Proposed Changes to H-1B Program Encourage Fraud, Undermine American Workers
On October 20, the Department of Homeland Security announced an expansive regulation to change the H-1B visa program. The proposed regulation not only hurts American workers but it undermines the integrity of the program and will encourage more fraud.
In theory, the H-1B program is considered a “skilled” guest worker program because it requires foreign workers to meet certain educational criteria to participate. Each year, the government makes 85,000 H-1B visas available to individuals holding a bachelor’s degree or a master’s degree. This numerical cap, set in statute, does not include the thousands of H-1B workers who are exempt from the cap (such as those who work for nonprofit entities or universities). These visas are valid for three years, but can be extended for up to six years. In addition, unlike most other guest worker programs, H-1B visa holders can also apply for permanent residency (i.e. a green card), essentially creating a permanent guest worker program.
FAIR has highlighted the abuses of the program, specifically the displacement of American workers. The visa program was intended to complement the U.S. workforce – not replace it. Nevertheless, the H-1B visa lobby, primarily tech giants and outsourcing firms, frequently claim that a sustained influx of foreign guest workers is necessitated by labor shortages and that America’s economic growth would suffer without foreign “top talent” that the program supposedly brings into the country. In fact, the program does not supplement the U.S. workforce. Rather, it supplants able-bodied Americans with foreign workers who are beholden to their employers by virtue of their presence in the U.S. depending upon employer sponsorship.
The Trump Administration attempted to reform the program by transitioning away from a deeply flawed system that currently allocates H-1B visas to employers via a lottery. In its place, the Trump Administration proposed awarding visas to prospective H-1B guest workers based on salary, rather than randomly. DHS, at that time, reasoned that prioritizing wage levels in the registration selection process “incentivizes employers to offer higher wages, or to petition for positions requiring higher skills and higher-skilled aliens that are commensurate with higher wage levels, to increase the likelihood of selection for an eventual petition. Similarly, it disincentivizes abuse of the H–1B program to fill lower-paid, lower-skilled positions, which is a significant problem under the present selection system.”
The Biden Administration, however, refused to implement the changes envisioned by the Trump Administration and withdrew the final rule in December 2021 after it was vacated by the U.S. District Court for the Northern District of California. Now, the Biden Administration is proposing its own changes, claiming that its new proposed rule would “modernize” the H-1B program.
The Biden Administration’s proposed rule barely gets to the heart of the H-1B visa fraud and abuse schemes that undermine the intent of the program. Study after study has highlighted fraud and abuse, and has shown that visa holders are not actually the best and brightest from around the world. In fact, they are coming into the United States to replace Americans (and sometimes be trained by Americans in the process).
While the administration claims the new rule will “modernize” the long-plagued H-1B visa program, instead it undermines American workers. It relaxes requirements on aliens working in the U.S. and the employers who hire them. It is an attempt to cut corners under the guise of efficiency, capitulating to big business and ignoring American workers at home who must compete for high-skilled job opportunities.
Bypassing the Numerical Cap
The Biden rule would allow companies to bypass the congressional numerical cap on visas, allowing by partnering with nonprofit entities or researchers to hire H-1B workers. This essentially formalizes an abuse of the program that has already been taking place. For years, there have been reports about universities and state governments partnering with companies simply to allow an individual to appear to be a nonprofit employee to avoid the cap placed on for-profit employers.
One such example was a program launched at the City University of New York (CUNY) in 2016. According to the New York Times, CUNY was luring foreign entrepreneurs to campus to “advise professors and students” and, in exchange, obtain their sponsorship for an H-1B visa. Today, several universities agree to sponsor foreign nationals for the Global Entrepreneur in Residence program for companies to obtain a cap-exempt H-1B visa. Senator Grassley (R-IA) highlighted these issues in a 2016 letter to then Homeland Security Secretary Jeh Johnson, describing the “growing movement” of employers “hacking” the program.
Instead of addressing the loophole, however, the Biden Administration is authorizing and encouraging its use. The proposed rule would exempt workers from the cap if the foreign worker “is not directly employed by a qualifying institution, organization, or entity” “so that they are less restrictive and better reflect modern employment relationships.”
The Biden rule also codifies a practice known as deference, or presuming one is eligible for an immigration benefit simply because it was previously approved. The Trump Administration, in 2017, attempted to rein in the practice of granting deference and expressly required agency officials to use their fact-finding authority. USCIS issued a policy providing that “adjudicators must, in all cases, thoroughly review the petition and supporting evidence to determination for the benefit sought.” The agency, at the time the 2017 policy was issued to curb deference, argued that continued scrutiny of H-1B petitions is warranted because the burden of proof in establishing eligibility is, at all times, on the employer (not the government). The agency also argued that the deference policy was “impractical and costly to properly implement” and that “an adjudicator’s fact-finding authority should not be constrained by any prior petition approval, but instead, should be based on the merits of each case.”
Under the Biden rule, however, adjudicators will be encouraged to approve renewals, deferring to the first approval – rather than looking at the new evidence and making sure the petitioner is truly eligible. The agency claims that applying deference will “help promote consistency and efficiency for both USCIS and its stakeholders.” By codifying this policy, adjudicators can now cut corners in order to approve petitions faster, appeasing employers in the process.
Criteria for “Specialty Occupation” Positions
The law states that the H-1B visa is intended for those coming temporarily to the United States to perform services in a “specialty occupation.” A specialty occupation is defined as one that requires: 1) theoretical and practical application of a body of highly specialized knowledge, and 2) attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States.
Until now, USCIS has interpreted this to mean that a foreign worker “normally” must hold a bachelor’s degree to obtain an H-1B visa. The Biden Administration is attempting to loosen this requirement by saying that “normally doesn’t mean always.” In addition, the rule provides that if an alien is placed at a third-party site, then it is the third party – not the petitioning employer – who is responsible for determining whether the position is a specialty occupation. This change makes it easier and more palatable for employers to outsource their workers to staffing firms, which was not the intent of the program.
Throughout the proposed regulation (including the title of the rule), DHS justifies the changes it is making by stating they “provide flexibility” for H-1B employers. In reality, the changes “provide flexibility” to employers by ensuring that the aliens are able to start or continue working in the country.
Most notably, the proposed rule authorizes automatic extensions of a student’s authorized period of stay for those who want to obtain an H-1B visa and work in the United States. In 2008, DHS created the cap-gap extension to remedy instances when there was a gap in employment between a student’s authorized period of stay and their employment for an H-1B employer. These “cap-gap extensions” provided a bridge, allowing students to remain in the country until they could work. The rule provides for an automatic extension until the following fiscal year to ensure that there is no disruption to employers.
In the proposed rule, DHS states that “Changing the automatic extension end date from October 1 to April 1 of the relevant fiscal year would prevent the disruptions in employment authorization that some F–1 nonimmigrants seeking cap-gap extensions have experienced over the past several years.” However, the proposal to extend the automatic cap-gap extension from October 1 to April 1 is not rooted in statute, nor does the rule cite any legal justification for the change. The change is attempting to help “prevent employment disruptions,” which, even if well-intentioned, is not authorized by law.
Under current rules, “[an H-1B] petition that requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with USCIS as provided in the form instructions.” This itinerary requirement was intended to deter and detect fraud and abuse, and ensure that foreign nationals were working where the employer claimed.
The Biden rule eliminates this itinerary requirement, arguing that it’s “largely duplicative” and slows down processing. However, it is well documented that many H-1B visa holders are not working where their employers say they are. The Office of the Inspector General reported that “in many cases, the projects provided within the petition are non-existent” which “allows beneficiaries to arrive in the country and not work in accordance with the H-1B agreements.” Eliminating this itinerary requirement, as proposed, will encourage more fraud in the program.
The Biden rule to “modernize” the long-plagued H-1B visa program fails to address the harm to American workers who compete against foreign nationals imported under the program. The visa program was intended to complement the U.S. workforce – not replace it. Study after study has highlighted fraud and abuse in the H-1B program and has shown that H-1B workers are not actually the best and brightest from around the world. In fact, they are coming into the United States to replace Americans (and sometimes be trained by Americans in the process).
This rule does not “modernize” the program, as the Biden Administration claims. Rather, it relaxes requirements on H-1B workers and the employers who hire them. It is an attempt to cut corners under the guise of efficiency, capitulating to big business and ignoring American workers at home who must compete for high-skilled job opportunities.
The rule includes other changes to the visa program that FAIR is still assessing. To view the entire rule or to provide comment, visit the Federal Register.