The United States Congress is moving forward on a once in a generation reorganization of the nation’s Immigration laws. The President has declared this to be a top priority for his new term. The Congress is actively engaged and there is significant momentum on the issue. The new immigration legislation is being enacted in the midst of uncertain economic times in the United States underlined with anemic job and economic growth. It is important for stakeholders to remain engaged in the debate and to ensure that their interests are not undermined.
This memo seeks to outline the:
- Broad parameters of the debate as it stands today;
- Process by which the legislation may be enacted;
- Concerns regarding the proposed legislation for users of H and L visas;
- Dangers that the process underway may additionally pose; and
- Manner in which H and L visa users can positively impact the legislation.
A group of eight prominent Senators, four each from the Republican Party and the Democratic Party, known as the “Gang of Eight” introduced a Bill S.744 entitled “Border Security, Economic Opportunity, and Immigration Modernization Act” in the Senate on April 16, 2013. The Bill will dramatically impact the H-1B and the L Visa programs that multinational companies, many in the technology industry, rely on. There has already been several hearings in the Senate Judiciary Committee. The House of Representatives is set to have hearings and introduce its version of the Immigration Bill in the near future. It is expected that this Bill will quickly move through the Senate and the House and be ready for the President’s signature sometime in the second half of this year.
By way of background, the Senate and House of Representatives will work independently on their own versions of the Bill; at first in Committee and then in the full Senate and House. Once passed by both the Senate and the House, the Bill will have to go through a process called Conference, where the Senate and the House versions are reconciled. There will then be a final vote in the Senate and the House, before the Final Bill goes to the White House for the President’s signature and becomes law. Additionally, the implementation and the interpretation of the law will be governed by Final Regulations, which will be issued by the relevant departments of the U.S. government including the Department of Homeland Security, Department of Labor and the Department of State.
There are powerful interest groups at play who are trying to impact the legislation in multiple ways. What seems to be emerging is a seemingly coordinated effort by some vested quarters to ensure that Business/Corporate Immigration be re-oriented to only help U.S. companies and put up barriers to foreign companies that bring in highly skilled, educated and professional workers to the United States. The severity with which Indian IT companies have been targeted, has been somewhat surprising.
Areas of Concern with Current Legislation:
The current debate centers principally on the 11 million plus undocumented/illegal individuals who are currently in the United States. The current proposal for an amnesty is extremely generous, with these workers having to pay $500.00 for an Employment Authorization and a $1000.00 fine to get their Permanent Residence. It is ironic that although 11 million individuals are being given an amnesty there is no mention of them depressing wages or “taking away American jobs.”
The only group at this juncture that could emerge as a big loser are companies that bring in high skilled foreign workers through the H and L visa programs. The target of the legislation, now on the Hill, seems to be squarely the Indian information technology (“IT”) companies, with Tata Consultancy Services, Wipro, Infosys and Cognizant being frequently mentioned by name. The draconian measures now proposed, include:
- Curtailing the ability of these companies from engaging on client projects;
- Limiting the number of employees such companies can sponsor; and
- Increasing manifold the fees for processing these employment visas.
These measures are Anti-Trade, Punitive and go against the stated goals of lawmakers to attract highly educated, highly skilled workers from around the world. Although the Senate version of the Bill leaves a loophole for H-1B dependent companies to escape the “dependency clause” by applying for Permanent Residency for its employees, there is concern that as the legislative process evolves, the legislation may become more restrictive and punitive.
Other Issues of Potential Concern:
There is significant rush to have this Immigration Reform Bill passed. Consequently, one of the major worries is that the legislation will be enacted without all the ramifications of the Bill being taken into full cognizance. There is also a significant lack of involvement in the legislative process by some of the stakeholders who will be most affected by the Bill. At hearings on Capitol Hill last week, there wasn’t any effective representation from the IT industry who are the major users of the L and H visas. In fact, there were several professors, who appeared as subject matter experts, and testified that even further stringent restrictions should be placed on the H and L visa categories. A matter of critical concern is that in the midst of this derogatory sentiment that exists in Washington for H and L visa users, more draconian measures are reflexively enacted without due consideration.
A lot of the information that the Senate heard at this hearing was either incorrect or dated. For example, the basic line of attack was this: H and L Visa holders get paid below median wage; they learn the work that is being done by Americans and then outsource these jobs abroad. There was no mention of the fact that most of these employees are well educated; have relevant job experience; create jobs and economic activity in the communities in which they live; and contribute to U.S. Social Security and other taxed but do not derive any benefit from this. Also missing in the debate was the fact that these high skilled workers are necessary for top American companies to support critical technology infrastructure; assist in the introduction new product lines and services; and maintain their technological advantage vis-à-vis the rest of the world. Additionally, in most cases these workers are paid above median wages.
Another area of concern was that although many stakeholders in the debate including IBM, Microsoft, ExxonMobil, Wal-Mart, Target and other such companies maintain strong Government Affairs Bureaus in Washington, they did not contribute anything positive about the IT companies from which they draw some of their critical resources. In fact, Chris Padilla, of IBM, stated that some restrictions on the use of employment visas may not be a bad thing. These companies represent a rich reservoir from which to draw critical support. Outreach to these companies will be an important element in trying to reverse the negative sentiment that currently exists and which seems to be unfortunately getting more hardened.
Most of the media coverage has been fairly hostile to the users of H and L visas. A search the web will show fairly limited mention of employment visas but each one is negative about H and L visa users. There is a complete lack of messaging and input from those who are the principal users of the H and L visas. With emotions running high on all sides, the continual drumbeat of professional jobs being outsourced is finding resonance and this view point needs to be countered in a serious manner.
Where the Legislative Process Stands:
The legislative process for the Immigration Bill has been somewhat ad-hoc and that is partly due to the fact that the Senate is majority Democratic and the House of Representatives is majority Republican. The Senate side, with input from the White House, has been the primary mover of the legislation with the introduction of Senate Bill S.744. The Bill has met with significant support from a broad spectrum of stakeholders, including many to the right of the political spectrum. One of the principals of the bill, Senator Marco Rubio of Florida, is considered to be a leading candidate for President from the Republican Party. Our contacts on Capitol Hill inform us that the Gang of Eight Senators seem to be committed to the Bill. They have taken political risks and expended political capital to sculpt this bill and are generally not disposed to hearing about any potential flaws or enact any changes. Consequently, the ability to impact legislation on the Senate side is going to be limited if non-existent at this time.
The reception of the Bill on the House side has been somewhat different. The House seems to want to enact Immigration reform through multiple pieces of legislation. However, this approach has met with widespread resistance and the House may have to yield work on Immigration reform as a whole. The House Judiciary committee will be where much of the work on the Immigration bill will take place.
There is no consensus on the issue on the House side and the Republican Party Representatives are deeply divided over this issue. There are some who suggest that a minority of Republicans can join with Democrats to form a majority and pass the legislation. In that case the House Bill will largely reflect the Senate version of the Bill. It may be noted that House Democrats are known to be particularly hostile to H and L visa users and consequently this outcome may be the worst of all options.
How to Positively Impact the Legislation:
Although there have been earlier attempts at Immigration Reform, the introduction of Senate Bill S.744 represents the most serious attempt on this issue in recent years. If passed, this law will most likely stand as the law of the United States for several decades and there will be very little possibility of changing it in the future. Immigration has become a political minefield which most politicians will want to avoid.
It is critical for stakeholders to ensure that they have an ability to impact the legislation in a positive way. It is still possible to have a strong input on this process and shape the final legislation. It is important to access the legislators, their aides and the decision formers in Washington. A potential engagement in the process can be built on five pillars:
- Trade: Working with a team of Trade Specialists who are able to impact the manner in which the legislation in written and also have access to decision makers on Capitol Hill and the Administration. The H and L visas limitations will have an impact on Trade and the restrictive language of S.744 may already run in contravention to existing U.S. commitments on Trade. This team of trade specialists should be the foundation of any effort to impact the legislation and should have the ability to coordinate the efforts of the various stake-holders and vested parties. Business Immigration is an important plank of Trade and the U.S. government which promotes free trade cannot be seen to contravene its own pronouncements. Fashioning Business Immigration in Trade terms may also find support among Free-Trade proponents in Congress.
- Economic Data: Appointing a respected economic Think-Tank which could do economic analysis and provide solid economic data – on the positive impact of educated, high skilled workers on the American economy and the strong value proposition that IT and other high technology companies represent. This will also take into account the multiplier effect of economic activity created by the high paid employees who come on short term assignment to the United States.
- Lobbying: Working with an effective lobbying organization which will be able to provide access to the Legislators, Administration officials and critical Aides who write the legislation. This is a critical component in being able to impact how the Legislation is written. Opponents of employment based immigration, including some Labor Unions are actively campaigning for harsher treatment of such visas.
- Public Relations: At this time, there is a severely negative representation of the impact of the H and L visas. This representation of jobs being outsourced and American workers being replaced has not been effectively challenged. The fact that many of these high skilled workers are helping American companies manage critical functions have not been mentioned. A fact based approach that brings out pertinent information and debunks emotionally charged invective will be important.
- Coalition Building: The Immigration reform process will reshape American society and change the trajectory of immigration to the United States. As this process unfolds it will be important to align with like-minded forces. It will be important to reach out to companies like Oracle, IBM, Apple, Wal-Mart et al. that represent the core of American industry and use highly educated, high skilled professional workers to manage critical functions and operations. In a collaborative world, these companies will be directly and negatively impacted, if they are unable to access the skills and professionals of their IT partners. It will be important to be able to access the right individuals in these organizations and seek their support.
An important impetus for Immigration reform is the stated goal of the President, the Administration and the Congress, to enact Immigration laws to stop illegal immigration and instead attract highly skilled professionals; particularly those with Science, Technology, Engineering and Math backgrounds. In fact, on this issue there is unanimity. However, S.744 does exactly the opposite. There should be better representation of the way IT companies contribute to America by in-sourcing jobs; offering U.S. companies hard to find skills on an as-needed basis and creating a strong economic multiplier effect on the U.S. economy. The facts and economic rationale are on the side of those this legislation most adversely effects. This provides the stakeholders a possible path to re-orient the current debate and legislation in a way that benefits, rather than threatens, companies which are currently in the cross-hairs of this process. But time is of the essence and the window to impact the legislation in closing fast.