Vol. 1, No. 3, February 1999

In January, the 106^th Congress convened in the wake of the turmoil which marked the 105^th Congress, with the impeachment of President Clinton and the resignations of both Speaker Newt Gingrich and Speaker-Designate Bob Livingston. During the current Congress, Representative Dennis Hastert (R-IL) is the new speaker; a slim voting margin exists between the House Republican majority and Democratic minority; the Senate will begin to focus on its legislative agenda after the conclusion of the impeachment trial; and the 2000 Congressional and Presidential elections loom ahead. The past Congressional session has been unlike any other, with no roadmaps available to predict the future. However, the business of the country goes on.

In January, House members met in their party caucuses to make committee assignments for the upcoming term; The Senate is finalizing its committees now. With regard to business immigration issues, most of the same players will be returning from the last Congress, with some significant new faces.

In the House, Representative Lamar Smith (R-TX), will return for his fourth year to Chair the Subcommittee on Immigration and Claims. Representative Smith has made no secret of his desire for restrictions in the immigration system. On the minority side, Representative Mel Watt (D-NC) has stepped down as ranking member to take another assignment. In his place, Representative Sheila Jackson-Lee (D-TX), will take over as the ranking Democratic member. Representative Jackson-Lee is in her third term in Congress and has not previously served on this subcommittee. The other members of the Subcommittee are: Republicans Bill McCollum* (FL), Elton Gallegly (CA), Edward Pease (IN), Christopher B. Cannon (UT), Mary Bono* (CA), Charles T. Canady* (FL), Robert W. Goodlatte* (VA); and Democrats Howard L. Berman (CA), Zoe Lofgren (CA), Barney Frank* (MA), Martin T. Meehan (MA). (Members marked with an * are new to the subcommittee this year).

On the Senate side, Senator Spencer Abraham (R-MI) will return as Chairman of the subcommittee for his second term. Senator Abraham was the principal Senate sponsor of the H-1B legislation from last year. Opposite him, once again serving as ranking minority member, is Senator Edward Kennedy (D-MA). Senator Kennedy has been a key player in immigration legislation for most of his years in the Senate. The other members of the Subcommittee are: Republicans Charles Grassley (IA), Jon Kyl (AZ), and Arlen Specter (PA), and Democrats Dianne Feinstein (CA), and new member Charles Schumer (NY).

The immigration subcommittees have jurisdiction over all bills regarding the admission of foreign nationals to this country, naturalization, and other related issues. The subcommittees also are responsible for Congressional oversight of the Immigration and Naturalization Service.

Although most immigration legislation must pass through these two subcommittees, other subcommittees also shape immigration policy. Among the most important are the Appropriations Subcommittees for the Departments of Commerce, State and Justice and the Judiciary (commonly referred to as "CSJ"), which must approve the budgets for the Immigration and Naturalization Service, the Department of State consular offices, and other important immigration agencies.

This year, the House CSJ Appropriations Subcommittee chairman is once again Representative Harold "Hal" Rodgers (D-KY). Last year, Representative Rodgers introduced a bill that would take away the enforcement functions of the INS, creating a new agency of the federal government. However, the bill was completely silent regarding the services functions of the INS, leading immigration advocates to believe that adjudications of employment and family-based petitions and applications would be harmed. Other Republicans on the subcommittee are: Jim Kolbe (AZ), Charles Taylor (NC), Ralph Regula (OH), Tom Latham (IA), Dan Miller (FL), and Zach Wamp (TN). The Ranking Minority Member of this Committee this year will be Representative Jose Serrano (D-NY). He is taking over the position from Representative Alan Mollohan (D-WV), who will remain on the subcommittee, along with Democrats Julian Dixon (CA) and Lucille Roybal-Allard (CA). Representative Serrano is a member of the Hispanic Caucus.

In the Senate, the CSJ Appropriations Subcommittee once again is chaired by Senator Judd Gregg (R-NH), and the Ranking Minority Member is once again Senator Ernest F. "Fritz" Hollings (D-SC). Other members are Republicans Ted Stevens (AK), Pete Domenici (NM), Mitch McConnell (KY), Kay Bailey Hutchison (TX), Ben Nighthorse Campbell (CO), and Democrats Daniel K. Inouye (HI), Frank Lautenberg (NJ), Barbara Mikulski (MD), and Patrick Leahy (VT).

The Chairmen of these subcommittees largely control the agenda of the subcommittees, including which bills come up for consideration and which hearings are held. However, all members of the subcommittees can be important in passing a bill. Businesses and organizations wishing to impact immigration policy should get to know their Representatives and Senators who sit on these committees.

During each Congress, Senators and Representatives introduce many bills, only a small percentage of which ever become law. Usually, Members of Congress introduce bills to highlight issues of importance to them. This Congress, a number of pro-and anti-immigrant bills already have been introduced.

Among these is H.R. 41, the Mass Immigration Reduction Act. Introduced by Representative Bob Stump (R-AZ) and currently with 50 cosponsors, this bill would create a moratorium on immigration by aliens other than refugees, priority workers, and the spouses and children of U.S. citizens. Under the bill, legal immigration would total less than 300,000 people per year. The United States currently admits about one million immigrants annually.

Of these 300,000, the bill would limit employment-sponsored immigrants only to those who qualify as aliens of extraordinary ability, outstanding professors or researchers, or who are multinational managers or executives (the employment-based first preference categories). Only 5,000 such immigrants would be admitted each year. Current law allows at total of 140,000 employment-based immigrants in all priority classes; first preference has 40,000 of that total.

The restriction would begin Oct. 1, 1999, and end after about five years — if illegal immigration decreases to less than 10,000 aliens per year and an end to the moratorium would not negatively affect the wages and working conditions of U.S. citizens, the environment or public hospitals and schools in high-immigrant areas. Representative Stump has introduced similar legislation during the last two Congresses. The bill received limited support from other Members, and was never considered in the Immigration Subcommittee.

To date, H.R. 41 has 49 cosponsors. The cosponsors of this measure constitute a list of some, but not all, of the major Congressional restrictionists who oppose both family and employment-based immigration. They are Alaska - Young, D. (R); Alabama - Bachus, S. (R), Callahan (R), Everett (R); Arizona - Dickey, J. (R), Shadegg (R); California - Doolittle (R), Herger (R), Hunter (R-), McKeon (R), Packard (R), Radanovich (R); Colorado - Hefley, J. (R), Tancredo (R); Florida - Goss (R); Georgia - Barr, B. (R), Collins, M. (R), Deal (R), Linder (R), Norwood (R); Idaho - Chenoweth (R); Illinois - Ewing (R); Kentucky - Lewis, R. (R); Louisiana - Baker, R. (R), Cooksey, J. (R), Tauzin (R); Maryland - Bartlett, R. (R); Michigan - Camp, D. (R), Missouri - Emerson, J. (R); Mississippi - Taylor, G. (D), Wicker (R); North Carolina - Coble (R), Hayes (R), Jones, W. (R), Taylor, C. (R); New Jersey - Saxton (R); New Mexico - Skeen (R); Nevada - Gibbons, J. (R); Ohio - Traficant (D); Oklahoma - Watkins (R); South Carolina - Spence (R); Tennessee - Duncan (R); Texas - Combest (R), Hall, R. (D), Johnson, Sam (R); Utah - Hansen, J. (R); Virginia - Goode (D); Wisconsin - Sensenbrenner (R); Wyoming - Cubin (R).

While it is uncertain what this bill's fate will be, few bills actually become laws. However, businesses with an interest in preserving their ability to hire and sponsor foreign nationals for needed positions should keep an eye on this bill and contact those Representatives who have cosponsored this legislation to inform them of the need to maintain the availability of employment-based immigration.

In early February, the Department of Labor (DOL) issued a notice in the Federal Register extending the deadline for filing comments on its proposed H-1B regulations for 15 days, to February 19, 1999. Interested parties should send their written comments to the Department of Labor by that date. The January issue of Connect! included information about filing these comments.

Why should all businesses be concerned about these proposed regulations? In spite of last year's legislative victory, U.S. employers are in jeopardy of losing the H-1B program as a usable means of hiring skilled foreign workers for key positions through the regulatory process. Specifically, here are some reasons why employers ("H-1B dependent" or not) should be concerned:

• All employers will have to develop and maintain documentation of their calculation as to whether or not they are "H-1B dependent."
• All employers will be required to develop and maintain documentation regarding their benefits plans, including which employees have which benefits in the LCA file for each H-1B employee.
• Where companies have H-1B dependent contractors at their location, they may be required to maintain documentation of all terminations that may constitute impermissible layoffs.
• All companies will be required to develop and maintain an "objective wage system" for all employees – a mathematical formula that can be used by a third-party to determine the salary paid to any given H-1B worker and any similarly-situated U.S. worker.
• All employers will be required to maintain hourly wage records for even FLSA-exempt employees, if the prevailing wage is given as an hourly rate (which it often is in H-1B processing).

• DOL would use the IRS definition of a "single employer" for all purposes under the H-1B program. This would mean that multi-entity corporations could have to coordinate many functions among the various entities, including benefits, wages, movement of H-1B employees for all entities, layoffs, and other purposes, every time an h-1B is hired, promoted, or moved.
• DOL would require employers to update the LCA files every time there is an adjustment to the salary for the H-1B and any similarly situated U.S. workers.
• The development of the "objective wage system" would require employers to create new company-wide compensation systems that would eliminate "subjective" factors such as the reputation of the employees school, performance that is not objectively measured, and others.
• Under its proposed "temporary placement option" DOL would require employers to track the movement of all of their H-1B personnel to determine when new LCAs must be filed, when new postings must be done, and when wage adjustments must be made. DOL would also require companies to guarantee reimbursement of travel expenses at Federal Government per diem rates.
• DOL would apply wage rates under the Service Contract Act (SCA) to occupations specified in that statute, regardless of whether or not the employer is subject to the SCA.
• DOL cross-references to other areas of labor law that will require companies to consult not only with immigration experts but with their labor experts to evaluate their compliance with these new requirements.

• ACWIA included provisions that allow DOL to investigate employers without a complaint, and to conduct "spot investigations" of willful violators. DOL also has more money for investigations from the new $500 fee.
• ACWIA increased the fines and penalties for violations, and includes fines and possible debarment for unintentional violations of the paperwork requirements.
• DOL proposes that among the "administrative remedies" available to it is "make-whole" relief for displaced U.S. workers and H-1B employees.

• DOL would inhibit the ability of employers to move H-1B workers to multiple worksites.
• DOL would require an employer to enforce contract provisions a State Court, even where there is no dispute between the parties.
• DOL would mandate that the employer pay for all expenses of the H-1B process, including attorneys fees, and would fine the employer for allowing an employee to hire an attorney to do the paperwork.

• DOL is proposing to move all labor certification programs (including the H-1B and permanent labor certification programs) to the Employment Services Administration.
• DOL is proposing to transform the permanent labor certification process into an enforcement-driven, attestation-type program (like H-1Bs).
• DOL is trying to win back issues that they lost during the negotiations for ACWIA, and will try again to enact them on all employers the next time any legislation moves in Congress.

It is imperative that employers let Congress and the Administration know that the Department of Labor is acting against the interests of U.S. business.

In early February, President Clinton delivered to Congress his proposed federal budget for Fiscal Year 2000 (which begins on October 1, 1999). The Budget contains the proposals for all federal agencies, including the Immigration and Naturalization Service (INS). Because Congress must approve the appropriations that fund these agencies for the next fiscal year, and because the level of funding directly impacts the provision of services and the granting of immigration benefits, businesses and organizations concerned about immigration should be interested in the proposals advanced.

The Administration's FY 2000 INS budget request, which totals $4.27 billion (an 8% increase over this fiscal year's funding level), does not dramatically shift the agency's focus but instead concentrates on managing its current resources and obligations. The budget maintains the border patrol and expands the technology and infrastructure to support this vastly expanded force. Other enforcement issues covered include criminal alien tracking (seeking to expand INS's ability to enter information in to the National Crime Information Center database), detention facility staffing and escorting of illegal aliens. The INS budget proposal also includes $124 million of appropriated funds for naturalization initiatives. However, the budget request is glaringly silent regarding backlog reduction in other benefits areas, including adjudication of business immigrant and nonimmigrant visa petitions, adjustment of status, and related filings.

The Administration's proposed FY2000 DOL budget includes $34 million for alien labor certification programs. This figure assumes a shift in administration of all foreign labor certification programs (including permanent labor certification, H-2A, H-2B, H-1B and others) from the Employment and Training Administration (ETA) to the Employment Standards Administration (ESA). The portion of the $500 training fees for H-1Bs that go to DOL (resulting from ACWIA ) will fund additional personnel.

The proposed budget includes no details about how these programs would be integrated into the ESA. Principal authority for enforcement of the current labor certification programs rests with the Wage & Hour Division of ESA. DOL alleges that this shift would streamline the administration of the programs, allow for concerted efforts at reengineering, improve processing of applications, and reduce the burden on employers while maintaining strong U.S. worker protections.

Acting Wage & Hour Administrator John Fraser, in public statements and to various offices on Capitol Hill, has characterized this move as one that employers should welcome. He contends that ESA has much broader experience in administering labor programs, and that the current division of responsibilities between the Office of Foreign Labor Certification Programs in ETA and the Wage and Hour Administration in ESA has caused employers undue confusion. However, he concedes that the majority of the Wage & Hour staff is currently made up of investigators engaged in various enforcement efforts, not administering services.

While immigration practitioners and businesses agree that there are many problems with how ETA currently administers the labor certification programs, this new proposal is a cause for concern. It would put the administration of an employer service – the certification of the application – into the section of the agency charged with investigating the law's violators (those employers who do not comply with the attestations they make when seeking to hire foreign workers). These two functions present a conflict of interest. Similar conflicts have plagued the INS in recent years, and several proposals have recommended separating the service and enforcement activities of that agency. Thus, it seems incongruous for the Administration to support the opposite approach for the DOL than it does for the INS.

DOL also is seeking Congressional authorization to charge user fees on employers for these programs. The proposed budget notes that these user fees will be used to administer the programs, conduct enforcement actions against employers, and provide "education and training programs for displaced workers." The budget proposal seems to replace currently appropriated funds for the labor certification programs' administration with these user fees. However, there is no indication that these user fees would bring in more funds to run the programs. Authorization for DOL to collect user fees would require separate Congressional approval. Similar proposals have failed in past Congresses.

Immigration advocates have learned that ETA and ESA are drafting a proposal to transform the permanent labor certification program (and presumably also the temporary labor certification program for H-2B visas) into an attestation-type program. While we do not have any details about such a program, past experience with DOL's administration of other attestation-type programs (for example in the H-1B, H-1A and F-1 programs) suggests serious concerns are warranted. DOL's proposed regulations on the recruitment and displacement attestations in the H-1B program may foreshadow how the agency would implement an attestation-type permanent labor certification program.

Businesses have long experience dealing with ESA and its Wage and Hour Division and members of the business community in Washington, DC already are expressing concern about these proposed changes. Businesses that sponsor foreign nationals for employment-based temporary and permanent visas and have concerns about these proposals should be prepared to contact Congress to register their opposition.

Employers who hire foreign nationals need to be aware of related issues regarding the approvals necessary before such individuals may begin working. Although many employers are aware of the immigration requirements, it is important to keep abreast of developments in other areas. One such area is the growing list of countries against which the United States has instituted some form of economic sanctions. For example, employers wishing to offer employment to an Iranian national may run into problems due to the United States' ongoing economic sanctions against that country.

In 1995, President Clinton issued an Executive Order directing all Executive agencies ‘to take all appropriate measures within their authority to carry out the provisions' of the Iran trade sanctions [E.O. 12,959, 60 Fed. Reg. 24,757 (1995)]. Specifically, the Executive Order prohibits "the importation into the United States...of any goods or services of Iranian origin." Also prohibited is "any transaction...by a United States person relating to...services of Iranian origin.

In 1997, the Department of State obtained an advisory opinion from the Office of Foreign Assets Control (OFAC) of the Treasury Department, which is charged with enforcing the sanctions, regarding their impact on the issuance of visas to nationals of Iran. The OFAC opinion stated that U.S. companies who sponsor Iranian nationals "resident in Iran" for employment-based temporary or foreign visas could be violating the sanctions. However, Iranian nationals who are "residing" in the United States, as permanent residents or as temporary residents, are not subject to these prohibitions, nor are Iranian nationals who are residing in third countries. The State Department subsequently issued guidance to its consular posts advising that employment-sponsored visas should be denied to Iranian nationals who are residing in Iran. The State Department further stated that Iranian nationals in the United States in a temporary visa status that normally requires that they maintain a "foreign residence which they do not intend to abandon" (which would include most visitors and students), should also be denied a visa.

Since the State Department issued this cable to its offices, the INS has been struggling to develop a policy with regard to the adjudication of employer-sponsored visa petitions for Iranian nationals. While the INS has not yet issued formal guidance to its offices, immigration attorneys report receiving notices from the Service Centers which suggest that the Service will deny a work-authorized visa unless the employer can show that the beneficiary is not "resident" in Iran.

Due to the continuing uncertainty surrounding this issue, employers wishing to file petitions for Iranian nationals, or other countries against which the United States has imposed sanctions-- such as Cuba, North Korea, Iraq, Libya, and others, are advised to consult with their immigration attorneys regarding possible implications of such sponsorship.

Connect! is published monthly by the American Immigration Lawyers Association and distributed to you as a service by its member attorneys. For more information about the stories in this newsletter or how to get involved in advocacy on these and other issues, please contact your immigration attorney.

During FY97, the United States granted legal residence to 798,378 people, a drop of 13% from a year earlier when the total stood at 915,900. The major categories of immigrants were: immediate relatives of U.S. citizens (322,440), family preferences (213,331), refugees/asylees (112,158), and employment preferences (90,607). The employment-based figures represent only 64% of the total number of visas that were available for employment preferences. The INS explains that this decrease in admissions results from not a decline in the demand to immigrate, but the large numbers of pending adjustment of status applications that have created longer wait times for immigrant adjustments, and the carryover provisions of immigration law (which reduced the annual limit of immigration to the U.S. based on family relationships).

FY1999 Total to 12/31/98 = 70,471

FY1997: The cap was reached on September 1, 1997. INS approved petitions after that date to count against the FY1998 Cap.

FY1998: The cap was reached on May 11, 1998. INS continued to approve petitions after that date against the FY1999 Cap.

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