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.
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.
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.
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.”
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. &