Senate bill's H-1B provisions aren't making anyone happy

Legislation would hike visa cap but change green-card rules

The immigration reform deal announced in the U.S. Senate last week is a work in progress with an uncertain future in both houses of Congress. And its H-1B provisions aren't making either proponents or critics of the visa program happy.

If the bill resulting from the bipartisan agreement survives the legislative gantlet, it will effectively increase the annual H-1B cap to 135,000 visas beginning in the next federal fiscal year, which starts in October. That is based on a proposed increase in the cap for regular H-1B visas from 65,000 to 115,000, plus the continuation of 20,000 visas that go to applicants who have received advanced degrees from U.S. universities, according to some groups that have analyzed the proposed legislation.

The measure would also provide some relief for companies that applied for H-1B visas for the next fiscal year but lost a selection lottery held by the U.S. Citizenship and Immigration Services. The USCIS received about 150,000 applications for the 65,000 regular visas on April 2, the first and only day that the agency accepted applications.

A computer program will randomly generate a list of visa winners. But the Senate bill, if it reaches President George W. Bush's desk as written, would apply to the 2008 fiscal year, enabling the USCIS to issue an additional 50,000 visas to applicants from this year's lottery pool.

In addition, the proposal in the Senate would allow the new cap of 115,000 regular visas to quickly rise if it was reached during the first half of a fiscal year. If that happened, the cap would increase another 15% for that fiscal year and then an additional 15% for the subsequent year, although it couldn't go any higher than 180,000 visas annually.

The legislation also incorporates some of the provisions included in an H-1B bill drafted earlier this year by Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa). For instance, the bill would require that no more than 50% of the U.S.-based employees at a company using H-1B workers be visa holders. The proposed rule would apply to all companies with 50 or more employees.

That limit could have a substantial effect on India-based offshore services firms, many of which are heavy users of H-1B visas, said Charles Kuck, an Atlanta-based immigration attorney and president-elect of the American Immigration Lawyers Association.

If the offshore vendors have more than 50% of their employees in the U.S. working under visas, the Senate legislation's proposed limit would "disable them from using the [visa] program for some period of time," said Kuck. Companies that also use H-1B visas but employ large numbers of U.S workers, such as Microsoft Corp., wouldn't be affected.

But proposed changes in how green cards are awarded to foreign workers "is a much bigger problem" for IT vendors, said Kuck. The Senate bill would create a point system for issuing green cards based on the skills and education of people seeking permanent residency. The current system is more market-driven because it allows employers to request green cards, more closely matching individual employees with needed skills.

The Senate's bill "puts the U.S. government in charge of who can be employed in the United States," Kuck said.

"As the bill stands now, I think it's pretty much a disaster for high-tech employers," said Stuart Anderson, executive director of the the National Foundation for American Policy, during a conference call this week. The call was held to announce the release of a report arguing, among other things, that H-1B workers are helping the economy and aren't hurting U.S. programmers, who enjoy low unemployment and high wages (download PDF).

But opponents of the H-1B program are dismayed over the proposed cap increase. John Miano, founder of the Summit, N.J.-based Programmers Guild, claims that H-1B workers are being used as a source of low-cost labor. Miano said studies done by his group have shown that the prevailing wage claims of companies with H-1B workers were about $16,000 less than actual prevailing wages.

Ron Hira, an assistant professor of public policy at Rochester Institute of Technology in New York, said the H-1B program is discouraging students from entering high-tech fields and weakening the ability of the U.S. to innovate and even keep the military properly equipped. "I think the stakes are really pretty high here," Hira said.

But many changes to the Senate bill are likely; in fact, the measure has already seen some. Last week, when initial drafts of the Senate bill surfaced, high-tech groups said that the 20,000-visa exemption for advanced degree holders had been removed from the legislation. But a later draft changed that, and the Compete America trade group, which represents high-tech organizations and other entities that support the H-1B program, says the exemption remains in the bill.

Even if the bipartisan agreement shepherded by Sen. Edward Kennedy (D-Mass.) does get out of the Senate, it also must win approval in the House of Representatives, where it would face additional proposed changes.

For instance, Rep. Bill Pascrell Jr. (D-N.J.), who in 2005 introduced a bill called the Defend the American Dream Act that sought to improve protections for U.S. workers threatened by offshoring, plans to introduce new legislation this year. "We're close, and we're working out the details," said Caley Gray, a spokesman for Pascrell.

Copyright © 2007 IDG Communications, Inc.

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