Proposed Durbin-Grassley Bill Would Revamp H1B & L-1 Programs

We at the Murthy Law Firm have received some recent questions about proposed legislative changes to the H1B and L-1 programs. Specifically, there are concerns regarding legislation that was introduced on April 23, 2009 by U.S. Senators Richard Durbin (D-IL) and Charles Grassley (R-IA). Known as the H1B and L-1 Visa Reform Act of 2009 (S. 887), this proposed legislation, if passed, would create sweeping changes in the H1B and L-1 programs. The bill is currently in the initial stages of the legislative process, as it is being reviewed by the Senate Judiciary Committee. If ultimately signed into law, this proposed law would significantly affect the H1B and L-1 visa programs and, particularly, IT consulting companies and employers that use the services of consultants. Some of the most significant proposed changes are summarized below. [It is important to note that, at the time of this writing, this is PROPOSED legislation only. Please read our article, The Legislative Process – How a Bill Becomes a Law on MurthyDotCom to understand what must happen in order for this to become law.]

Requirements and Restrictions for Advertising and Recruitment

The proposed legislation would require a thirty-day internet posting, including specification of the offered wage, minimum education, experience, and training required. The U.S. Department of Labor (DOL) would have to establish a searchable website for such posting notices. Employers would be required to conduct good-faith recruitment for qualified U.S. workers when filing for all H1B petitions, and would be prohibited from advertising for employees as for “H1B only or preferred” for any positions.

Contracting or Outsourcing Prohibited without Waiver and Other Requirements

In what would be an enormous industry-wide change, the bill contains a prohibition against contracting, placing, or outsourcing the services of H1B nonimmigrants with another employer, unless a waiver has been granted. The waiver requirements contained in the bill include a provision that the work to be performed by the H1B worker cannot be an arrangement to provide work for hire, and the H1B worker cannot be primarily supervised and controlled by the employer where he or she is placed. There are also non-displacement provisions.

Stricter Required Wages with Minimum Level 2 Wages in Most Cases

The wage requirements would be modified to prohibit paying less than the skill level two wages based on the Occupational Employment Statistics (OES) survey in most cases. This would be an important change, and is consistent with the DOL’s ongoing challenges to the use of the lower, level one, wages during current H1B wage investigations.

Enhanced Enforcement by DOL with Annual Audits of Larger Employers

The bill also includes enhanced enforcement provisions. It would permit the DOL to conduct investigations of employers without first having received a complaint from a third-party. The DOL would not need to provide notice to the employer of an active investigation if such notice would interfere with investigation efforts. Employers with more than 100 employees would undergo mandatory annual audits, if they have a workforce comprised of more than 15 percent H1B workers. Other employers would be subject to random audits. Findings from the audits would be public.

L-1 Outsourcing Prohibitions

If this proposed bill is passed into law, companies would be prohibited from employing specialized knowledge L-1 beneficiaries for more than one year if they are primarily stationed at a worksite other than the petitioning employer’s location. This requirement could be waived, under waiver provisions that mirror the waiver provisions for outsourced H1B employees, explained above.

L-1 Wage Provisions

The bill would add wage requirements to the L-1 petition. These requirements match the H1B requirements, discussed above. This would be a significant change, since L-1s currently have no provisions governing the required prevailing wage levels.

Enforcement Provisions for L-1 Employers

The bill would provide enhanced enforcement provisions for wage and other violations related to L-1 employees. These, too, are in line with the H1B requirements. It would require the DHS Inspector General to submit a report to Congress within six months of the passage of the bill on the use of L-1 blanket petitions to determine whether the current review process provides adequate safeguards against fraud and abuse.


This bill has onerous provisions that, if passed, may deter H1B and L-1 filings. This proposed bill still must overcome many procedural obstacles before it can become law. The bill has not yet reached the floor of the U.S. House of Representatives or the Senate for debate. Senators Durbin and Grassley proposed a similar bill in 2007, which, in those stronger economic times, never made it to a Congressional committee for review. The current bill under review by the Senate Judiciary Committee proposes modifications to the H1B and L-1 programs that could result in a complete restructuring of the consultant business model. Due to the potential impact of the H1B and L-1 Visa Reform Act, if it were to be passed into law, we at the Murthy Law Firm will monitor developments closely, to share any updates with our readers.

Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.