President Trump’s “Buy American, Hire American’’ executive order ostensibly prioritizes American workers over foreigners, scapegoating the H-1B program, as if this is a root cause of economic ills in this country. Unfortunately, the order does little to stop fraud and fails to recognize that employers can’t find the experienced workers required to fill open jobs.
The current H-1B program authorizes a cap of 85,000 new H-1B workers each fiscal year, with some exceptions. But demand exceeds supply: in April 2017, the US Citizenship and Immigration Services received 199,000 petitions, which were entered into a lottery to choose the 85,000 H-1Bs available for fiscal year 2018. Winners have now been notified; too bad for the losing companies and for America, because each year H-1B workers prove that they contribute to the success of US companies, stimulate the economy, and create more opportunities for US workers.
Massachusetts companies have demonstrated the value of hiring H-1B workers to fill gaps in the workforce. For the past three years, the Massachusetts Global Entrepreneur in Residence Program has assisted venture-backed start-up companies to secure valuable H-1B workers through the use of “cap-exempt” H-1B petitions. Since 2015, this innovative collaboration between government, higher-education institutions, and the private sector has led to the founding of 28 new companies, creation of 377 new jobs, and venture capital investment of $240.6 million into the Massachusetts economy.
Despite these successes, the H-1B program needs to rectify abuses and address the scarcity of talent facing US businesses. Here’s how to do it:
Ban “job-shops” from the H-1B program
“Job-shops” are large foreign-owned conglomerates that are hijacking the H-1B program. They bring in thousands of foreign nationals each year and place them at third-party locations, often at below-market salaries. These job-shops have little control over the foreign national’s actual work product, which is a violation of H-1B regulations. Moreover, job-shops can enter thousands of petitions into the H-1B lottery because they do not care which of their mass of employees win the lottery. This undercuts the purpose of the H-1B program. They should be banned from participating in the H-1B lottery.
Enforce the current wage rules
Employers filing H-1B petitions must agree to pay the fair wage for the job offered, yet foreign workers are often willing to work for less. There is currently no meaningful auditing by the Department of Labor to ensure that wage sources, wage levels, and occupational classifications supplied by employers are accurate; no serious auditing to ensure that the proper wage is paid to the H-1B employee; and no consistent penalties assessed against employers who cheat. This undercuts America’s faith in the H-1B program and must end.
Prioritize employers with the potential for job creation
Give priority in the H-1B lottery to US employers with the most potential for creating jobs for US workers. Companies that can prove an H-1B worker will likely lead to job creation for US workers should be prioritized.
Require the private sector to create training programs for US workers
H-1B regulations require that an employer filing an H-1B petition must pay a surplus filing fee, used to fund programs that address skill shortages in the US workforce. According to a 2013 Brookings Institute report, the federal government collected over $1 billion in these fees from US employers between 2002 to 2012, yet the money is not being spent to effectively train Americans to fill these H-1B jobs. The private sector and non-governmental organizations, which widely use the H-1B, are the engine of innovation and job creation in this country. They are better suited than the federal government to use the fees to train US workers to fill these open jobs.
As Massachusetts has exemplified, H-1B workers are transforming state and local economies across the nation in positive ways. By maximizing effectiveness of the H-1B system, President Trump has the ability to create an immigration system that expands opportunities for all US workers across all geographies and industries.
Jeff Goldman practices immigration law in Cambridge and is chair of the Massachusetts Governor’s Advisory Council on Refugees and Immigrants and cofounder of the Massachusetts Global Entrepreneur in Residence Program.