Here is a review of where things stand and what could happen both short and long term.
A Little Background
There is no denying that immigrants have been an integral part of the technology sector transformation over the past decade, having started more than one-half of the current U.S. start-ups valued at $1 billion or more, according to a study by the National Foundation for American Policy. In addition, each of these companies has added, on average, a robust 760 jobs. The study also reports that over 70 percent of key management and product development positions at these companies are held by immigrants, one of the largest being the ubiquitous ride-sharing company, Uber.
H-1B visas, allowing foreign skilled workers entrance to the United States, act as a sharp bottleneck to additional technology growth, with hundreds of thousands of applicants fighting for just 85,000 slots – 65,000 of which are for first-time applicants and 20,000 for individuals with a master’s degree or above. Even by maintaining the status quo – seemingly unlikely in the current political climate – technology companies still face massive skilled labor shortages. According to a 2016 article in The Boston Globe, “The war for tech talent escalates”, the fight for technology talent is so intense, that companies are offering their employees referral fees of $10,000 all the way up to $30,000 for software engineers and designers.
LogMeIn, one of the area’s hottest growth companies is chronically searching for 50 to 100 tech hires. “Technical professionals are in incredible short supply and there’s a huge need,” says LogMeIn’s Dena Upton. And new competition is emerging from growing technology centers like Phoenix, Charlotte, Minneapolis and Austin, promising even more intense talent wars in the years ahead.
The President’s First Moves
Against this backdrop, President Trump is already beginning to tackle immigration reform a few days into his term. He already has announced via executive order initiatives targeting illegal immigration and refugees:
- The allocation of initial funding to tackle the promised U.S./Mexico wall, intended to control unlawful immigration by our neighbors to the South.
- A warning to sanctuary cities that threatens revocation of federal grant funding for vowing to provide a safe haven for both and illegal immigrants.
- Hold on visas from certain Countries – Temporarily block entry visas from seven countries — Iraq, Syria, Iran, Sudan, Somalia, Yemen and Libya — for 90 days as part of a broader security review of visa-admission programs, after which permanent visa bans could be enacted for those countries and others. (Update: this ban has been suspended by the federal court of appeals. See more detailed post here.)
The Discussion Continues
That is a busy week by any measure, leading to wide-ranging speculation about all aspects of modifying visa regulations for both existing workers, as well as new applicants. While there is no clear consensus among market-watchers and economists about Trump’s next moves, here are a few of the topics being heavily discussed:
- H-1B Visa Program Reform – In past few weeks, new H-1B reform legislation has been introduced in Congress. Similar to Trump’s draft executive order, it proposes changes from a lottery-based to a priority-based system. Other proposed changes include measures to favor those with advanced degrees from U.S. schools, and those with high-paying jobs and preferred skills (details outlined in the proposal).
- International Entrepreneur Rule – Lobbying from technology leaders intended to loosen current standards for allowable length of stay, number of jobs that must be created and amount of funding required, making it easier for foreign-born entrepreneurs to secure funding and key talent. This rule has been frozen by Trump’s order at this time.
- NAFTA impact on TN Visa – The TN visa program was created under NAFTA and allows Canadian and Mexican professionals to live and work in the United States. Trump has advocated renegotiating NAFTA but has not commented on the TN visa program.
- Improved regulation of outsourcing firms – Review of foreign outsourcing practices, particularly in India, which accounted for 70 percent of H-1B visas allocated in 2014 according to the Department of Homeland Security.
- Economics of U.S. vs. foreign-born workers – Further analysis of root unemployment causes for U.S. technology workers, including age-related bias, lack of modern technology skills and their relatively high price tag.
- Revamping of the Optional Practical Training (OPT) program – Potential changes to tighten provisions of this program allowing foreign graduates in STEM-related fields to remain in the U.S. seeking jobs for up to 29 months.
- Impacts of U.S. visa regulations on China – Debate about how U.S. immigration policies may affect our trade with China and its possible emergence as the next super-power.
Important to reiterate that all of these items are proposed and nothing has been passed. Thus, Envoy-affiliated attorneys may be unable to advise on specific impacts but as soon as any of these potential matters become law, we will be reaching out with updates and advice.
While We Wait
Many employers are voicing their concerns and advocating for policies that will continue to encourage innovation and entrepreneurism. Lobbyist teams comprised of leaders like – Bill Gates, Mark Zuckerberg and a veritable “who’s who” of other technology leaders have formed the FWD.us organization to lobby against immigration regulatory changes that adversely affect innovation. On the FWD.us website, there are a plethora of ways to get involved, including joining local chapters, contacting your political representatives and telling your personal stories online.
The ACLU has advised that anyone who is stuck at an international airport and can’t get on a flight back to the U.S. should call the ACLU at 415-621-2488.
Here is another resource with helpful information.
CBP also posted a Q&A
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