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COVID-19 and the Special Impact on Employers of Foreign Workers – Special Rules for H-1B, H-1B1 and E-3 Employers

In response to the COVID-19 pandemic, many government authorities in the US and around the world issued shelter-in place orders in an attempt to protect public health and slow the spread of Coronavirus. In the US, employees in jobs listed as non-essential are ordered to work from home. As a result of the economic downturn, employers are evaluating business operations, including the options and consequences of termination, furlough, and reductions in pay and or hours. 

Employers of foreign workers often have additional legal obligations that must be considered before taking such action. In particular, employers of foreign professionals on H-1B, H-1B1 and E-3 specialty occupation worker visas have additional obligations and liabilities under US immigration law that must be considered, in addition to the other legal requirements under relevant state and federal employment law. 

Labor Condition Application

These employers are bound by attestations that the employer was required to make on the Labor Condition Application (LCA) filed with the visa petition, pursuant to  Department of Labor (DOL) regulations. The COVID-19 pandemic may impact the ability of employers to fulfill these obligations.  DOL recently issued additional guidance for scenarios likely to occur during this challenging time. 

Obligation to continue to pay the offered wage indicated in the LCA

DOL regulations require employers to pay the wage promised in the LCA with only limited exceptions.

The employer remains liable to pay even during nonproductive time caused by conditions related to employment, such as lack of work. When an employee is in a nonproductive state due to a decision made by the employer, the employer’s obligation to pay continues. 

However, no payment is required if the nonproductive time is caused by reasons unrelated to employment, such as a worker’s voluntary absence from work or a hospitalization. 

Note that the employer must still pay the required wage if the employee’s nonproductive period was subject to payment under the employer’s benefit plan, or state or federal law, such as the Family and Medical Leave Act or the Americans with Disabilities Act. 

When does the obligation to pay start?

The duty to pay is the earlier of:

  • The date the employee is first available for work or otherwise comes under the control of the employer, such as reporting for orientation or studying for a licensing exam;
  • No later than thirty (30) days after the worker is first admitted into the U.S. pursuant to the H-1B petition, whether or not employment otherwise commences; and
  • For a worker already in the United States, generally no later than sixty (60) days after the date the worker becomes eligible to work for the employer (usually the petition validity start date printed on the USCIS Notice of Action Form I-797 for a change of status or change of employer petition), whether or not employment commences.

How much pay is due and for how many hours?

The employer must pay full-time workers the full amount of the wages stated on the LCA.

If the LCA indicated that the job is part-time, the employer must pay for at least the number of hours indicated on the visa petition and the LCA. If the LCA and visa petition state a range of hours, then the amount paid must be for the hours actually worked, so long as the employer pays for no fewer than the minimum number of hours indicated for the range of part-time employment. 

When does duty to pay stop?

The obligation to pay stops when there is a bona fide termination of employment or one of the exceptions mentioned earlier applies. 

Note that bona fide termination under the immigration law differs from the federal and state employment law.  DOL regulations require the employer to notify the USCIS that:

  • The employment is terminated;
  • The petition should be withdrawn; and
  • The employee was offered payment for transportation home, if the termination occurs before the worker’s H-1B expiration date. 

The duty to pay continues even during a COVID-19 shelter-in-place order

The employer’s obligation to pay continues even during a COVID-19 shelter-in-place/quarantine order,  because these conditions are considered to have been caused by reasons unrelated to employment and the employee is otherwise able to work.  

Therefore, employers cannot furlough, bench, or otherwise render an H-1B, H-1B1 or E-3 employee who is nonproductive, and cannot stop paying the required wage, merely because an employee is unable to perform their work from home due to a COVID-19 – related order. 

Violation of this DOL rule exposes the employer to fines, back wage with interest and, in the most egregious cases, ineligibility to sponsor foreign workers for visas through the DOL’s temporary and permanent immigration programs for a period of time. In addition, the USCIS would withhold approval of immigrant and non-immigrant petitions filed by that employer. 

The duty to pay when an employee is afflicted with COVID-19 and consequently unable to work due to isolation and quarantine

The regulations do not require an employer to pay the required wage if an employee becomes nonproductive due to a reason which is not directly work-related and required by the employer, such as a worker’s voluntary absence from work or a hospitalization. 

That said, if an employer has policies in place requiring  an employee who has tested positive for COVID-19 to remain in quarantine, arguments may be made that the employer must continue to pay the employee because the quarantine rule was created and imposed by the employer.

An employer should be aware that it could be subject to required payment under the employer’s benefit plan or other statutes such as the Family and Medical Leave Act or the Americans with Disabilities Act.

Furthermore, this is an evolving situation.  New statutes, regulations and agency guidance is anticipated. Even more than usual, employers should consult with legal counsel regarding employers’ obligations during this national emergency.

Reductions in Pay

Employers seeking to reduce compensation may file a new LCA with the DOL and visa petition amendment or extension with the USCIS stating the new wage offer.

Note that the wage offer must still be at least the higher of the prevailing wage paid to similarly employed workers in the same geographic area or similar employed workers of the employer. 

The lower wage may start after the USCIS receives the visa petition. There is no requirement to wait for agency approval.

Converting a job from full-time to part-time

Employers seeking to convert a job from full-time to part-time must file a new LCA and a petition amendment or extension. The change may commence after the petition is received by the USCIS. 

Changes in work location / working at home

In response to shelter-in-place or similar provisions arising from the COVID-19 pandemic, many employers have employees working from home. Unless that new job site was included on the original LCA, DOL rules govern what action is required.

DOL regulations require employers to post notice of the LCA filing at the job site in two clearly conspicuous locations for 10 days, regardless of whether a new LCA was filed. Though the regulations do not provide specific exceptions for home worksites, during a 2017 American Immigration Lawyers Association’s Liaison meeting with the DOL’s Wage and Hour Division, the DOL indicated that the agency would not expect employees to post at their home residences. If the worker will be working at home in a geographical area of employment that is not covered by the LCA, the employer can post at its headquarter. 

Employers who have closed their offices due to the COVID-19 may not be able to physically post the notice at the headquarter office. In that case, employers may opt for electronic notification. DOL regulations provide that an employer may accomplish electronic notice by any means it ordinarily uses to communicate with its workers about job vacancies or promotion opportunities. For example, the employer can post the notice on an internal “home page” or “electronic bulletin board.” 

DOL regulations also state that the posting is required on or before work at the new site begins. In response to COVID-19, the DOL relaxed this requirement and issued guidance stating that employers are in compliance if the posting is done within 30 days after work at the new site begins. 

No new LCA if the new job site is in the same geographic area

If the new job site/home office is within the normal commuting distance of the job site listed on the approved LCA, no new LCA is required.    

The DOL has not clearly identified how many miles is considered the normal commuting distance. If the new job location is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment. The borders of MSAs and PMSAs are not definitive measures. If the new job site is within 50 miles, that is likely to qualify. 

No new LCA required for short-term placement

DOL regulations also state that a new LCA is not required for short-term placement at the new job site. 

This rule applies to H-1B only.  To qualify, the employer must first meet the following conditions:

  • must fully satisfy the other requirements to which it agreed upon on the approved LCA;
  • shall not place, assign, lease, or otherwise contract out any H-1B workers to any worksite where there is a strike or lockout in the course of a labor dispute in the same occupational classification(s) as that of the H-1B worker;
  • must continue to pay the required wage, the actual cost of lodging, and the actual cost of travel, meals and incidental or miscellaneous expenses for the duration of the assignment. 

The DOL identifies 30 workdays or less in a one-year period as short-term. 

Sixty workdays or less in a one-year period is considered by the DOL to qualify as short-term only if all of the following conditions are met. The employee must:

  • continue to maintain an office or work station at the previously approved permanent worksite (e.g., the worker has a dedicated workstation and telephone line(s) at the permanent worksite);
  • spend a substantial amount of time at the permanent worksite in a one-year period; and
  • maintain a residence located in the area of the permanent worksite and not in the area of the short-term worksite(s) (e.g., the worker’s personal mailing address; the worker’s lease for an apartment or other home; the worker’s bank accounts; the worker’s automobile driver’s license; the residence of the worker’s dependents).

The short-term placement rule does not apply for worksites for which the employer has a certified LCA for the occupational classification. In other words, if the employer has a certified LCA for a worksite, it must follow the proper rules to post notice. 

The DOL regulations did not contemplate a home office as a short-term placement. In any event, employers may well need to have employees working from home for well more than 60 days. Once any H-1B worker’s short-term placement has reached the time limit as stated above, the employer should take one of the following actions, if applicable:

  • File an new LCA for the new worksite and an amended H-1B petition; or
  • Immediately terminate the placement of the H-1B worker and revert to the permanent worksite as indicated on the approved LCA. 

Keep in touch

These are difficult times and government rules are reasonably expected to evolve, but not always as fast or in the ways expected. Dentons makes available to clients a large number of COVID-19 related resources regarding laws and regulations around the world. 

Please contact your Dentons lawyer for further assistance.

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COVID-19 and the Special Impact on Employers of Foreign Workers – Special Rules for H-1B, H-1B1 and E-3 Employers

Going, going gone: USCIS no longer accepting H-1B visa petitions for FY21

The registration and random selection period for new H-1B visas under the fiscal year 2021 quota limitation is over.

On March 31, 2020, the US Citizenship and Immigration Services (USCIS) completed the random selection of new H-1B registrants and updated their online database for employers and attorneys listing selections.

USCIS now needs to receive, starting April 1, 2020, the Department of Labor certified labor condition application and visa petition for each selected registrant within 90 days or less. The agency has not announced any extension of this deadline in response to COVID-19 pandemic. While USCIS has announced extensions of deadlines in many other situations and there remains the possibility that this deadline too might be extended in the future, it is best to prepare and file well before the current deadline.

H-1B quota background

The H-1B is one of the most commonly used visas for US employers of foreign professionals. In 1990, the US Congress, for the first time, imposed quota limits on the number of new H-1B visa petitions that the government would grant each fiscal year, setting the number at 65,000. 

Quota limits were not reached in the years immediately after 1990, but began to be a problem in the mid-90’s as the US economy expanded and the demand for foreign professionals by US employers increased. Congress increased the supply of new H-1B visa petitions to meet the country’s needs, but only temporarily. By the time the temporary increase expired, the US economy was suffering from the tech bubble burst of 2000 and the aftermath of September 11, 2001. New H-1Bs remained readily available.

However in 2004 quota limits on new H-1Bs began to be a problem again. On October 1, 2004, the very first day of fiscal year 2005, the FY05 quota was exhausted.  Congress responded by creating an additional 20,000 slots but limited their availability to those with graduate degrees from US universities.

The increase helped, but was insufficient to meet the needs of US employers. In each of the subsequent fiscal years, the quota was exhausted more and more quickly.  For fiscal year 2008, more petitions were received on the first day than the quota permitted, and the same was true in fiscal year 2009.

Fiscal years 2010, 2011 and 2012 broke with the historical pattern. Although the quota was used up, the same economic climate that limited job opportunities generally also impacted job opportunities for H-1B workers.  As a result, for those fiscal years, USCIS continued to accept new H-1Bs until December, January and November, respectively. 

By fiscal year 2013, the historical pattern resumed and US employer demand for new H-1B workers far outstripped the limited supply allocated by Congress. For many years now, the number of petitions received in the first five business days was so much greater than the quota that the likelihood of selection was less than 50 percent, making it hard for employers and foreign professionals to plan for the future.

For fiscal year 2021, USCIS implemented a new registration system that required employers and attorneys to create accounts and register prospective H-1B employees in March 2020. The agency’s random selection was done from this pool of registrants.

The limited supply of new H-1B visas is inadequate to meet demand. The problem that we have experienced for more than a decade continues to this day, with Congress failing to take the action needed to increase the number of new H-1B visa petitions to meet the needs of American employers. The result has been a shifting of many jobs to other countries, with resulting loss of revenue and business opportunity for the US.

What to do now

Although no new H-1B petitions will be accepted, there are still a number of solutions available to employers and foreign professionals. 

‘Old’ H-1Bs are quota-exempt

Note that only new H-1B petitions are subject to quota limits. A foreign professional granted H-1B status under the quota already is generally exempt from quota limits. This can be true if changing employers or changing from other visa status. For example, a former H-1B visa worker attending US university on F-1 student visa status may be eligible to return to H-1B status without being subject to new quota limits.

Exempt employers

Petitions by some employers are exempt. These are generally government, academic institutions and related research organizations.

Other visas available

There are a number of other visas that US employers may consider as alternatives to the H-1B. 

  • F-1 STEM OPT.  Some foreign students may be able to extend their pre- or post-graduation employment authorization. The list of STEM degrees that offer the chance of an additional 24 months of post-graduation employment authorization beyond the normal 12 months was recently expanded. 
  • Free Trade Agreement TN/H-1B1/E-3.  Citizens of Canada, Mexico, Chile, Singapore and Australia may want to consider free trade visa benefits available by treaty only to citizens of those countries.
  • H-3/J-1.  Training visas are a solution for some. While H-3 authorize only incidental productive work for what is primarily classroom-type training, the J-1 permits on-the-job training involving regular productive work.
  • Extraordinary-Ability Nonimmigrants.  For individuals who can document their extraordinary ability and have job offers using those skills, the O-1 visa is not subject to numerical limitations.
  • EB1A Extraordinary-Ability Immigrants.  Similar to the O-1, but without the requirement of a sponsoring employer. 
  • EB1B Outstanding Professors and Researchers Immigrants. Universities use this to sponsor qualified professors and researchers to immigrate. Other employers use this for qualified researchers.
  • EB2 and EB3 Professional Immigrants.  This is how employers sponsor most professionals to immigrate to the US.

There are many other nonimmigrant and immigrant visas that may be available.  Immigrant visas are subject to quota limits based in part on place of birth, with people born in mainland China and India often experiencing longer waiting times. The requirements for each solution vary from the H-1B, so employers and foreign nationals are well advised to consult their Dentons attorney to determine eligibility for these benefits.

Other countries

Quota limits in past years have driven the jobs offered by many employers offshore and this year is no exception. A number of the countries around the world where our law firm and clients do business have rules for the employment of foreign nationals that are as or even more generous than those offered by the US. 

Employing a candidate abroad, rather than losing a needed skill set, is an option for many employers. Where proximity to a US facility is desired, employers often consider near-shoring in Canada or Mexico.  Dentons is the world’s largest law firm and our global network of offices uniquely positions us to help guide employers through all of the options.

Next fiscal year

And there is always next year when the USCIS will begin to accept new H-1B registration for jobs starting October 1, 2021, under the fiscal year 2022 quota.

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Going, going gone: USCIS no longer accepting H-1B visa petitions for FY21

March 20, 2020, US immigration updates regarding border closures, employment verification completion, premium processing, and signature requirements

Several important announcements were made on March 20 by different US immigration-related agencies. For the full article please read Dentons client alert here.

Dentons will continue to monitor these issue and for the new developments, please visit COVID-19 (Coronavirus) hub. Please contact your Dentons lawyer if you have any questions.

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March 20, 2020, US immigration updates regarding border closures, employment verification completion, premium processing, and signature requirements

Verifying work authorization under USCIS’ OPT cap-gap rule

There are special rules that act to automatically extend the US employment eligibility of qualified F-1 foreign student visa holders beyond the period initially authorized. The rule that relates to F-1 visa holders seeking to change to H-1B work visa status is referred to as “cap-gap” because it is intended to fill the gap between the date the OPT (optional practical training) period would otherwise expire and the date that the new H-1B employment authorization starts.

The H-1B allows employers to temporarily employ a foreign national in a specialty occupation. The US Citizenship and Immigration Services (USCIS) grants H-1B status. There is a limit, or “cap,” on the number of individuals who can receive H-1B status, and H-1B employment generally begins on October 1, the start of the federal government’s fiscal year. 

OPT is an employment authorization for F-1 international students who have completed their studies. Typically, the OPT is granted for 12 months. STEM majors working for eligible employers may qualify for extensions totaling an additional 24 months. At the completion of the study program or the end of OPT, F-1 students have a 60-day grace period to take the steps necessary to either maintain their legal status or depart the US. For the non-STEM majors, that means their OPT status expires well before the October 1 start date of H-1B, hence the “cap-gap.”

To deal with this situation, USCIS’ OPT cap-gap rule automatically extends an eligible F-1 student’s status to bridge the gap between the end of F-1 status and start of H-1B status, thereby allowing the student to remain in the US during the “gap.”

The cap-gap extension applies if all three of the following conditions are met:

  • An employer timely files a Form I-129, Petition for Nonimmigrant Worker, with USCIS requesting a change of the student’s status to H-1B. Note: A petition requesting consular process does not qualify.
  • The H-1B petition asks for an October 1 start date.
  • The student’s status, including any applicable grace period, ends between April and September 30. 

How the OPT cap-gap protection is triggered by different events during the H-1B process

  • When an H-1B petition on behalf of the student has been filed with USCIS but not yet receipted, the student’s employment authorization automatically extends to June 1. While the extension is automatic, students can request from their school’s office of international students office an updated Form I-20 to serve as proof of legal status.
  • While the H-1B is pending with USCIS for processing, the student’s employment authorization automatically extends to September 30. Again, the student may, but is not required to, obtain an updated Form I-20 from the international students’ office. 

If USCIS denies the H-1B, or if the H-1B petition is returned as “not selected,” then there is no longer any cap-gap employment authorization. If the F-1 student’s OPT already expired, then the student has 60 days to depart the US or take other steps to maintain lawful status.

Employers are advised to request updated Form I-20s from their employees on OPT status as proof of valid work authorization, and to take note of the expiration dates.   

Note that if the student’s OPT expires before April 1 and the student is already in the 60-day grace period when the H-1B is filed, the cap-gap only extends the F-1 status, not OPT employment authorization. The student may remain in the US, but without OPT work authorization. 

Employers must verify the employment authorization for all employees in the US. Failure to do so may result in monetary penalties against the employer. Please contact Dentons for more information. 

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Verifying work authorization under USCIS’ OPT cap-gap rule

DHS publishes final rule governing FY 2020 H-1B cap season. Now it’s time to prepare your cap-subject petitions

Last week, the Department of Homeland Security (DHS) published the final rule amending regulations governing H-1B cap-subject petitions. For a detailed discussion of the proposed rule, see our recent blog post here. The final rule, however, makes some changes different from those set out in the proposed rule.

No online registration for FY 2020 H-1B cap season

Though suggested in the proposed rule, the final rule clearly states that an online registration requirement will not be implemented for the FY 2020 cap season. The agency explains that before implementation, it wants to complete user testing and other evaluative tools to ensure the system and process are fully functional. Employers should be ready in 2020 for the FY 2021 H-1B cap season, when the process change will likely take place. US Citizenship and Immigration Services (USCIS) will announce the implementation in advance of the cap season in which it will implement the requirement.

Changing the order of the H-1B lottery selection for the FY 2020 H-1B cap season

Currently, H-1B cap-subject petitions filed under the advanced degree cap are selected first, and unselected petitions get a second bite at the apple—an opportunity to compete, along with the regular cap petitions, for one of the 65,000 visas available for workers holding bachelor’s degrees. The final rule reverses this order. Effective April 1, 2019, USCIS will first select 65,000 petitions from all submissions, including both regular and advanced degree petitions. USCIS will then run a second lottery to select enough qualifying petitions to meet the 20,000 cap exemption for individuals with advanced degrees from US institutions. DHS states that the change will increase the chances of H-1Bs being awarded to individuals with US master’s degrees or higher by up to 16%, or 5,340 workers. Time will tell. Why DHS thinks random holders of US master’s degrees will better serve American competitiveness than will holders of bachelors’ degrees in targeted fields of study, such as STEM, or who otherwise meet the goals articulated in President Trump’s April 2017 executive order directing an interdepartmental review of the H-1B visa program, was not addressed in the final rule.

Dentons analysis

Employers need to submit full H-1B cap-subject petitions during the first week of April. Please contact your lawyer now to be fully prepared.   

Meanwhile, Dentons will continue to closely monitor any changes to the regulations surrounding the H-1B program, particular regarding the pre-registration requirement, and update you as needed.

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DHS publishes final rule governing FY 2020 H-1B cap season. Now it’s time to prepare your cap-subject petitions

Proposed end of H-4 employment authorization likely to affect over 100,000 families

Time appears to be almost up for more than 100,000 foreign citizens working in the United States under an Obama-era special authorization for spouses of foreign workers here on the H-1B visa.

When Congress failed legislatively to address the lengthy wait times for many professionals and their families to be granted resident status, the US Citizenship and Immigration Services (USCIS) in 2015, under the Obama administration, issued a regulation to allow H-4 visa spouses of qualified H-1B professionals to apply for an employment authorization document (EAD). Some members of Congress complained that the executive branch was overstepping its authority by making law—which is Congress’s job—and the regulation was the subject of much debate during the last presidential election. Now the Trump administration is seeking to make good on the President’s campaign promise to eliminate EADs for H-4 spouses.

This change especially impacts US employers of people born in India.

The reason why Indian-born professionals are impacted is because there are numerical limits on the number of green cards granted each year. To promote the diversity of new immigrants to the US, there are quota limits on the place of birth. No more than 7 percent of the total number of family-sponsored and employment-based visas available in a fiscal year may be issued to natives of any one independent country. As the demand for Indian-born professionals is far greater than the annual supply of green cards under the quota, this has created a backlog.

In 2018 for instance, the backlog of Indian-born professionals waiting their turn to get a green card was well in excess of a half million individuals. As a result, it now takes many years for an Indian-born professional to receive his or her green card. As a consequence, Indian-born professionals comprise the bulk of H-4 EAD holders.

Under the current regulation, an H-4 spouse can request an EAD if the H-1B professional is the beneficiary of either an approved employment-based immigrant visa petition, or a Department of Labor alien employment certification application or employment-based immigrant visa petition filed at least 365 days prior to the end of the sixth year of the professional’s H-1B status.

In April 2017, President Trump signed the “Buy American and Hire American” executive order, which, among other things, directed the Department of Homeland Security (DHS), in coordination with other agencies, to review H-1B-related policies. The H-4 EAD regulation was one of the policies reviewed and the result was its proposed elimination.

US employers rely on H-1B professionals to make up for the shortage of qualified American professionals while keeping jobs in the US. CEOs of major US companies, sent a letter to DHS opposing the plan to eliminate the H-4 EAD. The letter pointed out that “[t]hese spouses are often highly skilled in their own rights,” and “revoking their US work authorization will likely cause high-skilled immigrants to take their skills to competitors outside the United States.

These US employers found some support in Congress. Senators Kamala D. Harris and Kirsten Gillibrand sent a letter to DHS and USCIS opposing rescission of the H-4 EAD, pointing out that the proposed change would disproportionately impact South Asian women (in 2017, 94 percent of H-4 EAD were women and 93 percent were from India).

But the administration has not changed its position. In November 2018, DHS published its mid-year regulatory agenda, which included a proposed rule to revoke the H-4 employment authorization final rule. DHS stated that “[s]ome U.S. workers would benefit from this proposed rule by having a better chance at obtaining jobs that some of the population of the H-4 workers currently hold, as the proposed rule would no longer allow H-4 workers to enter the labor market early.” With record low unemployment levels and US employers already complaining of recruiting problems, it is unclear where the DHS thinks employers will find these US workers.

The new rule, if adopted, is expected to become effective in the first half of 2019 and would impact all 100,000+ individuals currently holding an H-4 EAD. Researchers also estimate that the proposed rule will affect entire families, including the H-1B professionals themselves, because many will not be able to afford to live on one income if their dependent spouse is forced to abandon his or her career. This is especially true in areas such as Seattle and the Silicon Valley, which employ high numbers of H-1B workers and have a high cost of living. Entire families may leave the US, taking their job skills to other countries to compete with their former employers—whose only options to remain competitive may be to outsource the jobs or set up their own offshore facilities. Nearshoring to Canada has become increasingly popular, due to the relatively lower cost of doing business there and proximity to the US.

The direct cost of each failed expatriate assignment is estimated to range from $250,000 to $1 million, according to researchers. More important, the departure of these highly skilled workers represents a brain drain and a significant loss of talent for most companies.

Dentons helps employers develop strategies to recruit the world’s best and brightest to fill posts in the US and abroad. For more information, please contact the authors or your Dentons lawyer.

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Proposed end of H-4 employment authorization likely to affect over 100,000 families

DHS new rule on H-1B lottery process: Who’s the winner?

 

Following President Trump’s “Buy American and Hire American” executive order issued back on April 18, 2017, a long-awaited new rule has been proposed by the Department of Homeland Security (DHS) that would change the existing H-1B selection process, although perhaps not before the April 2019 filing season.

Online registration

The proposed rule would require petitioners seeking to file cap-subject H-1B petitions to first electronically register with US Citizenship and Immigration Services (USCIS) during a designated registration period, which would begin at least two weeks before April 1. The registration would require information about the employer, as well as the individual H-1B beneficiary.

USCIS would then select at random from the online registration database until the limited supply available under the quota (65,000 regular cap and 20,000 US advanced degree holders) is exhausted.

The big change is that US employers would only file complete H-1B petitions for the named beneficiaries who have been selected. Government processing fees would only be paid for selected petitions.

Similar to current processing, DHS would prohibit more than one registration from the same petitioner for the same beneficiary during any given year. Further, the new rule would require petitioners to attest to their intent to file an H-1B petition for the named beneficiary in the position for which the registration is filed.

DHS believes that this will prevent US employers from submitting a large numbers of registrations but not following up with complete filings of H-1B petitions for the selected beneficiaries—something that was not possible under the existing system. The proposed rule states that USCIS would closely monitor whether selected registrations are resulting in the filing of complete H-1B petitions. If USCIS finds that petitioners are registering numerous beneficiaries but are not filing petitions “at a rate indicative of a pattern and practice of abuse of the registration system,” it would investigate and could hold the employers accountable.

Selection process

The proposed rule would reverse the order by which the H-1B cap petitions are selected. Currently, USCIS first selects 20,000 with US graduate degrees, and then allow the unselected to be considered a second time, with the rest of the world, for the 65,000 quota. The proposed rule reverses this order. The proposed rule claims that it would increase the likelihood that a US graduate degree holder would be selected by up to 16 percent, but no explanation for that calculation is provided in the rule.

Petitioners whose petitions are selected will be notified to file complete H-1B petitions for the named beneficiaries within a designated filing period, expected to be at least 60 days.

Dentons analysis

The new rule reduces USCIS’ workload, since it does not have to handle the return of unselected petitions. However, this is not likely to speed up the slow processing of H-1B petitions, since the agency generally relies on contractors to handle mailroom services, rather than the officers who adjudicate petitions.

While the new rule may reduce some paperwork for US employers, it will not likely reduce the costs, since the cost of evaluating potential H-1Bs and registering is still incurred prior to the employer signing the petition. In fact, the extra step of registration creates extra work for employers and lawyers.

The anti-fraud provision of the rule attempts to address some of the realistic problems in the H-1B problem, but at the same time creates uncertainty for US employers and would most likely result in employers that have made bona fide job offers backing out for fear of the heightened scrutiny and potential liabilities.

DHS estimates that it will spend nearly $280,000 to develop the new system and $200,000 per year to maintain it. The proposed rule does not charge employers for the registration. How long the agency will forgo charging employers for registration is hard to predict, but USCIS has very few services that it provides to employers without a fee.

It is clear that this change will detrimentally impact the ability of US employers to continue to employ foreign workers. Current law allows the continued employment of F-1 OPT/STEM OPT and J-1 workers while the H-1B is pending, until their petitions are selected and approved OR even until the government announces they are not selected or not approved. The new rule means that fewer employers will have fewer H-1B petitions pending. The situation will be even worse if the new rule speeds up adjudications, as faster adjudications means faster denials. In sum, the new rule will result in fewer US employers being able to meet their staffing needs with pending H-1B petitions.

The announcement warns that the new rule may not be implemented in time for the April 2019 H-1B filing season, since there may not be enough time to fully test the system. If the new system has not gone into effect at least two weeks prior to the filing deadline, employers should be prepared to submit full H-1B petitions for all candidates on the first business day of April 2019.

Employers and stakeholders have until January 2, 2019 to submit comments on the proposed rule.

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DHS new rule on H-1B lottery process: Who’s the winner?

Graduation: Time to request post-graduation work permission for foreign students

It’s April. Graduation is just around the corner. International students who are in F-1 status must consider their post-graduation plans. Now is the time to work with foreign student advisors and the USCIS for those seeking to work and gain practical training after graduation.

Optional Practical Training (OPT) is a period of temporary employment in the US that is directly related to an F-1 student’s major area of study. An F-1 student may be authorized 12 months of OPT after completing a degree from a US university. Eligible students must apply within 30 days of the foreign student advisor (known to USCIS as the “designated school official” or “DSO”) for OPT into the Student and Exchange Visitor Information System (SEVIS) record system.

The application time window is only open from 90 days before to 60 days after completing the degree. The latest possible start date for the OPT is 60 days after completing the degree. F-1 students must make sure to submit their applications, with application fee, within the time window. OPT will start after USCIS approves the Form I-765 and issues an employment authorization document (EAD).

An employer is not required when OPT is requested, but the student will need to find work soon or OPT will be lost and the student will need to leave the US if he or she is without work for more than 90 days after OPT is granted. F-1 students on OPT must report employment status to their DSOs, who will then update their SEVIS records. The reporting is important because a student with approved OPT but without current employer information in SEVIS is considered unemployed. This can have serious ramifications on the student’s future immigration opportunities. We are seeing an increasing number of requests from USCIS regarding OPT employment information when the student later applies for the H-1B work visa that is widely used by F-1 students to work in the US beyond OPT.

OPT can be extended by 24 months for F-1 students who graduate with a bachelor’s or higher degree in an eligible science, technology, engineering or mathematics (STEM) field from an SEVP-certified school accredited by an accrediting agency recognized by the US Department of Education. Eligible students must apply before the end of the OPT as indicated on the EAD.

During the STEM OPT period, the permitted unemployment period is 60 days. Unlike the initial OPT, where employer involvement is minimal, STEM OPT requires that the employer enroll in USCIS’ E-Verify employment eligibility verification program. Dentons lawyers guide employers on the E-Verify registration process and advise on compliance issues.

Also, the employer must agree to employ the student for a minimum of 20 hours per week and to provide the student with formal training and learning objectives. To fulfill this requirement, the student and the employer must complete and sign Form I-983, which must explain how the training opportunity has a direct relationship to the student’s qualifying STEM degree. Dentons lawyers assist employers in developing STEM OPT-compliant training programs.

During the STEM OPT extension period, students must report to their DSOs every six months and supply updated information regarding their employment. If an employer terminates a student’s employment or if the student leaves the job, the employer has to report in either situation to the relevant DSO within five business days. STEM OPT students must submit annual self-evaluations and report to their DSOs regarding the progress of their training. Both student and employer must report to the relevant DSO any material changes to the training plan. Reporting and record-keeping are important in case the student applies for H-1B later.

For more information about STEM OPT, please contact your Dentons lawyer and see the USDHS website for additional information.

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Graduation: Time to request post-graduation work permission for foreign students

Trade deals and immigration

How will future trade deals impact UK immigration policy?

With Brexit negotiations between the UK and the European Union progressing, the UK is keen to start trade talks with the EU as soon as possible. While a trade deal with the EU is a priority, other countries, including India and Australia, have expressed that, in the fullness of time, they also would like to negotiate their own trade deals with the UK.

The UK’s Brexit Secretary, David Davis, has stated that he is looking for a “Canada Plus Plus Plus” trade deal with the EU, a reference to the recent deal between the EU and Canada. Labor mobility is a key element of that deal, making it easier for certain skilled professionals from Canada to work temporarily in the EU, and vice versa.

We can also learn from other trade deals:

  • The Trans-Pacific Partnership (TPP) trade deal currently being negotiated between 11 Pacific Rim countries (notably not including the US, which withdrew from the pact) is also looking to include an element of labor mobility. For example, it is proposed as part of this deal that it will be easier for Australian employers to recruit people from Canada, Chile, Japan, Malaysia, Mexico and Vietnam by exempting them from the usual requirement of advertising the role to Australians as part of the immigration process. In return, Australians will get reciprocal access to the labor markets of these six countries.
  • Likewise, one of the outcomes of the Australia-United States Free Trade Agreement (AUFTA), which came into effect in 2005, was the US E-3 visa, which is available only to Australians. The E-3 visa is similar to the H1-B visa, however more generous in that it has a separate quota of 10,500, is renewable indefinitely and has the additional benefit of the spouse of the main visa holder being able to work. In contrast, the H1-B visa has a quota of 65,000 (for applicants of all other nationalities), is capped at six years and the spouse of the main visa holder is not able to work. Singapore and Chile enjoy similar preferential immigration routes to the US as a result of their free trade deals.

One of the key arguments for voting to leave the EU was that the UK would be able to negotiate its own trade deals. So what are our likely trading partners saying?

  • Australia has spoken of the need for “greater access” to the UK for Australian business people.
  • India has already stated that the UK will need to relax immigration rules and make it easier for professionals and presumably students from India to come to the UK.
  • The EU is another matter entirely with many competing priorities and parties. The degree of labour mobility post Brexit will depend on whether we see a “soft Brexit” or a “hard Brexit”, which is still very much to be decided.

What is certain is that any trade deal the UK negotiates after Brexit will be about more than goods and services. Labor mobility will be a key element and it is therefore inevitable that any future trade deals the UK agrees will have an impact on immigration policy.

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Trade deals and immigration

USCIS begins return of unselected H-1B petitions

The United States Citizenship and Immigration Services (USCIS) announced on May 3, 2017 that it completed data entry of all fiscal year 2018 H-1B cap-subject petitions selected in its computer-generated random selection process, and that it began returning all H-1B petitions that were not selected.

The agency did not provide a definite time frame for returning these petitions, but the unselected FY 2017 H-1B petitions were returned by the end of June 2016. The same timetable seems likely this year.

Petition approvals for selected cases have already started being sent. Because of the large volume, processing times vary greatly and petition approvals are likely to continue through the summer and even into the early fall, as was the case in prior years.

For the full text of the USCIS announcement can be found at the USCIS website.

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USCIS begins return of unselected H-1B petitions