Foreign countries are seeking to capitalize on President Donald Trump's new fee hike on applications for H-1B visas, a move some experts say could have a detrimental impact on the United States. Canada, Germany and China are among the countries that have publicly signaled intent to attract to their country’s tech industries the foreign talent that could otherwise go to the United States. Trump’s Sept. 19 proclamation says the new $100,000 fee on companies for every new H-1B visa application is necessary to reverse “systemic abuse of the program" that "has undermined both our economic and national security.” It focuses on the "large-scale replacement of American workers" in information technology and software, along with science, technology, engineering and math fields. Four days later, the German Ambassador to India and Bhutan posted a video welcoming immigrants and comparing his country’s system to a reliable German car. “We do not change our rules fundamentally overnight,” Philipp Ackermann said. Then on Sept. 27, Canadian Prime Minister Mark Carney indicated his country is looking to introduce measures to attract talented immigrants, saying “what is clear is the opportunity to attract people who previously would have got so-called H-1B visas.” And China launched on Oct. 1 a "K visa," which seeks to draw foreign talent into the country to work in the science and tech fields. An outlet in India, which receives many of the H-1B visas, referred to it as “China's H-1B.” Jorge Lopez, chair of the Immigration and Global Mobility Practice Group at the Littler Mendelson law firm, said companies in the United States with international capacity have previously discussed moving operations elsewhere, but with Trump's new H-1B fee "those discussions are happening more and more." Lopez said third-party companies have contacted him to ask about processing workers in other jurisdictions that are "more user friendly" than the United States. "It's the benefit of that country, because then they get the benefit of tax payments and use of resources that all goes to the home country," Lopez said. Canada is top of the list for countries seeking to capitalize on the new H-1B visa fee in the United States, Jorge said, followed by interest in Mexico as well as Costa Rica, which he said has a "nomad visa" that allows companies to hire even if that country may be a location where they have offices. A lawsuit challenging Trump’s H-1B proclamation pointed out how companies in the United States would lose out on foreign talent. "The Proclamation also ignores other benefits of bringing H-1B workers to the United States, where they consume goods and services and pay taxes in the United States," the lawsuit says. "Cutting off employers’ ability to employ H-1B workers will likely push some employers to outsource their work to other countries." David Bier, director of immigration studies for the libertarian Cato Institute, said the fee hike Trump imposed on H-1B compounds issues companies face in the United States with significantly more restrictive immigration laws compared to other countries. "When it comes to just squaring immigration ease for the worker or for the company, it's Germany and U.K. and Canada and Australia and New Zealand," Boer said. "I mean, go down the list, and they're all easier destinations than the United States and were before the Trump administration." Bier concluded if other countries tout their immigration systems, they would become an option for workers and companies "that's going to be taken more frequently as a result of this action by the Trump administration further restricting the U.S. system." Rep. Suhas Subramanyam, D-Va., a Democrat who has talked openly about his immigrant parents who came from India, said the new H-1B fee “is a direct attack on our economy.” “Companies are warning visa holders not leave the U.S. Those outside the country have 24 hours to return or risk being denied. This isn’t immigration policy. This is economic sabotage,” Subramanyam posted on Sept. 20. American workers Legislation on H-1B visas, such as a bill reintroduced after Trump’s move by Sen. Charles E. Grassley R-Iowa, and Richard J. Durbin, D-Ill., focus more on protecting American workers. And Trump's move has its defenders, who say the current H-1B system is rife with fraud and used to get around paying both foreign and domestic workers sufficient wages. Ronil Hira, an associate professor of political science at Howard University, described Trump's change as a net positive because the previous H-1B system was unfair to workers. "The problem with the H-1B program is that there aren’t sufficient worker protections," Hira said. "Employers love the program because they make extra profit by exploiting it." Although immigration law requires companies to pay H-1B the greater of either a prevailing wage or an actual wage, Hira said those guardrails are insufficient and have harmed the labor market. When employers provide a prevailing wage for H-1B workers, Hira said that would make them underpaid relative to American workers "because that prevailing wage is too low." "It sounds like a market wage, but it's not an actual market wage," Hira said. "It's set so low so that an employer can pay 20 to 40 percent less than what the market wage is." As a result, Hira listed incidents of companies seeking to undercut the American labor market by hiring with H-1B workers, pointing to reports in 2015 that Disney used a consulting firm to replace 250 of its information technology workers with foreign talent at a lower wage. Hira said if an employer sought to hire an H-1B worker on actual wage, those provisions under immigration law have "never been enforced," so the rules are easy for companies to manipulate to pay workers with lower wages. "I've talked to people at Wage and Hour Division, there's never been a case where they've actually investigated this and tried to enforce it," Hira said. "I think it would be pretty hard to enforce anyway, because there's lots of ways that you can call positions different, even though the people are doing the same work. So we need a much better regulatory regime around that."
