GOVERNMENT INTERFERENCE WITH MARKET FORCES IN BUSINESS IMMIGRATION

Free market adherents often complain about too much red tape and government interference, many times with good reason. They argue that the government creates inefficiency in the economy and ask simply for the market to be left alone. In the field of business immigration, they are right to complain.


As part of the free market economy, business owners make hiring decisions, weighing the cost of each hire against the ROI that the new employee should bring to the business. Although members of Congress and business owners consistently ask for less government interference, the current administration is intruding more and more on those hiring decisions, insofar as immigration is concerned, and in fact it is trying to shut down virtually all business immigration. A good example is what the government is doing to some of the most important and frequently used temporary work visas: H-1B, L-1A and L-1B.



Background

Immigrants historically have supported and expanded the US economy. During WWII, the US work force lost millions of workers to the armed services. Under the Bracero Program, the economy was supported by Mexican nationals who worked in key industries.

Foreign students in the US pay out of state tuition when they attend state supported public universities and colleges. To gain admission to our schools, these foreign students must be some of the very best and very brightest. And they are: after graduation, they are more likely than US born students to have advanced degrees, and nearly twice as likely to have PhDs.

Immigrants in general are extremely entrepreneurial, creating millions of jobs for domestic workers. Some of the companies co-founded by immigrants include Intel, Sun Microsystems, Google, eBay, and Yahoo.


Temporary Investors Welcomed

Our immigration system recognizes the importance of letting immigrants start businesses in the US. The E-2 category must be based on a treaty between the US and the applicant’s home country.[1] Under it, immigrants can start or buy a for-profit business and can renew the visa indefinitely as long as they continue to run the business.

The E-2 rules require the applicant to make a substantial investment and demonstrate the ability to run the business. The evidence must show the business is likely to be profitable and, most importantly, to hire US workers. Much like a banker deciding to approve a loan, the consular officer reviewing the case makes a decision based on whether the business appears likely to succeed and whether the applicant has identified risks that could jeopardize the business. In short, the review of the visa application is governed largely by business rules based on market forces and the applicant’s ability to identify and address those forces in a logical way. The consular officer does not interfere with legitimate business decisions.


Additional Temporary Visas Based on Business Needs

More recently, in 1990 Congress passed IMMACT 90, which added visa categories and reorganized our business immigration system. Among other things, that law created the H-1B and L-1 visa categories, which have proven to be highly useful in allowing highly skilled foreign workers to enter the US for temporary periods (total of 6 years for H’s, and up to 7 years for L’s). Congress recognized the need for businesses to run efficiently and with the best workers, and set up the H-1B category for employers who needed workers with college degrees. Under the H-1B category, those jobs can be filled by up to 65,000[2] foreign workers per year (plus an additional 20,000 who have US-issued Master’s degrees). L-1A and L-1B visas are not limited in number, but only highly skilled workers and executives or managers can be approved, and only if they have worked for a company outside the US for one full year in similar jobs.[3] The H-1B rules also require the employer to pay the prevailing US wage to the worker, so that the wages of US workers are not adversely impacted.

Both of these temporary work visa categories reflect a Congressional policy of letting standard market forces of supply and demand operate in relatively common sense ways.


USCIS and DOL Attack Businesses

Over the years, USCIS has challenged both H-1B and L visa petitions filed by US employers, making sure that the evidence satisfies the requirements under each visa category. However, the challenges raised by the Trump administration have been epic in their number and their scope. In fact, USCIS recently has been issuing so many Requests for Evidence (RFEs),[4] none of which require a filing fee, that the agency has begun losing money on an unprecedented scale, even claiming to Congress in the summer of 2020 that it was going to be out of money by October 1. (That did not come to pass.)


In addition to issuing an excess number of RFEs, USCIS also revoked a long-standing regulation that created a presumption for approval where the petitioner asked for a permissible extension of stay and there were no material changes since the first filing (worker, job duties, location, employer). Both decisions have caused USCIS employees to spend massive amounts of time reviewing petitions that previously were approved quickly and properly. Result: too much time per case, and no additional revenue. USCIS also hired some 37,000 fraud investigators, so that the government could root out allegedly wide-spread immigration fraud. More workers at USCIS, no revenue.


The most recent salvo came when COVID-19 hit. Shortly after that happened, the president issued a Ban against processing and all H-1B, H-2B, J-1 and L-1 visa applications until December 31, 2020. The claimed basis for the ban: these visas allowed unfair competition against US workers who have lost year round jobs. The reality – workers in these categories are not depriving US workers of jobs. H-1B workers fill jobs that currently have about a 3% unemployment rate in our economy. H-2B workers are limited to jobs that last only about 6+ months and do not include the kind of year round jobs on which the Ban was justified. J-1s also are very limited in time and type of work. L-1s rules require workers who have been employed outside the US for a full year and have intimate knowledge of the entire international organization; by definition, domestic US workers cannot fill those jobs.

Bottom line: this Ban constitutes the worst sort of governmental interference with free market forces and legitimate hiring decisions by US employers.


The next governmental attack came in mid-October, 2020, when USCIS and DOL issued two unsolicited and unprecedented H-1B regulations. Such regulations normally are issued as proposed rules, with significant time for the interested public to review and comment. Not this time: both were issued as Interim Final Regulations that apply immediately (DOL) or within 60 days (USCIS). The USCIS regulation revisits an issue on which USCIS has lost multiple federal lawsuits: it contends that for a job to qualify for H-1B status, the employer can only accept one kind of degree. Ever. Under any circumstances, and even if DOL data confirms that three or four closely related degrees are normally accepted by US employers because they all require the student to take similar, critical courses. Take, for example, a tech company that wants to fill a software developer position. DOL materials confirm that several degrees (e.g., in Computer Science, Software Design, Math, etc.) are typically accepted by employers in this field. The USCIS regulation states that the H-1B case cannot be approved because more than one degree properly prepares the applicant to perform the normal job duties.[5]


The DOL regulation is even more suspect. Even though H-1B jobs must require the worker to have a 4 year degree, in justifying the new, higher prevailing wage figures, DOL has used wage data for general categories that include jobs such as janitor. Based on such irrelevant data, DOL has increased the H-1B prevailing wage figures for high skilled and totally different jobs by as much as $50,000 per year. Under no circumstances can such data be justified as a logical reflection of true market wages for H-1B jobs. DOL is not protecting US workers by requiring such wage increases. Instead, this administration is trying to block US companies from hiring a small number of highly qualified foreign workers, at legitimately competitive wages, where the candidates possess educational backgrounds that US employers commonly look for in such candidates.


In immigration, this administration is doing everything it can to interfere with market forces and to replace business judgment with bureaucratic rules that lack any factual basis. All of these attacks have generated federal litigation that the government is losing, repeatedly. The Temporary Visa Ban was hit with an immediate injunction, and several companies have filed suit against USCIS and DOL over the most recent USCIS/DOL regs, with requests for preliminary injunctions. Based on the failure of both agencies to cite logical and reliable data for these regulations, and the failure to offer a logical explanation as to why they did not provide for the normal review and comment period, it is very likely that both will be enjoined.


The Ultimate Goal: Stop All Business Immigration

This administration claims it is protecting US workers with these policies and regulations. They do not. Instead, it has tried to shut down business-based immigration, in spite of the damage that these decisions will cause to US employers and, ultimately, to US workers. The only possible reason for this series of ill-advised policies and practices is that they enhance the administration’s efforts to shut down all immigration. Consistent with other anti-immigration policies (e.g., terminating the DACA program) of this administration, the assault on business-based immigration reflects another flank in its anti-immigration ideology. In more practical terms, those policies and regulations have at least one thing in common: they interfere to the maximum possible extent with free market forces.

In the business immigration field, this administration has come down on the wrong side of the issues, over and over again.As a result, its legacy has been shaped by all the wrong reasons: by how much harm and damage it has caused our economy, and by how many US employers it has blocked from hiring critical workers whose presence would have supported jobs for countless US workers during a pandemic that has decimated our economy.

[1]A number of E-2 treaties were signed early in our history, and we have continued to recognize the benefits of foreign investment: United Kingdom (1815); Colombia (1848); Costa Rica (1852); Switzerland (1855); Paraguay (1860); Honduras (1928); Norway (1932); Finland (1934); Liberia (1939); Italy (1949); Japan (1953); Ireland (1954). [2] The 65,000 number came out of a subcommittee discussion leading up to IMMACT 90, and had no particular basis; it just happened. Even so, in recognition of highly increased market demand, Congress increased the number of H-1B visas to 195,000 in FY 2003. The limit returned to 65,000 the next year and has remained there ever since, in spite of over 200,000 H-1B cases filed each year, and frequent requests by the business community to increase the total number, or “cap” on H-1Bs each year. [3] The US company to which the foreign worker is being transferred under the L-1 visa also must be related by common ownership to the foreign employer where the worker has been employed. [4] These RFE’s often are pro forma, and many times they ask for documents and information that the sponsoring company already has provided with the initial petition. [5] If the logic of USCIS’ position escapes the reader, it has escaped all of the federal judges who have listened to USCIS try to justify it.

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