The U.S. Department of Labor (DOL) is requiring employers that apply for H-1B visas to name any companies where their H-1B workers might end up on a contract basis.
This could have significant consequences for outsourcing and staffing firms that apply for large numbers of H-1B visas, then send those workers to other firms. Outsourcing remains a source of considerable controversy, and third-party companies might prove more reluctant to outsource their IT work to staffing firms if they believe the U.S. government might publicize the relationship at some point.
The DOL’s Form ETA-9035 & 9035E (PDF) asks that employers cite whether workers “will be placed with a secondary entity at this place of employment.” If the answer is “yes,” the employer must provide the legal business name of the “secondary entity,” along with the wage rate it pays nonimmigrant workers, and the prevailing wage rate.
Those companies that contract workers out to many clients will need to fill out forms for each third-party worksite. In addition to H-1B applicants, the new form applies to those filing H-1B1 and E-3 petitions.
“This revision to the labor condition application is nothing more than an attempt to discourage contracting out for services by U.S. companies whose contractors employ H-1B professionals,” Vic Goel, managing partner of Goel & Anderson, an immigration law firm, told Forbes contributor Stuart Anderson in an interview. (And hat-tip to Anderson for digging up the Form ETA-9035 & 9035E revisions.)
This move could impact large firms such as Cognizant, Tata, and Deloitte, which may face additional pressures thanks to (rumored) tweaks to immigration policy. According to Politico, the Trump administration plans on changing how H-1B applicants enter the annual visa “pools,” with an eye toward giving more visas to highly educated workers. That could impact outsourcing and staffing companies, which apply for more visas for bachelor’s degree holders (versus tech companies such as Google, which generally want H-1B visa holders with advanced degrees).
Such tweaks to current policy, however, may attract lawsuits from affected companies. Last month, ITServe Alliance, a nonprofit group that counts more than 1,000 IT service organizations as its members, filed a lawsuit against the United States Citizenship and Immigration Service (USCIS). That lawsuit argues that USCIS approved visas for too short a period, and wants the court to limit the agency’s ability to set ultra-short validity periods.
In theory, the new forms could allow the U.S. government to more quickly determine whether a consulting firm is engaging in H-1B fraud. However, those firms might worry that revealing their clients will expose them to more bad publicity. How this might pan out is anyone’s guess.