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H-1B Employers Look to Remote Work Options During Visa Freeze

June 29, 2020, 2:29 PM

The Trump administration’s latest proclamation to suspend temporary work visas aims to protect jobs for U.S. workers, but employers hiring guestworkers in specialty occupations are more likely to make short-term accommodations to keep employees on sponsored visas.

The administration’s latest expansion of travel restrictions for foreign nationals is part of its effort to spur economic recovery by encouraging businesses to hire U.S. workers. Senior White House officials estimated about 500,000 jobs would be preserved through the end of 2020. That number, however, doesn’t accurately reflect who’ll actually be out of a job, and how employers will react, immigration attorneys said.

“Employers spend a long time selecting people to sponsor for a visa. It’s expensive, and they have to really make sure they’re sponsoring the right person for the job,” said Susan Cohen, chair of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.'s immigration practice. “The idea that by preventing hand-picked individuals from coming would translate into a one-for-one new job opening for an American worker is preposterous. It doesn’t make any sense at all.”

Cohen represents clients in information services and media industries, biotech and life sciences sectors, software and AI startups, and financial services providers. She said that to date, none of these clients have decided to rescind offers to H-1B workers if they can’t bring them to the U.S. until next year.

Instead, those employees will work remotely from their current locale, a work arrangement that already has been proved successful by workplace shutdowns around the globe in the wake of the Covid-19 pandemic.

“We’ve learned through the pandemic that remote work is a common solution,” said attorney Eileen Scofield, who specializes in corporate immigration law at Alston & Bird in Atlanta. “Very few of those jobs will suddenly be open to U.S. workers.”

One potential wrench in the telework plan, however, will be how long it stays in place, Scofield said, adding that there could be issues down the line for companies’ corporate taxes. If workers waiting on visas are employed abroad for long enough, they could create a permanent establishment for that company and the business would then have a tax presence in that country.

That can create tax compliance challenges, Scofield said. “You have to watch out that you’re not creating any exposures or liabilities.”

Crunching the Numbers

On June 22, President Donald Trump signed an order banning entry to the U.S. for H-1B high-skilled guestworkers and their H-4 spouses waiting for green cards, intracompany transferees on L visas, summer exchange J visa holders, and nonagricultural seasonal H-2B guestworkers, with some exceptions.

But the reality of how companies hire H-1B and other guestworkers means that only a fraction of the administration’s anticipated openings will likely appear, said immigration attorney Roger Tsai, a partner for Holland & Hart in Denver.

“I think there’s a factual disconnect, even in the numbers,” Tsai said. “I would anticipate maybe 5 to 10% of the immigrant workers that we would have worked with will be impacted by this.”

About 90% of the 85,000 visa beneficiaries selected in the annual H-1B visa lottery are already in the U.S. under an F-1 student visa or participating in the optional practical training program, which allows students to stay and work in the U.S. for 24 months after graduation.

That means only 10,000 to 20,000 incoming H-1B visa holders will be suspended for fiscal 2021, Tsai said.

While most H-2B seasonal, nonagricultural guestworkers do come from outside of the U.S. each year, the program is also capped at 66,000 per year, and that total is split between the spring/summer and fall/winter seasons. The proclamation, in its current form, only precludes the 33,000 visas holders from entering for the upcoming fall season, he said.

“This is a mere, small fraction of the deep economic problems we’re experiencing,” Tsai said, referring to the 21 million reported job losses during the pandemic.

Company Transfers

Of the visa categories included in the proclamation, L-1 visas may be the least likely to yield new job openings for U.S. workers.

L visas are reserved for multinational companies to transfer employees to a branch or subsidiary in the U.S. It’s “illogical” for the L-1 visas to be included in the restrictions, because by definition the L-1 is someone who has worked abroad in the operation of the company for at least a year, Scofield said.

“There is no U.S. worker who could have that job, have that knowledge,” she added.

Moreover, workers on L-1 visas also have institutional knowledge of the company, something a new hire won’t have, and a skill set that will often be worth the wait to an employer, Cohen said. “L-1s are well known entities to their companies. They can hit the ground running when they get here.”

Workers on L visas are also unlikely to make a dent in the unemployment numbers, Tsai said. One of his firm’s clients is a large manufacturer in the U.S., and about 30% of their immigrant workers are L-1 holders, he said. Foreign workers who need to apply for a new L-1 during the time the proclamation is in effect probably account for “less than 50 or so workers,” he said.

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bloomberglaw.com

To contact the editor responsible for this story: Karl Hardy at khardy@bloomberglaw.com

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