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Small Business Digest


Time for America to Act in Order to Open the Door to Top Talent

Congress is contemplating the most substantial reform of America's immigration laws in 40 years. 

A large part of the reform is designed to address the tension between the need for border security and the expected regularization of the status of a pool of ten to twelve million undocumented aliens, aliens typically working in industries requiring en masse low-skilled labor. 

The aspect of the legislative debate that is the most critical for HR managers and C-suite executives is how the changes in the laws would affect a company’s ability to attract top talent from across the globe.

According to Elizabeth Espin-Stern, head of Baker & McKenzie LLP's Global Migration and Executive Transfers group, at the core of this employment debate is a recognition that America is falling behind its global counterparts in attracting the strongest candidates from abroad.

As HR managers seek to meet organizations' top staffing needs, they need to develop programs to match the overall reform structure, including both the mandates of compliance and the more flexible options that a modernized employment-based immigration process will present. 

The new reform provides a unique opportunity for the U.S. to reach out to the global work force that is vitally needed to maintain America's economic leadership. 

As Americans watch countries like the United Kingdom, Germany, Spain, Japan, Australia and Canada, among others, build visa systems designed to attract professional workers, those in the commercial sector are hard pressed to understand the strains in the U.S. immigration system. 

According to Espin-Stern, questions about this topic often include:

  • Why do U.S. employers have no secure vehicle to retain foreign graduates of U.S. universities beyond a 12-month stint? 
    Why is it that in a dual-career era, there are so few options for spouses of specialty occupation professionals to work? 
  • Why is it that the most valuable international professionals -- the ones sponsored for permanent residency - are facing shortage-driven queues of multiple years to obtain their permanent residency authorization? 
  • Augmenting the concerns of the U.S. business community are changing demographic and migration trends across the globe.  The aging of baby boomers is a worldwide trend.  Similarly, many of the studies that analyze demographics find that the nuclear family, population controls, and the impact of women in the workplace have stemmed growth in virtually every region of the globe.  In short, humans are procreating at levels that do not begin to replenish the inventory of human capital.  In this environment, the limited supply of workers makes the corporate sector all the more conscious of the need to win the global competition for top talent.

Globalization is a term of the past.  Today, only a small segment of business, typically companies wedded to public local contracts, operates on a purely domestic basis.  The executive and professional corps is accordingly accustomed to traveling from country to country, and the migration of workers is increasingly one that involves circulation among countries rather than permanent relocations. 

Similarly alarming is what one recent study cited as "Flight Capital," the exodus of the country's brightest minds to their original home countries as those countries build their infrastructure.

While the business community may well be vocal about the need for immigration reform, in the day-to-day operations businesses will change their behavior to respond to restrictions and opportunities. 

A predictable and troubling example is the decline of robust campus recruitment programs for international students once the H-1B quota supply fell to 65,000.  Equally predictable and even more troubling is the growing trend of U.S.-based companies to move projects, and ultimately operations, offshore, rather than struggle with U.S. visa and trade limitations.

According to Espin-Stern, the key issue for Congress is to develop reforms that restore a welcome to foreign visitors, students and workers. 

Among the most attractive aspects of proposed reforms currently being considered on Capital Hill are the following:

  • Adjustment of H-1B Quota.  This measure would restore a means for companies to retain graduates of the U.S.’s own university programs, particularly master's and PhD graduates, by creating a more realistic pool of H-1B visas for bachelor's degree holders (with a market escalator to account for growth over time), and exempting all such advance degree holders from any quota levels.
  • Merit-Based Points System.  This measure would provide new merit-based options for highly skilled professionals and managers to obtain U.S. permanent residency, although it would benefit from an enhancement of career-based achievements and a larger points value assignment to shortage occupations than those assigned in the Senate compromise legislation as originally introduced in May 2007.  Absent a parallel system maintaining key current employment-based categories (see below), a complete overhaul to a points system would potentially exclude some of the most valuable talent from abroad.
  • Parallel Employment-Based System.  This measure would allow premier candidates, including those qualifying for the current EB-1 extraordinary ability and the EB-2 exceptional ability categories, to apply for residency via the more traditional system.  In addition, it is essential that multinational executives and managers, currently a part of the EB-1 priority worker classification, be included in such a parallel system.

Other initiatives are needed including the provision of sufficient funding for technology and increased human resources, a roll-out of management training, development of ongoing quality audits, and modernization of the "customer service" function of U.S. Citizenship & Immigration Services. 

Similarly critical are advancements that would permit trailing spouses to work, facilitate unrestricted international travel throughout residency proceedings, and provide vehicles for issuance of work and travel permits on an expedited basis for appropriate business emergencies, not simply personal medical exigencies.

Espin-Sterns believes that one other aspect of the reform proposals that should merit close attention by U.S. employers is the enhancement of penalties that employers face for failing to comply with the rules for employment eligibility and identity verification of workers. 

Employers accustomed to a fairly routine I-9 process need to be aware that Homeland Security has heightened enforcement dramatically recently. 

In the past year, it has regularly pursued criminal penalties under a host of statutes against employers whose foreign workers (both direct employees and contract workers) lacked U.S. work permits.  The reforms imposed by Congress reflect this new agency posture, and expand liabilities for employers who fail to verify accuracy of social security records and identity of workers as well as employment eligibility. 

To further insure that employers meet their obligations in this regard, a timetable to convert the I-9 process to a pure electronic system is included in the proposed reform bill.

For further information, contact Elizabeth Espin-Stern at

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