Senate Version of Stimulus Bill to Restrict H-1B Visas for TARP Recipients

Today, Tuesday, February 10, the U.S. Senate is expected to vote and approve a version of the Stimulus Bill which President Obama has been pushing very hard over the past weeks.  The version of the Stimulus Bill contains a provision which would automatically and for a period of two years make all employers who are recipients of TARP funds H-1B dependent employers.

The relevant section of the Stimulus Bill is Sec. 1610:

Sec. 1610. Hiring American workers in companies receiving TARP funding.

(a) Short Title- This section may be cited as the `Employ American Workers Act’.

(b) Prohibition-

 (1) IN GENERAL- Notwithstanding any other provision of law, it shall be unlawful for any recipient of funding under title I of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343) or section 13 of the Federal Reserve Act (12 U.S.C. 342 et seq.) to hire any nonimmigrant described in section 101(a)(15)(h)(i)(b) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(h)(i)(b)) unless the recipient is in compliance with the requirements for an H-1B dependent employer (as defined in section 212(n)(3) of such Act (8 U.S.C. 1182(n)(3))), except that the second sentence of section 212(n)(1)(E)(ii) of such Act shall not apply.

 (2) DEFINED TERM- In this subsection, the term `hire’ means to permit a new employee to commence a period of employment.

(c) Sunset Provision- This section shall be effective during the 2-year period beginning on the date of the enactment of this Act.

What is Going to Happen?

The Senate version of the Stimulus Bill, including the language above, is expected to be approved by the Senate today.  However, the House version of the Stimulus Bill does not have such language and both versions will have to be reconciled so that both the Senate and the House approve the same text.  Only then the Stimulus Bill would become law after it is signed by the President.

This means that the language restricting H-1Bs at TARP recipients may not end up in the final law.  However, given the pressure to pass the legislation quickly, it is very possible that the House would adopt the proposed Senate language and ultimately impose the H-1B restrictions.

What Does the Prohibition Mean?

The text, as currently drafted, would impose some limits on the ability of companies recipients of TARP funds to hire new foreign workers on H-1B visas.  By making such employers “H-1B dependent”, the law would require any TARP recipient willing to sponsor an H-1B for the next two years to, among other things, (1) provide certain “displacement attestations” that no U.S. workers have been or will  be displaced as a result of the H-1B employee; (2) provide recruitment attestations about the nature of the recruitment process; (3) remain liable for displacement of U.S. workers as a reuslt of placement of H-1B employee with another employer.

However, the requirements on an H-1B dependent employer do not apply for “exempt H-1B nonimmigrants” which include (1)  those holding a master’s or higher degree or its equivalent in a specialty related to the intended employment, or (2) who earn wages (including cash bonuses and similar compensation) at an annual rate of at least $60,000.   This exemption is not likely to cover all, but is likely to cover many of the intended foreign national beneficiaries of H-1B visas from TARP recipient companies.

Who are TARP Recipients?

The list of companies recipients of TARP funds is very long, so we will not publish it at length.  Please find the full and recently updated list here.

Conclusion

While the Stimulus Bill draft may be a source for alarm for some, the reality is that (1) until the law is approved by both the Senate and the House, the text is not final and (2) there are some exceptions which would allow TARP companies to hire H-1B workers either by complying with the H-1B dependent employer requirements or by claiming the applicable exemptions.