Analysis of New H1B/ L1 BillSummary:
Senator Dick Durbin (D-IL) and Senator Chuck Grassley (R-IA) introduced the H1B and L1 Visa Reform Act on April 23, 2009. While some of the proposed measures will streamline the H1B process and reduce fraud, we see this as bill targeting outsourcing companies operating in the U.S. and is a type of protectionism. Furthermore, the bill in its submitted form will hurt U.S. competitiveness. We believe that this bill is designed to pander to the electorate rather than provide meaningful reforms. This bill will further impair the ability of the U.S. to attract high-skilled immigrants and may cause hundreds of thousands of high-skilled immigrants currently working in the U.S. to return to their home countries. The H1B Visa is the primary gateway for high-skilled immigrants to enter and remain in the U.S. Any legislation that makes H1B Visa less palatable to U.S. employers will actually promote outsourcing over immigration. Employers will simply hire those same employees outside U.S. borders or will be encouraged to pursue even more aggressive outsourcing policies. This, in turn, will lead to less wealth creation in the U.S. and more wealth creation overseas as innovation and economic growth will follow the best brains.
Here are some of the key points of the proposed bill:For Employers Hiring H1B employees:
1. Employers must pay the highest median average wage for all workers in a given occupational classification at a given skill level, with wages determined by the latest occupational employment statistics survey.
2. Employers must post a detailed job opening on the Department of Labor's website for at least 30 calendar
days before hiring an H1B applicant to fill that position.
3. Employers should not have displaced and will not displace a US worker within the period beginning 180 days before and 180 days after the date of filing of any visa petition. This lengthens the current displacement clause which currently is 90 days before and after. Unlike the current displacement clause, the new displacement clause will apply to ALL employers and not just H1B-dependent employers.
4. Companies of greater than 50 employees will be forbidden to have H1B and L1 employees exceeding 50 % of the firm's total employees.
5. Employers must submit W2 Tax statement for each H1B applicant.
6. The Secretary of Labor must establish a searchable website for posting H1B positions. The site must be operational and online within 90 days of the passage of the new law.H1B Employees working as consultants at Client offices:
By striking clause (ii) of sub-paragraph (E) of the section 212(n)(1), and then adding the new clauses under (F), the bill Prohibits placement of H1B employees on another employer's site. This will impact ALL consulting companies. H1B employees cannot be placed at a client site unless a waiver is obtained, which will mean every consulting services company will need to obtain a waiver in order to do business
. This will present an enormous burden on consulting companies using H1B visa employees including a number leading Indian firms such as Cognizant, WiPro and Infosys.Allowable waiver conditions include:
(I) the employer with whom the H1B non-immigrant would be placed has not displaced, and does not intend to displace, a United States worker employed by the employer within the period beginning 180 days before and ending 180 days after the date of the placement of the non-immigrant with the employer;
(II) the H1B non-immigrant will not be controlled and supervised principally by the employer with whom the H1B non-immigrant would be placed; and
(III) the placement of the H1B non-immigrant is not essentially an arrangement to provide labor for hire for the employer with whom the H1B non-immigrant will be placed.
In order to take advantage of the waivers, consulting companies have to insure the client did not displace US workers before and after 180 days from the start of every new assignment.