Copyright © 2004 Fragomen, Del Rey, Bernsen & Loewy, P.C. 1

Comprehensive Immigration Reform.... or Just a Little Bit?

West Michigan APA – March, 2014

Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 2

Presenter

Scott F. CooperPartner – Fragomen, Del Rey, Bernsen & Loewy

50 W. Big Beaver Road, Suite 200Troy, MI 48084

Tel. 248-282-5703Fax 248-250-5541

scooper@fragomen.com

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Topics

- An update on what Congress has been doing about reforming the immigration laws

- Potential consequences for employers and payroll professionals

- Other immigration happenings of importance to you

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What is Congress Up To?

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A Variety of Proposals

•Long standing effort to toughen wage requirements on H-1B workers and to place wage requirements on the L-1 category

•Comprehensive immigration reform measure (S. 744) passed the full Senate

•House considering piecemeal approach, some of which would impact H-1B workers

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S.744 Border Security, Economic Opportunity, and Immigration Modernization Act

•Payroll-related provisions

- H-1B 4-Tiered wage system would be reduced to three wage levels

- Would increase H-1B worker wages at each level

- Level 1 (entry level worker in the occupation) wage would be the mean of the bottom two-thirds of wages OR at least 80% of Level 2 wage

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S.744 Border Security, Economic Opportunity, and Immigration Modernization Act

•Payroll-related provisions

- Level 2 (entry degree with up to 2 years of experience) would be the mean of all wages surveyed by USDOL for the occupation

- Under current system, the mean is equivalent to Level 3 or greater

- Level 3 would be the mean of the top two-thirds of wages surveyed

- H-1B “dependent” employers would be required to pay at least Level 2 wages

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S.744 Border Security, Economic Opportunity, and Immigration Modernization Act•H-1B “dependent” employers face greater requirements and restrictions

•H-1B “dependent” = 15% or more of full-time equivalent US workforce employed in USDOL O*NET Zone 4 and Zone 5 occupations

•No exemptions from dependency count for masters degree holders or wages of $60,000+

•Exempts “intending immigrants” from the count

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S.744 Border Security, Economic Opportunity, and Immigration Modernization Act•Would have to initiate green card process to remove them from the count

•Combined H-1B and L-1 worker count also comes into play in determining dependency

•Non-displacement provisions 90 days before and after employee is on H-1B payroll

•H-1B dependent employers prohibited from outsourcing, leasing or otherwise contracting for the services or placement of H-1B worker

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S.744 Border Security, Economic Opportunity, and Immigration Modernization Act

•H-4 spouses would be eligible to work – There goes the tax hypo!

•60 day grace period for terminated H-1B to find a new employer

•Additional filing fee of $2,500 for all H-1B workers (employers with 25 or fewer workers pay $1,250)

•Total H-1B filing fees could be $5,750

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S.744 Border Security, Economic Opportunity, and Immigration Modernization Act

•Heavy users of H-1B and L-1 workers (more than 50% of US workforce) face additional fees and limits on total numbers of such workers

•L-1 program investigation program•Annual L-1 program compliance audits•Fine of up to $10,000 and minimum 2 year debarment for L-1 program violations

New Worker Verification System

►Similar to E-Verify

►Employers with more than 5,000 employees: Have two years to comply after the implementing regulations are issued

►Employers with more than 500 employees: Have no more than three years to comply after the implementing regulations issued

►Other employers: Must comply within four years of the implementing regulations being issued

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Skills Visa Act “Wage Accuracy” Problem

►Due to decrease in number of wage levels for prevailing wage purposes for immigration purposes

►Arises at all professional levels, not only entnry►According to US Chamber data, about 55% of the

time H-1B workers would have to have higher wages than US workers where a degree and 2 years of experience is required for the position

►Would apply at top wage levels 43% of the time►For campus recruits in entry-level positions, would

require higher wages for H-1B’s than US workers 90% of the time

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State of Play and Next Steps

►S.744 introduced April 16

►“Markup” of S. 744 ended May 21 and bill reported favorably for floor consideration

►Floor debate started on June 6

►S. 744 passed by Senate on June 27 by 68-32 vote

►“Markup” of House SKILLS Visa Act, H.R. 2131, on June 27; Approved by Committee but no floor debate scheduled yet – could occur as early as September

►To be determined – Conference of House bill(s) with S. 744

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Other Updates of Interest

►How are you doing with the new I-9, M-274 and I-94 rules?

►Office of Special Counsel updated advice regarding when to ask questions regarding immigration status especially if clarifying potential applicability of export control laws

►When the government shuts down, E-Verify shuts down

►L-1 site visits begin

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New Version of Form I-9

•New version required May 8, 2013•Prior forms dated 02/02/2009 and 08/07/2009 may be used until 05/07/2013- Employers should start to use new version immediately

- Must use 03/08/2013 version starting 05/08/2013

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Most Notable Changes to the Form• New optional fields in Section 1 for employee’s email address and

phone number- If email/phone number not entered then must enter “N/A”

• New requirement for certain employees to record foreign passport number and country of issuance in Section 1

- Record if I-94 issued by CBP at time of entry

- Enter “N/A” of I-94 issued by USCIS

• More spaces in section 2 for recording List A documents• Specific instructions on recording document information for foreign

students and exchange program participants in section 2• Specific instructions for completing section 2 when an employee

present receipts and for updating section 2 of the I-9 when the employee later receives and presents the actual document

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Most Notable Changes to the Form

•New form needed in case of name change- Must record new name in Section 3 during rehire or

reverification process

- Recommended to record name change in Section 3

- Name change due to change in identity requires new I-9

•Unclear how variation in format or omissions related to new fields or instructions will be treated by ICE in the event of an I-9 audit- Enter “N/A”

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List of Acceptable Documents

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Form I-9Section 1

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Form I-9Section 2

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Form I-9Section 3

• Only Re-verify Employment Authorization• Must re-verify on or before date employee’s current

authorization expires• Section 3 can be used in certain circumstances instead

of completing an all new form when former employees are rehired

Key Changes to M-274

• Expanded definition of “hire”

- Date the employment in exchange for wages or remuneration starts

• Instructions for multiple preparers

- Person reviewing documents must sign Section 2• More precise instructions on hyphenated names• Clearer emphasis on physical presence

- Employee must be physically present at time documents are presented and reviewed by ER

• New guidance on recording name changes• New guidance on retention of supporting documents• Relaxed rules on laminated Social Security cards• More document samples

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Automation of I-94

•CBP published aeffective 04/26/2013 eliminating issuance of the I-94 at ports of entry

•Foreign nationals entering by air or sea will not be issued paper I-94

•Does not apply to persons entering by land•Paper I-94s will still be issued in some circumstances (parolees, asylees, refugees)

•USCIS, DMV, SSA still require paper I-94s for issuance of benefits

•Paper I-94 can be printed from www.cbp.gov/I94

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Office of Special Counsel Update Advice

►OSC is advising that an employer should not be asking for a job applicant’s specific immigration status before making a job offer

►Sometimes it is necessary to obtain information to determine export control compliance

►Make such queries separately from the I-9 process

► Identify and rule out classes of protected persons

►“Are you one of the following: USC, PR, refugee, asylee or temporary resident?”

► If “yes”, then no more questions about status

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E-Verify and Government Shutdowns

►E-Verify shuts down

►Employees with outstanding TNC’s were given an additional 12 days to make DHS or SSA contact as required

►Might be applicable in other circumstances when E-Verify is down

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L-1 Site Visits Begin

►Similar to unannounced H-1B site visits

►Employer will need to present documentation verifying that the L-1 is being paid what was represented in the L petition

►Assure HR and receptionists prepared and a procedure in place to handle such visits

►Could involve high level employees where there is greater sensitivity to revealing compensation

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Questions?