February 6, 2009 – Firms receiving TARP funds will be automatically considered H-1B dependent

Senate approves ‘strict’ rules on hiring H-1B workers

Bill sought to bar firms receiving bailout money from hiring foreign workers but set restrictions instead

February 6, 2009 (Computerworld – Patrick Thibodeau)

The U.S. Senate agreed on Friday to set restrictions on the hiring of H-1B workers by financial services firms that receive federal bailout funds, but it didn’t bar the hiring of foreign workers as proponents had sought.

U.S. Sens. Bernie Sanders (I-Vt.) and Chuck Grassley (R-Iowa) had proposed legislation this week to prohibit any firm that received money under the Troubled Assets Relief Program (TARP) from hiring foreign workers.

The amendment passed today, part of the stimulus plan being debated in the Senate, didn’t include a blanket restriction on H-1B use and instead set a series of strict standards on H-1B hiring.

The Senate’s amendment would require companies receiving TARP funds, mostly financial services firms with a lot of bad mortgages, to comply with hiring rules set for “H-1B dependent” firms — those with more than 15% of their workers on H-1B visas.

Any firm receiving TARP funds will be automatically considered H-1B dependent, regardless of the percentage of H-1B workers on the payroll.

The H-1B dependent designation subjects employers to a number of provisions, including a good faith effort to hire U.S. workers first.

Sen. Grassley said in a statement late Friday that the modified bill means companies receiving TARP funds would still be able to hire H-1B visa holders, but would have to comply with the “H-1B dependent”-employer rules “which include attesting to actively recruiting American workers; not displacing American workers with H-1B visa holders; and not replacing laid off American workers with foreign workers.”

“Hiring American workers for limited available jobs should be a top priority for businesses taking taxpayer money through the TARP bailout program,” Sen. Grassley said.

“With the unemployment rate at 7.6 percent, there is no need for companies to hire foreign guest workers through the H1-B program when there are plenty of qualified Americans looking for jobs,” Sen. Grassley said.

Sen. Grassley and Sen. Sanders both argue that U.S. firms have a moral obligation to protect U.S. workers’ jobs.

“[H-1B dependent companies] have to make very, very strict non-displacement attestations for 90 days before you employ an H-1B and for 90 days afterward as well,” said John Nahajzer, a corporate immigration attorney and managing partner at Maggio & Kattar PC in Washington D.C. He added that if the employer finds any workers within this 90-day window before and after the H-1B worker is hired, then they are required to terminate the H-1B worker.

Today’s amendment may be tougher than the existing law. There are now exceptions to the H-1B dependency rule for foreign workers who are paid at least $60,000 in base wages or who have advanced degrees — but those exceptions don’t appear in the amendment. Nahajzer said he believes companies affected by this proposed law would be unlikely to hire H-1B workers.

Nahajzer said the amendment is essentially a ban on hiring H-1B workers by TARP receiving firms, “because it’s virtually impossible for [the] non-displacement provisions to be met by any company, much less the banks, which have been laying people off left and right.”

The fate of this H-1B amendment rests on the fate of the stimulus bill before the Senate today, and if that’s approved it will head to a conference where other changes are possible.

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