INDIAN IMMIGRATION POLICY AND THE TRANSNATIONAL PREVAILING WAGE FOR IT WORKERS

By Gary Endelman and Cyrus D. Mehta

For many years, those concerned about the hemorrhaging of good paying jobs to India, especially in the IT sector, have blamed overly liberal US immigration policies for their ills. Precisely the opposite is true. Right now, there is a deep and growing IT shortage for world-class talent in India, something that is openly acknowledged in the India press and by top Indian corporate leadership, http://bit.ly/d5TSsO. Even an Internet giant like Google is having a devil of a time in recruiting top-drawer talent, http://bit.ly/a2kT22. Despite the huge numbers of engineering graduates each year, a far smaller number are employable in the global economy and Indian IT firms are increasingly forced to launch innovative initiatives in a desperate attempt to solve the problem, http://bit.ly/cFMSIn.

In response to this talent crunch, Indian IT firms have been compelled to raise salaries. Already, wage inflation is a fact of life in India. The low wage advantages of India are steadily being eviscerated. http://www.indiadaily.com/editorial/17290.asp. Yet, despite this sharp rise in compensation, the fact that inflation is going up even faster threatens to wipe out much, if not all, of these highly prized gains. http://news.bbc.co.uk/2/hi/business/8563743.stm

Faced with all of this, how has the United States responded through its immigration policies? By adopting manifestly inadequate immigrant visa quotas combined with a miserly 65,000 H-1b visa allotment, the United States has done its best to keep the best and the brightest Indian IT talent at home. As a result, the talent shortage, while severe, and the wage inflation, while undeniable, has not nearly been as far reaching or dramatic as they would have been if US policies were more welcoming. In effect, US immigration policies have achieved the worst of all possible results. Indian IT workers do not earn as much as they could or should; as a result, they spend and consume less so that there is a reduced stimulative impact, thereby diminishing the purchasing power of all sectors of the Indian economy who depend upon the IT salaries for their own well being. Beyond that, precisely because they serve as a powerful though unintended depressant upon Indian IT wages, protectionist US immigration policies promote the exodus of white collar IT jobs and allied occupational opportunities from the US to India! How? Simple. Read on.

Despite what the US Department of Labor thinks, there is a transnational prevailing wage that governs IT compensation irrespective of national boundaries. The greater the difference in IT salaries between the US and India, the more pressure will be exerted upon IT employers in the US to leave and the greater will be the loss of jobs, not to mention the loss of many allied jobs that depend upon the continued presence of a vibrant IT sector. Correspondingly, if the IT wage differential between our two economies narrowed, the pressure to outsource would ease. If we wanted to even the playing field, the US would greatly expand both temporary and permanent work visas for India in the IT professions so that more IT jobs would remain here and Indian IT workers would be able to keep pace with inflation. It is a win-win situation. Right now, by bashing Indian migration, immigration restrictionists are accelerating outsourcing and enabling India to develop an effective strategic alternative to Silicon Valley years faster than need be happening.

It seems as if India is coming to the rescue of the United States. The Indian Ministry of Home Affairs (MHA) has announced the elimination of the prior odd 1% quota rule for all employment visa applications filed by Indian host companies or a maximum of 20 foreign nationals per company. To qualify for employment visas, the workers must now be highly skilled or professional, and in addition to meeting the other visa requirements, demonstrate that they will be paid a salary equivalent to at least $25,000 per year. This minimum salary requirement does not apply to ethnic cooks, interpreters or language teachers (other than English language teachers), or staff working for an Embassy or High Commission in India. Full details of the new rules for an Employment Visa are set forth in the Indian Ministry of Home Affairs FAQ, pp. 6-7, http://www.mha.nic.in/pdfs/work_visa_faq.pdf.

By restricting work visas to highly skilled workers making at least $25, 000, India is not only reducing the transnational wage differential but essentially eliminating it since the true wage for visa issuance will be $75,000.It is an article of faith that wage recoupment must be 3 times the normal amount in order to compensate for all other inefficiencies inevitably associated with the outsourcing process. If we cannot adopt intelligent immigration policies to save ourselves, it seems that India will do it for us.

It is true that the Indian rules only affect foreign knowledge workers rather than directly changing the wage scale for the domestic work force. We also note that the Indian rules apply to highly skilled workers across the spectrum, although our essay focuses on IT workers. However, the indirect impact is profound, greatly exceeding the sheer numbers which will be limited. Foreign IT workers earning $25,000 in India can exert enormous purchasing power upon other sectors of the Indian economy that will inevitably benefit. Beyond that, these changes create a two track wage system, one for foreigners and one for Indian workers. Inevitably, the two will exert an influence upon each other. Indian workers will demand equal wages for equal work, refusing to be paid less than their foreign colleague at the neighboring work station doing the same work but earning much more. They will move to another country if denied for these are the Indian IT gurus who enjoy global occupational mobility, a freedom without precedent in Indian history. The inflationary pressure exerted by foreign wage levels upon domestic compensation will increase as we climb the food chain so that the more experienced workers, the supervisors and experienced IT professionals whose expertise makes outsourcing from the United States possible, are also the very same workers who will demand that the wage gap between the two wage systems be narrowed, if not eliminated. This is precisely what will happen over time as Indian companies seek to alleviate the talent shortage whose existence poses a real and direct threat to Indian IT world market share. Ironically, India is repeating the mistakes of the H-1B labor condition application where the wages of foreign workers are kept artificially high not in response to actual market conditions but solely as a result of government diktat. As in the United States, this is an unsustainable condition whose primary consequence will be the injection of systemic wage instability that complicates intelligent business planning and spreads pervasive incoherence.

It also remains to be seen how India will administer the other requirement in the MHA FAQ that “Employment Visa shall not be granted for jobs for which qualified Indians are available.” How will that be determined? It is hoped that the visa applicant is allowed to make the case, and India does not adopt the rigid rules of the US Labor Certification system, requiring employers to undergo an artificial test of the labor market to establish that no US worker is available for the position. This system has been an abject failure in the US. Serving mainly to frustrate employers, it has conspicuously failed to expand job opportunities for domestic workers. One hopes that Indian officials will accept an employer’s attestation regarding shortage of skills in the occupation that will be filled by the foreign worker, along with the business need to hire such a person in India, supported by general statistics of shortage of talent in a particular occupation.

We cannot help but observe, though, that India is learning precisely the wrong lessons from the United States. For both nations, giving in to domestic protectionist pressures amounts to a voluntary and wholly unnecessary surrender of global market share. Expansion of bureaucratic restraints upon the IT sector may satisfy domestic critics but it will undermine job creation. If India adopts the “minimally qualified” standard that has given labor certification in this country its Twilight Zone character, the vitality of the IT industry which drives the entire Indian economy will suffer a powerful blow with untold consequences for India and the world. Once India’s immigration policies turn inward, a fateful, perhaps irrevocable step has been taken. Economic leadership in the 21st century will fall to those who win the global competition for talent and innovation, much as the race to capture natural resources shaped the recent past. Enlightened immigration policies that view the movement of human capital as an asset to be maximized rather than a problem to be controlled are central to seizing and defending the economic high ground. Will India turn away from the future and can the United States seize the unexpected opportunity this presents?

There is a silver lining in this for India as well. While wage inflation will cause a temporary loss in market share, in the long run, it will serve to refocus the Indian IT industry on the core need to win clients by superior service and quality of performance, precisely the character traits that has and will serve India well, long after their short-term low wage advantages had disappeared. National greatness cannot rest upon a race to the bottom. That is not where India’s future lies. The sustained pursuit of excellence is a goal to which India can and should dedicate itself for only this will allow the full and proper development of its enormously impressive talent base. Over time, not only will fewer IT jobs flee America, but higher Indian wages, both within the IT sector and beyond, will make possible the creation of a business model that can sustain Indian leadership in IT and reinforce its inherent value. In fact, this is exactly what is already happening. As the wage gap shrinks between India and the major outsourcing countries, IT giants are strategically positioning themselves so that future growth will come from experience and maturity rather than labor arbitrage. Diversification is the hallmark of this next generation business model. Wipro is actively moving into solar and other forms of renewable energy, http://bit.ly/bBcGVz. Infosys has pumped $100 million into Europe to expand its software footprint all across the Continent, http://bit.ly/ahPCbP. At the same time, by expanding into Southeast Asia, Infosys will widen India’s access to other emerging markets, http://bit.ly/da929d. No longer content to win new markets on the cheap, Infosys grows its Australian customer base through award-winning excellence as the IT consultant of choice, http://bit.ly/ceXxjj.

India may still remain a hub for IT services regardless of rising costs due to the sheer number of skilled workers and the fact that it has a high level of IT sophistication on which to build. As India diversifies, greater symmetries between the Indian and American economies will present themselves as both countries profit from maximizing what they do best. This is not a zero sum gain. On the contrary, everyone benefits from a more rational prevailing wage whose consistent application stabilizes global commercial relationships. Based on the comparative purchasing power in India relative to the United States and the large pool of low wage workers whose presence will remain a constant factor on the Indian scene for the foreseeable future, any discussion of the transnational prevailing wage and its impact must necessarily be both modest and evolutionary in its assessments. The changes that are coming may well take a long time in getting here. Nonetheless, given the dynamic nature of both the American and Indian economies, the inevitably of change is cannot be denied. It is on the way and both nations should use the time they have now to prepare for it. If that happens, an expanded H quota for Indian IT managers and professionals is a win-win formula for both countries.

BIA CONTINUES TO REAFFIRM BROAD “SOUGHT TO ACQUIRE” STANDARD UNDER CSPA

by Gary Endelman and Cyrus D. Mehta

In a recent unpublished decision, the Board of Immigration Appeals, in In re Jose Jesus Murillo, A099 252 007, October 6, 2010, http://drop.io/oucv5fe, reaffirmed its broadened “sought to acquire” standard under the Child Status Protection Act (CSPA). The CSPA artificially freezes the age of a child below 21 years of age so that he or she is not deprived of permanent residency when the parent is granted the same status. One of the requirements is for the child to seek permanent residency within one year of visa availability. Often times, a CSPA protected child falls through the cracks by failing to meet the prevailing rigid filing requirements within the one-year deadline.

The Board in In re Jose Jesus Murillo held that the term “sought to acquire” includes substantial steps towards the filing of the relevant application, although these steps may fall short of an actual filing or submission to the relevant agency. The Board’s interpretation will provide further relief to children who are otherwise protected by the CSPA but unable to comply with or navigate the complex bureaucratic requirements to file within one year. It should be noted that In re Jose Jesus Murillo is an unpublished decision, devoid of any precedential authority, and does not bind the DHS or the DOS. Still, it follows closely on the heels of other unpublished Board decisions that have applied the same “sought to acquire” standard and thus provides more ammunition to those who need to make similar arguments. See In re Kim, 2004 WL 3187209 (BIA Dec. 20, 2004), (the child beneficiary “sought to acquire” LPR status within one year of visa approval because her parents hired an attorney to start preparing the adjustment application within the one-year period); In re Castillo-Bonilla, 2008 WL 4146759 (BIA Aug 20, 2008) (the respondent “sought to acquire” LPR within the one-year period when, during this time, he informed both the Immigration Judge and the Board that he wished to file an adjustment application, even though the application was not actually filed within one year).

INA §203(h), introduced by Section 3 of the CSPA, provides the formula for determining the age of a derivative child in a preference petition even if the child is older than 21 years. To qualify as a child under INA §101(b)(1), one must be below the age of 21 and unmarried. The age is determined by taking the age of the alien on the date that a visa first became available (i.e. the date on which the priority date became current and the petition was approved, whichever came later) and subtracting the time it took to adjudicate the petition (time from petition filing to petition approval). Based on this formula, if the child’s age falls below 21, the child is protected under the CSPA. Specifically, §203(h)(1)(A) also requires the alien to have “sought to acquire” LPR status within one year of visa availability. It is the interpretation of the term “sought to acquire” that was the subject of the Board’s holding in In re Jose Jesus Murillo.

Both the Department of Home Security (DHS) and the Department of State (DOS) have interpreted the phrase “sought to acquire” narrowly. DHS limits this phrase to filing an I-485 application for adjustment of status. See “Revised Guidance for CSPA” (April 30, 2008), http://www.uscis.gov/files/nativedocuments/CSPA_30Apr08.pdf. The DOS too has interpreted “sought to acquire” narrowly and indicated that in consular processing cases, the date that a child seeks to acquire LPR status is the date Form DS 230, Part I, is submitted by the child, or by the child’s parent on the child’s behalf to the National Visa Center (NVC). See “Child Status Protection Act: ALDAC 2” (January 17, 2003), http://travel.state.gov/visa/laws/telegrams/telegrams_1369.html. In cases where the principal beneficiary parent adjusts status in the US, and the child will be applying for the visa overseas, the DOS requires the principal to file Form I-824 to initiate the child’s follow-to-join application. The DOS has also indicated that since Form I-824 is not the only way to initiate the process, posts may seek advisory opinion in cases in which some other “concrete” step has been taken.

We question why the DHS and DOS sought and continue to seek the most restrictive interpretation of what is clearly a remedial statute. Here is the legislative history of the CSPA, which is worth reproducing from the Board’s decision in In re Jose Jesus Murillo:

The congressional. intent in enacting the CSPA was to “bring families together” (Rep. Sensenbrenner, 148 Congo Rec. H4989-01, H49991, July 22, 2002) and to “provide relief to children who lose out when INS takes too long to process their adjustment of status applications”(Rep. Gekas, id. at R4992); see also, Rep. Jackson-Lee, “where we can correct situations to bring families together, this is extremely important.’.’ ld. atH4991. In enacting the CSPA, Congress expressed its concern that alien children “through no fault of their own, lose the opportunity to obtain immediate relative status.” H.R. Rep. 107-45, H.R. Rep. No.4 5, I 07th Cong., 1st Sess. 2001, reprinted in 2002 U.S.C.C.A.N. 640, 641 (Apr. 20, 2001). Indeed, the United States Court of Appeals for the Ninth Circuit has held that the CSPA should “be construed so as to provide expansive relief to children of United State citizens and permanent residents.” Padash v. INS,358 F.3d 1161, 1172 (9th Cir. 2004).

In In re Jose Jesus Murillo, the Board rejected the DHS’s position that “sought to acquire” means the actual filing of an application or petition. The Board stated that “it is not bound by the interpretation of the DHS or DOS as to the statutes which it administers” (citing Matter of M/V Saru Meru, 20 I&N Dec. 592, 595 (BIA 1992)). The Board observed that INA §203(h)(1)(A) includes the unique term “sought to acquire” rather than terms such as “file,” “submit” or “apply,” which appear in other parts of the INA. While each of these terms require the presentation of an application to relevant officials, the meaning of words such as “seek” or “sought” include “to try to acquire or gain” or “to make an attempt” according to the Board, which referred to the Merriam-Webster’s Collegiate Dictionary.

In In re Jose Jesus Murillo, the respondent claiming status as a child did not file the I-485 application within one year of visa availability. However, the respondent argued that he still satisfied the “sought to acquire” element because he hired an attorney to prepare his adjustment of status application within one year of the visa numbers becoming available, and he filed his application within a reasonable time thereafter while he was still under the age of 21. The Board held that the respondent child, whose age was otherwise protected under the CSPA, clearly demonstrated an intent to file his application and made substantial advances towards having the application prepared and filed through an attorney within the one-year period. The Board observed that if it had found otherwise, the child would have aged out and would have been unable to seek CSPA protection for no fault of his own. The Board also did not require a showing that this attorney was ineffective in filing the document within one year.

The Board’s decision to broaden the term “sought to acquire” to include steps short of actually filing an application is indeed welcome. There are many situations in which a child protected under the CSPA may not be able to comply with the rigorous filing requirements of the DHS or the DOS within the one-year filing period. Moreover, the Board’s ruling would assist those who are in removal proceedings, and who may not be able to obtain a timely hearing with an Immigration Judge in order to file an adjustment application within one-year of the visa number becoming available, and an alternative filing with the clerk of the court is not made within the year or rejected. There may be other situations where the parent may have filed an I-485 adjustment application many years ago, and may not have included the I-824 application with his or her application. It was not usual to attach an I-824 with an unadjudicated I-485 adjustment application prior to the CSPA. Moreover, there have also been situations where the NVC, during the initial processing of a consular visa application, may have erroneously omitted the child’s name even though he or she was protected under the CSPA. As a result, the child or the parent of the child may not have complied with the DOS requirement of filing a DS 230, Part I, but may have taken other steps to seek LPR status such as attempting to contact the NVC by letter or telephone to include the child, or took other steps such as seeking the advice of an attorney.

In these situations too, one can demonstrate that the CSPA child “sought to acquire” LPR status within one-year of visa availability. On the other hand, not every step to seek permanent residence in the one year period will be viewed favorably especially when it does not comport with CSPA’s purpose, which was to protect an alien child from aging out due to no fault of his own. In In Re Mario Francisco Cisneros Baron, 2009 WL 3713334, the respondent asserted that neither did he nor his parents file an adjustment application within one year because of his criminal convictions. He was put into removal proceedings and left voluntarily, and then illegally reentered and lodged an adjustment application in connection with subsequent removal proceedings. The Board, in this case, remained unpursuaded that his parents consulted with a lawyer within one year of the visa availability date since, here, the respondent was himself partially responsible for failing to file an adjustment application “because of a tactical decision resulting from his own criminal behavior.”

While none of these are published decisions, those seeking CSPA protection should rely on In re Kim, In re Castillo-Bonilla and now In re Jose Jesus Murillo to make similar arguments in cases before the DHS, an Immigration Judges, the Board, before US Consuls overseas and even in federal court. We commend the Legal Action Center of the American Immigration Council for filing a winning amicus brief in In re Jose Jesus Murillo, and readers will surely profit from its CSPA Practice Advisory, http://www.legalactioncenter.org/practice-advisories/child-status-protection-act. Practitioners should continue to seek to interpret “sought to acquire” in a broadly humane way for their clients to achieve what the Congress intended, a formula for the protection of children and advancement of family unit

THE ENIGMA OF BOKHARI V. HOLDER: WORK AUTHORIZATION IS NOT LAWFUL STATUS

By Gary Endelman and Cyrus D. Mehta
It has always been known that being authorized to work in the US is not the same thing as being in a lawful status. The Fifth Circuit Court of Appeals recently issued a decision in Bokhari v. Holder, No. 09-60538, September 29, 2010,  confirming this enigma. Simply stated, the fact that Mr. Bokhari timely filed an L-1A extension, which allowed him to continue working in the United States, was not sufficient for him to establish lawful immigration status that would have permitted him to file an application to adjustment status to lawful permanent residence. While this decision defies logic and has raised the hackles of many in the immigration bar, it does not break new ground and has been consistent with USCIS’s prior policy. The question is whether we should be affirming the status quo or continuing to litigate so that we can correct this contradiction. Read on.

Here are the facts in Bokhari v. Holder. On June 9, 2003, one day before his prior L-1A nonimmigrant visa status was due to expire, Mr. Bokhari’s employer filed form I-129 to extend his L-1A status. Unfortunately, the USCIS denied the I-129 petition on March 19, 2004. Mr. Bokhari diligently filed an appeal on April 19, 2004 which too got denied on September 2, 2005. While Mr. Bokhari was unsuccessfully attempting to extend L-1A status, he took another stab by filing an I-140 petition for permanent residence under the multinational manager category on June 8, 2004, and simultaneously filed an I-485 application to adjust his status even while he was not in lawful status. We know that Mr. Bokhari filed the I-485 late – long after his L-1A status expired – but he claimed the protection of INA § 245(k). This provision allows an applicant who has failed to maintain status for less than 180 days to still file for adjustment of status. Mr. Bokhara’s I-140 petition got approved on July 11, 2005, but his I-485 application got denied on September 20, 2005 and DHS commenced removal proceedings against Mr. Bokhari.

The sole issue in the case was whether Mr. Bokhari was in unlawful immigration status for more than 180 days and was thus ineligible to adjust status. Mr. Bokhari argued that while his request to extend L-1A status was pending, he was in lawful status. He actually had a solid argument since 8 C.F.R. § 274a.12(b)(20) authorizes an alien to continue working while the extension request for a nonimmigrant work visa status remains pending for 240 days. Thus, even though his original L-1 status expired on June 10, 2003, Mr. Bokhari asserted that he continued to remain in lawful status until March 29, 2004, when DHS denied the I-129 extension request. As he filed his I-485 application on June 4, 2004, he claimed that he had not been in unlawful status for more than 180 days. DHS disagreed and argued that he failed to maintain lawful status from June 10, 2003, and even though he was authorized to continue working, such a grant of authorization under 8 CFR §274a.12(b)(20) was not tantamount to lawful immigration status.

The Fifth Circuit agreed with DHS. It relied on another regulation, 8 CFR § 245.1(d)(1)(ii), which defines “lawful immigration status” with regard to a nonimmigrant, as one “whose initial period of admission has not expired or whose nonimmigrant status has been extended.” Hence, one whose status had not been extended, such as Mr. Bokhari’s, was not in lawful immigration status. The Court pointed to other similar paradoxical situations where an alien may be granted stay of removal and be granted employment authorization, but still be considered illegal, see United States v. Flores, 404 F.3d 320 (5th Cir. 2005), and also relied on an old administrative decision, see In re Teberen, 15 I.&N. Dec. 689 (BIA 1976), which made clear that an extension application in itself did not confer lawful status, and thus an alien could still be found deportable during this period.

The USCIS has also long drawn a distinction between maintaining lawful status and being lawfully present in the United States, See Unlawful Presence v. Out of Status, http://bit.ly/ahjXpj. Even though someone may be thoroughly out of status, such as an F-1 visa student no longer enrolled in school, this student is not accruing unlawful presence for purposes of the 3 and 10 year bars pursuant to INA § 212(a)(9)(B), which triggers after one departs the US and only after accruing more than 180 days of unlawful presence. Similarly, an applicant for adjustment of status, whose underlying nonimmigrant L or H status has expired, will not be considered unlawfully present for purposes of triggering the 3 and 10 year bars but will still not be considered to be in lawful status. This unfortunate individual might even be amenable to removal as a deportable alien pursuant to INA §237(a)(1)(C), see USCIS Consolidated Guidance on Unlawful Presence, http://bit.ly/c9xHs9.

Let us first consider the merits of the government’s position. While an adjustment applicant is not in a lawful status, or for that matter, one whom like Mr. Bokhari has applied for an extension of nonimmigrant status, he or she is still in a period of stay authorized by the Attorney General. The whole notion of a “period of stay authorized by the Attorney General” was created by USCIS to cover the twilight period between the expiration of status and its renewal. The two ideas do not mean the same thing as one falls away when the other arrives, such as adjustment of status giving way to lawful permanent resident status or an L-1 extension giving way to L-1 status once the extension request is granted. If the two concepts mean the same thing, then we would not have need for these “periods of stay.” Why do we have 8 C.F.R. §274a.12(b)(20)? It is to provide continued work authorization incident to previously approved status pending renewal of such status. In other words, allowing for continued work authorization is an interim relief measure until the status can be renewed. Once the extension is approved and the status is renewed, the need for such temporary measures drops away.

On the other hand, such a person who is in a “period of stay authorized by the Attorney General” is also vulnerable to removal. It makes no sense to allow one to stay and work in the United States under 8 C.F.R. §274a.12(b)(20) and then put him or her into removal proceeding. Moreover, those who are more susceptible to deportation in a post 9-11 world through illegal racial profiling, are likely to get snared if they have pending applications at the time of apprehension. This is what happened to the plaintiff, an Egyptian national, in El Badrawi v. DHS, 579 F. Supp. 2d 249 (D. Conn. 2008), http://www.bibdaily.com/pdfs/El%20Badrawi%209-22-08.pdf, who claimed he was falsely arrested while his employer, University of Connecticut, filed an extension to extend H-1B status. The court in El Badrawi v. DHS found the government’s position “bewildering” that Mr. El Badrawi was entitled to work in the United States but not entitled to be physically present in the United States. Even though Mr. Bokhari relied heavily on El Badrawi v. DHS, the Fifth Circuit gave short shrift to this decision. While Mr. El Badrawi was not claiming any entitlement to adjust status, his claim to be lawfully in the US and not be susceptible to arrest and deportation while his H-1B extension was pending was a legitimate one.

It is worth remembering that the INA never defines “status”. For this reason, consider the possibility that 8 CFR § §245.1(d)(1)(ii) may not be faithfully interpreting the statute. INA § 245(c)(2) only refers to an applicant not being eligible for adjustment of status because he or she is in “unlawful immigration status.” The authors credit the insight of David Isaacson who suggests that there must be a difference between “lawful immigration status” and “lawful nonimmigrant status, ” which is a separate bar to adjustment under INA § 245(c)(7), so that an extension can be viewed as a lawful status for the purpose of preserving § 245 eligibility. After all, pursuant to 8 CFR 245.1 (d)(1)(ii), extension of nonimmigrant status would qualify as a lawful immigration status. When the extension is still pending, such lawful status can be viewed as remaining valid in a provisional sense pending final adjudication of the extension request; in the interlude between expiration and renewal, the extension keeps the nonimmigrant status alive, looking back at the past yet open to the future.

This interpretation provides non-resident aliens with a more realistic assurance of being able to stay lawfully in the United States while their extension applications remain pending under §274a.12(b)(2). Those who are specifically granted work authorization while they file extension applications, or who file I-485 applications, should be less susceptible to removal that the student who had dropped out of school. It is neither legally sound nor logically persuasive to place non-citizens, and their derivative family members in removal, if they have pending applications for extensions or adjustment applications. They should also be considered to be maintaining a lawful immigration status while their requests for an extension are pending. Nobody would like to constantly live in fear, especially if they were in the EB-3 preference, and applying for yet another extension beyond the 6th year H-1B limitation, to imagine that ICE could issue a Notice to Appear for a removal proceeding when a timely non-frivolous H-1B extension along with H-4 extensions of family members were in process.

Whether USCIS has a regulation or not granting work status, it is not good policy to render nonimmigrants who file timely applications be susceptible to removal from the US. However, not all such twilight statuses need to be deserving of such immunity, such as an F-1 student who has dropped out of school, and who may not be accruing unlawful presence for purposes of the 3 and 10 year bar, but can still be put into removal. As opposed to such a student who has dropped out of school and not reinstated status, it would be wrong to deport a nonimmigrant who has been lawfully in the US and who has applied for a timely extension of status. It is hoped that in the future we will see more decisions that follow El Badrawi v. DHS rather than Bokhari v. Holder.

DISTURBING TREND OF K VISAS BEING RETURNED FOR REVOCATION AT US CONSULATES

By Cyrus D. Mehta

My distinguished colleague, Paul Parsons, in Austin, Texas, has justifiably complained to Jeff Gorsky, Chief, Legal Advisory Opinions Section, Visa Office, State Department, http://bit.ly/bl44VO, about the arbitrary manner in which consular posts administratively close K-1 or K-3 visa cases, and recommend revocation of the petition visas when they suspect the bona fides of the relationship. The K-1 visa allows a US citizen to sponsor a fiancé or fiancée. The K-3 visa allows the spouse of a US citizen to enter the US after the I-130 petition to sponsor the spouse for permanent residence has been filed.

If the consul has doubts about the relationship or a bona fide intent to marry, the case is quickly dispatched to the USCIS for revocation even before the attorney has a chance to intervene on behalf of the hapless client. It would be one thing if the USCIS acted quickly, by issuing a Notice of Intent to Revoke (NOIR), and allowing the petitioner to respond to any allegations of fraud or the alleged lack of a genuine relationship. Unfortunately, the USCIS takes its own sweet time, and it usually takes in excess of a year, and sometimes even in excess of two years, before the petitioner receives a NOIR. To add insult to injury, the K-1 approval has a validity date of only 4 months pursuant to 8 CFR § 214.2(k)(5). If the USCIS does not act quickly by issuing a NOIR within the 4 month period, which it most likely will not do, then the DHS never provides an opportunity to the petitioner to rebut the allegations on the ground that the 4 month validity period of the K-1 has lapsed. Another distinguished colleague, Brent Renison, in Portland, Oregon, has filed a class action suit complaining against this procedure and also challenging the validity of 8 CFR § 214.2(k)(5), http://www.entrylaw.com/tranclassaction.html. This is a most worthy law suit challenging a very arbitrary practice, and affected K-1 visa applicants may seek to join as class members. Details on the class action are provided in the link above.

A careful reading of 8 CFR § 214.2(k)(5), however, reveals that there is authority to extend the validity of the K-1 petition for an additional 4 months:

Validity . The approval of a petition under this paragraph shall be valid for a period of four months. A petition which has expired due to the passage of time may be revalidated by a director or a consular officer for a period of four months from the date of revalidation upon a finding that the petitioner and K-1 beneficiary are free to marry and intend to marry each other within 90 days of the beneficiary’s entry into the United States. The approval of any petition is automatically terminated when the petitioner dies or files a written withdrawal of the petition before the beneficiary arrives in the United States.

The State Department’s Foreign Affairs Manual at 9 FAM 41.81 Note 6.2 provides further authority to extend the K-1 any number of times:

An approved K-1 visa petition is valid for a period of four months from the date of Department of Homeland Security (DHS) action and may be revalidated by the consular officer any number of times for additional periods of four months from the date of revalidation, provided the officer concludes that the petitioner and the beneficiary remain legally free to marry and continue to intend to marry each other within 90 days after the beneficiary’s admission into the United States. However, the longer the period of time since the filing of the petition, the more the consular officer must be concerned about the intentions of the couple, particularly the intentions of the petitioner in the United States. If the officer is not convinced that the U.S. citizen petitioner continues to intend to marry the beneficiary, the petition should be returned to the approving office of DHS with an explanatory memorandum.

Notwithstanding this authority in the 8 CFR and the FAM, it makes no sense for the USCIS to refuse to give the petitioner an opportunity to respond on the ground that the K-1 has a limited validity of only 4 months. If that is indeed the policy, it also makes no sense for a US Consulate to even return a K-1 petition for revocation. It is a waste of time, government expense, and falsely raises the expectations of the affected parties who may be looking forward to challenge the illusory revocation.

When a K-1 petition is sent for revocation, it is also not prudent to file a new I-129F petition for a new K-1 visa. Consuls can be quite cynical, and will most likely instruct the K-1 visa applicant to wait for a resolution of the prior petition, which was recommended for revocation, before they will adjudicate the new K-1 visa. The love birds may decide that enough is enough, and one may pop the question to the other, and they get married. This ends the fiancé or fiancée relationship, and the I-129F petition is now rendered moot, even though it has been sent for revocation. The US citizen files a well documented I-130 petition establishing the bona fides of the marriage so that the foreign national spouse can apply for an immigrant visa at the US Consulate upon the approval of this petition. Surely, the consul should not be able to say that the post is still awaiting the outcome of the resolution of the K-1 petition. There is no longer an intent to get married, the parties are now married! The petitioner cannot possibly fight the NOIR, if at all it is issued, on the I-129F. It is hoped that a consul will independently look at the bona fides of the marriage de novo without asking the spouse to wait for the outcome of the K-1 visa petition.

On the other hand, it should not be assumed that the marriage of the couple and the subsequent filing of an I-130 petition would provide the panacea to the problem of the K-1 being sent for revocation. The consul may also hold up the immigrant visa processing on the ground that there was fraud or misrepresentation in the K-1, and this would provide an independent ground of inadmissibility under INA § 212(a)(C)(6)(i) to deny the immigrant visa application. Under such circumstances, in the event that a belated NOIR is issued on the K-1, it may be well worth it to respond to the allegations even though there is no longer a fiancé or fiancée relationship, and Marc Ellis in an insightful article also suggests a similar strategy, http://www.ilw.com/articles/2006,0323-ellis.shtm. Here too, it makes no sense for the consul to find prior fraud during the K-1 visa interview (if the consul suspected their bona fide intention to marry) when the couple have further reaffirmed their bona fides after marrying, but as we know, a lot of things do not make sense in K-1 visa processing these days. In my opinion, the K-3 may not be worth it as the I-130 petition is being approved quite quickly, and if both the I-130 and the I-129F get approved simultaneously, the National Visa Center will process the I-130 and not the K-3 for consular processing.

Given the risks of K-1 revocations, and all the complications accompanying such revocations, it behooves an I-129F petitioner to thoroughly document the relationship with the fiancé or fiancée, including trips together or meetings, exchange of correspondence, gifts to each other, and affidavits from others, such as friends and relatives, attesting to the relationship. Moreover, although an engagement ceremony is not required, if such an engagement ceremony did indeed take place, it should be thoroughly documented and explained within its cultural or religious context. The petitioner and his or her fiancé (e) should also include a detailed statement about how they first met, their contacts with each other, and about their clear plans to get married in the US.

Finally, it is extremely important to note that the parties should not be married prior to the grant of the K-1 visa as that would vitiate the I-129F. Even an unregistered marriage ceremony, so long as it is recognized as a marriage in the country, such as a Hindu marriage in India, will be considered a marriage and would invalidate the I-129F petition. Under those circumstances, the petitioner should withdraw the I-129F, and instead, file an I-130 petition. Even if a marriage has occurred, it should not be assumed that it would be considered bona fide. Similar documentation must be submitted with the I-130 petition, including proof of the wedding, to further establish the bona fides of the marriage so as to ensure a smooth and quick grant of the immigrant visa at the consular post.

MATTER OF LEGASPI: NARROWING THE SCOPE OF 245(i) GRANDFATHERING FOR DERIVATIVE BENEFICIARIES

By Cyrus D. Mehta

§ 245(i) of the Immigration and Nationality Act, which sunset on April 30, 2001, has been a great boon for those who are not in status in the United States. It permits adjustment of status of certain aliens who are unable to adjust under § 245(a) for entering without inspection or who are disqualified under § 245(c) of the Act, which include those who have accepted unauthorized employment or are in unlawful immigration status.

Even though more than 9 long years have elapsed since April 30, 2001, § 245(i) permits certain aliens to remain “grandfathered” if they were beneficiaries of visa petitions or labor certifications filed on or before April 30, 2001 provided they were properly filed and approvable as filed. See 8 CFR § 245.10(a). Derivative beneficiaries too, as specified in § 203(d), such as spouses or minor children who could accompany the principal beneficiary, can claim the benefit of grandfathering under § 245(i).

This is how § 245(i) works. A labor certification was filed prior to April 30, 2001 on behalf of principal alien “A” who was married to spouse “B” and who had a minor child “C” at the time of the filing. All of the aliens are grandfathered under § 245(i) even till this day. This is true even though “C” is no longer a minor and “B” may no longer be married to “A.” As long as the labor certification was properly filed and approvable as filed on behalf of “A” prior to April 30, 2001, it does not matter that the employer subsequently withdrew the labor certification in 2003. All of these aliens, “A,” “B” and “C,” if the subject of new labor certifications in 2010, may ultimately adjust status under 245(i) notwithstanding the fact they are not lawfully present. “A”, “B” and “C”, however, had to have been in the United States on December 21, 2000, assuming that the labor certification was filed after January 14, 1998.

In Matter of Legaspi, 25 I&N Dec. 328 (BIA 2010), http://www.justice.gov/eoir/vll/intdec/vol25/3694.pdf, the Board of Immigration Appeals (BIA) narrowed the scope of § 245(i) grandfathering for derivative beneficiaries by depriving them of conferring a similar 245(i) benefit to their spouses. After Matter of Legaspi, spouses of derivative beneficiaries cannot grandfather by virtue of being married to an alien who is grandfathered under § 245(i). In this case, the respondent was married to Ms. Blanco who was grandfathered under § 245(i), and thus he too claimed to be similarly grandfathered under § 245(i). Ms. Blanco qualified as a derivative beneficiary by virtue of an I-130 visa petition that her grandfather filed on her father’s behalf in 1987. Even though she never became a permanent resident under the 1987 petition, the BIA acknowledged that she remained a grandfathered alien under § 245(i).

The BIA rejected the respondent’s claim to be an independently grandfathered alien under § 245(i) by virtue of his marriage to Ms. Blanco in 2003. He was unable to adjust status under § 245(a) because he was not in lawful status, and needed § 245(i), as a defense in removal proceedings. This part of the BIA’s decision is consistent with a Memo from William R. Yates, USCIS dated March 9, 2005 (USCIS 245(i) Memo), http://bit.ly/dsyJJb, which is the government’s latest interpretation on § 245(i), and states that a spouse who marries a grandfathered alien after April 30, 2001, cannot independently “grandfather” under § 245(i). On the other hand, the USCIS 245(i) Memo did acknowledge that such a spouse could still seek to adjust status under § 245(i) as a dependent of the “grandfathered” alien:

An application for labor certification is filed on behalf of principal alien “A” in 2000. At that time, principal alien “A” is unmarried. Principal alien “A” marries spouse “B” in 2002. Principal alien “A” and spouse “B” have child “C.” An I-130 is filed on behalf of principal alien “A” and is ultimately approved in 2004. Principal alien “A” applies for adjustment of status. May spouse “B” and child “C” apply for adjustment of status under section 245(i) in conjunction with principal alien “A”?

If all other grandfathering requirements are met, spouse “B” and child “C” may seek to adjust status only as dependents of the principal alien “A.” Principal alien “A” is grandfathered as described in Scenario 1. Because spouse “B” marries principal alien “A” after April 30, 2001 sunset date, spouse “B” and child “C” are not grandfathered.

Until Matter of Legaspi, it was thought that a spouse who married any grandfathered alien after April 30, 2001, even if not independently grandfathered, could still adjust under §245(i) as a dependent of the grandfathered alien. This was assumed even if the original alien became grandfathered as a derivative beneficiary, such as Ms. Blanco. While in Matter of Legaspi, the respondent spouse was not seeking to adjust with Ms. Blanco but was eligible to adjust as a following to join spouse (revised on 10/12/10), the BIA’s opinion threatens to shut off this possibility too. The BIA argues that had Ms. Blanco been married at the time of her grandfather’s petition in 1987, she would not have been qualified as a derivate beneficiary as she would not have met the definition of “child” for purposes of § 203(d).

It is this aspect of the BIA’s decision in Matter of Legaspi that is problematic. While one can agree that a derivative beneficiary such as Ms. Blanco must have been single in order to qualify as a “child” at the time the petition was filed in 1987, Ms. Blanco continues to remain “grandfathered” under § 245(i) even after she ceases to be a child and even after she marries. Should she adjust status through a post-April 30, 2001 filed labor certification, her spouse (who may not be eligible under § 245(a)) ought to be able to adjust with her as a dependent under § 245(i). § 245(i) provides an eternal grandfathering benefit to qualified aliens, even after they ceased to be spouses and children. Once they are “grandfathered,” a new spouse ought to be able to at least adjust with them as dependents under § 245(i).

Matter of Legaspi, in this sense, erroneously interprets § 245(i), which was a generous provision that sought to allow aliens who were not otherwise eligible to be able to file an adjustment application in the US. Under the BIA’s logic in Matter of Legaspi, aliens other than derivative beneficiaries could also be affected. Anyone who got protection under § 245(i) by virtue of being single, such as an adult son or daughter of a permanent resident spouse, may not be able to have their “after acquired” spouses adjust with them as dependents under § 245(i).

It is hoped that the BIA clarifies its position in a future decision. While Matter of Legaspi makes clear that an “after acquired” spouse cannot independently grandfather under § 245(i), such a spouse ought to at least be able to adjust status as a dependent.

BOOMERANG: THE MOSQUE CONTROVERSY AND OTHER IMMIGRATION EXCESSES

By Gary Endelman and Cyrus D. Mehta

There is growing Islamophobia engulfing the country combined with a rise in xenophobia, http://www.time.com/time/nation/article/0,8599,2011798,00.html. The Islamophobia has been unleashed as a result of the unfortunate controversy over the Islamic center and mosque that will be built within two blocks of Ground Zero. Much has been written about this controversy, but there has been scant commentary about its impact on immigration and immigrants. It is time to step into this lacuna, which we do so in this blog post to link this Islamophobia to the xenophobia against immigrants. We are especially motivated to write after an immigrant Bangladeshi cabbie in New York last week was almost stabbed to death after the passenger, his assailant, realized he was a Muslim. More recently, arson has been suspected at a proposed construction site for a mosque and Islamic cultural center in Murfreesboro, Tennessee. Strangely, anti-Islamic sentiment, which was largely absent after September 11, has suddenly flared in New York City after the controversy surrounding the proposed Islamic center, even though two strip clubs, liquor stores and criminal defense attorneys who represent suspected terrorists thrive within two blocks of the WTC site, http://blogs.wsj.com/metropolis/2010/08/26/anti-muslim-bias-absent-after-911-surfaces-in-new-york/ . Ironically, two mosques have always existed in the vicinity for years and not a word was said about them.

An anti-Islamic sentiment seeped into immigration enforcement policy immediately after the September 11, 2001 attacks. Non-citizens from Muslim countries were rounded up, and when they could not charge them with links to terrorism, they were detained and deported in secret for immigration violations unrelated to terrorism. In late 2002 and early 2003, the immigration agency, under Attorney General Ashcroft, and his lieutenant Kris Kobach (who has also helped draft Arizona’s SB 1070), invented Special Registration to target only males from countries with mainly Muslim populations. They were required to report within a short time frame or face both immigration and criminal consequences. Those who faithfully reported, thinking they were helping law enforcement, but were found to have immigration violations, were quickly put in removal proceedings. Although more than 80, 000 males reported for Special Registration, no one was caught for terrorism. But over 13,000 men were put in removal while their wives, sisters and daughters were not. The program was a spectacular flop, a waste of resources for the immigration agency and tax payer, and most problematic of all, it antagonized immigrant communities who trusted that the government was neutral even after the September 11 attacks. Even though overt immigration polices against Muslims were disbanded, one still could not help notice the occasional visa applicant from a Muslim country not being approved for a visa or being denied naturalization for a flimsy reason.

But all this pales in proportion to the recent hate and invective we have see against Muslims after political leaders such as former Alaska Governor and Vice Presidential candidate Sarah Palin and former House Speaker Newt Gingrich, have made political capital of the mosque near Ground Zero controversy in the Summer of 2010. Gingrich has even equated Islam to Nazism, forgetting that those who caused the September 11 attacks hijacked Islam in the same way as the pastor of a Christian church in Florida has just hijacked Christianity by organizing a Koran burning day on September 11, 2010. Also note the nauseating description of Islam by Franklin Graham on national television calling it a devilish faith and his discussion of the “Muslim seed” of Obama.

Islamophobia is not growing in a vacuum and cannot be understood or appreciated without a reference to the pervasive economic anxiety gripping this nation and others in the developed world. It is the dramatic difference in economic conditions that accounts for the upsurge in Islamophobia now and its relative absence at the time of 9/11.This is not strange at all. Remember when Hitler came to power? The link between xenophobia and economic anxiety is a global rather than merely an American phenomenon, http://www.businessworld.in/bw/2010_07_31_Xenophobia_At_Work.html. A dark
tribalism has also engulfed Europe, with Switzerland constitutionally banning minarets and France outlawing the burqa, http://www.newsweek.com/2010/02/18/europe-s-big-choice.html. Migration itself is a global phenomenon and no country can frame immigration policies purely in a domestic context without reference to this wider movement of peoples across national boundaries. This is particularly the case throughout the developed economies of Europe, Japan and the United States where the population is aging, birth rates are dropping and only immigration can supply sufficient workers young enough to support complex and costly social systems. However, the very dependence on such migration in a time of economic anxiety also fuels a latent but increasingly emergent social dislocation, a sense that cultural realities are changing in a way that seems both menacing and hard to understand. This is what you see in the many tea party rallies when people bring signs saying they want to take their country back. Once again, this is an international problem. Even countries like the Netherlands that have long and proud traditions of humane immigration policies are changing in response.

The link between immigrants and radicalism goes back to the earliest days of the Republic. Federalists roundly condemned French immigrants as dangerous Jacobins and pressed President John Adams to sign the Alien and Sedition Acts in 1798 as a way to turn back the rising tide of Jeffersonian democracy. The nativist appeal of the Know Nothing movement in the 1840’s and 1850’s was fueled, in large measure, by the economic anxiety that swept through the industrialized North, especially among working class voters most fearful about competition for low-wage jobs that the enormous wave of recently arrived Irish immigrants presented. Throughout our history, the tenor of our immigration laws reveals a great deal about the national mood. The adoption of the first immigration restrictions in 1924 arose out of the disillusionment with foreign entanglements in reaction to the First World War. After the Pearl Harbor attack on December 7, 1941, 120,000 people of Japanese American ancestry were kept in internment camps from 1942 to 1946 (and approved by Cal. AG Earl Warren of all people!), which illustrates how the scapegoating of immigrants can come back to eviscerate the rights of citizens as well, http://www.immigrationpolicy.org/special-reports/have-we-learned-lessons-history-world-war-ii-japanese-internment-todays-secret-deten. The numerous ideological exclusionary grounds in the 1952 McCarran-Walter Act, unsuccessfully vetoed by President Truman, spoke of a frightened nation in the grip of Cold War hysteria. The abolition of the national origins quota in 1965 should properly be considered one of the hallmark civil rights measures of the Great Society. Passed the same year as the Voting Rights Act and only a year after the 1964 Civil Rights Act, the 1965 immigration law was the product of a confident and prosperous nation ready to embrace the world. The American Competitiveness in the 21st Century Act, passed at the peak of the dot.com boom in 2000, displayed an economic vitality whose expansion seemed to know no limit. The Schumer assault on H/L fees against companies that hire more than half their work force on H-1B and L visas, mainly Indian IT companies, most recently speaks of a frightened people who feel that they can no longer compete and worry that their time has past.

In light of this disturbing trend, noted columnist Tom Friedman in a recent New York Times Op-Ed best explains why it is important from a US immigration policy perspective to support the building of the Islamic Center, which will essentially be a 13 story building taken up by an auditorium, pool, gymnasium, offices and an exhibition space:

That resistance to diversity, though, is not something we want to emulate, which is why I’m glad the mosque was approved on Tuesday. Countries that choke themselves off from exposure to different cultures, faiths and ideas will never invent the next Google or a cancer cure, let alone export a musical or body of literature that would bring enjoyment to children everywhere.

When we tell the world, “Yes, we are a country that will even tolerate a mosque near the site of 9/11,” we send such a powerful message of inclusion and openness. It is shocking to other nations. But you never know who out there is hearing that message and saying: “What a remarkable country! I want to live in that melting pot, even if I have to build a boat from milk cartons to get there.” As long as that happens, Silicon Valley will be Silicon Valley, Hollywood will be Hollywood, Broadway will be Broadway, and America, if we ever get our politics and schools fixed, will be O.K. http://www.nytimes.com/2010/08/04/opinion/04friedman.html

We also admire Mayor Bloomberg for standing firm to his convictions and not retreating like other politicians have. How far will such a “no-mosque” zone stretch from the WTC site? Mosques that are being proposed in Staten Island, NY, and even as far in Murfreesboro, Tennessee, have met with virulent resistance. Even though President Obama admirably defended the right of Muslims to build the center, the next day he somewhat retreated by indicating that he was not commenting about the wisdom of building the mosque near Ground Zero. The following extract from Bloomberg’s no-compromise address at Gracie Mansion on August 24 is worth noting, http://blogs.wsj.com/metropolis/2010/08/24/bloomberg-on-mosque-a-test-of-our-commitment-to-american-values/:

Nonetheless, it was not so long ago that Jews and Catholics had to overcome stereotypes and build bridges to those who viewed them with suspicion and less than fully American. In 1960, many Americans feared that John F. Kennedy would impose papal law on America. But through his example, he taught us that piety to a minority religion is no obstacle to patriotism. It is a lesson that needs updating today, and it is our responsibility to accept the challenge.

The ill-conceived sacrifice of religious toleration will neither ensure our safety nor promote our security. As Benjamin Franklin reminded the Pennsylvania Assembly in February 1775, those “who would give up Essential Liberty to purchase a little temporary safety deserve neither liberty nor safety.” Memoirs of the life and writings of Benjamin Franklin (1818). Think of this when former House Speaker Newt Gingrich pollutes the national discourse by comparing those who advocate the Muslim cultural center with Nazis. Remember well when Senator Schumer slanders major Indian IT giants like Infosys or Wipro and compares them to criminals who steal cars and chop them up for parts, http://cyrusmehta.blogspot.com/2010/08/world-according-to-senator-schumer-if.html. Indeed, the very use of the term “job shop” suggests illegitimacy and even the concept of an “H-1B dependent” employer, not to mention the refusal of Congress to expand manifestly inadequate immigrant visa quotas, derives in no small measure from an unspoken but powerful bias against the “threat” of Indian migration. Popular frustration over federal inaction metastasizes into state-sanctioned bigotry like that directed against illegal immigrants through SB 1070 in Arizona. http://cyrusmehta.blogspot.com/2010/07/no-room-at-inn-sb-1070-and.html.

Nativist excess has a price tag. Here is a great example.http://www.azcentral.com/community/chandler/articles/2010/06/24/20100624chandler-arizona-immigration-california.html. An Arizona construction company lost out on a major construction contract to expand LA international airport precisely because the LA City Council boycotted Arizona in the wake of their state immigration law. Moreover, the Immigration Policy Center reports that over 35,000 businesses in Arizona are Latino-owned and had sales and receipts of $44 billion in 2004, which employed over 39,363 people in 2002, the last year in which such data was available, http://www.americanimmigrationcouncil.org/newsroom/release/how-much-will-arizonas-immigration-bill-sb1070-cost. “Gov. Brewer should keep in mind that, if significant numbers of immigrants and Latinos are actually persuaded to leave the state because of this new law, they will take their tax dollars, businesses, and purchasing power with them.”

The demonstrable willingness of our political leadership to demagogue against immigration contributes to a willingness in the body politic at large to equate all immigrants with a malignant terrorism against which our heralded commitment to diversity must and will give way. It is not that far a walk from portraying immigrants as the source of our economic malaise to depicting all Muslims as silent accomplices in 9/11. Nor is this the first time in our history when such a sad state of affairs has come to pass. As Abraham Lincoln wrote to his great good friend Joshua Speed on August 24, 1855:

Our progress in degeneracy appears to me to be pretty rapid. As a nation, we began by declaring that “all men are created equal.” We now practically read it, “all men are created equal except negroes.” When the Know-nothings get control, it will read, “all men are created equal except negroes and foreigners and Catholics.” When it comes to this, I shall prefer emigrating to some country where they make no pretense of loving liberty–to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocrisy.

Yet, all is not lost for we have emerged from other times of torment and returned to what Lincoln’s First Inaugural so rightly and famously called “the better angels of our nature.”. In time, the fever will break and America will regain its moral balance. The crusade against Islamophobia and all forms of nativist excess can only be won if America once again believes in itself. F. Scott Fitzgerald had it right:

France was a land, England was a people, but America, having about it still that quality of the idea, was harder to utter…. It was a willingness of the heart. The Crack-Up (1936).

Follow the Money: What the OES Counts That You Can’t

By Gary Endelman and Cyrus D. Mehta

What is the main complaint against foreign workers? Simple: They undercut American wages. How do we know that one might ask? Well, critics like Senator Charles Schumer (D-NY), who unveiled and passed HR 6080, the Border Security Emergency Supplemental Appropriations Act of 2010, do not tell us but the government actually does have a well established program to measure all this called the Occupational Employment Statistics survey. The Occupational Employment Statistics (OES) program conducts a semi-annual mail survey designed to produce estimates of employment and wages for specific occupations, www.bls.gov/oes/oes_emp.htm. All you have to do is to pay the foreign worker, when filing either an H-1B or labor certification application, based on what the OES says he or she should be paid and you know why our economy is in the ditch. While an employer is free to challenge the DOL’s reliance on the OES with a private wage survey, such a challenge is often costly and time consuming. So, it seems that perhaps we might take a closer look at this OES survey to find out what it is all about. Then, so the argument goes, we will know why H and L visa fees need to be higher, why DOL needs to audit more labor certifications and why Congress should declare a moratorium on all immigration.

How does the OES define “wages”? Let’s take a look at the OES website,
http://www.bls.gov/oes/oes_ques.htm#Ques3

How are “wages” defined by the OES survey?

Wages for the OES survey are straight-time, gross pay, exclusive of premium pay.
Included in the collection of wage data are:
· base rate,
· cost-of-living allowances,
· guaranteed pay,
· hazardous-duty pay,
· incentive pay, including commissions and production bonuses,
· on-call pay, and
· tips

Notice the inclusion of tips and incentive pay including commissions and production bonuses. These are obviously not guaranteed by their very nature. Now, this is passing curious since the Department of Labor PERM regulations bar consideration of such incentive compensation: “wage offered is not based on commissions, bonuses or other incentives, unless the employer guarantees a wage paid on a weekly, bi-weekly, or monthly basis.” 20 CFR 6456.20(c)(3). Nor is this contradiction limited to PERM We find it in the H-1B regulations as well, something that Senator Schumer probably knew but the rest of us perhaps overlooked: If you look at the 20 CFR 655.731(C)(2)(v) definition of “cash wages paid” for purposes of satisfying H-1B required wage, you see the following: “future bonuses and similar compensation…may be credited toward satisfaction of the required wage obligation if their payment is assured(i.e. they are not conditional or contingent on some event such as the employers annual profits)…” ( emphasis added). So using this definition, tips, commissions, and other forms of incentive pay could not be considered by the employer in demonstrating satisfaction of the required wage obligation even though OES considers them in setting the prevailing wage!

Well, what about fringe benefits? This is a way that employers reward performance without raising base salaries. Surely, DOL allows this you ask? Not so fast my eager young friend! In 1991, the Board of Alien Labor Certification Appeals (BALCA) decided a case styled Kids“R”Us, 89-INA-311 (Jan 28,1991). If you read this case,and you will doubtless want to after reading this blog, pay special attention to page 4 which talks about calculating the value of fringe benefits and relies upon Peddinghaus, 88-INA- 79 (July 6, 1988). The whole point is to allow a precise determination of how much the fringe benefits were worth- in contrast to OES acceptance of tips, bonuses and other incentive pay that cannot possibly be calculated with any degree of exactitude unless and until they are paid. Even if unique, fringe benefits must be guaranteed and cannot be based on contingent payments, such as bonuses based on profits or tips. In Kids”R”Us, the following benefits were brought forward by the employer as part of the salary:

· medical plan with HOM and Major Medical for which employee only paid $5 per week
· paid vacation
· life insurance
· stock options
· stock purchase program which company assisted by paying all brokerage fees and adding 10% to any employee purchase
· company paid profit sharing where employee had to pay nothing while company kicked in 8% into a retirement fund
· 401K where the company matched 1/2 of employee’s contribution

None of these depended upon corporate performance or profitability. They were not contingent compensation.The discrepancy between how the OES determines wages and how employers are allowed to do so is not a new controversy. Consider the following discussion between the American Immigration Lawyers Association and the Department of Labor from the last century:DOL/AILA Liaison Meeting Minutes (3/19/99)
DRAFT MINUTES OF DOL/AILA LIAISON MEETING ON MARCH 19, 1999

Question: It is our understanding that the OES survey reflects “total compensation,” including incentive compensation and bonuses. We understand that the set of instructions sent with the questionnaires instructed participating companies to include items such as bonuses as part of the reported wages? Is this true? If so, does this not run contrary to the requirement that the “wage offered is not based on commissions, bonuses or other incentives, unless the employer guarantees a wage paid on a weekly, bi-weekly, or monthly basis.” 20 CFR 6456.20(c)(3). Similarly, does the Service Contract Act also report total compensation benefits? In general, may an employer include sign-on bonuses, incentive pay, transportation and relocation allowances, which are all, reported as income to the IRS, as part of the salary? It the OES wage survey definition of compensation includes incentive pay, should we not be citing surveys that report “total cash compensation” wages rather than the “base salary”?

Answer: USDOL indicated that if a guaranteed bonus was paid every year, it could be considered as part of the prevailing wage.Question kind sir: Do the companies that respond to the OES survey have to prove they pay a guaranteed bonus every year or any year for that matter? Fast forward a few years and we come another AILA-DOL discussion of OES wage methodology from March 22, 2001:

QUESTION: The OES survey includes the use of discretionary bonuses, including production bonuses, commissions, cost-of –living allowances and the like. The OES wage computations in OES do not comply with the definition of weighted average of the salaries of workers surveyed. OES does not obtain specific salaries for each worker but rather requests that employers identify how many employees fit into defined wage ranges. There are other flaws in the OES, including the fact that there are only two levels, and Level II has the same range for highly experienced workers and moderately experienced workers.

ANSWER: DOL is aware of the issues regarding the OES. The regs do not mandate it’s use, but it is the best that DOL has to offer. OES will not be changed in the near future, so we will all have to live with the status quo. The PERM proposal will address prevailing wages and AILA will have an opportunity to comment on this issue in that context. However, DOL is continuing to provide training to SESA’s on prevailing wage determinations and assessing employer-provided surveys.

What most attorneys practicing today do not realize is that the OES has only been applied to labor certification since General Administrative Letter 2-98 on October 31,1997. Before then, as us folks who have been in the practice for a few more years remember, the state workforce authorities ( SWA of blessed memory) conducted a customized wage survey for each employer. OES was never meant to apply to labor certification and always took incentive compensation into account because, for most wage settings, this is accepted as part of what workers really got paid. At the time, our eagle-eyed colleague Deborah Notkin wrote a prophetic article entitled Labor Certification Practice: Coping With GAL 2-98 and the Occupational Employment Statistics (OES) Program that appeared in the May 3, 1999 issue of Interpreter Releases. The clash between the OES and labor certification became more painful when the OES switched to the Standard Occupational Classification System in 1999. This is the same system that DOL uses today to determine prevailing wages. Listen to how it operates:

“In 1999, the OES survey began using the Office of Management and Budget (OMB) Standard Occupational Classification (SOC) system. The SOC system is the first OMB-required occupational classification system for federal agencies. The SOC system consists of 821 detailed occupations, grouped into 449 broad occupations, 96 minor groups, and 23 major groups. The OES survey uses 22 of the 23 major occupational groups from the SOC to categorize workers in 1 of 801 detailed occupations…he OES survey’s transition to the new SOC system, estimates are not directly comparable with previous years’ OES estimates, which were based on a classification system having 7 major occupational groups and 770 detailed occupations. Approximately one-half of the detailed occupations were unchanged under the new SOC system, with the other half being new SOC occupations or occupations that are slightly different from similar occupations in the old OES classification system.” http://www.bls.gov/oes/oes_emp.htm

O*NET is based on the SOC system. It is the compressed nature of this system in its occupational categorization that often produces distorted wage surveys. Note when the OES began using SOC, not that far after GAL 2-98. It was only then that the SOC system acquired legal and logical relevance for labor certification.

So, if there is a double standard in the calculation of what wage should be paid, and if the OES system is used to penalize employers who have the temerity to file H1Bs and labor certifications when the methodology underlying the entire OES concept was never meant to apply to immigration in the first place, how in the name of Sam Adams and the Continental Congress did we wind up in this mess? For that, dear reader, you must endure a little history lesson. In 1993, Vice President Al Gore inaugurated the National Performance Review. From the point of view of labor certification, the impact of the National Performance Review was that the DOL, among other federal agencies, was asked to identify opportunities for reducing expenditures. The resulting savings would contribute to balancing the federal budget, which at that time was running heavily in the red. At the DOL, the labor certification program was a prime candidate for cutbacks. Being at the center of the labor certification process, the DOL experienced its artificiality and unreasonableness “up close and personal.” It would be only natural for budget officials and other high officials in the DOL to dislike such a program. With this background, the DOL inaugurated its re-engineering” initiative for labor certification in 1995. See Reengineering of Permanent Labor Certification Program; Solicitation of Comments, 60 Fed. Reg. 36440 (July 17, 1995) reported and reproduced in 72 Interpreter Releases 976,993 ( July 24, 1995).

The National Performance Review reported to the President in September 1995 that $223.8 million could be saved over five years in the labor certification program by “streamlin[ing] the alien labor certification process[,] by decentralizing authority to state employment agencies and automating form processing.” National Performance Review, Ch. 2, “Getting Results” ( Sept. 7, 1995) It described its proposal as follows:

“Streamline Alien Labor Certification: Streamline and speed up the [DOL’s] Alien Labor Certification process by decentralizing authority to state employment security agencies, consolidating DOL regional processing centers from 10 to four, and automating forms processing. Under this proposal, DOL will conduct spot audits of about 2 percent of its cases rather than review all state certifications. Also, states will be authorized to charge user fees to those few employers who use this service.” National Performance Review, “Appendix C: New Recommendations by Agency” ( Sept. 7, 1995).

The Clinton Administration reduced the size of federal civilian workforce by 426,200 positions between January 1993 and September 2000, shrinking 13 of 14 departments.http://govinfo.library.unt.edu/npr/whoweare/appendixf.html. From 1992 to 2000, the federal workforce was reduced by about 20 percent. http://www.innovation.cc/discussion-papers/nat-performance.htm . None of the proposed changes that the DOL outlined in the National Performance Review actually happened. What did happen was that funding for labor certification was reduced from $60 million in 1993 to $40 million in 1997. These cuts contributed to the National Performance Review’s aims, but none of the proposed reforms materialized. With the National Performance Review looking for federal programs to cut, the DOL’s Employment and Training Administration (ETA) requested the DOL’s Office of Inspector General (OIG) to conduct an audit of the labor certification program: “Since ETA requested the audit, we have launched our own reengineering efforts through the National Performance Review initiative to address program weaknesses and to achieve a more rational allocation of resources.” U.S. Department of Labor, Office of Inspector General, Office of Audit, Final Report: The Department of Labor’s Foreign Labor Certification Programs: The System is Broken and Needs To Be Fixed. Rep. No. 06-96-002-03-321 ( May 22, 1996). Herein lay a double irony: not only was the ETA asking for an audit that criticized the ETA, but the ETA felt alienated from its own roots because the ETA’s predecessor agency grew out of the Bureau of Immigration. Such cultural contradictions are the inevitable, though unintended, consequence of a system founded on a negative premise.

From 1992 to 2000, as a result of Vice President Gore’s National Performance review, the federal workforce shrank by about 20 percent, http://www.innovation.cc/discussion-papers/nat-performance.htm. The Clinton Administration reduced the size of federal civilian workforce by 426,200 positions between January 1993 and September 2000, http://govinfo.library.unt.edu/npr/whoweare/appendixf.html. This was why GAL 2-98 came about, why the SWAs stopped doing wage surveys and the job of determining prevailing wages for labor certification cases went to Bureau of Labor Statistics that was already using OES for non-labor certification wage survey purposes. PERM today is the fruit of the Clinton Era emasculation of labor certification funding and is the perfect expression of a dysfunctional program whose internal contradictions have never been resolved. What began as a desire to reinvent government ended in the shot-gun marriage of OES and labor certification when the Department of Labor abandoned the very concept of a meaningful prevailing wage to the tender mercies of its critics.

The H/L fee hikes sponsored by Senator Schumer are a continuation of what Senators Durbin and Grassley began in 2009, namely to use the OES wage system as a way to punish employers for sponsorship of work visas. Under the Durbin- Grassley proposal (S. 887 ), an employer who transfers an L employee to the U.S. for a cumulative period of time in excess of over 1 year would have to pay the prevailing wage, for Skill Level 2 in the most recent Occupational Employment Statistics (OES) Survey. Incidentally, the Skill Level 2 requirement also applies to H-1B workers, and thus if someone is legitimately an entry level worker, and can qualify for the H-1B visa, Durbin- Grassley would still requires the employer to pay the higher level wage even though a U.S. worker in a comparable situation may command the entry level wage. The full text of S. 887 may be found here, http://www.govtrack.us/congress/bill.xpd?bill=s111-887. The OES is not neutral. From the time of GAL 2-98 to today, those who seek to choke off employment migration to this country have consistently sought to expand its reach and impose ever more onerous conditions so that employers who had the temerity to file an application would think twice.

Moreover, when one thinks of OES, it should be in concert with the replacement of the DOT by O*NET with a dramatic collapsing of occupational categories and a downgrading of SVP quotients for many technical and scientific occupations that are the frequent subjects of labor certification. The end result of all this is artificially inflated wage determinations that must be paid by employers for less experience. We now have two forms of immigration restriction: numerical quotas set by Congress and qualitative restrictions applied by the DOL through the targeted deployment of administrative systems whose combined effect is to render successful immigration sponsorship more expensive, tedious and difficult. It would then be a mistake to believe that the world has not changed absent passage of CIR. In fact, the immigration calculus has shifted to a much less favorable posture so that legislative inaction has given way to administrative restraint.

There is another problem with the OES.The DOL violated the Administrative Procedure Act by adopting the OES system without providing stakeholders with the opportunity of notice and comment. Remember what BALCA said about attempts by DOL to make law through promulgating FAQs. In Matter of HealthAmerica, 06-PER -1 (BALCA July 16, 2006), the Board of Alien Labor Certification Appeals chastised the Certifying Officer’s reliance on FAQ No. 5:, : ” Whether FAQ No.5 provides persuasive authority depends on the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements and all those factors which give it power to persuade… We find that FAQ No.5 imposes substantive rules not found in the PERM regulations, nor supported by PERM’s regulatory history, nor consistent with notions of fundamental fairness and procedural due process.” Cannot the very same things be said with regard to the decision to abandon SWA wage surveys and use OES? We think they can and, for this reason, the decision to change the way wage surveys were conducted for LC purposes without notice and comment is an APA violation and unlawful. This represented an adoption by BALCA of the standard of deference previously articulated by the Supreme Court in Skidmore v. Swift & Co., 323 U.S. 134 (1944). Applying Skidmore deference, the weight accorded to such an administrative judgment “depend[s] upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.” Skidmore, 323 U.S. at 140. The failure of DOL to do any of this at the time they first applied the OES methodology to labor certification prevailing wage determinations following the promulgation of GAL 2-98 violated fundamental fairness and deprived DPL’s decision of Chevron-style deference. We concede that the DOL did follow APA when it promulgated PERM rules at 20 CFR 656. However, as noted above, these rules bar consideration of any form of incentive compensation. When confronted with this contradiction in the past, DOL has routinely claimed that it cannot control what BLS does Yet, facts are indeed stubborn things. Every time the DOL uses the OES to tell an employer what the wage should be, the DOL, is intentionally and consistently violating its own regulations which it cannot do under the Chevron test.

We propose that the best way to free up wages is to ensure that the worker is not held captive to the same employer for years. Once the H-1B worker arrives to work for the company that sponsored him or her, the requirement that a new employer again go through the same tedious application procedure be eliminated if the worker is in the same or similar occupation. Let’s free the H-1B worker to work for another company without the need to file a new petition or to even start his or her own company in the same occupation. Also, while this H-1B worker is being sponsored for permanent residency, he or she could be allowed to continue the green card process if working in the same occupation much sooner than the law allows presently. Presently, Section 204(j) of the INA only allows “green card” portability at the final stage of the process, when the adjustment application has been filed and has been pending for over 180 days. An Indian waiting in the EB-3 queue may have to wait for over a decade before being able to file an adjustment of status application. The law should be changed to make the H-1B completely portable following initial approval. Once this happens, an H-1B worker will be on the same footing as a US worker. The employer will have less of an incentive to keep captive an H-1B worker. The market will determine the wage to be paid to an H-1B worker who would have an easier access to another employer. If the H-1B visa becomes truly portable, the protection of the market, via occupational mobility, replaces the false protection of the LCA. Moreover, we also propose three possible ways to solve the OES problem, first urged by AILA in March 2001. In each case, the effect would be to ameliorate the artificial wage inflation now resulting from the allowance of incentive compensation and once again, as before the application of OES to immigration, restore the primary of market driven forces as the ultimate arbiter of salaries:(a) Back out all non-guaranteed calculations from the OES averages; (b) allow employers to include these same items in their wage offers for labor certification purposes; or (c) return to the pre-PERM era and allow variance in wage offers to bridge the gap between what OES defines as prevailing wage and what the employer can guarantee as base salary.

We know there is fear and loathing in the land for very good reasons. We know too that the misapplication of the OES wage methodology to immigration is not the whole problem or even most of it. Yet, it is key to what plagues our national conversation today for those who most loudly condemn substandard wages for foreign workers do not bother for a moment to acknowledge that those who decide these things are playing with the house’s money and a stacked deck. The most damning indictment against the Schumer Bill and the other manifestations of immigration protectionism is not that they will cost American job by inciting retaliation by our major trading partners, which will happen, or even that they promote a fortress American mentality at a time when our economic revival requires even greater integration into the global economy. Rather, it is that such misplaced antagonism rests upon an ignorance of history and serves more than anything else as an unspoken but undeniable admission that America’s best days are behind it. This is a lie that must not stand.

USCIS ISSUES GUIDANCE ON INCREASE IN H-1B AND L FEES

By Cora-Ann V. Pestaina

On August 19, 2010 USCIS held a stakeholders teleconference to provide much needed guidance on its implementation of Public Law 111-230 which was signed into law by President Obama on August 13, 2010 and will remain in effect until September 30, 2014. The panel included such recognizable names as Donald Neufeld. Although Public Law 111-230 increases H-1B and L-1 petition fees effective immediately upon enactment on August 13, 2010, USCIS will apply it to certain H-1B and L-1 petitions postmarked on or after August 14, 2010.

Essentially, Public Law 111-230 applies to employers who employ more than 50 employees AND have more than 50% of the workforce employed on H-1B, L-1 or on an employment authroization document (EAD) pursuant to L-2 status. Both full-time AND part-time employees must be counted and employers need only consider employees currently working in the U.S. Employers with employees on H-1B, L-1 or L-2 status, where the employees are constantly entering and leaving the US, should perform their calculation for purposes of Public Law 111-230 at the time of filing the relevant H-1B or L-1 petition. Public Law 111-230 only applies upon the petitioner filing its first H-1B or L-1 petition on behalf of the beneficiary. Accordingly, Public Law 111-230 does not apply when filing H-1B or L-1 petitions for extensions of stay by the same petitioner for the same beneficiary.

Several stakeholders had questions with regard to corporations with several subsidiaries each holding its own Federal Employer Identification Number. Stakeholders were concerned that depending on which corporation was used to perform the calculation, the employer could be subject or not subject to Public Law 111-230. USCIS offered no particular guidance on this except to point out that for the purposes of Public Law 111-230, it will use the definition of employer found at 8 CFR§214.2(h)(4)(ii) which states:

United States employer means a person, firm, corporation, contractor, or other association, or organization in the United States which:

(1) Engages a person to work within the United States;
(2) Has an employer-employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee; and
(3) Has an Internal Revenue Service Tax identification number.

Under Public Law 111-230, in addition to the filing fee ($320), the fraud fee ($500), the education and training fee (in the case of H-1Bs – $750 or $1,500) and the optional premium processing fee ($1000), affected petitioners must submit an additional fee of $2,000 if filing an H-1B petition and $2,250 if filing an L-1 petition. USCIS emphasized that it prefers a separate check made out to “Department of Homeland Security” for the required amount. Petitioners seeking guidance on what to write in the memo line on the check will have to wait, but can write “Public Law 111-230 fee” for now. In order to be consistent with the intent of the legislation, USCIS expects the fee to be paid by the petitioner.

USCIS stressed that petitioners who may have already submitted an H-1B or L-1 petition and think that the law may apply to them, should wait for a Request for Evidence (“RFE”). They will be given 30 days to pay the fee or provide evidence as to why they are not subject to the fee or the petition will be denied. USCIS assured listeners that an H-1B or L-1 petition would not be rejected for lack of this fee but would receive an RFE. Going forward, USCIS expects Petitioners who may appear subject to Public Law 111-230 (e.g. a dependent H-1B employer) to include an attestation along with its petition explaining why it is not subject to Public Law 111-230. Petitioner should include whatever evidence it deems appropriate along with this attestation. Soon USCIS will provide further guidance on what evidence it expects to receive.

USCIS is working on new Form I-129 which will include questions pertaining to this new law and will assist petitioners in determining whether the law is applicable to them. USCIS could not comment on any implementations of the law by the Department of State (e.g. re L-1 blanket petitions).

THE WORLD ACCORDING TO SENATOR SCHUMER: IF IT’S NOT A CHOP SHOP, IT’S A BODY SHOP

By Gary Endelman and Cyrus D. Mehta

Dear Senator Schumer:

We know that you and your colleagues with great aplomb approved a border security bill, H.R. 6080, that would provide $600 million in funding for putting $1,500 border security to prevent illegal immigration, which will be paid for by raising fees on certain H-1B and L-1 visa petitions. The hike in fees, $2,000 for an H-1B and $2,500 for an L-1, will be paid by a company that has 50 or more employees if more than 50% of these employees are admitted in H-1B or L status. Most of the companies that will face these punitive hikes will be Indian IT companies. The President signed the bill on August 13, 2010. What Indian IT consultants have to do with border security remains a genuine head scratcher. In a letter to U.S. Trade Representative Ron Kirk, India’s Commerce Minister Anand Sharma said the bill unfairly targets Indian companies and estimated it would cost the country’s firms an extra $200 million a year. “It is inexplicable to our companies to bear the cost of such a highly discriminatory law,” Sharma wrote. Perhaps the fact that these same companies subsidize US social security solvency to the tune of $1 billion per annum without any benefit flowing the other way might also raise hackles in Bangalore. http://www.indiapost.com/india/8922-India-protests-bill-raise-H1B-visa-fees.html

India bashing is a potent political strategy these days as you probably know. In the recent contest over the Democratic Party’s nomination for the Arkansas Senate seat held by your colleague Blanche Lincoln, business lobbyists funded controversial television ads attacking her challenger, Lieutenant Governor Bill Halter, for allegedly profiting from a software company that supposedly outsourced American jobs to India. (Halter denied the charge.) What did Senator Lincoln do? Take a listen:” With Indian music playing in the background, one of the ads featured several Indians thanking Mr. Halter for sending jobs to Bangalore. Although Ms. Lincoln condemned the ads as racially offensive, her campaign distributed mailers, emblazoned with pictures of the Taj Mahal, making the same charge.”http://india.foreignpolicyblogs.com/tag/indo-us-relations/ . Of course, this will not prevent President Obama from visiting India this coming November to highlight its importance to the United States. Will there be room for you on Air Force One?

Hopefully, Senator, the Indian Government will not retaliate against your visa fee hike in advance of the President’s arrival. Consider for a mement a warning by Azim Premji, the executive chairman of Wipro, one of the companies you singled out in your bill:

“I think the United States must realize that today 60 to 70% of the growth of the revenues of large American companies comes from India and China. These are the growth markets. It’s a simple thing for our government to raise tariffs. It’s a simple thing for our government to say no American corporation will get central or state government contracts, or defense contracts. On the other axis, we’re so open to global corporations to bid on exactly the same terms as Indian corporations. You’ll get a spate of protectionism coming, I have no doubt. You can see it in China, but they do it very subtly. Nearly 55% of the economy of China is government.”

http://www.businessweek.com/globalbiz/blog/globespotting/archives/2009/05/wipros_premji_o.html

Senator, your 50/50 rule, which is modeled after what Senators Durbin and Grassley have long advocated, http://www.cyrusmehta.com/News.aspx?SubIdx=ocyrus20099111575, could trigger a formal complaint by the Indian Government to the World Trade Organization on the grounds that the United States is failing to abide by its obligations under Mode 4 of the General Agreement on Trade in Services (GATS) that regulates services provided by “one Member through the presence of natural persons of a Member in the territory of any other member.” GATS Training Module: Chapter 1: Basic Purpose and Concepts, WTO Web site available at http://www.wto.org/english/docs_e/legal_e/06-gatt.pdf_e.htm. A recent study by the National Foundation for American Policy did not dismiss this possibility but expressed genuine concern that the United States would be deemed guilty of a restrictive trade practice, thus leaving us with the Hobson’s choice of revising our immigration laws or risking WTO discipline, not to mention a severe Indian response. http://www.nfap.com/pdf/GATSLegalAnalysis_NFAPPolicyStudy_June2010.pdf
We all make our living in a global village, Senator, and your fee hike is a boomerang that is going to come back around to hurt the very workers you want to protect. That is why business leaders are muttering in their martinis. US India Business Council President Rom Somers speaks for many:

It is totally outrageous in this day in age, when the world is so interconnected by the Internet, that draconian measures would be floated by the US Congress that tarbrushes Indian companies as ‘chop shops’…Our companies are creating value around the clock thanks to tie-ups with India, keeping us ahead of the global competition…Cutting our nose off to spite our face by imposing restrictions on movement of high-tech professionals will hobble American companies’ ability to compete in the global marketplace,” he said….Value addition is being provided by Indian companies 12 hours a day, 7 days a week for US companies, complimenting the value being generated by the American work force. When our day winds down and our workforce shuts the lights off, the Indian workforce awakes for their morning to continue adding value,” Somers added.”

http://www.deccanherald.com/content/87773/us-industry-outraged-senators-chop.html.

You might be interested to read a 2008 report from the US India Business Council concerning Indian investment in the United States. Covering 12 states, Indian corporate titans handed out paychecks to 30,000 Americans; the Tata Group, by itself, operated 16 businesses with 19,000 workers and an estimated total investment of $3 billion. http://www.expressindia.com/latest-news/Indian-firms-employ-over-30k-US-citizens-Study/332089/.

Senator Schumer, we are not sure whether you read our blog that we posted the night before you approved HR 6080 in the Senate on August 12, 2010, http://cyrusmehta.blogspot.com/2010/08/silence-in-time-of-torment-throwing.html, where we reminded you that the use of pejoratives such as “chop shop,” or even “job shop” with regard to Indian’s crown jewel IT company, Infosys, were racist terms, which have been legitimized in public discourse much as racist terms found acceptance in the Jim Crow era. You clarified the next morning, August 12, 2010, that the use of “chop shop” was not appropriate, but then indicated that the more appropriate term ought to have been “body shop,” which continues to rub salt in the wound and demonstrates an ignorance of the very real value that firms like Infosys, Wipro, Tata and other smaller companies with similar business models bring to American business. In your August 12 speech, you referred to the so called “good” H-1B folks at Oracle, Cisco and Apple who create products and technologies. But IT development is not just about making products such as iPhones or iPads. The same skills and ingenuity are used in efficiently providing IT services to major American businesses that run the economy. You later said, “If you are using the H-1B visa to run a glorified international temp agency for tech workers in contravention of the spirit of the program, I and my colleagues believe that you should have to pay a higher fee to ensure that American workers aren’t losing their jobs because of unintended uses of the visa program.” But Infosys and similar companies are not temp agencies and have ingeniously taken advantage of a global around the clock business cycle. They have been made possible by high speed internet, and the concept of software as a service is a unique Internet driven strategy. Moreover, they have efficiently provided these services to American businesses in a time of rapidly aging populations in the United States and Europe, which will result in a significant shortage of IT workers in the near future, http://www.visalaw.com/00feb2/11feb200.html.

As Angelo Paparelli astutely noted in his latest blog, “Temp agencies, whether domestic or foreign, supply temporary workers to fill short-term needs, sometimes at lower costs. Global sourcing enterprises use a legitimate business model that significantly benefits governments, businesses, citizens and customers by offering better quality, 24/7 service across time zones, and speedier start-up and delivery, while allowing customers to focus on core competencies. Global service providers are not ‘glorified international temp agenc[ies].’ They are no less vital to American businesses than are the hundreds of private contractors who serve the federal government, including the Departments of Justice and Homeland Security. Regrettably, the border-law’s definition of businesses that must pay the ramped-up H-1B and L-1 filing fees is not carefully tailored to reach only temp agencies engaged in body-shop activities. It unjustly imposes a protectionist tax on legitimate multinationals in the global sourcing industry,” http://ping.fm/hl1sO.

Senator Schumer, you focus only on the alleged exploitative aspects of the “job shop” business mode, but ignore completely the extent to which American companies are partnering with these Indian IT giants to create new business models that will transform the way services are provided to consumers on the most important issues facing them in their daily lives. Here is a great example, http://www.moneycontrol.com/news/business/satyamcisco-announce-collaboration-for-health-solutions-_311005.html. We know that you are too busy to find out much about the business model that these Indian companies use so perhaps we can do some of your research. These “glorified international temp; agencies” actually are some of the best run companies in the world . They are pioneers in workforce development and much of their mushrooming growth is not based upon smoke and mirrors but rather upon a holistic engagement with employees, treating them not as a cost to be controlled but a capital asset to be developed. During your upcoming recess, we recommend that you crack open a terrific book on this very subject called The India Way by Peter Capelli, Harbir Singh, Jitendra Singh and Michael Useem. http://hbr.org/product/india-way-how-india-s-top-business-leaders-are-rev/an/12037-HBK-ENG It’s a real page turner! Just take a look at one of the malefactors you mention in your speech, Infosys. In 2002, they had 10,700 employees and total revenues of $545 million. Seven years later, they employed 104,900 with gross revenues of $4.6 billion. Since the H quota has been set at the artificially low level of 65,000 during this time, maybe they were doing something else right?

While we applaud and admire your commitment to Comprehensive Immigration Reform, and realize that you had to pass the border bill to show Republicans that you did something to control the border in order to get some bipartisan support, and we do hope your trust in them was not misplaced, we think it is a fatal mistake not to challenge you on this point and concede that the business model used by Infosys and others is bad for America. This is what The Economist has to say, “What’s also funny about all this chest-thumping service-sector protectionism is that it comes from the world’s leading exporter of commercial services, who you’d think would understand the need for open markets in an industry where it is the world’s biggest player. In 2008, the last year for which the WTO has comprehensive worldwide data, America’s exports of commercial services were around 5 times India’s (and about 28% of its total exports). And while latecomers like India have been playing catch-up, America’s service-sector exports have not exactly done badly: they more than doubled in value between 1999 and 2008, when the US had a big surplus in its commercial-services trade.” http://www.economist.com/blogs/freeexchange/2010/08/trade_1. A great point. If all countries were to adopt your approach, guess who would be the big loser, Senator Schumer?

The wellsprings of American prosperity Senator are watered not by keeping talent out but by inviting talent in so that invention is encouraged, ideas are shared, and new technology developed . That Senator is what gives America its edge in the information age and keeps us a step ahead of our competitors. Why give that up? You are 100% right to worry that not enough American kids are studying computers on campus; as a result largely of the dot.com bust, the Computer Research Association that tracks these things reports that, at its nadir, the number of computer science majors undergraduate degrees at 170 institutions shrank to 8,021 in the 2006-2007 academic year. But, cheer up Senator! Since then, assisted by the advancement of computer research into emerging fields, enrollments have soared by 14%. http://www.computerworld.com/s/article/print/9180646/Senator_Schumer_H_1B_use_und

And here’s an interesting piece in Fortune Magazine, “It would be easy to imagine Reno, Ohio, as the type of place that would be hit hardest by outsourcing – a small American town losing out to the invisible hand shifting jobs to places like Bangalore and Guangzhou. Instead, outsourcing is bringing the jobs to Reno. Across the street from an Army Reserve center and next to a farm, a customer-service call center hums, its 250 workers answering phones for online travel agency Expedia. The center’s owner? Indian conglomerate Tata Group.” http://money.cnn.com/magazines/fortune/fortune_archive/2007/08/06/100141303/index.htm?postversion=2007080305. Senator Schumer, do you really oppose this?

Finally, while you admirably corrected the record by indicating that the Indian firms that you mischaracterized as “chop shops” were not engaged in illegal behavior, you still seemed to imply that the so called staffing agencies were responsible for reducing wages and cite to a flawed and biased study of the Economic Policy Institute, http://www.epi.org/analysis_and_opinion/entry/enforcement_needed_in_h-1b_visa_laws/. This study fails to take into account that employers must pay wages in accordance with DOL recognized prevailing wage surveys. If H-1B workers constitute a miniscule fraction of the employed population of the US, and wage surveys must take into account a broad cross section of employers, how can H-1B workers depress wages? Moreover, H-1B dependent employers, in order to escape the more onerous attestations, pay H-1B workers $60,000 or more, even if they may be entry level programmer analysts working in Minot, North Dakota! Perhaps, you could have looked around and referred to a recent peer reviewed study by Professors Lucas and Mithas of the University of Maryland School of Business by Professors Lucas and Mithas of the University of Maryland’s Business School, which demonstrates quite the opposite. H-1B and L visa workers in the IT Industry were paid 6.9% more than their American counterparts, and green card holders took home more than 12.9% than their American counterparts. This study confirms what we immigration lawyers have always known – that US employers seek out workers on H-1B and L visas because they are really good and not because they can get away by paying them cheaply. We also know that employers are not going to go through the hoops and hurdles of filing an H-1B or L visa petition, pay filing and attorney fees, take pains to comply with all of the complex regulatory requirements (including paying the prevailing wage for H-1B workers and those being sponsored for green cards through labor certification), and respond to burdensome requests for evidence, unless they believed in the worth of this foreign worker, http://cyrusmehta.blogspot.com/2010/05/study-shows-that-h-1b-and-l-1-workers.html.

Over the long haul, India is more than a promising market for Silicon Valley, it is a strategic alternative. Just as economic prosperity in the 20th century required investment and raw materials, competitive dominance in the information age of the new millennium will depend, in no small measure, on who can prevail in the global hunt for the best technological talent. Those who want to protect US jobs by closing down the Indian pipeline are having precisely the opposite effect. By making it more difficult to work and remain in the United States, such policies will either enable the Indian IT industrial complex to reach critical mass much earlier than would have otherwise been the case or give our chief competitors in Europe, Japan and China a badly needed infusion of talent. Beyond this, there is a deeper point, namely this: India is on the rise. The question is not whether this development will take place but, rather, whether, when it does, the relationship with the United States will be characterizaned by partnership or competition. Senator Schumer, your brand of immigration protectionism will not prevent Bangalore from developing into a strategic alternative to Silicon Valley but it most certainly will destroy any chance for the kind of entrepreneurial amity and technological cross-fertilization that will allow America to reap the benefits of this Indian renaissance. Beyond that, IT wages in India will either fall or slowly rise since the supply of qualified workers will grow. This means, in turn, the US companies, under enormous cost pressures, will be unable to resist the obvious solution of sending IT jobs to India or simply establishing Indian subsidiary operations in the first place. Wages are transnational, not domestic, and what is a prevailing wage cannot be defined in only, or even primarily, a domestic context and make sense since the economic systems in which people work are increasingly global without much interest in, or respect for, national boundaries. Skill not geography counts. Immigration is an economic force not a political problem and must be dealt with as any other economic issue. In the long run, American jobs will hemorrhage if wages are kept artificially high when world markets offer attractive alternatives at high quality but much lower cost. If you think this serves US national interest, ask the thousands upon thousands of steel workers in Ohio and Pennsylvania whose jobs are now being done in Korea. The American economic miracle depends not on cheap labor but on productive labor capable of creating jobs in industries that have yet to be invented.

If you think that it is cheap for Indian workers to come here, Senator, how much cheaper would it be for them to stay at home and have US jobs come to them? We are, it seems, no longer the only game in town.Your bill will only serve to accelerate this change in the Indian IT business model so that, rather than coming to the customers, India’s IT giants will have the customers come to them. Infosys Technologies, the second largest software exporter in India with over 66 per cent of its revenues coming from North America , has already begun to plan for this transition. Kris Gopalakrishnan, CEO and ME of Infosys Technologies, predicts that, over time, as more US technology companies establish a presence in India, Infosys will be able to service them while cutting back on H-1B sponsorship.http://www.domain-b.com/infotech/itnews/20100814_models_oneView.html . You will have made the H visa irrelevant Senator but the jobs at issue will also have gone away, not just the H1B jobs but those of the American workers that are inextricably linked with them. Your bill forces India to respond for their failure to do so will only serve as a green light to the rest of their Western customer base to follow your example. That is the real fear. http://economictimes.indiatimes.com/articleshow/6285448.cms An expression of this anxiety over the future was immediately played out on the Mumbai stock exchange where shares of Infosys Technologies Ltd., Tata Consultancy Services Ltd. and Wipro Ltd. declined across the board. Tata Consultancy, the country’s largest IT concern fell l 1.7 percent; Infosys, the second-biggest dropped 1.6 percent and Wipro slid 2.1 percent on the Bombay Stock Exchange, compared with a 0.4 percent loss in the benchmark Sensitive Index. http://www.businessweek.com/news/2010-08-10/india-expresses-concern-on-discriminatory-u-s-bill.html. Change that was inevitable will now come more suddenly and with greater force. The thousands of Americans working in India will almost certainly be the collateral damage swept up by the coming Indian response.

Senator Schumer, we know that you have good motives because you desire Comprehensive Immigration Reform and pushed the border bill to eliminate any excuses that nothing was being done at the border first. I think you will find lots of people who are inherently anti-immigrant. They will continue to ask for more enforcement and will never agree on a CIR measure. I hope we are wrong, and that you did not give away a previous bargaining chip prior to passing a CIR proposal, and have it paid from a group of employers who have nothing to do with illegal immigration at the Mexican border.

Thank you for hearing us out, Senator Schumer. In case you are stuck and cannot get CIR passed, and see more jobs moving outside the US because of the hike in fees and other protectionist proposals, please do not hesitate to call upon us and we will be glad to write another letter of advice.

SILENCE IN A TIME OF TORMENT: THROWING INDIAN IT FIRMS UNDER THE BUS

By Gary Endelman and Cyrus D. Mehta

A Border Security bill, H.R. 6080, which was passed by the House on August 10, 2010, proposes to add 1,500 more border officers on the US-Mexico border. It proposes to pay for their salaries and other support systems by substantially raising the filing fees of H-1B and L petitions filed by companies that employ 50 or more employees if more than 50% of these employees are admitted on H-1B or L visas. H.R. 6080 is identical to S. 3721 passed in the Senate on August 5, 2010. When discussing the bill, Senator Schumer, who initiated the fee increase, indicated that the burden of the increased fees – $2,000 more for each H-1B and $2,500 more for each L – would fall on Indian IT companies and likened the largest Indian IT giant, Infosys, to a “chop shop,” http://blogs.wsj.com/indiarealtime/2010/08/06/us-senator-infosys-is-a-chop-shop/. It is unclear whether the Senator meant that Infosys was like one of those shady places where stolen cars parts are surreptitiously dismantled and sold, or whether it was a slip of the tongue and he actually meant “job shop.” Since a revenue generating measure must first be initiated in the House and S. 3721 is technically infirm, H.R. 6080 will again be sent to the Senate tomorrow for a vote

We ask that the Senate seriously consider removing the increased fee provision for a number of reasons. The very use of the pejorative term, be it “chop shop” or “job shop,” which has been legitimized in public discourse much as racist terms found acceptance in the Jim Crow era ignores the very real value that firms like Infosys, Wipro and Tata bring to American business. They lower costs, find top drawer talent and keep US competitiveness at a high level. That is why all major US corporations, and many governmental entities, use them and why not using them would make business more expensive and less able to maintain leading positions on the world economic stage. The use of this term reflects something more profoundly disquieting, a cultural insularity that is unworthy of a great power, a state of mind that insults the very nations whose good will we claim to be courting.

Our elected representatives ought to also consider that Infosys employs 1,300 citizens and permanent residents in the US and has been working towards hiring over 1,000 additional people over the past few quarters, http://www.financialexpress.com/news/chop-shop-reference-is-distressing-says-infosys/658222/. Also take note that 372 acquisitions worth $21 billion and 127 Greenfield investments worth $5.5 billion by Indian companies has created nearly 60,000 jobs between 2004 and 2009, a report said on August 10, http://www.india-us.org/?page=Publications. Also worth noting is an extract from the remarks Secretary of State Hilary Clinton delivered at a US-India CEO Summit on June 22, 2010 in Washington DC, http://www.state.gov/secretary/rm/2010/06/143535.htm

As both President Obama and Prime Minister Singh have said numerous times in the last 16 months, the increased cooperation between the United States and India is the cornerstone of our 21st century strategic partnership. The President and the prime minister reinvigorated this forum last year based on the idea that Washington and Delhi need to catch up to the business and innovation cooperation that is already happening in New York and Mumbai. In the latest example of the growing links between our countries and our economies, just last week Congressman Jim McDermott unveiled a report by the India-U.S. World Affairs Institute showing that Indian investment in the U.S. grew by an estimated 60 percent in 2009, to over $7 billion. That same report indicated that trade in goods between our countries tripled between 2004 and 2008, and that since 2004 Indian acquisitions in the United States have supported approximately 40,000 jobs here in our country, with manufacturing exports to India linked to another 96,000 jobs. That’s great progress and it’s a solid base on which to build.”

Immigrant rights advocates are legitimately opposed to the bill as putting a few more troops on the border does nothing to solve our immigration problems and distracts from the main objective, which is to repair a broken immigration system through Comprehensive Immigration Reform. But advocates have also remained strangely silent about the penalties on India-based employers in this bill, and we wonder whether it reflects a tendency to throw Indian IT firms under the bus. Is it that by providing more disincentives to Indian firms, there will be less usage of H-1B numbers so others can enjoy them, along with the impact that the January 8, 2010 Neufeld Memo and the intensely prejudicial scrutiny of Senator Grassley has had on IT firms? http://cyrusmehta.blogspot.com/2010/01/new-uscis-memo-on-employer-employee.html This is all too reminiscent of the division within the pro-immigration community in 1996 when business groups remained moot on the sidelines while Congress shredded due process protections for the undocumented in the vain hope that they would somehow escape the whirlwind. Although the more onerous H-1B dependent employer provisions in the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) were targeted towards Indian companies, on February 17, 2009, these additional attestations have also been imposed on employers who received funds through the Troubled Asset Relief Program or under section 13 of the Federal Reserve Act, through the Employ American Worker Act (EAWA). There has clearly been an unspoken but transparently real anti-Indian animus that can be seen in much of US immigration policy. The impact of the priority date system shows it as we have demonstrated in The Tyranny of Priority Dates, http://drop.io/EndelmanMehtaTyrannyofPriorityDates/m. The refusal to accept 3 year Indian university degrees, regardless of how prestigious the institution is, shows it. We need to denounce this bias for what it is, and also because these biases generally come back to haunt all other immigration groups.

Will the bill actually be able to pay for itself through the increased fees or will it increase the government’s debt? H-1B usage by the top Indian IT firms has been down in 2009, http://www.hindustantimes.com/world-news/americas/US-visa-curbs-aren-t-scaring-India-Inc/Article1-584874.aspx. As our esteemed colleague Angelo Paparelli has noted in his recent blog, no analysis has been undertaken as to how much revenues can be generated through increased fees from these companies, and it also likely that more jobs will move overseas “because America is obviously and increasingly hostile to global businesses,” http://www.nationofimmigrators.com/?p=346.

The increase in fees will only serve to lower IT wages in India and serve as an incentive for more American IT jobs to leave the US. Only by increasing the H-1B numbers can the wage differential between American and Indian IT workers be narrowed. This is a perfect opportunity to remind everyone that, despite India’s vast population, there is a real and growing IT talent shortage in India, http://blogs.hbr.org/kanter/2009/03/what-indias-talent-shortage-me.html. Current immigration policy undercuts the ability of US IT companies to remain in the US by choking off H numbers and L numbers so that there their Indian competitors can lower salaries and attract US business. Not only will this lower IT salaries in India and drive more jobs out of US but it will accelerate the ability of the Indian IT industry to develop a critical mass of IT talent so that, rather than just attracting jobs from the US, they will have the ability to present a strategic alternative to Silicon Valley. This is a quantum difference from simply enticing US IT jobs to migrate to India. This will make Silicon Valley strategically irrelevant so that, regardless of what the H quota would be, or how many restrictions are attached, the numbers will gather dust since the desire to use them will no longer be present. The irrelevance of Silicon Valley is neither beneficial for the US nor India since the growth of Indian IT was largely fueled by Indian immigrants who benefitted and thrived in Silicon Valley.

This latest action shows the continuing conflict or tension between the global economy in which the US, like all advanced nations, participates and a national immigration policy that responds to domestic pressures. While the former requires the regular, predictable yet controlled movement of all forms of capital, including human capital, the latter does an injustice to the very groups that it claims to protect by promoting the exodus of white collar jobs. This kind of anti-Indian bias can only serve to conflict with, and so limit the effectiveness of, US attempts to improve the overall US-Indian relationship, precisely in the way that the Chinese Exclusion laws complicate US relationships with Japan and other Asian nations in the run up to World War II. At a time when we have signed a nuclear cooperation pact with India, when we seek expanded access into many different sectors of the Indian economy, to pursue immigration policies whose underlying and barely concealed purpose is to keep Indians out of the US and make it difficult for those already here to stay permanently makes no sense, if only from the narrow perspective of US national interest, let alone our moral stature as a leader on the world stage.

This is our main critique of the punitive legislative proposal against Indian companies. We object not because it insults India, which it does or even because it legitimizes Indian bashing as acceptable political discourse which is most certainly true. Rather, we object because it conflicts with American foreign policy and, by making the US economy less competitive in the global marketplace, fails to achieve its stated objective of protecting US workers against the winds of change. We seek to sail with these winds, to make them our friend and to benefit from the warmth of their embrace. So should we all. In a post-9/11 world of societal anxiety and pervasive joblessness, it is not hard to understand why Indian IT companies make an irresistibly inviting target. To those who take refuge in this, and in the possibility that such nativist wrath will not come to focus its fury on them, we urge most fervently that they think again and consider the teaching of German pastor Dietrich Bonhoeffer who gave his life in the struggle against Nazism:

First they came for the Communists, but I was not a Communist so I did not speak out. Then they came for the Socialists and the Trade Unionists, but I was neither, so I did not speak out. Then they came for the Jews, but I was not a Jew so I did not speak out. And when they came for me, there was no one left to speak out for me”

(We give credit to our friend and colleague, Laura Danielson, a noted immigration attorney, for sowing the seeds for some of the ideas in this post)