How the Proposed H-1B Visa Reform Bill May Affect Foreign Workers

Earlier this year, immigration changes were proposed that would increase the H-1B visa numbers from 65,000 to 180,000 each year, raising hope among US employers for increased access to foreign employees. Controversially, earlier last month Senators Chuck Grassley and Dick Durbin introduced the H-1B and L-1 Visa Reform Act in an effort to encourage US employers to hire Americans before foreign employees.

Effect of the Visa Reform Bill

The bill was proposed partly due to accusations that some US firms are using the H-1B visa system to displace legitimate US workers for lower cost foreign workers, which is being investigated by the US government. Specifically, the Visa Reform Bill would disallow certain companies from hiring H-1B employees if more than 50 percent of their employees are already H-1B and L-1 visa holders.
This could largely affect companies who outsource foreign workers, many of them Indian, to fill positions for information technology, engineers, and programmers, forcing them to recruit qualified American workers over H-1B visa holders.

The H-1B and L-1 Visa Reform Act

The H-1B and L-1 Visa Reform Act includes restrictions on the number of H-1B Visas that can be allocated, and also includes wage protections for H-1B visa holders by ensuring that wages are based upon, among other things, “the locally determined prevailing wage level for the occupational classification in the area of employment.” This is a move that could be seen as leveling the playing field for wages, and removing any incentive to replace workers solely on the basis of cost savings.

In addition, in a move to further protect American workers, the Visa Reform Bill also mandates that the employer “will provide working conditions for such H–1B nonimmigrant that will not adversely affect the working conditions of United States workers similarly employed by the employer or by an employer with which such H–1B nonimmigrant is placed” – a move in anticipation of the possibility of some US employers making or changing working conditions for United States’ workers to the point that they leave the employ of the company, as a result opening up positions for foreign nonimmigrant workers through the H-1B Visa Program.

The Visa Reform Act specifically targets companies with 50 or more employees, companies that may have violated the laws, or restructured to circumvent the Visa Reform Act. If a company has more than 50 employees, no more than 50 percent of their workforce can be nonimmigrant workers.

Employers who violate the terms of the bill, if passed, may be penalized with a fine of up to $25,000.

A statement from Senator Chuck Grassley can be found here, and the bill in full may be read here.

Visit our H-1B Visa section for more information about the H1 visa.