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Show Me the Money: What the Trump administration’s budget and spending priorities reveal to employers

May 25, 2017
1:00 PM – 2:00 PM EDT
Webinar

Our Employment and Labor team marked the passage of President Trump’s first 100 days with a webinar on May 25, 2017 that looked at whether the president’s budget proposal backed up his prior public statements about wanted changes to employment, benefits and immigration regulations, as well as the impact on employers of the spending bill passed by Congress to prevent a government shutdown. By “following the money,” you can better prepare for future compliance demands and enforcement risks. For your convenience, the program can be viewed in it’s entirety and to register to the webinar by visiting the event page.

We hope you are able to join the program.

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Show Me the Money: What the Trump administration’s budget and spending priorities reveal to employers

‘Hire American’ executive order

End of days—or much ado about nothing?

The visa rules that allow US employers to temporarily hire certain foreign professionals is either going to change dramatically…or not, and there will have been much ado about nothing.

President Trump signed the “Buy American and Hire American” Executive Order (EO) on April 18, 2017. This EO does not change any existing law or regulation. It merely calls on the relevant federal agencies to make changes. This means employers can anticipate more, not less, government regulation and new agency policies, limited by US immigration law made by Congress.

Here is the text of the immigration-related components of the EO:

Sec. 5. Ensuring the Integrity of the Immigration System in Order to “Hire American.” (a) In order to advance the policy outlined in section 2(b) of this order, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse.

(b) In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.

It is clear that the EO makes no new rule or change in law, unlike previous EOs like the travel bans. This EO merely instructs the relevant agencies to propose new rules and issue guidance, if appropriate, with the stated goal of protecting US workers and preventing fraud/abuse and suggesting H-1B reforms.

With so little information in the EO, what can employers expect. Limited insights can be gleamed from the backgrounder issued the night before this EO was issued, when the White House held a press briefing.

Enforcement

The EO merely instructs the agencies to issue proposals and guidance to prevent fraud or abuse. The backgrounder does not do much more than explain that the Administration seeks the strict enforcement of all laws governing entry into the US of foreign workers. The EO calls on the Departments of Labor, Justice, Homeland Security and State to take prompt action to crack down on fraud and abuse. The backgrounder states:

And then again, you add that on top of the across-the-board reform process for guest worker and visa programs in general to make sure that they’re strictly complying with all the rules, laws, and protections for American workers, again, which there are many, but there hasn’t been this kind of systematic review. And this is something that the President, if you look, actually promised that he would have the Department of Labor go and do this kind of systematic review and take these kinds of actions.

We will monitor agency actions carefully to see how this develops, but employers are well advised to review the immigration-related records keeping and compliance systems. Annual affirmative audits and trainings are best practices that the Immigration and Customs Enforcement agency looks to when considering whether to reduce fines and penalties for violators. Employers are well-advised to consult with counsel on what steps can be taken now, as well as expected changes that can be planned for.

H-1B visa random selection and wages

The EO instructs these agencies to suggest reforms to ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries. The backgrounder says that these agencies are expected to report back on proposed ways to change how new H-1B visa petitions are allocated.

Existing rules allocate the limited annual supply of new H-1B visa petitions for most US employers on a random-selection basis. The EO suggests that the foreign worker’s skills and compensation be taken into consideration. Ironically, this would give preference to requests from employers who pay foreign workers more than the average paid to Americans.

The backgrounder acknowledges that some immigration changes can only be made by Congress. Just like the Obama Administration, however, the Trump Administration seems willing to bypass Congress and act unilaterally and not wait for Congress to act.

From the backgrounder:

But you could be looking at things on the administrative side, like increasing fees for H1B visas.  You could be looking at things like if we could adjust the wage scale—a more honest reflection of what the prevailing wages actually are in these fields. Obviously, taking a more vigorous stance, which various—in the Department of Justice do with respect to enforcing gross and egregious violations of the H1B program. You could see potential—and again, we’ll have to get a full legal analysis and review from all the departments, but right now the lottery system disadvantages master’s degree holders. There’s ways that you could adjust the lottery system to give master’s degree holders a better chance of getting H1Bs relative to bachelor’s degree holders. There’s a lot of possible reforms that you could do administratively in addition to a suite of legislative actions.  

There is no change in the H-1B random selection process, which is already concluded for fiscal year 2018. Changes can reasonably be anticipated for fiscal year 2019 filings in April 2018. What skills, wage offers, or other factors will impact the likelihood of selection remains to be determinedassuming that the status quo changes at all.

We will continue to share more information and analysis as the law evolves.

The full text of the EO is published on the White House web site; click here to read the backgrounder press release. To read the President’s remarks on signing the EO click here.

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‘Hire American’ executive order

The Trump wild card: what employers can expect from the new administration

Thursday, January 26, 2017
1:00 PM – 2:00 PM EST
Webinar

With Donald Trump’s election as the 45th president of the United States, and the Republican Party retaining control of both the Senate and House of Representatives, employers can expect some changes.

Join us for an engaging discussion on the Trump administration’s workplace policy priorities, their likely impacts on employers, and what you can do now to prepare for the changes to come. Among the topics to be covered are: the effect on the labor pool of proposed changes in immigration policy; the impact of Obamacare “repeal and replace” on employer-sponsored health plans; compensation issues; the future of regulations covering whistleblowing and human rights protections; the Trump NLRB; the DOL’s Fiduciary Rule; and workplace discrimination. Dentons partner Cynthia Jackson will lead a panel of Dentons lawyers as they tackle these questions and more.

Meeting agenda

Immigration outlook: labor force issues

Campaign promises to increase worksite visa audits and investigations, build a wall along the Mexico border, establish a deportation force, and place new restrictions on immigration from some majority-Muslim countries may become law. The new Administration is likely to adopt policies even before Congress acts. How will these developments impact employers who rely on business visas to hire the best and brightest from around the world? We will predict the future and provide guidance on how employers can prepare now.

The repeal of the ACA and other developments post-ObamaCare

The election of Donald Trump to the presidency, together with Republicans maintaining control of Congress has, for the first time since the Affordable Care Act’s enactment, put the law’s future in serious question. With the new Administration taking the reins of government on January 20, we will discuss the distinct possibility of the ACA’s repeal and replacement, including options for the White House and the expected congressional timeline for debating and passing legislative changes.

Compensation and other DOL regulations

The Department of Labor raced to the end of the Obama administration with a wave of regulatory activity applying to the public sector and government contractors relating to overtime, blacklists, pay equality and sick leave. Courts stalled implementation of some of the more controversial regulations. How will the new administration act in its initial days regarding the recent flurry of regulations?

Whistleblower and human rights developments

During the campaign, President-elect Trump stated that he would dismantle Dodd-Frank, repeal President Obama’s executive orders and unburden companies of excessive regulation. We will address how that will impact whistleblower and bounty hunter programs at the SEC and elsewhere, as well as laws impacting eradication of human trafficking and slavery.

The DOL’s fiduciary rule and the evolution of the NLRB under Trump

The Trump NLRB is expected to reverse recent Board decisions relating to concerted activity, joint employment, election processes and other issues favoring labor. But when will the reversals begin? This presentation will address both NLRB issues and processes during the first year of a Trump presidency. In addition, we will briefly discuss the status and likely future of the DOL’s fiduciary rule.

Workplace discrimination

The Obama administration broadly interpreted Title VII to include anti-discrimination protections on the basis of sexual orientation and gender identity. We will look at whether that trend will continue under Trump. Other current trends in anti-discrimination enforcement and litigation will also be discussed, with a focus on statements made by the President-elect and his team during the campaign and the transition.

Register Now

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The Trump wild card: what employers can expect from the new administration

New national interest waiver ruling

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Increased immigration opportunities for individuals of exceptional ability

There are increased opportunities for individuals of exceptional ability to immigrate to the United States based on new national interest waiver rule after the US Department of Homeland Security issued on December 27, 2016, designated the Matter of Dhanasar decision as precedent.

Summary

The new rule means that USCIS may grant a national interest waiver if the petitioner demonstrates:

(1) that the foreign national’s proposed endeavor has both (a) substantial merit and (b) national importance;

(2) that he or she is well positioned to advance the proposed endeavor; and

(3) that, on balance, it would be beneficial to the United States to waive the requirement of a job offer and thus of a labor certification.

The employment-based second preference immigrant visa category (EB2) includes individuals of exceptional ability who can self-petition to immigrate.  That means they sign their own immigrant petition and do not need a sponsoring employer. Further, the normal requirement of an employer obtaining an alien employment certification from the US Department of Labor can be waived on a showing that the waiver is in the national interest.

Analysis

The new rule states that “substantial merit” may be in a range of areas, citing business, entrepreneurialism, science, technology, culture, health, or education, research, pure science, and the furtherance of human knowledge as examples.  Showing the potential to create significant economic impact may be favorable, but is not required.

“National importance” focuses on potential prospective impact, rather than geographic terms.  National or global implications are relevant, but even a ventures that focus on one geographic are of the US may qualify.

The requirement that the immigrant be well positioned to advance the proposed endeavor focuses on the immigrant.  Relevant factors include education, skills, knowledge, and record of success in related or similar efforts, plan for future activities, and the interest of others (e.g., potential customers, users, investors).

The benefit to the US is an analysis of both:

  • Impracticality of securing a job offer or alien employment certification; and
  • Benefit of the immigrant’s contributions to the US warrants foregoing the alien employment certification.

Matter of Dhanasar

The immigrant in Matter of Dhanasar held a PhD in Engineering, as well as Master’s degrees in Mechanical Engineering and Applied Physics. His research focused on hypersonic propulsion systems and computational fluid dynamics.  He developed a validated computational model of high-speed air-breathing propulsion engine and a novel numerical method of calculating hypersonic air flow.  He intended to work in air and space propulsion systems R&D at university, as well as supporting teaching activities in STEM disciplines.

The US Citizenship and Immigration Services denied the immigrant petition, but that decision was reversed on appeal to the Administrative Appeals Office.  The AAO found there was both substantial merit and national importance to the immigrant’s work due to potential use in military and civilian applications, advances to scientific knowledge, and American national security and competitiveness applications.  The high level of accomplishment to date by the immigrant was found to show benefit to the US even assuming that other qualified US workers are available.

Matter of New York State Department of Transportation

The new ruling vacates the AAO’s decision in Matter of New York State Department of Transportation, which had been in effect since 1998.  That case severely limited self-sponsored EB2 due to a restrictive interpretation of the national interest waiver requirements, which was often misinterpreted by the USCIS to require the very labor market test that was intended to be waived.

Impact

The new ruling makes the self-petition EB2 national interest waiver much more widely available.  As a result, we anticipate a significant increase in filings, including in some cases where the self-petition EB1 extraordinary ability immigrant visa category might be in consideration.  On the other hand, the EB2 category remains oversubscribed with long waiting periods for immigrants born in mainland China and India.  These individuals will continue to shun EB2 in favor of the more stringent requirements of EB1.

The complete text of Matter of Dhanasar can be found here.

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New national interest waiver ruling

Important new regulations for immigrant workers

The US Citizenship and Immigration Services (USCIS) published important new regulations for immigrant workers on November 18, 2016. The regulations become effective January 17, 2017.

Summary

The agency has amended its regulations to provide benefits to those in the employment-based first (EB1), second (EB2) and third (EB3) immigrant visa categories and their employers. The agency’s stated goal is to improve processes and increase certainty for employers seeking to employ and retain such workers, provide greater job flexibility for those workers, and clarify relevant Department of Homeland Security (DHS) policies.

New Rules

There are a number of new regulations, some of which adopt current agency policy and others that are new. The following are some of the most important ones.

For occupations in which a license is required (e.g., doctor, lawyer, etc.), the USCIS will grant the H1B visa for up to one year, if the only obstacle to license issuance is lack of a Social Security number.

For the purpose of counting the number of days spent in the US in H1B visa status towards the normal six-year limit, the USCIS will consider any twenty-four-hour period spent outside the US as one day, regardless of the reason for the absence.

A former H1B visa holder who is no longer in H1B visa status, and regardless of whether he or she is in the US or abroad, may seek an exemption from the normal six-year limit. The foreign worker must be otherwise eligible and the beneficiary of an approved EB1, EB2 or EB3 petition for whom the visa is not current under the quota system as of the date that the H1B petition is filed.

Lengthy adjudication delays of permanent resident status will not support an extension of H1B status beyond the normal six-year limit if the immigrant fails to file for permanent residence or an immigrant visa within one year of the visa becoming current under the quota system. If the visa becomes unavailable again, a new one-year period will be afforded when an immigrant visa again becomes available. The USCIS may also in its discretion excuse failure to timely file upon a showing that the failure was due to circumstances beyond the immigrant’s control.

Credible documentation that an H1B visa worker faced retaliatory action from the sponsoring employer regarding a violation of that employer’s H1B labor condition application obligations may be considered by the USCIS as grounds to grant an extension of H1B stay, or a change of status to another visa classification, notwithstanding the worker’s loss of, or failure to maintain, his or her H1B status.

The definition of “same occupational classification” for purposes of establishing the portability of immigrants to new jobs, has been modified to mean an occupation that resembles in every relevant respect the occupation for which the EB petition was originally granted. “Similar occupational classification” is now defined as an occupation that shares essential qualities or has a marked resemblance or likeness with the original occupation. This guidance is similar to what agency memoranda have already stated.

Employment eligibility verification regulations are amended to authorize employers to accept as proof of employment eligibility Form I-797C and also state that the original employment authorization document is automatically extended for up to 180 days. This is a new rule and will help employers.

Background

The US limits the number of employment-based immigrants annually, by both visa category and country of birth. The quota allocation set in 1990 has never been increased. The annual supply for most categories and countries of birth seems sufficient to prevent lengthy waiting periods; the greatest source of delay are USCIS and Department of Labor (DOL) agency processing times.

The most significant exceptions are for immigrants born in India and mainland China. So many employment-based immigrants born in those two countries are in the queue that waiting periods of for most immigrant visa categories now are many years.

Employer-sponsored EB visas tend to be for specific jobs, at specific work sites, with stated duties and compensation. In general, sponsoring employers and immigrant workers must intend after immigration is complete to work in the same job at the same work site with the same duties for the same (or similar) compensation.

Congress addressed this problem in the American Competitiveness in the 21st Century Act of 2000 (AC21). The USCIS (and its predecessor, the Immigration and Naturalization Service) issued implementing policy guidance, which has been clarified and revised over the years.

The lengthy processing delays were also a problem for H1B professional workers, since there is normally a limit of only six years of status. AC21 provided for extensions beyond the six-year limit.

The EB1 immigrant visa category includes individuals of extraordinary ability, outstanding professors and researchers, and multinational managers and executives. The EB2 category is for professionals with advanced degrees and individuals with exceptional ability. The EB3 category is for professionals and skilled workers, while the EB3W category is for other workers in short supply.

Read the full text of the new regulations here.

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Important new regulations for immigrant workers

US green card availability to increase beginning October 1

visa-perm

Effective October 1, 2016, green cards will become more readily available for most people immigrating to the United States on employment-based (EB) immigrant visa categories.

The US State Department announced in the October 2016 edition of its Visa Bulletin that the agency is processing requests under the EB1 category for all countries of birth, effective October 1. This category includes aliens of extraordinary ability, outstanding professors and researchers, and multinational managers and executives, regardless of place of birth. During the summer, the agency reported a lengthy backlog for EB1 immigrants born in mainland China and India.

The EB2 category—for professionals with an advanced degree and aliens of exceptional ability—is also immediately available, except for individuals born in mainland China and India, for whom the category is backlogged to February 15, 2012, and January 15, 2007, respectively.

The EB3 category—for professionals and skilled workers—has limited available for all places of birth. That said, the backlog for most places is to June 1, 2016, and it is not likely to slow the process of immigration, since the Department of Labor generally takes more than four months to grant the alien employment certification application, often referred to as PERM, longer and that is a prerequisite for EB3 immigration.

The EB5 category—for investors—is currently available for all places of birth except mainland China, which continues to be where the majority of EB5 immigrants are born. EB5 is unavailable for China-born investors in projects in Regional Centers, while EB5 is available to China-born investors in non-Regional Center projects who have I-526 immigrant petition receipt dates on or before February 22, 2014.

There is an annual limited supply of immigrant visas in all EB categories that is replenished effective October 1, the first day of the new fiscal year. In categories where the annual demand tends to be greater than the limited supply, the Visa Bulletins issued for October through April often show the most movement. There is often more movement in the dates for individuals born in mainland China and India during these months. The EB1 and EB5 dates that have improved so much since the September 2016 Visa Bulletin are likely to retrogress once again later in the fiscal year, but the State Department did not release a prediction as to when or by how much.

The full text of the October 2016 Visa Bulletin can be found here.

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US green card availability to increase beginning October 1

New policy guidance for immigrants changing employers

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On March 18, 2016, the United States Citizenship and Immigration Services agency (USCIS) issued new policy guidance regarding how certain employment-based immigrants can change employers during the immigration process without jeopardizing the ability to obtain permanent residence.

In general, employer-sponsored immigration under the employment-based first (EB1), second (EB2) and third (EB3) preference immigrant visa categories requires the sponsoring employer and the immigrant to intend to work together in the job identified on the immigrant visa petition. A change of employer prior to approval of permanent resident status (popularly referred to as a green card) does not automatically terminate the residence application, but does call into question whether the required intent remains. The result is that immigrants are generally reluctant to change jobs prior to completing residence, even when other American employers are trying to recruit them.

In 2000, the US Congress recognized that slow processing by the USCIS (formerly the Immigration and Naturalization Service, or INS) harmed the ability of American employers to compete in the global market for key job skills, as immigrants chose other countries or were forced to leave the US because temporary visas expired before the USCIS completed its work. The American Competitiveness in the Twenty-First Century Act of 2000 (AC21) created greater job flexibility for immigrants to change jobs if the USCIS failed to complete processing of the application to adjust status to resident within 180 days, and if the new job is in the same or similar occupation as the old job. The USCIS was delegated responsibility to issue regulations to implement this law.

Although the USCIS never went through the process mandated by law to issue implementing regulations, the agency issued three prior AC21 policy memoranda and a FAQ. The March 18, 2016, memorandum entitled “Determining Whether a New Job is in ‘the Same or a Similar Occupational Classification’ for Purposes of Section 24(j) Job Portability” (PM-602-0122.1) is the latest.

This memorandum revises the USCIS Adjudicators Field Manual (AFM) to instruct officers to focus on the Department of Labor (DOL) occupational classification assigned to the jobs or other material information. The factors to be considered are: the duties, job requirements (skills, experience, education, training, license/certification) and wages. Location and employer industry sector are not identified, although both can certainly impact wages and are logically relevant in that regard.

The DOL occupational classifications can be found at O*NET OnLine. The DOL’s Online Wage Library can help show how the same or similar occupational classification might result in a change of wage for different locations and over time.

Some EB2 and EB3 visa categories require a DOL alien employment certification (PERM). In these cases, the DOL occupational classification is determined by the DOL on the prevailing wage determination and on the PERM application. The memorandum places the burden of proof on the immigrant to establish the DOL occupational classification for the new job.

In contrast, there is no DOL determination for the EB1 visa category for outstanding professors and researchers (EB1B), or for the multinational managers and executives (EB1C) visa categories, which could make for less predictability or greater flexibility in the outcome. The memorandum places the burden of proof on the immigrant to establish the DOL occupational classification for these jobs.

Aliens of extraordinary ability (EB1A) and aliens immigrant based on the national interest waiver (EB2NIW) self-sponsor, and are not impacted by a change of employer and the new memorandum.

In cases where the jobs have different occupational classifications, but fall within the same broad occupation, the memorandum states the officer may treat such evidence favorably. It also states that such positions will generally be considered to qualify as similar if they largely share the same duties, experience and education requirements.

The memorandum provides further guidance for career progression. While movement from junior to senior levels within the same occupation are likely to qualify, movement form a non-managerial to a managerial role will require a showing that the immigrant remains primarily responsible for the same or similar functions. The memorandum gives a favorable result in an example of a software developer being promoted to computer and information systems manager, while rejecting the promotion of a cook to food service manager, citing the different focus of the jobs as the defining characteristic.

Read the full policy memorandum at the USCIS website.

Dentons lawyers regularly guide employers and immigrant employees in developing and implementing strategies to preserve immigration benefits during such changes as work site relocation, career advancement, reductions in force and changes of employer, including AC21 issues.

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New policy guidance for immigrants changing employers

Department of Labor’s new fiduciary conflict of interest proposal remains controversial

Pensions-(ThinkStock)

Last Tuesday, the US Department of Labor (DOL) released its 120-page notice of proposed rulemaking to revamp the Employee Retirement Income Security Act’s (ERISA) fiduciary conflict of interest rules, along with 246 pages of proposed prohibited transaction exemptions and amendments to existing exemptions. Even before their issuance, the proposed rules drew harsh criticism from the investment community, which recognized that the proposed rules would turn many financial professionals into ERISA fiduciaries and change how they could be compensated and the way they do business.

Given the vocal opposition to the new rules, the ultimate scope and fate of their specific provisions is yet to be determined. But the ongoing debate over how investment advisers should operate in the face of potential conflicts of interest is unlikely to leave the current status quo in place. At stake is not just what standards will apply to the investment advisory community, but who within the federal government will establish those standards.

Dentons’ Pensions, Benefits and Executive Compensation team explores the proposed rules.

Read the complete article

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Department of Labor’s new fiduciary conflict of interest proposal remains controversial