The H-1B and L-1 Visa Reform Act of 2017 is a bipartisan bill introduced into the U.S Senate by Senators Chuck Grassley, Dick Durbin, Bill Nelson, Richard Blumenthal and Sherrod Brown on January 20, 2017.

The purpose of the bill is to prevent alleged abuses of the H-1B and L-1 visas by U.S firms, whereby firms use the visas to replace U.S employees with foreign workers, in order to achieve cost savings. The bill seeks to achieve its objective by proposing a radical overhaul of the eligibility requirements for both visas, the administration of visa applications by USCIS and by monitoring the use of such visas by U.S firms.

Background

The H-1B Specialty Occupation Visa

The H-1B visa is a non-immigrant visa, created in 1990, which allows U.S employers to employ foreign professionals in specialty occupations, for a temporary period of time. Under the rules, 85,000 H-1B visas are issued annually.

Unfortunately, demand for H-1B visas vastly exceeds the number of visas available. In 2017, the H-1B visa cap was reached a mere four days after the application window opened. Under the current system, H-1B visas are awarded by way of a lottery.

L-1 Intra-Company Transferee Visa

Similarly, the L-1 visa is a temporary non-immigrant visa which allows companies to relocate foreign qualified employees to its US subsidiary, affiliate or parent company. Unlike the H-1B visa, there is no annual cap on the number of visas available annually.

Criticisms of Current System

As noted above, many critics have expressed concerns that the H-1B and L-1 visas are being used by large U.S firms to replace American employees with foreign workers at a lower rate of remuneration, in order to reduce overheads and achieve costs savings. It is alleged that this practice has the effect of undercutting the wages of U.S staff across the industry and causes a downward spiral in wages.

Equally, others have voiced concerns the perceived “extensive abuse” of the H-1B visa by some U.S employers has unduly increased competition for H-1B visas, making it more difficult for other firms to obtain the H-1B visas they require to fill skill shortages in their workforce.

At the other end of the spectrum, U.S immigration practitioners have long contended that the cap on the number of H-1B visas issued annually is arbitrary and unfair. It therefore seems all sectors of society are united in their view that the current system, particularly with regard to the H-1B visa, is unsustainable in the long-term and in need of reform.

Key Provisions of the H-1B and L-1 Visa Reform Bill

The H-1B and L-1 Visa Reform bill proposes to radically overhaul the administration of both visas, in response to the above criticisms:

H-1B Visas

  • The bill proposes the abolition of the current “lottery” system of H-1B visa allocation, in favor of an alternative system of allocation. Under the proposed system, first priority for H-1B visas would be reserved for foreign nationals with a degree in a field of science, technology, engineering or mathematics (STEM) from a U.S. institution of higher education.

 

  • The bill proposes to alter the evidence required to satisfy the “specialty occupation” requirement of the H-1B visa. If enacted, an applicant would require a U.S. degree or equivalent foreign degree, as a qualification for “specialty occupation” eligibility. Experience in a specialty occupation will no longer be considered the equivalent to a degree.

 

  • The period of authorized admission for an H-1B non-immigrant will be reduced from six years to three years. A three-year extension will be available for aliens with extraordinary ability, advanced degrees or professors.

 

  • Companies which employ more than 100 employees, of which more than 15% are H-1B visa holders, will be subject to annual audits by the Department of Labor.

 

  • The bill increases the penalty for employers displacing U.S. workers. Any employer which violates the rules will be liable to the harmed employee for lost wages and benefits.

L-1 Visas

  • The bill prohibits the replacement of a U.S. worker with an L-1 worker.

 

  • The bill prescribes new L-1 requirements regarding employer petitions for employment at a new office, wage rates and employer penalties.

 

Our View

While it is clear the H-1B visa in particular requires urgent reform, in our view the bill is unlikely to achieve its stated aim and may even harm U.S industry, undermining the very raison d’etre of the visa.

The American Medical Association has expressed fears any attempt to restrict access to visas will disrupt the flow of physicians and other health care workers to rural and low-income areas of the U.S. At present, a large number of heath care workers in rural and low-income communities are international medical graduates.

Similarly, commentators have warned that many U.S universities are dependent on the H-1B visa to fill their academic positions, due to a national shortage of U.S graduates in STEM fields. It is said such universities are reliant on H-1B visa holders to meet their skills shortages.

Some technology firms may simply seek to move their operations abroad in a bid to attract foreign talent, if they are unable to obtain sufficient H-1B visas to meet their needs. It is therefore difficult to see what the proposed reforms will achieve, save for making it difficult for U.S firms to fill skill shortages and thereby trade effectively on the global stage.

At Davies Legal, we offer advice and representation in relation to all types of U.S visa application, including H-1B visas and L-1 visas. We provide a professional, friendly and efficient service, at a competitive fixed fee. Call now for advice regarding the merits of pursuing an application for an H-1B or L-1 visa and a complimentary quote.

Published: 13th April 2017