H1-B Visas and the Neufeld Memorandum

I don't generally spend much time delving into the intricacies of U.S. immigration law but I thought this issue was interesting because it touches directly on my field, IT.

The H1-B visa is a work permit program that targets that highly sought after group of skilled migrants (called "travailleurs hautement qualifiés" in French) who work in professions like healthcare, IT, engineering and many others (list here).  It is similar to the EU Blue card in the sense that a migrant must first find a position and then it is the future employer who requests the visa from the U.S. government.  Though it is good for 6 years (and allows for Green Card status later on), it does not allow family members to come and work as well (unless of course they qualify for their own H1-B visas).

Nevertheless this visa was both sought after and fought over for many years.  In times past the quota for each year was reached very quickly.  In 2007, for example, the cap of 85,000 for 2008 was reached by April 3, 2007 - a mere 3 days after the program was opened on April 1.  What kind of companies were requesting H1-B visas?  To no one's surprise, a lot of IT companies were taking advantage of this program:  Infosys, Cognizant, Wipro and Microsoft.

Then came the crisis and demand dropped precipitously.  How bad was it?   It took months for the quotas to be filled instead of weeks or days.  As MPI reports in Migration and the Great Recession, legal immigration to the U.S. slowed considerably in those years. (Note to Tea Party and all other anti-immigrant groups in the U.S. - if you want to stop immigration in its tracks, just tank your economy.) 2010 was a bit better but the bloom is off the rose.  This article from Forbes India, "The H1B Visa's Fall From Grace,"  says that there were two other factors that are leading to decreased demand:  a steep rise in application fees - it now costs between 3000 to 5000 USD to apply - and increased scrutiny of applications - the Obama administration has, contrary to what the Right in the U.S. is saying, stepped up enforcement of immigration law to a nearly unprecedented degree.

Into this already troubled picture, has marched the U.S. government, specifically the United States Citizenship and Immigration Services, with the the Neufeld Memorandum (something similar to a "circulaire" here in France) which aimed to step up enforcement of H1-B immigration and employment law.  The issue was the mobility of H1B workers and how IT companies can assign them to different client sites.  Something, by the way, that is pretty standard if you are working in an IT service company.

According to this article, in the past it was understood that when an IT worker changed work locations, all the company had to do was file a little form called a Labor Condition Application with the Department of Labor.  The Department of Immigration was not informed and had no way of knowing where the worker was actually working based on his or her original H1-B application.

With the Neufeld Memorandum that sets higher standards for investigation of employer/employee relationships combined with greater enforcement, immigration agents are checking out these workers by going to the original site/employer to investigate.  If they find that the worker is no longer physically present in that location, they report back that the worker and his/her employer are, shall we say, in an "irregular situation."  The seems to be causing everyone to waste a great deal of time and energy.  One article I read even said that "the USCIS’s fraud detection national security division may also pay a “friendly” surprise visit to the client company to ensure that the work location and other terms of employment are consistent with the H-1B petition."  Oh my.  I'm sure that those clients were just THRILLED to get a visit from U.S. immigration.

So what is the impact of all of this?  Forbes reports that companies are using different strategies to get around this.  Some are simply hiring more U.S. citizens and legal residents or trying for L-1 visas instead since "Visas issued in the L-1 category involve transfers within the same company, and employees do not need to be paid the minimum wage levels of the US, which are much higher than what an employee on an L-1 would be paid."  Other IT companies are simply tweaking their off-shoring models and keeping more of their staff at home and doing the work from Bangalore, for example.

Now I am pretty sure that U.S. government did not intend to make the United States less competitive in the global market for worldwide talent.  I'm even more sure that they are or will be mightily annoyed by efforts of foreign migrants and multi-national IT companies to work around their rules.  But the fact remains that both migrants and companies are rational actors and all of their solutions are quite logical and well within the law.  To make matters even worse, I fail to see how anyone is going to benefit from this:  certainly not U.S. IT workers who may see a few more jobs available but who will face increased competition from migrants in the U.S. on L-1 visas who are apparently not subject to minimum wage laws, and IT workers in lower-cost locations outside the U.S.  It will also hurt migrants who come in with good skills needed by U.S. industry and who, frankly, have other options and other countries that are much more inviting.  These people are legal, for heaven's sake, and making them jump through multiple bureaucratic hoops and harassing them in front of their clients is just unbelievably counter-productive and punitive.

In the 2011 MPI report, Shared Challenges and Opportunities for US and EU Immigration Policymakers, they issued this mild warning:

The U.S. has a strong competitive advantage in attracting and integrating the highly skilled... However, analysts argue that the United States is resting on its laurels and that without more active strategies to provide an attractive immigration "package" to the highly skilled, it may lose some of its traditional advantage.

"May lose"? 

Sorry, mes amis, it is time to take that sentence out of the possible future and move it firmly into the present tense.