H-1B visa

The H-1B visa program allows American companies and universities to employ foreign scientists, engineers, programmers, and other professionals in the United States.

The program has been criticized domestically for allegedly displacing American workers, as a form of corporate welfare[1] and by the source countries for encouraging brain drain. However, advocates claim the program (and similar ones operated by other technologically-advanced countries) provides an incentive for companies not to move their operations abroad. Earnings remitted by foreign workers are a major source of income for some developing countries, easing their burden of debt.

US policy on maximum duration

In theory, the maximum duration of the H-1B visa is six years (ten years for exceptional Defense Department project-related work). H-1B holders who want to continue to work in the U.S. after six years, but who have not obtained permanent residency status, must remain outside of the U.S. for one year before reapplying for another H-1B visa.

There are generally 2 exceptions to the 6 year duration of the H-1B visa:

• If a visa holder has submitted an I-140 petition or a labor certification prior to his 5th year anniversary of having the H-1B visa, he is entitled to renew her H-1B visa in 1 year increments until there is a decision on her permanent residence.

• If the visa holder has an approved I-140 petition after the 5th year anniversary, but is unable to initiate the final step of the green card process due to priority date issues, he may be entitled to a 3 year extension of his H-1B visa. This exception originated with the American Competitiveness in the Twenty-First Century Act of 2000^[2].

The reality is different. The vast majority of H-1B visa holders intend to stay permanently in the United States. In countries like India, the H-1B is regarded as the first step towards getting a US green card. Almost all H-1B visa holders from third world countries apply for permanent residency status within a year or two of arriving in the United States.

Quotas and changes in quotas

The number of new H-1Bs issued each year in the United States is subject to an annual quota. This annual quota has had a significant impact on the high tech industry. It has generally been set at 65,000 visas per year, with some exceptions for workers at exempt organizations like universities and nonprofits. During the early years of this quota, the early 1990's, this quota was rarely actually reached. By the mid-1990's, however, the quota tended to be filled each year on a first come, first served basis, resulting in new H-1Bs often being denied or delayed because the annual quota was already filled. In response to the very hot high-tech market of the late 1990s, the quota was increased first to 130,000 and then, in 2000, to 195,000 visas per year. This increase in the quota seemed to play a role in oversaturating an already softening high-tech job market. During the years the quota was 195,000, it was never reached, and the availability of high-tech jobs in the USA plummetted as there was just too much competition for positions.

In 2005, the quota reverted to 90,000 when the temporary increase passed by Congress in 1999 expired. Since then, the quota is again filling up rapidly every year, making H-1Bs again increasingly hard to get. More recently, the basic quota was left at 65,000 but with an additional 20,000 visas possible for foreign workers with US advanced degrees. Of the 65,000 total, 6,800 are reserved for citizens of Chile and Singapore under free trade agreements with those countries. Outside of the 65,000 quota, another 10,500 visas annually are available to Australian citizens under a similar but more flexible program, the E-3 visa program.

Controversies and criticisms

Historically, H-1Bs have sometimes been described as indentured servants, and while the comparison is not entirely accurate, it had some validity prior to the passage of American Competitiveness in the Twenty-First Century Act of 2000. Although the USA generally requires short- and long-term visitors to disavow any ambition to seek the green card (permanent residency), H-1B visa holders are an important exception in that the H-1B may legally and openly be used as a steppingstone to the green card under what is called the doctrine of dual intent. H-1B visa holders must generally (with some exceptions) be sponsored for their green cards by their employers. In the past, the sponsorship process has taken several years, and for much of that time the H-1B visa holder was unable to change jobs without losing their place in line for the green card. This created an element of enforced loyalty to an employer on the part of an H-1B visa holder. Critics alleged that employers liked this enforced loyalty because it reduced the risk of the H-1B employee leaving to go work for a competitor, and put American citizens at a disadvantage in the job market, because the employer had less assurance that the U.S. citizen will stay at their job for an extended period of time.

Worker Protection and Law Enforcement

Under the regulations, H-1B Labor Condition Applications (LCAs) are a matter of public record. Corporations hiring H-1Bs are required to make these records available to any member of the public who requests a look at them. Copies of the relevant records are also available from various web sites, including the Department of Labor. The laws which set up the H-1B program contain various provisions which appear to be designed to prevent the program from being used to import workers for the purpose of breaking a strike, or for the purpose of replacing US citizen workers. Unfortunately, there has been very little attempt to enforce these provisions, especially those parts which require that the H-1B visa holder be paid the "prevailing wage".

Examination of the LCA data base suggests that, contrary to law, the majority of H-1B workers are being paid substantially less than the "prevailing wage", usually 30-40% less. In addition, the public records show many cases in which H-1B holders are being paid less than one-third of what a US worker is paid.

Many companies avoid filing LCAs and the appearance of hiring vast numbers of H1-B employees by hiring through employment agencies. The H1-B holder is then a permatemp and typically paid even less, as the agency offered a low bid to the paying company and also takes a large cut of the H1-B holders salary.

Recent changes to US law

The American Competitiveness in the Twenty-First Century Act of 2000 and the Department of Labor PERM system for labor certification erased most of the earlier claimed arguments for H-1B's as indentured servants during the green card process. With PERM, labor certification processing times have been reduced to less than 60 days. Due to the changes in the law, the H-1B employee is free to change jobs six months after their I-140 application has been approved by USCIS, even if their I-485 application is backlogged in processing. In some cases, if those labor certifications are withdrawn and replaced with PERM applications, processing times will improve but the person will also lose their favorable priority date. In those cases, employers' incentive to attempt to lock in H-1B employees to a job by offering a green card is reduced, because the employer bears the high legal costs and fees associated with labor certification and I-140 processing but the H-1B employee is still free to change jobs.

However, many people are ineligible to file I-485 at the current time. Thus, they may well still be stuck with their sponsoring employer for many years. There are also many old labor certification cases pending under pre-PERM rules.

Similar Programs

In addition to H1-B, there are a variety of other programs which allow foreign workers to come into the US for some period of time. As the H-1B quotas are used up, and as pressure to crack down on perceived abuses of H-1B has grown, corporations have shown more interest in these other programs.

L-1 visas are issued to foreign employees of a corporation. Historically, L visas were used by companies like IBM to bring in foreign workers for training purposes. Under recent rules, the foreign worker must have worked for the corporation for at least one year prior to getting the visa. There is no requirement to pay prevailing wages. For Canadian residents, a special L visa category is available.

TN-1 visas are part of the NAFTA treaty, and are issued to Canadian and Mexican citizens. ^[3] Formerly, they were also issued to third country citizens who had obtained permanent residency in Canada. This procedure is called "touching base".

W visas are issued to residents of Singapore under the Singapore free-trade treaty.

E visas are issued to residents of Australia under the Australia free-trade treaty.

H1B1 visas are issued to residents of Chile under the amended NAFTA treaty.

When reading this list of visas you should be aware that the rules and regulations of who may apply for them changes every few years. Keeping current on visa law could easily be a full-time job. One recent trend in work visas is that various coutries attempt to get special preference for their nationals as part of treaty negotiations. (Poland allegedly asked for 50,000 Green Cards as the price of supporting the recent Iraq War.^[4]) Another trend is for changes in immigration law to be embedded in large Authorization or Omnibus bills, so that individual politicians do not have to stand up and vote to give away American jobs. A third trend involves large numbers of unemployed Americans with excellent computer and database skills who have suddenly taken an interest in politics.

Common misconceptions about H-1B

There are many popular misconceptions about H1B workers.

Myth 1: H-1B workers pay no US taxes, or are paid in their home country to avoid US tax.

H-1B workers are supposed to pay the same taxes as any other US resident.^[5] Any person who spends more than 183 days in the US in a calendar year is a tax resident and is required to pay US taxes on their worldwide income. From the IRS perspective, it doesn't matter if that income is paid in the US or elsewhere.

Myth 2: H-1B workers do not pay social security taxes.

H-1B workers pay the same taxes as any other person residing in the US, including Social Security and Medicare, though they are not eligible to any Social Security or Medicare unless they retire in the US, which by the very definition of the temporary nature of the VISA, is unlikely.^[6]

Myth 3: H-1B workers are given living allowances that are free of taxes.

H-1B workers pay the same taxes as any other person residing in the US. If an H1-B worker is given a living allowance, it is treated the same by the IRS as any other US resident.

Myth 4: H-1B workers are unable to change jobs, and employers can exploit this as H1Bs are effectively 'indentured servants'.

Since the signing of the American Competitiveness in the 21st Century Act in 2000, an H-1B holder may change employers at any time by filing a H-1 transfer. The H-1B holder can commence at the new employer immediately rather than having to wait for the USCIS to process the transfer. This limits the ability of an unscrupulous employer to exploit employees on H-1B visas as 'indentured servants'.

If an employer sponsors an H-1B for a green card, then there is a period of time for visa processing during which the H1B holder cannot change employment without forfeiting the green card process. They would however retain H-1 status. As of late 2005, the time required for PERM labor certification approval and filing of an I-140 is approximately twelve months.

Myth 5: Employers can sue H-1B holders if they leave.

Suing employees for leaving is generally difficult under US labor laws, regardless of whether the employee is an H-1B holder, a permanent resident or a US citizen. Although any employer can make this threat, the legal history of employers who have attempted to sue or otherwise claim money from H-1B employees shows that such claims are rarely successful.

In 2001, San Mateo County Superior Court Judge Phrasel Shelton ruled in an H-1B employee's favor on the unfair competition statute and ordered the employer to drop restrictive language in its employee contracts. The H-1B employee in the case was awarded over $200,000 in fees and damages^[7]. In 2002 the employer appealed the decision and lost.^[8]

In addition, Department of Labor's H-1B regulations issued in 2001 prohibit employers from making an H-1B employee pay a penalty for quitting prior to an agreed upon date.

Myth 6: H-1B's can sponsor their own visa or have their own company on the side.

This is very rare. According to the USCIS ^[9]"H-1B aliens may only work for the petitioning U.S. employer and only in the H-1B activities described in the petition. The petitioning U.S. employer may place the H-1B worker on the worksite of another employer if all applicable rules (e.g., Department of Labor rules) are followed. H-1B aliens may work for more than one U.S. employer, but must have a Form I-129 petition approved by each employer."

References

1. ^ *American Competitiveness in the Twenty-First Century Act of 2000
2. ^ *IRS Publication 519 (2004), U.S. Tax Guide for Aliens
3. ^ *Mexican and Canadian NAFTA Professional Worker
4. ^ *Alien Liability for Social Security and Medicare Taxes
5. ^ *'Body shop' must pay fees in H-1B lawsuit
6. ^ *Appeal denied in H-1B visa case
7. ^ *H-1B Frequently Asked Questions
8. ^ *Poland, Iraq, and Visas

External links

• H-1B Special coverage from computerworld.com
• US Citizenship and Immigration Services site on H-1B visa Program
• List of the top employers in the US.. A bit dated but still an interesting list
• US Department of Labor Foreign Labor Database
• US Department of State information on H-1B visa
• US GAO Report on H-1B Problems, PDF format
• H-1B worker wins case
• H-1B information for doctors
• ImmiTips: H-1B information for all

Anti-H-1B websites

• ZaZona
• Rescue American Jobs
• H-1B Info
• Norman Matloff
• H1B Visa Scams
• An American Scam: How special interests undermine national security with endless 'techie' gluts