On August 13, 2010, President Obama signed HR 6080, the Emergency Border Security Supplemental Appropriations Act (“Act”), into law. The Act provides $600 million in additional funding for border security that will allow the purchase of unmanned aerial vehicles to boost border surveillance, as well as the deployment of 1,500 new federal agents along the southern border. A significant source of this funding will be the increased filing fees that U.S. Citizenship and Immigration Services (“USCIS”) must now charge for certain H-1B and L-1 visa petitions.
Under the Act, certain frequent users of the H-1B and L-1 programs must pay higher filing and fraud prevention fees. Effective immediately, the filing fee for each new H-1B petition has been raised from $320 to $2,000 for employers that have more than 50 employees in the United States, if over 50 percent of their employees are working in either H-1B or L-1 status. The filing and fraud prevention fee for those employers filing L-1 petitions has been increased to $2,250. Under the Act, these fee increases will remain in effect through Sept. 30, 2014.
Senator Charles Schumer (D-New York), who introduced the legislation in the Senate, stated that the Act is “enormously important because it will clear the path for restarting bipartisan discussions we absolutely need to have on how best to restore the rule of law to our entire immigration system.” Senator Schumer added, “The purpose of this fee is not to target businesses from any particular country,” but rather to raise fees for businesses that “use the H-1B visa to do things that are contrary to the program’s original intent … .”
The Act, however, has not been universally accepted. In fact, the Act has created a firestorm among employers in the Silicon Valley. Noting that the flow of technology talent is now out of the United States, the National Association of Software and Service Companies, an association that represents Indian tech firms, argues that the Act will accentuate this outflow, at a time when the country desperately needs this technical talent, by adding to the perception that the United States is hostile to these foreign workers. Adding to these concerns is the perception that this type of law only accelerates the outsourcing trend by organizations that do not want to pay more for foreign workers to come here. Since these workers often are catalysts for the creation of domestic employment, legislation like the Act, which is designed, in part, to protect American jobs, will actually harm the U.S. economy in the long run by providing more economic incentives to outsource those jobs to countries that are more hospitable to foreign labor.
On August 6, 2010, the U.S. Customs and Border Protection (“CBP”) announced an interim final rule that will increase the fees that foreign travelers must pay to use the Visa Waiver Program (“VWP”) on or after September 8, 2010. This rule amends Department of Homeland Security (“DHS”) regulations that established the “Operational and Travel Promotion Fees” that must be paid to apply for an Electronic System for Travel Authorization (“ESTA”) starting on September 8, 2010.
One of the prerequisites for use of the VWP is an ESTA certification. This new rule increases the fees associated with the ESTA process. The total fee for a new or renewed ESTA certification for those approved to travel using the VWP will be raised to $14. This consists of a $4 processing fee for all travelers seeking ESTA certification, and then an additional $10 only if the ESTA application is approved. These fees will be charged to the traveler’s credit or debit cards. Presently, the ESTA system accepts only the following credit/debit cards: MasterCard, VISA, American Express, and Discover. Please note that no ESTA application will be accepted for processing until full payment information is received.
The DHS published a notice of the interim final rule in the Federal Register on August 6, 2010, and will accept comments through October 8, 2010. For more information about ESTA, please visit http://www.CBP.gov.
The DHS issued a final rule, effective on August 23, 2010, that amends its regulations regarding how Forms I-9 may be electronically signed and stored. These new rules clarify that:
Employers must complete the Form I-9 within three business days, not three calendar days, of the hire date;
Employers may elect to use an electronic storage system, as long as it satisfies regulatory requirements;
Employers using electronic systems need not retain audit trails for every viewing of the Form I-9, only when the Form I-9 is created, completed, updated, or modified, altered, or corrected; and
Employers may provide employees with confirmation of Form I-9 completion but are not required to do so unless the employee requests a copy.
This final rule serves as another reminder of the importance for employers to make sure that each vendor offering electronic Form I-9 support has a system that satisfies all regulatory requirements. Otherwise, employers may end up discarding paper Forms I-9 in reliance on a system that the DHS will not accept, and that could lead to substantial fines.
On August 11, 2010, the U.S. Department of State (“DOS”) issued a final rule (“Final Rule”) clarifying the requirements for organizations seeking to use the J-1 nonimmigrant classification for Trainees and Interns. The Final Rule followed an interim rule issued by the DOS on June 19, 2007 (“Interim Rule”), that established a new internship program, clarified the eligibility requirements for J-1 Trainees and Interns, and modified the selection criteria for participation in the J-1 training program.
The DOS received over 1,600 comments to its Interim Rule. The Final Rule basically confirms the Interim Rule but makes certain procedural changes that are expected to make the J-1 program easier to use. For instance, the Final Rule permits the use of telephone interviews to screen possible participants, removes the requirement that the sponsor obtain a Dun & Bradstreet report profiling the organization where the participant will be placed, clarifies the requirements for workers’ compensation coverage and the need for an Employer Identification Number to verify the host organization’s existence, and allows participants to repeat training or internship programs under certain circumstances. The Final Rule will take effect on September 10, 2010.
As of August 13, 2010, USCIS has confirmed the filing of approximately 29,700 H-1B cap-subject petitions for fiscal year 2011. USCIS also reported the filing of approximately 12,300 of the additional 20,000 H-1B cases reserved for holders of advanced U.S. degrees. This leaves room for approximately 35,300 new H-1B approvals under the 2011 “Regular” Cap quota, and 7,700 H-1B approvals under the 2011 “Masters” Cap quota. USCIS will continue to accept all eligible H-1B cases until a sufficient number of H-1B and H-1B1 petitions have been received to reach the statutory limits.
On August 17, 2010, the Department of Labor (“DOL”) announced that Smartsoft International Inc., a computer consulting company based in Georgia, has agreed to pay $999,732 in back wages and interest to 135 H-1B nonimmigrant workers. The DOL’s Office of the Solicitor reached this determination based on a finding of the DOL’s Wage and Hour Division (“WHD”) that Smartsoft had violated the H-1B program’s rules by failing to pay the wages that the program required.
The WHD determined that some Smartsoft employees were “… not paid any wages at the beginning of their employment; paid on a part-time basis despite being hired under a full-time employment agreement; and paid less than the prevailing wage applicable to the geographic locations where they performed their work.” Smartsoft contested the WHD’s conclusions and requested a formal hearing. As part of the August 17th agreement, Smartsoft agreed to drop further challenges to the WHD determination but noted that it “strongly believes” that it would have prevailed in legal proceedings over this issue.
In announcing this resolution, DOL Secretary Solis indicated that it “underscores the Labor Department’s commitment to enforcing our nation’s employment laws, including those designed to protect H-1B program participants … .” Employers with H-1B workers should consider the Smartsoft resolution as a reminder of their wage obligations under the H-1B program and the costs associated with failing to live up to those obligations.
The DOS recently issued its Visa Bulletin for September 2010. This Bulletin determines who can apply for permanent residence and when. The cutoff dates for the Employment-Based Third Preference are as follows: December 15, 2004, for all chargeability, including the Philippines and the Dominican Republic, October 22, 2003, for China; Unavailable, for Mexico; and January 1, 2002, for India. The cut-off dates for the Employment–Based Second Preference are as follows: Current for all chargeability, including Mexico, the Philippines, and the Dominican Republic; and May 08, 2006, for India and China. The monthly Visa Bulletin is available at http://travel.state.gov/visa/frvi/bulletin.
For more information or questions regarding the above, please contact: