SI Review: July 2013

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Benefit of Counsel

The Immigrant Story

How will comprehensive reform impact employing foreign labor?

By Christopher T. Musillo, Esq.

The spring and summer has seen a contentious immigration debate, with Congress focusing on passing a Comprehensive Immigration Reform bill (CIR). The mainstream media’s discussion of CIR has centered on two points: the fate of 10 to 12 million undocumented foreign nationals and securing the southern border with Mexico. While these two issues are providing the momentum for reform, a number of other noteworthy changes that are under consideration could have an enormous impact on the employment of foreign labor, especially in the staffing industry.

Greater visa numbers. Current law allows 65,000 new “regular” H-1B visa approvals every fiscal year and an additional 20,000 for graduates of American master’s degree programs. This H-1B cap of 85,000 visas has been met every single year since the 1990s, including during the recession years. In most years the cap has been oversubscribed on the first day of eligibility. American businesses have regularly asked Congress to raise this H-1B quota. Congress is hearing the call. Most potential legislation calls for increased H-1B numbers.

Increased enforcement. The tradeoff for the greater H-1B numbers is greater enforcement regulation. Several members of Congress allege the H-1B program is ripe with abuse despite the fact that only about 25 H-1B employers out of several hundred thousand approvals over the years have been deemed willful violators of the H-1B program. Is the problem one of perception or too few enforcement agents? It will soon be clear as all versions of CIR step up funding for H-1B enforcement.

H-1B and staffing. Some in Congress perceive H-1B abuse because they do not understand the staffing business model, confusing “outsourcing” with “offshoring.” As a result, several proposed measures specifically target the industry. In some versions, placing H-1B recipients at third-party worksites is outright prohibited. Worse yet is that regulatory agents at USCIS have already assumed that Congress wants it to use a higher level of scrutiny on staffing companies’ visa petitions and have begun to do so.

Green card numbers. A common theme among the various proposals is that there are insufficient green card quotas. The insufficiency means that some employers and workers have been unwilling to wait many years for their quota number to be “current.” By increasing green card numbers, Congress hopes to incentivize future employers and workers to adhere to immigration regulation. For the industry, this should mean faster green cards and less worrying about quotas.

E-Verify. E-Verify is a federal program whereby employers can check a prospective employee’s work authorization status. Government contractors and some states have made E-Verify mandatory. The conventional wisdom is that E-Verify has been a mixed blessing. On the one hand, E-Verify is an online system where employers can feel confident that their employees are in the U.S. lawfully and hold appropriate work authorization. On the other hand, many report that the system has produced an alarming number of false negatives that have prevented lawful employees from working. Congress appears ready to require E-Verify for all employers, likely phasing it in over a few years.

Merit-based immigrants. Congress appears ready to embrace what economists have been telling them for years: that the current system skews too far in favor of familial ties and does not focus enough on the economic prospects of the immigrants themselves. The plan that Congress appears to have settled on will create a merit-based green system, which would allow the Department of Homeland Security to weigh a number of factors, such as education, job prospects, U.S. ties and English fluency to prioritize an applicant’s visa. The merit-based system will come at the expense of the family categories and will eliminate the visa lottery program.

Industry challenge. Contingent labor and staffing companies have traditionally been large users of foreign-trained employees. These employees have proven to be beneficial for employers and American society as a whole. It is incumbent on the industry to make sure that Congress hears this story or else misperceptions, and not realities, will drive future legislation and regulation.

Christopher T. Musillo is co-managing partner at Musillo Unkenholt. He can be reached at c.musillo@muimmigration.com.

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