Labor Immigration Law

One of the most popular U.S. work visas, the H-1B, will start accepting filings for new H-1B employment on April 1, in exactly one week.     Pursuant to each yearly H-1B quota, new H-1B filings can be filed on April 1, at the earliest, for a starting date of employment on or after October 1.

The H-1B Quota and Expectations for This Year

When the H-1B visa category was created in 1990, Congress imposed an annual cap on the number of new H-1B visas which can be issued.  Although the cap has varied through the years, it is set to 65,000 per year plus 20,000 for graduates of U.S. masters programs for the new fiscal year (FY2012) starting on October 1, 2011.

As discussed above, the H-1B cap “opens” on April 1, 2011 and will remain open for new H-1B filings until the 65,000 H-1B limit is reached.  While it is impossible to predict exactly when the FY2012 H-1B cap will be reached, it is helpful to provide some context.  For FY2009, filing made on or after April 1, 2008, caused the H-1B cap to be reached in eight (8) days.   For the FY2010, the H-1B cap was open between April 1, 2009 and December 22, 2009 and for last year, FY2011, the H-1B cap was open between April 1, 2010 and January 25, 2011.

Conclusion

As a result, and due to the slow economic recovery, while we expect a robust H-1B filing season this spring, we anticipate that H-1B visa demand would be similar to last year when the H-1B cap was open for eight months.   Throughout the H-1B season, and as early as mid-April, we will be providing updates on the number of H-1B cap filings and will be revising (hopefully by making them more accurate) our estimates of how long the H-1B cap would last.  To ensure you receive these updates, please sign up to our free weekly newsletter.  If you wish to start a new H-1B work visa petition under this year’s quota, or if our office can be of any help, please contact us.

As of yesterday, March 21, 2011, the E-Verify Self Check system has been launched and made available to users who maintain an address and are physically located in Arizona, Idaho, Colorado, Mississippi, Virginia or the District of Columbia.

About E-Verify Self Check

E-Verify Self Check is the first online E-Verify program offered directly to workers and job seekers. This voluntary, free, fast and secure service was developed through a partnership between the Department of Homeland Security (DHS) and the Social Security Administration (SSA).  The goal of the system is to allow individuals in the United States to check their employment eligibility status before formally seeking employment.   The system uses Equifax (a credit rating company) to provide identify verification and, through a combination of DHS/SSA records review, can provide evaluation on its users’ employment eligibility.

One of the drives behind E-Verify Self Check is to allow individuals who plan to seek employment to verify their employment eligibility and so that they have an advance opportunity to correct issues relating to their employment authorization records in DHS or SSA systems.

Although the E-Verify Self Check system was launched yesterday along with active PR, the system is essentially a test limited to only a few states plus the District of Columbia and would probably require congressional approval before it is widely deployed.

USCIS estimates that Self Check users will generate about 850,000 to 1 million queries in the first year, with approximately 8 million queries after/when the program is expanded nationwide.   The current plans for expansion are to include 16 states in fiscal year 2012 and roll out nationwide afterwards, if the USCIS budget permits.

Procedures

The E-Verify Self Check process consists of four steps.

1. First, users would enter identifying information online (such as name, date of birth and address).
2. Second, users would confirm their identity by answering demographic and/or financial questions generated by a third-party identity assurance service (Equifax, as of now).
3. Third, the users would enter work eligibility information such as a Social Security number and, depending on citizenship status, an Alien Registration number.
4. Finally, E-Verify Self Check checks users’ information against relevant SSA and DHS databases and returns information on users’ employment eligibility status.

Concerns

One of the main concerns with E-Verify Self Check is that the results of the program would be shared with employers or would otherwise affect or stay on a person’s credit or background record.  USCIS has assured that E-Verify Self Check query information or results are never shared with users’ employers or prospective employers.  However, using the E-Verify Self Check would result in a “soft hit” on a user’s credit score.  These soft hits are generally not shown to businesses and are not used to calculate credit scores.

Similarly, USCIS prohibits employers from requiring prospective employers submit to E-Verify Self Check as condition of their employment.

Conclusion

Although it is very early to gauge E-Verify Self Check’s success so early, our office has heard concerns that using E-Verify Self Check may impact a user negatively.  Although USCIS strives very hard to allay such concerns, the fact is that the perception that negative information provided by E-Verify Self Check may be used against an employee  still remains.

Workers who have had information consistency problems with DHS or SSA in the past, or have a reason to believe that their records may not be accurate in either of those agencies, would benefit from using the E-Verify Self Check system to ensure that their records are proper and that a subsequent E-Verify check by an employer would likely be a positive one.

In connection with the 2007 adjustment of status (I-485) filing “blizzard” and due to the fact that there are many I-485 applicants who are hoping to switch jobs, our office has handled numerous AC21 green card porting cases.   One of the most frequent questions we receive is whether a new proposed job position is “same or similar” for purposes of complying with AC21 and meeting its requirements.

Generally, a new job should be in the same job classification as the job for which the approved immigrant petition was filed.  For example, an adjustment applicant working as Computer Analyst, where the PERM/I-140 were filed for Computer Systems Analysts (SOC code 15-1051.00) classification should be able to switch to a new job which fell under the same classification – 15-1051.00.

In a recent teleconference, the Nebraska Service Center (NSC) provided some unofficial but helpful guidance on their reasoning and practice when adjudicating AC21-related cases.   NSC was asked to provide some guidance as to their criteria in adjudicating the “same or similar” job standard.  In response, NSC confirmed that the “same or similar” has not been a significant issue because NSC has been applying a “common sense” approach – NSC has confirmed that most petitions invoking AC21 portability based on similar occupations are indeed usually similar, i.e. accountant doing another accounting position, IT consultant working in the IT field.    On the other hand, IT worker making “slurpees at the 7-Eleven” would not be considered to qualify under AC21.

While this conference call and the information about the “common sense” approach NSC takes with respect to AC21 review does not state the official USCIS position, it nonetheless provides a helpful insight into the operations and standards at NSC.  Also, it should serve to provide some relief and flexibility to the thousands of I-485 adjustment applicants who are seeking to switch jobs but when the new proposed jobs are not exactly similar to the jobs for which they were initially sponsored.

Now that the H-1B quota has been reached (as of December 21, 2009), we are receiving an increasing number of inquiries by both cap-subject employers and prospective employees about the alternatives for work authorization between now and October 1, 2010, when the new fiscal year’s H-1B quota would begin (as a reminder, April 1, 2010 is the earliest a cap-subject H-1B application can be filed).  We describe some of the most common H-1B visa alternatives.  Note that the list is not intended to exhaust all possible visa types and scenarios pursuant to which an employee may be legally employed.  Our goal is to list some of the common options for the benefit of our clients and readers.  We are happy to discuss individual cases as part of our FREE initial consultation.

O-1 or P-1 Extraordinary Ability Visas

O-1 and P-1 visas are generally reserved for individuals who have extraordinary ability in the sciences, arts (including the television and motion picture industry), education, business, or athletics.  By definition, not many individuals qualify for one or both of these visa types, but where possible, an application for O-1 and/or P-1 should be prepared in lieu of H-1B.   In addition to being able to obtain work authorization pursuant to these visa types, an O-1 and/or P-1 approval may establish the basis for the subsequent application for an EB-1 category permanent residency.  Please contact us if you would like our help in evaluating your O-1 and/or P-1 visa case.

L-1 Intracompany Transferree

The L-1 visa type allows multinational companies who have presence abroad to transfer their employees from their overseas offices to their U.S. office (or to establish a new U.S. office).  This visa type is a good option for foreign employers seeking to establish or boost their U.S. presence and for foreign nationals currently employed abroad.   Foreign nationals who are currently in the U.S. generally will not qualify for L-1 visa.  An added benefit to the L-1 visa is that family members are entitled to a work authorization pursuant to L-2 status.

E-1/E-2 Treaty Trader or Investor

The E-1/E-2 visas allow nationals of countries with which the U.S. has trade treaties to invest an amount in the U.S. and receive an E-1 (treaty trader) or E-2 (treaty investor) visa.  See a list of treaty countries.

The E-1 treaty trader visa is suitable if the foreign national has a multinational employer who is willing to transfer them, and the company has significant trade between the foreign country and the U.S.  The employee must also have skills which are essential to the operation of the company trade.   Dependents of E-1 visa holder are eligible for work in the U.S.

The E-2 treaty investor allows foreign nationals to invest (preferably) a substantial amount in the U.S. and obtain an E-2 visa to be able to manage and direct their investment.  The amount required for investment generally varies depending on the industry (the so called, proportionality test) with more capital-intensive industries requiring more significant investment for E-2 application.   Dependents of E-2 visa holders are eligible to apply for work authorization.

H-1B Program Changes by Congress Unlikely

While we do not expect Congress to raise the H-1B cap for FY2010, it is nonetheless possible.  There are a number of proposals currently circulating in Congress, some of which aim to increase the H-1B cap.  However,  the chance of such proposals becoming law outside of a comprehensive immigration reform (which is barely starting to gain ground) is small.

Wait and File on April 1, 2010 for the FY2011 Cap

For some of our clients, waiting until April 1, 2010 to file a new cap-subject H-1B petition may be the best option.  The H-1B visa type, although subject to some requirements, is a fairly common visa type for which many qualified employees are eligible.    As of now, the FY2011 H-1B cap is expected to be the same as it was for the FY2010 fiscal year – 65,000 H-1B visas.  However, as the economy starts to improve and employers increase hiring, we do not expect that next year’s H-1B numbers will remain available for as much as 8 months, as they did in 2009.   Accordingly, we urge employees and employers to prepare and file most or all of their H-1B petitions on or about April 1, 2010, to ensure that their petition has the greatest chance to be included in the quota.

USCIS released updated information on the numbers of cap-subject H-1Bs filed since April 1.  As of November 27, 2009, USCIS has received approximately 58,900 H-1B petitions counting toward the 65,000 cap (an increase of 2,000 in the past week).   The updated count means that as of November 27, 2009, there were 6,100 H-1B visas left under this year’s H-1B quota and USCIS will continue to accept petitions subject to the general cap.

U.S. Masters Degrees Quota Reached

USCIS has received sufficient number of petitions for aliens with advanced degrees and as a result, USCIS has announced that the master’s cap for FY2010 has been met.  As of October 25, 2009, all FY2010 H-1B petitions for holders of U.S. advanced degrees will be counted towards the general cap of 65,000.

H-1B Quota Trends

The numbers, as reported over the past few weeks indicate that there was a notable increase in the H-1B filings.  As we previously reported, there has been an increase of about 900-1,300 H-1B visas for each of the past five weeks, in addition to this week’s increase of 2,000 H-1B visas.  Based on our tracking of the H-1B numbers, this increase shows a notable weekly increase in the numbers of H-1B filings.  As a result, if the current trend remains, we estimate that the H-1B quota will be reached within a 3-5 weeks.

If you are considering filing a cap-subject H-1B petition as part of the FY2010 quota, please contact us as soon as possible.

Under a new directive marked as “Tier 1″ (high strategic importance and significant impact on one or more industries), the Internal Revenue Service (“IRS”) has indicated that it will be focusing increased resources on H-1B sponsor companies’ tax withholding and reporting.

As our clients and readers know, the H-1B nonimmmigrant work visa is one of the most commonly used work visas for sponsoring foreign workers.   The H-1B visa requires that the H-1B beneficiary be employed as an “employee” (as opposed to a “consultant”) with all the benefits and rights afforded to the company’s other employees.   All wages earned by H-1B employees must be reported on Form W-2 and subject to withholding of income tax (and often employment tax) in the same way as U.S. citizens and residents.  Additionally, the IRS can examine expenses paid for or reimbursed to the employee which payments could represent compensation or a taxable employee benefit. 

Our firm often receives inquiries from corporate and individual clients as to whether there is a specific requirement that the H-1B employee be considered a “W-2 employee” versus a “1099 contractor.”  The IRS statement and the upcoming audits of H-1B employers make it very important that any H-1B employee be considered as an “empoyee” and a Form W-2 prepared along with the proper withholdings.

The U.S. Customs and Immigration Enforcement (“ICE”) has released a supplemental guidance sheet with respect to gap-cap extensions available to holders of F-1 status who work pursuant to their optional practical training and who are beneficiaries of a cap-subject H-1B work visa petition.

The guidance sheet is helpful in not only describing in more detail what happens when an OPT F-1 holder is a beneficiary of an H-1B petition.  Normally, when USCIS receives an H-1B petition it enters the information into its mainframe called CLAIMS.  This update automatically updates the SEVIS system and which automatically should reflect the cap-gap extension for the F-1 holder.    If this process does not work (due to time constraints, mainly), SEVIS allows the Designated School Official (“DSO”) to enter manually that the student is in valid status pursuant to cap-gap into SEVIS.

This functionality also allows DSOs to enter gap-cap information in cases where the H-1B application has been filed but it has not yet been processed by USCIS.  The guidance notes, however, that the “manual” update of cap-gap status by the DSO should not be done unless in cases where the student’s OPT may expire before USCIS can receipt the H-1B petition (and therefore enter the H-1B petition in CLAIMS).

A memorandum dated May 20, 2009 by Barbara Velarade provides some guidance to the USCIS Service Centers with respect to the standards for adjudicating H-1B petitions filed on behalf of beneficiaries seeking employment in a health care specialty occupation.

Generally, the Velarde memorandum provides two kinds of guidance, one for beneficiaries with a license and one for beneficiaries who do not.  We will review each in turn.

Beneficiaries Who Have a License

According to the memorandum, when the USCIS adjudicator reviews H-1B application where the beneficiary has provided documentary evidence of his or her valid license to practice a health care occupation in the state in which the beneficiary will be employed, the adjudicator should not look beyond the license and should accept its validity on its face.

If the beneficiary has an unrestricted license the adjudicator should approve the petition for up to three years (or the maximum permissible depending on the LCA validity period and other circumstances).  The fact that a license has to be renewed periodically, for example, every year, should not prevent the adjudicator from issuing a 3-year H-1B visa.

On the other hand, if the beneficiary has restricted license, the adjudicator should approve the petition for one year only or the duration of the restricted license, whichever is longer.

Beneficiaries Who Do Not Have a License

Generally, in order to perform a health care occupation, the beneficiary must obtain a license from the state in which the beneficiary will be employed.  If the H-1B petition claims that the beneficiary cannot obtain a license due to the fact that the beneficiary needs to obtain a social security (SSN) card or a valid work authorization document, then the adjudicator is asked to determine the requirements for obtaining license and whether the beneficiary is qualified to perform the specialty occupation.  Additionally, the beneficiary will have to show that he or she (1) has filed an application for license and (2) cannot obtain a full unrestricted license due to the requriements of possessing a SSN card or valid immigration document in the form of a letter from the State Board.

Assuming the H-1B petition is approvable in accordance with the standards set forth in the memorandum, the validity period should be one year.   Subsequent requests for extension must include evidence that the beneficiary has been granted a valid unrestricted license to practice the health care occupation.  Failure to provide such evidence will result in the denial of the H-1B extension  petition.

USCIS has released a memorandum, dated March 20, 2009, which provides additional clarifications about H-1B sponsorship by companies which are recipients of TARP funds.  We have written extensively about these restrictions earlier this year but there were still questions outstanding.  This USCIS guidance should provide final clarify on the subject.

The restrictions apply to any Labor Condition Application (LCA) and/or H-1B petition filed on or after Feb. 17, 2009, involving any employment by a new employer, including concurrent employment and regardless of whether the beneficiary is already in H-1B status. The EAWA also applies to new hires based on a petition approved before Feb. 17, 2009, if the H-1B employee had not actually commenced employment before that date.

However, one of the main questions after the Stimulus Bill passed was whether the new rule would apply for existing H-1B holders at TARP companies.  The USCIS memorandum makes it clear that  the restrictions do not apply to H-1B petitions seeking to change the status of a beneficiary already working for the employer in another work-authorized category. It also does not apply to H-1B petitions seeking an extension of stay for a current employee with the same employer.

CNNfn.com has an interesting article on the H-1B visas demand for this April’s H-1B quota.   The article cites the weak economy, the H-1B restrictions imposed recently on TARP recipients and the bankruptcy of Satyam Computer Services (which filed ~2,000 H-1Bs in 2008) as one of the reasons that the H-1B demand will be weakest in years.  The article suggests that it may take several weeks to fill the entire H-1B quota this April (as opposed to a few days over the past years).

We do not have good estimates that the H-1B demand will be less than the 65,000 (plus additional 20,000)  and as a result there will not be a lottery to distribute the available visa.  However, we do agree wholeheartedly with the article that the H-1B demand this April is likely to be the weakest it has been in many years.