For decades, the H-1B visa category has been viewed by foreign national professionals, particularly those in STEM disciplines, as the golden ticket to an enviable new life in America. Similarly, many employers have long utilized the H-1B program as a valuable option for securing needed professional resources. However, changes in H-1B adjudication practices, many tied to the 2017 ‘Buy American, Hire American’ Executive Order (BAHA), have created a dubious H-1B landscape for employers and foreign national employees alike. In an effort to unravel the complexities of the H-1B’s newest changes in protocol and what they mean for the employers who rely on these highly skilled workers, the HR Team is publishing a three-part series examining the topic.
This month, we are fortunate to receive guidance from Liz LaRocca, Of Counsel to the international law firm of Steptoe & Johnson, LLC. Ms. LaRocca, who leads Steptoe’s Immigration practice, has represented multinational corporations and individuals in immigration matters for more than 20 years. In this introductory article, we’ll take a look at the history of the H-1B, its value to American employers, and an overview of the program’s latest changes. Ms. LaRocca shares her expertise and offers some valuable filing advice that can save employers time and money, while increasing their likelihood of securing approved H-1B petitioners.
We’ve come a long way, baby
The Immigration and Naturalization Act of 1965 abolished an earlier quota system founded on national origin and established a more progressive immigration policy based on family reunification and attracting skilled labor to the United States. The policies it put into effect greatly changed the demographic makeup of the U.S. immigrant population, as this legislation facilitated diverse, less Euro-centric, immigration patterns. Twenty-five years later, then-President George H.W. Bush signed into law the Immigration Act of 1990. A significant milestone and first comprehensive overhaul of the U.S. legal immigration system in decades, it embodied the framework still in use today. The Immigration Act of 1990 also gave birth to the H-1B, temporary professional employee program. The H-1B was intended as a forward-thinking immigration option that would help meet the needs of a technology-driven American economy by moving toward the temporary admission of immigrants based on their education and skills. The H-1B category allows companies in the U.S. to temporarily hire foreign workers who hold a bachelor’s degree or higher in their specific field of work. It is designed to help firms respond to labor shortages in rapidly-growing sectors that require high-level acumen, particularly in the STEM fields. The demand for new workers in the H-1B category is so high that a lottery system is utilized to fill the 85,000 available H-1B program slots each year for first-time H-1B workers.
H-1B visas bolster innovation in the U.S. economy.
The United States has created a dynamic and powerful economy with the help of both native- and foreign-born workers. Nearly half of all Fortune 500 companies have been founded by first-or second-generation immigrants, including likely former H-1B holders. The National Foundation for American Policy reports that four of the six highest-profile U.S. tech companies, including Amazon, Microsoft, Intel and Google, were among the top ten employers for approved H-1B petitions in fiscal year 2018, reflecting the strong demand for this high-skilled talent in our economy. There’s little doubt that foreign-born scientists, engineers and IT professionals are a primary source of vitality for the American tech industry.
So why all the fuss?
While supporters of the H-1B program argue that it brings in talented foreign professionals to fill a skills gap, critics say it promotes outsourcing and undercuts U.S. wages and employment of U.S. workers. Under the current Administration that pledges to “rebuild our country with American hands and American labor”, concerns swirl around the H-1B program. In April 2017, President Trump issued the BAHA Executive Order instructing the Department of Homeland Security (DHS) to “propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of U.S. workers in the administration of our immigration system.” Also under fire is a 2015 Obama-era rule that grants work permission to the spouses of H-1B foreign nationals who are on track for permanent resident (green card) status. Employers who depend on these highly-skilled workers are justifiably concerned about the stability of their existing workforce and access to new H-1B employees.
A recent report released by the National Foundation for American Policy (NFAP), a nonprofit, nonpartisan organization that conducts public policy research on trade, immigration, education, and other issues, provides confirmation that the Trump Administration has radically changed how the U.S. Citizenship and Immigration Services (USCIS) is adjudicating H-1B petitions. Unsurprisingly, the report found that the denial rate of H-1B petitions has soared in the past several years. From FY 2009 through FY 2016, the denial rate for H1B petitions seeking new employment never rose above 15%, and was at 8% or less for six of those fiscal years. By FY 2018, however, the denial rate had soared to 24%. For the first quarter of FY 2019, the denial rate reached an unprecedented level of 32%. Meanwhile, the number of H-1B petitions for which requests for evidence (RFEs) were made during the adjudication process shot up by a staggering 75% over FY 2018. Notably, these substantial spikes in RFEs and denials were not been prompted by any new immigration law or regulation. This adjudication pattern is solely driven by reinterpreting existing regulations and imposing what many view as extreme and unfounded H-1B interpretive standards.
Despite these grim statistics, many employers have a continued need for H-1B employees within their workforce. An awareness of the new H-1B landscape, combined with selectivity and appropriate preparation, are the keys to navigating this new environment. New H-1B case filings for prospective employees who have not held that status previously are subject to an annual limit or “cap.” While the time has passed for filing these cases for the upcoming fiscal year 2020, the changes to the selection procedure are relevant as employers consider their longer term and future employment needs.
The changing face of the H1B in FY 2020.
The 2020 fiscal year H-1B “cap” filings, which were submitted during the first five days of April, 2019, underwent a lottery process conducted using new rule changes issued by the Trump Administration. These changes give preferential treatment to applications made by individuals with advanced (masters or above) degrees from a U.S.-based college or university institution. Under this new protocol, the USCIS selects 20,000 of the H-1B petitions which qualify for what is known as the “Master’s Cap.” Thereafter, all cases which do not qualify for the “Master’s Cap” and all remaining cases which were not selected for the “Master’s Cap” undergo a lottery to selection to determine which cases will be eligible under the “Regular Cap” limit of 65,000. The USCIS predicts that this new process will result in a 16% increase in the proportion of H-1B recipients who hold at least the eligible U.S. master’s degree. This preference is something that should be taken into consideration by employers when contemplating H-1B filings.
Another major change to the H1B program, the deployment of lottery pre-registration process, was postponed for this year but is slated for implementation in FY 2021. Rather than preparing a complete H-1B petition in order to undergo the lottery selection, employers will instead submit a basic online form. This is an effort to streamline the process, but it favors employers who are well-informed about the H-1B process and can anticipate their H-1B hiring needs.
Short supply and high demand.
Under the current lottery process (without a pre-registration component), the USCIS accepts H-1B petitions until all 85,000 numbers are allocated, but there is a minimum filing window of five business days. For many years, the cap limits have been exceeded within the five business day minimum filing period. H-1Bs are clearly in short supply and high demand. The process for applying is highly regulated, with very specific steps and requirements which must be taken into account when strategizing and preparing these cases. Filing a carefully prepared, thorough H-1B petition is more important than ever before, with little to no room for error. Says Ms. LaRocca, “In this new era, employers will be held to higher levels of scrutiny and must be prepared to meet harsher standards of proof. It isn’t just about submitting the H-1B petition. Overcoming the lottery and selection process is just the beginning.” If you’re among the thousands of employers that rely on highly skilled H1B workers, the following pointers will put you in a prime position for the next visa lottery.
- Start planning early. The best way to prepare for the 2021 cap season is to assess your needs far in advance. Under long-standing procedures, H-1B petitions must be ready to file in April each year. This requires several months of advance preparation and, starting in 2021, allowance for the pre-registration lottery process. Ms. LaRocca notes that getting an early handle on hiring needs and the approximate number of petitions you will need to file will allow you to better manage your budget and the H-1B coordination workload with your attorney. Ms. LaRocca helps employers determine which of their employees are in need of H-1B petitions and, of those, which are the best candidates. Once you know how many petitions you anticipate filing it is necessary to prepare each candidate’s Labor Condition Application (LCA), a prerequisite to a properly-filed H1B petition. The LCA must be submitted to the U.S. Department of Labor (DOL) and approved prior to the H-1B petition filing. The DOL routinely takes up to one day to certify the LCA. There are procedural requirements for the employer prior to this filing. The LCA preparation and processing time must be considered to ensure the ability to timely file the H1B petition.
- The devil is in the details. Incomplete H-1B petitions are rejected outright. Reasons for rejection include improperly addressed filing fee checks, incorrect filing address, missing signatures, improper job start dates, and other simple clerical errors. Making a small administrative mistake can result in a rejection that will preclude any chance of the H-1B lottery for a full year. While focusing on the big picture, employers must also focus on what may otherwise seem like insignificant elements.
- Gather your evidence. When petitioning for H-1B, Specialty Occupation workers, the USCIS states that employers must provide significant amounts of evidence with their This evidence includes: evidence showing the proposed employment qualifies as a specialty occupation; evidence showing the beneficiary is qualified to perform the specialty occupation; a copy of any required license or other official permission for the beneficiary to perform the specialty occupation in the state of intended employment (if applicable); and a copy of any written contract between the employer and the beneficiary, among others. Ms. LaRocca stresses that employers need to have an intimate understanding of what the potential H-1B employee will be doing and what the employer genuinely requires in terms of education and experience. The employer must also consider how they will be able to document this work and support the need for a specific level of education and experience. Most employers will need qualified assistance to navigate these requirements, as well as to assess and comply with applicable wage levels. All of these issues must be considered and addressed, particularly in light of harsher evidence thresholds and remaining antiquated DOL requirements that often do not fully correlate to today’s high-tech occupations and employer needs.
- Put a backup plan in place. “H-1Bs are a precious commodity and are increasingly difficult to attain,” notes Ms. LaRocca. By assessing your workforce and recruitment needs in advance, you can potentially take advantage of other visa options that may be easier to accomplish. For example:
- TN Visa – Started under NAFTA, this a special non-immigrant status
- H1B1 – A variant of the H1B visa for nationals of Singapore and Chile
- E3 Visa – For Australian natives
- O Visa – For extraordinary ability
- L Visa –Multinational transferees. Allows multinational companies to transfer certain employees from a company’s parent or affiliate abroad to the U.S.
In the end, says Ms. LaRocca, employers need to be creative and well-prepared when it comes utilizing the H-1B immigration category. Having an HR department with immigration acumen and a good grasp on its complex landscape can be a tremendous advantage. She also recommends that employers with H-1B visa needs have qualified immigration counsel on call.
Is your organization ready to face the changing H-1B landscape? The HR Team is here to offer valuable tools and insights that can facilitate your petition processes. Please contact our knowledgeable professionals to learn more.
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