1. Copyright © 2004 Fragomen, Del Rey, Bernsen & Loewy, P.C. 0 Comprehensive Immigration Reform.... or Just a Little Bit? West Michigan APA – March, 2014

2. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 1 Presenter Scott F. Cooper Partner – Fragomen, Del Rey, Bernsen & Loewy 50 W. Big Beaver Road, Suite 200 Troy, MI 48084 Tel. 248-282-5703 Fax 248-250-5541 scooper@fragomen.com

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

4. Copyright © 2004 Fragomen, Del Rey, Bernsen & Loewy, P.C. 3 What is Congress Up To?

5. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 4 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

6. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 5 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

7. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 6 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

8. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 7 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

9. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 8 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

10. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 9 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

11. Copyright © 2011 Fragomen, Del Rey, Bernsen & Loewy, LLP 10 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

12. 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 11

13. 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 12

14. 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 13

15. 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 14

16. 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 15

17. 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 16

18. 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” 17

19. 18 List of Acceptable Documents

20. 19 Form I-9 Section 1

21. 20 Form I-9 Section 2

22. 21 Form I-9 Section 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

23. 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 22

24. 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/I94www.cbp.gov/I94 23

25. 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 24

26. 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 25

27. 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 26

28. Copyright © 2004 Fragomen, Del Rey, Bernsen & Loewy, P.C. 27 Questions?