THE H-1B PROGRAM:

AMERICA’S HOME COURT ADVANTAGE IN GLOBAL COMPETITION

THE ISSUE:  The H-1B program is a prompt, lawful way for U.S. employers to hire foreign-born professionals on a temporary basis. This program allows U.S. business to recruit and hire the best-qualified candidates from around the world, and compete on a level playing field with foreign companies in such key industries as high-tech, manufacturing, pharmaceuticals, biotechnology, and education. 

BACKGROUND:  Who are H-1Bs?  H-1Bs are temporary foreign professionals hired by U.S. employers. They can only be hired for “specialty occupations,” which are defined under the law as jobs that require a professional who has the equivalent of a bachelor’s degree in their field of specialty. Examples are doctors, engineers, professors, accountants, researchers, medical personnel and computer professionals.

What does the Employer Need to Do?  A U.S. employer using this program must guarantee that 1) the foreign professional will be paid at or above the rate paid for a similar position at the employer’s own offices, or at those of their local competitors; 2) the foreign professional will not adversely affect the working conditions of U.S. colleagues; 3) U.S. colleagues will be given notice of the professional’s presence among them; and 4) there is no strike or lockout at the worksite.  The employer also must demonstrate that the position requires a professional in a specialty occupation and that the intended employee has the required qualifications.

The American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) increased the number of H-1B visas (no more than 115,000 new admissions each year for FY99 and 2000, 107,500 in 2001, and 65,000 after that). ACWIA also added new requirements for employers who use a higher percentage of H-1B workers (including that companies first recruit in the United States, and not lay off American workers before using the H-1B program). ACWIA stiffens the punishments for companies that violate the law. The new punishments include fines of up to $35,000, a three-year bar from participating in visa programs, and repaying salaries of any under-paid foreign professionals. ACWIA further requires employers to pay a fee of $500 per visa to fund education and training programs for U.S. workers.

Why is the H-1B program essential?  U.S. employers use the H-1B program to hire foreign professionals with highly needed skills. Employers typically hire H-1B professionals for three reasons:

Needed skills – To obtain essential skills or rare and unique knowledge;

Global market expertise – For their special expertise in overseas needs, markets, trends or distribution, allowing U.S. businesses to compete in global markets; and

Temporary shortages - To fill temporary shortages of needed skills.

No employer would go through the extra burdens, costs, and delays of hiring a foreign professional worker unless they could not find the skills they need among U.S. workers.  If American companies are prevented from hiring essential people to fill critical positions, an increasing number of jobs dependent upon these slots will go unfilled each year, resulting in American jobs being lost and American projects losing out to foreign competition. As the U.S. economy becomes increasingly global, H-1B professionals become even more essential to America’s continued economic growth.

CURRENT STATUS:  ACWIA increased the number of temporary visas through Fiscal Year 2001, while making significant changes to the program to enhance domestic workforce protections. However, the increases mandated in ACWIA were insufficient; the H-1B visa cap was reached well before the end of FY1999 and was reached in March of 2000.   Advocates support the following bills introduced this year to increase the H-1B limit:

S. 2045: Senators Orrin Hatch, Spencer Abraham, Phil Gramm, Dianne Feinstein, Bob Graham, and others introduced the American Competitiveness in the 21^st Century Act on February 9, 2000.  This bill would increase the H-1B cap to 195,000 for FY2000, 2001 and 2002.  The bill also would exempt from the cap H-1B nonimmigrants employed by higher educational institutions and research institutions, and foreign graduates of U.S. masters and doctoral degree programs sponsored by U.S. employers within six months of their graduation.  Because of support from Senators Hatch, Abraham, and Gramm, this bill appears to be the vehicle through which the Senate will address this issue. Advocates strongly support this bill.

H.R. 3983:  A bi-partisan group of Representatives, led by David Dreier (R-CA), Chair of the House Rules Committee, and Zoe Lofgren (D-CA) introduced the “Helping to Improve Technology Education and Achievement” or “HI-TECH Act” on March 15, 2000. The bill has the strong bi-partisan support of such key members as Representatives Tom Davis (R-VA), the chairman of the Republican Congressional Campaign Committee, and Representative Patrick Kennedy (D-RI), chairman of the Democratic Congressional Campaign Committee. The bill would increase the limit on H-1B visas to 200,000 for FY2001, 2002 and 2003, and would “set aside” 10,000 of the 200,000 visas for employees of higher educational institutions, and government and non-profit research institutions, and 60,000 visas for individuals who hold masters or higher degrees (or their equivalent). The bill would also deal with problems resulting from the per-country limits in business immigration by allowing unused visas to spill over to oversubscribed countries. Another provision in the bill allows applying “carryover visas” from FY1999 that were counted against the FY2000 cap back to FY1999, thereby having fewer carryovers for this year. Finally, the bill would increase the fee for initial petitions from $500 to $1,000.  Advocates strongly support this bill, while being concerned about the impact of an increased fee on non-profits, small businesses, and state and local governments that are increasingly using the H-1B program.

Advocates and the business community do not support the Smith Jackson-Lee bill, reported out of the House Judiciary Committee, H.R. 4227 -- the “Technology Worker Temporary Relief Act.”  While the bill purports to grant unlimited visas for the next three fiscal years, additional visas over the current caps will be available only to employers who can document that their median wage has increased in the last year.  In addition, the bill would permanently change the H-1B category, requiring sponsoring employers to have at least $250,000 in gross assets or document ongoing business activity, requiring H-1B nonimmigrants to be in full-time employment (at least 35 hours per week) and be paid at lest $40,000, and eliminating the availability of work experience equivalence to a required bachelor’s degree.  The bill would require DOL to post individual information regarding H-1B employees, including their degrees and nationality, on the Internet.  It also imposes two new fees totaling an additional $300 for fraud investigation and H-1B processing things the agencies are supposed to be doing now.  The new visas are virtually inaccessible to employers, and the additional restrictions on the category also raise serious concerns.

ADVOCATE’S POSITION:  Advocates believe that the H-1B cap is a cap on U.S. economic expansion. If U.S. employers cannot quickly and efficiently hire the workers they need to develop new products, create ground-breaking research, implement new projects, and expand their operations, they will be at a competitive disadvantage with foreign countries with less restrictive immigration policies. The European Union and Asia are becoming America’s largest competitors in global markets, partly because their policies allow companies to hire foreign professionals with exceptional talents and abilities. All U.S. industrial sectors face increasing competition from abroad and increasing job shortages. Further restrictions on the H-1B program will only encourage America’s competitors.  Now more than ever America needs the ability to hire highly skilled employees.  AILA strongly supports S. 2045 and H.R. 3983, and opposes H.R. 4227.