Public Policy Priority Issue Update

L-1 and H-1B VISA PROVISIONS IN THE FY2005 BUDGET BILL

Washington (22 November 2004) — On Saturday, 20 Nov., the House and Senate approved the final conference report on the omnibus budget bill (H.R. 4818) authorizing FY 2005 Federal budget appropriations.  President Bush has indicated that he will sign the bill into law.  The bill contains two titles making changes to the L-1 Visa program for intracompany transfers involving non-U.S. personnel and the H-1B Visa program (admission of skilled non-immigrant workers).

Congress enacted several reforms advocated by IEEE-USA to the L-1 and H-1B visa programs, correcting several shortcomings in the programs and targeting abuses that adversely affect U.S. high-tech workers.  Among the most important of these are:

• an expansion of the Department of Labor’s investigative powers,
• expanded data collection on the use of H-1B and L-1 visas,
• establishment of a new H-1B fraud detection and prevention fee,
• a meaningful prevailing wage requirement designed to ensure that H-1B workers receive the same pay as American workers,
• greater flexibility in workforce training programs funded with H-1B petition fees, and
• restrictions on third-party outsourcing of L-1 visa holders.

Congress increased the H-1B visa application fee from $1,000 to $1,500, and as recommended by IEEE-USA, increased the percentage of this fee going towards National Science Foundation’s low-income scholarship program.  This program provides $10K a year scholarships to help low-income individuals pursue advanced degrees in mathematics, engineering and computer science or other technology and science programs.

Unfortunately, Congress also created a new H-1B visa exemption for international students graduating from U.S. institutions with graduate degrees.  IEEE-USA worked unsuccessfully to defer consideration of the exemption proposal until 2005, a time when a more comprehensive debate over the immigration system would be possible.  However, IEEE-USA succeeded in limiting the exemptions to 20,000 visas per year.

It is too early to say what overall affect these provisions will have on engineering employment, but Congress is clearly concerned about abuses of temporary work visas and took several steps that they believe will help to prevent them in the future.

The following is a summary of the key provisions contained in H.R. 4818:

H.R. 4818

Title IV, Subtitle A – L-1 Visa Reform

Sec. 11:  Title:  L-1 Visa (Intracompany Transferee) Reform Act of 2004

Sec. 12:  “An alien who will serve in a capacity involving specialized knowledge with respect to an employer for purposes of section 101(a)15)(L) and will be stationed primarily at the worksite of an employer other than the petitioning employer or its affiliate, subsidiary, or parent shall not be eligible for classification under section 101(a)(15)(L) if:  (i) the alien will be controlled and supervised principally by such unaffiliated employer; or (ii) the placement of the alien at the worksite of the unaffiliated employer rather than a placement in connection with the provision of a product or service for which specialized knowledge specific to the petitioning employer is necessary.”

Sec. 13:  Requirement for prior continuous employment of L-1 workers with specialized knowledge is increased from six months to one year for blanket petitions.

Sec. 14:  Directs the Department of Homeland Security (DHS) to maintain statistics regarding L-1 visa petitions filed, approved, extended and amended.

Sec. 15:  Directs the DHS Inspector General to examine and report to the House and Senate Judiciary Committees within 6 months on “the vulnerabilities and potential abuses in the (L-1) visa program…”

Sec. 16:  Directs establishment of an L-1 Visa Interagency Task Force with representatives from the Departments of Homeland Security, Judiciary and State, to review the Inspector General’s report and note specific areas of agreement and disagreement.

Sec. 17:  Subtitle takes effect 180 days after enactment.

Title IV – Subtitle B – H-1B Visa Reform

Sec. 21:  Title:  “H-1B Visa Reform Act of 2004”

Sec. 22:  Petition Fees:  Increased from $1,000 to $1,500 per petition, but halved for employers with 25 or less full-time equivalent employees in the U.S.

Sec. 23:  Prevailing Wage Requirement:  The prevailing wage requirement for pay to H-1B workers increased from 95% of prevailing wage to 100%.  The Secretary of Labor shall make available a governmental survey to determine the prevailing wage; the survey “shall provide at least 4 levels of wages commensurate with experience, education and the level of supervision.”

Sec. 24:   Department of Labor Investigation Authority:  The Secretary of Labor may initiate an investigation of any employer that employs H-1Bs if the secretary has reasonable cause to believe that the employer is not in compliance.  The investigation must be for reasonable cause, but is not limited to “completeness and obvious inaccuracies” on the visa petition.   Investigations may also be prompted by complaints presenting “specific credible information from a source who is likely to have knowledge of an employer’s practices or employment conditions regarding a willful failure or patter or practice of failures, or a substantial failure affecting multiple employees.”  The Secretary of Labor may withhold the identity of the source, which is not subject to FOIA disclosure.  DoL shall establish a process for receiving such complaints, which will be submitted to Congress annually. 

Sec. 25:   Establishes an exemption from the H-1B visa cap for individuals employed (or has received an offer of employment) who have “earned a master’s or higher degree from a United States institution of higher education…until the number of aliens who are exempted from such numerical limitation during each year exceeds 20,000.” 

Also requires DHS to maintain and report “statistical information on the country of origin and occupation of, educational level maintained by, and compensation paid to, each alien who is issued a visa or otherwise provided nonimmigrant status and is exempt.”

Sect. 26:  Fraud Prevention:  Establishes an additional $500 fraud prevention and detection fee on an alien filing an application abroad for a visa authorizing admission to the United States.  Establishes an H-1B and L Fraud Prevention and Detection Account in the Treasury.  Makes one-third of funds available to the Secretary of State to combat fraud through programs/activities at U.S. embassies and consulates abroad, one-third to Department of Homeland Security for fraud prevention and detection activities and one-third to Department of Labor for enforcement activities.  Requires consultations between the departments.

Sec. 27:  Changes the allocation of H-1B fund distribution as follows:

• Department of Labor retraining grants reduced from 55% to 50%
• NSF low income scholarship program increased from 22% to 30%
• NSF K-12 math/science partnerships decreased from 15% to 10%
• Department of Labor visa processing/administration increased from 4% to 5%
• Additional DoL funds to speed up processing remain at 5%

Note that a separate distribution is established for fraud detection and prevention.

Sec. 28:  Job Training Grants:  Authorizes the Department of Labor to award grants to eligible entities to provide job training and related activities for workers to assist them in obtaining or upgrading employment in industries and economic sectors projected to experience significant growth and to ensure that these grants are coordinated with the public workforce investment system.  Funds may be used to assist unemployed and employed workers in gaining skills and competencies needed to obtain or upgrade career ladder employment positions in identified industries and sectors.  Funds may be used to develop and implement model activities such as developing appropriate curricula to build core competencies and training workers, identifying and disseminating career and skill information, and increasing the integration of community and technical college activities with activities of businesses and the public workforce investment system.  Grants may be awarded to businesses, trade associations, education and training providers, and workforce investment boards.  The DoL, in consultation with state workforce investment boards, will identify significant growth industries.  Funds should be distributed “equitably” geographically.  DoL may require funding matches.

Sec. 29:  NSF Low-Income Scholarship Program:   Increase potential awards from $3,125 a year to $10,000 a year, and expand eligibility to include “computer science, or other technology and science programs designated by the Director.”  Up to 50% of funds may be used for undergraduate programs for curriculum development, professional and workforce development, and to advance technological education through means other than scholarships.

Sec. 30:  Subtitle takes effect 90 days after enactment.

For more information on IEEE-USA’s related position statements, policy communications and activities, see:  http://www.ieeeusa.org/policy/issues/H1bvisa

Contact:

Vin O’Neill
IEEE-USA
Phone:  202-785-0017
Email:  v.oneill@ieee.org

Last Update:  15 May 2007
Staff Contact: Vin O'Neill, v.oneill@ieee.org