Human Capital

Immigration Uncertainty

Employers, especially in technology, are fearful of changes to the foreign worker visa program.
By: | April 7, 2017 • 5 min read

Uncertainty over President Trump’s travel ban and the potential for changes to the H-1B visa program have many companies contemplating the risks to foreign workers.

New proposals could call for some drastic changes to the visa program at a time when many technology companies say there’s already a talent shortage.

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At the same time, critics of the H-1B visa program, which is used for professionals in specialty fields, say some companies are playing the system to replace American workers with less costly foreign staff.

The debate is ongoing although it has heated up with the new administration’s pronouncements, leaving companies that rely on H-1B workers with both uncertainty and risk.

H-1Bs Essential to Secure Talent

Goldman Sachs estimates there are nearly one million H-1B visa holders working in the U.S., accounting for up to 13 percent of the country’s tech workforce. An H-1B visa is an employment-based, non-immigrant visa category for temporary workers.

Employers must apply to U.S. Citizenship and Immigration Services (USCIS) on the worker’s behalf. Most applicants are required to hold at least a bachelor’s degree or equivalent training and must be paid the prevailing wage for the role.

Employers pay filing fees of between $1,570 to  $2,320 per worker for three-year visas that can be extended for up to six years. Of the 85,000 H-1Bs offered annually by the USCIS, 20,000 are reserved for those with a master’s degree or higher.

William Stock, attorney, Klasko Immigration Law Partners

If the USCIS receives more than the number of petitions in the first five business days of the annual filing system, it awards visas on a random lottery system run by computer.

William Stock, an attorney with Klasko Immigration Law Partners in Philadelphia, and president of the American Immigration Lawyers Association, said companies have often used H-1Bs to fill roles in IT infrastructure and software development that they otherwise haven’t been able to fill.

According to Code.org, there are nearly a half-million open computing jobs, yet only 43,000 Americans graduate from college with computer science degrees annually. While many tech jobs can be outsourced overseas, Stock said there’s still a strong need for talent to be onsite in the United States.

Employers Anticipate Change

Companies of all sizes are evaluating the potential for changes in the system, said Matthew Dunn, partner with Kramer Levin Naftalis & Frankel law firm.

While there are some steps President Trump could take on his own, Dunn said, mass changes would likely need to be approved by Congress.

Sen. Chuck Grassley, R-Iowa, and Sen. Dick Durbin, D-Ill., recently announced plans to introduce a bill that would require all employers seeking H-1B visas to demonstrate “good faith efforts” to find American workers first.

It would also do away with a lottery system and require that employers prioritize the top foreign students who studied in the U.S.

Dunn said it could add pressure for companies since they are already challenged with obtaining the workers they need.

“Right now, there are 85,000 H-1B visas available each year and there are over 200,000 applicants so the chance of getting one is less than 50 percent,” said Dunn.

Other proposals would boost salary thresholds for workers and remove loopholes in the existing H-1B regulations that let some work for less money than U.S. counterparts.

While there is generally bipartisan support for a vetting process to ensure U.S. workers are not being replaced by cheap foreign labor, employers are still concerned that reforms could curtail their access to talent.

Dick Burke, CEO, Envoy

In the meantime, Stock said, these employers are seeking “as many H-1Bs as they can this season” before there are changes to the law, and they’re also ensuring their salaries are competitive.

Companies are also eyeing their vendor relationships to assess their dependence on foreign workers and how changes could impact their ability to deliver products or services.

Dick Burke, CEO at Envoy, a company that helps secure work authorizations across the globe, said many employers are seeking to move foreign workers to “higher ground” by securing more durable authorization.

Mexican and Canadian citizens can be moved to a NAFTA Professional (TN) work visa and others can use an L-1 work visa, a class designed to help multinationals move more people around. Burke said other companies are even trying to help employees obtain a green card as a legal permanent resident.

“They’re really trying to take advantage of the opportunities that the immigration process permits and we’re helping our [clients] do that,” said Burke.

Travel Ban “Unpredictable”

While employers anticipate changes in the H-1B program in the coming year, President Trump’s travel ban executive order has been a more pressing issue.

Dunn said it is difficult to contend with the new “unpredictability of rules that government may require them to follow.”

“It was just sprung on companies and business travel was certainly disrupted and then plans for future travel have been put on hold,” said Dunn.

It was just sprung on companies and business travel was certainly disrupted and then plans for future travel have been put on hold. — Matthew Dunn, partner, Kramer Levin Naftalis & Frankel

Companies have been communicating with their “employees of concern” about adjustments and status of the ban, he said. And while some of these companies have been holding town hall-type meetings to lend support to foreign national workers, others have been taking a “wait and see” approach.

Stock said the ban has led to a great deal of uncertainty in the business community as it was “unprecedented in scope” and not tethered to “any realistic risk/benefit analysis.”

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While employers remain at the mercy of federal regulations, Burke said, many are deciding to “become more vocal” with their representatives.

There’s not only concern about changes to immigration in the United States but about how foreign governments could respond with potential retaliation. The perception that the travel ban, now being fought in the courts, focuses on Muslims may cause retribution in the global economy, Burke said.

India is the biggest provider of H-1B workers, making up nearly 70 percent of the foreign workforce.

“There’s big concern for companies with global operations. There’s a fear that if you’re not going to let our people come in, we’re going to make it very difficult for you to transact business in our country,” said Burke. &

Craig Guillot is a writer and photographer, based in New Orleans. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2017 RIMS

Cyber Threat Will Get More Difficult

Companies should focus on response, resiliency and recovery when it comes to cyber risks.
By: | April 19, 2017 • 2 min read
Topics: Cyber Risks | RIMS

“The sky is not falling” when it comes to cyber security, but the threat is a growing challenge for companies.

“I am not a cyber apocalyptic kind of guy,” said Gen. Michael Hayden, former head of the Central Intelligence Agency and National Security Agency, who currently is a principal at the Chertoff Group, a security consultancy.

Gen. Michael Hayden, former head of the CIA and NSA, and principal, The Chertoff Group

“There are lots of things to worry about in the cyber domain and you don’t have to be apocalyptic to be concerned,” said Hayden prior to his presentation at a Global Risk Forum sponsored by Lockton on Sunday afternoon on the geopolitical threats facing the United States.

“We have only begun to consider the threat as it currently exists in the cyber domain.”

Hayden said cyber risk is equal to the threat times your vulnerability to the threat, times the consequences of a successful attack.

At present, companies are focusing on the vulnerability aspect, and responding by building “high walls and deep moats” to keep attackers out, he said. If you do that successfully, it will prevent 80 percent of the attackers.

“It’s all about making yourself a tougher target than the next like target,” he said.

But that still leaves 20 percent vulnerability, so companies need to focus on the consequences: It’s about response, resiliency and recovery, he said.

The range of attackers is vast, including nations that have used cyber attacks to disrupt Sony (the North Koreans angry about a movie), the Sands Casino (Iranians angry about the owner’s comments about their country), and U.S. banks (Iranians seeking to disrupt iconic U.S. institutions after the Stuxnet attack on their nuclear program), he said.

“You don’t have to offend anybody to be a target,” he said. “It may be enough to be iconic.”

The world order that has existed for the past 75 years “is melting away” and the world is less stable.

And no matter how much private companies do, it may not be enough.

“The big questions in cyber now are law and policy,” Hayden said. “We have not yet decided as a people what we want or will allow our government to do to keep us safe in the cyber domain.”

The U.S. government defends the country’s land, sea and air, but when it comes to cyber, defenses have been mostly left to private enterprises, he said.

“I don’t know that we have quite decided the balance between the government’s role and the private sector’s role,” he said.

As for the government’s role in the geopolitical challenges facing it, Hayden said he has seen times that were more dangerous, but never more complicated.

The world order that has existed for the past 75 years “is melting away” and the world is less stable, he said.

Nations such as North Korea, Iran, Russia and Pakistan are “ambitious, brittle and nuclear.” The Islamic world is in a clash between secular and religious governance, and China, which he said is “competitive and occasionally confrontational” is facing its own demographic and economic challenges.

“It’s going to be a tough century,” Hayden said.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]