Turner Padget Insights

Business Visas Help Companies Fill Critical Positions

Posted On Mar 23, 2016

Immigration is much in the news these days as the presidential candidates discuss border security, terrorism and preserving jobs for U.S. citizens. These public policy issues deserve a thorough vetting of candidates, but they shouldn’t be confused with the legal business visa process that thousands of American businesses depend upon.

Unfortunately, our schools are not producing a sufficient number of graduates in some professional fields, and American businesses have to bring in foreign nationals to fill critical positions. There is a common misconception that these businesses are hiring cheap labor that displaces U.S. citizens, but that’s wildly inaccurate. American businesses are incurring substantial expense to bring in foreign workers with specialized skills, and they would gladly hire U.S. citizens but for the dearth of domestic talent in some professional areas.

Competition for some business visas is furious

The most sought-after business visa is the ‘H-1B,’ which allows a business to hire a foreign national who has a specialty skill for up to six years. These workers must have bachelor’s degrees or the equivalent in their field, such as required by accountants, engineers and architects.

By law, only 65,000 H-1B visas can be issued each year to for-profit businesses with an additional 20,000 offered for candidates with master’s degrees, yet there are currently about 250,000 applications each year.

An employer can apply or “petition” for an H-1B visa as early as April 1 for work commencing as early as October 1 in the same year. The process requires extensive documentation of the need to fill the position, evidence that it will not displace a U.S. citizen and, importantly, a commitment to pay what the U.S. Department of Labor (DOL) has determined is the prevailing wage for the position in the local area.

These wages have not been adjusted since the Great Recession and are therefore often much higher than the current market rate. Routinely, we see companies paying $70,000 for a foreign worker to fill a job that they could pay a U.S. citizen with the same skills $45,000 – if only they could find a qualified U.S. worker.

Once the paperwork is approved by the DOL and the U.S. Citizenship and Immigration Services (USCIS) – a process that can take months – the foreign national must apply for a visa at a U.S. embassy or consulate abroad. The State Department then vets the worker in an interview to confirm that the individual has the skills claimed on the application and satisfies security criteria of the U.S. Department of Homeland Security (DHS). 

There is a streamlined visa similar to the H-1B for employers who want to bring in skilled workers from Canada or Mexico in designated fields. This ‘TN’ visa – authorized by the North American Free Trade Agreement’s (NAFTA) facilitation of open trade between the U.S., Mexico and Canada – has criteria similar to the H-1B, but there is no quota and the process benefits from less bureaucratic red tape.  Candidates don’t even have to apply for visas prior to entering the country. 

Businesses operating in highly seasonal industries, like the agricultural and hospitality sectors, would suffer greatly without the aid of the ‘H-2’ categories of visas, which authorize temporary foreign work from residents of some countries to fill their labor gaps at the height of tourist and picking seasons.  Contrary to common belief however, even employers of these foreign workers must pay prevailing wages. 

What all of these visas have in common is that they don’t create permanent residency status (or a “green card”) or displace U.S. citizens. The visa process is driven by a business seeking to fill a position – not a foreign national seeking work in the U.S. 

The U.S. welcomes people willing to invest in the creation of jobs

Thankfully, there are other visa categories designed to pull foreign investment into the U.S. economy.

The ‘L’ visa permits a manager, executive or skilled worker of a foreign company to transfer to a U.S.-based parent, branch, affiliate or subsidiary. Used creatively, the structure of this intracompany transfer can take many forms, but we often counsel clients who apply for these visas to open a U.S. office to test American markets for their services or products. 

The ‘E-2’ visa permits a person or company to invest cash in an existing U.S. business. There is no bright-line test for approval, but it usually requires at least a $200,000 investment in a company and the visa holder must take an active role in the business. This program has been a boon for startup companies looking for investors, and it takes about a year to get approval.

An additional benefit of ‘E-2’ is that, while authorizing only temporary work, visas can be renewed indefinitely if the target business remains an ongoing concern. USCIS naturally scrutinizes these visas to make certain the money is not sourced from nefarious groups or illicit sources. In our guidance to clients, we connect the dots for USCIS’s accountants to prove the investment is from legitimate origins.  

The ‘EB-5’ visa requires a larger investment, at least $1 million, or $500,000 in a low-employment area, and proof that the investment will create 10 full-time jobs for U.S. workers. Unlike other business visas that confer only temporary residency, the ‘EB-5’ authorizes permanent residency status (green card).

Watch for changes ahead

Ideally, the U.S. school system would produce all of the graduates that businesses need to fill specialty positions, but we’re likely to continue to see a shortfall of talent for some time. Although the business visa process can be improved – there are instances of fraud and abuse – it provides a framework that helps businesses fill critical positions while maintaining relatively tight controls that prevent an unbridled flow of foreign workers into the U.S.

Turner Padget has experience assisting businesses in all types of worker visas. Given the intense discussion about immigration in the current national political debate, it’s likely that Congress and the new administration will review these programs next year, and we will follow any changes closely. Call our team if you anticipate filling positons with foreign workers and we can advise you on whether a business visa is right for you.

R. Taylor Speer is an associate in the Greenville, S.C., office of Turner Padget where he represents clients in business disputes, as well as immigration and employment matters. He may be reached at (846) 552-4618 or by email at tspeer@turnerpadget.com.