Greenberg Traurig LLP
 
Montserrat Miller, Laura Reiff
 
On March 29, Senators Chuck Grassley (R-IA) and Dick Durbin (D-IL) introduced the "H-1B and L-1 Visa Fraud and Abuse Prevention Act of 2007" (S. 1035) which, if enacted, will dramatically alter the landscape for American employers seeking to hire skilled foreign labor and intracompany transferees.

Generally speaking, the H-1B category applies to aliens coming temporarily to perform services in a specialty occupation and is capped at 65,000 temporary visas per year. The cap is met on a regular basis prior to the end of the fiscal year. The L-1 category applies to aliens who work for a company with a parent, subsidiary, branch, or affiliate in the United States. These workers come to the U.S. as intracompany transferees who are coming temporarily to perform services either in a managerial or executive capacity (L-1A) or which entail specialized knowledge (L-1B) for a parent, branch, subsidiary or affiliate of the same employer that employed the professional abroad. There is currently no annual cap on L-1 visas.

While the likelihood of S. 1035 passing on its own—outside the larger context of comprehensive immigration reform—is slim at this time, the purpose of introducing this bill now may have been more a shot across the bow than a belief that it could pass on its own. Meaning that Senators Durbin and Grassley, who both sit on the Senate Judiciary Committee, can be expected to push all or parts of this bill as an amendment to the comprehensive immigration reform bill which is expected to be taken up in the Judiciary Committee in May.

The legislation includes several significant changes to how H's and L's would be processed, and passage of all or parts will significantly impact the hiring of these workers by employers. Major changes include: (i) a new recruitment requirement for H-1B petitions; (ii) altering how wages are computed for H visas and a new wage requirement for L visas; (iii) additional paperwork requirements for employers; (iv) increased audits and investigations; and (v) a prohibition on blanket L petitions.

H-1B Reform

Non-displacement and Good Faith Recruitment Requirements

Expands the non-displacement and good faith recruitment requirements to all H-1B employers, not just those who are H-1B dependent or bad actor employers.
Expands the ability of the Department of Homeland Security (DHS) to randomly investigate H-1B employers by including all employers, not just H-1B dependent employers.
Doubles the time periods for the non-displacement provisions of the law, from 90 days (before/after) to 180 days.
Recruitment

Requires that employers advertise jobs in addition to the posting requirement and the notice to the bargaining representative.
Requires that the Department of Labor (DOL) establish a list of H-1B "available jobs" to be publicly available without charge, and requires that H-1B employers post jobs on this site for at least 30 calendar days. This expansion of the recruitment requirement would be new to how H-1B petitions are currently processed.
This information must be available on a website and also at 1-stop centers created under the Workforce Investment Act.
Employers must post the following about the job: employer’s name, address, city, EIN, phone number/email of the hiring contact, wage rate and how paid, hours, start/end date, number being hired, job title/description, worksite, and how to apply for the job.
The Labor Department cannot charge those viewing the information but may charge a nominal filing fee to employers.
Outplacement

Amends current law to state that employers "shall not place, outsource, lease, or otherwise contract for the placement of an alien admitted or provided stats as an H-1B nonimmigrant with another employer."
Limit on H-1B Workers

Adds a new requirement to the law which states that employers with less than 50 employees in the United States cannot have more than 50% of their workforce being H-1B workers.
Wages

Eliminates the current "actual" and "prevailing" wage language and instead requires employers to pay the higher of the: (i) locally determined prevailing wage for the job in the area of employment; (ii) median average wage for all workers in the job in the area; or (iii) median wage for skill level 2 in the job found in the OES.
Adds a new requirement to the law which states that employers may have to submit to the Internal Revenue Service (IRS) W-2 forms for workers.
Paperwork Requirement

Adds a new requirement to the law that requires employers to provide original or certified copies of all immigration documents between DHS, DOL or any other Federal agency related to an alien’s immigrant or temporary status filed by that employer within 10 working days of being notified by any alien who is applying for a green card.
Investigations and Audits by the Labor Department and DHS

Expands the authority of the Labor Department to conduct H-1B investigations from 12 months to 24 months and generally gives the DOL more latitude in when they can conduct investigations.
Allows DHS to conduct "surveys of the degree to which employers comply" with the H-1B requirements and mandates that DHS conduct annual compliance audits of not less than 1 percent of H-1B employers. It also mandates that DHS must conduct annual compliance audits of each employer with more than 100 employees in the United States if more than 15 percent of their workforce is H-1B workers.
Doubles current H-1B monetary fines from $1,000 - $5,000 to $2,000 - $10,000.
Authorizes the hiring of 200 additional employees to "administer, oversee, investigate and enforce" H programs.
Information Sharing

Mandates that U.S. Citizenship and Immigration Services (CIS) share with the DOL information submitted by H-1B employers.
Mandates that H-1B workers receive a brochure outlining the employer’s obligations under the law and employee’s rights (not just immigration laws) and information about how to contact Federal agencies about those rights, as well as a copy of the H-1B application.
Whistleblower Protections

Adds new language to the law making employers liable to employees harmed by H violations for lost wages and benefits.
L Visa Reform

New Facilities

Start up operations would be limited to one year and additional documentary requirements would need to be met prior to issuance of the temporary visa (e.g., business plan, a physical premises and financial ability).
Extensions could be granted, but there are specific documentary requirements, such as proof of adherence to the business plan, evidence of the truthfulness of statements made on the original application, evidence that the premise originally stated as the one is in fact being used, etc.
Blanket Petitions

Current law is amended to disallow blanket L petitions.
Outplacement
Adds a requirement in the law that says that L employers cannot "place, outsource, lease, or otherwise contract for the placement" of L workers with another employer.
Investigations and Audits

Adds language allowing DHS to initiate investigations of L employers if they receive "specific credible information" about violations of the law.
Requires DHS to establish a procedure to file complaints.
Gives complainants 24 months after the date of the alleged violation to file a complaint with DHS.
Requires DHS to provide notice to employers when they are commencing an investigation.
Allows DHS to conduct "surveys of the degree to which employers comply" with the L visa requirements and mandates that DHS conduct annual compliance audits of not less than 1 percent of L employers. It also mandates that DHS must conduct annual compliance audits of each employer with more than 100 employees in the United States if more than 15% of their workforce are L workers.
Imposes civil penalties of $2,000 to $10,000 for misrepresentations of material facts and mandates that for one or two years DHS will not be able to approve L petitions for employer’s found in violation of the law.
If a whistleblower is involved, employers would be liable for fines up to $10,000 and lost wages and benefits.
Wages and Benefits

Adds a requirement in the law that requires L employers to offer workers minimum wages as specified in the H-1B section above (i.e., prevailing wage, median average wage or median wage for skill level 2).
Adds a new requirement to the law which states that employers may have to submit to the IRS W-2 forms for workers.
Requires that employers provide L workers with all the same benefits as American workers and mandates that employers cannot require workers to pay penalties for ceasing employment early.
Whistleblower Protections

Adds new language to the law making employers liable to employees harmed by L violations for lost wages and benefits.
Employers need to be ever vigilant to happenings on Capitol Hill, particularly in the context of immigration reform which is a fluid situation that changes almost daily. We can assist clients with monitoring the legislative landscape to apprise employers of situations that could affect their hiring and recruitment practices.
 
 
Disclaimer
This GT ALERT is issued for general purposes only and is not intended to be construed or used as legal advice. Greenberg Traurig attorneys provide practical, result-oriented strategies and solutions tailored to meet our clients' individual legal needs. The Firm's responsive approach to client service often cuts across legal subject matter, applying the right experience and resources to provide cost-effective solutions.