Labor Immigration Law

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.

The cap-subject H-1B filing deadline of April 1 is approaching quickly.  USCIS has advised that similar to last April’s filing window, this year, in the event that there are more H-1B applications than there are available visas (i.e. there will be a lottery), the filing window would be five (5) days, from Tuesday, April 1 until and including Tuesday, April 7th.

Some of our H-1B clients ask whether the recession will impact the H-1B processing and we understand that despite the slowdown in the economy, there is an expectation that there will be more than 65,000 H-1B visas which would result in there being a lottery to distribute the available H-1B numbers.

We would be happy to help you or your company with preparing and filing an H-1B cap-subject visa application this April.  If you need our help and services, please contact us at your earliest convenience.

A week after the Stimulus Bill was signed into law and the dust has started to settle, we have compiled a summary of the key points of the Stimulus Bill’s restriction on TARP-recipient companies to issue new H-1B visas.   The law became effective upon the stimulus bill’s enactment, February 17, 2009. It is important to note that the law will remain effective for only two years after its enactment. Thus, it will sunset on February 16, 2011.

Final Text of the Stimulus Bill Imposing the H-1B Limitations

Section 1611 of the American Recovery and Reinvestment Act of 2009 (“ARRA”)  reads:

SEC. 1611. HIRING AMERICAN WORKERS IN COMPANIES RECEIVING TARP FUNDING.

(a) SHORT TITLE.—This section may be cited as the ‘‘Employ American Workers Act’’.

(b) PROHIBITION.—

(1) IN GENERAL.—Notwithstanding any other provision of law, it shall be unlawful for any recipient of funding under title I of the Emergency Economic Stabilization Act of 2008 (Public Law 110–343) or section 13 of the Federal Reserve Act (12 U.S.C. 342 et seq.) to hire any nonimmigrant described in section 101(a)(15)(h)(i)(b) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(h)(i)(b)) unless the recipient is in compliance with the requirements for an H–1B dependent employer (as defined in section 212(n)(3) of such Act (8 U.S.C. 1182(n)(3))), except that the second sentence of section 212(n)(1)(E)(ii) of such Act shall not apply.

(2) DEFINED TERM.—In this subsection, the term ‘‘hire’’ means to permit a new employee to commence a period of employment.

(c) SUNSET PROVISION.—This section shall be effective during the 2-year period beginning on the date of the enactment of this Act.

What Exactly Are the H-1B Restrictions?

Covered companies are not allowed to “hire” an H-1B worker unless the company has complied with additional LCA attestations which are generally imposed on H-1B dependent employers.  These additional attestations are:

(1) that the employer has, prior to filing the H-1B petition, taken good-faith steps to recruit U.S. workers for the position for which the H-1B worker is sought, offering a wage that is at least as high as that required under law to be offered to the H-1B worker. The employer must also attest that, in connection with this recruitment, it has offered the job to any U.S. worker who applies and is equally or better qualified for the position; and

(2) that the employer has not laid off, and will not lay off, any U.S. worker in a job that is essentially equivalent to the H-1B position in the area of intended employment of the H-1B worker within the period beginning 90 days prior to the filing of the H-1B petition and ending 90 days after its filing.

Which Employers Are Covered Under the H-1B Restriction?

A company which receives funding under title I of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343, the “TARP Bill”) or that receives funding under Section 13 of the Federal Reserve Act (12 U.S.C. § 342 et seq., authorizing the Federal Reserve’s “Discount Window” for short-term, secured loans to financial institutions and other companies) is covered under the H-1B restriction.   USA Today has a chart with names of the TARP companies and the U.S. Treasury has a list of transaction reports under the TARP program.

Note that companies recipients of funds pursuant to the ARRA stimulus bill, but not under the TARP Bill, are not subject to the H-1B restriction.

Are There Exemptions?

Generally, employers who are H-1B dependent can claim one of two exemptions – having salary higher than $60,000 or having a master’s degree – and avoid having to provide the additional attestations.  However, these two exemptions have been made explicitly unavailable to TARP companies.

What Happens to H-1B Workers at Existing TARP Companies?

The statute is drafted to prohibit any “new hires” between February 17, 2009 and February 16, 2011.  “Hire” is defined as permitting “a new employee to commence a period of employment.” As a result, it seems that the H-1B restrictions do not apply to H-1B workers who are already employeed at the TARP companies.  However, neither USCIS nor DOL have issued implementation guidance or regulations yet, so it is not completely certain that they will take the same view.