April 2010 Newsletter

The annual cap or quota for new H-1B visas is set by Congress at 65,000 new visas per year, not including the 20,000 H-1B visas available under the U.S. advanced degree cap exemption. As of April 1st, the “filing season” for new H-1B visas was officially underway.

United States Citizenship and Immigration Services (“USCIS”) has announced that, as of April 15, 2010, 13,600 H-1B petitions filed under the regular cap and 5,800 H-1B petitions filed under the Master’s exemption cap have been received.

USCIS also announced that, as of April 16, 2010, it had approved 62,622 H-2B petitions of the 66,000 allocated for the fiscal year 2010. At present, the H-2B cap set by Congress is 66,000 per fiscal year, with 33,000 to be allocated for employment beginning in the first half of the fiscal year (October 1 – March 31) and the same number allocated for employment beginning in the second half of the fiscal year (April 1 – September 30). Any unused numbers from the first half of the fiscal year are made available for use by employers seeking to hire H-2B workers during the second half of the fiscal year. However, there is no “carry over” of unused H-2B numbers from one fiscal year to the next.

The recent surge in first quarter corporate profits is reportedly translating into increased hiring for certain industries, especially the technology industry.   Some believe this rapid growth in the technology sector is the beginning of a new product cycle, often referred to as the “mobile internet tsunami”, which some believe will continue well into the foreseeable future.

Notwithstanding the job market in the technology sector showing signs of life, U.S. unemployment remains at just under 10% and will likely remain at an inflated rate for years to come.  While employers reportedly added more than 160,000 jobs in the month of March, the biggest monthly gain in three years, a closer look at the numbers reveals roughly one-third of that growth came from the U.S. government’s hiring of 48,000 temporary workers in connection with the completion of the 2010 Census.

So what does this recent job growth mean for U.S. employers vis-a-vis the H-1B program? Make no mistake, H-1B usage is down drastically from recent years. Despite the newly optimistic views about the economy, U.S. companies appear to be reassessing their recruitment needs and goals and processing H-1B petitions only for key personnel. Such change in sentiment appears to be driven by a multitude of reasons, including (i) the higher costs associated with the processing of H-1B petitions; (ii) the limited period of authorized stay available in H-1B visa classification; (iii) the increased scrutiny in the adjudication of H-1B petitions; (iv) the newly emerging difficulties with the admittance of H-1B visa holders by CBP at ports of entry; (v) a rise in “administrative processing” delays at U.S. consulates abroad; (vi) attractive new destinations for business outside the U.S. due to more realistic immigration laws and the concomitant outsourcing of work to locations such as China, India and Canada; and, of course, (vii) the increased availability of U.S. workers due to our nation’s heightened unemployment levels.

In light of all of this, while U.S. workers stand to gain with a host of job opportunities becoming available as the result of F-1 and H-1B visa holders returning abroad, for now, it appears that the answer to our question of whether the economic recovery will result in an increased usage of H-1B visas is – probably not.

Of course, lay-offs are a fact of life, especially so in today’s economic environment. In circumstances involving a reduction in force, company policies typically offer a few weeks of “severance” (with the date of termination effective immediately) in lieu of providing the employee with notice of the actual termination. While such severance packages may be fair, they (often unknowingly) present a unique set of problems to employees working in the U.S. pursuant to a work visa, since most work visa classifications are “employer specific”. This means that the foreign national worker is not only dependent upon his/her employer for wages, but for his/her ability to remain in legal status.  Indeed, the U.S. Department of Homeland Security considers a foreign national worker to be “out of status” as of the date of termination—regardless of the duration or amount of severance.

As such, for a terminated foreign national to remain in the U.S. in an authorized period of stay, an application for an extension of stay (assuming new employment is found) or a change of status to another non-immigrant classification (e.g. B-2 visitor for pleasure) must be filed prior to or contemporaneous with the termination of one’s employment.  This is true not only for the worker, but also for his/her family.  A failure to do so will likely render the entire family “out of status” and subject to removal from the U.S.

To ameliorate these harsh effects, employers should consider providing their foreign national employees with a fair period of notice before they are actually terminated from employment. 

While both sides of the aisle appear to agree that our country’s immigration system is broken and in dire need of reform, Congress remains in a deadlock over the debate regarding comprehensive immigration reform. Indeed, while Republicans in Congress have been quick to criticize President Obama for failing to live up to his campaign promise to pass immigration reform in his first year in the presidency, with the exception of Lindsey Graham (R-SC), Republicans have avowed little public support for a comprehensive immigration reform bill heading into midterm elections.

There is, however, a tinge of bipartisan support for certain piecemeal legislative reforms to our immigration laws. One example of such proposed reform is the recently-introduced “Start-Up Visa Act of 2010”, sponsored by Senators Richard Lugar (R-Ind) and John Kerry (D-Mass). “The Start-Up Visa Act of 2010” seeks to create a new EB-6 category for immigrant entrepreneurs. 

The EB-6 category (a hybrid of the EB-5 immigration visa category) allows qualified immigrant entrepreneurs the opportunity to remain in or to enter into the United States if they have the appropriate funds required to start an innovative enterprise. First, qualified applicants under the bill must prove that a qualified venture capitalist has invested not less than $100,000 on behalf of each entrepreneur in a total equity financing of not less than $250,000. Second, qualified applicants are required to prove that the enterprise has created at least five (5) full-time jobs and accumulated an increase in revenue of at least $1 million within two years of initiation of business. If these goals are met, the immigrant entrepreneur would be granted permanent resident status in the United States.

With the recent developments in the political tug-of-war between climate change legislation and comprehensive immigration reform, only time will tell whether such bill will go anywhere in Congress.

Portions of this Newsletter have been
Reprinted with permission from AILA
Copyright © 2010, American Immigration Lawyers Association