The Trump administration may eliminate an opportunity for spouses and children of H-1B workers to work in the United States while waiting for green card adjudication. How will this impact the state of our economy?

H-4 EAD applies to families of H-1B workers

H-4 status is available to spouses and children of H-1B workers. H-4 nonimmigrants were not allowed to work in the United States until February 2015. That month, the Obama administration published a final rule allowing H-4 nonimmigrants to apply for work authorization if (1) their H-1B spouse was the beneficiary of an approved I-140 permanent resident petition, or (2) their spouse had their H-1B status extended beyond the six-year limit under AC21. These conditions effectively limit EAD availability to spouses of H-1B workers living in the U.S. for at least six years.

Because nationals of India and China experience long waiting periods for U.S. permanent residence, due to high demand in numerically limited green card categories, the H-4 EAD rule allowed these spouses the opportunity to work in the U.S. while waiting a decade or more for green card adjudication. H-4 EAD (“Employment Authorization Document”) applications require no employer sponsorship, and provide free-market work authorization to qualified H-4 spouses, allowing U.S. employers to tap a previously unavailable talent pool. H-4 EADs permit self-employment, allowing entrepreneurs to start new companies.

Impact of proposed H-4 EAD elimination

The rule to eliminate the H-4 EAD is under review by the Office of Management and Budget. After this technical review, the proposed regulation will be published in the Federal Register. Following a 30- to 60-day comment period, DHS will review public comments and develop a final regulation, also subject to OMB review. Interested parties can be expected to challenge the final rule in federal court. Meanwhile, H-4 EAD applications remain viable until those steps are complete. Since the text is not yet public, it’s unknown whether the proposed rule will permit current H-4 EAD holders to work until their EAD cards expire, or whether they will face instant nullification upon the effective date of the final rule.

This proposed rule will affect about 100,000 work-authorized H-4 foreign citizens, approximately 90 percent of them women from India. Since many of these workers reside in high cost-of-living tech centers, families that can’t afford to live on one income may leave the U.S. for their home country, migrate to Canada, or move elsewhere. The skill sets of both spouses may land in other countries, possibly to compete against their former employers. U.S. companies will lose their investment in these skilled employees, and will face difficulty finding the same talent in the domestic population.

The Trump administration justified the elimination of the H-4 EAD with this comment: “DHS anticipates that there would be two primary impacts that DHS can estimate and quantify: the cost-savings accruing to forgone future filings by certain H-4 dependent spouses, and labor turnover costs that employers of H-4 workers could incur when their employees’ EADs are terminated. Some U.S. workers would benefit from this proposed rule by having a better chance at obtaining jobs that some of the population of the H-4 workers currently hold, as the proposed rule would no longer allow H-4 workers to enter the labor market early.”

Although U.S. companies can seek H-1B status for these H-4 workers, demand greatly exceeds the annual limit of 85,000 new H-1Bs. Therefore, a large percent of H-1B filings are eliminated in the annual H-1B lottery, preventing DHS from considering them on the merits. The uncertainty of the H-1B lottery process is unappealing to top tech talent.

The misalignment between the U.S. national interest in attracting global talent and the outmoded rules of our immigration system can be chalked up to Congressional inaction. Simply increasing the H-1B cap to meet market demand for international talent would directly benefit U.S. employers. The H-4 EAD was a patchwork solution to larger economic needs. Its proposed elimination represents the fulfillment of a campaign promise, but the effect on the economy, to say nothing of the impact on individuals and local communities, can be seen as governmental failure to address the needs of U.S. employers.