President Donald Trump has tightened the rules for employer-sponsored visas and is stepping up enforcement efforts against illegal immigration. One result is that many U.S. employers–from software startups to mushroom farms–are struggling to find the immigrant workers they need.
Immigration lawyers and other experts say some employers are finding ways to work around restrictions on the popular H-1B visa by using more obscure visa types. Other employers, they say, are delaying big projects or expanding their overseas operations to employ foreign workers in their own countries.
Ultimately, experts say, more American companies may move their operations out of the U.S. to find skilled workers if immigration rules curtail their use of foreign labor in this country.
This is particularly true for U.S.-based technology firms that are struggling to fill jobs because of the tight restrictions on H-1B visas for college-educated workers coming from India and Asia, says Dick Burke, CEO of Envoy Global, a Chicago-based firm that helps companies bring in foreign workers or send U.S.-based staff abroad. Burke says the fierce anti-immigrant rhetoric coming out of Washington, in and of itself, is discouraging potential workers and creating uncertainty for companies.
For employers that are considering relocation, Burke says, Vancouver, Canada is a popular destination–or another country where hiring immigrant workers is less of a headache.
Burke says these companies often rely on the following reasoning: “We have to grow. But if it comes down to not doing it or doing it elsewhere, we’ll do it elsewhere.”
Many business leaders argue that U.S. immigration policy needs a thorough overhaul to ensure a healthy flow of skilled immigrants–from graduate students in American universities on student visas to junior scientists and engineers at corporate and academic research centers. Many argue that the H-1B program, in particular, is critical to keeping the U.S. competitive in a global economy.
Employers also worry about the signals being sent to foreign employees of U.S.-based companies. The string of new visa rules and rhetoric “is causing problems, particularly for multinational companies,” says HR Policy Association CEO Dan Yager. “It sends a message to those employees that they’re not wanted here.”
The association, which represents chief HR officers at large U.S. companies, has long lobbied for comprehensive immigration reform, a prospect that has dimmed in recent months.
“There is a fundamental disagreement between most of corporate America and policymakers who want to close our borders,” Yager says.
A Shift to Legal Workers
During the 2016 presidential campaign, much of the immigration debate focused on the southern border, where Trump vowed to build a wall that would keep out unauthorized workers. By early 2017, even before any wall was constructed, the flow of workers had diminished. To cope, some major agricultural employers that traditionally depended on labor from Mexico are doing just what the president wanted: They’re shifting to legal workers. One tool is the government’s E-Verify service, which can confirm a worker’s legal status.
A newer tool is the H-2A visa for agricultural “guest workers.” Known in the early 20th century as the “bracero” program, it was revived as part of immigration-reform legislation in1986.
By 2017, Department of Labor statistics show, more than 7,000 H-2A visas were issued in California alone. But one grower and packer in the state’s agricultural heartland, the Central Valley, considers the program a temporary fix for now.
“It’s kind of a pilot program” for most growers in area, Porterville Citrus General Manager Jim Phillips told the Fresno Bee newspaper in April. Growers in the Central Valley will likely continue using the H-2A program if the initiative is successful this season, he says.
Companies that have been in the habit of hiring undocumented workers should take extra care today, employment attorneys warn. Many expect to see the pace of workplace audits–already at a brisk pace under the Obama administration–pick up under Trump.
The administration claims immigration authorities arrested more than 41,000 people across the country in raids over the first five months of 2017, up nearly 40 percent from the same period last year.
The president signaled on Inauguration Day that immigration policies would change.
“One by one, the factories shuttered and left our shores, with not even a thought about the millions and millions of American workers that were left behind,” he said. “The wealth of our middle class has been ripped from their homes and then redistributed all across the world.”
The ranks of employers concerned about the immigration restrictions–and the impact it could have on their talent strategies and businesses–began to grow once President Trump took office. On Jan. 27, he signed the first so-called travel ban, limiting entry from travelers coming from certain countries. After a federal court upheld challenges to the ban, the president issued an updated set of restrictions. That ban also was invalidated by judges, with a federal appeals court ruling against Trump on May 25.
These restrictions, though still in flux, cause employers anxiety, says Matthew Dunn, a partner with Kramer Levin in New York. In addition to making travel more complicated and expensive, the shifting policies “make them less confident in the visa program.”
Tighter H-1B Rules
The president’s reform efforts focused squarely on the H-1B visa program on April 18 with his “Buy American and Hire American” executive order. Among other things, it called for a broad review of the popular H-1B program “to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”
The H-1B was already in the crosshairs, however. In early March, the administration had announced it was suspending the premium-processing option, which shaved 15 days off the H-1B process for a fee of $1,225.
It’s clear the H-1B program still “is under the microscope,” and more changes could be coming, Dunn says.
The uncertainty is unnerving for companies, particularly those that plan to bring over defined cohorts of immigrant workers each year.
The new delays and extra scrutiny mean it’s more important than ever to get visa applications done early, says Eleanor Pelta, a partner with Morgan Lewis in Washington.
“We’re advising employers that applications must be prepared quickly,” she says.
Employers have long objected to limits built into the H-1B visa program, including a cap that now stands at 85,000 total visas. The number of applications routinely exceeds that limit.
But tech industry leaders acknowledge that overseas staffing companies have attracted close scrutiny because of their use of H-1B visas to supply overseas workers to U.S. tech firms in bulk, often at wages that undercut those earned by domestic job candidates. “President Trump has rightfully brought attention to the abuses to the H-1B program conducted by outsourcing firms, demonstrating the need for administrative and legislative reform to this important program,” says Gary Shapiro, president and CEO of the Consumer Technology Association, a trade group based in Arlington, Va.
“For meaningful reforms to occur, Congress would need to act … . The program is a critical tool for U.S. companies to hire talent that they cannot find elsewhere. We hope that Congress will be able to advance legislation to end abuse of the H-1B system.”
Simply capping the number of H-1B visas is counterproductive, Shapiro says.
Citing a recent survey by the CTA, Shapiro points out that 86 percent of tech employers say they need more employees with technical skills. With H-1B visas harder to get, many tech companies feel they must rely more on part-time contract workers or even move their operations overseas, he says.
Shapiro notes that because H-1B visas are granted through a lottery, an artificially low cap on visas are awarded based on luck and not merit, preventing American companies from filling technical roles. The visa cap has already sent many U.S. companies overseas and costs the nation about 500,000 jobs each year. Increasing the number of available H-1B visas each year would be an economic win for the U.S. economy–every H-1B worker creates 1.83 additional jobs for American workers, according to the CTA.
“Although the administration has taken some measures to address the problem, there are still many unanswered questions,” Shapiro says. “For meaningful reforms to occur, Congress would need to act. We hope that Congress will be able to advance legislation to end abuse of the H-1B system and improve its efficiency for the companies that use it for its intended purpose.”
The Path to Permanent Residency
The shortage of H-1B visas also is prompting many companies to accelerate the usual process of moving foreign-born employees up the ladder toward citizenship, experts say.
Dunn notes that companies are increasingly doing more to help foreign employees with a visa get a green card, which grants permanent residency. Among other things, these efforts can go a long way to strengthening employee loyalty, he says.
“They want to know the company is willing to invest [in them],” he says.
Most employers that hire foreign workers have have not taken any drastic steps, immigration lawyers and other experts say.
“A lot of companies are still in reaction mode,” says Jay Jamrog, a co-founder and senior vice president for research at the Seattle-based Institute for Corporate Productivity. At the very least, he explains, more of them are investing in long-term workforce planning, matching projected long-range needs with an analysis of the risks that immigration limits will continue to pinch their supply of overseas workers.
Jamrog urges employers to think of immigration challenges in the larger framework of understanding the company’s “talent risk.”
“Do a systematic analysis,” he says.
Among companies that are hurrying to keep the talent flowing, many are tweaking their use of the immigration process to bring in workers without using H-1B visas, Burke notes. One popular alternative is the L-1 visa, which is intended for employees being transferred to the U.S. from an overseas office.
Another alternative is the O visa, Burke says. But the bar is high for such visas, he says, noting that they’re “intended for people of real talent or renown,” such as celebrated performers or scholars.
Yet another alternative, also limited in use, is the TN–or NAFTA Professional–visa for workers from Canada and Mexico.
Still, none of these options are likely to ease employer concerns over the aforementioned Trump executive order.
Although tech firms have been the most prominent critics of the new restrictions on H-1B visas, “It’s hurting businesses across the board,” Jamrog says, including manufacturing and education.
The angry political talk isn’t helping, either, he says.
“Just the rhetoric alone is scaring people” who might otherwise bring their talents and training to a U.S. employer, Jamrog says.
Burke agrees. “The skills gap is real,” he says, and employers often have no choice but to hire foreign talent.
Many business leaders argue that U.S. immigration policy needs a thorough overhaul to ensure a steady flow of skilled immigrants, from grad students here on student visas to junior scientists and engineers at research centers.
“Our global competitors understand that attracting top talent from around the world is vital to a country’s economic success, and many have already re-written their immigration policies accordingly,” Yager told Congress via a letter presented during the last attempt at comprehensive immigration reform in 2003. “We urge Congress not to miss this opportunity to level the playing field for U.S. employers. We can’t afford to wait.”