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Science Careers Blog

February 23, 2009

Stimulus Bill Imposes H-1B Visa Limits (Updated x 2)

The American Recovery and Reinvestment Act of 2009 signed into law last week (a.k.a. economic stimulus bill) contains provisions that make it more difficult for some companies -- those involved in the TARP financial bailout package -- to hire workers on H-1B temporary work visas. Beryl Benderly discussed the impact of H1-B visas in her column last month in Science Careers.

According to ComputerWorld, an IT industry publication, the stimulus bill says that for 2 years companies receiving funds from the government's Troubled Asset Recovery Program (TARP) are deemed "H-1B dependent." This designation, usually reserved for companies where H1-B holders comprise 15% or more of their workforce, imposes limits on companies seeking to hire more H-1B staff.

Companies deemed H-1B dependent must attest that they've made good-faith efforts to find American workers to fill their openings before recruiting H-1B talent. These employers must certify that they have offered minimum prevailing wages during their recruitment. The measures are aimed at preventing the company from claiming that they could not find workers while offering unrealistically low pay.

There are other restrictions on H-1B dependent companies. They cannot lay-off an American worker 90 days before or after filing an H-1B petition. And they must also have offered the job to to an American worker who applied and is at least equally qualified than the H-1B worker. If a company claims to have followed these rules, but a subsequent audit shows they did not, they can be banned from further participation in the H-1B program. According to the immigration law firm Shihab & Associates, the Department of Labor has recently increased these H1-B audits. 

The practical impact of this provision in the stimulus bill on hiring will likely be minimal. The limits affect new hires, not existing holders of work-related visas. And while the amount of TARP money is staggering, the number of companies involved -- generally in the financial services industry -- is relatively small. Only about 1 percent of workers in this industry have H-1B visas. Our look in November at the financial services industry as a source of alternative employment for scientists suggests this segment of the economy isn't poised for explosive growth anytime soon.

The stimulus bill also does not impose any limitations on outsourcing, which according to Rochester Institute of Technology professor Ron Hira, has increased among American banks since the rescue bill passed last fall. Charles Kuck, president of the American Immigration Lawyers Association, however, told ComputerWorld, "These banks will not able to hire qualified foreign talent to pull them out of this mess -- if that was necessary." Kuck added,  "Maybe we've got all the homegrown talent we need to pull us out of this mess, because now we have to hope we do."

Update, 25 February 2009: The Economic Times of India reports a growing protest in India to the stimulus bill's provisions, including calls for a boycott of American multinationals.

Update, 10 March 2009. The Charlotte Observer reports today that Bank of America has rescinded job offers to "a small number of foreign-born business students" who held H-1B visas, because of the restrictions in the stimulus bill. The bank, based in Charlotte, North Carolina, did not say how many offers were rescinded. The story reported, however, that in 2008 Bank of America applied for less than 100 H-1B visas to work in North Carolina, mainly in computer engineer and programmer positions.

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