While much of the focus on the comprehensive Immigration Modernization Act of 2013 has been on the Mexican border and immigrants’ ability to obtain citizenship, the bill also includes significant changes to highly skilled worker immigration laws.
CEOs and entrepreneurs say the changes are desperately needed and beneficial, but others say the proposed bill comes with its share of downsides.
“The number of H-1B visas permitted this year for hiring was completely reached in just five days,” said Joe Panetta, president and CEO of Biocom. “And that shows just how dramatic the issue is. That means that 39,000 requests for H-1B visas were denied, and those 65,000 visas granted are allocated based on a lottery system.”
H-1B visas are one avenue for U.S. companies to hire highly-skilled foreign workers with a minimum of a bachelor’s degree for a three-year period, with the option to extend the stay to six years. The proposed legislation, which passed in the Senate on June 27 but has yet to make it to Congress or the Oval Office, would increase the minimum number of H-1Bs available from 65,000 to 115,000, with a ceiling of 180,000 visas a year.
San Diego-based immigration attorney Vaani Chawla, founder of Chawla Law Group, said while many CEOs will see the increased availability of H-1Bs as a good thing, the accompanying increase in cost might not be quite as welcomed.
“In the current filing fee structure, there’s a base fee of $350 paid for any H-1B visa,” Chawla said. “Then there’s a $500 fraud detection fee each time an employer files for a new H-1B, and a $750 minimum ACWIA fee to go to the training of U.S. workers in shortage occupations.”
Employers with a maximum of 25 employees pay the $750 fee while companies with more than 25 full-time equivalent employees face a $1,500 fee. Under the new bill, this American Competitiveness and Workforce Improvement Act (ACWIA) fee increases by an additional $1,250 per H-1B visa for companies with 25 or fewer employees, and tacks on $2,500 per visa to those with more than 25 employees, according to Chawla.
Since the vast majority of H-1B visas go to people in the science, technology, engineering and math (STEM) fields, with a Brookings Institution study in June finding that computer-related occupations accounted for 70 percent of all H-1B visas, there has been some contention as to whether these visas are taking jobs away from American workers.
Diego Berdakin, president of BeachMint and four-time entrepreneur, said that while the number of students graduating from college in the United States has doubled since 1980, the number of those graduating with degrees in engineering has remained flat.
“We’re in desperate need of engineering talent that we don’t have,” Berdakin said. “And the only way to get access to it is to tap people internationally, or even domestically. I mean a lot of these people are coming to the United States, they’re getting Ph.D.s here, they’re getting degrees and they’re not able to stay in this country for a variety of reasons.”
At a Connect panel discussion moderated by Panetta on Friday, Berdakin and fellow panelists Rep. Scott Peters; Matt Michelsen, CEO and co-founder of The Backplane; and Joe Green, founder and president of FWD.us; agreed that increased funding for STEM education in the United States is necessary and perhaps a long-term solution to the problem of homegrown STEM talent, but said this push won’t solve the current crisis.
“The only way for us to compete worldwide in the next decades and century is by having the ability to have the talent here that we need,” Peters said.
Green said that with U.S. immigration law the way it stands, this talent is being held in barges off the coast of San Francisco in a practice known as seasteading, as well as getting penned up in Canada.
“There’s this trend where a lot of tech companies are opening offices in Vancouver, which they call holding pens,” Green said. “So literally what they’re doing is they’re getting folks that they want to bring in to their offices in California, and they can’t get their visa so they put them in Vancouver since it’s on the same time zone and because Canada has much more equal immigration laws. And they take employees from California and send them to Vancouver to work with supervisors, so it’s actually removing Americans to work in Canada.”
The panelists cited an almost endless supply of jobs for qualified candidates and the cost of H-1Bs as further proof that this solution doesn’t take jobs from American citizens. Green said he knows CEOs who will hire any candidate capable of performing at the necessary level, without regard to the number of positions.
“In engineering there’s no job cap,” Green said. “As long as somebody meets the bar they will hire them, but they have to meet the bar. They would rather hire no one than to hire someone below that bar.”
Berdakin said it costs him an average of $25,000 to hire a foreign engineer, so he would much rather hire American workers, but said there simply aren’t enough to fill the demand.
H-1Bs have also come under fire for supposed "wage slavery," or a way for companies to pay foreign workers less than they would domestic ones. Chawla said if companies follow the law, this should not be the case.
“The rules are you have to pay the higher of the actual wage or the prevailing wage paid to similarly employed workers,” Chawla said. “If they are following the rules, the chances of companies paying them less are significantly decreased because they have to pay the higher of the actual or prevailing.”
Green echoed that statement, saying the companies that hire H-1B workers treat them very well in his experience.
“There’s this distorted view that somehow this is like wage slavery or something, which could not be further from the truth,” Green said. “These are companies that have sand volleyball courts and feed them three meals a day.”
Aside from H-1B visas, the Immigration Modernization Act also proposes the creation of a non-immigrant X visa, which Chawla said is a part of the legislation that she particularly likes. This 'startup visa' would enable investors who contributed at least $100,000 to a U.S. business or were part of a business that created at least three jobs and generated $250,000 in revenue from business conducted in the United States during the three years prior to filing for the visa, to temporarily live in the United States for three years.
“With our economy struggling along as it has, it’s great trying to keep STEM workers who are highly-skilled in areas with shortages here, but it’s also important to look at investors and entrepreneurs,” Chawla said. “To some extent, that should be our priority -- allowing investors to come here.”
The proposed legislation is comprehensive and therefore tackles all aspects of immigration, with changes to many other facets of skilled worker law and immigration policies in general. The panelists at Connect’s event agreed that the compromises reached in the bill have positives and negatives, but provide a solution to a problem that they say desperately needs one.
Chawla echoed that sentiment, saying it all depends on your point of view and interests.
“There are positives and negatives all over the place as a result of compromise,” she said. “But that’s what we expect. You get an increase in the cap, but there’s a payback, you don’t get it for free. There are certain limitations required to get that. So, you know, it depends on your priorities. If your priority is the cap, it’s great. If your priority is the ability to file an H-1B quickly when you have a prospective employee you need on staff, it could be problematic.”