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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“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.
-
Stock Market Today: The Dow Adds 15 Points To End Its Losing StreakEquity indexes opened higher but drifted lower as markets priced in new Fed forecasts.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
Europe Faces Economic and Political Headwinds Next YearThe Letter Challenges for Europe: Potential tariffs, high energy prices and more competition from China will weigh on the bloc in 2025.
-
Don't Sleep on Japan's Economic TransformationThe Letter After almost three lost decades, Japan — one of the world's biggest economies — is finally showing signs of life.
-
Kiplinger Outlook: Telecom Companies Brace for Tough TimesThe Letter The telecom industry is entering a new era that threatens profitability. But the coming Trump administration will make it easier for the major players to adjust.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
AI Start-ups Keep Scoring Huge SumsThe Kiplinger Letter Investors continue to make bigger bets on artificial intelligence start-ups, even for small teams with no revenue. Some backers think a startling tech breakthrough is near.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
