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Trump Policy Limiting H-1B Visas Could Meet Its End in Texas

Dec. 17, 2019, 10:45 AM

A case pending in federal district court in Texas could deal a deadly blow to what immigration attorneys say is a key Trump administration tactic in its crackdown on the H-1B specialty occupation visa.

For nearly two years, U.S. Citizenship and Immigration Services has been handing H-1B approvals to information technology consulting companies that allow workers to remain on the visa for only a few weeks or months at a time, despite a request for the full three years allowed.

The USCIS is backing its decisions with a February 2018 policy requiring consulting and staffing companies to submit an itinerary detailing the H-1B visa holder’s work for the length of the visa. If an employer can’t provide the full itinerary, the agency is cutting the length of the visa to correspond with how much future work those companies can show.

As a result, members of the IT consulting industry say the practice is causing them to lose business and thousands of dollars in filing and attorneys’ fees to request multiple H-1B extensions during the year. The companies say their H-1B workers, some of whom are long-term employees, are vital to fulfilling their clients’ contracts. They also say it’s impossible to know exactly what a worker will be doing years into the future.

One of those companies—Sugar Land, Texas-based Flexera Global Inc.—also says the USCIS practice is illegal.

Accelerated Decision

Flexera, which received three short-term H-1B approvals earlier this year, sued the USCIS in September in the U.S. District Court for the Southern District of Texas under the Administrative Procedure Act. In each, it requested the visa for three years but was approved for just a handful of months—one as short as three months.

The practice violates the agency’s own regulations, and Flexera is owed an explanation for what’s essentially a denial of its H-1B petitions for the remaining months it sought, the company says.

Now, the USCIS wants the case decided early on a motion to dismiss. It’s asking the court to rule not on the specifics of Flexera’s H-1B petitions, but rather on the legal issues of whether it can issue short-term H-1B approvals and whether it needs to explain itself when doing so.

The USCIS’s gamble means a ruling in favor of Flexera could be a giant step toward eradicating a thorn in IT consultants’ side.

It “moves up our timetable by like four months” from how these types of cases are normally decided, said Fairfax Station, Va., attorney Jonathan Wasden, who’s representing Flexera. The agency attorneys’ move thus “increases the odds that they’ll get an unfavorable decision faster,” he said.

If that happens, “the floodgates are going to open” to other legal challenges, he said.

A USCIS representative declined to comment on the case.

Losing Business

The itinerary policy and short-term H-1B approvals are among several measures business immigration attorneys say the USCIS has taken to curtail use of the visa program. IT staffing and consulting companies have been the administration’s main target, receiving more denials than other industries.

Kishore Khandavalli and Deepali Khadakban, IT business executives and members of the trade association ITServe Alliance, say they’re struggling with the fallout.

“We’re losing business to offshore companies,” said Khandavalli, founder and chief executive officer of SevenTablets and iTech US. Businesses hate uncertainty, and the inability to guarantee that a worker can remain on a project for more than a few months is driving clients to competitors in other countries who can make that promise, he said.

“We want to keep innovating, and that should happen in America,” said Khadakban, founder and CEO of Precision Technologies Inc. But with some 500,000 open IT jobs and a tech unemployment rate of less than 2%, the needed talent isn’t available from the domestic labor pool, she said. “The work is going to go where the talent is.”

In some cases, frustrated H-1B workers and their employers have simply given up.

“We sent an employee to Toronto just last week because he wasn’t able to get an H-1B extension,” Khandavalli said. Khadakban has had four or five employees leave the U.S. for Canada as well.

Keeping an H-1B worker in legal status can mean thousands of dollars in government filing fees and attorneys’ fees each time the visa must be extended. And it’s likely to get more expensive soon: The USCIS is proposing to charge employers that meet a certain visa usage threshold $4,000 every time they extend an H-1B visa, as opposed to just for the initial petition or where the worker is changing employers.

The fee is required of businesses with 50 or more employees that have 50% or more workers on H-1B or L-1 intracompany transferee visas.

‘Up to Three Years’

John Miano, an attorney with the Immigration Reform Law Institute, said he’s “long advocated” for shorter H-1B approval times. Congress set the maximum H-1B term at six years, but gave the agency authority to set a limit within that time frame, he said.

USCIS regulations say an H-1B approval “shall be valid for a period of up to three years.”

The question is whether that means approvals must be for the full three years, or whether they can be issued for shorter periods of time via a change in policy versus a change in the regulations, said Miano, whose organization is the legal arm of the Federation for American Immigration Reform, which advocates for lower immigration levels.

Agencies can change their policies at any time, but regulations require notice and an opportunity for public comment.

For example, courts across the country held DACA was lawful even though that program was established without any regulatory changes, he said, referring to former President Barack Obama’s Deferred Action for Childhood Arrivals program.

The program, which provides deportation protection and work permits to young, undocumented immigrants who came to the U.S. as children, was implemented via memorandum from then-Homeland Security Secretary Janet Napolitano.

“It’s a wacky world of inconsistency,” Miano said.

Old Law

Wasden said the USCIS is relying on a relic of the law before it was changed in 1990 to separate out H-1B visas from O visas for foreign nationals with extraordinary ability and P visas for athletes and performers.

Although it applied to the combined H visa, the itinerary requirement really was meant only for what are now the O and P visa categories, he said.

Wasden also is representing ITServe in a separate lawsuit that’s challenging the 2018 itinerary policy head-on.

“You can see the kind of havoc that it can play in the lives of beneficiaries” of the visa petitions, who can lose driver’s licenses tied to their visas, said New York immigration attorney Cyrus Mehta.

Mehta said he’s even seen retroactive approvals where the validity period for the visa had already expired by the time the decision was sent. “It’s as good as a denial” because the decision is “meaningless” at that point, he said.

Unless the courts shut down the practice, “I think it’s just going to get worse and create lots of hardships,” he said.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bloomberglaw.com

To contact the editors responsible for this story: Cheryl Saenz at csaenz@bloombergtax.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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