, are increasing it is worth examining what such a change might mean for the fees and costs of such a model. As such, looking at countries such as Canada, which has a streamlined and a much less expensive fee structure than in the United States, may be beneficial.

Canadian Self-Petitioning Model

Temporary work permits in Canada cost around 155 Canadian dollars. Foreign workers applying for an employer-specific work permit must have their employer complete a Labor Market Impact Assessment that costs the business around CA$1,000 in processing fees. Foreign employees working in Canada under a temporary work permit can access permanent residency via the Federal Skilled Program or Canadian Experience Class Program. Neither of these programs require an employer sponsor as in the United States. Economic immigration in Canada, which includes both the Federal Skilled Program and the Canadian Experience Class Program, costs around CA$1,325, including a residence fee of CA$500, with an additional cost of CA$1,325 for spouses to receive permanent residency and CA$225 per child. While legal representation may be preferred by some candidates, it is not a requirement for accessing Canadian residency. Nonimmigrants looking to immigrate to Canada can also utilize immigration consultants regulated by the Immigration Consultants of Canada Regulatory Council.

Figure 1. Canada and United States Immigration Fee Comparison (in U.S. Dollars)

*Note: U.S. immigration fees are not exhaustive and do not include additional fees required to be paid by the petitioning employer and/or foreign employees. Some of the additional fees include medical fees, Biometric Fee of $85, Fraud Prevention and Detection Fee of up to $500, Premium Processing fee of $2,500, and additional cost for petitioning companies based on number of employees on H-1B, which can range from $1,500 to $4,000.

Canadian Immigration Fee Type Cost (In U.S. Dollars) U.S. Immigration Fee Type Cost
Temporary Work Permit $118 Petition for a Nonimmigrant Worker $460
Labor Market Impact Assessment $749 Form I-140 Immigrant Petition $700
Application for economic immigration (Federal Skill Program and Canadian Experience Class) $617 Immigrant Visa if applying from abroad with Form I-140 $345
Permanent Residence Fee for Economic Immigration $500 Adjustment of Status from a temporary visa to green card (applying from inside the U.S.) $1,225
Economic immigration for spouses (includes fee for permanent residency) $993 Adjustment of status for spouses $1,225
Dependent child $168 Adjustment of status per child $750
Applying for and replacing permanent resident cards $37 Replacing permanent resident cards (form I-90) $455
Total$3,182Total$4,705

Regulations for Canada’s visa costs are set by Immigration, Refugees, and Citizenship Canada. While the volume of applications generates some revenue for the IRCC, the organization also receives government funding as part of its budget. Under the planned 2018 federal budget, IRCC was slated to receive CA$747 million in support of Canada’s 2018-2020 Immigration Levels Plan. The allocation of CA$747 million is part of a larger allocated budget of CA$875 million in over six years for Canadian multi-year immigration plan. This sum is in addition to an already assigned six-year federal budget of CA$298 million for IRCC.3 In FY 2018-2019, IRCC generated around CA$1.3 billion in total fee revenue, which was approximately 56% of the total projected spending of CA$2.356 billion for the same fiscal period.

In April 2020, the Canadian government declared that it was increasing processing fees for economic class applicants who are seeking permanent residency by 50%. Fees are expected to increase again in 2022 based on the Consumer Price Index increase rounded to the nearest CA$5. The Canadian government states that the fee increase is to offset the financial burden of immigration costs from the Canadian taxpayer to the applicants, who are primary beneficiaries of the program, a move closer towards the USCIS fee system. However, it is yet to be determined whether this move will affect the number of immigrants applying to the Canadian system. Regardless, the current immigration fees for skilled workers immigrating to Canada is still much lower than the sponsorship fee paid out to USCIS in the United States.

Processing Times and Backlogs in the Canadian and U.S. Immigration Systems

The Canadian government introduced service standards for temporary and permanent resident application as early as September 20114 to process applications for different visa programs which includes temporary and permanent residency programs, work permits, labor market impact assessment, and economic class immigration. For economic class immigration5, with some exceptions, the IRCC aims to process electronic applications within 180 days of submission with a target of meeting at least 80% of the submitted applications. In 2018-2019, IRCC’s performance records indicated that for a majority of the applications, the government had met or exceeded their service standard in the temporary residence application category and had met 71%, 77%, and 79% of applications within the standard 180 days processing time for Initial Permanent Resident Card application, Federal Skilled Worker Program, and the Provincial Nominee Program.6 Furthermore, in January 2015, the Canadian government introduced a new two-tier immigration management system called Express Entry that has helped to successfully reduce backlogs and wait times to six months or less.

By comparison, in the United States, the processing times for H-1Bs can be long and backlogs and wait times for a green cards to be available have been burdensome for some nationalities. In 2000, the U.S. Congress passed a “sense of Congress” resolution that requires USCIS to process H-1B petitions within 30 days, but is not considered a mandate. However, USCIS almost never meets the 30-day threshold unless employers pay the $1,500 premium processing fee. According to USCIS, H-1B petitions process can take up to eight months (240 days) depending on the processing center. Unless the employee is changing status from a different nonimmigrant visa within the United States in which case the change can be approved along with the petition, a foreign worker applying for a nonimmigrant H-1B visa from overseas, once the petition is approved, can take an additional couple of months.

Since the United States only offers 140,000 employment-based green cards annually and sets limitations based on nationality—each nation receives seven percent of the total annual visas, regardless of the demand for green cards from that country—it has created an unprecedented backlog in the employment-based immigration system for certain nationalities. As noted in a previous BPC article, as of 2019, there were an estimated 800,000 Indian nationals awaiting green cards who are currently stuck in the backlog. Cato Institute estimates that by year 2030, the green card backlog for skilled immigrants will exceed 2.4 million. The employment-based backlog has most affected Indian and Chinese nationals, and with no change in the current processing system, foreign nationals from India are expected to have the longest wait times in the EB-2 and EB-3 visa categories of 89 years.

Conclusion 

Visa processing fees and sponsorship for employment-based immigration are more expensive and lengthier in the United States than in Canada. Employment-based visa processing in Canada is based on applicant self-petitioning and is more streamlined to keep fees related to temporary and permanent employment-based residency applications low for employers and foreign workers alike. Canada’s service standard and the introduction of new immigration systems has also allowed the government to properly tackle application processing times and long backlogs. A service standard set by the IRCC makes the Canadian immigration system accountable to the general public who pay for these services. Moreover, funding support from the Canadian government helps the IRCC maintain low visa prices and application costs, although it is shifting to more of a cost-recovery model.

In the United States, however, with 97% of funding from fees alone, USCIS may not be in a similar position to adjust visa fees from applicants and keep application costs low. Earlier this year, USCIS claimed that it was running out of money, which the agency asserts was due to a drop in visa applications from COVID-19, and requested a $1.2 billion bailout from Congress. With the passage of the Emergency Stopgap USCIS Stabilization Act, USCIS is allowed to collect existing premium processing funds meant for infrastructure improvements, and raise premium processing fees for certain visa applications while increasing the premium processing time frame from 15 to up to 45 days for certain petitions. This is likely to increase overall costs of employer-based visa sponsorship, who often rely on premium processing, without tackling processing times and lengthy backlogs. USCIS’ financial dilemma, high application fees, lengthy backlogs and processing times, unnecessary application procedures, and a convoluted employment-based immigration system that is onerous for both employers and employees all converge and encourages the United States to look at other models. A self-petitioning model, as in Canada, is at least worth considering because this flexibility of self-applying for a work visa and its low cost may ultimately help Canadian employers attract and recruit foreign workers in Canada at a higher rate than the United States.

End Notes:

1 USCIS receives a small portion of its budget through the annual DHS appropriations process which funds special projects such as backlog reduction, E-Verify, and immigrant integration projects.
2 Fees related to the H-1B Nonimmigrant Petitioner Fee and Fraud Prevention and Detection Fee is set by statute and DHS cannot adjust those fees.
3 The federal budget for IRCC includes funding for protecting temporary foreign workers, supporting Canada’s official languages, career pathways for minority newcomer women, protecting vulnerable women and girls, irregular migration, and expanding diversity for entrepreneurs.
4 Service standards for different applications were introduced at different times. The standards were reviewed in February 2019.
5 Economic class immigration includes Canadian Experience Class, Federal Skill Worker Program, Provincial Nominee Program, Quebec Selected Skill Worker Program, and Skilled Trades Program.
6 The government only processed 5% and 2% of the application within 11 months service standard time for the Provincial Nominee Program and the Quebec- selected Skilled Workers Program.

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