The Potential Impact of the U.S. Presidential Election on Business Immigration

by Kramer Levin Naftalis & Frankel LLP

Kramer Levin Naftalis & Frankel LLP

Immigration changes are widely expected to be a key focal point in President-elect Donald Trump’s administration. Although we do not yet have details on how specific policies and programs will be affected, below is a summary of some potential implications of the election on business immigration.

The TN (NAFTA) Status Might Be in Jeopardy

On the campaign trail, President-elect Trump was critical of the North American Free Trade Agreement (NAFTA) and called for “renegotiating” the agreement or withdrawing from it altogether. Therefore, it is theoretically possible that the TN nonimmigrant classification established under NAFTA, which permits qualified Canadian and Mexican citizens to seek temporary entry into the U.S. to work for a U.S. employer in one of a list of NAFTA enumerated professions, may be eliminated. However, we would note that it is quite difficult to cancel or amend a multilateral agreement, especially such a long-standing one as NAFTA. Even if the new administration successfully withdraws from the agreement, it would likely take many months or years for the withdrawal to fully take effect. Furthermore, even if NAFTA is “renegotiated” in some respects, President-elect Trump has given no indication of his intent to rescind the TN provisions of the agreement. We also note that the Canadian nationals who now hold TN status under NAFTA might be able to keep that status under the predecessor bilateral Canada-U.S. Free Trade Agreement (FTA), which predated NAFTA. Some have argued that the FTA, which went into effect in 1989, would automatically be “reactivated” to take the place of NAFTA in the event the U.S. withdraws from the latter.

Nevertheless, despite our belief that the TN status is likely to remain a viable option, given the state of uncertainty surrounding NAFTA, clients with employees in TN status may wish to consider applying for H-1B visas for them this coming fiscal year. Please contact us by mid-January if you’d like to discuss any individual cases, as the date for filing new H-1B cases is April 1.

Work Permits for Certain Foreign Students and Spouses of Certain H-1B and L-1 Workers May Be Cut Back

The recent Obama administration rule that allows foreign graduates from U.S. colleges and universities to obtain an additional two years of work authorization (provided the students’ degrees are in STEM fields and the employers participate in e-Verify) may be in jeopardy. Additionally, the Obama administration rule allowing spouses of H-1B workers who are in the midst of the employment-based green card process (and who would be eligible for permanent residence except for the extensive visa backlog) to seek employment authorization documents (EADs) is also subject to repeal. Similarly, a long-standing rule permitting spouses of L-1 visa holders to apply for EADs may also be in jeopardy.

H-1B Status May Have New More Restrictive Requirements

Although President-elect Trump has given no indication of his intent to pursue changes to the H-1B visa category, he has spoken in general terms of his intent to “establish new immigration controls to boost wages and to ensure that open jobs are offered to American workers first.” This may indicate his desire to amend the H-1B laws to add increased salary requirements, and to impose a test of the labor market recruitment and similar measures aimed at discouraging the hiring of H-1B professionals. We do not yet know specifics of what these suggested revisions to the H-1B laws may look like, but Senator Jeff Sessions (R-Ala.), a close advisor to President-elect Trump, introduced a bill late last year which may offer some hints. That bill, known as the American Jobs First Act, would, among other changes, require H-1B employers to commit to paying H-1B workers $110,000 or what they paid an American worker to perform the similar work (whichever figure is higher), and would increased “transparency” of the filing to the job-seeking public to encourage U.S. worker recruitment efforts. Another avenue for H-1B changes might be the targeting of the large IT-outsourcing firms, which now use approximately 30 percent of all H-1B visas each year. These firms, many of which are based in India, could be subject to special rules limiting their ability to petition for high-tech foreign national professionals.

Changes to the H-1B statute and regulations such as those proposed by Senator Sessions will require both congressional and executive branch action. As many members of Congress (both Republican and Democratic) remain opposed to such measures — seeing them as punitive to U.S. employers rather than beneficial to U.S. workers — it is far from clear whether they will be implemented and which new conditions will be added.

The EB-5 Program Might Be Modified or Eliminated

U.S. Citizenship and Immigration Services (USCIS) allots 10,000 EB-5 immigrant visas each fiscal year to individuals seeking permanent residence on the basis of their investment in a new commercial enterprise. Permanent resident status is available to one who has invested — or is actively in the process of investing — at least $1,000,000 (or $500,000 if in a Targeted Employment Area (TEA)). The investor must also demonstrate that the investment will create or preserve at least 10 full-time jobs. USCIS also gives EB-5 investors the option of investing with an economic entity known as a Regional Center. Regional Centers, which number over 500 nationwide, are “preapproved” for EB-5 investments by USCIS — which means USCIS recognizes the economic entity as a designated participant in the EB-5 program, and acknowledges that its econometric models and business plans appear to be feasible and that jobs should be directly or indirectly created through investment in the approved industry categories.

The EB-5 program has been under increased scrutiny in recent months amid news reports that the program has been abused. A recent congressional proposal to reauthorize the program would require increased disclosures by Regional Centers to investors regarding business risks, conflicts of interest and their compliance with securities laws. The act would also narrow the definition of a TEA, would require investors to demonstrate the creation of direct jobs through their investment in a Regional Center (rather than only indirect jobs) and would raise the investment threshold to $800,000 (for TEAs) and $1.2 million (for non-TEAs).

We do not yet know whether the Trump administration will support continuation of the EB-5 program. We will monitor this situation very closely.

Visa Applications to Have Increased Scrutiny

Beyond the specific programs and benefits described above, possible changes to the visa application and screening process at U.S. embassies and consulates may also affect your foreign national employees. For example, President-elect Trump has championed more stringent screening of applicants for visas, which would include applicants for employment-based nonimmigrant visas. He also supports a moratorium on visa issuance in countries where adequate screening cannot be guaranteed. We do not yet know which countries will qualify as those which do not offer adequate screening, but will alert you once more information becomes available.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Kramer Levin Naftalis & Frankel LLP

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