There are some tough-looking new rules in the Gang of Eight's proposed legislation seeking to discourage employers from becoming dependent on H-1B workers.
This is in S.744, the omnibus immigration "reform" bill, and the new H-1B rules are typical of the deceptive elements that are so common in that package.
The S.744 authors, wanting to appear to be defending American workers, have decided that, in the years 2015 through 2024, employers with 51 or more workers including 30-50 percent H-1Bs will have to pay an extra $5,000 application fee for each additional H-1B. In 2015 through 2017, that fee goes to $10,000 per worker if the H-1B employment rate is 50-75 percent.
There are other proposed rules, too, that make life as an H-1B-dependent employer unattractive.
Do not be too impressed, however, by what the Gang is trying to do for American workers, because there is an all-too simple loophole that could obliterate these fees and other restrictions.
The existing law, according to a U.S. Labor Department factsheet, indicates that all workers — not just professionals — are to be counted when determining who is an H-1B-dependent employer. (If you have 51 or more employees, and have hired 15 percent of them through the H-1B system, you are an H-1B dependent employer.)
So, Congress is complicating things. You could say that under the proposed law, there would be three layers of H-1B dependency: the old and continuing one, at 15 percent, and new ones, say "very H-1B dependent" at 30 percent-plus, and "extremely H-1B dependent" at 50 percent-plus.
But whatever the level of dependency, these employers — including the Indian outsourcing firms that routinely hire just about nothing but H-1Bs — have an easy out.
One of them could simply buy or merge with (or appear to merge with) an outfit that has a lot of American workers (or more precisely, non-H-1B workers). Suddenly some set of grocery stores or restaurants, full of non-H-1B workers, is part of a larger corporation that also does IT work, and the IT unit continues to hire H-1B workers, but the other parts of the corporation have enough resident workers so that the 15 percent rule does not bite.
Such a merger could be a genuine one — the outsourcing firms make large profits — or it could be a sham, but the latter still would probably fool the government.
Suppose, to make up some names, New Delhi IT, Ltd., the H1-B employer, more or less merges with Juicy Hamburger Co., which has lots of resident employees, and both nominally become units of a blandly titled organization, Metropolitan Ventures, Inc., thus saving New Delhi IT from being ruled "H-1B-dependent".
It is easy to imagine that the two firms would never share a genuine common management, and that each would, in fact, go its own way with each set of profits being sent into the old channels. But the fast food firm would get both some cash from the other firm, as well as some free IT services, and New Delhi would escape from the H-1B dependent label. There would be one-time legal fees, but the long-term, overall savings could be substantial.
One might hope that such a maneuver would be banned in S.744, but that is unlikely.