CONNECT!

A Newsletter on Business Immigration
April/May 2001 Issue Vol. 2, No. 2

WHAT'S CONNECTED?

CONGRESSIONAL NEWS

• H-1Bs and the Economy: What Do Recent Changes in the Economy Mean?
• High-Level Working Group On U.S.-Mexico Migration Holds First Meeting; Senators Visit Mexico
• Bush Unveils Spending Plan; Lists Outline of INS Reorganization

SPOTLIGHT

• Section 245(i) Extension Expires; Further Extension Supported by the Administration and Members of Congress

AGENCY NEWS

• Changes at INS: Wyrsch to UNHCR
• EOIR Director Named Acting INS Commissioner
• Bush Nominates Senate Sergeant at Arms as New INS Commissioner

POINT OF INTEREST . . . Undocumented Immigrants Contribute Billions to Social Security Surplus

CONGRESSIONAL NEWS:

H-1Bs and the Economy: What Do Recent Changes in the Economy Mean?
The H-1B visa is a temporary, nonimmigrant visa used by employers to sponsor foreign nationals in "specialty occupations," jobs that require at least a bachelor's degree in a related specialty. This category has been used in the decades since its creation to bring to the United States talented foreign professionals with specialized skills and knowledge not generally available here, to meet the needs of employers for knowledge and experience in overseas markets, and to fill specific workforce shortages in professional occupations. Over the last decade, the well-known shortages in the information technology ("IT") industry have driven up demand for H-1B professionals. Congress responded to this demand in 1998 and 2000 by increasing the number of H-1B visas for such professionals. However, a slowdown in the last months affecting the IT sector has led to layoffs and other cutbacks. Some now wonder about the impact of this slowdown on the demand for H-1B professionals and the effect on the current H-1B workforce. In general, we believe that the slowdown is not having a significant impact on demand, and, although individual H-1B professionals may be laid off, most seem to be finding new employment.

INS' numbers do not indicate any significant decline in overall H-1B demand, but recent filings have slowed. As of March 7, INS reported to Congress it had approved 72,000 H-1Bs against the current FY 2001 cap of 195,000. News articles quote INS reporting an additional 66,000 H-1B cases pending on that date (an unknown number of which may count toward the cap). These figures are higher than the numbers at the same time last fiscal year: 74,300 approvals and 45,000 pending. However, between January and February of this year, the number of new filings decreased by 14,000, from 30,000 in January to 16,000 in February. It is too soon to tell if this trend will continue or indicates a slowdown. INS has not released any updated statistics.

However, INS' counting methods are notoriously inaccurate. In 1999, INS mistakenly issued more H-1Bs than the cap at that time allowed and had to hire KMPG to audit their count to determine the size of the overissuance. (The audit found more than 25,000 visas too many had been issued.) INS has never published its counting methodology as required by the American Competitiveness in the 21st Century Act ("AC21") and may still be making many of the same mistakes that led to previous years' miscounts. Therefore, even with INS' numbers, the real story may be unknown. Finally, changes both in filing patterns and the annual cap may have affected this year's numbers, rather than any effect from the slowdown. Last year, because the cap was reached early in FY99, INS "carried over" an estimated 30,000 H-1B cases to count against the FY2000 cap, meaning that as of October 1, the count was already "in the hole" by that many visas. However, because AC21 cleared out the FY1999 and FY2000 backlogs, the full visa allotment was available at the beginning of the fiscal year. Therefore, comparisons of this year's cap count actually show demand for October 1 to March to be higher than last year, since last year's count included filings from the summer.

The 2000 law also removed from the cap H-1B professionals hired by higher educational institutions that normally would begin their major hiring season around May. Their absence form the reported count could result in the appearance of lower demand. Also, last year, INS received the bulk of its filings in January and February as employers filed before the cap was reached (which happened in March). This year, INS received the bulk of filings in December as employers raced to file before the education and training fee was increased from $500 to $1000. Therefore, recent declines in filing rates between January and February this year cannot accurately be compared to last year to determine any pattern.

With regard to the H-1B professionals themselves, there is no evidence that H-1Bs are being especially targeted for layoffs. Businesses are treating foreign professionals as they treat American workers. If H-1Bs are part of ongoing projects, they are being retained. If they are part of business operations being reduced or discontinued, then they may be laid off. Unemployment figures have not dramatically risen, in spite of layoffs, indicating that most employees are finding new jobs.

However, under the law, temporary foreign professionals who have been laid off cannot receive welfare benefits. The H-1B employer is required to pay for transportation home, if the employee chooses to depart rather than find new employment. Technically, foreign nationals who are no longer working for their sponsoring employer immediately fall "out of status" and can be removed from the United States. However, such removals are not a priority for INS enforcement. In many cases, if the individual finds a new sponsoring employer relatively quickly, INS may reinstate their H-1B status on a discretionary basis. However, this is completely at the discretion of the INS examiner in the case. INS should revise its policy to officially provide laid off H-1B employees a reasonable "grace period" in which to either find new employment or wrap up their affairs and depart.

While it is clear that the slowdown in the economy has hit the hardest on the IT sector, its impact on H-1B professionals and the ongoing demand for them, given our continuing lack of skilled, educated IT professionals, remains to be determined.

High-Level Working Group On U.S.-Mexico Migration Holds First Meeting; Senators Visit Mexico
The High-Level Working Group on U.S.-Mexico Migration announced in February by Presidents George Bush and Vicente Fox held its first meeting on April 4. The Working Group consists of U.S. Secretary of State Colin Powell, U.S. Attorney General John Ashcroft, Mexican Interior Minister Santiago Creel and Mexican Foreign Minister Jorge Castañeda.

At the meeting, the Mexican representatives raised several issues including a new guest worker program for Mexican nationals, an increased number of permanent visas, greater protections for illegal immigrants, an extension of Section 245(i), and a yet-to-be-defined system for "regularizing" the status of Mexican undocumented immigrants. (Their notion of "regularization" seems to include legalized work status and protection from abuse from unscrupulous employers.) The Mexican delegation also discussed efforts that Mexico will undertake to reduce the number of illegal immigrants from other countries that "pass through" Mexico on their way to the U.S., by increasing border enforcement at Mexico's southern border with Guatemala, requiring more foreign citizens to obtain visas for visits to Mexico, and cracking down on corrupt Mexican border guards who work with international smuggling rings.

The Working Group also established the mechanics for future talks and a timetable for activities. In a joint statement issued following their meetings, the Working Group stated that they would discuss border safety, the H-2 visa program, regularization of undocumented Mexicans in the United States, alternatives for temporary workers with an emphasis on "circularity", worker rights and labor demand, cooperation on law enforcement issues, and regional economic development.

The joint statement also called on all Mexicans in the United States who could benefit from the short restoration of Section 245(i) to file their applications before the April 30, 2001 deadline. Finally, the Working Group agreed to hold joint border meetings to strengthen existing mechanisms and develop new ideas on border safety. The Working Group hopes to present a preliminary report to the Binational Commission in the summer and a final report to the two Presidents in the fall.

On the heels of this meeting, Senate Foreign Relations Committee Chairman Jesse Helms (R-NC), one of the harshest Congressional critics of the former Mexican government, recently visited that country accompanied by four other members of the Senate committee: Senators Joseph Biden (D-DE), Lincoln Chafee (R-RI), John Ensign (R-NV) and Chuck Hagel (R-NE). During this unprecedented three-day visit, the Senators met with Mexican President Vicente Fox, Foreign Minister Jorge Castaneda, and members of the Mexican Senate. The agenda included discussions about drug policy, trade, and immigration and border control. Senator Helms' trip and comments reflect his support for Mexican President Vicente Fox, who defeated the ruling Institutional Revolutionary Party (PRI), which had borne the brunt of the Senator's wrath. However, the Senator also may be recognizing the importance of the Mexican relationship to his home state, where immigrant workers are critical to key businesses, including tobacco, construction and poultry, and where the Hispanic population has exploded since the 1990 Census, and now numbering close to 5 percent of the population. The other Senators making the trip have similar issues in their states.

Following the meetings, both Senators Hagel and Biden noted that a deal with Mexico on migration issues is close. According to Senator Hagel, "significant immigration reform [could happen] during the next two years." Senator Biden stated, "We feel very strongly that we are very close to being able to make an accommodation that meets the interest of the American government and the Mexican government." However, details of what this might entail were not made public.

Employers who rely heavily on "essential workers" are observing these meetings closely. Whether real immigration reform will emerge that can meet the needs of employers for a long-term, stable workforce will depend largely on whether this new era of "cooperation" will overcome the traditional challenges that often accompany an immigration debate and can take advantage of the new relationship between Mexico and the United States.

Bush Unveils Spending Plan; Lists Outline of INS Reorganization
President Bush formally submitted his Fiscal Year 2002 budget to Congress on April 9. While the budget appears to provide some extra appropriations for the INS, it is unclear whether adjudications is receiving any significant increase in appropriated funds to deal with backlog reductions, despite a pledge by the Administration of $100 million for each of the next five fiscal years to support this effort. In fact, the $100 million for the first year results from $45 million in additional appropriations, $20 million from a new fee on certain business petitions (the "premium processing" fee), and $35 in funding returned to the INS this year from other programs to which it had been diverted last year. In addition, the agency's enforcement budget has been increased once again.

The budget also mentions the President's plan to split "INS into two agencies with separate chains of command, but reporting to a single policy official in DOJ." While the issue of INS reorganization clearly has budgetary considerations, the document does not provide further details. The President has indicated his intention to work with Members of Congress in crafting legislation to reorganize the INS. Immigration advocates have laid out three major principles for INS reform: 1) placing a single person in charge with clout and policy-making authority; 2) separation, but coordination, of the enforcement and adjudications functions; and 3) adequately funding the adjudications arm.

The budget submission includes the following details:

• Total overall INS Budget Request: $5.51 billion, a 10% increase over the FY 2001 funding level. The budget includes $380 million in "enhancements" and provides $123 million in additional funding to the agency's base. The budget adds a total of 1,364 new staff positions, allowing INS to grow to more than 36,200 positions by the end of FY 2002.
  
  
• Immigration Services: The budget proposes a five-year $500 million initiative ($100 million to implement the first installment) to bring all processing times within a six-month window, while the budget includes $45 million in direct appropriations for this effort. According to testimony by Attorney General John Ashcroft before the Senate Appropriations Subcommittee, the remainder of the funds is expected to come from $35 million in "base funding" and $20 million from implementation of a new premium processing fee for faster service on certain business immigration filings (See article in Feb./March issue regarding this fee).
  
  
• Border Management Budget Request: Increases the personnel of the U.S. Border Patrol by 570 agents. Provides almost $43 million in construction funding to support Border Patrol enforcement efforts.

SPOTLIGHT: Section 245(i) Extension Expires; Further Extension Supported by the Administration and Members of Congress
The extension of eligibility for Section 245(i) granted by last year's LIFE Act expired on April 30. Section 245(i) was a provision of immigration law that allowed certain individuals to get their green cards who would not otherwise be eligible without leaving the United States. Individuals who have a relative or employer sponsor for a green card but whose immigration status in the United States had lapsed or who were here illegally could use 245(i) to pay a fee and process their application within the United States. The existence of Section 245(i) is crucial for these people because under a 1996 provision of the law individuals who have been out of status for more than six months or one year and depart to process their green card can be barred from returning for three or ten years. The original Section 245(i) provision was allowed to expire on January 14, 1998. Last December, Congress extended Section 245(i) for a four month window, to April 30, 2001.

Section 245(i) is the only hope for legal status for many undocumented immigrants. Although many have been living in the country for many years, hold jobs, pay taxes, and have the family or employer sponsorship that would make them eligible for green cards, the "catch-22" of the three and ten year bars and the absence of any mechanism that would allow them to adjust status in this country has forced many of them to remain underground. Employers with valuable employees have looked to Section 245(i) as the only potential means of retaining good workers. Family members view Section 245(i) as the only way to remain with their loved ones.

During this four-month window, record numbers of individuals and employers filed the underlying petitions and labor certification applications that will later allow adjustment of status. However, problems with implementation meant that many were unable to benefit from this provision simply because there were insufficient lawyers and authorized legal clinics available to process applications and petitions. In addition, the INS delayed issuing regulations until March. Unlicensed immigration consultants and "notarios" took advantage of the confusion generated by the absence of an adequate infrastructure and offered their "services" to people desperate for guidance.

In addition, employers who wished to assist individuals by sponsoring them for labor certification were deterred by reports that such filings have resulted in enforcement actions by INS against both the employees and the employers under employer sanctions laws, resulting in even more individuals unable to take advantage of the new law. Unfortunately, the sponsors of the LIFE legislation did not take into account this factor. (Three days before the expiration of the law, the INS issued a memorandum to its offices directing them to take no enforcement action against individuals based on Section 245(i) filings. The policy only applies to cases filed in those last three days, but the INS has dropped proceedings already instituted in some parts of the country. The memorandum does not protect employers who file labor certification applications from employer sanctions investigations.)

Congress has heard about the hardships created by the extremely short four-month window for filing petitions that preserve eligibility for adjustment of status under Section 245(i). Four bills have been introduced to extend this deadline. Senators Chuck Hagel (R-NE) and Edward Kennedy (D-MA) have introduced S. 778 that would extend the Section 245(i) deadline for one year, until April 30, 2002. This bill joins three bills already introduced in the House: H.R. 1242, introduced by Representative Peter King (R-NY) that would extend the deadline for six months; and H.R. 1195, introduced by Representative Charles Rangel (D-NY) and H.R. 1615, introduced by Representative Sheila Jackson-Lee (D-TX), that would extend the deadline for one year. In early May, President Bush issued a letter to Congress supporting an extension of Section 245(i). However, his letter did not address the length of the extension. These initiatives would provide an immediate, short term, and temporary solution to the current filing crunch.

Unfortunately, none of these bills addresses the enforcement issues nor provides a long-term solution, which is the permanent restoration of Section 245(i). A permanent restoration is the only real solution that would prevent the separation of families, allow businesses to retain valued employees, and provide much-needed income for the Immigration and Naturalization Service.

AGENCY NEWS

Changes at INS: Wyrsch to UNHCR
Mary Ann Wyrsch, who had been Acting INS Commissioner since the resignation of Doris Meissner was appointed on February 28 as United Nations Deputy High Commissioner for Refugees and began her new position in early April.

EOIR Director Named Acting INS Commissioner
Because of Ms. Wyrsch's departure, Attorney General John Ashcroft on March 6 named Kevin Rooney Acting Commissioner "until a permanent INS Commissioner is appointed." Mr. Rooney previously served as the Director of the Executive Office for Immigration Review ("EOIR"), a branch of the Department of Justice that oversees Immigration Judges and the Board of Immigration Appeals. A career Department of Justice employee, Mr. Rooney previously served as Deputy Director of EOIR, Assistant Attorney General for Administration, and Assistant Director of the Bureau of Prisons.

Bush names Senate Sergeant at Arms as New INS Commissioner
On May 4, President Bush announced his intention to nominate James W. Ziglar, who has been the Senate Sergeant-at-Arms, as the new Commissioner of the Immigration and Naturalization Service. Although Mr. Ziglar has no immigration expertise, supporters of his nomination emphasize that his private-sector management experience and work in the Senate are desperately needed at the beleaguered agency.

Immigration advocates are closely watching this nomination and those named to the all-important policy positions within the agency, including General Counsel. While having management experience is a plus during a time when the agency is likely to be reorganized by Congress, immigration is an important domestic and foreign policy issue for the U.S., and it is imperative that experts be appointed within the agency to guide that policy. Historically, most INS Commissioners have not had previous immigration experience. A significant exception was former Commissioner Doris Meissner who studied immigration policy at the Carnegie Endowment for International Peace before being appointed by President Clinton in 1993.