Welcome to another installment of “Dear Sophie,” the advice column dedicated to addressing immigration questions relevant to the technology sector.

Sophie Alcorn, a Silicon Valley immigration lawyer, emphasizes, “The inquiries you submit are crucial for disseminating knowledge, empowering individuals globally to overcome geographical limitations and realize their aspirations.” She extends an invitation to those in people operations, founders, and job seekers in Silicon Valley to submit their questions for consideration in her next column.

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Dear Sophie:

I am trying to understand the recently released H-1B regulations concerning wage levels and job qualification criteria. What steps must employers take to ensure compliance? Do these changes impact other visa categories?

— Concerned in Richmond! 🤯

Dear Concerned:

As you noted, both the Department of Labor (DOL) and the Department of Homeland Security (DHS) have recently issued interim rules impacting the H-1B program. However, the DOL’s rule extends its influence to other visas and green cards as well. These interim rules, with one taking effect immediately upon publication, represent an overreach of authority.

The current administration continues to employ rhetoric intended to garner support through appeals to prejudice, protectionist policies, and exclusionary sentiments. Ironically, businesses were already offering legitimate positions to qualified employees within the innovation sector, positions that are not easily interchangeable and are, in fact, catalysts for American job growth. A 2019 report by the Economic Policy Institute indicated that for every 100 jobs created in the professional, scientific, and technical services industries in the U.S., an additional 418 indirect jobs are generated. Similarly, 575 additional jobs are created for every 100 positions in the information sector, and 206 additional jobs for every 100 jobs in healthcare and social assistance.

The DOL rule, effective October 8, 2020, substantially increases the wages employers are required to pay employees sponsored for H-1B, H-1B1, and E-3 specialty occupation visas, as well as H-2B visas for temporary non-agricultural workers, and EB-2 and EB-3 green cards for advanced degrees and skilled workers, respectively.

The new DHS rule, which further restricts H-1B visas, will become effective on December 7, 2020. DHS will not apply this new rule to any petitions that are currently pending or have already been approved. Therefore, your organization should consider renewing your employees’ H-1B visas – if they are eligible – prior to this date.

The American Immigration Lawyers Association (AILA) has established a task force to analyze the rules and provide support for potential legal challenges. While both the DOL and DHS rules are likely to face litigation, they will likely remain in effect for a considerable period before any legal challenges have an impact. AILA is actively seeking individuals, companies, and organizations who will be negatively affected by these new regulations to serve as plaintiffs.

The DOL rule mandates that employers pay significantly higher wages to employees they sponsor for H-1B, H-1B1, and E-3 specialty occupation visas, H-2B visas for temporary non-agricultural workers, and EB-2 and EB-3 green cards. The new rule notably raises the prevailing wage for occupations based on the geographical location of the work, which will disproportionately affect startups and smaller businesses.

For all four non-immigrant (temporary) visas – H-1B, H-1B1, H-2B, and E-3 – employers must file a Labor Condition Agreement (LCA). This agreement requires employers to pay the higher of the actual wage paid to U.S. workers in comparable positions or the prevailing wage. An approved LCA is a prerequisite for sponsoring an employee for one of these visas.

EB-2 and EB-3 green cards necessitate that sponsoring employers obtain PERM Labor Certification from the DOL before a green card petition can be submitted to U.S. Citizenship and Immigration Services (USCIS). The PERM process requires employers to pay the prevailing wage for the position and to undertake specific recruitment efforts to attempt to hire a U.S. worker for the position before filing for labor certification.

Prevailing wages are categorized into four levels based on experience, ranging from Level 1 (entry-level) to Level 4 (most experienced). Under the new rule, the required wage levels for workers will now be based on a higher percentile wage:

The latest prevailing wage data, based on occupation and location, in the Foreign Labor Certification Data Center system has been updated to reflect the new DOL rule. However, there appears to be an issue with the system, or unusually high wages are being required: No wage levels are currently available for application software developers in Silicon Valley or for computer and information systems managers in Silicon Valley or San Francisco. The FLCDC currently indicates that wages for these categories may be at least $208,000 annually.

Prior to the new rule, the prevailing wage for a software quality assurance engineer at Level 2 in Silicon Valley was approximately $111,000. Now, the prevailing wage for the same position, at the same level and location, is around $140,000, representing a 26% increase.

The DOL rule will affect:

• Pending applications for prevailing wage determinations
• New applications for prevailing wage determinations
• LCAs filed with DOL where the employer did not obtain a prevailing wage determination prior to filing
• EB-2 (excluding EB-2s with National Interest Waivers) and EB-3 green card petitions that rely on prevailing wage determination applications

The DHS “specialty occupation” interim rule solely impacts H-1B qualifications. It significantly restricts H-1B eligibility by requiring employers to demonstrate that a bachelor’s degree in a specific field is essential for the position, by proving this is a consistent requirement for similar roles within the industry. For instance, an individual with a degree in mechanical engineering could be denied an H-1B visa for a quality engineer position, and a software engineer could not qualify with an electrical engineering degree. This will limit the use of H-1B visas in many computer-related professions and in emerging fields like data analytics, artificial intelligence, or growth product management.

The new rule also reduces the permissible period of stay for H-1B visa holders working at third-party worksites from three years to just one year. Their sponsoring employers – typically staffing and outsourcing firms – will now be required to renew these workers’ H-1B visas annually. However, the maximum stay under an H-1B remains six years. The DHS rule also strengthens the definition of the employer-employee relationship, requiring additional documentation, which will impact employers sponsoring H-1B visa holders at third-party workplaces.

DHS estimates that approximately one-third of H-1B applications will be denied under its new rule. It also projects that the rule will impose nearly $25 million in new annual costs on employers and an additional time burden of 30 minutes for completing and filing H-1B petitions.

The DOL is accepting public comments on the rule through November 7, 2020, despite the rule already being in effect. You can submit a comment on the new rule here. DHS, which oversees USCIS, is also accepting public comments on its rule here through November 7, 2020, before it takes effect 30 days later. These public comments may lead to modifications of the rules, so I encourage you to voice your concerns by submitting a comment.

Please keep me informed of how these new rules are impacting your company, and let’s collaborate to foster a more innovative, economically advantageous, and supportive immigration system. When everyone has the opportunity to pursue their dreams, we all benefit.

Wishing you all the best,

Sophie

Do you have a question? Submit it here. We reserve the right to edit your submission for clarity and/or brevity. The information provided in “Dear Sophie” is for general informational purposes only and does not constitute legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here. You can contact Sophie directly at Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms. She is currently accepting applications for potential guests!