On November 10, 2015, United States Senators Chuck Grassley (R – IA) and Dick Durbin (D – IL) introduced S.2266, the H-1B and L-1 Visa Reform Act of 2015. Most, but not all, of the proposed reforms within the bill would significantly increase the costs, burdens and penalties for employing H-1B and L-1 workers in the U.S.
In all likelihood, this bill (full text available here) will not become law. Nonetheless, much of the proposed language within the bill closely resembles, and in some cases appears to be structured in anticipation of, other legislative attempts to further restrict the H-1B and L-1 programs. Below are some of the most interesting and controversial proposals contained within Senate bill S.2266 (spoiler alert: If you thought some of the proposed modifications to the H-1B and L-1 programs contained in Senate bill S.744 (BSEOIMA) were onerous, brace yourself!):
- Mandatory pre-filing H-1B recruitment: H-1B employers would be required to conduct mandatory 30 day recruitment prior to submitting an LCA to the DOL. If any equally or better qualified U.S. worker applies for the job, the H-1B employer must offer the job to the U.S. worker, and the U.S. worker must reject the offer, in order to proceed and submit the LCA.
- Maximum period of time permitted in H-1B status reduced from 6 years to 3 years. If the H-1B employee is the beneficiary of an approved EB-12, EB-13, EB-2 or EB-3 I-140 petition, then an additional 3 year extension – up to maximum of 6 years – would be possible (AC21 extensions notwithstanding).
- Third-party placements for H-1B and L-1 workers significantly restricted:
- No third-party placements for H-1B employees, unless the H-1B employer first requests and receives a waiver from the DOL; and
- Third-party placements of L-1B employees could not exceed 1 cumulative year, unless the L-1 employer first requests and receives a waiver from the DOL.
- Non-displacement of U.S. workers:
- H-1B employers would be required to attest (as part of the LCA process) and maintain records that they have not displaced and will not displace U.S. workers 180 days before, or 180 days after, the “placement” of the intending H-1B worker with the employer.
- L-1 employers would be bound by similar non-displacement attestations and record-keeping requirements, and L-1B employers seeking a waiver of the 1 year maximum on third-party placements would presumably need to establish compliance with this attestation as part of the waiver application process (the specific procedures for which would be left to DHS/DOL rulemaking).
- LCA processing times would increase to 14 days from the current 7, and employers would be required to pay an LCA government filing fee. The DOL would be required to review pending LCAs not only for completeness, but also potential “indicators of fraud or misrepresentation.”
- Degrees only: No more experiential H-1Bs would be permitted (i.e., when a beneficiary qualifies for the H-1B based on a combination of education, training and/or experience determined to be equivalent to a U.S. bachelor’s degree and has expertise in the specialty). Further, the degree requirement would be further restricted to: at least a U.S. bachelor’s degree in the specific specialty “directly related to the occupation.”
- Egregiously confusing and narrow redefinition of L-1B “specialized knowledge:” Stay tuned for an upcoming Wolfsdorf Rosenthal LLP blog post dedicated exclusively to this topic…
- Current H-1B Bachelor’s Cap visa lottery would be modified to an 8-tier preference system. Current or former F-1 students with U.S. advanced and/or STEM degrees, and U.S. employers willing to pay the foreign national significantly higher wages than what is currently required, stand to benefit the most from this proposal. Notably, this proposal only pertains to the 65,000 H-1B visas available under the general H-1B Bachelor’s Cap, and does not modify the 20,000 H-1B visas available under the U.S. Master’s Cap exemption.
- Stricter New Office L-1 extension requirements: Extensions from the first year of New Office L-1 status would require much more specific and rigorous documentation, including evidence of “full” compliance with the underlying business plan. Another 1 year “New Office” L-1 extension would only be possible if the L-1 employer can demonstrate it has been engaged in “regular, systematic, and continuous provision of goods and services for the 6 months immediately preceding” the date of filing the extension, and failure to meet any of the specified criteria was “directly caused by extraordinary circumstances.”
- Higher H-1B required wage rates; new L-1 required wage rates: H-1B employers would no longer be permitted to utilize the DOL’s entry-level, or “Level 1,” prevailing wage rates for purposes of calculating the required H-1B wage rate. H-1B employers, and also L-1 employers, would be required to pay their H-1B/L-1 workers the highest of three different prevailing/median wage rate sources.
- Significantly greater fines for H-1B non-compliance; new fines for L-1 non-compliance: Monetary penalties would be increased by a factor of x5 (e.g., from $1,000 per violation to $5,000 per violation, from $5,000 per willful violation to $25,000 per willful violation, etc.).
- Requires the DOL to conduct annual compliance audits on H-1B and L-1 employers with over 100 employees if H-1B/L-1 employees make up more than 15% of their workforce; and requires annual compliance audits on at least 1% of all H-1B and L-1 employers. The USCIS Fraud Detection & National Security Directorate (“FDNS”) already conducts random, unannounced workplace site-visits to many H-1B and L-1 employers’ places of businesses to verify the accuracy of H-1B and L-1 petitions.
The above is not an exhaustive list of all the immigration reform proposals contained within Senate bill S.2266. Other business immigration reform efforts have also been introduced in Congress, including Senate bill S.153, the I-Squared Act of 2015. If your business would be adversely impacted by the proposed restrictions on H-1B and L-1 employers contained within Senate bill S.2266, tell your Senators!
Please contact your Wolfsdorf Rosenthal LLP immigration attorney today if you have any questions regarding this, or any other ongoing immigration reform efforts.