Date: Fri, 6 Feb 2009 21:08:00 -0800 From: Norm Matloff To: Norm Matloff Subject: Senate ties TARP aid to H-1B restrictions To: H-1B/L-1/offshoring e-newsletter The Senate voted today to place restrictions on the hiring of H-1Bs by banks that accept government bailout money. The legislation, which was proposed by Senators Grassley and Sanders as an amendment to the economic stimulus bill, would in its original form have imposed a flat ban on hiring of H-1Bs by the TARP-aided banks. It was weakened quite a bit (details below), and of course may not survive conference committee etc., but it certainly sends a strong message. The move was sparked by an AP story that ran in many major newspapers, investigating usage of H-1Bs by banks that had accepted bailout funds. The AP places restrictions on redistribution of its articles, so I will not enclose it here, but you can read it at, for instance, http://news.yahoo.com/s/ap/20090201/ap_on_bi_ge/bailout_foreign_workers One of the good things about that article was that it noted that paying H-1Bs below-market rates can be done perfectly legally. Here is an excerpt from the article: * Foreigners are attractive hires because companies have found ways to pay * them less than American workers. * Companies are required to pay foreign workers a prevailing wage based on * the job's description. But they can use the lower end of government wage * scales even for highly skilled workers; hire younger foreigners with * lower salary demands; and hire foreigners with higher levels of * education or advanced degrees for jobs for which similarly educated * American workers would be considered overqualified. * "The system provides you perfectly legal mechanisms to underpay the * workers," said John Miano of Summit, N.J., a lawyer who has analyzed the * wage data and started the Programmers Guild, an advocacy group that * opposes the H-1B system. I've explained elsewhere the details of these and other loopholes. Needless to say, the industry lobbyists were quick to react. Note that the vanguard of the industry lobbyists includes the American Immigration Lawyers Association (AILA), who have obvious vested interests. Indeed, according to the immigration lawyers newsletter Immigration Daily, for many law firms H-1B and employment-based (EB) green cards form the lion's share of their business. I'm enclosing below the press release from the AILA. As always, the AILA press release cites work by the National Foundation for Public Policy, a one-man organization run by Stuart Anderson, who is hardly an unbiased researcher. He's been making a living writing articles supporting the H-1B program since the mid-1990s, and was the author of the lengthy 1997 report by the industry lobbying group Information Technology of America, which formed the basis for the doubling of the H-1B cap enacted by Congress in late 1998. Anderson later worked as a Senate staffer, and was the author of that 1998 legislation, and then of a second act increasing the cap in 2000. Though he does not say who his present employer (funder) is, the fact that the lobbyists who quote him the most are immigration attorneys would seem to point to the American Immigration Lawyers Association or their American Immigration Law Foundation as his main funder. Anderson's job creation claim comes from a blatant statistical reasoning error. See http://heather.cs.ucdavis.edu/Archive/NFAP2.txt for details. The industry lobbyists love to portray any restriction on H-1B as blocking industry's ability to hire "the best and the brightest" from around the world. I strongly support bringing in outstanding talent, and have personally acted on that conviction in a number of ways, but as I have shown in my writings, the fact is that only a tiny percentage of H-1Bs are of that caliber. And if a bank does find someone of outstanding talent, it can hire the person under the O-1 visa program. Now, what effect would the measure have if it survives the political process? I have not seen the exact text yet, but according to press reports the provision would extend to all TARP-aided banks the rules now in force for H-1B-dependent employers. The two main features of those rules are (a) that the employer must recruit Americans for a position before filling it with an H-1B and (b) employers may not hire H-1Bs during the period of 90 days before and 90 days after a layoff. Restriction (a) is not quite as strong as it sounds. A similar provision in EB green card law is full of loopholes, as the infamous YouTube videos demonstrated so dramatically; see http://heather.cs.ucdavis.edu/Archive/YouTubeVideosH1B.txt There is a little-known technical difference between the American recruitment requirements in H-1B-dependent and EB law, with the H-1B-dependent version being somewhat more effective. Also, there is an exemption in the H-1B dependent rules for workers who earn at least $60,000 or have a Master's degree. All in all, the numerical impact of the Sanders/Grassley amendment would probably be limited. But it is certainly worthwhile. The provisions here were part of the Durbin/Grassley bill in the last Congress. In addition, that bill addressed the real heart of the problems with H-1B and EB green cards, by setting a definition of prevailing wage that would reflect reality. Due to these provisions--U.S. recruitment, anti-layoff and prevailing wage--I strongly endorsed the bill. (It also had some other parts that I felt were not important.) A Computerworld article on today's vote is enclosed below, in addition to the AILA press release. For the AP story on the vote, see www.forbes.com/feeds/ap/2009/02/06/ap6020618.html Norm www.computerworld.com/action/article.do?command=viewArticleBasic&taxonomyName=knowledge_center&articleId=9127552&taxonomyId=1&intsrc=kc_top Computerworld Senate approves 'strict' rules on hiring H-1B workers Bill sought to bar firms receiving bailout money from hiring foreign workers but set restrictions instead By Patrick Thibodeau February 6, 2009 (Computerworld) The U.S. Senate agreed on Friday to set restrictions on the hiring of H-1B workers by financial services firms that receive federal bailout funds, but it didn't bar the hiring of foreign workers as proponents had sought. U.S. Sens. Bernie Sanders (I-Vt.) and Chuck Grassley (R-Iowa) had proposed legislation this week to prohibit any firm that received money under the Troubled Assets Relief Program (TARP) from hiring foreign workers. The amendment passed today, part of the stimulus plan being debated in the Senate, didn't include a blanket restriction on H-1B use and instead set a series of strict standards on H-1B hiring. The Senate's amendment would require companies receiving TARP funds, mostly financial services firms with a lot of bad mortgages, to comply with hiring rules set for "H-1B dependent" firms -- those with more than 15% of their workers on H-1B visas. Any firm receiving TARP funds will be automatically considered H-1B dependent, regardless of the percentage of H-1B workers on the payroll. The H-1B dependent designation subjects employers to a number of provisions, including a good faith effort to hire U.S. workers first. Sen. Grassley said in a statement late Friday that the modified bill means companies receiving TARP funds would still be able to hire H-1B visa holders, but would have to comply with the "H-1B dependent"-employer rules "which include attesting to actively recruiting American workers; not displacing American workers with H-1B visa holders; and not replacing laid off American workers with foreign workers." "Hiring American workers for limited available jobs should be a top priority for businesses taking taxpayer money through the TARP bailout program," Sen. Grassley said. "With the unemployment rate at 7.6 percent, there is no need for companies to hire foreign guest workers through the H1-B program when there are plenty of qualified Americans looking for jobs," Sen. Grassley said. Sen. Grassley and Sen. Sanders both argue that U.S. firms have a moral obligation to protect U.S. workers' jobs. "[H-1B dependent companies] have to make very, very strict non-displacement attestations for 90 days before you employ an H-1B and for 90 days afterward as well," said John Nahajzer, a corporate immigration attorney and managing partner at Maggio & Kattar PC in Washington D.C. He added that if the employer finds any workers within this 90-day window before and after the H-1B worker is hired, then they are required to terminate the H-1B worker. Today's amendment may be tougher than the existing law. There are now exceptions to the H-1B dependency rule for foreign workers who are paid at least $60,000 in base wages or who have advanced degrees -- but those exceptions don't appear in the amendment. Nahajzer said he believes companies affected by this proposed law would be unlikely to hire H-1B workers. Nahajzer said the amendment is essentially a ban on hiring H-1B workers by TARP receiving firms, "because it's virtually impossible for [the] non-displacement provisions to be met by any company, much less the banks, which have been laying people off left and right." The fate of this H-1B amendment rests on the fate of the stimulus bill before the Senate today, and if that's approved it will head to a conference where other changes are possible. http://www.prweb.com/releases/Economy/Stimulus/prweb1971974.htm Congress Takes a Wrong Turn on Way to Stimulus The American Immigration Lawyers Association (AILA) believes Congress took a disturbing step backwards today - to an era of employment protectionism. Washington, DC (Vocus) February 6, 2009 -- The American Immigration Lawyers Association (AILA) believes Congress took a disturbing step backwards today - to an era of employment protectionism. Adopting by voice vote an amendment by Senators Sanders (I-VT) and Grassley (R-IA) - who like to frame issues through an "us versus them" lens - the Senate caved to an old reactionary instinct: when times get tough, turn inward, put on the blinders, and hunker down. Unfortunately, we know empirically that this instinct is deeply counterproductive to economic growth and creates a climate of jingoistic divisiveness. The Sanders-Grassley amendment that was originally filed made no pretense about the objective: it barred TARP fund recipients from hiring foreign workers under the H-1B program for one year. In part, we suspect, because of the ugly optics surrounding such a blatantly protectionist message, the amendment was subsequently dressed up with some qualifiers and legal niceties. But the net effect of the amendment that ultimately passed is the same: the financial institutions who receive funding under the program will be hard pressed to hire any foreign nationals (or extend the visas of currently employed foreign workers) for a 2-year period. A March 2008 National Foundation for American Policy report (NFAP report) has shown that for every H-1B position requested by an S&P 500 U.S. technology company, overall employment at the company increased by five workers. The report also found that among companies in the study sample experiencing layoffs, for every H-1B position requested, total employment was estimated to be two workers more than it otherwise would have been. Instead of seeing the current economic calamity as a global problem and immigrants as part of the collective solution, the Senate unwisely chose to restrict the financial industry's access to top-flight global talent who can help create jobs for U.S. workers. In these difficult economic times, we cannot afford knee-jerk, fear driven policies that will stymie growth. Our nation's capacity to funnel the world's diverse talent pool into a highly productive economic engine is a central reason that we are the wealthiest nation in history. AILA calls on Congress to adopt forward-looking policies that embrace our status as the preeminent landing spot for the world's best and brightest. It is time to turn our back on short-sighted, insular policies, not on the world's highest achievers who can help lift us from our economic malaise. The American Immigration Lawyers Association is the national association of immigration lawyers established to promote justice, advocate for fair and reasonable immigration law and policy, advance the quality of immigration and nationality law and practice, and enhance the professional development of its members. Contact George Tzamaras 202-507-7649 gtzamaras @ aila.org