The H-1B and L-1 Visa Reform Act of 2017 Section-by-Section Chart
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1 The H-1B and L-1 Visa Reform Act of 2017 Section-by-Section Chart Section Provisions Key Impacts on Employers Recruitment Attestation - Every H-1B employer must attest that it has offered the job to any U.S. worker who applies that is equally or better qualified than the H-1B worker. Employers must attest they have taken good faith steps to recruit equally or better qualified U.S. workers for the occupation for which the H-1B is sought using procedures that meet industry wide standards, offering the higher of the actual or prevailing wage. 30 Day Posting - Before filing an initial labor condition application (LCA), H-1B employers will be required to post a detailed H-1B job opening to a Department of Labor (DOL) website for at least 30 calendar days. The requirement for employers to post on the DOL website will only apply to petitions filed 30 days after the website is up and functioning. DOL is required to create a searchable, freeto-the public job posting website for H-1B jobs 90 days after the bill s enactment. The postings must include descriptions of: wages and other terms and conditions of employment; minimum education, training and experience and other requirements for the position; and the process of how to apply for the job. The bill applies today s willful violator and H-1B dependent employer attestations to all H-1B employers. The posting requirement will mean a 30-day delay upfront in filing a LCA for an H-1B compared to today s system. The recruitment requirement may entail that employers create a way to track and record their equally or better qualified candidates and workers, similar to what employers already do with PERM. A concern is that DOL may not agree that a hired worker is equally or better qualified. As a result, employers may choose to place more work overseas. Modifies INA 212(n)(1)(G); (n)(1)(c); (n)(3) Page 1
2 Similar to past versions of the bill, all H-1B employers must attest they will not displace a U.S. worker 180 days before or after the filing of an H-1B petition. This means that if an H-1B is hired there can be no displacement in an essentially equivalent position located in the same area of employment for a span of almost one year. The 180 day period may not include any period of on-site or virtual training of the H-1B by employees of the employer. All H-1B employers must attest they will not at any time replace a U.S. worker with one or more H-1Bs. Modifies INA 212 (n)(1)(e) Given the dynamic nature of modern business, it is difficult for employers to make this attestation. This may have the impact of prohibiting H-1B hires needed to expand one business unit if the employer has lay-offs in other parts of the business. Further, if an employer did attest to non-displacement, they would have to be able to show a nondisplacement did not occur. This could involve having to show a voluntary job departure or, for instance, whether two jobs are essentially equivalent. These factors could easily lead an employer to place work overseas, as opposed to having to maneuver a much more cumbersome process in the United States. An employer may not place, outsource, lease or otherwise contract for the services or placement of an H-1B with another employer, regardless of the physical location where such services will be performed, unless a waiver is obtained from the government. DOL must publish waiver rules subject to notice and comment. The DOL may grant a waiver in 7 days if the employer with which the H-1B is placed: Does not intend to replace a U.S. worker with one or more H-1B workers; A waiver would have to be obtained first by an employer from the government before a placement could be made. If a waiver were ultimately granted, this would nonetheless delay the time in which an employer could place work possibly slowing down projects, business and even innovations. If a waiver is not granted, no placement could be made. Page 2
3 Has not displaced and does not intend to displace a U.S. worker 180 days before and after the H-1B placement; The H-1B will be principally controlled and supervised by the petitioning employer; and, The placement of the H-1B is not essentially labor for hire for the employer with which the H-1B will be placed. Waivers will be difficult given no employer can see the future. Section 101 H-1B Wage & Working Condition & Wage Methodology Requirements Modifies INA 212(n)(1)(E) *which today only applies to H-1B dependent employers outplacing nonexempt H-1Bs Requires employers to pay the higher of the: (1) Locally determined prevailing wage for all workers in the occupational classification in the area of employment; (2) The median wage for all workers in the occupational classification in the area of employment; and, (3) Level 2 wages found in the most recent Occupational Employment Statistics survey. Employers must continue to provide working conditions for an H-1B that will not adversely affect the working conditions of workers similarly employed by the employer or by an employer with which the H-1B is placed. An employer is required to disclose the wage determination methodology in the labor condition application, beyond the number of workers sought; the occupational classification; the wage rate and conditions under which they will be employed. Puts in place a three-tier wage system, as opposed to today s four-tier wage system. Eliminates entry level prevailing wage for H-1Bs. In reality this inflates wage. Employers must not treat similarly situated U.S. workers and foreign national workers differently and yet this would put employers in a position of paying many foreign national workers more than similarly situated U.S. workers. Page 3
4 Modifies INA 212(n)(1)(A) Section 102 H-1B Advertising and Recruiting Section /50 H-1B & L-1 Rule Section 102 W-2 Wage and Tax Statement Submission Section 103 Expanded LCA Review and Investigation Prohibits advertising only for H-1Bs or giving preference to H-1Bs. Prohibits employers from primarily recruiting H-1Bs or those that will become H-1Bs. Modifies INA 212(n)(1)(G)(ii) If an employer has 50 or more employees in its U.S. workforce, no more than 50% can be on H-1B and/or L-1 visas. An employer cannot restructure its organization to avoid this rule. Modifies INA 212(n)(1)(G)(ii) An employer must submit an IRS Form W-2 individual wage report with USCIS the period the employer previously employed one or more H-1B employees. Modifies INA 212(n)(1)(G)(ii) DOL may review LCAs for completeness, indicators of fraud or misrepresentation of material fact, as opposed to just reviewing for completeness and obvious inaccuracies as under current law. The bill, different from past versions, removed the word clear indicators. DOL s maximum period for review of LCAs is extended from 7 to 14 days. Employers cannot primarily recruit H-1Bs or those that will become H-1Bs. If violated the employer would not be able to petition for H-1B or L-1 visas. Generally, these provisions means that DOL could decide that similarities or differences in the employer s LCA require an in-depth review or that unintentional technical errors Page 4
5 Section 104 H-1B Cap Visa Allocation DOL may initiate its own investigation of LCAs if it finds indicators of fraud or misrepresentation of material fact, as opposed to initiating investigations only on formal complaints, with fines significantly increasing. Modifies INA 212(n)(1)(K) New, the bill prioritizes the annual allocation of the 65,000 H-1B visa cap. Specifically, the Department of Homeland Security (DHS) shall consider H-1B petitions in the following order: F-1 graduates who earned a U.S. STEM advanced degree while physically present in the United States from an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 that has been accredited by an accrediting entity recognized by the Department of Education (DOE). Petitions certifying that the employer will pay the H-1B Level 4 wages in the occupational classification found in the most recent Occupational Employment Statistics survey. F-1 graduates who earned a U.S. advanced degree while physically present in the United States from an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 that has been accredited by an accrediting entity recognized by the DOE. Petitions certifying that the employer will pay the H-1B Level 3 wage in the occupational classification found in the most recent Occupational Employment Statistics survey. constitute evidence of fraud or material misrepresentation. Employers hiring U.S. STEM advanced degree graduates who are paid at the highest wage level 4 get priority for the 65,000 H-1B cap, if the degree was earned at a school that qualifies under the bill. The new preference system favors U.S. highly educated workers who earn STEM degrees and are highly paid. The new system would disadvantage those earning foreign degrees even if they were graduates of top universities. Those foreign degrees paid at the highest wage levels would fare better. Additionally, fewer of the 65,000 visas would be available for bachelor s degrees. Page 5
6 F-1 graduates who earned a U.S. STEM bachelor s degree while physically present in the United States from an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 that has been accredited by an accrediting entity recognized by the DOE. F-1 graduates who earned a U.S. bachelor s degree while physically present in the United States from an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 that has been accredited by an accrediting entity recognized by the DOE. H-1B holders working in occupations listed in Group 1 of the Department of Labor Schedule A of occupations for physical therapists and professional nurses. Petitions filed by employers meeting a criteria of good corporate citizenship and compliance with immigration laws. This would include an employer with a valid E-Verify identification number that is not under investigation by any federal agency for violation of immigration or labor laws, and has not been in the preceding five years; that during the preceding 3 years had at least 90 percent of its H-1B petitions filed approved, and that filed immigrant petitions for at least 90 percent of employees on H-1Bs during the preceding 3 fiscal years. Any remaining petitions. The bill defines the field of STEM as one included in the DOE s Classification of Instructional Programs taxonomy within the Page 6
7 summary groups of computer and information sciences and support services, engineering, biological and biomedical sciences, mathematics and statistics, and physical sciences. Modifies INA 214(g)(3) Section 105 Institutions of Higher Education To qualify for cap exemption, H-1Bs must be employed by an institution of higher education. This is different than today where an H-1B qualifies for cap exemption if employed at an institution of higher education. Section 106 Elimination of Degree Equivalency Section 107 LCA Filing Fee Modifies INA 214(g)(5) A new provision modifies the definition of specialty occupation requiring an H-1B to have a bachelor s or higher degree in the specific specialty directly related to the occupation. An H-1B may no longer qualify through a degree equivalency (i.e. education and experience). While the bill still allows for a foreign degree equivalent, it no longer allows for education and experience as an equivalent to the completion of such degree. Modifies INA 214(i) DOL may impose a reasonable filing fee for LCAs. The fees will be used by DOL for administration, oversight, investigation and enforcement of the H-1B program. Modifies INA 212(n) Employers that rely on the education and experience equivalency, likely many working in trades, will be impacted by this proposed change. A new fee for employers to consider when hiring H-1B workers. The fee amount is not expressed in the legislation. Page 7
8 Section 108 DOL Subpoena Authority Section 109 Limit on Extension of H-1B DOL may issue subpoenas and seek injunctive relief to ensure compliance with H-1B requirements. Modifies INA 212(n)(2) A new provision limits the authorized admission of an H-1B to not exceed three years, unless the H-1B is a beneficiary of an approved immigrant petition, in which case an extension of up to three additional years is allowed if the total period of admission does not exceed six years. The exception would be for additional extensions beyond the sixth year allowed under AC21 for those individuals waiting in the green card backlogs. Modifies INA 214(g)(4) Unless an employer is sponsoring an H-1B for a green card, the H-1B s period of admission is limited to three years. For temporary work, a three year H-1B does not work across all industries. For instance, while a three year H-1B could work for an IT company where the work flows that way, it does not work for a hospital training doctors as a medical internship and residency takes longer than three years to complete. Section 110 Elimination of B-1 in Lieu of H-1B Section 111 DOL Audit Authorities and Investigations Eliminates B-1 in lieu of H-1B. Modifies INA 214(g) The period of time to file an H-1B complaint is extended from 12 to 24 months. DOL does not need to have reasonable cause to investigate a complaint. Likely to result in more audits on H-1B employers. Page 8
9 Section 112 Increased DOL Penalties Section 112 H-1B Benefits DOL may conduct compliance surveys and annual compliance audits without cause. DOL must conduct annual compliance audits of at least 1 percent of H-1B employers and of H-1B dependent employers with more than 100 employees located in the U.S. Modifies INA 212(n)(2)(A) Imposes mandatory penalties for violations of H-1B law. DOL shall impose up to a $5,000 penalty/violation for any violation of the H-1B requirements. Current law is up to a $1,000 penalty/violation of certain obligations. DOL shall impose up to a $25,000 penalty for willful violation, up from $5,000 today. An employer that unlawfully displaces or replaces a U.S. worker shall be penalized up to $150,000/violation, up from $35,000 today. It is a violation to retaliate against any current employee, former employee or applicant for employment. Modifies INA 212(n)(2)(C) An employer must offer an H-1B the same benefits as U.S. workers, including: On average, about a five-fold increase in penalty amounts for violations of the bill s H-1B provisions. Page 9
10 (1) The opportunity to participate in health, life, disability and other insurance plans; (2) The opportunity to participate in retirement and savings plans; and, (3) The cash bonuses and non-cash bonuses like stock options. DOL may fine up to $5,000/violation. Modifies INA 212(n)(2)(C) Section 112 Prohibition on Retaliation Retaliation against a current employee, former employee, or applicant for employment because an employee disclosed information or cooperated with requirements of the law will be a violation of the law. Modifies INA 212(n)(2)(C) Section 113 Liability to Employees Section 114 Initiation of DOL Investigations Employers that violate any H-1B requirement shall be liable to the employee harmed by such violation for lost wages and benefits. Modifies INA 212(n)(2)(E) Eliminates the requirement that the identity of the whistleblower is known to the DOL Secretary, but the requirement remains the Secretary must receive specific, credible information from a source who is likely to have knowledge. Allows employees of DOL to be a credible source to initiate investigations. DOL can initiate an investigation on credible anonymous tips, even if those tips do not reveal a pattern or violations. The tip may come from a DOL employee or officer or from the DHS Secretary s office. Page 10
11 Allows DOL to initiate an investigation if information was obtained from a non-immigration related investigation. Different from today s law, USCIS Director shall provide information to DOL regarding any information contained in the materials submitted by H-1B employers as part of the adjudication process that indicates the employer is not complying. The statute of limitations to initiate an investigation increases from one to two years. A determination to initiate an investigation is not subject to judicial review. DOL has 120 days to provide notice of an adverse determination. Eliminates the requirement that information provide reasonable cause to believe that employer has committed a willful failure, engaged in a pattern or practice or has committed a substantial failure. Unlike current law, allows information from credible sources about the number of workers sought, occupational classification, and wage rate to be a basis for an investigation. Modifies INA 212(n)(2)(G) Section 115 USCIS shall provide DOL with any information submitted by an employer in the H-1B materials that indicates that the employer is not complying with visa requirements for H-1Bs. DOL may initiate Page 11
12 Information Sharing Between DHS and DOL Section 122 Information Sharing with Employees and conduct an investigation and hearing after receiving such information. Modifies INA 212(n)(2)(H) On a written request from a former, current or prospective H-1B employee, the employer must provide the original (or certified copies) of all documents (petitions, notices and other written communication exchanged between the employer and DOL, DHS or other agency) related to the employee s petition, including communications with the DOL and other enforcement entities within 21 working days (as opposed to 10 working days in past bills) of receiving the request. Company may withhold sensitive financial information or proprietary information. Modifies INA 204 Section 122 GAO Report on Wage Classification Not later than one year after the date of enactment the bill a GAO report on accuracy and effectiveness of DOL s job classification and wage determination system must be issued. The report shall: (1) Address whether the system in place accurately reflects the complexity of current job types as well as geographic wage differences; and, (2) Make recommendations concerning necessary updates and modifications. Page 12
13 Modifies INA 204 Section 123 Notice of Rights to Employees Requires that if an H-1B or L-1 is issued inside or outside the U.S. that the appropriate issuing office (DOS/DHS) must provide H and L workers a brochure outlining employer obligations and employee rights, including labor and wage protections, contact information to make a federal complaint or get help and a copy of the petition for the position submitted to the government. Modifies INA 214 Section 124 Additional DOL Resources Section 201 Waiver of Outplacement for L-1 & Prohibition of Replacement of U.S. Workers Authorizes DOL to hire up to 200 additional employees to administer, oversee, investigate and enforce the H-1B program. Funds will come from the new LCA filing fee. An employer may not employ an L-1 worker for a cumulative period exceeding one year who will be stationed primarily at the worksite of an employer other than the petitioning employer or its affiliate, subsidiary, or parent, including pursuant to an outsourcing, leading or other contracting agreement, unless an employer receives a DOL waiver. DOL may provide a waiver in seven days if the employer with which the L-1 would be placed: Does not intend to replace a U.S. worker with one or more L-1 workers; A waiver would have to be obtained first by an employer from the government before a placement could be made. If a waiver were ultimately granted, this would nonetheless delay the time in which an employer could place work possibly slowing down projects, business and even innovations. If a waiver is not granted, no placement could be made. Waivers will be difficult given no employer can see the future. Page 13
14 Has not displaced and does not intend to displace a U.S. worker within 180 days before and after the L-1 placement; The L-1 will be principally controlled and supervised by the petitioning employer; and, The placement is not essentially an arrangement to provide labor for hire. INA 214(c)(2)(F) Section 201 Specifics on Prohibition of Replacement of U.S. Workers Section 202 & 203 New Office L-1 Not at any time may an employer replace a U.S. worker with an L-1. An employer may not displace a U.S. worker within 180 days before or after the placement of an L-1. INA 214(c)(2)(F) Puts forward additional evidentiary and substantive criteria for new office L-1 applications and conditions of the approval of the extension regarding the petitioner meeting the staffing requirements. DHS must work with DOS to verify the existence of a company or office in the U.S. or in a foreign country. INA 214(c)(2) Section 204 Gives DHS the authority to initiate its own investigation into any employer of L-1s with regard to compliance with the L-1 program. DHS may initiate an investigation if it receives specific, credible Page 14
15 Investigation and Complaints Against L-1 Employers information. The source may be anonymous and DHS is not required to disclose the source s identity to the employer. The time to receive information of an alleged violation is two years. DHS must provide notice to an employer of the intent to conduct an investigation unless it would interfere with the investigation itself and give the employer a chance to respond before beginning the investigation. DHS determination of whether to notify an employer is not reviewable in court. If DHS believes a reasonable basis exists to show noncompliance, then it must give the employer notice of the determination of noncompliance and the employer must have the opportunity for a hearing within 120 days of the determination. INA 214(c)(2) Section 204 DHS Audits of L-1 Employers DHS shall conduct annual compliance audits of not less than one percent of L-1 employers. DHS shall conduct annual compliance audits of each employer with more than 100 employees if more than 15 percent of the employer s U.S. workforce are L-1s. DHS shall make available to the public a summary or report of the findings of the audits. DHS may issue subpoenas and injunctions to ensure compliance. INA 214(c)(2) Page 15
16 Section 205 L-1 Wage Provisions & Working Conditions Section 205 W-2 Submission to DHS Section 206 L-1 Penalties Employers that have L-1s that work for a cumulative period in excess of one year are required to pay the L-1 worker the higher of: The locally determined prevailing wage for all workers in the occupational classification in the area of employment; The median wage for all workers in the occupational classification in the area of employment; and, Level 2 wages found in the most recent Occupational Employment Statistics survey Employer must offer the same benefits to L-1 employees as to U.S. workers like insurance plans, retirement and savings plans and cash bonuses, non-cash bonuses like stock options. DOL can fine up to $5,000 for violation of this requirement. Prohibits early termination penalties or liquidated damage provisions. The government will determine if any required payment is a penalty or liquidated damages under state laws. INA 214(c)(2) An employer must provide DHS with a copy of the W-2 tax form for each L-1 worker. INA 214(c)(2) If DHS decides that an employer has failed to meet a condition of the law or misrepresented a material fact DHS shall: Placing the three-tier wage system and benefit requirements on L-1s is a large change for U.S. employers as many multinational employers do not place L-1s on U.S. payroll. If this bill is ever enacted, employers would have to place L-1s on U.S. payroll severing home country payroll and offer the same benefits they offer to U.S. workers today to L-1 professionals. Page 16
17 Impose civil monetary penalties not to exceed $5,000/violation; Not approve any other nonimmigrant petition for one year; If DHS determines there is a willful violation, it shall impose a civil monetary penalty of up to $25,000/violation and DHS will bar approval of any other nonimmigrant petition for up to two years. The employer shall be liable to the employees for lost wages and benefits. INA 214(c)(2) Section 207 Prohibition on Retaliation An employer commits a violation by taking retaliatory action against a former or current employee or an applicant for employment because an employee disclosed information or cooperated with requirements of the law. INA 214(c)(2) Section 208 Blanket L Visa Program Modifications Section 210 Shifts adjudication of the blanket petition filed in conjunction with an L-1 visa application to DHS and away from DOS. DHS will have the discretion to permit the expedited processing of such petitions by DHS. INA 214(c)(2)(A) Specialized Knowledge would only apply to: Page 17
18 Specialized Knowledge Definition An individual whose advanced level of expertise and proprietary knowledge of the employer s product, service, research, equipment, techniques, management or other interests of the employer are not readily available in the U.S. labor market; If the individual has knowledge that is clearly different from those held by others employed in the same or similar occupations; and, Would not apply to individuals who have general knowledge or expertise which enables them to only produce a product or provide a service. Proprietary Knowledge criteria: Petitioner s ownership of patent products and copyrights does not establish an employee s specialized knowledge. Must be key individual with knowledge critical for performance job duties. Employer s different procedures are not proprietary knowledge unless the entire system and philosophy behind them is clearly different from those of other firms and procedures are relatively complex and protected from disclosure to competition. INA 214(c)(2)(B) Page 18
19 Section 209 Reporting Requirements Under the bill DHS and DOS are required to submit an annual report about the number of H-1B, L-1, O, P and Q petitions and visas that have been approved, denied, withdrawn or waiting for final action. Both departments are required to report on the total number of H-1B and L-1 workers in the United States. Specifically DHS must submit a report about: H-1B and L-1 countries of origin, occupations, education levels and compensation levels; A list of H-1B and L-1 employers and the number of petitions filed, the occupational classifications, the number of green cards filed by the employer; A list of all employers with more than 15 percent H-1B or L-1s in its U.S. workforce; A list of all employer with more than 50 percent H-1B or L-1s in its U.S. workforce; A breakdown of H-1Bs and L-1s by gender; and A list of all employers granted a waiver for outplacement. INA 214(c)(8) Section 212 Effective Date Provisions in this bill are effective on enactment unless otherwise mentioned and apply to petitions and application filed on or after the date of enactment. Page 19
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