On November 15, 2017, the House Judiciary Committee marked up legislation that would change the law governing H-1B dependent employers. The legislation needs to pass the entire House and the Senate needs to take up action on this bill before it goes to the President for signature.
Section 1. The bill will be known by the title “Protect and Grow American Jobs Act.”
Section 2. Prohibition on Displacement of United States Workers.
INA Section 212(n)(1)(E)(i) currently states that employers may not displace and will not displace a US worker in the period beginning 90 days before and ending 90 days after the date of filing an H-1B visa application. The bill amends the latter part of this by prohibiting displacement beginning 90 days before the filing of the H-1B and ending on the last day an H-1B worker is employed.
The current law doesn’t apply the displacement provision to employees exempt from the dependent worker provisions. The bill would eliminate that exception.
Current law bars H-1B dependent employers from placing an H-1B worker at another employer (regardless of whether the other employer is dependent) where the H-1B worker performs work at the other employer and there are indicia of an employment relationship with the other employer UNLESS the other employer assures the H-1B employer that it hasn’t displaced workers within the last 90 days and won’t displace workers in the 90 days after placement of the worker.
The proposed bill would alter this in several important ways. First, third party employers must provide assurance to the H-1B employer that it has not displaced a US worker in the 90 days beforehand and won’t displace US workers during the H-1B worker placement period. Second, the 3rd party employer must inform the H-1B employer immediately if there is a displacement of a US worker. When the H-1B employer learns of a displacement at the client site, it must inform the Secretary of Labor of the displacement and cease the placement of the H-1B worker and other H-1B nonimmigrants that are essentially the equivalent of the H-1B worker’s job. The H-1B employer must cease the performance of any services benefiting the 3rd party employer by the nonimmigrant and other H-1Bs employed in jobs that are essentially the equivalent of the H-1B worker’s job. The 3rd party employer must also assure the H-1B employer that it will provide the Department of Labor with information it may request as part of its investigation of the employer.
Section 3. Required Recruitment of United States Workers.
Current law (INA 212(n)(1)(G)) requires dependent employers to take good faith efforts to recruit US workers and offer the job to any US worker who applies and is equally or better qualified for the job for which nonimmigrants are sought.
The bill would add a requirement for the employer to submit with the H-1B application for a dependent employer a report summarizing recruiting efforts made including 1) the good faith steps taken to recruit US workers, 2) the number of US workers who applied for the job, 3) the number of such workers who were offered for the job and, if so, whether workers accepted the offers; and 4) for each worker not offered the job, the reason the job was not offered.
Section 4. Required Wages.
Current law (INA 212(n)(1)(A)) requires employers to pay H-1B the higher of the actual wage level paid by the employer to others with similar experience and qualifications for the specific job in question or the prevailing wage for the particular job.
The bill would additionally require payment of the mean wage level for the job classification for H-1B dependent employers that place H-1Bs at third-party sites.
Section 5. Enforcement.
Current law (INA 212(n)(2)(C)) provides for the fining of employers that violate the displacement provisions. The section would be amended to make the displacement period match the other new sections – 90 days before the filing of the H-1B through the end of the H-1B worker’s employment or placement at a third-party site. Furthermore, liability for displacement extends to H-1B employers placing any H-1B employee at a third-party employer. Current law limits liability for displacement if the worker placed at a third-party site is non-exempt from the dependency rules. The Department of Labor is also charged under the bill to annually conduct random investigations of at least 5% of H-1B dependent employers.
H-1B dependent employers will be required to pay USCIS a new $495 fee when filing an initial or change of employer petition. The fee may increase over time. The fee does not apply to H-4 petitions. The fees are to be used to support H-1B dependent employer enforcement activity.
Section 6. H-1B Dependent Employer Defined.
Under current law (INA 212(n)(3)(A)(iii)(II)) or employers with more than 51 employees, H-1B dependency is based on hitting a threshold of having 15% of nonexempt employees. This section would increase the percentage to 20%.
Section 7. Exempt H-1B Nonimmigrant Defined.
Under current law (INA 212(n)(3)(B)), exempt employees are those being paid at least $60,000 or who has attained a master’s or higher degree (or its equivalent) in a specialty related to intended employment.
Under the bill, for the first-year H-1B exempt employees are those making at least the lesser of $90,000 and the mean wage level for the occupational classification. After the first year, the amount is the lesser of $135,000 and the greater of $90,000 and the mean wage level.
These amounts will be adjusted every three years based on the Consumer Price Index.
Section 8. Report on H-1B Dependent Employers.
The Secretaries of Labor and Homeland Security shall annually publish a joint report on the use of the H-1B program by employers that are H-1B dependent. The report will include information on each employer that filed dependent worker petitions, the occupational classifications and required wages listed in the applications, the worksites at which nonimmigrants were to be employed and each investigation conducted under the H-1B dependent rules.
Section 9. Effective Date.
Except for Section 8, the other provisions of this bill are to take effect immediately for all H-1B applications filed after passage. However, the new $495 fee won’t be required until 90 days after the bill passes.