According to the Department of Labor projections, professional occupations will grow faster and add more jobs than any other major occupational group, creating at least six million new jobs by 2014. Nearly two million of these will be in science and technology. As a result, the declining numbers of freshmen majoring in fields such as computer science has become a cause for concern for many U.S. employers. For generations, the U.S.A. has relied on foreign talent to compete, innovate and grow within the global marketplace. Yet, today, companies run into obstacles in trying to get the “best and brightest” foreign nationals into the country.

The Current State of the H-1B
Earlier this year, more than 120,000 skilled workers anxiously awaited news of whether the U.S. Citizenship and Immigration Services (USCIS) would process their H-1B non-immigrant visa petitions. Since 2004, the number of
H-1B visas available to skilled workers with college degrees has been limited to 65,000. Of that, 6,800 are set aside under the terms of the U.S.-Chile and the U.S.-Singapore Free Trade Agreements, leaving 58,200 H-1B visas for the general applicant pool. In 2004, the cap on the number of available H-1B visas was reached ten months after the H-1B visas became available on April 1. This year, USCIS received 123,480 cap-subject petitions — more than two times the number of H-1B visas available in the general pool — on the first day of accepting applications. In response to this unprecedented demand, USCIS conducted a computer-generated lottery to determine which of the H-1B petitions received would have a spot in the coveted group of 58,200 to continue on to final processing. The H-1B visa rush left employers scrambling for alternatives to get foreign talent into the country. 

Global Services PREDICTIONS

Even if current regulations don’t get stricter through amendments, their enforcement certainly will

The debate on skilled immigrants will peak as 2008 Presidential elections approach, and then ebb.

With the demand for H-1B petitions far exceeding supply, employers have resorted to devising creative plans to work around the problem. Possible solutions: Other visa classifications, temporary assignments overseas, or hiring talent to work outside of the U.S.A. Some companies have used the L-1 intracompany transfer visa in an attempt to circumvent the H-1B category requirements. Recently, The Wall Street Journal reported on Microsoft’s plans to open a software-development center in Canada to allow it to recruit and retain highly skilled workers without having to go through potential issues with U.S. immigration.

Multinational corporations, and technology companies in particular, have advocated an increase in the number of H-1B visas, in light of the shortage of highly skilled professionals in the mathematics and science fields. However, critics argue that outsourcing firms use the H-1B to the detriment of U.S. employers and for the benefit of companies overseas. In addition, those challenging the expansion of the H-1B cap argue that companies abuse the H-1B category by displacing well-qualified and well-paid U.S. workers with foreign nationals.

Proposed Legislation
While Congress added restrictions to the L-1 category in 2005, historically, the L-1 intracompany transfer category has received support from Congress, which seems to perceive the L visa as a way to encourage international trade. Legislators have been less receptive of the H-1B category. Used primarily for skilled workers with the equivalent of bachelor’s degrees, the H-1B visa has been criticized as a threat to U.S. labor.

S.1639, Secure Borders, Economic Opportunity and Immigration Reform Act of 2007, proposed an overhaul of H-1B visa provisions, including annual admissions’ cap increases, a non-displacement requirement and an increase in penalties for failure to follow H-1B provisions. It also contained proposed changes to the L-1 visa, such as limitations on the approval of L-1 petitions for start-up companies.

Republican Senator Richard Durbin’s provisions in one of 27 proposed amendments to S.1639 recommended changes that would severely limit the practical application of the H and L categories. The provisions called for a per company limit on the percentage of H-1B and L employees, additional requirements for the determination of appropriate wage rates, a prohibition on the outplacement of H-1Bs and Ls, and new wage requirements for employers with L workers who have been employed for more than one year. 

The Durbin provisions are reflective of draconian bills before Congress. The L-1 Non-immigrant Reform Act, introduced in May, proposes to amend the L-1 category by eliminating the blanket L visa, authorizing L-1 employer investigations, establishing L-1 employer penalty provisions, requiring a Labor Condition Application filing with the Department of Labor, increasing the prior foreign employment requirement and setting an annual 35,000 L-1 visa limit.

Implications for 2010
While talk of providing blanket authorization for illegal aliens currently in the U.S.A. dominates media coverage, the “securing our borders” theme running throughout post 9/11 immigration discourse has emerged as part of the discussion on work authorization for skilled workers and intracompany transferees.

As a result, enforcement remains a major issue, especially for potential Republican supporters of an immigration bill in a Democratic Congress. However, by mixing the two issues — securing our borders and protecting our workers — Congress may not move forward on either. For employers, this translates into tougher employment verification rules. S.1639 proposed to implement an Employment Eligibility Verification System (EEVS), which imposes compliance and record-keeping requirements on employers.

Companies need to be cognizant of best practices with regard to employment verification and immigration strategies, given the stricter scrutiny of skilled temporary workers that is likely here to stay.    

As a member of Baker & McKenzie’s Global Migration and Executive Transfer Practice Group, Betsy represents American and multinational companies engaged in the global transfer of personnel. Her practice includes non-immigrant work visa petitions, labor certification applications and immigrant visa petitions for the U.S.A.