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Stimulus Act Restricts Use of H 1B Workers

    Client Alerts
  • February 23, 2009

The American Recovery and Reinvestment Act of 2009 ("ARRA"), the stimulus bill signed by President Obama on February 17, 2009, includes provisions that will immediately affect certain companies, principally in the financial industry, that employ H-1B foreign specialty occupation ("professional") workers.

Section 1611, or the "Employ American Workers Act" ("EAWA"), of the ARRA places new restrictions on H-1B petitions filed by any company that receives funding under title I of the Emergency Economic Stabilization Act of 2008 (the "TARP Bill") or that receives funding under Section 13 of the Federal Reserve Act (short-term, secured loans made to financial institutions from the Federal Reserve's "Discount Window"). From February 17, 2009 through February 16, 2011, when the EAWA will sunset, companies that have received funding under the TARP Bill or through the Discount Window must comply with two extra Labor Condition Application attestations, previously imposed on "H-1B dependent employers."

Specifically, the employer must attest that it has:

  1.  taken good-faith steps to recruit U.S. workers for the position for which the H-1B worker is sought, offering a wage that is at least as high as that required by law to be offered to the H-1B worker. The employer must also attest that, in connection with this recruitment, it has offered the job to any U.S. worker who applies and is equally or better qualified for the position.

  2. not laid off, and will not lay off, any U.S. worker in a job that is essentially equivalent to the H-1B position in the area of intended employment of the H-1B worker within the period beginning 90 days prior to the filing of the H-1B petition and ending 90 days after its filing.

Unlike the current H-1B dependent employer rules, under EAWA there are no exemptions from the extra attestations for H-1B workers who possess a Master's degree or who receive wages of at least $60,000 per year. It is still unclear whether the restrictions will apply to H-1B extension petitions filed on behalf of current H-1B employees of covered employers or to H-1B changes of status filed for current employees of covered employers who are working pursuant to another nonimmigrant status such as F-1, TN or L-1.

It is important to note that the EAWA does not apply to companies receiving funds under the stimulus bill itself. The EAWA's restrictions only apply to banks and other companies receiving TARP money or credit directly from the Federal Reserve System.

Also of note: The Kingston E-Verify amendment, which would have required companies which received TARP money to enroll in the government's E-Verify (electronic worker verification) system  was struck from the ARRA.