July 31, 2014

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July 31, 2014

Historic Immigration Bill Passes Senate but House May Have Its Own Agenda

Vice President Joe Biden presided over a historic session as the Senate passed its immigration reform bill, the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744), last Thursday, June 27, 2013. The White House blog noted, “The Senate’s passage of the bill was immediately met with support from bipartisan leaders and a broad spectrum of groups across the country – from Democrats to Republicans, business to labor leaders and clergy.” In fact, the bill itself was a culmination of efforts exerted across party lines, industries, trade unions, associations and other unaffiliated groups. The bill moves us a bit closer to the possibility of fixing a broken and dysfunctional immigration system and employers should plan to watch what happens in the House over the next few weeks and take part in the discussion by contacting their Congressional representatives.

Overview

Lauded by supporters for providing a path to residency for some of the estimated 11 million undocumented immigrants currently living in the U.S., the bill also addresses border security. The undocumented immigrants will be required to undergo a rigorous registration process that will offer Registered Provisional Immigrant (RPI) status, putting them at the back of the immigrant visa waiting line but allowing them to stay in the U.S. while they wait. These individuals will pay back taxes and undergo background checks. However, as part of a compromise in the Senate, certain milestones must be met before any of the RPIs may adjust their status to that of a legal permanent resident (“green card” holder). Those milestones include the Department of Homeland Security (DHS) certifying a 90% effectiveness in apprehensions and returns along the United States-Mexico border, having a phased-in E-Verify program in place, increasing the number of border patrol agents, and completing additional border fencing. Specifically employers nationwide will be required to use the E-Verify program determine the work eligibility of their employees. The Border Patrol force will be nearly doubled with the addition of 20,000 agents. Security will also be increased with the construction of 700 miles of border fencing and the implementation of several high-tech security measures at the border and in airports.

Highlights of S. 744 for Employers

Non-immigrant (temporary visas)

The legislation increases visa caps in multiple categories but at the same time adds more restrictive guidelines for certain categories including the L-1 visa. Changes to the H1-B (professional worker) visa program, include an immediate increase in the visa cap from 65,000 per year to 115,000 for the first fiscal year after the date of enactment and then increases up to 180,000 depending on market demand. A nice perk added is open work authorization for spouses of H-1B workers provided we have a reciprocity agreement in place. The bill also increases fees and limits the number of overall H-1B and L-1 visa holders a company can hire. For those following the guest worker debate, the W visa category may provide relief to employers. The W visa will provide from 20,000 to 200,000 visas for low-skilled nonagricultural workers that would fluctuate yearly. Also, a new agricultural worker visa program would allow certain existing agricultural workers to receive residency after continuing to work in the industry for five more years. Another new nonimmigrant investor visa, the X visa, will target entrepreneurs who raised at least $100,000 in investment, or who created no fewer than three jobs during a two-year period prior to the application and generated $250,000 in annual revenue.

Immigrant (Permanent Residence)

The future immigration portion of the bill establishes a merit-based point system that awards points to immigrants with educational credentials, work experience, and other qualifications. It also recaptures unused visas. This will augment, not replace, the current employment and family based categories. Physician access should be increased, as the J-1 visa waiver for those who work in medically underserved areas is made permanent. The EB-5 classification benefited from a few tweaks including exempting spouses and children from the 10,000 annual cap, designating Targeted Employment Areas for a five year period and allowing for concurrent filing of an investor petition and an adjustment of status application for investors who are already in the U.S. in a valid non-immigrant status. The bill also creates a companion to the EB-5 visa, the new EB-6 immigrant investor visa category. This visa will allow entrepreneurs to obtain permanent residency if they have a significant ownership in a U.S. business and have had a significant role in the start-up of the business. The immigrant’s investment must create at least five jobs and must receive at least $500,000 in venture capital or investment, or create five jobs and generate $750,000 in annual revenues in the prior two years.

What is Next?

While the bill’s passage through the Senate was a victory for immigration reform supporters, the bill still has a long battle ahead before being implemented into law. The White House and the Gang of Eight are urging the House to adopt the bill, but it is already facing significant resistance from House members who are currently working on their own immigration bill. House Speaker Boehner stated that the House will continue working on the immigration bills they originated and already have in committee. In response to questions about whether the Senate bill would pass through the House Boehner responded, "The House is not going to take up and vote on whatever the Senate passes. We're going to do our own bill, through regular order."

If the House and Senate pass the same bill, then it will be sent to the President to be signed into law. However, based on the Speaker’s statements it is likely that the House Judiciary Committee will first take up the immigration legislation and the Senate’s bill will not be immediately adopted. If the House and Senate pass different bills, then the bills will be sent to Conference Committee. Like most major legislation, it is likely that the immigration bill will go to a Conference Committee to work out a compromise and memorialize it in a conference report. That report must then be approved by each chamber. Only then can President Obama be given the opportunity to sign comprehensive immigration reform into law. It will be important to watch the timing as Congress adjourns for August recess. Observers are concerned that immigration reform will lose momentum as Congress may be preoccupied with other items and focused on the upcoming mid-term elections when they return. It is important for employers to review the highlights of the bill, as well as the carve outs and the possible amendments. It is critical for employers to become an active part of the dialogue by contacting their representatives to ensure their concerns and requests are included in the debate.

Copyright © 2014, Sheppard Mullin Richter & Hampton LLP.

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