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Senate Version of Stimulus Bill to Restrict H-1B Visas for TARP Recipients

Today, Tuesday, February 10, the U.S. Senate is expected to vote and approve a version of the Stimulus Bill which President Obama has been pushing very hard over the past weeks.  The version of the Stimulus Bill contains a provision which would automatically and for a period of two years make all employers who are recipients of TARP funds H-1B dependent employers.

The relevant section of the Stimulus Bill is Sec. 1610:

    Sec. 1610. 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 is Going to Happen?

The Senate version of the Stimulus Bill, including the language above, is expected to be approved by the Senate today.  However, the House version of the Stimulus Bill does not have such language and both versions will have to be reconciled so that both the Senate and the House approve the same text.  Only then the Stimulus Bill would become law after it is signed by the President.

This means that the language restricting H-1Bs at TARP recipients may not end up in the final law.  However, given the pressure to pass the legislation quickly, it is very possible that the House would adopt the proposed Senate language and ultimately impose the H-1B restrictions.

What Does the Prohibition Mean?

The text, as currently drafted, would impose some limits on the ability of companies recipients of TARP funds to hire new foreign workers on H-1B visas.  By making such employers “H-1B dependent”, the law would require any TARP recipient willing to sponsor an H-1B for the next two years to, among other things, (1) provide certain “displacement attestations” that no U.S. workers have been or will  be displaced as a result of the H-1B employee; (2) provide recruitment attestations about the nature of the recruitment process; (3) remain liable for displacement of U.S. workers as a reuslt of placement of H-1B employee with another employer.

However, the requirements on an H-1B dependent employer do not apply for “exempt H-1B nonimmigrants” which include (1)  those holding a master’s or higher degree or its equivalent in a specialty related to the intended employment, or (2) who earn wages (including cash bonuses and similar compensation) at an annual rate of at least $60,000.   This exemption is not likely to cover all, but is likely to cover many of the intended foreign national beneficiaries of H-1B visas from TARP recipient companies.

Finally, the definition of “hire” is drafted in a way that includes only new employment.  This should mean that H-1B extensions for H-1B holders already employed at TARP recipient companies should not be subject to the additional requirements.

Who are TARP Recipients?

The list of companies recipients of TARP funds is very long, so we will not publish it at length.  Please find the full and recently updated list here.

Conclusion

While the Stimulus Bill draft may be a source for alarm for some, the reality is that (1) until the law is approved by both the Senate and the House, the text is not final and (2) there are some exceptions which would allow TARP companies to hire H-1B workers either by complying with the H-1B dependent employer requirements or by claiming the applicable exemptions.

Update (14:57 pm):  the Senate approved the Stimulus Bill by 61-47 votes.

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Recent PERM Numbers Suggest Increasing PERM Delays

The U.S. Department of Labor (DOL) has released its quarterly report on PERM for the first quarter of FY 2009 covering October 1, 2008 to December 31, 2008.  For comparison, you can read about the previous DOL report here.

There are some interesting numbers.  Unfortunately, the news is not good for PERM applicants.  As of December 31, 2008, there were 53,200 active PERM cases pending at DOL.  This is significantly higher than the 40,200 cases which were pending as of September 30, 2008.  This means that for the past three months, the backlog at DOL’s PERM processing centers has increased by 13,000 cases, or by 32%.   For the same period, between October 1 and December 31, 2008, DOL received 20,752 new PERM applications but it completed only 4,571 cases.

These  numbers confirm our observations that PERM applications are backlogging significantly and the processing time is likely to skyrocket over the next 6-12 months.  According to (fairly reliable) information compiled by our friends at trackitt.com, the PERM processing times have been steadily increasing from somewhere around 70 days in late 2007 and early 2008 to 200-200 days in mid 2008.   Based on DOL’s statistics, we expect the PERM processing times to incrase more.

We will continue monitoring the PERM timelines and attempt to draw some conclusions which would help our clients plan their immigration strategy.  Please subscribe to our newsletter to receive regular updates on this topic.

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E-Verify Requirement for Federal Contractors Postponed

The requirement, imposed late last year on certain federal contractors to become E-Verify compliant or become ineligible for contracts with the federal government was due to become effective on January 15, 2009.  However, the requirement, after attack by a number of organizations special interest groups, has been postponed until at least May 21, 2009.

There are a number of legal challenges on the proposed rule and we will continue posting updates on the topic as they become available.

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USCIS Updates Form I-9, Employment Eligibility Verification

USCIS has updated Form I-9, Employment Eligibility Verification and the new form is available for us; however, two versions exist. Please note that the version dated 06/05/07 is only available if used BEFORE February 2, 2009. The version dated 02/02/09 will be appropriate for use ON or AFTER February 2, 2009.

UPDATE: the implementation of the updated Form I-9 has been delayed.

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Form I-9, Employment Eligibility Verification Revised

USCIS has announced that is has submitted for publication in the Federal Register an Interim Final Rule which modifies the Employment Eligibility Verification process.

The Interim Final Rule narrows the list of identity documents which are acceptable and specifies that expired documents are not considered acceptable forms of identification.   The changes included in the Interim Final Rule are intended to improve the security and the trustworthiness of the employment eligibility verification process.

The Interim Rule eliminates Forms I-688, I-688A, and I-688B (Temporary Resident Card and older versions of the Employment Authorization Card/Document) from List A on Form I-9.  These documents are no longer issued and those that were in circulation have expired. The Rule also adds to List A of the Form I-9 foreign passports containing specially-marked machine-readable visas and documentation for certain citizens of the Federated States of Micronesia and the Republic of the Marshall Islands.  The Rule makes other, technical changes to update the list of acceptable documents. The revised Form I-9 includes additional changes, such as revisions to the employee attestation section, and the addition of the new U.S. Passport Card to List A.

Form I-9.

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E-Verify Becomes Mandatory for Federal Contractors

We have written about this requirement in the past, but it is now a final rule.  Starting January 15, 2009, federal contractors and subcontractors will be required to begin using the U.S. Citizenship and Immigration Services’ E-Verify system to verify their employees’ eligibility to legally work in the United States.

Federal contracts awarded and solicitations issued after January 15, 2009 will include a clause committing government contractors to use E-Verify. The same clause will also be required in subcontracts over 3,000 for services or construction. Contracts exempt from this rule include those that are for less than $100,000 and those that are for commercially available off-the-shelf items. Companies awarded a contract with the federal government will be required to enroll in E-Verify within 30 days of the contract award date. They will also need to begin using the E-Verify system to confirm that all of their new hires and their employees directly working on federal contracts are authorized to legally work in the United States.

It is interesting to note that the final rule is significantly narrower than the proposed rule circulated earlier this year.  The revised final rule would limit its application to contracts worth $100,000 or more, instead of $3,000, and require employers to check the eligibility only of workers on those contracts, instead of all their workers. The changes would apply to solicitations or awards made after January 15, and exempt workers who have already received security clearances, contracts for commercial, off-the-shelf items, and contracts lasting less than 120 days.

According to Department of Homeland Security numbers, more than 92,000 employers currently use E-Verify, a free Internet-based system operated by the DHS in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of their employees. During Fiscal Year 2008, more than 6.6 million employment verification queries were run through the system representing 1 out of every 8 hires made in the United States. Approximately 96.1 percent of all cases queried through E-Verify are instantly found to be employment authorized, and individuals who are not immediately cleared are given the opportunity to correct their government records in order to confirm their work eligibility.

We are attaching a Frequently Asked Questions document, released by USCIS yesterday, to address most of the concerns and questions which may be raised by this new rule.  We at the Capitol Immigration Law Group are an E-Verify registered agent and we can help you understand the requirements of the system and we can help you in your compliance efforts.  Please contact us for more information.

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EB-5 Investor Visa Regional Center Pilot Program Extended

About the EB-5 Visa and Regional Centers

Under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1153(b)(5), 10,000 immigrant visas per year are available to qualified individuals seeking permanent resident status on the basis of their engagement in a new commercial enterprise (generally of at least $1 million).  Of the 10,000 investor visas (i.e., EB-5 visas) available annually, 5,000 are set aside for those who apply under a pilot program involving an CIS-designated “Regional Center.”

The Regional Center program was established by Congress as a pilot program to determine the interest of foreign investors, in exchange of a green card, in specific investment areas, determined by the U.S. government, which are in need of investment capital and development.  The general requirement of $1 million investment is lowered by half, to $500,000, for such Regional Centers.

A Regional Center is generally set up and run by a third party, that allows the prospective foreign national to invest $500,000 (in an economically depressed area in the US), but not have to be involved in the oversight of the investment nor the job creation. The Regional Center personnel are set up to create 10 new jobs on behalf of the investor and are involved in the day to day operations of the whatever investment vehicle that they are overseeing.  The Regional Center program thus allows foreign investors to obtain the benefit of their investment, receive a green card, and not have to be involved in the day-to-day operations of their U.S.-based business.

Extension of the Regional Center Program

The Regional Program is a temporary program, which was scheduled to expire on September 30, 2008.  However, Congress has extended its expiration through March 6, 2009.    This is only a short extension to allow Congress time to debate and discuss the future of the program.

The U.S. House of Representatives has passed the bill authorizing the extension of the Regional Center program, but the Senate has yet to review it as of the time of this writing.  It then has to be signed by the President into law.   However, in the meantime, the EB-5 program has been authorized by a stop-gap resolution signed by the President.

Fiscal Year 2008 Regional Center Statistics

To support the popularity of the Regional Center program, USCIS recently releases statistics on EB-5 and the Regional Center EB-5 visas.  During Fiscal Year 2008, there were:

  • 12 new EB-5 regional centers were approved;
  • 1017 Forms I-526, Immigrant Petitions for Alien Entrepreneur filed; and
  • 350 Forms I-829, Petitions by Entrepreneurs to Remove Conditions filed.

These numbers suggest some very good news for foreign EB-5 investors who seek to obtain a green card – while Congress is designating more and more new Regional Centers, there are still plenty of investor visas available to fill the annual cap of 10,000.

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E-Verify and Students on Curricular Practical Training

Problem:  students on Curricular Practical Training (CPT) are always sent to secondary verification by E-Verify.

From our own practice and from statistics released by the government, it is clear that more and more employers are signing up for E-Verify, some in response to federal or state regulations, some on their own effort to maintain a compliant workforce.  However, as more and more foreign nationals are being screened through the system, we are starting to notice some of the less obvious quirks of the system.

One of those quirks is the fact that F-1 students who have are working under CPT, which is employment that is part of a student’s specified degree curriculum. The Designated School Official (DSO) authorizes CPT for students before they can begin wok by annotating their I-20 in accordance with the 8 CFR 214.2(f)(10)(i). Unlike Optional Practical Training (OPT), no employment authorization from USCIS is needed.

The problem has two parts.  First is the requirement that all E-Verify employers conduct checks on all of ther employees, including students on CPT. The second part is the fact that E-Verify is not connected to SEVIS, the system which maintains the foreign students’ records, including CPT authorizations.  As a result,  E-Verify always sends a CPT student to secondary verification.

The USCIS has responded that even though students on CPT are always sent to secondary verification, such secondary verification should occur within 24 hours, assuming the student’s record can be located in the SEVIS system.    Despite USCIS claims, we urge students on CPT and employers who employ such students to be aware of this quirk in E-Verify and allow extra time for E-Verify screening.

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New I-9 Form Released

USCIS has released a new version of the Form I-9, Employment Eligibility Verification.  Employers should start using the revised form (it has Rev. 06/16/08 in the bottom right corner) effective immediately because USCIS will no longer accept older versions.

Because employers are required to complete a Form I-9 for each new hire, the change in the form should be noted.  The substantive changes in the form are minor.

The following documents are no longer acceptable evidence both as identity and as employment eligibility:

  • The Certificate of United States Citizenship (Form N-560 or N-561);
  • The Certificate of Naturalization (Form N-550 or N-570);
  • The Form I-151, a long out-of-date version of the Alien Registration Receipt Card (“green card’”);
  • The Unexpired Reentry Permit (Form I-327); and
  • The Unexpired Refugee Travel Document (Form 1-571)

The revised List A of the List of Acceptable Documents now includes the most recent version of Form I-766, Employment Authorization Document.

Finally, the instructions regarding Section 1 of Form I-9 now indicate that the new hire is not required to provide a social security number unless the employer participates in the E-Verify program.

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Executive Order Mandates Federal Contractors to Use E-Verify

The debate surrounding E-Verify is in full force.  In the meantime, the federal government and many states are busy implementing regulations requiring employers to become E-Verify compliant and start using the E-Verify system for all of their new hires.

The latest regulation is an Executive Order 12989 as Amended, dated as of  June 6, 2008, which requires all federal agencies and departments to require from all federal contractors who are also employers to become E-Verify participants and ensure that all new hires are subject to E-Verify checks.

Section 5(a) reads: “Executive departments and agencies that enter into contracts shall require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system designated by the Secretary of Homeland Security to verify the employment eligibility of: (i) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (ii) all persons assigned by the contractor to perform work within the United States on the Federal contract.

Based on this Executive Order and other federal and state regulations, it is clear that E-Verify is here to stay.  While the debate on its  effectiveness and burdens on employers will continue, there are a number of “carrots” which make E-Verify participation extremely hard to reject.  In addition to the ability to obtain federal contracts, many employers must become E-Verify employers in order to be able to hire or extend F-1 visa OPT documents for highly qualified foreign graduates.

The good news is that we at the Capitol Immigration Law Group can help you with your E-Verify compliance.  We are E-Verify Designated Agent and we allow you to outsource your E-Verify compliance work to us.   As a law firm, we not only provide E-Verify processing but we can also advise your company on developments in the law which can affect your company and employees.  Please contact us for more information on how your company can become E-Verify compliant in few easy steps.

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