Silicon Valley Immigration Lawyer Blog

Now that the H-1B season is in full swing, employers need to be wary of falling into traps with their Labor Condition Applications. An employer's lack of familiarity with the problems surrounding the Department of Labor's new I-Cert system can make the difference between having an H-1B application counted towards the 2010-2011 cap, and missing it entirely. Employers must use the I-Cert system to obtain a certified Labor Condition Application (LCA). A certified LCA must be submitted with an H-1B application. But the DOL's problems with the I-Cert system have been causing H-1B denials.

Last year the Department of Labor rolled out its new "I-Cert" system for H-1B's, H-2A's, and PERM applications. H-1B employers are required to file LCAs electronically using the Department's LCA Online System. The LCA's for H-1B's includes declarations regarding the payment of prevailing wages for the position, and the working conditions offered. By law, the DOL must certify the LCA within seven days, unless it is incomplete or inaccurate. When completing the LCA, an employer must enter their Federal Employer Identification Number (FEIN) assigned by the IRS. When the I-Cert system initially started, long-established employers started receiving denials of their LCA's because the DOL could not verify the employer's FEIN. This happened to companies of all sizes, and even to companies that had been using the prior LCA program for years.

The DOL has since provided a rather weak "fix" to this problem. Employers can submit proof of their FEIN in advance of submitting an LCA. An employer who does this should receive confirmation from the DOL within a week, that the DOL has confirmed the employer's existence. Although this appears ridiculous to employers who have been in business and paying taxes to the IRS for years, it is ultimately a time saver. If an employer does not submit proof of their FEIN in advance, then a few days after submitting an LCA, the employer might receive a denial based on the DOL unable to confirm the employer's FEIN. The employer will then have to submit the proof of FEIN, and once the DOL confirms the employer's existence, the employer will have to submit a new LCA. Submitting the proof before filing the initial LCA can save one to two weeks.

Continue reading "DOL Issues with H-1B Labor Condition Applications" »

It's time for Silicon Valley employers to prepare their H-1B filings for fiscal year 2010/2011. April 1st is the first day that employers can submit H-1B applications for the 2010-11 fiscal year. The fiscal year begins on October 1st, and H-1B applications can be submitted up to six months ahead of time - on April 1st.

Congress sets the annual cap for new H-1B visas, and it is currently 65,000 plus an additional 20,000 H-1B visas for employees with a U.S. Master's degree or higher. Except for last year, the prior few years saw the cap reached within the first few days of April 1st. If the USCIS determines that the volume of applications the first few days of April shows that the cap will be reached, then they will conduct a lottery and include all the applications submitted within the first five days of April 1st.

H-1B visas are a work visa for foreign professionals. To qualify for an H-1B, the worker must, at a minimum: (1) Be coming to work for a U.S. employer; (2) Be coming to work in a specialty occupation position. A specialty occupation ordinarily requires the attainment of a bachelors degree or its equivalent, as a minimum for entry into the occupation, and (3) Have at least the requisite bachelors degree or equivalent.

To sponsor a prospective employee for an H-1B, an employer must first obtain a certified Labor Condition Application (LCA) from the Department of Labor. The main purpose of the LCA is to assure that employment of H-1B workers will not adversely affect U.S. workers in the same occupation. An employer must attest that they will pay the H-1B worker the higher of either the same wage that similarly employed workers are currently paid, or the "prevailing wage" for similarly employed workers across the metropolitan area.

Once an LCA is approved, the employer can file the H-1B petition with the USCIS. An H-1B can be granted for an initial three year period, and can be extended for an additional three years. After six years in H-1B status (or a combination of H-1B and L-1 status), an H-1B worker must leave the U.S. for at least one year before returning on another H-1B (or L-1).

Spouses and children can obtain H-4 visas that allow them to accompany the H-1B worker, but the H-4 does not allow them to work.

Employers wanting to sponsor employees for H-1B's or immigrant visas will face new legal procedures beginning January 1, 2010. Employers will need to obtain the "prevailing wage determination" through a centralized Department of Labor office in Washington D.C..

The "prevailing wage" is the average wage paid to similarly employed workers in the requested occupation, in the same geographic area. The immigration laws require that the hiring of a foreign worker will not adversely affect the wages of U.S. workers working in the occupation in the area of intended employment. To comply with the law, the Department of Labor requires the wages offered to the foreign worker to be at least the prevailing wage in the geographic area of employment.

Employers sponsoring foreign employees for H-1B's, H-2B's, E-3's, and for employment-based green cards must establish that the wage offered is at least as high as the prevailing wage. In some instances, the employer can rely on published date to make to determine the prevailing wage themselves. In other instances (i.e. the employment-based green card process), employers must submit a request to the Department of Labor to make a Prevailing Wage Determination.

Up until now, employers submitted a form online or via fax to the Department of Labor's State Workforce Agency in their own particular state. When this law office sought a Prevailing Wage Determination, we would fax a Prevailing Wage Request form to the California Employment Development Department. If we wanted to recommend a particular job classification or wage level, we would include that supporting documentation with our fax. We would usually get a faxed response within a few days. If our result showed that there was a misunderstanding, etc., we had the name and phone number of the person who made the Prevailing Wage Determination, and we could call and talk to them.

Continue reading "Silicon Valley Employers to Face Slower Process for Work Visas" »

Immigrants, or foreign-born U.S. citizens, make up over 50% of Silicon Valley company founders. This, according to the Wall Street Journal article "Start-Up Visas Can Jump Start the Economy", is the evidence as to why Congress should pass an immigration law allowing for start-up visas. According to the article, even though foreign-born residents made up approximately 12.5% of the U.S. population, nearly 40% of technology company founders and 52% of Silicon Valley company founders are foreign-born. If U.S. immigration laws made it easier for bright, entrepreneurial foreign nationals to obtain a work visa to start a new company, then we would see more new business which would lead to more jobs for all.

Right now, immigration laws make it difficult for a foreign national to start their own business while maintaining legal immigration status. This blog has posted before about the Start-Up Visa, and evaluated the current immigration options for those entrepreneurial spirits determined to start a new company. The situation typically originates when foreign nationals come to the U.S. as students to earn a U.S. Bachelor's degree or even a U.S. Master's degree. Upon graduation, a foreign national usually needs a company to sponsor them for a work visa in order to stay and work in the U.S. As I've pointed out in a prior post, an entrepreneur's own company can sponsor them for an H-1B visa, but this route is challenging as the USCIS assumes that H-1B's are for larger companies, and not a one or two employee company. The other nonimmigrant option, the E-1 or E-2 based on a substantial investment or substantial international trade, has several limitations including it only being available for people from certain countries.

The Wall Street Journal article recommends that the requirements for a start-up visa are showing a minimum investment from legitimate sources, such as venture capital firms or angel investors. The article hypothesizes that some start-ups would fail (as start-ups often do), but the visa could continue as long as the entrepreneur continues to raise capital, create jobs, make sales, etc.

Continue reading "The Economic Case for "Start-Up Visas"" »

An earlier blog post "Silicon Valley Employers Need to Prepare for Surprise USCIS Visits" described the "new normal" of USCIS employees or contractors showing up unexpectedly and inquiring about past visa petitions and foreign national workers. A recently held Department of Homeland Security program, titled, "2009 Government and Employers: Working Together to Ensure a Legal Workforce" sheds more light onto the types of visits being conducted.

Ronald Atkinson, Chief of Staff of USCIS' Fraud Detection and National Security (FDNS) office, explained the three types of site visits that are currently being conducted:

1. Risk Assessment Program fraud study. Applicable to any type of benefit program, including family and employment-based visas, this study is part of a joint program between USCIS and ICE (Immigration Customs and Enforcement). Applications and petitions are chosen at random, usually on a post-approval basis, for visits to help in designing profiles of potential fraud.
2. Targeted site visits. These visits take place where fraud is suspected, and consist of a visit to ask questions. Advance notice, including notice to counsel, is supposed to be provided.
3. Administrative site visits. These relate to religious worker and H-1B petitions. They generally are conducted by contractors who know nothing of immigration law. Religious worker visits are performed under the regulations for that category. For H-1B site visits, the contractors have been equipped with a set of specific questions, and all employers/beneficiaries should be asked pretty much the same questions, primarily reaching the issues of whether there's really an employer there, whether the employer knows it filed the petition, and whether the beneficiary is doing the work and receiving the wage indicated on the petition. H-1B visits are done on a post-adjudication basis, and are randomly selected. Each employer should receive only one such visit, but may receive different visits for different sites.

Continue reading "Why USCIS Might Be At Your Door" »

Former Palo Alto resident Yong Li is apparently similar to many Chinese-born immigrants leaving Silicon Valley to return to China. This weekend's San Jose Mercury News highlighted his situation in an article titled "Silicon Valley Brain Drain: Immigrant Chinese Return to Homeland to Pursue Entrepreneurial Dreams". Mr. Li left his family in Palo Alto to start up a pharmaceutical company in Tianjin, China, with the financial backing of the Chinese government. He is representative of a wave of highly skilled immigrants returning to China to start companies.

According to the article, Chinese recruiters regularly come through Silicon Valley targeting highly skilled and educated Chinese immigrants who have lost jobs, and who just graduated from college and cannot find jobs. The timing is good for recruiters, as the U.S. economy continues downward and venture capital funding evaporates. Chinese recruiters are selling the Chinese immigrants on prospects of China's large and growing market, and on the Chinese government's deep pockets to fund and assist new companies. The growing anti-immigrant sentiment accompanying record-high unemployment in the U.S., makes these offers even more attractive.

Surely there are many people who will cheer this news, and see it as cutting out some of the competition for already scarce jobs. This view is short-sighted, and misses the significance of a "Brain Drain". I have previously posted on the potential effects of talented immigrants leaving the U.S., and on the importance of reforming U.S. immigration laws to encourage the "best and brightest" to stay.

Although China turns out thousands of engineers and scientists from its universities each year, we have to ask ourselves why Chinese recruiters are coming to the U.S., and specifically to Silicon Valley to recruit. The Mercury News article states that "it does not have deep ranks of seasoned scientists and technologists." One Chinese national who returned is quoted as stating that finding qualified talent has not been easy. Lack of experienced talent is surely not the only reason, and we should recognize that part of the reason that Chinese recruiters come here is to seek out those who have learned and gained experience in a creative, open, and innovative culture unique to Silicon Valley.

Earlier this month Silicon Valley was abuzz with the exciting news that two locals, Elizabeth Blackburn and Carol Greider had won the prestigious Nobel Prize in medicine. The two were honored for their work in DNA replication, along with Jack Szostak of Harvard who also partnered in the research. Also noted in reports was that Elizabeth Blackburn is a dual citizen of the U.S. and Australia, and that Jack Szostak was born in the United Kingdom.

The significance of these prize winners' immigration backgrounds is highlighted in an article from this week's Wall Street Journal, "Immigrant Scientists Create Jobs and Win Nobels", by the President of the Massachusetts Institute of Technology, Ms. Susan Hockfield. The article digs into the immigration history of recent Nobel Prize American winners. While eight out of nine of this year's winners in chemistry, physics and medicine are American citizens, four of the Americans were born outside of the U.S. and only came here as graduate or post-doctoral students, or as scientists. According to the article, they came because the U.S. system of higher education and advanced research has been a magnet for creative talent.

U.S. immigration laws need to encourage drawing in this global talent, as opposed to obstructing it with arcane, protectionist immigration laws. The U.S.' role in global innovation, as well as the U.S. economy will benefit. According to the article, of the 35 young innovators recognized this year by Technology Review magazine for their exceptional new ideas, only six went to high school in the United States. From MIT alone, foreign graduates have founded an estimated 2,340 active U.S. companies that employ over 100,000 people.

The immigration laws, however, do not encourage foreign students to stay after graduation and put their newly acquired knowledge to work in the U.S. A foreign national applying for a student visa at a U.S. Consulate abroad will be denied a visa if the U.S. Consular Officer does not believe the student will return to their home country upon graduation. To further complicate matters, if a foreign student does find U.S. employment it is often in capacity as an H-1B specialty worker and the student and their prospective employer will have to compete for one of only 65,000 annual H-1B visas. Many graduate and post-doc students come to the U.S. on a J-1 visa, which often requires the visa holder to return to their home country for two full years before applying for permanent residence in the U.S.

Continue reading "Immigration Laws Must Allow the Best and the Brightest Into the U.S. " »

Suppose a U.S. government agent walks through the front door of your Palo Alto start-up, and tells the first employee seen that he is there to speak with HR about the company's H-1B employee. The employee politely informs the agent that there is no HR - it's a "start-up". The agent then studies their own copy of the H-1B petition, and states he needs to speak with the person who signed it. Of course this person (founder, co-worker, Board member) is not in the office. Is your company prepared for this scenario?

The USCIS has a division called the Office of Fraud Detection and National Security (FDNS). Created in 2004, their purpose is to deter and combat immigration benefit fraud, and to assure benefits are not granted to people who threaten national security or public safety. They currently have approximately 650 staffers throughout the U.S., and have contracted with additional private investigation firms. They are now targeting the H-1B program. The Vermont Service Center has forwarded about 20,000 cases to the FDNS, and it is presumed that the California Service Center has forwarded a comparable number.

FDNS visits are typically unannounced, and occur either at the employer's principal place of business or at the H-1B employee's worksite. The purpose is to verify information contained in a particular H-1B petition. The FDNS officer will request to meet with an HR representative or with the person who signed the H-1B petition. The FDNS officer will have a copy of the petition. They will request specific information about the company, including: the employer's business, the business locations, the number of employees, the H-1B worker's job title, job duties, work location, and salary. The FDNS officer may also request to view the company's federal tax returns, quarterly wage reports, and the H-1B employee's recent pay stubs and last W-2.

The FDNS may then request a tour of the employer's facility and may take photographs. They may also request to interview the H-1B employee, and even the H-1B's manager or a colleague.

Employers should take the following steps to prepare for FDNS surprise visits:

Continue reading "Silicon Valley Employers Need to Prepare for Surprise USCIS Visits" »

Like most H-1B employers, Silicon Valley employers need to start over-documenting their H-1B petitions and increasing the material provided about the sponsoring employer, as well as about the employee and the proposed job. Recent reports of fraud in the H-1B program, as well as Senator Grassley's vocal proposals to tighten screening of H-1B employers have cast a cloud of fraud onto the H-1B program.

The cover article in the October 12, 2009 Business Week issue is called "America's High-Tech Sweat Shops: How U.S. companies may contribute unwittingly to the exploitation of foreign workers". This article highlights the various ways in which some H-1B employers have abused the visa system, and taken advantage of unknowing foreign nationals seeking work in the U.S. Fraud ranges from employers: charging potential H-1B workers exorbitant fees as high as $15,000 to submit visa applications; allowing potential H-1B workers to pay fees and obtain an H-1B visa only to come to the U.S. and find that the employer does not have a paying job for them; siphoning off H-1B employees' wages; failing to pay H-1B employees between contract jobs - also called "benching"; to employers claiming that an H-1B worker is employed in a low-wage metropolitan area so that a lower wage can be paid - but actually employing the H-1B worker in a higher wage area.

Unfortunately, the Business Week article is just one of several recent highlights of H-1B fraud. Last week Senator Grassley (R-Iowa) wrote a letter to the new head of the USCIS, Alejandro Mayorkas, pushing for tighter restrictions on H-1B employers. His letter referenced the USCIS' 2008 internal assessment of compliance in the H-1B program. Although the 2008 USCIS report showed a rate of error in H-1B applications of almost 20%, Senator Grassley characterized these errors as fraud, whereas only 13% were found to be fraud and 7% were considered to be technical errors. In his letter to Director Mayorkas, Grassley requested more information from petitioning employers to assure that work is waiting for H-1B employees and they will not be "benched".

Continue reading "Silicon Valley H-1B Employers Will Face Tougher Challenges in Light of Fraud Reports" »

Two bright, energetic, Palo Alto-based entrepreneurs recently sent me a link to Startupvisa.com. A visa designed for the entrepreneurs of a start-up company would have been perfect for them. Instead, we had to wrestle their jobs and their company into the H-1B category.

The H-1B visa permits a U.S. employer to employ a professional worker. Using the H-1B category for entrepreneurs can be challenging because often the new venture begins as a one or two-person company. A typical case is the foreign national who comes to the U.S. as a student to earn a Master's degree. While in school, they develop their own ideas for new ventures, and also develop business contacts. Upon graduating (or even before), they begin working on their new ideas and attract venture funding. Soon after, they establish a formal business entity. At some point, the foreign national realizes that they need the appropriate visa to continue working on their new U.S. venture.

The challenges with a small, newly established company sponsoring its only employees for an H-1B visa rest, in some part, with the USCIS' perception that small companies do not need H-1B workers. Companies with less than 25 employees, established less than 10 years ago, and with gross annual income under $10 million will be highly scrutinized for fraud, and will likely be required to submit additional documentation establishing the need for the professional worker. An additional challenge with the H-1B visa is the annual cap 0f 65,000 new visas. Except for this year, the past several years have seen the cap reached within the first week that new visas become available.

The E-2 visa is supposed to be an option for investors and entrepreneurs. However, the challenges with this option are that the entrepreneur must also be the investor, and that this visa is only available to people from certain countries. An employee of an E-2 qualifying company can actually qualify for an E-2 without being an investor, as long as they are going to be employed in an executive or supervisory capacity, or if they have essential skills or knowledge. However, the challenge is that the employee must be from the same country as the principal investors, and the principal investors cannot be U.S. citizens or U.S. permanent residents.

Continue reading ""Start-Up" Visa Makes Sense for Silicon Valley" »