H-1B Visa Limits Set By Economic Stimulus Package

Computerworld — A provision requiring banks receiving federal bailout funds to give hiring priority to U.S. workers over foreigners with H-1B visas made it into the final version of the economic stimulus bill that President Barack Obama signed last week.

But House and Senate negotiators dropped a separate proposal that would have forced all employers benefiting from stimulus money to use the government's Web-based E-Verify system to vet the employment status of their workers.

The new H-1B restrictions require financial services firms that get money under the Troubled Assets Relief Program (TARP) to comply with rules set for "H-1B-dependent" companies -- those where more than 15% of the workers are on visas.

The rules set a number of requirements for organizations looking to hire H-1B holders , including the need to attest that the employer actively recruited U.S. workers and wouldn't be displacing or replacing U.S. citizens.

Sens. Bernie Sanders (I-Vt.) and Chuck Grassley (R-Iowa) initially proposed an outright ban on H-1B hiring by TARP-recipient banks, but the scope of their amendment to the stimulus bill was later scaled down.

Even so, Charles Kuck, president of the American Immigration Lawyers Association in Washington, said it's unlikely that the affected financial services firms will try to hire H-1B holders for IT jobs and other positions because of the added cost and work now required.

That could leave the firms unable to tap the skills of "qualified foreign talent" to help them during a time of economic crisis, Kuck added. "Maybe we've got all the homegrown talent we need to pull us out of this mess, because now we have to hope we do," he said.

But some H-1B critics contend that the hiring restrictions may do little to stop IT functions from being shifted to foreign workers, since the stimulus bill doesn't place any limits on offshoring.

Ron Hira , an assistant professor of public policy at Rochester Institute of Technology, claimed that many TARP recipients have "huge shadow workforces" at outsourcing vendors. And outsourcing by Wall Street firms has risen since the federal bailout program began last fall, according to Hira.

Restricting H-1B hiring "will rectify some of the indefensible practices of quasi-nationalized banks," Hira said. "But unfortunately, it doesn't close the loopholes where most of the abuse occurs."

The E-Verify provision that was left out of the stimulus bill would have required companies benefiting from the $787 billion package to vet information in job applications by comparing it to data in work-eligibility databases maintained by the U.S. Social Security Administration and the Department of Homeland Security . Also excised from the bill was a proposed extension of the overall E-Verify program beyond March 6, when it is scheduled to expire.

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