Lamar Smith H1B Bill: More Burdens than Benefits
Posted Mar 10, 2000

On March 1, 2000, Representative Lamar Smith (R-TX) the outspoken opponent of immigration who holds the key post of Chairman of the House Immigration Subcommittee, introduced a bill (H.R. 3814) which masquerades as a relief measure for technology companies. Representatives Tom Campbell, Chris Cannon and Bob Goodlatte are co-sponsors of the bill.

In the face of a relatively generous Senate bill (S. 2045, described in the February 17, 2000 MURTHYBULLETIN), Smith is offering an extremely restrictive House alternative. Dubbed the Technology Worker Temporary Relief Act of 2000, the Smith bill does appear to increase the fiscal year 2000 H1B quota by 45,000, (totaling 160,000 and then decreasing to 107,500 in FY2001 and 65,000 in FY 2002). However, in the Smith Bill, the increase in visas would not take effect until the effective date of the Department of Labor (DOL) regulations to enforce the American Competitiveness and Workforce Improvement Act (ACWIA) of 1998. (ACWIA has also been discussed in previous issues of the MURTHYBULLETIN). This would seem to assure that the additional numbers would not be available this year at all since the DOL has not yet, after over one year, finalized the H1B regulations! This provision makes the increase an illusion, since FY 2000 will be ending on September 30, 2000, hardly enough time to finalize the DOL regulations and begin implementing them!

The Smith Bill also imposes substantial new burdens on employers. The $500 H1B training fee would be increased to $1000, and an additional fee of $100 would be imposed to fund anti-fraud efforts. Employers would be required to show an increase in the number of full-time U.S. workers, and an increase in the average wage paid to such workers. Only those employers possessing at least $5 million in gross assets would be eligible to apply for H1Bs. Furthermore, ALL foreign degrees would have to be verified by the U.S. Department of State, which would inevitably result in significant additional delays.

Start-up companies would find it much more difficult to use the H1B program, not only because of the asset threshold mentioned above, but also because the company's headquarters would not be allowed to be located in a person's home. (This provision has stemmed from some internet companies using their personal home address as the official address of the company.)

In contrast to the treatment of smaller or newer companies, the Bill offers a premium processing method for the largest employers. Companies that have been in business for at least 5 years and have yearly income of at least $100 million for each of the last two years, are not "H1B dependent" (defined in ACWIA based on the proportion of H1Bs to the total number of workers), have never had an H1B petition denied or revoked for fraud, and have not been in willful violation of certain other requirements within five years, can pay an additional $250 per petition to request fast track processing. A special office of INS would be set up specifically to handle this type of petition, and petitions not decided within 30 days would be automatically approved.  (The income requirements do not pertain to universities, government agencies and non-profit research institutions.)

In the press release announcing the Bill, Representative Smith characterized the measure as "a reasonable and measured response to the concerns of the high-tech industry." He described the fast-track procedure as a way to "expedite the process for legitimate users." In an economy where small business is responsible for a high percentage of job growth, the implication that smaller companies are less "legitimate" is both galling and inaccurate. Citing statistics that question the existence of a worker shortage in the high technology sector, Rep. Smith declared, "There is no credible or objective study documenting the high-tech labor shortage." Unfortunately, the National Science Foundation study on this issue, which was commissioned by the U.S. Congress, will apparently not be completed in time to influence the current debate.

The Law Office of Sheela Murthy strongly encourages all U.S. employers to contact their elected representatives to oppose H.R. 3814 and to voice their support for the Senate Bill, S. 2045! If you need help with the format of the letters to send or other help, please contact us by email to assist you in this regard.