America’s traditional view on immigration has been: “Give me your tired, your poor, your huddled masses yearning to breathe free.” As we head into the fall presidential elections, we’re now hearing such promises as: “I will stop illegal immigration, triple border security and put in the surveillance and biometric tracking to secure the border.” Not to mention the beautiful wall.
Immigration is again dead center in the political crosshairs. The thrust of the discussion is border security and illegal immigration rather than legal immigration. That’s unfortunate.
Security and illegal immigration are important issues, of course, but our broken legal immigration system is probably more harmful to our nation.
I just got off the phone with a Pittsburgh-based entrepreneur whose high-tech start up is starved for workers. He has plowed his personal funds and investors’ capital into his business, which provides unique online learning opportunities and services for disabled children. While investors project that this company could achieve significant profits and educational advances, it needs highly specialized talent to get there.
The entrepreneur has identified two individuals whose specific expertise is desperately needed now to get the technology and the firm off the ground. The problem is that they are not U.S. workers. They are not tired or poor or part of the huddled masses; they are highly credentialed research scientists with European doctoral degrees. They need employment authorization, which comes in the form of a non-immigrant status, the most popular of which is the H-1B visa. But without proper authorization, they can’t work, so neither can the start-up.
While the H-1B visa is popular, it’s impractical because getting one is unpredictable. There are only a limited number available in any given year. Due to high demand by employers in recent years, H-1B status has been awarded only through a lottery each April — forcing companies to depend on luck in making business decisions.
Each fiscal year, the U.S. Citizenship and Immigration Service grants up to 85,000 “cap subject” H-1B visas. Subject to the cap are new applications by most for-profit employers. The cap allows 20,000 H-1Bs for people with qualifying master’s or higher degrees, 1,400 for Chileans, 5,400 for Singaporeans and 58,200 for all other eligible petitioners. Last year, more than 240,000 applications were filed for 85,000 visas.
H-1B petitions are generally filed in the first five business days of April. After that, the cap-subject visas are gone until the next year. The applications are for employment to begin Oct. 1, the beginning of the federal fiscal year. So, if an employer is unlucky in the lottery in April, he or she must wait another year to try again.
The largest users of the H-1B visa are the huge information-technology staffing firms, each of which file hundreds or thousands of applications for consultants to be employed by American businesses. Their lottery chances per application are no different than those of the start-up entrepreneur, but their business model focuses on providing as many foreign consultants to serve as many U.S. businesses as they can. In contrast, many start-ups are trying to hire one or two workers with specialized skills not otherwise available and without whom the business is in jeopardy.
To qualify for H-1B status, a potential employee must have an offer of employment (not self-employment) to perform work that is usually performed by a person with at least a bachelor’s-level of education and who is otherwise qualified for the position. If a license is required, for example, the alien must have the license. There are special rules for physicians.
A potential U.S. employer must offer at least the prevailing wage, as determined by the U.S. Department of Labor and have the capital to pay it. The employer must post a notice of the hiring and attest that working conditions for the visa holder will not adversely affect other workers similarly situated, among other things.
Then there are the filing costs. Even if there were no legal fees, an employer must pay a $325 filing fee, a $500 anti-fraud fee and a $1,500 training fee. The training fee is $750 for employers of fewer than 25 employees. If the employer loses the lottery, it gets its filing fees back, but no employee.
There are more details involved in obtaining H-1Bs and other work-authorized visas. One H-1B strategy is to seek employment with a nonprofit institution of education or an affiliated employer that is cap exempt.
There has been some high profile H-1B abuse reported by both employers and employees. There has been controversy over whether the practices of some H-1B employers or their customers negatively impact wages and working conditions of American workers. But this is truly the exception.
As for the Pittsburgh-based entrepreneur, we had a difficult conversation. I explained the lottery.
“Why can’t there be enough H-1B visas to keep up with the need?” he asked. “The law hasn’t changed this century; it’s 2016 and our company’s future depends on a lottery — that’s crazy!”
But that’s the law. We discussed having his potential employees work remotely and other unattractive alternatives. For now, we are preparing the applications and crossing our fingers.
It is clear that the supply of H-1B visas does not meet the demand required by our economy. The H-1B is for educated, typically energetic individuals yearning to contribute to America. The law should reflect this reality by periodically adjusting the H-1B cap to meet demand and the economy’s needs, while still protecting U.S. workers.
For a decade or more, our elected officials have considered fixing this and other parts of our broken legal immigration system. If not now, when?
Originally published in the Pittsburgh Post Gazette on March 27, 2016