Is Your Startup Growing? What You Need to Know About Today’s Immigration Climate
Immigration is a complicated topic. It touches everything from politics to economics and can make for heated debates at family dinners. So it’s always important to know the facts.
This post explores common misconceptions around immigration as it relates to work visas, recent legal and policy changes, and our thoughts on what the future holds.
Common misconceptions about hiring foreign talent
Despite the plethora of research that shows how beneficial hiring foreign talent is for US employers and the economy more broadly, there are nevertheless a handful of misconceptions that pervade the immigration debate. Here are some of the more common misconceptions along with potential reasoning and our attempt to debunk them.
Foreign workers undercut US salaries
In the world of employment visas, particularly in the tech sector, there’s a common misconception that foreign workers take lower salaries than US workers and therefore undercut salaries altogether. The most commonly scrutinized visa is the H-1B, a “specialty occupation” visa that allows up to 85,000 foreign nationals (65,000 with a bachelor’s degree or higher and 20,000 with a master’s degree or higher from a US institution) to work in the US for up to six years. Despite the scrutiny, the largest H-1Bs employers are STEM companies, and tend to pay some of the highest wages.
According to the Pew Research Center, “the biggest names in technology planned to pay the highest average salary to H-1B visa holders in fiscal 2016.” On this list was Microsoft, Google and Facebook with an average H-1B salary of $126,096, $131,882, and $140,758, respectively. And while other IT employers tend to pay less than these tech giants, the Pew Research Center noted that overall, “the 2016 median salary reported for H-1B visa applicants was higher than the median salary paid to some U.S. workers in similar high-skill occupations,” specifically in “computer and mathematical occupations.”
This doesn’t mean that companies have not tried to take advantage of the H-1B visa program. Scandals have happened in the past, most famously at Walt Disney World, where US workers sued the company (unsuccessfully in the end) over claims that they had been displaced by foreign workers. However, the vast majority of workers brought in on H-1B visas are actually supplementing current staff and helping fill the hundreds of thousands of new IT jobs that will be created over the next decade.
Foreign workers take US jobs
Another common misconception is that foreign workers take US jobs. However, some of the most successful startups with immigrant founders have created thousands of US jobs.
In fact, according to an October 2018 National Foundation for American Policy report, “Immigrants have started more than half (50 of 91, or 55%) of America’s startup companies valued at $1 billion or more.” And this has turned into some serious job numbers. Most notably, Uber, whose co-founder, Garrett Camp, was born in Canada, employs over 9,000 people in the US as of December 2017, and supports over 3 million drivers. SpaceX, whose founder, Elon Musk, was born in South Africa, employs over 7,000 people in the US. The We Company, whose co-founder, Adam Neumann, was born in Israeli, employs over 6,000 people in the US. The list goes on.
Not only have immigrants already created tens of thousands of domestic jobs, they’re also almost twice as likely as native-born Americans to become entrepreneurs.
Current work visa landscape
Now that we’ve covered a few misconceptions about foreign workers and their impact on the US economy, what’s happening today in immigration anyway?
Record number of H-1B visa applications challenged
When the United States Citizenship and Immigration Services (USCIS) receives an H-1B visa petition with insufficient evidence, they issue something called a Request for Evidence (RFE), asking for additional evidence so that they can make a decision to either accept or deny the application. RFEs explain exactly what evidence is lacking and provide a response deadline.
While RFEs have always been part of the game, the number of RFEs issued by USCIS first skyrocketed in 2017. RFEs more than doubled from 28,711 to 63,184 between the third and fourth quarters of FY 2017. The rate more than doubled again from FY 2017 to FY 2018. The jump in RFEs wasn’t restricted to H-1B visas either: RFE rates for L-1 (intracompany transferees) and TN (NAFTA) visas also increased.
And while RFEs aren’t necessarily denials, the rate of denials went up as well. Employers and immigration attorneys around the country were thrown into a frenzy starting in 2017 with this unprecedented level of pushback by USCIS with no clear guidance. Some employers resorted to actually taking the government to court – business and immigration attorneys teamed up and filed lawsuits against USCIS in response to this unprecedented level of denials and lack of guidance. While many of these cases are ongoing, there are early signs that courts are siding with the affected employers.
H-4 visa holders are at risk of losing work authorization
H-4 visas are granted to dependents of primary H-1B visa holders. A dependent is typically the spouse or child of the professional coming to work in the US on an H-1B visa. Barack Obama, during his presidency, signed an executive order granting work authorization for H-4 visa holders that had either been granted an H-1B in the past or had a green card petition in the works.
However, the Trump Administration has proposed to terminate H-4 visa holders’ employment authorization, potentially affecting over 100,000 people and their employers. While this proposal is still very much under review, it has received considerable scrutiny due to the cost to the economy, US employers, and of course, the affected families.
While the H-1B often holds the spotlight in terms of immigration news, there have been other immigration developments.
For example, while not yet in effect, the US is opening up the E-2 visa, which grants individuals who make a substantial investment in a US company the right to work here. And as Israel’s IT sector continues to boom through large startup exits and expanding investment ecosystem, this new visa treaty will bring more investment dollars to US soil, and jobs along with it.
Additionally, the government recently doubled the number of H-2B seasonal worker visas for 2019. The H-2B allows US employers to hire foreign workers for one-time, seasonal (non-agricultural) employment. Think hotels during summer months, ski resorts during winter months, and so on.
There are still other, smaller changes to various employment immigration policies, the effects of which are still yet to be seen. But one thing’s for sure – the immigration landscape is ever-changing.
What does the future hold?
Despite the common misconceptions and questionable policy changes surrounding employment immigration, and the uptick of IT jobs going to Canada, the government is actually take huge steps forward in terms of cleaning up our immigration system.
For example, this year USCIS reversed the order of the H-1B visa lottery, promising more H-1B approvals for individuals with advanced degrees than ever before. In addition, USCIS is preparing for an H-1B pre-registration system to go into effect in 2020, which signals a move away from paperwork and toward automation. And while there are questions around how that the pre-registration system will play out, it’s a step in the right direction.
Immigration will probably remain a touchy subject until the end of time. But when it comes up in conversation, even if at the dinner table, it’s always good to be ready with the facts.