Business Community Faced With New Immigration Challenges

Sunday, May 1, 2005 - 01:00

The issue of immigration in this country has long been a controversial political topic. The post September 11 era has only heightened the level of importance many Americans place on their opinion of what Congress or the Bush administration should do to protect our homeland through immigration reform. Rarely a day goes by when there is not some immigration-related story that makes its way to the national news front. Regardless of one's personal views on homeland security or immigration levels, the business community in this country has been and will continue to be forced to deal with challenges associated with legislative and procedural immigration changes. Some of these changes have just recently become effective and will have an immediate impact on businesses that employ foreign nationals in the U.S.

H-1B Visa Reform

For U.S. employers seeking to hire foreign nationals in professional positions pursuant to temporary employment visas, the challenge has become significant. The most popular work visa category, the H-1B visa, has been overutilized to the extent that the 65,000 annual visa limit on this category was reached on the very first day of the 2004/2005 fiscal year. This left some employers scrambling for options on how to lawfully hire the brightest foreign national university graduates. The cap will almost certainly be met on the first day of the upcoming fiscal year which begins October 1, 2005. In December of 2004, Congress passed and President Bush signed the Omnibus Appropriations Act of Fiscal Year 2005 which contained the "H-1B Visa Reform Act." The H-1B Act addresses, among other issues, the lack of available H-1B visas by annually exempting 20,000 H-1B visas from the 65,000 numerical limit. These 20,000 additional H-1B visas, however, are reserved for applicants who hold a U.S. Master's degree or higher degree.

For U.S. employers, having 20,000 annual additional H-1B visas is the good news. The bad news is that a $1,500 training fee is now required for most new H-1B visa petitions. Additionally, the Act adds a new Fraud Prevention and Detection Fee of $500 which must be paid by employers seeking a new H-1B visas for foreign national employees or by employers filing H-1B petitions for employees who are switching employers. The H-1B Act also provides the Department of Labor with additional investigative authority to determine whether U.S. employers are in fact complying with H-1B visa regulations. The new investigative authority may likely result in an increase in the number of enforcement efforts that occur with respect to H-1B visa employers.

L-1 Visa Reform

Another popular temporary work visa that has been affected by legislative changes is the L visa category. The Omnibus Appropriations Act for Fiscal Year 2005 also contained the "L-1 Visa Reform Act" which affects multi-national employers that transfer managers, executives, and specialized knowledge personnel to the U.S. Like the H-1B legislation, a new Fraud Prevention and Detection Fee of $500 will be required for new L visa petitions. The L-1 Act also addresses the issue of visa outsourcing by preventing temporary visa holders from working primarily at a worksite other than that of the visa petitioning employer. Finally, the legislation calls for the establishment of a task force specifically to address issues associated with the L visa category. The L Visa Interagency Task Force which shall be comprised of representatives from the Department of Homeland Security, the Department of Justice, and the Department of State must report to the House and the Senate Judiciary Committees its findings on the vulnerabilities and potential abuses of the L visa category. The task force's report will likely be the genesis of new legislation that could further restrict or limit this visa program. Therefore, it will be incumbent upon multi-national companies to stay abreast of pending immigration legislation to prepare for alternative visa solutions for foreign national workers.

Increased Enforcement

Since September 11, 2001, there has been an increase in government worksite enforcement efforts aimed at combating illegal immigration. The majority of these efforts have been focused on security sensitive industries or areas. Corporate America should be prepared for more of the same in the future. Employers that have not placed a great emphasis on proper maintenance of their I-9 forms are encouraged to do so before U.S. Immigration and Customs Enforcement (USICE) or the Department of Labor (DOL) knocks on the door. Historically, there has not been a significant amount of activity by the government in terms of enforcement since Congress passed the Immigration Reform and Control Act of 1986. However, with the public's demand for a more secure homeland since 9/11, enforcement efforts have increased. The Bush administration's immigration reform proposal would provide an avenue for undocumented workers to achieve lawful status through employment opportunities but also calls for a significant increase in enforcement efforts. The end result for the U.S. business community will likely be an increase in audits and/or investigations by USICE and DOL. Employers are encouraged to conduct their own internal audits of their I-9 documentation before the efforts on the part of the government become more commonplace. Company representatives who are responsible for completing the I-9 employment verification process should be properly trained to ensure accurate compliance.


The issue of immigration in this country will continue to be debated in Congress, in the media, and in the boardroom. It is likely that additional legislation will be passed this year that will impact U.S. businesses. Employers that are concerned about these issues are encouraged to track pending legislation by speaking with their Senators or Congressmen or otherwise monitoring how immigration changes may impact their business.

Patrick L. Cont is a Partner with the national labor and employment law firm Ford & Harrison LLP, where he practices in the area of business immigration. He can be reached at (864) 699-1147.

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