Buy American and Hire American: A Brainstorming session with USCIS


Recently, USCIS conducted a listening session on the Presidential Executive Order titled Buy American and Hire American. That order intends to " create higher wages and employment rates for workers in the United States, and to protect their economic interests ". With respect to H-1B visa program, the order requires the concerned departments to suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.

USCIS invited comments and suggestions from the general public on changes to be made to H and L visa programs, and employment based immigration programs, to protect the interests of U.S. workers, and prevent fraud or abuse. In sum USCIS wanted to know in what areas changes are required.

Interested stakeholders who had called in included U.S. workers who were laid off, non-immigrants who are awaiting benefits, immigration law practitioners etc. The major concerns expressed by stakeholders were in the following areas:

(1) H-1B visa abuse from program usage perspective;

(2) H-1B cap abuse;

(3) L-1B visa abuse;

(4) Watered-down wages in both H and L programs;

(5) Benching of H-1B employees;

(6) Employers abusing H-1B employees;

(7) U.S. workers being required to train H-1B employees and then being laid off;

(8) H-4 EAD abuse;

(9) EB-1 (multinational managers) visa abuse;

(10)Reforming the process of allotting green card visa numbers by asking USCIS not to count dependents etc.

Much remains to be seen as to how USCIS will address each of these larger issues. But a pragmatic approach should be, as suggested by one immigration law practitioner, a balanced one where bonafide immigrants and non-immigrants continue to receive benefits while protecting the interests of U.S. workers and the visa programs integrity.

Some suggestive changes:

Salary. Most callers seem to have examined the LCA wages from the DOL H-1B labor registry, and concluded that H-1B workers drive down wages. In a real word scenario, most employers pay wages that are much higher than those listed on the LCA. Then, why do they list a lower wage on the LCA? Simple, that way if the employee is benched, the employer only need to pay the lower wage listed on the LCA. DOL can address this by ensuring that the employers only attest to the actual salary that is being paid to the employee.

Prevailing Wage Levels. Previously, the DOL FLCDataCenter used to list only 2 prevailing wage levels, Level 1 (beginner) and Level 2 (now Level 4), and allowed 5% variance pay (i.e., employer can pay no less than 95% of the prevailing rate of wages). Later, DOL eliminated the 5% variance, and started to list 4 wage levels. DOL must revamp its survey on how to collect data on actual wages paid to employees, and set the prevailing wages based on that data. That may drive up the wages. Next, DOL may make it mandatory to obtain a prevailing wage determination from DOL, prior to filing the LCA, by having the employers to list:

(1) job title

(2) the SOC code

(3) the job duties

(4) education requirements

(5) experience requirements

(6) highest education level achieved by the employee

(7) number of years experience gained by the employee in the related field

(8) number of employer’s workers working in that occupation at the specified location.

Later, USCIS must make it mandatory to submit the prevailing wage determination along with the H-1B package, and documentation as to how the employer has set the actual wage rate.

H-1B Cap. This was one of the hot items on the list. Many callers felt that the visas must only be granted to most-skilled or highest paid beneficiaries. However, none of them have suggested a clear standard on how this is to be set. Does “most-skilled” means having 10-years or more of experience? Does highest-paid mean $100,000 and above? For example, if the position of systems analyst requires a bachelor’s degree and 2-years experience only, and assuming that the beneficiary has the same, then the employer would be required to offer $100,000 or more to score a cap number. But that would go against the DOL rule that the wage be set by considering wages paid to other workers having similar skills and knowledge in that particular locality. There should be a balance here, and not arbitrary standards.

The major problem with the H-1B cap is having a requirement that petitions be filed in short window of 6 months (i.e., beginning April of each year), for an employment start date of October 1 of the same year. Most employers resources need for the rest of the year cannot be practically assessed in a short window. Due to a high demand for visas, the H-1B cap has closed as soon as it started as demonstrated by the below trends:

· FY-2014 H-1B Cap

- Both caps reached in first week

- USCIS received 124,000 H-1B petitions

· FY-2015 H-1B Cap

- Both caps reached in first week

- USCIS received 172,500 H-1B petitions

· FY-2016 H-1B Cap

- Both caps reached in first week

- USCIS received 233,000 H-1B petitions

· FY-2017 H-1B Cap

- Both caps reached in first week

- USCIS received 236,000 H-1B petitions

· FY-2018 H-1B Cap

- Both caps reached in first week

- USCIS received 199,000 H-1B petitions

We expect a similar outcome in the next cap season too.

Perhaps USCIS can consider spacing out the cap numbers, allowing a maximum of 19,400 petitions be filed for each 2 month period (i.e., 19,400 for April-May, 19,400 for June-July, and 19,400 plus all left over for August and September). That way, it is expected that only petitions based on actual need basis will be filed by the petitioners, rather than a bum rush to exhaust all the visas in one-shot during the first week the season begins. Secondly, this will also give ample opportunity for small businesses, and mid-size companies, to get a good shot of receiving cap numbers for their needs. Otherwise these businesses are competing with volume filers and most of them end-up getting disappointed if their cases are not selected in the lottery (random selection process). Thirdly, this will give businesses opportunity to identify their yearend needs more securely.

L-1 visas. The time has probably come to mandate petitioners to submit LCAs for L-1 petitions too. Most complaints were that outsourcing companies are sending personnel on L-1 visas and they are cheap labor. In reality, several companies pay L-1 visa holders a U.S. salary and foreign component in their country of residence. Since DOL does not collect much data, unlike H-1Bs, there is no proper source for knowing how low the L-1 beneficiaries are paid. So if LCA filing is mandated, data for this program can also be captured, and measured properly. Moreover, RFEs and denials received for L-1B also look into what wages are paid to the L-1 beneficiaries to determine if the employee can be considered having “Specialized Knowledge”. Having an LCA can make this determination easier. As mentioned in earlier section, if USCIS makes it mandatory to submit the prevailing wage determination along with the L-1 package, and documentation as to how the employer has set the actual wage rate, then this documentation can be extremely useful for USCIS to determine if worker is a “Specialized Knowledge” professional.

Some commentators said L-1 beneficiaries are managed by client companies, and not by petitioner, and that is plain wrong because L-1 Visa Reform Act prohibits it. We will have to look into the real world scenario here. While most employees are supervised by petitioner managers, some amount of supervision from Client Company is inevitable, and this is a fact accepted by USCIS. For example, if an employee is deputed to work at USCIS, then it is unrealistic to expect USCIS will exercise zero supervision on that worker. The balance should be that as long as petitioner’s manager exercises supervision and control for a majority of time (70% or more), then they should be treated to have met the burden mandated by the L-1 Visa Reform Act.

Protecting U.S. Workers. Many commentators said they were asked to train non-immigrants before they were laid off, and now they are out of work for a prolonged period of time. A much of the time was spent in accusing outsourcing companies for the job losses. While I am not for or against outsourcing companies, I think it is unfair to say they are the one and only cause. It is fair to have USCIS and DOL investigate U.S. companies actually receiving the outsourcing/non-immigrants services. Realistically, outsourcing companies don’t just barge in and replace U.S. workers. It only happens because the receiving company, the U.S. Company, had decided to lay off U.S. workers to cut costs and pull-in more profits. It is also possible that the U.S. Companies took this initiative on their own, and not because of any recommendation by outsourcing companies.

DOL and USCIS can take many actions such as:

(1) If a U.S. worker is laid off, the U.S. Company must mandatorily report it to DOL prior to the termination. In turn, the DOL would send a questionnaire to the U.S. Company and laid-off worker asking for reasons for termination to check if the lay-off is because of replacement by a non-immigrant worker or for something else.

(2) Company laying off U.S. worker must pay him/her training fee covering 2 months so that the worker will be able to market himself again.

(3) If investigation reveals that U.S. worker was laid-off because of replacement by a non-immigrant worker, then the IRS should levy a “termination” tax (say $5,000 per occurrence) so that such companies are discouraged from that displacement practice.

(4) If an outsourcing company intentionally displaced a U.S. worker, and replaced him/her by a non-immigrant worker, then the IRS should levy a “penalty” (say $5,000 per occurrence) so that such companies are discouraged from that displacement practice.

(5) Companies hiring U.S. workers must be given tax credit (says 2-3% of the offered salary for each occurrence) so that they are encouraged in hiring such workers. This can be determined by amending the Form 941, Quarterly Wage Report, in which companies can indicate the number of new hires and their wage details.

Conclusion. This is a nation of immigrants. Discouraging immigration is not the answer. A balance reform approach that continues to grant immigration benefits, and protecting local workers at the same time, is required. Unfortunately, a comprehensive immigration reform is not finding any consensus in the Congress. In lack of legislation, the concerned departments must make level-headed decisions, after consulting each other, in rule making process to achieve a balance.

About The Author

Jagan Tamirisa is a Senior Research Associate at the Law Offices of Rakesh Mehrotra.