This change would significantly reduce the time that U.S. citizens are separated from their immediate relatives, as foreign nationals are currently required to remain outside the U.S. while their immigrant visa application and their waiver application are adjudicated. This USCIS proposal clarified that only foreign nationals who are immediate relatives of U.S. citizen spouses or parents would be able to take advantage of this change. This proposal is not expected to be implemented until the end of this year. We will continue to monitor and report on the progress of this important development.

Background

Immigration law bars certain foreign nationals from being admitted into the U.S. (receiving permanent residence or any other visa)  if they have previously accrued unlawful presence in the U.S. – whether by entering the U.S. without being inspected by an immigration officer or by overstaying the time allotted to them by a nonimmigrant visa obtained in the past. Those who have accrued between 181 days and 1 year of unlawful presence are subject to a 3-year bar before becoming admissible into the U.S. Those who have accrued more than 1 year of unlawful presence are subject to a 10-year bar before becoming admissible into the U.S. Immediate relatives of U.S. citizens who entered the U.S. on a nonimmigrant visa and later overstayed their time, or were admitted and inspected by an immigration officer on some other basis, are able to adjust their status without leaving the U.S. and without needing to obtain a waiver for the unlawful presence they accrued in the U.S. – immigration law forgives them for the unlawful presence. However, those immediate relatives of U.S. citizens who have accrued unlawful presence and who cannot demonstrate having been admitted and inspected by an immigration officer upon entry are unable to apply for adjustment of status from within the U.S. Immigration law requires that they depart the U.S. and apply for an immigrant visa at a consulate post abroad.

Unfortunately, this departure is what triggers the 3- and 10- year bars and subjects them to the requirement of the filing of the application for waiver of this ground of inadmissibility.  To obtain a waiver of unlawful presence, foreign nationals in this predicament are required to demonstrate that, if this application for a waiver is not granted, their U.S. citizen or lawful permanent resident spouse or parent will suffer extreme hardship. Because this waiver is discretionary, the individuals must also warrant a favorable exercise of discretion.  While the term “extreme hardship” has not been exactly defined, this term has been interpreted very narrowly and involves the balancing of various factors.

Current Practice

The current practice of the filing and adjudication of these waivers has required that the foreign national depart the U.S. and file the waiver with the consular post processing his or her immigrant visa. This has caused significant delays during which the foreign nationals remain separated from their immediate U.S. citizen- or lawful permanent resident-relatives while the waiver is adjudicated. Moreover, the foreign national has no guarantee when he or she leaves the U.S. that the waiver will be granted, and thus, he or she faces the prospect of leaving the U.S. without the ability to return for either three or ten years.

The waivers are adjudicated by USCIS offices having jurisdiction over the particular consular post where the foreign nationals applied for their immigrant visas, by a newly-created International Operations Support Branch of USCIS located in Anaheim, California, or –at times – the USCIS Nebraska Service Center. If USCIS denies the application for waiver, their decision may be appealed to the Administrative Appeals Office (“AAO”). Because the processing times for these waiver applications at the USCIS level are currently several months, and at the AAO level are over 2 years, this delay causes significant additional hardship to the families of the foreign nationals, from whom they are currently required to be separated for the duration of the adjudication of the application, without the grant of which their immigrant visa cannot be processed.

USCIS Proposal

The contemplated change in processing is intended to reduce this burden of separation. It is, however, limited only to foreign nationals whose spouses and/or parents are U.S. citizens, and not lawful permanent residents. This change would allow the qualifying foreign nationals to file their applications for waiver of grounds of inadmissibility prior to departing the U.S. and remaining in the U.S. while the USCIS adjudicates their application. If successful, USCIS would grant a provisional waiver prior to, and dependent upon, their departure to attend their immigrant visa interview at a consular post. While the procedural details were left out of the USCIS announcement, it is anticipated in the immigration legal community that the unlawful presence waiver applications would be adjudicated by the International Operations Support Branch of USCIS in Anaheim, CA, as well as the USCIS Nebraska Service Center.

In addition to significantly reducing the time foreign nationals who have accrued unlawful presence would be forced to spend separated from their U.S. citizen immediate relatives, USCIS expects that this change would streamline the process of waiver adjudication and visa processing for the foreign nationals in question, reducing the processing time even further due to the lessened amount of time the case would have to be moved back and forth between the U.S. Department of State, the various consular posts and USCIS. USCIS also expects this to produce a welcome cost reduction associated with the processing of such cases, as the adjudicators would be located in the United States, rather in international USCIS offices.

This change is not expected to be implemented until the end of this year, and its details are still largely unclear. USCIS is expected to issue a proposed rulemaking that will address this change, along with all of its fine points and new processes. Of course, as always, with such proposals, questions linger as to whether this change will cause a further backlog in the adjudication, as well as an overall reduction in approval rates, for unlawful presence waivers. All of this remains to be seen once- and if- the rulemaking for this change is implemented and it takes place. However, one thing is clear – it seems to be the current administration’s step toward alleviating some of the painful delays caused by the backlogged and often inefficient processes within immigration law.

Yesterday, Senator Grassley, R-IA, informed the Senate that he was placing a “hold” on the Senate’s consideration of HR-3012.  Such a hold greatly complicates the ability of the Senate to pass the bill, as it is a warning that the Senator would filibuster the bill if it came to the floor.

You can read my thoughts on the bigger picture at AILA’s Leadership Blog, but it’s enough to note that for now, the bill is effectively dead unless other Senators can convince Senator Grassley to remove his hold.

In reaching its decision, BALCA first reviewed prior regulations, DOL memoranda, and caselaw, and found that to date, DOL consistently approved labor certifications for positions in medical residency programs. However, BALCA went on to note the absence of a definition of “permanent employment” in the regulations or prior caselaw – including caselaw specifically approving medical resident labor certification — and chose to fashion a new test for whether any position may be considered “permanent employment” and thus eligible for labor certification.  BALCA announced a three part test for a position to be considered “permanent:”

• There must be an agreement – not necessarily a written contract, but at least an intention on the part of the employer to offer, and of the employee to accept, employment of indefinite duration;
• The position need not be guaranteed to last forever – that is, a position may be “permanent” even if it can be ended by the employer and the employee at some point in the future; and
• To be “of indefinite duration,” the position must have two characteristics.  First, it must be “of lasting duration,” meaning that the person will fill the position for an indefinite period of time – certainly expected to last more than a year, but with no specific ending date, even one that is three or more years away.  Second, there must be an “assurance of continuation of employment,” meaning that the employer must have the capability and intention of providing lasting and continuous employment.

In BALCA’s own words, “[T]he regulatory requirement of an offer of permanent employment is focused on a snapshot of the good faith intention of the employer at the time the labor certification is filed to make an offer of permanent employment – that is, indefinite employment of a lasting and continuous nature – within the expectations of any typical job offer.  An employer that has no intention to continue the employment of the immigrant beyond a set term of years cannot have the requisite intent.” (Opinion at page 72, footnote omitted).

Applying this definition to  medical residencies generally, BALCA found that the employers of medical residents do not generally have the intent to offer permanent employment, but instead only employment for the duration of the residency term. BALCA explained that its newly-adopted definition of “permanent” contemplated the expectation of indefinite employment at the time of the filing of the labor certification.  BALCA then concluded that resident positions do not fit the newly adopted definition of “permanent employment” because medical residency positions are not of “lasting duration” and do not offer an “assurance of continuation.”

Though BALCA ruled that medical residency programs in general may not qualify for foreign labor certifications, it did note that the specifics of the residency programs at Albert Einstein Medical Center and Abington Memorial Hospital were not in the appellate record.  BALCA remanded the labor certification denials back to the Certifying Officer for review of the evidence submitted by the Hospitals that related specifically to these two medical residency programs and for new decisions consistent with the Board’s general findings.

Though the full impact of BALCA’s decision is unknown at this point, it will likely limit medical facilities’ ability to sponsor their International Medical Graduates for permanent residence during their residency.  Abington Memorial Hospital and Albert Einstein Medical Center asserted to BALCA that their intention in recruiting resident physicians was to obtain the services of physicians who would continue on an indefinite basis with the Hospitals after their residencies; BALCA left that issue for the Certifying Officer to address on remand, but in doing so, asserted (with no basis in the record) that post-residency positions were “distinct positions” from the upper year resident positions offered in these applications.

Even prior to this decision, many hospitals were rethinking their strategies for retaining International Medical Graduates in light of the Department of Labor’s reluctance to approve labor certifications during the residency period.  This BALCA decision will cause foreign born physicians to have to rethink their career paths and plans, and hospitals their recruiting and retention strategies.  For further information or consultations on the effect of this decision, please contact your attorney at the Firm.

What Problem is HR 3012 Addressing?

Under current law, no more than 7% of the visas issued per year in any one immigrant visa category can go to natives of any one country.  On the employment-based immigrant visa side, natives of India and China face longer waits than natives of other countries, because natives of those countries send more high-skilled immigrants to the US than any other country.  On the family-based immigrant visa side, natives of Mexico and the Philippines face longer waits than natives of other countries, because there are more immigrants and US citizens with family ties to those countries than there are to other countries.

Quota backlogs in the employment-based system range from “immediately available” for the highest skilled immigrants (persons of “extraordinary ability,” “outstanding researchers” and “multinational managers and executives”) to an estimated 6-10 years for skilled workers and professionals from most  countries.  Because of the per-country limits, however, natives of India and China only have “immediately available” immigrant visas if they are in those highest skilled classes.  If they are advanced degree professionals (such as doctors, or more senior managers, or mid-career professionals), natives of India and China face quota delays of at least 4-7 years.  If they are other professionals or skilled workers, however, their waits could be 30, 40 or even 70 years (based on the current quota available per year per country divided by the number of pending cases for natives of those countries).  This bill aims to even out the disparity between India and China, on the one hand, and the rest of the world, on the other, when it comes to allocation of these visas per year.

Quota backlogs on the family side are similarly backlogged, with natives of Mexico and the Philippines taking quite a bit longer than natives of other countries for their relatives to be able to enter.

What would HR 3012 do?

HR 3012, as passed by the House, would not raise the number of legal immigrants allowed to enter the United States, which is a significant reason it was able to garner such broad support in the House.  It would, however, adjust the number of legal immigrants within the employment-based and family-based caps from each country.

HR 3012 would not add any new visas to address the quota backlogs for approved legal immigrants awaiting the availability of immigrant visas each year.  Rather, it would eliminate, over a three year period, the per-country limit in the employment-based system.  The elimination of the per-country limit would gradually make more visas available to natives of India and China, where backlogs in the employment based second preference (advanced degree professionals) would likely fall significantly from 4-7 years (and might even become “immediately available”) and backlogs in the employment based third preference (skilled workers and professionals) would likely fall to 10-12 years.

Because HR 3012 does not add any new visas per year, however, the reductions in quota delays for Indian and Chinese nationals may come at the expense of increased delays for natives of all other countries.  It is even possible that backlogs in the employment-based second preference will slowly develop for natives of all countries as the law takes effect over its three year implementation.

On the family side, the changes made by HR 3012 are not as dramatic – they only raise the per-country limit from 7% to 15%.  Therefore, natives of Mexico and the Philippines will have somewhat shorter waits, while natives of other countries will not be too adversely affected.

Will HR 3012 Become Law?

HR 3012, or a similar bill, still has to pass the US Senate.  Early indications are that quick passage may not be possible due to the objections of some Senators, meaning that HR 3012 may never become law.  Likewise, if the Senate passes a bill similar to HR 3012, but not identical, a committee made up of House and Senate members would have to meet and agree on a common version, which would again have to pass both houses.  At this point, therefore, it is still rather speculative as to whether HR 3012 will become law.

How Will HR 3012 Affect My Pending Case?

Both because HR 3012 may not pass the Senate, and because it will gradually be phased in over three years, our current estimation is that even if it became law, it would not affect most employment based second preference (EB-2) pending at the moment.  For EB-3 cases currently in process, if HR 3012 passes, it would likely drop the total delay for Indian and Chinese dramatically, while raising the delay for natives of other countries by a relatively smaller amount.  Unfortunately, even the State Department office responsible for allocation of the visas cannot provide any more detailed prediction than that.

We will continue to monitor developments and update our clients as further details become available.

Please note that H-1B1 petitions for nationals of Chile and Singapore can still be approved due to free trade agreements with those countries, and that “cap exempt” employers (such as universities and nonprofit research organizations) can continue to seek H-1B status on behalf of their employees. In addition, petitions filed on behalf of current H-1B workers who have been counted previously against the cap will not be counted toward the FY 2012 H-1B cap.

The “final receipt date” for H-1B purposes is November 22, 2011.  Regulations now provide that all H-1B petitions received by USCIS on or before November 22, 2011 have been submitted “under the cap,” but all H-1B petitions received by USCIS on or after November 23, 2011 will be rejected, as the cap was reached on November 22, 2011.

Klasko Law is contacting employers about options for those beneficiaries of H-1B petitions that did not make the cut-off for the cap.

Additionally, as we reported in March 2011, USCIS previously sought public comment on the proposed “H-1B Pre-Registration Rule,” which would allow an employer to register online and wait for an H-1B number before filing the full H-1B petition with supporting documentation with USCIS.  USCIS has stated that this electronic registration system will not go into effect until a final rule is published and becomes effective. If a final version of the rule is published by January 2012, USCIS could implement the proposed registration system for the fiscal year 2013 H-1B season, which opens in April 2012.  As of now, however, USCIS has not given any indication of when the “Pre-Registration Rule” will become final and effective.  Klasko Law will notify employers if and when a final rule is published that mandates electronic pre-registration with USCIS for cap-subject H-1B petitions.

Premium processingis unlikely to be implemented in the very near future.  My best estimate is the first half of calendar year 2012, and maybe the first quarter.  It will likely be limited to regional center designation applications and exemplar I-526 (project pre-approval) petitions.  There is a possibility that individual I-526 investor petitions will be eligible for premium processing at a later date.  In the meantime, regional centers and investors should file petitions in the normal fashion.  If premium processing is implemented, almost certainly it will apply to pending petitions.

There appears to be agreement between Republicans and Democrats in the House of Representatives for a long term and hopefully permanent extension of the regional center pilot program.  The biggest area of disagreement may be whether, as part of the extension, Congress implements a new EB-6 program for venture capital financing of startup ventures in the U.S.  If so, there is some indication that at least the Republicans in the House of Representatives may want to take the visa numbers for the EB-6 program out of the EB-5 quota.  EB-5 advocates will be arguing against any attempt to reduce EB-5 numbers.

USCIS has already hired three new business analysts and is in the process of hiring one or more economists.  Hiring and training these individuals will be a critical part of implementing premium processing and implementing the proposed Decision Board, which would allow for in-person or telephonic discussions between regional centers and CIS prior to decisions on regional center designations and project pre-approvals.

Even without premium processing, regional center designation applications and project pre-approval applications will likely be processed more promptly than the present 8 to 10 months.  Now that USCIS has mostly completed the November 2010 filings, and since there were far fewer filings in the months following November 2010, processing times should improve.  It is not as clear that processing times will improve on the investors’ I-526 petitions.

USCIS will not commit to a formal position on three legal issues “for several weeks” and likely will include most or all of the positions in a new policy memorandum.  The three issues are:

• Deference to safe designation letters with respect to geographical areas of TEAs;
• EB-5 money used to pay down bridge financing;
• Definition of “material change” for purposes of condition removal and what must be done in the event of a material change.
• It appears likely that CIS will agree that it should defer to state designation of geographical areas of TEAs and that EB-5 money can be used to pay down bridge financing.  Until issuance of a policy memorandum, there are indications that CIS adjudications on these issues have been more favorable since we had our meeting with Director Mayorkas on August 10.  The material change issue will likely be the subject of a separate USCIS stakeholders engagement meeting prior to issuance of any memorandum.

Following our August 10 meeting, it appears that USCIS is rethinking its policy on exemplar.  Hopefully, the policy memorandum will include a commitment that, if the documentation regarding the regional center and the project in the investor’s I-526 petition is identical with the exemplar 526, CIS will be bound by the approval of the exemplar.  Unless and until that happens, there does not appear to be any good reason for waiting the necessary time for approval of the exemplar 526 if it will be filed independently of a regional center designation application. If it will be filed concurrently with a regional center designation application, since the processing time will be the same as the regional center designation processing time, it may be sensible to continue filing the exemplar 526 for the first project.

Following the approval of the EB-5 petition, the investor needs to apply for adjustment of status or consular immigrant visa processing.  The immigration attorney can handle that work even if he does not handle the EB-5 petition.  Likewise with reentry permit applications, which are very common for EB-5 investors who become permanent residents.

Five years after obtaining conditional permanent residence based on an EB-5 petition, the investor and his family may choose to naturalize.  This is further spin off work for the immigration attorney.  After naturalization, the investor may sponsor family members for permanent residence, which creates even further spin off work.

Some immigration attorneys perform non-immigration legal services.  The EB-5 process leaves plenty of room for other services, including tax advice, corporate structuring advice, real estate purchases, employment law issues, etc.

Finally, the immigration attorney may receive a finder’s fee from a regional center even if he does not perform the legal work for the investor.  However, the finder’s fee should not be accepted until the attorney does a careful review of both securities law ramifications and the rules of professional responsibility in his jurisdiction of practice.

We expect that USCIS will begin phased implementation of the proposal to make the EB-5 process more expeditious and user friendly no later than September.  The phases are expected to include premium processing for regional centers and investors in “shovel ready” projects and changing the adversarial process to a consultative process, with regional center developers being afforded the right to a hearing with expert economists and business analysts to resolve any issues.

The second development is the scheduling on September 8 of an EB-5 hearing by the Chairman of the House of Representatives Judiciary Committee, Congressman Lamar Smith.  Congressman Smith will be a key figure in the attempts to convert the EB-5 regional center program from a pilot program to a permanent program.  Some indications of the Congressman’s position on this issue may be gleaned from the September hearing. 

By mid-September, there may well be progress on both of these important developments in EB-5 practice.

–a regional center designation has absolutely nothing to do with whether any particular project within a regional center is a good project for EB-5 purposes.

2. Don’t just accept an I-526 or I-829 package prepared by a regional center.

–if the package prepared by the regional center raises questions or issues in the mind of the investor’s attorney, it may very well raise questions in the minds of USCIS. The issues should be resolved in advance of filing.

3. It’s all about the I-829.

–the I-526 EB-5 petition must be prepared with the I-829 condition removal application in mind.

4. Only 6 regional centers have I-829 approvals.

–this does not mean that the other regional centers have had their I-829 applications denied. A very large majority of regional centers have not been around long enough to reach the I-829 approval stage.

5. An investor is best advised not to be the first or last investor in a project.

–the first investor may find to his chagrin that the project does not attract sufficient investors to be fully funded. The last investor might discover that insufficient jobs were created, and all of the created jobs were allocated to the earlier investors.

6. It is critical for a regional center to have a more general and conservative business plan, rather than a specific, aggressive business plan.

–any change in a business plan might be considered a “material change.” The more specific the business plan, the more chance of a change. Also, a more conservative business plan may have more reachable targets.

7. The availability of a reduced $500,000 investment is not known until each investor’s I 526 petition is approved.

–USCIS regulations and interpretations are that the targeted employment area (TEA) issue is not decided until the time of investment. In the case of an investment put in escrow until the I-526 is approved, the date of investment is considered the date that the escrow is released following the approval.

8. An investor does not have to prove the lawful source of all of his or her money.

–an investor only has to prove the lawful source of $500,00 or $1,000,000, depending on the amount of the investment.

9. There is a difference between a direct job as defined by USCIS and a direct job as defined by an economist.

–USCIS defines a direct job as being a W-2 employee of the new commercial enterprise in which the investor invests. Economists define direct jobs as direct employees of the job creating enterprise or the construction company, as opposed to indirect or induced employment.

10. It is better to rely on indirect and induced jobs, rather than direct jobs.

–reliance on direct jobs could result in condition removal denial if there are less direct jobs than projected or if some of the employees can’t be proven to be U.S. citizens or permanent residents. Relying on indirect or induced jobs, such as through an economic model that relies on expenditures, may result in the regional center having more control over proving the required facts for condition removal.

Director Mayorkas’ proposal has three major elements.

One element of great importance is providing for accelerated processing (target two months) and premium processing (15 day processing) for “shovel ready” projects. This would apply to the regional center designation application, the exemplar I-526 project preapproval and the petitions of the investors in these projects. Although the definition of “shovel ready” is ambiguous and might better be defined as a project for which the developer is ready to seek investment capital, the concept is a very important one. Present processing times are unrealistic, and developers cannot be expected to wait the 12 to 18 months necessary for a regional center to be approved, a project to be approved, and an investor’s petition to be approved.

The second key component of the Mayorkas proposal involves the hiring of qualified expert personnel to adjudicate regional center designation applications and project pre-approval applications. Director Mayorkas proposes to add economists and business analysts for this purpose. Economic development specialists might also be added to the USCIS staff. The issues to be adjudicated in these applications are both complex and technical, and the Immigration Service needs to bring to the task professionals experienced in dealing with these issues.

The third major component of the Mayorkas proposal is to change the regional center and project pre-approval process from an adversarial to a consultative process. The Director proposes to change the present petition filing/RFE/RFE response process into one where the developer would have the right to a hearing with the expert professionals described above in order for the Service to articulate any questions or concerns and for the developer and his team of professionals to provide answers. This should result in faster, better and more informed adjudications.

The public has had an opportunity to comment on the proposal. Although commenters no doubt suggested improvements to the proposal, there is no question that implementation of the proposal, with whatever changes are deemed appropriate, will be a major step forward in making the EB-5 program more attractive for businesses seeking capital. This would be consistent with President Obama’s Select USA Initiative to attract more foreign direct investment into the U.S.

Although the proposal is a major step forward, it means nothing unless and until it is actually adopted by USCIS. The public eagerly awaits notification of its implementation.