Tightening L-1 Rules in Grassley/Durbin Bill and Canada's Approach

By David North on November 30, 2015

The proposed S. 2266, as introduced by Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D- Ill.), will, in addition to the previously described H-1B reforms, make some major changes in the L-1 foreign workers program, which up to now has had no labor market protections at all.

The L-1 program allows multinational firms to move professional employees into the United States on a temporary basis. In most years the admissions of such workers have been at about the level of H-1B admissions, which in FY 2013 were a little above 500,000 for the L-1s and a little below that for the H-1Bs.

The best news is that S. 2266 will (unless the lobbyists kill this provision) introduce wage standards into the L-1 program for the first time. The key provision reads as follows:

(K) (i) An employer that employs a nonimmigrant described in section 101(a)(15)(L) for a cumulative period of time in excess of 1 year shall—

(I) offer such nonimmigrant, during the period of authorized employment, wages, based on the best information available at the time the application is filed, which are not less than the highest of—

(aa) the locally determined prevailing wage level for the occupational classification in the area of employment;

(bb) the median wage for all workers in the occupational classification in the area of employment; and

(cc) the median wage for skill level 2 in the occupational classification found in the most recent Occupational Employment Statistics survey

Too often in the past employers have brought alien workers into this country and continued to pay them at home country rates (i.e., with very low wages) rather than either hiring a resident worker, or even an H1-B, at a more appropriate rate of pay. This provision, if it lasts and if it is enforced, should cause some employers to hire resident workers rather than foreign ones.

The new bill also offers:

  • Stiffer penalties for abusing employers (but not as stiff as the Canadian ones noted below);

  • Much tighter rules for the opening of a new branch office in the United States, which had served as a loophole for aliens who simply moved the former business in the home country to the United States;

  • A narrower definition of the "specialized knowledge" that L-1 workers are supposed to have, which has been broadened to a ridiculous extent by immigration lawyers and some judges;

  • A better enforcement scheme, including protection for whistle-blowers; and

  • A provision banning the replacement of incumbent U.S. workers by L-1s.

The replacement provision, while welcome, is a bit of window dressing. In both the L-1 and the H-1B programs the basic problem is that the foreign workers, rather than American workers, are persistently hired into new jobs, not the replacement of incumbent workers. When replacement happens, as with the Disney case in Florida, it draws a lot of understandable attention.

The Canadian Approach

Meanwhile, on the other side of our northern border, both the incoming Liberal regime and the outgoing Conservative one have taken numerous steps to tighten Canada's foreign worker program. Without going into these new rules in depth, it is fair to say that the regulations are much stricter than anything proposed in the States.

As samples, we have these provisions from regulations laid down earlier this year by the Conservatives:

As of December 1, employers who fail to comply with the new ... requirements will be subject to the following sanctions:

  • warnings;

  • fines ranging from $500 to $100,000 per violation, up to a maximum of $1 million over one year, per employer;

  • being banned from accessing the programs for one, two, five, or ten years or permanently; and

  • publication of the employer's name on a public list with details of the violation(s) and sanction(s).

See more here.

In comparison, there is a provision for a fine up to $25,000 per violation and a two-year debarment in S. 2266 regarding willful misbehavior of L-1 employers.

As for the Liberals, the newly elected government has decided that there should be monthly censuses of temporary alien workers, calling for:

a monthly disclosure regime that indicates the number of temporary foreign workers in Canada by (i) region, (ii) National Occupation Classification code, (iii) employer.

None of those casual, oft-delayed annual reports; up north they want to know what is happening right now, employer by employer.

Wouldn't it be nice if American employers seriously abusing foreign worker programs were faced with at least the threat of a $1 million fine and permanent disbarment from these programs?

Read Part 1

Read Part 2