What if Arnold Schwarzenegger, the “governator” of California, were able to run for president of the United States?¹ What if being born in the U.S.A. did not guarantee you U.S. citizenship?² What if hiring an undocumented worker suddenly became punishable by a $50,000 fine and up to five years imprisonment?³ This is just a sampling of recently introduced immigration-related legislation that could affect us all.

Immigration is one of the most divisive issues in our society today. We can’t pick up the paper or watch the news without hearing about the need for immigration reform and the push for major changes in our nation’s immigration policy. Wal-Mart was recently fined a record $11 million for its use of illegal immigrants to clean floors at stores in 21 states. Not only are our national lawmakers debating critical issues, but our states are addressing their individual concerns and needs as well. The Georgia General Assembly recently considered House Resolution 256 that would bar illegal aliens from access to social amenities, i.e., public education (including universities), driver’s licenses and publicly funded healthcare.

When Georgia Republican Johnny Isakson was campaigning in Atlanta for the U.S. Senate seat he eventually won, he clearly stated that the number one issue for his constituents was immigration. We may have as many as 10 million people in the United States illegally, and a proposed guest worker program is still only getting lip service.

Under President Bush’s immigration reform proposal, workers illegally in the United States would be allowed to enter a temporary labor program and be provided a guest worker visa. This visa would allow the worker to remain in the United States for three years and allow for a one-time renewal of the visa. Unfortunately, to date no legislation has been introduced in connection with this proposal. At a recent press conference President Bush told reporters, “I’m against amnesty. I’ve made that very clear. On the other hand, I do want to recognize a system where a willing worker and a willing employer are able to come together in a way that enables people to find work without jeopardizing a job that an American would otherwise want to do.”

In response to President Bush’s proposal, Representative James Sensenbrenner of Wisconsin, chairman of the House Judiciary Committee and a member of the President’s own party, introduced legislation that runs counter to the President’s moderate approach.

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Development of U.S. Immigration Law

Current immigration law reflects the struggle between protection of our domestic workforce and retention of our global competitiveness through the use of foreign talent. Today, the recruitment and retention of foreign employees are critical components of human resource and corporate legal functions. A fundamental grasp of the strategies available under business immigration law is essential to the achievement of business objectives.

Immigration to the United States is governed by federal law (Title 8 of the United States Code) and administered by the Department of State (DOS, principally through its foreign consulates and embassies), the Department of Labor (DOL) and the Department of Homeland Security (in particular the U.S. Citizenship and Immigration Services [USCIS]).

Before the late 1800s, U.S. law imposed no restriction whatsoever on immigration to this country. In response to the increasing number of immigrants, Congress in 1921 enacted a general quota system that for the first time set an annual limit on the number of aliens (aliens refers to all foreign-born persons who are not U.S. citizens) allowed to immigrate (Quota Law of May 19, 1921 [42 Stat. 5]). The subsequent Immigration and Nationality Act of 1952 remains the cornerstone of our country’s immigration policy. On a different front, the Immigration Reform and Control Act of 1986 for the first time required U.S. employers to verify the identity and work authorization of all new employees, whether U.S. citizens or aliens. Subsequent legislation continues to refine these laws, often reflecting an effort to adapt their application to the global workplace.

Immigrant and Nonimmigrant Aliens

Aliens may come to the United States in one of two basic categories: nonimmigrant or immigrant. Nonimmigrants are aliens coming to the United States only for a temporary, finite period. Immigrants are those coming to the United States to reside permanently. The category used for entry will of course depend upon business objectives, eligibility and timing.

In general, aliens must be in possession of a nonimmigrant or immigrant visa in order to come to the United States. A visa is issued only at U.S. consular posts (embassies and consulates) abroad. Nonimmigrant visas consist of either an ink stamp or “machine-readable” laminated paper affixed to a right-hand page of the alien’s passport. The nonimmigrant visa should be thought of as an entry permit, specifying the temporary category for which the alien has been found eligible.

Upon presentation of the nonimmigrant visa to a Customs and Border Protection (CBP) inspector on arrival to the United States, the inspector typically will question the alien in order to reassess the alien’s eligibility to enter the country and will then issue to the alien a Form I-94 card, or “Arrival/Departure Record.” The I-94 card should be thought of as a stay permit, which shows the nonimmigrant status under which the alien has entered, as well as the authorized duration of stay in this country. The expiration dates on the visa and I-94 card frequently are not the same. The visa need only be valid at the time the alien seeks to enter the United States, whereas the I-94 card controls the length of authorized stay in this country. In light of the penalties on aliens who “overstay,” it is now more important than ever that aliens and their employers comply with the date of stay specified on the I-94 card.

Foreign Business Workers – A Dilemma

The nonimmigrant visa categories most frequently used for business personnel are the Temporary Business Visitor (B-1); Treaty Trader or Investor (E-1 or E-2); Temporary Worker or Trainee (H-1B, H-2, or H-3); NAFTA Professional (TN); and Intracompany Transferee (L-1). A longstanding issue is the intent of a foreign worker, who is temporarily present in the United States in any nonimmigrant category, to remain in the country permanently. This often causes difficulties because the desire to remain permanently is viewed as contradictory to the temporary visa classification. However, for some visa categories, USCIS does recognize the “dual intent” doctrine–whereby the foreign worker presently intends to remain in the United States temporarily and the U.S. employer intends to employ the alien temporarily, while at the same time the foreign worker has the long-term intention to become a lawful permanent resident and the U.S. employer intends to employ the alien permanently if and when permitted to do so by law. For a list of nonimmigrant classifications, please see Appendix A.

The H-1B Specialty Occupation Temporary Worker visa category illustrates the constant state of flux in immigration law. The H-1B category is available to foreign workers who hold a U.S. bachelor’s degree or the equivalent. The job in question must be in an industry that generally requires such a degree for entry-level work. Known as a “specialty occupation” or “professional” visa, the H-1B is often used for systems analysts, engineers, architects, accountants, physicians and numerous other professionals.

In 1990, Congress first introduced a quota for H-1B visas, setting it at 65,000 annually. The technology sector has been responsible for vigorous U.S. economic growth since 1995. Yet the H visa category, unlike other temporary visa categories, remains subject to a quota. The high-tech surge of the 1990s soon rendered the quota inadequate. For example, the 1998 quota was exhausted in the eighth month of the INS fiscal year (which begins each October 1). This resulted in thousands of H-1B visas being stalled until the new quota arrived. Congress responded by raising the quota to 115,000 annually thanks to the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). Accompanying the visa cap increase were higher government filing fees and increased penalties for violations. An additional $500 filing fee to be paid by the employer was required for certain H-1B petitions. In part, that $500 fee paid for U.S. citizens, lawful permanent residents and other U.S. workers to attend job training and receive scholarships or grants for mathematics, engineering or science enrichment courses administered by the National Science Foundation and the Department of Labor.

The modern “green card” has not been green since 1964.

Despite the visa increase, however, the 1999 quota was exhausted in month nine, leaving a summer gap during which no new hires could begin work. The 115,000 quota for year 2000 was exhausted in month six (March 2000), leaving employers once again with a long, dry summer and no new H-1B hires available for work. To make matters worse, the 2001 quota was set to drop to 107,500 H-1B visas.

Fortunately, the American Competitiveness in the 21st Century Act of 2000 (AC21, also known as High Tech Visa Senate Bill 2045, now Pub. L. No. 106-313) became effective on October 17, 2000, and provided long-awaited relief. AC21 increased the quota to 195,000 for the next three fiscal years. The additional ACWIA filing fee was doubled to $1,000. The increased cap for H-1B visas under AC21 and some of the other ACWIA provisions sunset on October 1, 2003, and the number of H-1B visas to be issued in any fiscal year returned to 65,000. USCIS announced on February 17, 2004, just five months into the fiscal year, that it had received enough H-1B petitions to reach the 65,000 cap on H-1B numbers for fiscal year 2004. And this fiscal year, we ran out of the 65,000 H-1B numbers on October 1, 2004, the first day of fiscal year 2005, a veritable disaster for U.S. businesses relying on foreign talent.

On December 9, 2004, President Bush signed the Omnibus Appropriations Act for FY 2005, which contains provisions affecting the H-1B nonimmigrant visa category. The H-1B provisions of the Omnibus Appropriations Act reinstitute the ACWIA fee and raise it to $1,500 (employers with no more than 25 full-time equivalent employees may submit a reduced fee of $750). In addition, the Act creates a new Fraud Prevention and Detection Fee of $500, which must be paid by employers seeking an initial grant of H-1B nonimmigrant classification. Other than petitions to amend or extend stay filed by an existing H-1B employer, there are no exemptions from the $500 fee.

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In FY 2004, USCIS naturalized 536,176 persons.

The Omnibus Appropriations Act, and Public Law 108-441 (Dec. 3, 2004), provide new exemptions from the congressionally mandated annual H-1B cap. The first 20,000 H-1B beneficiaries who have earned a master’s degree or higher from a U.S. institution of higher education are not subject to the annual congressionally mandated H-1B visa cap of 65,000. For FY 2005, the new provision will allow USCIS to accept new petitions on behalf of up to 20,000 beneficiaries meeting these criteria. At the time of the writing of this article, USCIS advised that the 20,000 extra H-1B visas would not be limited to people with a master’s degree, and that the opening of the application period would be announced in a Federal Register notice to be published any time now. As immigration practitioners across the country are gearing up for the filing of new H-1B petitions to take advantage of this bonanza, one imagines that the extra H-1B numbers will be gobbled up in a matter of days. In addition, USCIS suddenly replaced the forms to be used to file for H-1B status without notice. On another front, the DOL has finally kicked off its new process for the electronic filing of labor certification applications, usually the first step in obtaining permanent resident status.

How Immigration Policy Affects Business

Since the nation’s founding, the United States has been a nation of immigrants, striving to attract the best and the brightest from around the world to help shape the diverse culture we proudly call America. Our immigration history, however, has been marked by significant policy changes that have affected the influx of foreigners at various times.

As more and more people from different backgrounds move to the United States, immigration is likely to become more intensely debated. Some Americans favor more immigration restrictions and argue that immigrants take jobs away from U.S. citizens, refuse to learn English and are a drain on social services. Others point to America’s historic commitment to immigration and believe that immigrants keep the nation strong, economically competitive and culturally rich. Even Federal Reserve Chairman Alan Greenspan said that he supports increased immigration because it is good for the United States. The debate continues . . . .

A brief overview of significant milestones in our immigration history:

The Immigration and Nationality Act, or INA, was created in 1952. The INA has been amended many times over the years, but is still the basic body of U.S. immigration law. Before the INA, a variety of statutes governed immigration law but were not organized in one location. The McCarran-Walter Bill of 1952, Pub. L. No. 82-414, collected and codified many existing provisions and reorganized the structure of immigration law.

• Act of March 26, 1790 (1 Stat. 103): The first federal activity in an area previously under the control of the individual states, this act establishes a uniform rule for naturalization by setting the residence requirement at two years.

• Chinese Exclusion Act of May 6, 1882 (22 Stat. 58): This act suspends immigration of Chinese laborers to the United States for 10 years. The act also bars Chinese from naturalization and allows the entry of Chinese students, teachers and merchants. Fortunately, the Chinese exclusion laws were repealed on December 17, 1943.

• Immigration Act of February 5, 1917 (39 Stat. 874): This act codifies all previously enacted provisions excluding persons with contagious diseases, the insane, polygamists, paupers, professional beggars, epileptics, anarchists, persons with physical or mental defects, imbeciles, the feeble-minded, and children under the age of 16 without parents. In addition, it excludes illiterate aliens from entry, expands the list of aliens excluded for mental health and other reasons and further restricts the immigration of Asian persons.

• Immigration Act of May 26, 1924 (43 Stat. 153): The first permanent limitation on immigration, this act establishes the “national origins quota system.” In conjunction with the Immigration Act of 1917, it governs American immigration policy until 1952. In addition, it establishes the “consular control system” of immigration by mandating that no alien may be permitted entrance to the United States without an unexpired immigration visa issued by an American consular officer abroad. It goes on to impose fines on transportation companies who land aliens in violation of U.S. immigration laws, define the term “immigrant” and designate all other alien entries into the United States as “nonimmigrant,” and establish classes of admission for nonimmigrant entries.

• Immigration and Nationality Act of June 27, 1952 (INA, 66 Stat. 163): The INA brings into one comprehensive statute the multiple laws that, before its enactment, governed immigration and naturalization in the United States. In general, it perpetuates the immigration policies from earlier statutes with some significant modifications. The INA makes all races eligible for naturalization, thus eliminating race as a bar to immigration, and it eliminates discrimination between sexes with respect to immigration. It also revises the national origins quota system of the Immigration Act of 1924 and introduces a system of selected immigration by giving a quota preference to skilled aliens whose services are urgently needed in the United States and to relatives of U.S. citizens and aliens. It modifies and adds significantly to the then existing classes of nonimmigrant admission. The INA introduces the alien address report system whereby all aliens in the United States are required annually to report their current address to the INS and establishes a central index of all aliens in the United States for use by security and enforcement agencies.

• Immigration and Nationality Act Amendments of October 3, 1965 (79 Stat. 911): These amendments abolish the national origins quota system eliminating national origin, race or ancestry as a basis for immigration to the United States and establish allocation of immigrant visas on a first come, first served basis, subject to a seven-category preference system for relatives of U.S. citizens and permanent resident aliens and for persons with special occupational skills, abilities or training. More importantly, the 1965 amendments introduce a prerequisite for the issuance of an immigrant visa of an affirmative finding by the Secretary of Labor that an alien seeking to enter as a worker will not replace a worker in the United States nor adversely affect the wages and working conditions of similarly employed individuals in the United States.

• Immigration Reform and Control Act of November 6, 1986 (IRCA, Pub. L. No. 99-603): This comprehensive immigration legislation creates sanctions prohibiting employers from knowingly hiring, recruiting or referring for a fee aliens not authorized to work in the United States and increases enforcement at U.S. borders. It also creates a new classification of “seasonal agricultural worker” and provisions for the legalization of certain such workers and authorizes legalization for certain other aliens. Among other provisions, the act creates a nonimmigrant Visa Waiver Pilot Program allowing certain aliens to visit the United States without applying for a nonimmigrant visa.

• Personal Responsibility and Work Opportunity Reconciliation Act of August 22, 1996 (110 Stat. 2105): This act establishes restrictions on the eligibility of legal immigrants for means-tested public assistance and it bars legal immigrants (with certain exceptions) from obtaining food stamps and Supplemental Security Income (SSI), while establishing screening procedures for current recipients of these programs. It also bars legal immigrants (with certain exceptions) entering the United States after the date of enactment from most federal means-tested programs for five years, while providing states with broad flexibility in setting public benefit eligibility rules for legal immigrants.

• Illegal Immigration Reform and Immigrant Responsibility Act of September 30, 1996 (IIRIRA, Pub. L. No. 104-208): This much-maligned act establishes measures to control U.S. borders and protect legal workers through worksite enforcement. It increases border personnel, equipment and technology as well as enforcement personnel at land and air ports of entry and establishes three voluntary pilot programs to confirm the employment eligibility of workers, while reducing the number and types of documents that may be presented to employers for identity and eligibility to work. Among other provisions, this act institutes three- and 10-year bars to admissibility for aliens seeking to reenter after having been unlawfully present in the United States. In addition, it provides for a pilot program on limiting issuance of driver’s licenses to illegal aliens and declares aliens not lawfully present ineligible for Social Security benefits, while promulgating procedures for requiring proof of citizenship for Federal public benefits.

• In 2002, President Bush signed into law the Homeland Security Act of 2002 (Pub. L. No. 107-296) thereby creating the Department of Homeland Security, which is now in charge of our immigration functions (see Trust The Leaders Issue 4, Summer 2003, page 26).

Endnotes