Why Tech Employers Hate Congress' New Immigration Reform BillWhy Tech Employers Hate Congress' New Immigration Reform Bill

For years, big tech employers have lobbied Congress to raise the cap on H-1B visas, the ones most commonly used to hire foreign tech workers, letting them work in the United States up to six years.

So the recent compromise immigration reform bill hammered out by a group of senators and the White House--which would raise the cap from 65,000 to 115,000, and as high as 185,000 in later years--must be a wish come true for tech employers, right?

Not exactly. "This bill could well be worse than the status quo we have now, and that says a lot," says Jack Krumholtz, Microsoft's managing director of federal government affairs. That's because the immigration reform bill, which includes some of the biggest changes in immigration policy in decades, could put more restrictions on all companies using H-1Bs.

Immigration was center stage in Washington last week, with President Bush personally making the case for reform. The hottest debate was over amnesty for 12 million undocumented workers in the country. The fate of the many thousands of college-educated foreigners is getting much less attention.

But it's a huge deal to tech companies. About one-third of Microsoft's U.S. employees are on visas or green cards or are in the process of qualifying for a green card, the company says. If (still a big if) the immigration reform bill becomes law with its proposed H-1B provisions, "it will make the program unworkable moving forward," says Krumholtz.

That sentiment was echoed by Robert Hoffman, VP of government affairs at Oracle and co-chair of Compete America, a coalition of tech companies pushing for visa and green card reform.

There's a lot tech employers don't like about the bill. For starters, it wouldn't raise the available number of visas nearly as high as a bill passed by the Senate last year. That would have raised the H-1B cap to 115,000 but also would have exempted all foreign students with advanced degrees from U.S. universities and added 20,000 visas for foreign students with advanced degrees in science, technology, engineering, and math from foreign schools. Today, beyond the 65,000, there are 20,000 visas that are set aside for people with advanced degrees from U.S. schools.

The government received enough petitions in one day to meet the 65,000 H-1B visa cap for fiscal 2008, which starts Oct. 1. The cap on the 20,000 advanced degree visas was hit about a month later. On the first two days companies could apply for visas, April 2 and April 3, employers filed nearly 120,000 petitions for the 65,000 allotment--plenty to fill even the 115,000 slots in the latest proposal.

EMPLOYERS OPPOSE POINTS

Tech employers also aren't pleased about one of the most dramatic shifts proposed by the reform bill: a move to a merit-point system, where individuals are given green cards--which provide permanent U.S. residency--based on points for skills, education, and occupation. It would give points for family ties in the country but with much less emphasis than today's law.

Tech employers say the point system takes power away from businesses, because employers would no longer be the green card sponsor for specific individuals they want to hire. Instead of people getting green cards because a company wants to hire them, they would get them because government officials think their skills will be valuable and help the economy. "The point system is built on top of a scarcity of green cards, and then shifts personnel decisions into the hands of bureaucrats and away from employers," Hoffman says.

It seems likely the government would put a premium on individuals with degrees or skills in high-demand areas of science, technology, engineering, and medicine. But tech employers contend the point system would pit low skills and high skills against each other for the same scarce green cards. It would leave an employer's ability to hire someone "up to chance," says Krumholtz.

The other big complaint is over more restrictions. Under current law, only companies that have more than 15% of their workforce on H-1B visas--called "H-1B dependent" companies--are held to certain tougher rules. This bill would apply them to all H-1B employers.

Those rules include H-1B employers attesting that no U.S. worker was displaced from a particular job six months before or after an H-1B worker was hired for that role. Such restrictions create big hurdles for "legitimate" employers in terms of flexibility of their workforce and global competitiveness, Krumholtz says. Oracle's Hoffman says the provisions "are a huge requirement that might violate international trade laws." They hinder companies from responding to changes in the economy--for instance, if an H-1B worker was hired for a specific job a few months before an economic downturn, Hoffman wonders, would that prevent a company from laying off any American workers?

The biggest complaint about H-1B visas is companies that bring people here just to hire them back out to U.S. clients at below-market wages. "If there's abuse or fraud, let's go over that, let's target those actions to employers abusing the system or engaging in fraud," says Krumholtz. "Why apply those restrictions to legitimate employers?" Hoffman says those enforcement changes could make H-1B hiring too costly, and that would drive U.S. companies to do exactly what Americans don't want: to send work offshore rather than bring people here to do the work.

Other proposed restrictions include requiring that an H-1B visa applicant's educational degree matches the job. So an individual applying for a U.S-based job as a software engineer would need a software engineering degree. "What if that person has a Ph.D. in mathematics?" asks Krumholtz.

A few other countries, including Australia, Canada, and most recently the United Kingdom, have point systems. But Australia has a dual-track system that includes employer-sponsored immigration, something not in the U.S. plan. "The biggest winners in this are Australia, Canada, France," and other countries that are making immigration easier for the highly skilled and educated, he says.

Hoffman says multinational companies such as Oracle will be less affected, since a talented developer who can't get into the United States could take a job in one of Oracle's other global offices. He says it'll be harder, though, for promising U.S. startups to hire foreign tech talent.

So is the tech companies' displeasure a sign of a big win for H-1B critics? "As 'comprehensive immigration reform,' it's a total joke," says John Miano, founder of U.S. tech professional advocacy group Programmers Guild, via e-mail. "The bill doesn't please anyone--does not solve the problem it's addressing."

Miano predicts H-1B changes won't happen as part of this package, and any changes to the H-1B cap or green card rules could come in targeted bills. That might not be a bad thing. The issue of thousands of highly skilled, would-be immigrants is a far different one from amnesty for 12 million undocumented immigrants working here. Perhaps a separate debate would be better.