Philip Martin: H-1B Attestation and PERM Labor Certification

Three Topics 1990 H-1B Trade off: easy access and annual cap Today: raising the cap vs adding US worker protections PERM: trust the employer to check US labor market

H-1B Program Context: –IRCA dealt with unauthorized in 1986, now legal –Unemployment > 7% in mid-1980s, slow to fall –Workforce 2000: Labor market mis-matches-- sufficient US workers, but not enough with the “right” skills Compromise: employers have easy access to H-1Bs in exchange for annual cap of 65,000

H-1B Concepts No test of US labor market for a particular job Law written to limit DOL review of LCA-- check “only for completeness and obvious inaccuracies” Computer checks LCAs, no text fields and no human review

Four Attestations Pay higher of prevailing or actual wage H-1B employment will not adversely affect US workers No strike or lockout has made the job vacant Employer has notified employees of intent to hire H-1Bs

H-1B Dependent/Willful H-1B dependent employers (more than 15% H-1B employees) and willful violators of regs add 3 attestations: –No displacement of US workers 90 days before and after H-1B LCA filed –Took good-faith steps to recruit US workers –Will not transfer H-1Bs to US employers who displace US workers

From DOL-DHS Employer includes DOL “certification” of LCA with I-129 petition to USCIS, plus $1,500 and $500 fees DHS checks whether named foreigner is eligible for H-1B visa and approves petition DHS: Issues H-1B visa to foreigners inside the US, or provides approved petition so that foreigners outside the US can get visas from DOS consulates

DOL Checks of LCAs Prevailing wage: Employer may use the SWA determination, CB agreement, or private survey DOL classifies H-1B jobs into 4 levels: –Level 1, job requires a BA, wages are 15th to 20th percentile in that occupation – : Computer Programmers –US Median wages (2006) $31.50/hour, $65,510/yr –US Employment (2004) 455,000

H-1B Issues: Employers Employers: not enough H-1B visas –US unis do not produce enough scientists and engineers –Employers are best judge of who is qualified to fill a particular job –Why put hurdles between employers and foreign workers “needed” to keep US competitive?

H-1B Issues: Critics Easy attestation process invites fraud and abuse--no charge to file LCA, penalty for mistake is notice to fix H-1B workers are (1) not the best and brightest or (2) they have qualifications that should entitle them to higher US wages Job shops/body brokers: hard-to-police labor market intermediaries

H-1B Proposals Raise the cap vs increase protections for US workers Compromise: tie increase in H-1B cap to more protections. ALL employers would have to make no US-worker displacement attestation (how to enforce) No job ads for “H-1B workers only,” but no labor market test for each job vacancy DOL WHD gains new enforcement powers

Larger Context Is there a shortage of S&E workers? H- 1B--no test for availability of US workers on a job-by-job basis Should US employers ignore borders in making hiring decisions? Is human capital mercantilism (maximize stock of gold) appropriate economic strategy for 21st century?

Immigration US: family-based immigration system 2006: 1.3 million immigrants –800,000 family-sponsored –160,000 employment-based –380,000 refugees, diversity, others –Employment-based: 77% adjust status –3rd preference professionals with BA: 3,500 principals, 95 % adjustments

PERM Certification vs attestation: who controls the border gate? Certification: DOL checks (1) that US workers are not available to fill a particular advertised job and (2) that the employment of the desired foreigner will have no adverse effects PERM: from supervised recruitment to trust- the-employer and audit

PERM Employer files ETA Form 9089 with details of job and foreigner desired to fill it; day review In almost all cases, job is already filled by the foreigner for whom the employer is requesting an immigrant visa Purpose of labor certification: determine whether US workers are available and whether foreigner has adverse effects

Employer Recruitment Employers place ads and recruit US workers, record outcome of efforts Submit recruitment report: advertised in X, got Y applicants, not hired for Z reasons Form 9089 is reviewed by analyst, about 85 percent approval

Denials and Audits If denied, most employers fix and refile (no charge); cost is lost time in getting priority date for visa Audit: employer submits documentation of recruitment efforts, resumes of applicants etc

Conclusions 1 H-1B: Easy attestation procedure to fill (unfilled) jobs; cursory check of employer LCAs; goal--fill vacant jobs quickly PERM: protect US workers by ensuring, for each job, that US workers are not available and no adverse effects But: job is already filled by the person for whom the immigrant visa is sought

Conclusions 2 Evaluation of H-1B and PERM depends answers to other questions If it were harder to hire H-1Bs, would employers outsource jobs or retrain older US workers? Should foreign workers already employed in a job be replaced by US workers who learn about it during required recruitment?