How H-1Bs Shaped the Market

By Jennifer Freer

H-1B visas have been around since 1952, but they have evolved along with the booming technology industry, said Elizabeth Espin Stern, chairwoman of the Business Immigration Practice Group for Shaw Pittman, a law firm in Washington, D.C., specializing in IT and telecommunications issues.

"As the commercial sector grew, businesses needed to take advantage of global talent," she said.

While professional workers have been recognized in immigration laws as far back as the Immigration Act of 1917, the H-1 category did not exist until the act of 1952. Under that act, temporary workers of "distinguished merit and ability" were admitted to the United States, but only if filling temporary positions, Stern said.

That changed in 1990 when Congress overhauled immigration laws, not to promote immigration but to make distinct categories and restrictions for companies using H-1B visas.

The Immigration Act of 1990, which took effect Oct. 1, 1991, imposed a quota of 65,000 on H-1B visas and reflected Congress' view that H-1B workers were not of distinct merit and ability. Their jobs were regarded as specialty occupations that required a U.S. bachelor's degree or equivalent.

In order to use an H-1B visa, a company must have a specific IT job that needs to be filled and show that there is no one qualified in the United States to take the position.

The company then must find a specific person it has recruited and prove that person is qualified.

The company then files a petition with the Immigration and Naturalization Service. The petition goes to the State Department, which checks to make sure the potential hire does not have a criminal background. Approval usually comes in two to three months.

Phillip Merrick, chief executive officer and founder of webMethods Inc., is one person who came to the United States on an H-1B visa. Originally from Melbourne, Australia, he eventually got his green card.

Using the visa, Merrick worked for Viar, a contractor in Alexandria, Va., that is now part of DynCorp, Reston, Va. He started webMethods, a provider of integrating enterprise software over the Internet, in Fairfax, Va., four years ago. He now has more than 300 employees and $4.5 million in annual revenue.

His company started using H-1Bs two years ago and now uses about 15 such visas a year, he said.

"We can't find people fast enough to keep up with the growth in the technology industry," Merrick said. "Ultimately, this will have a major drag on the economy if it's not fixed. The U.S. education system is not turning out enough qualified people to fill the positions."• Hatch-Abraham Bill

Increase in H-1B quota: 195,000 annually for three years

Fees for businesses: $500 per visa paid by sponsoring employers, $375 million for training U.S. workers

Green card status: Automatic extension of visa if the immigrant petition or status of application has been pending for more than one year.

Transfer of visas: Workers may change employers when new employer files petition with INS rather than waiting for approval.

• Dreier-Lofgren Bill

Increase of H-1B quota: 200,000 for three years beginning in 2001. For 2000, additional visas issued to clear backlog.

Fees for businesses: $1,000 per visa; 33 percent to the Stafford Loan Forgiveness Program, 17 percent to Upward Bound Math/Science Program, 14 percent to National Science Foundation Scholarships, 25 percent to Regional Skills Alliance Job Training and 6 percent to improved processing by INS.
Green Card status: Extension for H-1B status beyond the sixth year when the permanent residency paperwork is stalled beyond six months.

Internet recruitment: The Labor Department would be required to take Internet recruitment efforts into account. Employers would post job openings on a Web site for 30 days.
Electronic filings: The Labor Department and the INS would be required to establish a Web-based system to allow employers to check the status of petitions online within one year of the bill's enactment.


• Lamar Smith Bill

Increase of H-1B quota: Temporary elimination of quota for two years; return to 65,000 by 2003.

Fees for businesses: $500 per visa would remain unchanged

Minimum salary requirement: H-1B workers would get a minimum of $40,000, unless they work for colleges or non-profit organizations.

Posting salary: Employers would have to submit information about H-1B employees without names to the Labor Department for Internet posting.

Full-time work required: Workers have to work at least 35 hours per week.
Degree requirement: Degrees in specialty field required. Substituting experience for degrees not acceptable.

Gross asset: Unless employer is a government institution, employers would have to have gross assets of $250,000 filed with SEC to use H-1B visas.

Source: Information Technology Association of America