Facebook’s U.S. Worker Discrimination Settlement Should Compel Congress to End H-1B ‘Dual-Intent’ Legal Fiction

Loopholes in the law allow Big Tech and other companies to permanently retain ‘temporary’ foreign workers at the expense of American workers

By Robert Law on October 21, 2021

On Tuesday, the U.S. Departments of Justice (DOJ) and Labor (DOL) announced separate settlement agreements with tech behemoth Facebook regarding charges the company discriminates against U.S. workers in favor of foreign workers. Under the DOJ settlement, Facebook will pay a civil penalty of $4.75 million to the U.S. government and pay up to $9.5 million to the U.S. worker victims of Facebook’s discrimination. Separately, under the DOL settlement Facebook will “conduct additional notice and recruitment for U.S. workers and will be subject to ongoing audits to ensure its compliance with applicable regulations.” DOJ filed the anti-discrimination lawsuit against Facebook at the end of the Trump administration, while the DOL audit was initiated in early 2021.

The DOJ press release brags that the combined maximum financial penalty of $14.25 million is “the largest fine and monetary award that [DOJ] ever has recovered in the 35-year history of the INA’s anti-discrimination provision.” In a quote, Assistant Attorney General Kristen Clarke declares, “Facebook is not above the law. ... This settlement reflects the [DOJ] Civil Rights Division’s commitment to holding employers accountable and eradicating discriminatory employment practices.” This strongly worded press statement sounds good, but significantly overstates the impact of the settlement. Facebook is one of the world’s largest companies, generating $86 billion in revenue in 2020. Quick math reveals that the “largest fine and monetary award” in history is a mere 0.016 percent of Facebook’s revenue. As my colleague David North accurately described the settlement: “Mighty Facebook gets a wrist slap for favoring alien workers.”

Setting aside the paltry financial penalty, the real story is the loopholes in the law that allow companies like Facebook to maintain a constant pipeline of cheap foreign labor instead of hiring or retaining qualified American workers. The opening paragraph of the press release says that DOJ and DOL reached settlement agreements to resolve “claims that Facebook routinely refused to recruit, consider or hire U.S. workers ... for positions it had reserved for temporary visa holders in connection with the [permanent labor certification program (PERM)] process.” (Emphasis added.)

Curiously, the vague phrase “temporary visa holders” is used throughout instead of DOJ being transparent that all of the alien workers Facebook was impermissibly preferring over U.S. workers were H-1B nonimmigrant visa workers. I will explain below how loopholes in the law make H-1Bs such an attractive option for employers to use to displace or replace more expensive U.S. workers. This should compel Congress to close these loopholes because Facebook would have gotten away with it if its discrimination against U.S. workers hadn’t been so blatant in this particular case.

Generally speaking, nonimmigrant visa categories allow an alien to be admitted temporarily into the United States for the specific purpose of that nonimmigrant classification. Given the temporal nature of the nonimmigrant classification, in order to receive the visa and be admitted into the United States section 214(b) of the Immigration and Nationality Act (INA) requires an alien to overcome a presumption of immigrant intent. The alien can do so by providing evidence like a return plane ticket or the existence of strong ties to the home country that make it more likely that the alien will depart the United States in accordance with the terms of his or her nonimmigrant status.

Nominally, the H-1B is a nonimmigrant status that allows an alien to temporarily work in the United States in a specialty occupation for up to six years. However, thanks to a lobbyist-driven loophole in the law, H-1Bs are exempt from overcoming the presumption of immigrant intent. This concept is referred to as “dual intent”, a legal fiction that says an H-1B alien can have both nonimmigrant (temporary) and immigrant (permanent) intent. But the special treatment for H-1Bs doesn’t end there. Through the American Competitiveness for the 21st Century Act (AC21), an alien who is sponsored for an employment-based immigrant visa before the end of the fifth year can remain in the United States indefinitely (and work) on the H-1B until a green card is available.

Combined, Big Tech and other companies have used these loopholes to stack the deck against American workers. Unlike other guestworker programs, there is no general requirement that an employer be unable to find a qualified American first. At first glance, it appears that heavy users of H-1Bs like Facebook, known as “H-1B dependent employers”, are required to attempt to recruit Americans first. However, thanks to another loophole found at section 212(n)(3)(B) of the INA, an H-1B-dependent employer can avoid recruiting Americans as long as they pay foreign workers at least $60,000 a year. While that exceeds the national average salary, it is generally less than half the going rate in the tech industry or for other professional jobs in high-cost coastal cities like San Francisco, New York City, and Washington, D.C.

When I was the policy chief at USCIS, I requested a data pull on the H-1B petitions filed by H-1B-dependent employers. The review revealed that 99 percent of H-1B-dependent employers opted for the $60,000 salary exemption rather than trying to recruit American workers. This exemption completely guts the congressional attempt to impose higher restrictions on heavy users of H-1Bs. These companies are literally buying their way out of recruiting Americans for what amount to uncompetitive salary amounts in the given fields and localities.

The next step in the process of how these companies exploit U.S. immigration law to harm American workers is when the employer goes to petition for the H-1B to obtain a green card. Despite the talking point from advocates of unlimited immigration that H-1Bs are the “best and brightest”, most are petitioned for by the employer at the two lowest prevailing wage levels. Then, the employer typically petitions for an EB-3 employment-based visa (“skilled workers, professionals, and other workers”), which really only requires at least a bachelor’s degree or two years’ work experience. Again, the EB-3 is the lowest priority category for employment-based green cards (EB-4 and EB-5 are not traditional worker categories).

Recognizing the harm that foreign workers could have on American workers, Congress requires an employer to obtain a labor certification as part of the EB-3 process. Through section 212(a)(5)(A) of the INA, an alien worker is inadmissible unless the DOL secretary has certified that “there are not sufficient workers who are able, willing, qualified ... and available” and that “the employment of such alien will not adversely affect the wages and working conditions of workers in the United States similarly employed.”

The operative phrase “similarly employed” is how Big Tech retains its pipeline of cheap foreign labor except in the most egregious of scenarios, like the blatant discrimination exhibited by Facebook. Since the H-1B foreign worker already has a job, it is nearly impossible to show that converting the H-1B to an immigrant worker will adversely affect the wages and working conditions of “similarly employed” Americans. That adversity already occurred at the H-1B stage because Congress has failed to impose such a prerequisite for obtaining H-1B status. Thus, by the time the employer goes into the PERM process, the H-1B isn’t being considered for a new job, but the job he or she already had held for many years.

Through numerous loopholes in the law (allowing H-1B “dual intent”, no American worker recruitment requirement for H-1Bs, AC21 perpetual holding of H-1B status until a green card is available), Congress has implicitly blessed a scheme that irrefutably harms American workers. It is long overdue for Congress to close the loopholes that disadvantage American workers, typically in tech, compared to foreign workers.