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 under-paid foreign professionals. ACWIA further requires employers to pay a fee of $500 per visa to fund education and training of 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. But 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 available number of these 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 the last fiscal year.

As a result, Senator Phil Gramm (R-TX) and Representative David Dreier (R-CA) have introduced S. 1440 and H.R. 2698. These companion measures call for an increase in H-1B visas to 200,000 for fiscal years 2000, 2001 and 2002 (in succeeding fiscal years, the cap would revert to 65,000). Both measures also would exempt from the cap H-1B professionals with at least a master’s degree who receive total compensation of at least $60,000, and people with at least a bachelor’s degree who work at colleges and universities. Finally, H-1B professionals working at universities would be exempt from ACWIA’s attestation requirements, provided they have at least a bachelor’s degree.

On October 27, 1999, Senator John McCain introduced S.1804, the “21^st Century Act” which, while primarily focused on Commerce Department initiatives to encourage science, math and technology education, would suspend the H-1B cap through FY2006.

A related measure, H.R. 2687, was also introduced by Representative Zoe Lofgren (D-CA). H.R. 2687 would create a new "T-visa" for certain highly skilled, temporary workers who have completed degrees in American universities in the sciences.  H.R. 2687 would charge a $1,000 fee for a T-visa (and $500 for an extension), and user fees would go into a high-tech education fund providing science-related scholarships for American school children. Senator Charles Robb (D-VA) has introduced S. 1645 which also would create a new “T” visa, but includes strict labor attestations that would restrict the usefulness of the program.

Finally, on November 18, 1999, Representative David Wu (D-OR) introduced H.R. 3508, which would allow up to 65,000 H-1B visas each year (not counted under the normal cap) for advanced-degree professionals if their employers make scholarship contributions for each year of their employment.

AILA’s POSITION:  AILA believes 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 companies which have less restrictive immigration policies. The European Union and Asia are becoming America’s largest competitors in global markets, in part because their policies allow companies to hire foreign professionals with exceptional talents and abilities. All U.S. industrial sectors face increasing competition from abroad. Further restrictions on the H-1B program would only encourage America’s competitors.  Now more than ever America needs the ability to hire highly skilled employees.  AILA strongly supports S. 1440 and H.R. 2698.  AILA also supports H.R. 2687, but is concerned about the impact of the high fees on small employers and start-up firms.

39H18074.1 REVISED
December 17, 1999