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Bush Administration Renews Efforts to Curtail Hiring Abuse

Immigration Update

March 28, 2008

The Bush administration is renewing its prior efforts to reign in foreign hiring abuses through two recently announced measures: (i) supplemental proposed rulemaking relating to the August 2007 Final ("No-Match") Rule enjoined by the U.S. District court for the Northern District of California last October, and  (ii) new limitations on H-1B visa applications.

Pending approval, the Department of Homeland Security could begin warning 140,000 employers as early as June about suspicious Social Security numbers used by their workers, forcing companies to clear up questions about worker identities, or fire them within 90 days. Failure to comply could result in fines or criminal prosecution.

Implementation of the August 2007 Final ("No-Match") Rule had been preliminarily enjoined by U.S. District Judge Charles R. Breyer, while he heard a lawsuit brought against the Department of Homeland Security (DHS) by a coalition of business groups, labor unions, farm advocates and civil liberties groups.

The plaintiffs had alleged that the DHS' final rule would cause major workplace disruptions and discriminate against lawful workers who could be fired by their employers, due to faulty Social Security records.  The plaintiffs noted that the Social Security Administration’s Inspector General had found that the Agency’s database contained errors on some 17.8 million people, most of whom are native-born U.S. citizens.

In the 44-page document released by the DHS last Friday, for a 30-day public comment period, Homeland Security officials estimated that the cost of complying for companies with fewer than 100 workers would be $3,000 to $7,500. The compliance cost to larger companies would be between $13,000 and $34,000. Those estimates, however, do not include the cost of firing workers and replacing them with new employees.

The "DHS does not believe that the direct costs incurred by employers . . . would create a significant economic impact" on most companies, the department said in a statement.

DHS officials are also seeking to control abuse in the highly-coveted H-1B visa process for specialty occupation workers.

Effective immediately, employers will no longer be allowed to submit more than one H-1B visa application per employee, an attempt by the DHS to eliminate the “gaming” that had arisen in recent years, by companies seeking to improve their odds of approval by filing several applications per prospective employee.  April 1st will be the first day employers can file an H-1B petition for fiscal year 2009; and such applications will be subject to a 65,000 cap plus 20,000 visas for aliens with advanced degrees from U.S. universities.

Last year, the annual cap was met on the first filing day, with some companies winning as many as 4,000 H-1B visas and others complaining of being locked out of the process. Before the new rule was announced last week, officials at U.S. Citizenship and Immigration Services were expecting approximately 500,000 H-1B visa applications to be filed this year.

The annual rush for the highly coveted H-1B visa has fueled a call to either raise the government cap or eliminate it altogether, a campaign led by large technology companies such as Microsoft Corp. and Google, Inc., who argue that thousands of crucial jobs are not being filled in their industry. H-1B opponents argue that the visas are taking jobs in computer programming and other sectors away from qualified Americans, noting that the systems heaviest users are foreign-based outsourcing companies.

Federal legislation that seeks to reform the H-1B system includes:

Bill I. The Innovation Employment Act (H.R. 5630), introduced by U.S. Rep. Gabrielle Giffords (D-AZ.), which would increase the cap to 130,000 per year in 2009 and to 180,000 per year from 2010 to 2015, if the 130,000 cap is reached the year before. H.R. 5630 would also eliminate caps on H-1B visas for foreign graduate students attending U.S. colleges, universities, and studying science, technology or a related field.  Currently the cap for those students is set at 20,000 visas.  H.R. 5630 would also increase penalties for H-1B fraud, and allow the U.S. Dept. of Labor to reject H-1B applications for “clear indications of fraud.”

Bill II. The Strengthening States Technology and Innovation Act (H.R. 5642), introduced by U.S. Rep. Lamar Smith (R-Tex.) would raise the annual cap from 65,000 to 195,000 for 2008 and 2009.

Bill III. Senate Bill 1035, introduced by Sen. Richard Durbin (D-IL) and Charles Grassley (R-IA), would require all companies applying for H-1B visas to (i) advertise the job opening for 30 days on a Department of Labor (DOL) website, (ii) certify that they have tried to hire U.S. workers first, and (iii) that the H-1B holder will not displace an American worker.  The DOL would also be required to post summaries of all H-1B applications.