Changes to US Visa regulations issued on October 8th will primarily affect the H1B Visa. The ripple effect of these new restrictions will be felt within and without the US economy, as well as by those foreign workers who have been H1B Visa holders up to now.
In today’s email we detail these most recent changes, and discuss how the new restrictive regulations could affect the immigration/ foreign worker landscape within the US in the years to come, possibly leading to more applications for the EB5 Visa.
H1B VISA CHANGES
During the second week of October 2020, the Trump Administration rolled out severe changes to the H1B skilled worker Visa.
In summary, these are the new updates:
Dramatic escalation of prevailing minimum wage; Visa duration lowered from 3 years to 1 year; restrictions on position requirements; and elimination of qualitative terms such as “usually” “most” etc, in job postings.
1. Visa duration decrease from 3 years to 1 year
Decreasing visa duration to only 1 year introduces volatility and will greatly affect workplace stability as well as lower the quality of life for the visa holder. Time spent hiring and re-applying will take away from both profit and earnings, resulting in both companies and individuals looking for more streamlined options.
2. Higher H1B min wage
The argument here is that by increasing average prevailing wage, the market will encourage a more natural wage increase, thus benefiting domestic workers. The point being that currently, domestic workers have to compete against skilled H1B Visa holders working at a lower wage. The counterpoint is two fold:
1. Foreign skilled workers bring expertise that domestic workers do not possess.
2. Drastically increasing wages will encourage firms to outsource out-of-country to the same type of workers in their home countries.
3. New definitions between employers-workers
New rules affect the type of worker that can be hired, with more stringent qualification requirements regarding “specialty occupations”. The resulting effect of denied applications will most likely result in off-shore hirings, and/ or companies moving overseas.
“The Department of Homeland Security (DHS or the Department), is amending certain DHS regulations governing the H-1B nonimmigrant visa program. Specifically, DHS is: Revising the regulatory definition of and standards for a “specialty occupation” to better align with the statutory definition of the term; adding definitions for “worksite” and “third-party worksite”; revising the definition of “United States employer”; clarifying how U.S. Citizenship and Immigration Services (USCIS) will determine whether there is an “employer-employee relationship” between the petitioner and the beneficiary; requiring corroborating evidence of work in a specialty occupation; limiting the validity period for third-party placement petitions to a maximum of 1 year; providing a written explanation when the petition is approved with an earlier validity period end date than requested; amending the general itinerary provision to clarify it does not apply to H-1B petitions; and codifying USCIS’ H-1B site visit authority, including the potential consequences of refusing a site visit. The primary purpose of these changes is to better ensure that each H-1B nonimmigrant worker (H-1B worker) will be working for a qualified employer in a job that meets the statutory definition of a “specialty occupation.” These changes are urgently necessary to strengthen the integrity of the H-1B program during the economic crisis caused by the COVID-19 public health emergency to more effectively ensure that the employment of H-1B workers will not have an adverse impact on the wages and working conditions of similarly employed U.S. workers. In addition, in strengthening the integrity of the H-1B program, these changes will aid the program in functioning more effectively and efficiently.”
The rules are in effect December 7, 2020.
So what will be the impact of these new regulations?
“They are the most comprehensive attack on H1B visas in history which will result in denial of H1B renewals for half a million people currently on H1Bs, and a dramatic reduction of H1B new employment.”
Besides reducing the number of foreign skilled workers employed by American companies, the rules should see an increase in lower wage out-of-country outsourcing, with resultant income and taxes being spent in the employees country, and/or companies moving overseas. Both outcomes somewhat defeat the goal of bolstering the US economy.
1. 2021: Biden or Trump???
From the documents put forward by the Biden campaign, their stance and tone in general is more friendly and welcoming towards worker visas and immigration than the current administration.
“According to Sarah Pierce, a policy analyst at the U.S.-based think-tank and research centre Migration Policy Institute, the policy differences between the two men can be summed up like this: “Biden’s platform is essentially a plan to reverse everything that has happened under President Trump.” “
According to CBC.ca
- H1B Program to continue as it was before Oct changes.
- Immediate review of Temporary Protected Status for vulnerable populations.
- Revisions to Mexican and Canada border policy.
- Removing Green Card country quotas.
- No foreign student STEM visa caps.
The election is still to come, no one can say with certainty who will win, nor what will exactly change with the new administration. We have to be ready to adapt to any result. It bears mentioning that some legal analysts are stating that the new October rules were steamrolled to offer President Trump’s base the message they are looking for, and that the legal validity could be questioned in court.
2. Drive from H1B to EB5
Among immigration experts, including the editors at ILW.com, there is an opinion that the new H1B restrictions will create more momentum towards EB5 applications.
“Since late 2018, H1Bs in the USA have constituted the largest EB5 market in the world, larger than any specific country. These draconian regulations and the resultant fear among H1Bs will increase the demand for EB5. Even if 0.5% of the half million H1Bs affected by these regulations go in for EB5, that’s 2,500 EB5 wires. Even if that is spread over 3 years, it would meaningfully and dramatically expand the H1B to EB5 market in the USA.”
US VISAS OF THE FUTURE: THE EB5 GREEN CARD VISA
The EB5 Green Card Visa looks to be one that will stay untouched in the coming years. The last big hit on the EB5 Visa occurred in November 2019 when the investment amount doubled on TEA approved projects from 450,000 USD to 900,000 USD plus management costs. This increase came into play due to the backlog of applications, causing applicants from some countries to wait years before receiving their Green Card. The back log also caused other logistical issues in the form of changes to the TEA regulations overriding previous ones, resulting in petition denial. As we mentioned in a recent article, backlog time is starting to decrease due to the decreased number of applications starting late 2019.
Consider the EB5 Green Card Visa
You’re looking for more opportunity and financial freedom in the US. Weigh out your options, and feel free to discuss your possibilities with an expert at BAI Capital.
If the finances allow, consider the EB5 Green Card Visa. The EB5 is the only process that turns any investor into a Green Card holder, leading into citizenship. As well, it is a passive investment and does not require further participation from the investor nor additional renewal nor extensions.