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Capped Out: Where Do We Go From Here?

by Gary Endelman

Gary Endelman Announcing the obvious with an air of discovery, the U.S. Citizenship and Immigration Services (USCIS) told the world on February 17,2004 that it had received enough H-1B petitions to meet FY 2004's cap of 65,000 new workers. USCIS will turn back any new H-1B petitions for first-time employment that come in after February 17th. Employers will have to wait until April 1 before filing a petition requesting new FY 2005 H-1B approval with an October 1st validity date. That is what we know right now. Capped out, where do we go from here?

No visa was more closely linked with the high tech boom of the late 90's than the H-1B and none has come under shaper challenge or closer scrutiny since the bubble burst. As the economy remains sluggish, with the specter of a jobless recovery casting a pall over Wall Street's revival, the H-1B has become a lightning rod for critics. The charge that unscrupulous employers import cheap labor to displace Americans is not a new one; indeed, it pre-dates the H-1B and is as old as immigration itself. Hard times have breathed new life into these old accusations, making them more threatening and believable. Even the companion L-1 intracompany transferee visa that, until now, has managed to fly quietly under the radar is threatened by the general turbulence. What is most striking about recent Congressional hearings on the L-1 is the extent to which critics seem most upset over alleged H-1B abuse. Indeed, the most damning charge flung at the L is that employers are turning to it precisely to avoid H-1B restrictions. That is why restrictionists want to reconfigure the L in the image of the H. Those who seek to drive out foreign workers do not distinguish between the H and L visas. Their rejection of the H leads them to disavow the entire body of immigration law whose purpose is to arm the U.S. to engage in a global competition for talent and people.

How Congress deals with the H-1B will shape the future of business immigration for years to come. If we cannot articulate a rational policy here that serves the nation well, we will not be able to do it anywhere else. The ongoing H-1B debate is really about the direction that the American economy will take in the digital age. Members of Congress worried about re-election now clearly think that a lowered H-1B ceiling will stem the flow of good paying jobs out of their districts. The law may distinguish between dependent and non-dependent H-1B employers, but most legislators do not. They will tell anyone who asks that the H-1B is to be used as a visa of last resort only when there is a demonstrated shortage of U.S. workers with needed skills. The fact that most H-1B employers have to make no such showing would come as a rude and most unwelcome surprise on Capital Hill.

Business and immigrant advocates have already begun lobbying Congress for a higher H-1B cap. If there is a rationale for the 65,000 number, it remains America's best-kept secret. The problem with these fluctuations in the H-1B cap is not primarily one of numbers, but of uncertainty. In this kind of institutional indecision, where the rules of the game change every few years without rhyme or reason, it is impossible for American employers of H-1B workers to engage in intelligent planning that seeks to maximize the benefit of their presence. Restrictions on where they can work, how often they can travel, what kinds of jobs they can perform-all these inject rigidity and artificiality into the economy that serves no purpose other than to empower those who police such activity. This kind of micromanagement does not create wealth, produce jobs, or make employers more competitive. Beyond all of this, it is sheer fallacy to look at the H-1B quota in isolation from the need to create a rational and simplified labor market control system. Failing to do so ignores the basic truth that employers do not recruit for 3 or 6 years; they are looking for employee who will be around for the long haul. It makes no sense to expand the H-1B quota without doing something to enable these same employers to retain the very H-1B beneficiaries they have trained after their authorized stay is up. If we do nothing about labor certification, any improvements made in the H-1B arena will be wasted. Frustrated employers will respond by taking the logical step of decreasing H-1B sponsorship and sending the jobs overseas. Only low-wage, English-speaking havens, like India, will benefit.

The inherent difficulty of settling upon any cap number suggests that perhaps the focus of the debate belongs elsewhere. All H-1Bs are not created equal. What is important is not how many H1B workers come, but what kind of H-1Bs come. If the economy needs certain skills in certain jobs, then it is these types of H-1Bs that should be favored without any limit. Correspondingly, if the economy has a surplus of expertise in a designated discipline, then, until a shortage develops, no H-1Bs of this type should be allowed. Whatever the end result, any cap on H-1B admissions should not be a political but an economic decision arising out of what the economy needs. The amount of red tape and dollars that are now required to sponsor an H-1B worker is insane but not particularly surprising given who makes the rules. This is what happens when Congress senses there is a problem, but cannot really figure out how to correct it without any help from either the regulators or the regulated. Legitimate users of the H-1B program must acknowledge its underlying flaws and try to be a part of the solution, rather than never yielding an inch. Honest opponents must recognize that the H-1B is essential for American companies to be diverse, seamless and productive in a global economy where wage pressures operate in a transnational context.

Any new H-1B cap must be the product of negotiation and consultation. It should be set on a country-by-country basis that varies as the facts and circumstances of America's bilateral economic relationships vary. Only when we have a cap that puts the economic interests of America first will any such restriction serve a useful purpose. The number of H-1Bs from Venezuela need not be the same as the H-1B influx from Canada, nor should it be since America's commercial links with each are fundamentally dissimilar. To argue, as some immigration advocates do, that this would result in some favored nations getting a disproportionate percentage of the overall H-1B visa allotment reflects an alien-centered view of the H-1B that cannot be reconciled with vigilant protection of the American national interest. To counter this, why not allow unused H-1B visa numbers from one nation to be used by H-1B applicants from an oversubscribed country, much as Congress did to wipe away chronic immigrant visa backlogs for China and India? Beyond that, there is no entitlement to the H-1B and access to this program should be earned through the extension of reciprocal benefits and trade concessions offered to the United States by those countries whose citizens and economies benefit from, indeed depend upon, its continued existence.

The recent Free Trade Agreements signed with Chile and Singapore, which have the effects of taking away 6,800 H-1B visas, more than 10% of the total, and count against the cap in the 1st and 7th years, make H-1B admissions from these countries dependent on how many Americans in these same occupations are allowed to work there. Here is an interesting model that transforms the H -1B visa into a tool for American penetration of emerging foreign markets. Washington did not set the cap on H-1Bs from Singapore and Chile alone, but all concerned trading partners in concert who decided how much global mobility they would allow. What works for Chile and Singapore should work for other nations should work for other nations with whom we do business on a regular basis. Allowing an H-1B worker from India or China the freedom to work in the United States in H-1B status should be a conscious decision to share the fruits of our national sovereignty and prosperity with allies whose citizens have the talent to help us; in turn, they should be prepared to level the playing field by opening their markets to American capital. The extent of H -1B admissions from any particular country would, as with Chile and Singapore, be the subject of bilateral conversations that treat the controlled movement of people as an asset to be maximized, not a problem to be controlled.

Does the economy have the same need for all H-1B occupations? The question answers itself. Without the need for Congress to do anything, USCIS can use the authority it already has under the Negotiated Rulemaking Act to convene experts from business, labor, academia, professional societies, ethnic groups and the immigration bar to prepare a list of occupations worthy of H-1B pre-approval. This is precisely what USDOL has long since done with labor certification in the form of its "Schedule A". The creation of such a list for H purposes will keep jobs at home, protect American workers, and benefit employers who can afford to increase domestic hiring. Annual revision of the list will keep it current. What about those occupations that do not make it onto such a list? Do they lose out entirely? No, but their H-1B visa would be valid for only one year, not three. They would not be exempt from the presumption of entering the U.S. as an intending immigrant. Section 214(b) of the Immigration and Nationality Act would apply. Only those occupations pre-approved for H visa treatment would continue to benefit from the doctrine of dual intent under which H visa holders can come temporarily to the U.S. while exploring green card options after arrival. There is nothing particularly radical in such notions. This is precisely how the Singapore and Chile Free Trade Agreements deal with the issue.

The ultimate protection for any worker, regardless of where they come from, is the job mobility that comes from having a genuine stake in society not dependent on any particular employer. In the American Competitiveness in the 21st Century Act, Congress endorsed the concept of H-1B portability, but the law still takes only a few baby steps down this road. How about taking some giant ones? Why not allow the H-1B alien to file the petition in his/her own name, much as they can now self-petition under the national interest and extraordinary ability immigrant visa categories? The resulting H-1B approval would then truly belong t the alien visa holder rather than to the employer who immediately loses any leverage that the market would not otherwise provide. Armed with such a weapon against unreasonable employer demands, the H-1B alien has no further need for protection by USDOL. The entire forest of protective regulations inspired by the American Competitiveness Workforce Improvement Act instantly becomes irrelevant. Honest employers with well paying jobs will still get the workers they need. Give H-1B workers ownership of the visa so that they can vote with their feet to look for greener pastures when they perceive themselves to be the victims of mistreatment. When this happens, once the H-1B becomes truly mobile and imbued with spirit of capitalism, no further justification for keeping the labor condition application can possibly present itself. It will then be a failed experiment whose time has come and gone.

The benefit for different kinds of H-1Bs should not blind us to the transparent need to change their method of delivery. That is why we need a Blanket H-1B program much as we have a Blanket L intracompany transferee program. Once USCIS approves a Blanket H petition, the USDOL would be asked to certify a labor condition application and the alien beneficiary could then apply for the visa at the U.S. consulate in their home country. This is precisely how the Singapore and Chile H-1Bs work since neither case requires prior USCIS petition approval. Once USDOL approves the employer's attestation, the US Consular authorities need only decide whether the prospective US job is a professional occupation requiring the relevant university degree that the alien has earned. Eligibility for this Blanket H-1B should depend on the number of H-1B petitions that USCIS has approved for the US employer in the past year, the percentage of full-time equivalent H workers in their employ, and a demonstrated ability to pay the prevailing wage No H-1B dependent employer, nor any company found guilty of a willful or material labor condition application violation, could participate in the Blanket H-1B program.

To do most, or even part of this, we will all have to take a huge leap of faith and start talking not just to ourselves but reach across the aisle to adversaries who do not agree or even like us. Unwilling to do that, not much will happen. Now that the H cap has been reached, where we go from here depends on our ability to come to terms with the central reality that an immigration system that most Americans do not understand as being in their best interest will never prosper or long endure. It is not a matter of H-1B numbers or more dollars. Neither a higher H cap, nor more dollars, nor an unlimited cadre of USCIS adjudicators can make an H visa regime work that does not place serving the national interest and the U.S. economy as its first, last and only priorities. The choices are ours. What happens next depends on us.

About The Author

Gary Endelman practices immigration law at BP America Inc. The opinions expressed in this column are purely personal and do not represent the views or beliefs of BP America Inc. in any way.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.