The H-1B Program and PERM:
Implications for Science and Engineering Workers
By Philip Martin
Summary
Foreign workers in high-tech seem to inspire extreme assertions. Bill Gates of Microsoft said: The terrible shortfall in the visa supply for highly skilled scientists and engineers stems from visa policies that have not been updated in more than 15 years. We live in a different economy now, and it makes no sense to tell well-trained, highly skilled individuals--many of whom are educated at our top universities--that they are not welcome here." Intel chairman Craig Barrett urged the US government to staple a green card" or immigrant visa to the diplomas of foreign students who graduate from US universities with science and engineering degrees.
There are also many critics of the H-1B program. Some call H-1B visa holders high-tech Braceros, suggesting a link to a now discredited program that admitted almost five million Mexicans to work on US farms from the 1940s to the 1960s. Others emphasize that most of those admitted with H-1B visas are not the worlds best and brightest, a least as suggested by the complexity of the jobs they fill and the salaries they are paid.
The H-1B program was created by the Immigration Act of 1990 at a time of feared mis-matches in the US labor market: the assumption was that the US had sufficient workers, but too few were prepared to fill jobs in fast-growing new industries. The compromise in the H-1B program was to give US employers easy access to foreign professionals, but to cap the number of visas available at 65,000 a year. It took until the late 1990s before the number of H-1B visas was fully used, but since then all available visas have been used, including in the first hours they became available for FY08.
The US has a family-based immigration system, meaning that two-thirds of US immigrants receive visas to settle in the US because they have family members here who petitioned for their admission. Most of the 140,000 employment-related immigrant visas a year are available to foreigners whom US employers assert are uniquely qualified to fill particular US jobs. The sharp contrast between the easy attestation process to hire H-1B workers and the harder certification process to obtain immigrant visas for particular foreign workers and their families has been the source of considerable frustration.
The H-1B Program
The H-1B program permits US employers to employ foreigners in specialty occupations. As explained by the US Department of Labor, which is the first agency that deals with employer requests for H-1B workers, A specialty occupation requires the theoretical and practical application of a body of specialized knowledge and a bachelor's degree or the equivalent in the specific specialty, such as science, computing, or medicine (www.foreignlaborcert.doleta.gov).
H-1B visas are valid for up to three years, and may be renewed once; family members may accompany H-1B visa holders. They permit their holders to adjust status while in the US, that is, to change from guest worker to immigrant if the foreigner qualifies for an immigrant visa for family, employment, or other reasons. There is a limit of 65,000 H-1B visas a year, plus 20,000 for foreigners with MS and PhD degrees from US universities, plus an unlimited number of H-1B visas available to nonprofit institutions such as universities.
Admissions of H-1B visa holders, which count individuals each time they arrive in the US, were 432,000 in FY06, up from 407,000 in FY05; there were also 290 admissions under the Chile and Singapore FTAs (H-1B1), down from 500 in FY05. Because H-1B visa holders may stay in the United States six years, there may be 600,000 to 800,000 in the US at any one time. About half of H-1B visa holders are in computer-related jobs; by some estimates, half of the net new jobs in US software development are filled by H-1B visa holders. Seven of the 10 largest applicants for H-1B visas in FY06 were India-based IT companies, led by Infosys and Wipro.
The H-1B program is employer friendly in the sense that it allows most US employers to control the border gate. Employers attest to the US Department of Labor that they are paying the prevailing wage for the foreigner they are requesting permission to bring to the US (www.lca.doleta.gov/eta_start.cfm?actiontype=home&CFID=2094000&CFTOKEN=84470643), and DOL must normally approve their requests within seven days. Most guest worker programs, by contrast, require certification, meaning that the government controls the border gate and does not open it until the employer has engaged in supervised recruitment of local workers and satisfied other requirements, such as offering housing to foreign workers. The Bracero program and European guest worker programs in the 1960s were certification programs, as are the current the H-2A and H-2B programs for temporary foreign workers admitted to fill temporary US jobs.
Employers seeking H-1B workers file a Labor Condition Application (LCA) with Department of Labor that outlines the wages, duties, and working conditions of the job. Only H-1B dependent employers and willful violators of H-1B regulations must also make good-faith efforts to recruit U.S. workers and pledge not to displace a similar US worker 90 days before or after an H-1B LCA is filed. With an approved LCA, an employer can file an I-129 petition with the United States Citizenship and Immigration Services (USCIS), and the LCA plus I-129 allow a foreigner to apply for an H-1B visa inside the US or abroad. Over 99 percent of LCAs and I-129 petitions are approved, but the US Department of State rejects five to 10 percent of foreigners seeking H-1B visas.
H-1B Jobs and Wages
The jobs and wages in the LCAs filed by employers attesting to their need for H-1B workers are available from the US Department of Labor (www.flcdatacenter.com). DOL classifies the jobs for which H-1B workers are sought into four levels based on the skills required. Over half of the LCAs filed in recent years have been for the lowest-skill level, Level 1, meaning that the job requires a BA degree and the wage is in the 15th to 20th percentile of all wages in that occupation. The median wage for new H-1B workers in IT was $50,000 in 2005.
The Bureau of Labor Statistics' Occupational Employment Statistics (OES) reports median wages by occupation. In 2005, over 90 percent of the prevailing wages specified by employers in LCAs requesting H-1B workers offered wages below the median US wage in that occupation and area.
H-1B Issues
The H-1B program is criticized by both employers and worker advocates. In recent years, the major employer complaint has been that the 65,000 H-1B visas a year are gone soon after they become available. Many employers say that US schools do not produce sufficient scientists and engineers, and that the H-1B program is thus vital to their survival and competitiveness.
Some employers also complain of the cost of filing LCAs. Most employers use attorneys to file their LCAs, paying $2,000 to $3,000 per application plus fees to government agencies.
Worker advocates have two major complaints about the H-1B program. First, they allege that foreign workers holding H-1B visas are often low-wage substitutes for US workers, not the best and brightest of the global labor force. These critics assert that easy access to H-1B workers distorts US labor markets in the sense that wages are held down and US workers may be deterred from embarking on S & E careers because they will have to compete with foreign workers who are tied to the US employer they expect to sponsor them for an immigrant visa.
Second, the employer-friendly nature of the H-1B program can lead to abuses that are hard to detect and correct. The assumption in 1990 was that college-educated US workers could and would complain loudly about employer abuses, so there was no need for the detailed certification and oversight procedures included in the H-2A and H-2B programs, which admit unskilled farm and nonfarm workers. The emergence of so-called body brokers and other middlemen who bring H-1B workers into the US intending to farm them out has led to questions about this self-policing assumption. There have been many disputes over payments to H-1B workers for unemployment or bench time, especially since many paid significant recruitment fees. Although legal, the fact that some US employers asked their US employees to train their H-1B replacements before being terminated has also raised complaints.
H-1B Proposals
The major goal of employers has been to raise the cap on the number of H-1B visas available, while critics want additional protections and improved enforcement.
The SKIL bill (Securing Knowledge, Innovation and Leadership), introduced in 2006 and included in comprehensive immigration reform proposals in 2006 and 2007, would raise the H-1B cap from 65,000 to 115,000, and in some versions by more if all available visas were used up the previous year. As introduced, SKIL would exempt from the cap foreigners holding an advanced degree in science or engineering from a foreign university (the additional 20,000 H-1B visas currently available are for foreigners with advanced degrees from US universities).
The most recent immigration reform bill debated, the Comprehensive Immigration Reform Act of 2007, included a version of the SKIL bill that would have raised the cap on H-1B admissions to 115,000 in FY08 and eventually to 180,000 a year. CIRA 2007 would have also introduced new protections for US workers by requiring all employers, rather than just H-1B dependent employers (those with at least 15 percent H-1B workers), to certify that they did not lay off US workers 180 days before and after hiring H-1Bs. Employers would have been prohibited from placing ads for "H-1Bs only," and employers with 50 or more workers could have had a maximum of 50 percent H-1B employees. The IT industry wanted to increase the number of H-1B visas with no changes in requirements.
Other Temporary Worker Programs
Foreign workers may be admitted under other nonimmigrant or temporary programs as well. The O-1 program offers visas to foreigners with extraordinary ability in the sciences, arts, education, business or athletics, which is defined as the individual having a level of expertise indicating that the person is one of the small percentage who have risen to the top of the field of endeavor. The supporting documentation for applicants for O-1 visas includes national and international prizes, scholarly publications, and evidence that the alien has or will command a high salary in the United States.
O-1 visas are issued for one year, but can be renewed indefinitely. There were almost 32,000 admissions in FY06 (up from 30,000 in FY05), plus 9,600 accompanying persons. In these and the data below, persons admitted several times are counted each time they arrive in the United States.
NAFTA created a limited freedom of movement zone for Canadian, Mexican, and US workers with a college degree or more. Employers in one NAFTA country can hire an unlimited number of workers from other NAFTA countries who have at least a college degree, and they do not have to pay these so-called NAFTA professionals the prevailing wage. Mexicans or Canadians entering the US to fill such a job are to be admitted if they provide written job offers and proof of nationality and education at the port of entry; their TN visas are renewable indefinitely. Some 74,100 TN visa holders were admitted in FY06, up from 65,000 in FY05.
A third way for foreigners to enter the US and work in science and engineering is via the L-1 program. It permits multinationals to transfer mangers and workers with specialized knowledge of the companys products or processes who were employed at least a year abroad to a US branch. There is no ceiling on the number of L-1 visas that can be issued, and 321,000 were admitted in FY06, up from 312,000 in FY05.
Finally, some foreigners may do science and engineering-related work while in the US with business visitor (B-1) visas. Polish workers with B-1 visas in 2003 installed equipment in a Mercedes auto assembly plant in Alabama. The Polish workers reported that most of their $1,100 a month wage was deposited in Poland while they were in the US for three to six months. Their case prompted a debate over whether Mercedes violated the intent of the business visitor program.
Temporary to Permanent
Many H-1B visa holders want to become immigrants. Most US employers believe that the government should make it easy for them to sponsor especially foreigners with science and engineering skills for immigrant visas.
The US has three types of employment-related immigrant visas. The most relevant for the H-1B program is the EB-3 visa, generally available to foreigners with at least a BA. EB-1 visas are for foreigners with "extraordinary ability," and EB-2 is for foreigners with "advanced degrees." There is little or no wait for EB-1 and EB-2 visas, but there is a queue for EB-3 visas, especially for nationals of China and India.
CIRA 2007 would have changed the legal immigration system for at least 14 years, but may not have made it easier for H-1B visa holders to obtain immigrant visas. There were about four million foreigners waiting for immigrant visas in May 2005, including 1.5 million spouses and minor children of legal immigrants (112,000 immigrant visas were issued to spouses and minor children of legal immigrants in FY06). This backlog would have been cleared by adding 440,000 visas a year to expedite family unification
CIRA 2007 would also have instituted a new point system to select immigrants. Foreigners seeking to immigrate would have had to earn at least 55 of the maximum 100 points to get an immigrant visa, with up to 47 points available for employment (given for type of US job, age and experience, and employer recommendation), up to 28 for education, and up to 15 for English and civics. Once an applicant achieved the minimum 55 points, another 10 could have been awarded for having US relatives. Foreigners seeking visas to fill high-demand jobs, whether as janitors or engineers, would have gotten up to 16 of the 47 employment points.
For example, under the system proposed in CIRA 2007, a 29-year old Mexican who had worked six years as a US guest worker could achieve 61 points by having five years of US job experience in a high-demand occupation (health care aide), being young and knowing English, and having a US relative. However, a 45-year old Indian IT worker with a PhD and a US job offer but no US work experience would receive only 49 points, despite knowledge of English.
Employers of H-1B workers were disappointed by the new point system, in part because points replaced the current system under which employers select persons best qualified to fill particular US jobs. Oracle VP Robert P. Hoffman was quoted in the New York Times on May 20, 2007 expressing a preference for sponsorship: "Under the current system, you need an employer to sponsor you for a green card. Under the point system, you would not need an employer as a sponsor." Hoffman added: "We don't understand what it is that's so inefficient about employers selecting the talent rather than the point system doing it for us."
January 18, 2008 Agenda
The H-1B program and the labor certification process for obtaining immigrant visas will be discussed at a January 18, 2008 seminar at UC-Davis. Those interested in participating can contact Philip Martin at: plmartin@ucdavis.edu
Sloan West Coast Program on Science and Engineering Workers
Agenda
The H-1B Program and Labor Certification:
Attestation and PERM
Friday, January 18, 2008
Andrews Conference Room, 2203, SSH Building
DRAFT
This seminar is the first in a series that discusses issues related to science and engineering workers on the West Coast. Each seminar will feature a background paper outlining the issues and presentations by researchers as well as industry, government, and advocate representatives. We hope that each seminar will produce a better understanding of areas of consensus and disagreement on a particular aspect of the science and engineering labor force and labor market.
This seminar focuses on the current processes by which both temporary workers and immigrants are admitted to fill US jobs in science and engineering. The H-1B program uses an attestation admissions process, meaning employers provide assurances about wages and working conditions. With such attestations, approval for hiring H-1B workers is almost automatic, provided visas are available. By contrast, securing an employment-related immigration visa usually requires labor certification, which generally requires evidence of efforts to recruit US workers. PERM (Program Electronic Review Management) is a relatively new and expedited labor certification process.
The background paper will review attestation and certification and focus on recent changes and current issues. The government participants will explore the impacts of recent changes, and Rep Lofgren will explain the status of legislation that would change the H-1B program. The researchers panel will explore the impacts of these processes on immigrants and US workers, and the industry panel will address employer and worker concerns.
The seminars are supported by the Sloan Foundation (www.sloan.org) in cooperation with the NBERs Science & Engineering Workforce Project (www.nber.org/~sewp).
8am Breakfast available
9am Welcome and introductions, Philip Martin, UCD, Michael Teitelbaum, Sloan, Barry Klein, UCD
9:15am From H-1B to Immigrant: An Overview of the Process and Issues
Philip Martin, UC-Davis
9:45am Issues in Attestation and Certification
Alicia Cackley, GAO
Harry Sheinfeld, DOL Solicitors Office, Wash DC
David Kahn, DOL Solicitors Office, San Francisco
Susana Rincon, DOL, Wage and Hour, San Jose
11am Break
11:15am Rep Zoe Lofgren (D-CA) Chair, House Subcommittee on Immigration
12:30pm Lunch
1:30pm Researchers panel
Norm Matloff, UC-Davis, Patterns in Wages in the PERM Data
Lori Kletzer, UCSC
Tom MacCurdy, Stanford
John Trumpbour, Harvard SEWP, South Asian H-1Bs and Recent S&E Migration back to India
3pm Break
3:15pm Industry and Worker Perspectives
Jeff Wheeler, Intel
Lisa Spiegel, Duane Morris
4:30pm Adjourn and wine tasting
