April 2, 2004

H-1B Cap Exemption Legislation Introduced

Representative Lamar Smith (R-TX), a former Chairman of the House Immigration Subcommittee and a key Member on immigration matters, introduced legislation that would provide for an exemption from the H-1B cap for up to 20,000 U.S. university Master's and PhD graduates (H.R. 4166).

The impact on FY 2004 H-1B numbers remains to be seen. The bill would otherwise leave the yearly H-1B cap at its current level of 65,000.

The Smith measure is likely to move through the House of Representatives this spring or summer.

Additional provisions of the Smith bill are discussed below.

Education and Training Fee and Dependent Employer Attestations. The $1000 education and training fee and the "dependent employer" attestations would be re-instituted and made permanent under the Smith proposal. In 1998, Congress imposed an education and training fee of $500, which was raised to $1000 in legislation enacted in 2000. Also in 1998, Congress enacted new recruitment and non-displacement attestations for H-1B dependent employers, (generally those with more than 15% of their workforce in H-1B status). Both the education and training fee and the dependent employer attestations expired on September 30, 2003. Under the Smith proposal, the fee and the attestation provisions would be effective 30 days after enactment.

New Anti-Fraud Fee. The Smith proposal includes a new $500 anti-fraud fee to be paid by the employer at the time of initial application for an H-1B or L-1 visa. In the case of blanket L-1s, the fee would be paid at the U.S. Consulate. The fee would apply only to the principal foreign national, not to spouses or dependents. The fee would not be required upon extension of the visa, but would be required where a change of employers takes place. This provision would be effective 90 days after enactment.

New Limited L-1 Visa Requirements. In addition, the Smith bill includes L-1 visa language introduced previously by Sen. Chambliss in S. 1635. This provision would amend the Immigration and Nationality Act (INA) to prevent L-1B classification for "specialized knowledge" personnel from being issued to those foreign nationals who would be (1) supervised and controlled by an employer who is not affiliated with the employer for whom the petition was granted and/or (2) placed with an unaffiliated employer to provide labor that does not involve the specialized knowledge specific to the petitioning employer. The provision also calls for a further amendment to the INA: an increase in the pre-employment requirement from six months to one year for L-1 visa applicants filing under the blanket program. These provisions would be effective 180 days after enactment.

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