To kick off the conversation, in the current U.S. immigration climate, what are two top concerns of employers?
- U.S. employers are racing the clock to reach compliance.
The first area of concern relates to compliance. The I-9 flexibility rule, announced in March 2020 at the start of the pandemic and updated in March 2021, is expiring next month. This rule allowed employers to review documents remotely for completion of the Form I-9, Employment Eligibility Verification, which must be completed by US companies for all new hires. Now, the flexibilities induced by the COVID-19 pandemic are ending, and a final grace period has been extended to employers. July 31 is a big deadline facing U.S. employers to return to in-person verification and update any I-9s for employees hired after March 20, 2020, if they have not done so already. Employers have until August 30 to review their I-9 forms for compliance, a process that includes meeting with employees in person to review employment authorization and identity documents, updating their Forms I-9 as needed. After more than three years of remote I-9 flexibilities, reaching compliance through in-person meetings will be a tough feat for larger corporations. - U.S. employers are faced with skills shortages without a way to fill the gaps.
Second, at Barnes & Thornburg, we’re seeing a high demand for talented applicants with degrees in STEM (Science, Technology, Engineering, and Math) fields to fill clients’ positions in IT, finance, and notably, healthcare, a sector with a low unemployment rate. Many of these sectors have historically relied on the H-1B nonimmigrant visa category, but it has become increasingly difficult to secure the numerically limited H-1B visa in recent years due to an increase in submissions in the annual lottery. The H-1B lottery for fiscal year 2024 had over 780,000 H-1B registrants for 85,000 available H-1B slots, compared to over 460,000 available in the FY 2023 lottery, a 61% increase. Compared to 26.9% for 2023, the selection rate for 2024 was only 14.6%. Given the statistical challenges of securing an H-1B visa on behalf of employees, U.S. employers are unable to easily fill the gaps in the workforce.
Speaking of ways to fill workforce gaps, let’s talk about Deferred Action for Childhood Arrivals (DACA), which was introduced by an executive order during the Obama administration. This program is still a piece of the pie, so to speak, of employer action and obligations, but how big of a piece is it for large U.S. employers?
It isn’t a very big piece at the moment, but it certainly could be.
Since its inception, DACA has been important to employers as an estimated sixty percent of these individuals, often called DREAMers after the Development, Relief, and Education for Alien Minors or “DREAM” Act, are in the labor force.
There could be over 600,000 of these so-called DREAMers, but right now, we're in limbo as we await legislation to be passed. The Dream Act of 2023 has bipartisan support, having been introduced by Senators Dick Durbin (D-IL) and Lindsey Graham (R-SC) but it has been difficult to pass anything related to immigration because of the many issues we're seeing at the border and because of misperceptions or misunderstandings concerning the contributions of DACA recipients to our economy.
Polls show that most Americans are in favor of some type of DACA relief for these individuals because they've been vetted via background checks, fingerprinting, verification of educational credentials, and more. These individuals are adults and working, many in critical industries, such as healthcare, including nurses and first responders, as well as in education with an estimated 15,000 teachers in DACA status. They've resided in the U.S. for many years and, for most, the U.S. is the only home they know. For these reasons, it really doesn't make sense to deny them an opportunity to continue living and working in the U.S.
For context, the proposed Dream Act of 2023 would create a conditional permanent resident status valid for up to eight years for DREAMers that would provide protection from deportation, work authorization, and permission to travel outside the U.S. There is some contention regarding healthcare insurance for these DREAMers that has become the subject of ongoing litigation, and we may not know until the case reaches the U.S. Supreme Court next year whether DACA will become an actual program under the rule of law. Until then, DACA recipients remain in limbo.
For now, the U.S. Citizenship and Immigration Service (USCIS) is not accepting new DACA applications, but those who have been approved under the previous program are eligible to renew their Employment Authorization Document (EAD) card and maintain DACA status, allowing them to avoid deportation and apply for employment authorization on a yearly basis.
It sounds like DACA has made a positive impact on the U.S. in general, but please tell us more about the pros and cons. Specifically, what are the economic benefits and downsides to extending work authorization to those eligible for DACA?
I've read some reports that DREAMers, by virtue of their ability to work and be consumers in the U.S., would bring billions of dollars to the economy. That’s billion with a B! Also, many DREAMers are working in industries facing unemployment rates of 5% or less, highlighting the critical need for such individuals.
While we await legislative action, how does the current “limbo” state of DACA affect employer practices?
Companies have to balance it all very carefully: abiding by employment laws when hiring individuals and long-term planning for their workforce. For those who have valid work authorization, employers are limited in their inquiries regarding the employee’s status and cannot make assumptions about whether the individual’s DACA status is going to be available in the next year or two. On the other hand, employers must be realistic about what they can do as an employer and how to make informed operational decisions.
Many employers in the tech sector are pushing for DACA relief since they have so many employees whose status would be impacted by any kind of DACA program, whether it allows them to stay in the U.S. or not. With this in mind, employers need the government to address the issue one way or the other so companies will know whether and how they can lawfully employ these individuals.
Turning back to all categories, are there popular U.S. immigration options that companies can leverage to fill open positions?
NAFTA and, more recently, the USMCA for Canada, Mexico, and the U.S. have been very helpful in terms of global mobility options for those countries. The U.S. also has treaties with other countries, such as Australia, Singapore, and Chile, who are eligible for their own quota of H-1B workers, a carve-out of the lottery system.
We’re also seeing many H-1B employees affected by mergers and acquisitions. An H-1B visa holder can continue employment without interruption following a merger when the new employing entity qualifies as a “successor in interest” and agrees to take on certain responsibilities and follow specific steps prior to the close of the deal. We’re assisting employers with this to take advantage of a continuation in H-1B status for employees.
When there isn’t a viable U.S. immigration option to leverage to fill vacancies or extend work authorization for existing employees, how do employers respond?
Across the globe, there are companies who are asking the following questions: Where can we find talent if we can't find it in the US? Do we have offshore units in other parts of the world to help supplement our US workforce?
For example, I have a client that is looking to offshore its labor needs because it can't find enough STEM individuals in relevant fields. It is considering India, South Africa, and Canada.
In particular, Canada has become a hot spot for transferring talent, and we're now being asked by our global clients to provide both U.S. and Canadian immigration services. This is largely driven by the challenges involved with the numerical limitations of the H-1B lottery, which has become so statistically challenging that many talented foreign students who attend U.S. universities, earning master’s degrees and even PhDs, are leaving the U.S. if they’re not selected in the H-1B lottery. In many instances, they’re going to Canada.
Regardless of whether employers are considering outbound or inbound immigration, what are a few of the greatest challenges in the global mobility sphere in 2023?
In short, there are a lot of moving parts with global mobility, exacerbated by post-pandemic issues with processing delays at the consulates and U.S. agencies.
Facing backlogs when securing a visa appointment
With few exceptions, employees coming to the U.S. for the first time must secure a visa appointment at the U.S. consulate abroad to receive a visa stamp. Largely due to the COVID-19 pandemic and staffing challenges, the visa appointment backlog increased in recent years, and the consulates have not fully caught up to the demand for visa appointments. This affects many immigrant and nonimmigrant visa categories, and we're seeing a high demand for visa appointment. Of note, India's backlog is projected to last another year, causing our clients have to keep checking the system for any missed appointments so they can seize the slot.
These procedural issues and delays that we're still seeing post-pandemic also affect employees who have been working in the U.S. since the onset of the pandemic without traveling internationally. Now, these individuals want to travel back to their home countries to visit family and loved ones but need a visa stamp before reentering the U.S.
As for those individuals who are waiting to get a visa appointment, we have to counsel them specifically. With respect to some professors, research scientists, physicians and the like, we have been able in some cases to request an expedited appointment. Similarly, we can help facilitate expedited visa appointments for employees of companies with critical needs.
Delays once in the U.S.
In addition, we are seeing some backlogs once the individual arrives in the U.S. While nonimmigrant visa holders are technically work-authorized once they get their visa stamp and enter the U.S., the Social Security Administration has been backlogged with the Social Security number (SSN) process, which is often required to add an individual to company payroll systems. We're seeing a delay of four to six weeks, or even as long as two months, to get a SSN. Some companies use the workaround of entering a “dummy SSN” and correcting the SSN on the back end for W-2s and W-9s once issued, but others require a Social Security number before placing the employee on payroll.
With so many moving parts, who is the best “captain of the ship” to navigate through the sea of immigration and global mobility?
We encourage employers to have a point person for immigration. Sometimes, it's a member of the Human Resources department, and other times it's someone in executive management or a member of the legal team. It really depends on the company.
Immigration counsel works closely with the company, in conjunction with the foreign national employee, to secure and extend an employee’s ability to lawfully work in the U.S. Immigration counsel relies heavily on consistent communication with the company, and such lines of communication must also be open to the foreign national.
To provide an example, the foreign national employee should be responsible for the employer of a work site change. The H-1B program regulates the work site location, and if an employee needs to move out of state or has other work site issues, they need to notify the employer to amend their H-1B before they can make the move. Having a point person or designated department can streamline this process.
We find that when companies invest in the personnel dedicated to the company’s immigration matters, they are able to build a robust immigration program together with immigration counsel that meets the needs of the company.
Published July 6, 2023.
