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Big Changes Proposed for High-Skilled Worker Visa Programs (1)

Oct. 6, 2020, 6:52 PM; Updated: Oct. 6, 2020, 9:02 PM

Two measures that Trump administration officials say would dramatically alter the hiring of highly skilled foreign workers were released Tuesday under special waivers allowing them to bypass normal regulatory review.

One rule, from the Department of Homeland Security, would narrow the jobs that qualify for H-1B specialty occupation visas and change the definition of an H-1B employee/employer relationship, while its companion, released by the Labor Department, would define how much those workers should be paid.

Officials estimate that as many as a third of all H-1B petitions would likely be rejected under the new interim final measures, which the administration maintains are part of its ongoing efforts to protect jobs for U.S. workers.

“This rule the department is publishing this week is far and away one of the most significant reforms made to the H-1B program in the past 20 years,” Deputy Secretary of Labor Patrick Pizzella said on a conference call with reporters Tuesday.

But employers of H-1B workers could face a “tremendous amount of uncertainty in terms of continuity of employment for key resources,” said attorney Eleanor Pelta, a partner at Morgan Lewis who specializes in immigration and nationality law.

“It’s going to have a real detrimental effect on employers’ abilities to hire employees with key expertise, but also to continue to employ certain individuals with key expertise,” Pelta said. “We’re not only talking about new H-1Bs applied for during the lottery season, but also H-1B extensions that are continuously filed.”

The interim final rule released by the Labor Department will take effect immediately, while the DHS rule will go into effect in 60 days, according to department officials. The measures will be open for public comment once they are published in the Federal Register on Oct. 8.

‘Abused by Some Companies’

Both the DOL and DHS rules were submitted for approval by the Office of Information and Regulatory Affairs, the office within the White House Office of Management and Budget that reviews all significant federal regulations.

But in an unusual move, both were withdrawn from review on Sept. 30 and received waivers to proceed.

Those choices could open the rules to legal challenges, Pelta said.

“The procedural aspects of forcing a rule out, that perhaps hasn’t gone through sufficient levels of internal review and has not been available for appropriate notice and comment before becoming effective, is a definite weak point in the process,” she said. “Obviously, those who want to challenge this in the courts are going to look for those procedural weak points.”

There are four tiers of wages that an employer must pay to high-skilled guest workers, and the appropriate wage rate is determined by the job and region where the visa holder will be employed. The new DOL regulation targets prevailing wage rates for H-1B visas, H-1B1 visas for guest workers in specialty occupations from Chile and Singapore, and E-3 specialty occupation workers from Australia.

DOL sets prevailing wages at the 17th, 34th, 50th, and 67th percentiles of the Bureau of Labor Statistics Occupational Employment Statistics database. The new rule would update those levels to the 45th, 62nd, 78th, and 95th percentiles of wage distribution, according to officials.

“The H-1B visa program has been abused by some companies who seek to undermine American workers by bringing low-cost or low-paid foreign labor into our country,” Acting DHS Deputy Secretary Ken Cuccinelli said on the conference call.

Third-Party Placement of H-1Bs

The rule from DHS also would establish new policies for employers of H-1B workers who then contract those workers to third-party job sites, such as IT staffing companies—long a Trump administration target.

Petitions with that specific employer/employee relationship would “generally be rejected,” officials said. However, “it isn’t automatic,” and there would be an analysis on a case-by-case basis.

In some instances, U.S. Citizenship and Immigration Services officers would have the option to approve an H-1B petition for one year, and then would have “continuous vetting” processes in place to determine whether to grant or deny the visa for the remaining two years, officials said.

This kind of short-term approval of H-1B petitions was available to USCIS officers until June when the agency agreed to rescind two memorandums as part of a settlement in a lawsuit challenging the agency’s third-party placement policies.

Critics of the H-1B program applauded these new rules as “long-overdue moves to protect American workers.”

“These reforms strike directly at the harmful staffing-company model of employment that has commodified these visa workers, displaced qualified Americans, and undermined the integrity of employment visa programs,” the Center for Immigration Studies said in a statement.

(Updated with additional reporting throughout.)

To contact the reporters on this story: Cheryl Bolen in Washington at cbolen@bgov.com; Genevieve Douglas in Washington at gdouglas@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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