Great ResignationDiversity and InclusionCompensationCEO DailyCFO DailyModern Board

How These 3 Bills Could Make It Much Harder to Hire Foreign Workers

February 8, 2017, 7:26 PM UTC

Startups and small businesses that depend on skilled foreign workers may soon find new restrictions for the visa program they’ve relied on for decades.

Three bills pending in Congress are taking aim at the popular H-1B visa program, created in 1990, which allows up to 85,000 skilled workers to come to the U.S. each year, for a period of up to 6 years.

They coincide with a draft executive order that will instruct the Department of Labor to review all the regulations related to the visas, as well as rules pertaining to workers transferred to the U.S. by large companies on something called an L-1 visa, with the somewhat vague goal of changing or eliminating requirements that are not “in the national interest.” The pending legislation also comes at a time when Silicon Valley and other industries have voiced deep concerns about the Trump Administration’s new get-tough orders on immigration.

The H-1B visa program, which had nearly three times as many workers applying as there were coveted spots in 2016, has for years been burdened by the seemingly arbitrary threshold for workers; caps are now typically hit within a week of applications being opened up. Politicians have also made it a focus in recent years, claiming the visa holders too often take jobs away from U.S. workers, and that outsourcing firms such as Infosys and Tata, the biggest users of the visas, damage American workers by undercutting prevailing wages.

The pending legislation would alter the program significantly. It would, for instance, swap out the current lottery system for a process that would award visas to workers with the highest qualifications, and based on specific industry needs. Changes might also include boosting salary thresholds for workers, and removing loopholes in the existing H-1B regulations that let some visa holders work for less money than their U.S. counterparts. The legislation would similarly create requirements around recruitment, stipulating that American workers had been sought before foreign-born workers.

“There are bipartisan proposals for a vetting process to make sure U.S. workers are not being replaced by cheaper foreign labor,” says Jorge Lopez, a partner and immigration specialist at law firm Littler Mendelson.

Here’s a look at key points of the pending bills:

Protect and Grow American Jobs Act

A bill introduced in January by Rep. Darrell Issa (R-CA) takes aim at so-called H-1B dependent firms that employ 15% of more of their workers using the visa. According to current law, such firms must vouch that they’ve searched for U.S. workers before hiring an H-1B employee. But they’re given a significant loophole that lets them offer their jobs to a foreign worker, rather than a U.S. citizen, if they pay at least $60,000, or hire a worker with a master’s degree in a field related to the work. Issa’s bill raises the salary minimum to $100,000, indexing that threshold to inflation, and gets rid of the master’s degree exemption.

Nevertheless, the new salary threshold concerns some legal observers who say salaries of that size may put H-1B workers permanently out of reach for many small companies.

“My concern is that H-1Bs will go to places like Silicon Valley or New York, and that small employers in different areas may be frozen out,” says Kim Thompson, a partner at Fisher & Phillips, a law firm based in Atlanta.

High-Skilled Integrity and Fairness Act

Another recent California bill, from Rep. Zoe Lofgren (D-CA), who represents Silicon Valley, would give preferential treatment to dependent employers who increase salary caps for their H-1B workers to $130,000. Additionally, it would set aside 20% of new H-1Bs for startups with fewer than 50 workers. Lofgren’s bill would also eliminate per country caps for such workers.

“It offers a market-based solution that gives priority to those companies willing to pay the most,” Lofgren said in a statement about the legislation. “This ensures American employers have access to the talent they need, while removing incentives for companies to undercut American wages and outsource jobs.”

H-1B and L-1 Visa Reform Act

Senators Chuck Grassley (R-IA) and Richard Durbin (D-IL) have introduced versions of this bill in prior years. Their current legislation would eliminate the lottery system currently in place, instead emphasizing worker qualifications and industry needs. Under the senators’ proposed system, people pursuing a college degree in the U.S. and those with advanced degrees would get preference. It would also favor workers in science, technology, engineering, and math (STEM) professions. The bill would forbid U.S. companies from using existing loopholes to displace U.S. workers with H-1B holders. It also stipulates that all U.S. employers must conduct labor market tests, requiring them to first recruit American workers. The bill would further authorize the Department of Labor to conduct workplace investigations for H-1B fraud.

Related: What President Trump’s Agenda Means for Small Business Owners

It would also limit firms with 50 or more employees from adding additional H-1B workers if 50% or more of their workforce holds H-1Bs.

“Congress created these programs to complement America’s high-skilled workforce, not replace it,” Senator Chuck Grassley said in a statement last month introducing the legislation. “Unfortunately, some companies are trying to exploit the programs by cutting American workers for cheaper labor.”