Analysis of the "H-1B and L-1 Visa Reform Act of 2015"

By John Miano, July 27, 2016

In our new book Sold Out: How High-Tech Billionaires & Bipartisan Beltway Crapweasels Are Screwing America's Best & Brightest Workers, Michelle Malkin and I explain in detail the provisions of the H-1B program and the H-1B provisions of Marco Rubio and Chuck Schumer's cynically misnamed "Comprehensive Immigration Reform."

I previously did the same for Rubio and Orin Hatch's I-Squared Act that we say should be more appropriately called the "I'm Screwed Act" in Sold Out.

There are now three bills that have been introduced in the Senate to address the rampant abuse in the H-1B program. I will give them the same scrutiny and go through the provisions of each bill in detail.

The next bill up is the H-1B and L-1 Visa Reform Act of 2015. This bill is sponsored by Senators Grassley, Durbin, Nelson, Blumenthal, and Brown.

Section 101 of the bill changes the prevailing wage requirements of the H-1B program. Currently, 8 U.S.C. § 1182(n)(1) requires the employer to pay the “prevailing wage.” However, 8 U.S.C. § 1182(p) redefines the prevailing wage (normally the 50th percentile) for H-1B purposes so that the employer can pay the worker at the 17th percentile.

In San Francisco, the average wage for a computer programmer is $104,770 a year but, under the current law, an employer can pay an H-1B programmer $66,518. This is why H-1B workers are concentrated in high wage locations in the United States.

The Grassley bill requires the H-1B worker to be paid the higher of:

  1. The prevailing wage (which can be the 17th percentile in 8 U.S.C. § 1182(p))
  2. The median wage (the 50th percentile)
  3. The median wage for skill level 2 (the 34th percentile)

There text is longer than necessary because the second option will always be the highest wage of the three.

This section of the bill also requires posting for 30 days a job description and how one may apply for the job.

It bans replacing Americans with H-1B workers.

It bans placing H-1B workers with another employer unless the employer applies for a waiver with the Department of Labor in which the employer certifies it will control the workers and the workers will not be used to replace Americans. The Department of Labor has discretion to grant or deny the waiver.

Section 102 bans recruitment targeted towards hiring H-1B visa holders, limits employers to a maximum of 50 percent of its workers on H-1B visas, and requires the employer to submit W-2 information to the Department of Labor to show proof that wages have been paid to the workers.

Section 103 addresses the most notorious provision in the H-1B program. The first step in the H-1B process is for the employer to file a Labor Condition Application (LCA) with the Department of Labor. This is where the employer certifies that it is paying the prevailing wage and conforming to the rules of the H-1B program.

Under current law, the Department of Labor is required to approve all LCAs within seven days as long as the form is filled out correctly. Consequently, industry lobbyists have fought to the mat to preserve this requirement that allows employers to abuse the system with impunity. In fact, many bills that increase the number of H-1B visas try to mislead the public by rewording this provision to no effect. Sold Out describes in detail how the Rubio/Schumer "Comprehensive Immigration Reform" would have reworded this provision to no effect.

This bill does the obvious and just deletes the restriction on the approval process. It also allows the Department of Labor to investigate when LCAs show a pattern of abuse. Under current law, the Department of Labor is prohibited from reviewing LCAs after they have been approved.

Section 104 changes the process for allocating H-1B visas and is the most complex part of the bill. Currently, 8 U.S.C. § 1184(g)(3) requires H-1B visas to be allocated in the order petitions are filed.

The Grassley bill requires H-1B petitions to be considered in this order:

  1. Aliens in the United States with advanced degrees in science, technology, engineering, or mathematics from an American school.

  2. Aliens that will be paid at the 67th percentile for occupation and location.

  3. Aliens in the United States with advanced degrees.

  4. Aliens that will be paid the median wage or higher. (This is redundant, given the requirements in § 101 of the bill).

  5. Aliens in the United States with degrees in science, technology, engineering, or mathematics from an American university.

  6. Aliens in the United States with degrees from an American university.

  7. Aliens who will be working in occupations where the Department of Labor has determined there are not sufficient American workers.

  8. Petitions filed by employers meeting specific criteria of "good corporate citizenship".

  9. All other H-1B petitions.

Section 105 addresses the academic exception from the H-1B quotas. That exemption was created to exempt aliens employed "at an institution of higher education". In a typical example of agency abuse, DHS started interpreting the exemption to apply to anyone working at a location owned or controlled by a university.

This provision changes the word "at" to "by". The fact that Congress would have to make such a change illustrates the absurdity of the Supreme Court's "Chevron Doctrine."

Section 106 of the bill restricts H-1B visas to those who have a college degree. Currently, H-1B eligibility is determined by the occupation. If the job is in a specialty occupation (one that normally requires a college degree) an alien can get an H-1B visa without having a degree.

Section 107 directs the Department of Labor to charge a fee for filing an H-1B Labor Condition Application (LCA). Currently there is no change and there has been legislation to prohibit the Department of Labor to charge such a fee.

Section 108 expands subpoena authority to the Department of Labor for H-1B-related investigations.

Section 109 reduces the maximum duration of an H-1B visa from 6 years to 3 years. However, it still permits extensions when the alien has a green card petition.

Section 110 addresses another area of agency abuse. Although aliens on B visitor visas are prohibited from coming to the United States for employment, the State Department’s consulates in India have created a program called B in Lieu of H-1B (BILO) that allows certain aliens to work on a visitor visa instead of H-1B (a practice waiting for a lawsuit challenge). The Grassley bill would ban the practice of BILO.

The remainder of the bill addresses the L-1 intra-company transfer visa.

Section 201 prohibits the subcontracting of aliens on L-1 visas to other companies unless the employer certifies the alien will not displace American workers and will operate under the control of the employers.

It also unequivocally makes it unlawful to replace Americans with L-1 workers.

Section 202 applies to employers coming to open new offices. It requires the employer to have a business plan and a bona fide office space.

Section 203 is short and requires the Secretary of Homeland Security to work with the Secretary of State to verify that companies employing guestworkers actually exist.

Section 204 is lengthy and requires the establishment of a process for receiving and investigating complaints of violations.

Section 205 effectively requires aliens on L-1 visas to be paid at least the median (i.e. prevailing wage).

Section 206 imposes penalties for violating the provisions of the L-1 program.

Section 207 prohibits retaliating against an employee for disclosing violations.

Section 208 requires the Secretary of Homeland Security to establish a procedure for processing blanket petitions for L-1 visas.

Section 209 requires the Secretary of Homeland Security to provide Congress with annual reports on H, L, O, P, and Q visas. Currently such reports only exist for H visas.

Section 210 redefines "specialized knowledge" to limit the eligibility of L-1B visas.

Section 211 contains a minor change replacing the Attorney General with the Secretary of Homeland Security.