Yesterday, President Donald Trump released an executive order that extended an existing ban on immigrant work visas through the end of the year. The move prohibits immigrants who are outside the United States from applying, but because new visas are generally issued in October, the impacts of the new rules will be felt well into 2021.
The proclamation specifically targets H-1B and H-2B visas, as well as J and L visas. As a result, the San Francisco Bay area, with its high concentration of STEM-based industries, could be disproportionately impacted.
To better understand the executive order’s potential impacts on the startup community — and the tech landscape in general — I interviewed TechCrunch contributor Sophie Alcorn, a Silicon Valley-based immigration lawyer.
TechCrunch: How long does the executive order prohibit issuing new work visas?
Sophie Alcorn: The new ban will last until at least December 31, 2020 and may be continued longer “as necessary.” The government plans to revisit this order within the next month. Every 60 days after that, the Departments of State, Labor and Homeland Security will be recommending modifications if necessary.
What will be some of the initial impacts of suspending new H-1B visas?
Beneficiaries of this spring’s H-1B visa lottery (for government fiscal year 2021) will not be able to apply for visas at consulates this year. Normally after the I-129 petition gets approved in the summer, applicants will go for visa interviews at consulates abroad to request H-1Bs and to enter the U.S. before the October 1 typical start date. That will probably not be possible this year.
For individuals with technical, professional and research backgrounds and companies that engage in research, a big effect is that there won’t be new J-1s issued this year either for interns, trainees, researchers and specialists who are currently abroad.
Do you have a sense of how many J-1 visa holders there are in the Bay Area?
I estimate that there are at least 15,000 J-1 visa holders in the Bay Area. In 2018, California had over 35,000 participants across over 600 sponsors according to the State Department. The purpose of the program is to promote cross-cultural exchange.
J-1s are not just au pairs, who are vital to so many families, including those with special-needs children, but many other types of workers as well. Other examples are post-doctoral researchers at universities such as Stanford and Berkeley in myriad fields. J-1 holders are also conducting advanced research at private tech companies in fields such as AI and semiconductors and genomics.
There are also several government labs conducting cutting-edge research in the Bay Area that rely on the most brilliant international scientists from around the world, such as at NASA Ames Research Center at Moffett Field in Mountain View and Lawrence Livermore National Laboratory.
J-1 holders’ spouses are eligible for work permits; often these individuals are brilliant professionals in their own right working at large tech companies as well.
Who is most likely to use L-1s?
Many international startups expand to the U.S. through the L-1 visa program. They often have a company that’s already making money in another country and they come to the U.S. through a country-sponsored incubator or accelerator program. They are often looking to expand to the U.S. market and are often interested in hiring a U.S. sales team. Additionally, they often seek venture capital funding from U.S. investors who wish for them to have a strong U.S. presence.
Many large tech companies use L-1A and L-1B visas as well, to bring in highly skilled managers and individuals with specialized knowledge of the company from their overseas offices to the States. Many large companies transfer international employees who were never selected in the H-1B lottery and who ran out of time on OPT or STEM OPT abroad to fulfill the requirements, so these individuals can return after a year of employment in another country. That won’t be possible in 2020.
Who qualifies for the exceptions?
There are two major exceptions to this executive order. The first is for individuals working in jobs related to the U.S. food supply chain. So anybody working in agriculture and agtech who wants an H-1B, J-1 or L-1 might be able to get a visa despite the order.
Also, there is a “national interest” exception. So if somebody is working on a technology that will create jobs for Americans or cure COVID-19, I think we can make an argument here for them too.
What else does the order consider?
The administration is also going to take a look next at whether immigrants who are currently inside the U.S. on H-1B status or who are seeking EB-2 or EB-3 green cards are a “disadvantage” to U.S. workers by considering changes to the Labor Condition Application process for H-1Bs. The Labor Department will also be investigating companies for failure to meet these labor conditions or misrepresentations about them.
Has issuance of visas declined since the pandemic began? Across the board, or certain ones?
Yes. This is another situation where the administration’s “bark” is worse than its “bite” because most of the consulates have been closed for months and have not been issuing visas anyway.
Routine visa services at all U.S. consulates and embassies around the world were suspended as of March 20, 2020. U.S. consulates and embassies continue to provide urgent and emergency visa services as resources allow.
Each consulate is slowly making its own plans to reopen based on the physical environment. Since every office has a different physical layout, they will need to make tailored plans to ensure social distancing to prevent the spread of COVID-19 to protect the State Department personnel and individuals seeking visas.
There is talk of some of the consulates beginning to start accepting some appointment scheduling, but this is being rolled out slowly, and for months the only visas that have been issued are typically on an emergency basis.
So depending on when the consulates were going to reopen this year merely based on pandemic-prevention reasons, the marginal effect of this order might not actually be that large.
Are H-1B visas capped?
Yes and no. Some H-1Bs are subject to this cap, and some aren’t. Of the 85,000 limit on capped H-1Bs every year, in my experience we’ve typically had two or three times that many lottery applicants every year since we came out of the 2008 financial crisis. Back in the early 2000s there was a special law that temporarily increased the H-1B allotment, but it was discontinued.
The data is confusing because USCIS adjudicates many H-1B transfers, amendments and extensions every year that are not subject to the cap. For example, in fiscal year 2016, about 400,000 were filed and 87% were approved. Then in fiscal year 2017, the total number of petitions dropped to 336,000 and only 59% were approved. In fiscal year 2018, the number of applications increased again back to over 418,000, with a 79% approval rate.
Do you have a sense of which countries represent the bulk of H-1B recipients?
The most recent data is that most H-1Bs are issued to people born in India, which accounts for about 70% of the total. Additionally, about 10% of H-1Bs are issued to individuals born in China. The rest of the world is pretty evenly distributed, with Canada, South Korea, the Philippines, Mexico, Taiwan and the U.K. taking the lead.
What’s the average annual salary for an H-1B STEM worker?
The average salary for some of the top jobs across the country is typically about $80-100,000. There is a minimum required H-1B salary based on the job classification and the geography of every position.
For top companies recruiting top talent, the wages can easily exceed the required minimum. Wages could be higher in geographic areas with higher cost of living and for exceptionally talented employees. There is also some concern that some employers use the program to pay international employees below-market wages.
How has your business changed, if at all, since the 60-day green card ban? What do you expect to see in the immediate future?
When I got sworn in, I took an oath as an “attorney and counselor at law.” We are spending more time than before in our role as counselors of the law, advising and supporting our clients on strategy and helping to prepare them to have the strongest visa and green card application and petitions possible prior to the time of filing.
We’re rolling out some special programs in the next couple of weeks to support individuals to take immigration into their own hands, including a course on how to qualify for O-1A visas (which are not affected by the ban) and green cards such as EB-1A and EB-2 NIW, which don’t require immigration sponsorship. These programs are more and more important to folks in tech as they don’t require a major financial investment or marriage. Folks who are interested can sign up to learn more.
What sort of questions have you been getting from clients since news of the EO was leaked?
We’ve been getting tons of “quick questions” all day long, and for the last several weeks as well. A lot of people want to clarify that this doesn’t affect O-1s and E-2s.
They also want to know if it will affect people already inside the U.S. People are also concerned about whether there will be any changes to OPT (Optional Practical Training) and STEM OPT, but so far there have been no changes.
If the government awards H-1B visas by highest salary instead of lottery, how would this impact startup hiring?
The government will also next look into the allocation of the H-1Bs in the lottery each year to ensure “that the presence in the United States of H-1B nonimmigrants does not disadvantage United States workers.”
If they choose to award H-1Bs by highest salary, they may need to go about it through a regulatory change with a proposed rule rather than through the route of an executive order.
If that happens, the biggest effect I see would be to very early-stage tech companies in Silicon Valley. If they have only raised a couple hundred thousand dollars, it may be very difficult to sponsor a founder as an employee for an H-1B transfer. If an early-stage company has already raised a few million dollars from a VC, it might be more palatable.
This would be a blow to very early-stage tech companies trying to get off the ground. I want the administration to see that the economic impact created by immigrants contributing to early-stage tech companies is a huge potential engine for growth for the recovery of the U.S. economy. Immigration in Silicon Valley creates jobs for America.
Who is not affected?
Many commonly used visas in Silicon Valley are not affected by the ban. Some of the categories of people not affected by this executive order include:
- People seeking O-1A visas for extraordinary ability
- People seeking E-1 and E-2 visas based on trade and investment at companies from countries that have treaties with the U.S.
- TN status for Canadian and Mexican citizens
- Green cards in the EB-1 category, such as for people with extraordinary ability, researchers and multinational managers and executives
- People who are outside the U.S. and have valid H-1B, L-1 and J-1 visa foils already placed in their passports subsequent to a visa interview
- People in the I-485 adjustment of status process currently in the U.S.
What next steps do you recommend for current green card holders? What about people abroad who were planning to apply this year?
Current green card holders should consider filing for re-entry permit before departing since several people have gotten stuck outside the United States due to the pandemic and might be at risk for a determination that they have abandoned permanent residence if they have been out of the country for too long when they return.
People seeking green cards this year should definitely consider whether they qualify to file an I-485 for adjustment of status within the United States as opposed to departing and seeking consular processing of an immigrant visa.
People who are currently outside the United States should talk to an attorney about their options but may have to wait until the consulates reopen to continue processing immigrant visa applications. If they currently possess a dual intent non-immigrant visa then they should speak with an attorney about whether they can legitimately enter the United States and seek adjustment of status here.
The question of immigrant intent is a very touchy one and making a mistake about it could potentially permanently bar somebody from ever coming into the United States, so it’s crucial to be guided by an expert attorney in such situations.