Employee Benefits

Tighter Rules Pose New Hurdles for H-1B Visa Hires

Hardest hit will be health care firms and government contractors.

Companies that rely on H-1B visa workers to fill some critical spots face new pitfalls this year as the application season for fiscal year 2011 begins April 1.

U.S. Citizenship and Immigration Services (USCIS) is imposing stricter rules and more oversight on the hiring of foreigners who work as independent contractors or at third-party sites or who have an ownership stake in the company that’s sponsoring them for the H-1B visa. H-1B visas are designed to help companies meet their workforce needs through the temporary hire of foreign workers who are highly skilled in specialized fields.

Immigration lawyers say that the new guidelines, which were issued in January, will require employers to have more direct control of H-1B employees. And they say it will impose new legal expenses for employers who must prove they are in compliance.

“The employer has to go miles and miles further to document the employer-employee relationship in places where they didn’t have to do before,” says Eleanor Pelta, first vice president of the American Immigration Lawyers Association.

Among the industries most adversely affected by the new tweaks are health care, government contracting and consulting.

The H-1B visa program has been a hot button issue for years, but it has become especially vitriolic during times when the economy is slumping and unemployment is high. Critics say businesses have more than enough skilled workers to choose from in the U.S. and that they use the program to find foreign workers who will accept lower wages. Proponents respond that there is a dearth of highly skilled workers in specialized fields and that access to foreign skilled workers enables U.S. firms to remain competitive and ultimately add new jobs as they grow and expand.

Stepped-up scrutiny of workers is leading to more rejected applications, according to supporters of the H-1B visa program. Many legitimate workers employed by legitimate H-1B employers are being denied entry for technical reasons that previously were not an issue, according to Michael Patrick, a partner and general counsel at Fragomen, Del Rey, Bernsen and Loewy.

As a result, the new guidelines are discouraging employers from using the H-1B program, says Patrick. “It certainly imposes restrictions on work arrangements that have been common in the H-1B program for years,” he says. “It has become a less than attractive alternative for employers.”

Patrick adds that the USCIS could face lawsuits over whether the agency overreached when it issued what amount to new rules without going through the proper rulemaking process.

Enforcement is also rising. The government plans five times the number of employer-site visits this fiscal year than in FY 2009. The audits, which will top out at 25,000, include unannounced interviews with a company representative and an H-1B worker as well as work site tours and record reviews, says Patrick.

But there’ll be one silver lining for employers this year. The H-1B program won’t hit the 85,000 cap placed on the number of H-1B visas on day one, or even in the first month, as it had during the boom years of 2006 and 2007. As a consequence of the economic slowdown, demand for H-1B visas is down. Fortunately for those firms who’ve been shut out in years past, the window for securing a worker will be much longer.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 12 Best Consumer Discretionary Stocks to Buy for 2022
stocks to buy

The 12 Best Consumer Discretionary Stocks to Buy for 2022

Consumer discretionary stocks may be among 2022's most challenging places to invest in. But these picks could overcome several sector headwinds.
January 4, 2022
How to Know When You Can Retire
retirement

How to Know When You Can Retire

You’ve scrimped and saved, but are you really ready to retire? Here are some helpful calculations that could help you decide whether you can actually …
January 5, 2022

Recommended

Most-Overlooked Tax Deductions and Credits for the Self-Employed
Tax Breaks

Most-Overlooked Tax Deductions and Credits for the Self-Employed

If you've recently gone into business for yourself, see how the tax laws can work for you.
December 21, 2021
Welcome to the Post-Pandemic Workplace
work life balance

Welcome to the Post-Pandemic Workplace

There are five generations in the workforce for the first time. Here's how employers are trying to please everyone.
December 17, 2021
The Biden Tax Plan: How the Build Back Better Act Could Affect Your Tax Bill
Politics

The Biden Tax Plan: How the Build Back Better Act Could Affect Your Tax Bill

Depending on your income, the Build Back Better Act recently passed by the House could boost or cut your future tax bills.
November 22, 2021
Workers: Expect Higher Salaries and More Perks in 2022
Employee Benefits

Workers: Expect Higher Salaries and More Perks in 2022

The pandemic economy, the “Great Resignation” and inflation are motivating companies to raise wages and find ways to increase employee satisfaction.
November 4, 2021