S.744 The Border Security, Economic Opportunity, and Immigration Modernization Act (Bill Summary)

April 23, 2013

Bill Summary: May 29, 2013 | View the PDF Version

On April 17, 2013, Senators Chuck Schumer, John McCain, Dick Durbin, Lindsey Graham, Bob Menendez, Marco Rubio, Michael Bennet, and Jeff Flake introduced S.774, entitled the Border Security, Economic Opportunity, and Immigration Modernization Act. If passed, S.744 would grant amnesty to the approximately 12 million illegal aliens currently living in the U.S., create new guest worker programs for agricultural workers and low-skilled workers, and significantly increase legal immigration.

Bringing in hundreds of thousands of foreign workers to fill jobs in high-skilled occupations would make sense only if there were a critical shortage of native workers, and not the oversupply that currently exists. Companies use guest worker visa programs not to supplement American workers but to supplant them. The H-1B visa is the most widely used method of bringing in high-skilled workers and has steadily grown into a federally sanctioned program used by U.S. employers to circumvent the domestic labor market and to displace or disqualify capable American workers.

One of the critical moments during the Judiciary Committee markup was a deal struck by Sen. Chuck Schumer (D-NY) and Sen. Orrin Hatch (R-UT) to “reform” the H-1B visa program in order to gain Hatch’s support for the bill. The Hatch-Schumer deal eliminates the few protections for American workers written into the legislation. The deal includes limiting the number of employers required to attest that they have not displaced U.S. workers within certain timeframes, and excluding most employers from the requirement in S. 744 that all employers offer jobs to equally or better qualified U.S. workers. Additionally, the deal nearly triples the H-1B cap to 200,000, with the specific number determined by how quickly the cap is reached during the previous year instead of taking into account market conditions.

The following summary covers the provisions in Title IV of the bill that would expand the H-1B and L (or “high-skilled”) guest worker visas.

Employment-Based Nonimmigrant Visas

Market-Based H-1B Visa Limits

Raises the H-1B ceiling from 65,000 to a base of 115,000 to 180,000 per year plus an additional number determined by how quickly the cap is reached. Under the Hatch-Schumer deal, if the base is 180,000 and is filled within 45 days, another 20,000 H-1B visas are issued, making the true maximum cap 200,000 per year.
- The ceiling cannot adjust upwards if the BLS “management, professional, and related occupations” category averages a 4.5 percent unemployment rate over the prior year.
  - Note: the “management, professional, and related occupations” category is extremely broad and encompasses significantly more than the STEM fields; effectively masking the true employment situation in tech fields.
  - Note: the unemployment rate for this category is currently 3.7 percent which is nearly double what is was when the 2007 amnesty bill was defeated
- Increases the additional H-1B allocation for advanced degree holders from U.S. universities from 20,000 to 25,000 per year, but restricts those visa holders to individuals with science, technology, engineering, and mathematics (STEM) degrees.
  - Defines STEM as encompassing the DOE’s Classification of Instructional Programs “within the summary groups of computer and information sciences and support services, engineering, mathematics and statistics, biological and biomedical sciences, and physical sciences.”
- In effect, this nearly triples the maximum number of allocated H-1Bs from 85,000 to 225,000 per year. Note: This calculation does not include H-1Bs who are employed at an institution of higher education or a nonprofit/governmental research organization which are exempt from the H-1B ceiling.

Employment Authorization for Dependents of Employment-Based Non-Immigrants

Grants work authorization to all H-1B worker spouses. Note: revised prevailing wage requirement (see below) does not apply to accompanying spouses granted work authorization.
- Secretary has discretionary authority to suspend employment authorization if the H-1B’s home country does not offer reciprocal employment to spouses of U.S. workers.
Maintains work authorization to L nonimmigrant spouses.
Amends section 214(c) to change authority from Attorney General to DHS Secretary.

Eliminating Impediments to Worker Mobility

Establishes a 60-day transition period for H-1B workers to change jobs without losing lawful status. Note: There is no grace period to find a new employer under current law
The Secretary must give deference to a prior approval of H-1B and L Nonimmigrant visas in reviewing a petition to extend the status, unless the Secretary determines that:
- There was a material error with previously approved petition;
- A substantial change in circumstances occurred;
- New “material information” was discovered that “adversely impacts” the eligibility of either the employer or the nonimmigrant; or
- “In the Secretary’s discretion, such extension should not be approved.”
The Secretary of State may waive the interview requirement for “low-risk” H-1B and L nonimmigrant visa applicants.

Stem Education and Training

Establishes a $1,000 employer fee per application for the labor certification required by INA 212(a)(5).
Specifies that 40 percent of funds in the H-1B Nonimmigrant Petitioner Account (INA 286(s)) go to STEM education for low-income and underrepresented groups.
- 30% of funds for low-income STEM scholarship program with an emphasis on underrepresented groups (to include women and minorities).
  - Funds may be used for loan forgiveness or repayment of student loans for lowincome STEM degree holders.
- 10% of funds for K-12 STEM grant program with an emphasis on grants that target lower income populations with a focus on women and minorities.
Fees collected under sec. 212(a)(5)(A)(v) are deposited in the newly created STEM Education and Training Account (INA 286(w)) and the Secretary of Education distributes the funds as follows:
- 70% of funds proportionately allocated to the 50 states, D.C., and the U.S. territories to improve STEM education.
  - No state or territory will get less than 0.5 percent of the total amount allocated.
- 20% of funds for minority-serving colleges to encourage STEM studies.
  - Funds may be used for loan forgiveness or repayment of student loans for lowincome STEM degree holders.
- 5% of funds for statewide workforce investment activities, including programs that benefit veterans and their spouses;
- 3% of funds for American Dream Accounts; and
  - These accounts are for low-income students (those eligible for free or reduced price lunch) that monitor higher education readiness and include a college savings account.
    - A maximum of 25 percent of grant funds can be used for the initial deposit of a college savings account.
    - The student’s parent may withdraw funds from the account (except the college savings account) at any time.
  - Grants awarded to entities that set up these accounts are for 3 years and may be extended for an additional 2 years.
- 2% of funds for administrative expenses, including an annual evaluation of the impact of the activities funded by the account.

H-1B and L Visa Fees

Adds a new fee for employers of H-1B and L visa workers:
- $1,250 per petition from employers with 25 or fewer full-time employees.
- $2,500 per petition from employers with more than 25 full-time employees.
  Note: petitions often include multiple applications for employees so this fee is not imposed per worker
- Nonprofit research institutions and educational institutions are exempt from the fee.

H-1B Visa Fraud and Abuse Protections

Modification of Application Requirements

Requires H-1B-dependent employers to pay H-1B workers a higher minimum wage than non-H-1B-dependent employers:
- H-1B-dependent employers must pay level 2 wages (see below)
- Non-H-1B-dependent employers must pay the greater of:
  - The actual wage paid by the employer to other employees with similar experience and qualifications for the specific job; or
  - The prevailing wage (see below)
Raises the prevailing wage definition (taking into account experience, education, and level of supervision for each occupational classification by metropolitan statistical area): (p. 693)
Note: the revised prevailing wage definition still allows employers to pay H-1B workers discounted wages because the prevailing wage does not factor in “hot skills” that command a premium in the open market.
Note: the prevailing wage requirement does not apply to accompanying spouses granted work authorization.
- Level 1 wages: mean of lowest 2/3 of wages surveyed; not less than 80% mean wages.
- Level 2 wages: mean of wages surveyed.
- Level 3 wages: mean of highest 2/3 of wages surveyed.
- Special Rule for universities and nonprofit research/governmental research organizations: 100 percent of the wage level determined to be the prevailing wage, only taking into account employees at the organization in the area of employment.
Before hiring an H-1B worker, employers are required to advertise job openings on an Internet website maintained by the Secretary of Labor for at least 30 days. (p. 698) The posting must detail:
- Wage ranges and other terms and conditions of employment;
- Minimum education, training, experience, and other requirements;
- Process for applying for the position;
- Title and description of the position, including the job site location; and
- The employer’s name, city, and zip code.
Nondisplacement of U.S. workers (p. 699)
- The Hatch-Schumer deal gutted the requirement in S. 744 that all employers attest that they have not and will not displace U.S. workers during the 90 days before to 90 days after filing an H-1B petition.
- Instead, the deal has 3 different nondisplacement time periods based on whether the employer is:
  - H-1B skilled worker dependent employer (created by Hatch-Schumer): may not displace a U.S. worker during the 90 days before through 90 days after filing a petition for H-1B workers.(note this is current law for H-1B-dependent employers)
    - H-1B skilled worker dependent employer is defined as employers with at least 15 percent of workforce in O*NET Job Zone 4 (“considerable preparation” needed) and Zone 5 (“extensive preparation” needed) positions are H-1B workers.
  - H-1B-dependent employers: doubles the time period to 180 days before to 180 days after filing a petition for H-1B workers.
    - For employers with 25 or fewer full-time “equivalent employees” who are employed in the U.S., employ more than 7 H-1B nonimmigrants;
    - For employers with between 26 and 50 full-time “equivalent employees” who are employed in the U.S., employ more than 12 H-1B nonimmigrants; or
      - Note: this allows 46 percent to 24 percent of the workforce to be H-1Bs
    - For employers with at least 51 full-time “equivalent employees” who are employed in the U.S., H-1B workers are at least 15 percent of full-time workforce
    - Exempt from H-1B-dependent employer classification:
      - Nonprofit institutions of higher education;
      - Nonprofit research organizations; and
      - Employers whose primary line of business is healthcare and are petitioning for a physician, nurse, or physical therapist
  - Non-H-1B-dependent employers are not subject to the non-displacement time period (meaning they can replace U.S. workers with H-1B workers) unless:
    - The employer is using the H-1B worker with the “intent or purpose” of displacing a specific U.S. worker; or
    - H-1B workers are displaced who work for a government entity or are public school teachers.
Recruitment of U.S. workers (p. 700): prior to filing an H-1B application, all employers must:
- The Hatch-Schumer deal eliminated the S. 744 requirement that all employers attest they have offered the job to any U.S. worker who is equally or better qualified.
- Instead, only H-1B skilled worker dependent employers must offer the job to equally or better qualified U.S. workers while all other employers merely have to:
  - Advertise the position online; and
  - Take “good faith steps” to recruit U.S. workers “using procedures that meet industrywide standards” and offer at least the wage rate offered to H-1B workers.
Outplacement of H-1B workers (p. 701)
- H-1B-dependent employers are prohibited from outsourcing H-1Bs.
  - Exception: H-1B-dependent employers may outsource workers for only a $500 fee if the employer is:
    - A nonprofit institution of higher education;
    - A nonprofit research organization; or
    - In the health care business and petitioning for a physician, nurse, or physical therapist.
- Non-H-1B-dependent employers may outsource for only a $500 fee per outsourced worker.
Exempts newly created “intending immigrant employee” from H-1B total when assessing whether an employer is an H-1B-dependent employer or H-1B skilled worker dependent employer. (p. 703) (The “Facebook rule”)
- Intending immigrant employee: an alien who intends to work and reside permanently in the United States, as evidenced by:
  - A pending or approved application for a labor certification filed for the alien by a covered employer; or
  - A pending or approved immigrant status petition filed for the alien by a covered employer.
    - Covered employer: an employer that sponsors at least 90 percent of H-1Bs for green cards during the 1 year period ending 6 months before the filing date.
- Intending immigrant employees count as U.S. workers when determining whether an employer is a “dependent” employer.

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