H-1B Restriction Under Stimulus Bill

On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009, otherwise known as the “Economic Stimulus Bill.”

While the bill seeks to stimulate the struggling U.S. economy by providing bail out funds and tax cuts to important yet beleaguered industries, it also seeks to limit or restrict the hiring of H-1B workers by certain companies.

The companies affected are those that receive funding under the Emergency Economic Stabilization Act of 2008 (also known as TARP Bill, P.L. 110-343) or receive secured short-term loans through the Federal Reserve.

Under the bill, any covered company will not be allowed to petition foreign workers under the H-1B program unless they comply with certain labor condition application attestations. These attestations are:

First, that prior to filing the H-1B petition, the company must have taken good faith efforts to recruit U.S. workers for the position, offering a wage of at least as high as that required by law and further, that the position has been offered to any U.S. worker who is equally or better qualified for the job.

Second, that the company has not laid off and will not lay off any U.S. worker in a position equivalent to the H-1B position within the period beginning 90 days prior to filing and up to 90 days after its filing.

This section of the bill, introduced by Senators Sander (I-Vermont) and Grassley (R-Iowa), has drawn critical comments among employers, recruiters, professional workers, immigration lawyers and interest groups because of the adverse effects it will have on the hiring of highly skilled H-1B workers considered vital in strengthening the U.S. economy.

Charles Kuck, president of the American Immigration Lawyers Association said that while “the stimulus bill looks helpful,” it is “counterproductive when it restricts the financial industry’s access to top-flight talent who can help create jobs for U.S. workers.”

Given the upcoming start of the filing for H-1B petitions on April 1, 2009 for FY 2010, this new development is a cause of concern for petitioning employers and their prospective H-1B beneficiary-workers.

Yearly, Congress allots 65,000 H-1B visas for skilled workers and professionals in specialty occupations to be able to work temporarily in the U.S. For the past several years, despite the U.S. economic debacle, the H-1B allocation has been oversubscribed and used up indicating a continuing clamor to hire skilled foreign workers for companies to remain competitive.

While the United States Citizenship and Immigration Services (USCIS) and the Department of Labor (DOL) have yet to issue their implementing regulations and guidance on this new law, it appears that those who already have an H-1B status but seek an extension of their H-1B are not covered by this restriction since they are not new hires.

Also, those who were already previously hired by the employer under a different immigration status such as F-1, TN or L-1B but are only applying for a change of status may be considered exempt. On the other hand, those seeking change of employers under H-1B may be covered by the restriction.

This H-1B restriction will expire on February 16, 2011.