You have likely seen several reports in the news and online regarding the Trump Administration’s plans to alter employment-based visa programs, including the H-1B and L-1 visa programs. In the first week of February, several sources started reporting on a “leaked draft Executive Order” relating to the H-1B program. There also have been reports on proposed reform acts in Congress, including the Protect and Grow American Jobs Act, the H-1B and L-1 Visa Reform Act of 2017, and the High-Skilled Integrity and Fairness Act of 2017. The reporting in this regard has been politically tailored and has created significant uncertainty among those currently on work visas.

The leaked draft Executive Order has not been authenticated by the government, and has not been signed by the President. Further, the bills introduced in Congress are conflicting and none of them are scheduled for a Congressional vote. Nonetheless, many news sources are misconstruing the contents of these potential changes to the work visa programs, particularly as they relate to the annual H-1B Cap lottery. We have reviewed these proposed changes and hope to clarify media reports.

Draft Executive Order

Our firm has obtained and reviewed a copy of the purported draft Executive Order, and it proposes no immediate changes to the H-1B or L-1 visa programs. Rather, if signed by the president, it would (1) request that the Secretary of Homeland Security propose alternatives to the H-1B cap lottery, (2) implement site visits to H-1B and L-1 visa employers, and (3) commission an investigation into any potential harm to American workers caused by the H-1B and L-1 visa programs.

Significantly, it does not call for the Secretary of Homeland security to propose regulation changes to the H-1B Cap process, only to brainstorm potential changes.

Any proposed regulation, including those proposed in response to an Executive Order, must be set for public notice and comment and must be factually supported to accomplish an end goal. That comment period can range from 30 to 180 days depending on the complexity of the regulation. After the notice and comment period and before the regulation can be made effective, the administrative agency must review the data, evidence and comments submitted and determine that the proposed regulation will solve the problem identified.

Again, there have been no recent Executive Orders relating to H-1B or L-1 visas. Even if the purported draft Executive Order were signed, it would not immediately affect either the H-1B or L-1 visa programs, and we would not expect to see any changes in the form of proposed regulations for many months. This also means that the Fiscal Year 2018 H-1B CAP filing program should remain unchanged even if such an Executive Order were signed.

H-1B and L-1 Visa Reform Act of 2017

This act was recently introduced in the Senate, but has not been voted on or approved. If approved by Congress and signed by the president, it would make several substantive changes to the H-1B and L-1 visa programs. Some highlights are:

H-1B Changes:

• Alters required wages to be the highest of the prevailing wage in the market, the national median wage for all workers in the DOL labor classification, or the median wage for OES Skill level 2 for the position in the market.
• Employers will be obligated to post a LCA notices on their website.
• Increases the non-displacement attestations for non-exempt H-1B employees to one year, allocated as six months before and after hiring. This applies only to H-1B dependent employers.
• Prevents employers from employing more than 50% of their work force in H-1B status.
• Eliminates the H-1B Cap lottery and replaces it with a preference system, in the following descending order:
  • Applicants who have earned a U.S. master’s degree in a STEM field.
  • Applicants who are paid at the OES level 4 wage for the position.
  • Applicants who have earned a U.S. master’s degree in a non-STEM field.
  • Applicants who are paid at the OES level 3 wage for the position.
  • Applicants who have earned a U.S. bachelor’s degree in a STEM field.
  • Applicants who have earned a U.S. bachelor’s degree in a non-STEM field.
• Removes the ability to satisfy H-1B eligibility by substituting work experience for a degree, and requires an actual U.S. degree or foreign equivalent.
• Adds an LCA filing fee.
• Shortens the maximum validity period for an H-1B from six to three years in the absence of an approved I-140. H-1B holders are entitled to successive three-year extensions upon an approved I-140.

L-1 Changes:

• Prohibits L-1 employee outsourcing beyond one year, unless the employer can show that the outsourcing will not displace an American worker.
• Prohibits employers from replacing an American worker with an L-1 worker.
• Implements the same prevailing wage requirements as H-1B workers, stated above.
• Adds additional requirements to definition of “specialized knowledge” for L-1B petitions, namely that the specialized knowledge must be clearly different from similar employees, and must be more than general knowledge of a service or product.

The main impacts would be seen in the annual H-1B cap process, which prioritizes STEM degrees and higher wages. Employers also would be required to pay above-market wages to entry level H-1B employees and all mid-level H-1B employees in non-metropolitan areas. L-1 visa employers would be required to pay L-1 employees the prevailing wage under the same system, which would have similar but less pronounced impacts because L-1 employees are generally more experienced. H-1B employers will also be required to start the Green Card application process almost immediately upon hiring the foreign national, as the H-1B validity period is halved.

High-Skilled Integrity and Fairness Act of 2017

This Act was also recently introduced into the House of Representatives and has not been approved by Congress or signed by the president. It proposes the following changes:

• Alters the allocation of Employment-Based Immigrant Visas (Green cards) available per year, with the effect of allocating more to India and China.
• Permits the use of experience gained at the petitioning employer to satisfy experience requirements in PERM Labor Certifications.
• Alters the H-1B dependent employer and non-displacement attestation requirements. Currently, H-1B employers are not required to conduct recruitment or attest that they have not displaced American workers if less than 25% of their workforce is in H-1B status. Further, if the employer’s workforce is comprised of more than 25% H-1B workers, it is still exempt from the recruitment and non-displacement attestations if the H-1B employee earns more than $60,000 per year or has a master’s degree. This Act alters these requirements by decreasing the workforce percentage to 15% and increasing the exemption wage to $130,000 per year.
• Eliminates the OES Level 1 prevailing wage, causing employers to pay Level 2 wages for entry level positions.
• Eliminates the H-1B Cap lottery and replaces it with a wage priority system, as follows:
  • 200% of the Level three (highest 2/3 of surveyed wages) prevailing wages
  • 150% of the Level three (highest 2/3 of surveyed wages) prevailing wages
  • 200% of the Level two (mean of all wages) prevailing wages
  • 150% of the Level two (mean of all wages) prevailing wages
  • 200% of the Level one (lowest 2/3 of surveyed wages) prevailing wages
  • 150% of the Level one (lowest 2/3 of surveyed wages) prevailing wages
• All remaining petitions.
• Permits F-1 Visa students to apply for a Green Card.
• Eliminates the need to file H-1B amendments for job location changes.

Similar to the H-1B and L-1 Reform Act of 2017, the largest impact will be to the annual H-1B cap, which may cause a lower allocation to non-Silicon Valley-based H-1B employers. This act will also increase the prevailing wages for recent college graduates and entry-level positions.

Protect and Grow American Jobs Act

This Act was recently introduced into the House of Representatives and has not been approved by Congress or signed by the president. This Act also proposes to alter the recruitment and non-displacement attestations for H-1B employers. Currently, H-1B employers are not required to conduct recruitment or attest that they have not displaced American workers if less than 25% of their workforce is in H-1B status. Further, if the employer’s workforce is comprised of more than 25% H-1B workers, it is still exempt from the recruitment and non-displacement attestations if the H-1B employee earns more than $60,000 per year or has a master’s degree. This Act would eliminate the master’s exemption and raise the qualifying salary to $100,000.

These reform acts are nothing new. Similar bills are introduced every year, but few make it very far in the legislative process. The current political climate has simply pushed immigration reform into the news. There is clearly no consensus as to any particular reform because these three bills were simultaneously introduced by Congress. This decreases the likelihood of any one bill becoming law.

Lastly, do not believe everything you read on the Internet. If you or your employees have any concerns regarding changes to the immigration process, please do not hesitate to contact us.

Additional Information

Kutak Rock provides a full range of immigration law services, including work visas and green card application preparation and filing, as well as I-9 and employment-based visa compliance. If employers have questions or want to discuss the worker visa programs, they should contact their Kutak Rock attorney or a member of our Immigration Law practice.