Comments on the Senate Passed Fairness for High Skilled Immigrants Act - Cato Institute

on 03:12Dec, 04, 2020

December 4, 2020 10:08AM

The Senate passed an amended version of the Fairness for High Skilled Immigrants Act (S. 386/H.R. 1044). The bill has already passed the House of Representatives on a massive 365-65 vote. Since then, Sen. Mike Lee (R-UT) repeatedly attempted to pass the bill on “unanimous consent” under which any member can object—which led to deals with Senators Chuck Grassley (R-IA), Rand Paul (R-KY), David Purdue (R-GA), and Dick Durbin (D-IL) that amended the House bill. Sen. Rick Scott (R-FL) who was the latest member to object lifted his hold last night, allowing final passage.

The Senate version is now substantially different from the House version with deleterious provisions to which the House Judiciary Committee has already voiced opposition, but it has also committed to finding common ground to resolve. 

What’s in the Fairness for High Skilled Immigrants Act, December 2020 version?

Green card reforms:

    Phases out employment-based per county limits on green cards: The main purpose of the legislation is to treat all employment-based immigrant visa applicants on a first-come, first-served basis without regard to birthplace. Under current law, immigrants from no single birthplace can receive more than 7% of the total number of immigrant visas or green cards issued in a year unless they would otherwise go unused. The effect of this provision is that while Indians are half the skilled employer-sponsored applicants, they receive just 10 percent of those green cards and—as a result—are nearly 90 percent of the backlogged applicants.
    Comments: The House bill is the same. Basically, this provision is the only reason the bill has made it as far as it has. The discrimination against Indian skilled immigrants mean, as I’ve estimated before, that new Indian green card applicants will almost certainly never receive green cards in their lifetime. More than 200,000 of the 700,000 Indians in line will likely die before they receive their green cards. The fact that other immigrants almost immediately receive their green cards makes the system massively unfair and is already causing skilled workers to leave the country. Indians and Chinese—the only two significantly backlogged applicants—also receive wage offers significantly higher than those for the average applicant from other countries.
Provides for an 11-year phase out period: The bill’s green card changes will only take effect on October 1, 2022. For the EB-2 and EB-3 categories for non-executive level employees of U.S. businesses, the bill guarantees immigrants which are not from the top two origin countries (India and China) a certain percentage of the green cards for 9 years: year 1 (30%), year 2 (25%), year 3 (20%), year 4 (15%), years 5 and 6 (10%), and years 7 through 9 (5%). No more than 25 percent of these “reserved” green cards can go to immigrants from any single country. No more than 85 percent of the other “unreserved” green cards can go to a single country (India). In addition, a minimum of 5.75% of all EB-2 or EB-3 green cards will go to immigrants from these non-top 2 countries for 9 years prioritizing spouses and minor children of immigrants already in the United States and immigrants awaiting visas abroad. It’s unclear if the 5.75% counts toward the prior reservation or must be in addition to it. This ambiguity means it is not possible to say with certainty how long it will take for the current backlog to be processed under the bill.
    Comments: The House bill would have taken effect immediately and only contained a 3-year phaseout with set asides for non-Indian or Chinese applicants of 15% in the first year and 10% in the next two years. Eleven years is an incredibly long time to continue a system based on birthplace discrimination. It will probably take about 13 years to process all existing Indian applicants under this system, while new applicants continue to take priority. If only applicants who are not currently in the United States received priority, that would be a rational basis for discrimination since those already in the United States are already benefiting more from the U.S. immigration system than those abroad. But these provisions continue the discrimination that the bill is designed to eliminate for a decade (albeit to a lesser degree).
Guarantee for nurses and physical therapists: The bill carves out 4,400 EB-3 green cards (11% of the category) for nurses and physical therapists—defined as “shortage occupations”—for 7 years. The spouses and minor children would not count against this limit but would still receive green cards at the same time.
    Comments: The House bill has no similar provision. This essentially creates a temporary new category for legal immigrants who DOL deems to be in short supply. I have no problem with this. It is as arbitrary as the rest of the employment-based categorization scheme and does not involve birthplace discrimination.
Caps H-1B visa holders and H-4 visa holders (or those who held H-4 status in the last 2 years) to no more than 70% of all employment-based green cards during the first 9 years after implementation and 50% for all subsequent years.
    Comments: This is a way of continuing discrimination against Indians indirectly because Indians are 70 percent of H-1B visa holders. Moreover, nearly all of the backlogged immigrants in the green card queue from India are working on the H-1B visa. This provision undermines the purpose of the bill and makes little sense as an anti-H-1B measure because it forces H-1B holders to remain on the temporary status longer than they would otherwise. We don’t know the exact breakdown of the status of those in the green card backlog from India, but it’s likely at least 90 percent H-1B visa holders, so this will delay the receipt of green cards to backlogged Indians. If not for the backlog, the effect would not be very great. About 70 percent of EB-2 and EB-3 green card applicants in 2019 were on the H-1B visa based on Department of Labor’s labor certification data. It is likely less than this in the EB-1 category (multinational executives, those with extraordinary ability, etc.) who have other temporary visa options available or come from abroad, and there probably are very few in the EB-4 special immigrant and EB-5 investor categories, so assuming only 50 percent of EB-1 is on H-1B visas, the number of new H-1B green card applicants is probably only slightly higher than 50 percent. That said, it would hamstring any increase in that program.
Raises the family-sponsored per country limit on green cards to 15 percent: Family-sponsored preference categories also currently have a 7% limit on green cards for immigrants from individual birthplaces. The bill more than doubles that limit to 15% increasing in absolute terms from about 15,820 to 33,900. This will primarily benefit long-backlogged immigrants from Mexico and the Philippines, but also India and China.
    Comments: The House bill is the same. This provision does not go as far as the employment-based provision in ending discrimination based on birthplace in the family-sponsored system, but it is a significant benefit to long-backlogged, family-sponsored immigrants who are mostly waiting for immigrant visas abroad.
Bars adjustment of status to all Chinese “affiliated” with the Chinese Communist Party: The new language (presumably proposed by Sen. Scott) requires DHS to “not adjust status of any alien affiliated with the military forces of the People’s Republic of China or the Chinese Communist Party” (CCP). This is similar to the existing ground of inadmissibility in 8 U.S.C. 1182(a)(3)(D) for members or those “affiliated with” any communist party anywhere. However, the existing ground of inadmissibility has exceptions for involuntary membership, past membership, or close family members. However, the current ground applies to both adjustment of status in the United States as well as consular processing abroad. Effectively, this provision requires all Chinese immigrants to apply for immigrant visas at consulates abroad.
    Comments: This is just more de facto national origin discrimination. Most Chinese have no ideological connection to the CCP even if they join it. The main reason to have joined the party is that it facilitates promotions, especially within government or state-owned enterprises but overall. Lotus Yuen of The Atlantic has called membership the “ultimate resumé booster” in China. It can also allow Chinese to avoid direct state persecution. While the government obviously has an interest in stopping actual espionage, this ban is overbroad. The United States should want communists to experience the superiority of the U.S. system and encourage defectors from communist China. The United States has benefited greatly from Chinese immigrant innovators in science, technology, and medicine, and this ban would push inventors back toward the communist regime. That said, because it only applies to adjustment in the United States, the practical effect amounts to an expensive inconvenience rather than an outright ban.

Adjustment of status from temporary visa to green card

    “Early filing” (H-1B lite status): Allows backlogged temporary workers to receive a separate, limited, 3-year, renewable employment authorization (apart from their underlying status) 2 years after their employer petition was approved by filing an adjustment of status to legal permanent residence application (i.e. green card application) prior to a green card number being available under the caps. You can credit Sen. Durbin with this provision. Currently, anyone whose adjustment of status application is pending for at least 180 days can receive an employment authorization document (EAD). This EAD allows them to work for any employer that they want while remaining in line based on the original employers’ petition. The original employer’s petition remains valid so long as they work in “the same or a similar occupational classification.” However, you currently cannot apply for legal permanent residence prior to a green card or immigrant visa number being available. The bill states that these new “early filers” could also receive this same authorization. However, the bill adds new requirements for this authorization. The job would have to have wages “commensurate with” those for the employer’s similarly situated U.S. workers in the area.

    If the employer had fewer than 2 such employees, it would have to attest that they were similar to the wages for similar U.S. workers in the area. The worker would have to file a Confirmation of Bona Fide Job Offer or Portability with a request for employment authorization. The employment authorization would last for three year increments with renewals, which is better than the adjustment of status EAD available now (which is only a 1 or 2 years). The worker would also have to provide a signed letter from their employer with the required attestations. A Confirmation of Bona Fide Job Offer or Portability would need to be filed (again if necessary) within 12 months of the green card application being adjudicated. If the Confirmation of Bona Fide Job Offer or Portability was deemed not to meet the requirements, the green card application would be denied. The minor children and certain spouses of temporary workers would also not benefit from this provision. The cost would be $2,000 for each Confirmation of Bona Fide Job Offer or Portability, in addition to the cost of the adjustment of status green card application. Half the fees would go to immigration adjudications and half into the general fund of the U.S. Treasury.

    Comments: The senators have made this provision about as watered down as they can get it, but it is still the most important unequivocally positive change from the language that the senators have added. It would make it easier for H-1B workers to change jobs. Currently, H-1Bs stuck in the backlog have to renew every single year, which is costly and problematic if the government decides to readjudicate the underlying H-1B petition. It would also allow other temporary workers, such as those on Optional Practical Training, to extend their status when they otherwise would not be able to, potentially enabling them to avoid having to obtain an H-1B at all.
Prevents “aging out” of children of temporary workers in the backlog who have filed an adjustment of status application under the early filing provision. Currently, a dependent child of an H-1B worker loses their status on their 21st birthday. They also lose their eligibility for a green card at the same time. The bill would provide them both a status past their 21st birthday.
    Comments: This is an unambiguously positive provision.

H-1B high skilled temporary worker reforms (none in House bill)

    Requires the posting of H-1B jobs for new H-1Bs on government website for 30 days. If the Department of Labor (DOL) cannot get the website up and running within 180 days, the bill allows just a 30-day extension. If the website still cannot work, the H-1B program could not permit additional H-1B applications.
    Comments: This seems like it is risking a lot for DOL to create a working website in less than a year. Forcing employers to advertise positions that may or may not actually be available makes little sense.
Bans advertising only to H-1Bs.
    Comments: This provision is not unreasonable.
Bans recruiting primarily H-1Bs.
    Comments: Unlike the prior ban on advertising, this provision undermines a major purpose of the H-1B visa, which is to allow employers to hire workers for specialty positions. This tells businesses that they cannot simply recruit and hire a specific foreign worker or workers who they believe will fill whatever niche they need. Moreover, the “primarily” implies that companies would have to spend at least 50 percent of their time recruiting U.S. workers, even if they had already decided that a specific noncitizen was the person that they wanted. It treats the H-1B program like the lesser-skilled H-2 programs where the main purpose of the hire is labor, not skills. Moreover, it would greatly harm businesses that already employ the worker under a different visa category (L-1, F-1, J-1, etc.).

    Employers could probably evade this requirement by making the job descriptions so demanding that only an existing employee could fill the position, as they commonly do under the permanent labor certification process. But why do the authors think it helps U.S. workers to create a bunch of sham job advertisements? The Justice Department's recent Facebook lawsuit highlights the perils of handing such vague language to any administration. This concern is compounded because the bill also allows DOL to troll through companies' files whenever it wants without any underlying complaint from an employee or U.S. worker. 

Requires providing every W-2 for every H-1B worker employed by the company over whatever period DOL wants.
    Comments: This provision would impose a significant administrative burden for no upside. The H-1B process is already too time-consuming and expensive.
Bans hiring new H-1Bs if an employer has more than 50% of its workforce on H-1Bs or L-1s (for skilled intracompany transfers from abroad).
    Comments: As far as I can tell, only two large companies come close to fitting this profile: Cognizant (49.999%) and Tech Mahindra (50.3%), though a few others may be close if H-1B visas were more readily available. The provision sets a dangerous precedent that H-1B-heavy companies should be legally discouraged. But it’s unclear what the purpose of this restriction is, except to target certain companies that specialize in certain tech services to the benefit of others who are more widely diversified. Even if the requirement was only 25 percent, it would only force Cognizant and other specialized companies to sell or merge with a larger company with more employees, not change any business practices or cease hiring H-1B workers.
Requires DOL to charge a fee for H-1B labor condition applications (LCAs) to cover the cost of processing.
    Comments: The bill also says that the fee could be used for “administration, oversight, investigation, and enforcement.” If the purpose of the fee is to cover the cost of the application, that’s reasonable. If the purpose is to force compliant employers to cover the costs of DOL actions against noncompliant employers, that’s unfair. This authority should be at least clarified.
Bans B-1 temporary business visas for anyone who would “normally” be classifiable as an H-1B:
    Comments: This provision is unambiguously negative. Foreigners visiting the United States “temporarily for business” can receive a B-1 visa if they . The State Department has stated since the 1960s that in cases where a person who could qualify as an H-1B is only coming for a short period, they are “more appropriately” classified as a B-1 so long as they are paid from sources abroad. In a proposed rule, the comment period of which ends in December 21, the State Department is proposing its own reversal of this policy. Presumably this legislative provision is also intended to stop this practice, though the word “normally” adds some ambiguity. The “B-1 in lieu of H-1B” option is important because there is no other option specifically for skilled professionals on short-term assignments, especially those that come up suddenly and need to be completed quickly. 

    U.S. businesses contracting with foreign companies, foreign multinationals investing in the United States, or foreign companies without a physical presence in the United States use this option, but it’s unclear how widespread it is because the State Department doesn’t separately record B-1s-in-lieu-of-H-1Bs from the total 38,000 B-1s. In 2010, however, the State Department stated that the consulates in India (the largest source of H-1Bs) made “fewer than 1,000” such grants against nearly 60 times as many H-1Bs. Nonetheless, this rule directly restricts legal trade, travel, and employment to no benefit to the United States.

Requires employers that retaliate against people who “reasonably believe” are disclosing evidence of an H-1B violation to pay backpay.
    Comments: This is an extension of current law prohibiting employers from retaliation by explicitly requiring them to pay backpay.
Requires DOL to review H-1B LCAs for “fraud or misrepresentation” rather than only for “completeness and obvious inaccuracies”.
    Comments: This undermines the type of expedited review that LCAs receive. As soon as adjudicators must undertake a more substantive review than completeness and obvious inaccuracies (such as, an internal inconsistency), the review will add significantly more time and expense to an already expensive and time-consuming process.
Requires employers pay at least the actual wages paid to similar U.S. workers in the local area.
    Comments: This provision extends a current provision of the law to state the “actual wages” must be based only on wages of workers in the area of intended employment. There is also a slight tightening in how it defines similar U.S. workers from “similar experience and qualifications” to “substantially the same duties and responsibilities.” In some cases, using only U.S. workers in one area might raise the wage in some cases, while it might lower the wage in other cases. Again, narrowing the workers to those with “substantially similar duties and responsibilities” would have the same ambiguous effect.
Vastly expands DOL audit and investigation authority:
    Allows DOL to conduct compliance surveys or annual audits of any H-1B employer. Requires audits of anyone with 100 H-1B workers if more than 15% of their employees. Allows investigations based on anonymous sources not in the form of a complaint from workers or other harmed parties. Allows DOL to audit or investigate based on information in an LCA. Eliminates the requirement that the DOL secretary personally certify that reasonable cause exists for an H-1B investigation. Removes the 60-day time limit on investigations.
      Comments: Currently, H-1B audits are based only on complaints or other verified, nonanonymous sources that come to the DOL from people DOL knows would have knowledge of an H-1B violation. According to DOL, this latter authority had never been used as of this year, so H-1B audits have exclusively been based on complaints. Congress imposed these restrictions because it wanted to limit the authority of DOL to conduct meritless investigations. These provisions would allow DOL to target employers for audits without any reason to believe a violation has occurred. This is yet another burden in an already burdensome and expensive process.
Eliminates the protection from penalties for employers that made a good faith effort to follow the rules or that underpaid employees based on use of a prevailing wage methodology based on industry standards.
    Comments: These harmful provisions are replaced with a benignly labeled “information sharing” provision on page 19.
Triples the fines for H-1B LCA violations. Fines increase from $1,000 to $3,000 for non-willful violations, from $5,000 to $15,000 for willful violations, from $35,000 to $100,000 for displacement of U.S. workers.
    Comments: Adjustments for inflation since 1998 would not quite double the fine amounts, so these increases are clearly intended as more than an update to outdated statutory figures.
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