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105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-657
_______________________________________________________________________


 
            WORKFORCE IMPROVEMENT AND PROTECTION ACT OF 1998

_______________________________________________________________________


 July 29, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Smith of Texas, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3736]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 3736) to amend the Immigration and Nationality Act to 
make changes relating to H-1B nonimmigrants, having considered 
the same, report favorably thereon with an amendment and 
recommend that the bill as amended do pass.


                                CONTENTS
                                                                   Page
The Amendment..............................................           2
Purpose and Summary........................................           6
Background and Need for the Legislation....................           7
Hearings...................................................          23
Committee Consideration....................................          23
Vote of the Committee......................................          23
Committee Oversight Findings...............................          25
Committee on Government Reform and Oversight Findings......          25
New Budget Authority and Tax Expenditures..................          26
Congressional Budget Office Cost Estimate..................          26
Constitutional Authority Statement.........................          27
Section-by-Section Analysis and Discussion.................          27
Agency Views...............................................          34
Changes in Existing Law Made by the Bill, as Reported......          35
Additional Views...........................................          41

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Workforce Improvement and Protection 
Act of 1998''.

SEC. 2. TEMPORARY INCREASE IN SKILLED FOREIGN WORKERS; TEMPORARY 
                    REDUCTION IN H-2B NONIMMIGRANTS.

  Section 214(g) of the Immigration and Nationality Act (8 U.S.C. 
1184(g)) is amended--
          (1) by amending paragraph (1)(A) to read as follows:
          ``(A) under section 101(a)(15)(H)(i)(b), subject to paragraph 
        (5), may not exceed--
                  ``(i) 95,000 in fiscal year 1998;
                  ``(ii) 105,000 in fiscal year 1999;
                  ``(iii) 115,000 in fiscal year 2000; and
                  ``(iv) 65,000 in fiscal year 2001 and any subsequent 
                fiscal year; or'';
          (2) by amending paragraph (1)(B) to read as follows:
          ``(B) under section 101(a)(15)(H)(ii)(b) may not exceed--
                  ``(i) 36,000 in fiscal year 1998;
                  ``(ii) 26,000 in fiscal year 1999;
                  ``(iii) 16,000 in fiscal year 2000; and
                  ``(iv) 66,000 in fiscal year 2001 and any subsequent 
                fiscal year.'';
          (3) in paragraph (4), by striking ``years.'' and inserting 
        ``years, except that, with respect to each such nonimmigrant 
        issued a visa or otherwise provided nonimmigrant status in each 
        of fiscal years 1998, 1999, and 2000 in excess of 65,000 (per 
        fiscal year), the period of authorized admission as such a 
        nonimmigrant may not exceed 4 years.''; and
          (4) by adding at the end the following:
  ``(5) The total number of aliens described in section 212(a)(5)(C) 
who may be issued visas or otherwise provided nonimmigrant status 
during any fiscal year (beginning with fiscal year 1999) under section 
101(a)(15)(H)(i)(b) may not exceed 5,000.''.

SEC. 3. PROTECTION AGAINST DISPLACEMENT OF UNITED STATES WORKERS.

  (a) In General.--Section 212(n)(1) of the Immigration and Nationality 
Act (8 U.S.C. 1182(n)(1)) is amended by inserting after subparagraph 
(D) the following:
          ``(E)(i) Except as provided in clause (iv), the employer has 
        not laid off or otherwise displaced and will not lay off or 
        otherwise displace, within the period beginning 6 months before 
        and ending 90 days following the date of filing of the 
        application or during the 90 days immediately preceding and 
        following the date of filing of any visa petition supported by 
        the application, any United States worker (as defined in 
        paragraph (3)) (including a worker whose services are obtained 
        by contract, employee leasing, temporary help agreement, or 
        other similar means) who has substantially equivalent 
        qualifications and experience in the specialty occupation, and 
        in the area of employment, for which H-1B nonimmigrants are 
        sought or in which they are employed.
          ``(ii) Except as provided in clause (iii), in the case of an 
        employer that employs an H-1B nonimmigrant, the employer shall 
        not place the nonimmigrant with another employer where--
                  ``(I) the nonimmigrant performs his or her duties in 
                whole or in part at one or more worksites owned, 
                operated, or controlled by such other employer; and
                  ``(II) there are indicia of an employment 
                relationship between the nonimmigrant and such other 
                employer.
          ``(iii) Clause (ii) shall not apply to an employer's 
        placement of an H-1B nonimmigrant with another employer if the 
        other employer has executed an attestation that it satisfies 
        and will satisfy the conditions described in clause (i) during 
        the period described in such clause.
          ``(iv) This subparagraph shall not apply to an application 
        filed by an employer that is an institution of higher education 
        (as defined in section 1201(a)of the Higher Education Act of 
1965), or a related or affiliated nonprofit entity, if the application 
relates solely to aliens who--
                  ``(I) the employer seeks to employ--
                          ``(aa) as a researcher on a project for which 
                        not less than 50 percent of the funding is 
                        provided, for a limited period of time, through 
                        a grant or contract with an entity other than 
                        the employer; or
                          ``(bb) as a professor or instructor under a 
                        contract that expires after a limited period of 
                        time; and
                  ``(II) have attained a master's or higher degree (or 
                its equivalent) in a specialty the specific knowledge 
                of which is required for the intended employment.''.
  (b) Definitions.--
          (1) In general.--Section 212(n) of the Immigration and 
        Nationality Act (8 U.S.C. 1182(n)) is amended by adding at the 
        end the following:
  ``(3) For purposes of this subsection:
          ``(A) The term `H-1B nonimmigrant' means an alien admitted or 
        provided status as a nonimmigrant described in section 
        101(a)(15)(H)(i)(b).
          ``(B) The term `lay off or otherwise displace', with respect 
        to an employee--
                  ``(i) means to cause the employee's loss of 
                employment, other than through a discharge for cause, a 
                voluntary departure, or a voluntary retirement; and
                  ``(ii) does not include any situation in which 
                employment is relocated to a different geographic area 
                and the employee is offered a chance to move to the new 
                location, with wages and benefits that are not less 
                than those at the old location, but elects not to move 
                to the new location.
          ``(C) The term `United States worker' means--
                  ``(i) a citizen or national of the United States;
                  ``(ii) an alien lawfully admitted for permanent 
                residence; or
                  ``(iii) an alien authorized to be employed by this 
                Act or by the Attorney General.''.
          (2) Conforming amendments.--Section 212(n)(1) of the 
        Immigration and Nationality Act (8 U.S.C. 1182(n)(1)) is 
        amended by striking ``a nonimmigrant described in section 
        101(a)(15)(H)(i)(b)'' each place such term appears and 
        inserting ``an H-1B nonimmigrant''.

SEC. 4. RECRUITMENT OF UNITED STATES WORKERS PRIOR TO SEEKING 
                    NONIMMIGRANT WORKERS.

  Section 212(n)(1) of the Immigration and Nationality Act (8 U.S.C. 
1182(n)(1)), as amended by section 3, is further amended by inserting 
after subparagraph (E) the following:
          ``(F)(i) The employer, prior to filing the application, has 
        taken, in good faith, timely and significant steps to recruit 
        and retain sufficient United States workers in the specialty 
        occupation for which H-1B nonimmigrants are sought. Such steps 
        shall have included recruitment in the United States, using 
        procedures that meet industry-wide standards and offering 
        compensation that is at least as great as that required to be 
        offered to H-1B nonimmigrants under subparagraph (A), and 
        offering employment to any United States worker who applies and 
        has the same qualifications as, or better qualifications than, 
        any of the H-1B nonimmigrants sought.
          ``(ii) The conditions described in clause (i) shall not apply 
        to an employer with respect to the employment of an H-1B 
        nonimmigrant who is described in subparagraph (A), (B), or (C) 
        of section 203(b)(1).''.

SEC. 5. LIMITATION ON AUTHORITY TO INITIATE COMPLAINTS AND CONDUCT 
                    INVESTIGATIONS FOR NON-H-1B-DEPENDENT EMPLOYERS.

  (a) In General.--Section 212(n)(2)(A) of the Immigration and 
Nationality Act (8 U.S.C. 1182(n)(2)(A)) is amended--
          (1) in the second sentence, by striking the period at the end 
        and inserting the following: ``, except that the Secretary may 
        only file such a complaint respecting an H-1B-dependent 
        employer (as defined in paragraph (3)), and only if there 
        appears to be a violation of an attestation or a 
        misrepresentation of a material fact in an application.''; and
          (2) by inserting after the second sentence the following: 
        ``Except as provided in subparagraph (F) (relating to spot 
        investigations during probationary period), no investigation or 
        hearing shall be conducted with respect to an employer except 
        in response to a complaint filed under the previous 
        sentence.''.
  (b) Definitions.--Section 212(n)(3) of the Immigration and 
Nationality Act (8 U.S.C. 1182(n)(2)), as added by section 3, is 
amended--
          (1) by redesignating subparagraphs (A), (B), and (C) as 
        subparagraphs (B), (C), and (E), respectively;
          (2) by inserting after ``purposes of this subsection:'' the 
        following:
          ``(A) The term `H-1B-dependent employer' means an employer 
        that--
                  ``(i)(I) has fewer than 21 full-time equivalent 
                employees who are employed in the United States; and 
                (II) employs 4 or more H-1B nonimmigrants; or
                  ``(ii)(I) has at least 21 but not more than 150 full-
                time equivalent employees who are employed in the 
                United States; and (II) employs H-1B nonimmigrants in a 
                number that is equal to at least 20 percent of the 
                number of such full-time equivalent employees; or
                  ``(iii)(I) has at least 151 full-time equivalent 
                employees who are employed in the United States; and 
                (II) employs H-1B nonimmigrants in a number that is 
                equal to at least 15 percent of the number of such 
                full-time equivalent employees.
        In applying this subparagraph, any group treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        of the Internal Revenue Code of 1986 shall be treated as a 
        single employer. Aliens employed under a petition for H-1B 
        nonimmigrants shall be treated as employees, and counted as 
        nonimmigrants under section 101(a)(15)(H)(i)(b) under this 
        subparagraph.''; and
          (3) by inserting after subparagraph (C) (as so redesignated) 
        the following:
          ``(D) The term `non-H-1B-dependent employer' means an 
        employer that is not an H-1B-dependent employer.''.

SEC. 6. INCREASED ENFORCEMENT AND PENALTIES.

  (a) In General.--Section 212(n)(2)(C) of the Immigration and 
Nationality Act (8 U.S.C. 1182(n)(2)(C)) is amended to read as follows:
  ``(C)(i) If the Secretary finds, after notice and opportunity for a 
hearing, a failure to meet a condition of paragraph (1)(B) or (1)(E), a 
substantial failure to meet a condition of paragraph (1)(C), (1)(D), or 
(1)(F), or a misrepresentation of material fact in an application--
          ``(I) the Secretary shall notify the Attorney General of such 
        finding and may, in addition, impose such other administrative 
        remedies (including civil monetary penalties in an amount not 
        to exceed $1,000 per violation) as the Secretary determines to 
        be appropriate; and
          ``(II) the Attorney General shall not approve petitions filed 
        with respect to that employer under section 204 or 214(c) 
        during a period of at least 1 year for aliens to be employed by 
        the employer.
  ``(ii) If the Secretary finds, after notice and opportunity for a 
hearing, a willful failure to meet a condition of paragraph (1), a 
willful misrepresentation of material fact in an application, or a 
violation of clause (iv)--
          ``(I) the Secretary shall notify the Attorney General of such 
        finding and may, in addition, impose such other administrative 
        remedies (including civil monetary penalties in an amount not 
        to exceed $5,000 per violation) as the Secretary determines to 
        be appropriate; and
          ``(II) the Attorney General shall not approve petitions filed 
        with respect to that employer under section 204 or 214(c) 
        during a period of at least 1 year for aliens to be employed by 
        the employer.
  ``(iii) If the Secretary finds, after notice and opportunity for a 
hearing, a willful failure to meet a condition of paragraph (1) or a 
willful misrepresentation of material fact in an application, in the 
course of which failure or misrepresentation the employer also has 
failed to meet a condition of paragraph (1)(E)--
          ``(I) the Secretary shall notify the Attorney General of such 
        finding and may, in addition, impose such other administrative 
        remedies (including civil monetary penalties in an amount not 
        to exceed $25,000 per violation) as the Secretary determines to 
        be appropriate; and
          ``(II) the Attorney General shall not approve petitions filed 
        with respect to that employer under section 204 or 214(c) 
        during a period of at least 2 years for aliens to be employed 
        by the employer.
  ``(iv) It is a violation of this clause for an employer who has filed 
an application under this subsection to intimidate, threaten, restrain, 
coerce, blacklist, discharge, or in any other manner discriminate 
against an employee (which term, for purposes of this clause, includes 
a former employee and an applicant for employment) because the employee 
has disclosed information to the employer, or to any other person, that 
the employee reasonably believes evidences a violation of this 
subsection, or any rule or regulation pertaining to this subsection, or 
because the employee cooperates or seeks to cooperate in an 
investigation or other proceeding concerning the employer's compliance 
with the requirements of this subsection or any rule or regulation 
pertaining to this subsection.''.
  (b) Placement of H-1B Nonimmigrant With Other Employer.--Section 
212(n)(2) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(2)) 
is amended by adding at the end the following:
  ``(E) Under regulations of the Secretary, the previous provisions of 
this paragraph shall apply to a failure of another employer to comply 
with an attestation described in paragraph (1)(E)(iii) in the same 
manner as they apply to a failure to comply with a condition described 
in paragraph (1)(E)(i).''.
  (c) Spot Investigations During Probationary Period.--Section 
212(n)(2) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(2)), 
as amended by subsection (b), is further amended by adding at the end 
the following:
  ``(F) The Secretary may, on a case-by-case basis, subject an employer 
to random investigations for a period of up to 5 years, beginning on 
the date that the employer is found by the Secretary to have committed 
a willful failure to meet a condition of paragraph (1) or to have made 
a misrepresentation of material fact in an application. The preceding 
sentence shall apply to an employer regardless of whether the employer 
is an H-1B-dependent employer or a non-H-1B-dependent employer. The 
authority of the Secretary under this subparagraph shall not be 
construed to be subject to, or limited by, the requirements of 
subparagraph (A).''.

SEC. 7. PROHIBITION ON IMPOSITION BY IMPORTING EMPLOYERS OF EMPLOYMENT 
                    CONTRACT PROVISIONS VIOLATING PUBLIC POLICY.

  Section 212(n)(2) of the Immigration and Nationality Act (8 U.S.C. 
1182(n)(2)), as amended by section (6), is further amended by adding at 
the end the following:
  ``(G) If the Secretary finds, after notice and opportunity for a 
hearing, that an employer who has submitted an application under 
paragraph (1) has requested or required an alien admitted or provided 
status as a nonimmigrant pursuant to the application, as a condition of 
the employment, to execute a contract containing a provision that would 
be considered void as against public policy in the State of intended 
employment--
          ``(i) the Secretary shall notify the Attorney General of such 
        finding and may, in addition, impose such other administrative 
        remedies (including civil monetary penalties in an amount not 
        to exceed $25,000 per violation) as the Secretary determines to 
        be appropriate; and
          ``(ii) the Attorney General shall not approve petitions filed 
        by the employer under section 214(c) during a period of not 
        more than 10 years for H-1B nonimmigrants to be employed by the 
        employer.''.

SEC. 8. IMPROVING COUNT OF H-1B AND H-2B NONIMMIGRANTS.

  (a) Ensuring Accurate Count.--The Attorney General shall take such 
steps as are necessary to maintain an accurate count of the number of 
aliens subject to the numerical limitations of section 214(g)(1) of the 
Immigration and Nationality Act who are issued visas or otherwise 
provided nonimmigrant status.
  (b) Revision of Petition Forms.--The Attorney General shall take such 
steps as are necessary to revise the forms used for petitions for visas 
or nonimmigrant status under clause (i)(b) or (ii)(b) of section 
101(a)(15)(H) of the Immigration and Nationality Act so as to ensure 
that the forms provide the Attorney General with sufficient information 
to permit the Attorney General accurately to count the number of aliens 
subject to the numerical limitations of section 214(g)(1) of such Act 
who are issued visas or otherwise provided nonimmigrant status.
  (c) Reports.--Beginning with fiscal year 1999, the Attorney General 
shall provide to the Congress not less than 4 times per year a report 
on--
          (1) the numbers of individuals who were issued visas or 
        otherwise provided nonimmigrant status during the preceding 3-
        month period under section 101(a)(15)(H)(i)(b) of the 
        Immigration and Nationality Act;
          (2) the numbers of individuals who were issued visas or 
        otherwise provided nonimmigrant status during the preceding 3-
        month period under section 101(a)(15)(H)(ii)(b) of such Act; 
        and
          (3) the countries of origin and occupations of, educational 
        levels attained by, and total compensation (including the value 
        of all wages, salary, bonuses, stock, stock options, and any 
        other similar forms of remuneration) paid to, individuals 
        issued visas or provided nonimmigrant status under such 
        sections during such period.

SEC. 9. GAO STUDY AND REPORT ON AGE DISCRIMINATION IN THE INFORMATION 
                    TECHNOLOGY FIELD.

  (a) Study.--The Comptroller General of the United States shall 
conduct a study assessing age discrimination in the information 
technology field. The study shall consider the following:
          (1) The prevalence of age discrimination in the information 
        technology workplace.
          (2) The extent to which there is a difference, based on age, 
        in promotion and advancement; working hours; telecommuting; 
        salary; and stock options, bonuses, or other benefits.
          (3) The relationship between rates of advancement, promotion, 
        and compensation to experience, skill level, education, and 
        age.
          (4) Differences in skill level on the basis of age.
  (b) Report.--Not later than October 1, 2000, the Comptroller General 
of the United States shall submit to the Committees on the Judiciary of 
the United States House of Representatives and the Senate a report 
containing the results of the study described in subsection (a). The 
report shall include any recommendations of the Comptroller General 
concerning age discrimination in the information technology field.

SEC. 10. GAO LABOR MARKET STUDY AND REPORT.

  (a) Study.--The Comptroller General of the United States shall 
conduct a labor market study. The study shall investigate and analyze 
the following:
          (1) The overall shortage of available workers in the high-
        technology, rapid-growth industries.
          (2) The multiplier effect growth of high-technology industry 
        on low-technology employment.
          (3) The relative achievement rates of United States and 
        foreign students in secondary school in a variety of subjects, 
        including math, science, computer science, English, and 
        history.
          (4) The relative performance, by subject area, of United 
        States and foreign students in postsecondary and graduate 
        schools as compared to secondary schools.
          (5) The labor market need for workers with information 
        technology skills and the extent of the deficit of such workers 
        to fill high-technology jobs during the 10-year period 
        beginning on the date of the enactment of this Act.
          (6) Future training and education needs of companies in the 
        high-technology sector.
          (7) Future training and education needs of United States 
        students to ensure that their skills at various levels match 
        the needs of the high-technology and information technology 
        sectors.
          (8) An analysis of which particular skill sets are in demand.
          (9) The needs of the high-technology sector for foreign 
        workers with specific skills.
          (10) The potential benefits of postsecondary educational 
        institutions, employers, and the United States economy from the 
        entry of skilled professionals in the fields of engineering and 
        science.
          (11) The effect on the high-technology labor market of the 
        downsizing of the defense sector, the increase in productivity 
        in the computer industry, and the deployment of workers 
        dedicated to the Year 2000 Project.
  (b) Report.--Not later than October 1, 2000, the Comptroller General 
of the United States shall submit to the Committees on the Judiciary of 
the United States House of Representatives and the Senate a report 
containing the results of the study described in subsection (a).

SEC. 11. EFFECTIVE DATE.

  The amendments made by this Act shall take effect on the date of the 
enactment of this Act and shall apply to applications filed with the 
Secretary of Labor on or after 30 days after the date of the enactment 
of this Act, except that the amendments made by section 2 shall apply 
to applications filed with such Secretary before, on, or after the date 
of the enactment of this Act.

                          Purpose and Summary

    H.R. 3736 would temporarily increase the quota for ``H-1B'' 
nonimmigrants and would add protections for American workers to 
the H-1B program.

                Background and Need for the Legislation

I. The H-1B Nonimmigrant Worker Program

                            A. Introduction

    ``H-1B'' visas are available for workers coming temporarily 
to the United States to perform services in a specialty 
occupation.\1\ Such an occupation is one that requires ``(A) 
theoretical and practical application of a body of highly 
specialized knowledge, and (B) attainment of a bachelor's or 
higher degree in the specific speciality (or its equivalent) as 
a minimum for entry into the occupation in the United States.'' 
\2\
---------------------------------------------------------------------------
    \1\ Section 101(a)(15)(H)(i)(b) of the Immigration and Nationality 
Act (hereinafter cited as ``INA'').
    \2\ INA sec. 214(i)(1).
---------------------------------------------------------------------------
    The total number of aliens who may be issued visas or 
otherwise provided nonimmigrant status as H-1B workers during 
any fiscal year may not exceed 65,000.\3\ The period of 
authorized admission is up to 6 years.\4\ Thus, a total of 
390,000 aliens may work in the U.S. at any one time. In fiscal 
year 1997, the 65,000 cap was reached for the first time on 
September 1.\5\ In fact, 5,099 aliens approved in September had 
to wait until October 1997 (the beginning of the new fiscal 
year) until they could work. In fiscal year 1997, the cap was 
reached on May 11.\6\
---------------------------------------------------------------------------
    \3\ INA sec. 214(g)(1)(A).
    \4\ INA sec. 214(g)(4).
    \5\ U.S. Immigration and Naturalization Service data. The number of 
aliens issued visas or otherwise provided nonimmigrant status as H-1B 
workers in 1992 was 48,645, in 1993 was 61,591, in 1994 was 60,279, in 
1995 was 54,178, and in 1996 was 55,141. Id.
    \6\ Id.
---------------------------------------------------------------------------
    Aliens seeking most temporary visas have to show that they 
have a residence in a foreign country which they have no 
intention of abandoning. This is not the case with H-1B visas. 
In fact, many employers use the H-1B visa as a ``try-out'' 
period for aliens for whom they are considering petitioning for 
permanent residence. If an employer does decide to seek 
permanent resident status for an alien, the alien can work for 
the employer as an H-1B alien during the multi-year period 
usually required to receive the labor certification needed as a 
prerequisite for permanent residence. In fiscal year 1996, a 
total of 18,441 aliens adjusted from H-1B status to legal 
permanent resident status.\7\
---------------------------------------------------------------------------
    \7\ Id.
---------------------------------------------------------------------------
    As to the country of origin of H-1B nonimmigrants, in 
fiscal year 1998 (through March), 44% of petitioned-for aliens 
came from India, 9% came from the People's Republic of China, 
5% came from the United Kingdom, 3% came from the Philippines, 
and 3% came from Canada.\8\ As to the occupations performed by 
H-1B nonimmigrants, in fiscal year 1996, 41.5% were computer-
related,\9\ 19.5% were therapists, 4.9% were other medicine/
health professionals, 2.9% were college/university faculty, 
2.5% were registered nurses, 2.4% were accountants/auditors, 
and 2.3% were physicians.\10\ In fiscal years 1992-95, 
computer-related positions had never surpassed 25.6%, and 
therapists reached a high of 53.5% in 1995.\11\
---------------------------------------------------------------------------
    \8\ Id.
    \9\ The Department of Labor considers computer-related occupations 
to include systems analysis/programming, software systems engineering, 
computer systems technical support, data communications and networks, 
computer system user support, and certain other occupations.
    \10\ U.S. Department of Labor data (based on approved 
applications).
    \11\ Id.
---------------------------------------------------------------------------
    As to the wages of H-1B nonimmigrants, in fiscal year 1997, 
3.1% were paid less than $25,000, 75.9% were paid between 
$25,000 and $50,000, 16% were paid between $50,000 and $75,000, 
and 4.9% were paid more than $75,000.\12\
---------------------------------------------------------------------------
    \12\ Id.
---------------------------------------------------------------------------

                       B. The Attestation Process

    Because the need of employers to bring H-1B aliens on board 
in the shortest possible time, the H-1B program's mechanism for 
protecting American workers is not based on a lengthy pre-
arrival review of the availability of suitable American workers 
(such as the labor certification process necessary to obtain 
most employer-sponsored immigrant visas). Instead, an employer 
files a ``labor condition application'' making certain basic 
attestations (promises) and the Secretary of Labor then 
investigates complaints alleging noncompliance.\13\
---------------------------------------------------------------------------
    \13\ INA sec. 212(n).
---------------------------------------------------------------------------
    There are four attestations:
          (1) The employer will pay H-1B aliens wages that are 
        the higher of the actual wage level paid by the 
        employer to all other individuals with similar 
        experience and qualifications for the specific 
        employment in question or the prevailing wage level for 
        the occupational classification in the area of 
        employment, and the employer will provide working 
        conditions for H-1B aliens that will not adversely 
        affect those of workers similarly employed.
          (2) There is no strike or lockout in the course of a 
        labor dispute in the occupational classification at the 
        place of employment.
          (3) At the time of the filing of the application, the 
        employer has provided notice of the filing to the 
        bargaining representative of the employer's employees 
        in the occupational classification and area for which 
        the H-1B aliens are sought, or if there is no such 
        bargaining representative, the employer has posted 
        notice in conspicuous locations at the place of 
        employment.
          (4) The application will contain a specification of 
        the number of aliens sought, the occupational 
        classification in which the aliens will be employed, 
        and the wage rate and conditions under which they will 
        be employed.\14\
---------------------------------------------------------------------------
    \14\ INA sec. 212(n)(1).
---------------------------------------------------------------------------
    The Secretary of Labor must accept an employer's 
application within seven days of filing unless it is incomplete 
or obviously inaccurate.\15\ Departmental investigations as to 
whether an employer has failed to fulfill its attestations or 
has misrepresented material facts in its application are 
triggered by complaints filed by aggrieved persons or 
organizations (including bargaining representatives).\16\ 
Investigations shall be conducted where there is reasonable 
cause to believe that a violation has occurred.\17\
---------------------------------------------------------------------------
    \15\ Id.
    \16\ INA sec. 212 (n)(2)(A).
    \17\ Id.
---------------------------------------------------------------------------
    An employer is subject to penalties for failing to fulfill 
the attestations--for willfully failing to pay the required 
wage, for there being a strike or lockout, for substantially 
failing to provide notice or provide all required information 
in an application--and for making a misrepresentation of 
material fact in an application.\18\ Penalties include 
administrative remedies (including civil monetary penalties not 
to exceed $1,000 per violation) that the Secretary of Labor 
determines to be appropriate and a bar for at least one year on 
the Attorney General's ability to approve petitions filed by 
the employer for alien workers (both immigrant and 
nonimmigrant).\19\ In addition, the Secretary of Labor must 
order an employer to provide an H-1B nonimmigrants with back 
pay where wages were not paid at the required level, regardless 
of whether other penalties are imposed.\20\
---------------------------------------------------------------------------
    \18\ INA sec. 212(n)(2)(C).
    \19\ Id.
    \20\ INA sec. 212(n)(2)(D).
---------------------------------------------------------------------------
    Between 1992 and 1997, the Secretary of Labor received 250 
complaints and launched 158 investigations. Of the 103 
investigations that have become final, a violation was found in 
90. Civil monetary penalties of $205,500 have been assessed. In 
71 investigations, $1,940,506 in back wages were found to be 
due to 430 H-1B nonimmigrants.\21\
---------------------------------------------------------------------------
    \21\ U.S. Department of Labor data.
---------------------------------------------------------------------------

          C. Labor Department Concerns About the H-1B Program

    In 1995, then Secretary of Labor Robert Reich stated that:

          Our experience with the practical operation of the H-
        1B program has raised serious concerns * * * that what 
        was conceived as a means to meet temporary business 
        needs for unique, highly skilled professionals from 
        abroad is, in fact, being used by some employers to 
        bring in relatively large numbers of foreign workers 
        who may well be displacing U.S. workers and eroding 
        employers' commitment to the domestic workforce. Some 
        employers * * * seek the admission of scores, even 
        hundreds of [H-1B aliens], especially for work in 
        relatively low-level computer-related and health care 
        occupations. These employers include ``job 
        contractors,'' some of which have a workforce composed 
        predominantly or even entirely of H-1B workers, which 
        then lease these employees to other U.S. companies or 
        use them to provide services previously provided by 
        laid off U.S. workers.\22\
---------------------------------------------------------------------------
    \22\ Nonimmigrant Visas: Hearings Before the Subcomm. on 
Immigration of the Senate Judiciary Comm., 104th Cong., 1st Sess. 
(Sept. 28, 1995).
---------------------------------------------------------------------------
    Responding to such concerns, the Department of Labor 
promulgated a set of final rules which went into effect on 
January 19, 1995.\23\ Instead of targeting job contractors or 
companies relying to an excessive degree on H-1B aliens, the 
regulations imposed what many (including this Committee) 
considered to be burdensome new requirements on all employers 
of H-1B aliens.\24\ The National Association of Manufacturers 
sought to overturn the regulations on various procedural and 
substantive grounds. The U.S. District Court for the District 
of Columbia declared on procedural grounds many portions of the 
regulations invalid and void.\25\
---------------------------------------------------------------------------
    \23\ 59 Fed. Reg. 65646 (Dec. 20, 1994).
    \24\ See H.R. Rep. No.104-469, 104th Cong., 2d Sess., pt. 1, at 
147-49 (1996).
    \25\ National Association of Manufacturers v. U.S. Department of 
Labor, Civ. Action No. 95-0715 (D. D.C. July 22, 1996).
---------------------------------------------------------------------------
    The Department of Labor's Office of Inspector General 
conducted an audit of the H-1B program. Its report, issued in 
1996, was generally critical of the program. The report found 
that correct wages were not always being paid:

          The employer's attestation to * * * pay the 
        prevailing wage is the only safeguard against the 
        erosion of U.S. worker's [sic.] wages.
          For 75 percent * * * of all cases where the 
        nonimmigrant worked for the petitioning employer * * * 
        the employer did not adequately document that the wage 
        level specified on the [application] was the correct 
        wage. * * * Therefore, although the employers are 
        attesting that they have adequately documented the wage 
        to be paid the alien, most do not. For these cases we 
        are unable to determine the full extent to which H-1B 
        nonimmigrants are being paid less than the prevailing 
        wage.
          Nevertheless, many employers paid the aliens less 
        than the * * * wage they certified they would pay, 
        whether the wage rate was adequately documented or not. 
        Of the * * * cases where the employers adequately 
        documented the wage paid, 19 percent of the aliens were 
        paid less than the wage specified on the 
        [application].\26\
---------------------------------------------------------------------------
    \26\ Office of Inspector General, U.S. Department of Labor, Final 
Report: The Department of Labor's Foreign Labor Certification Programs: 
The System is Broken and Needs to Be Fixed 21 (May 22, 1996).

    The report also criticized job contractors, or ``job 
---------------------------------------------------------------------------
shops'':

          We found that 6 percent of the * * * H-1B aliens * * 
        * were contracted out by the petitioning employer to 
        other employers. Some of the petitioning employers 
        operate job shops--companies which hire predominantly, 
        or exclusively, H-1B aliens then contract out these 
        aliens to other employers. The current H-1B law does 
        not prohibit this practice; however, there is a concern 
        that these job shops are paying the H-1B aliens less 
        than prevailing wage, making contracting out with job 
        shops more appealing to the U.S. employer.
          Our sample of * * * cases also included six petitions 
        for another job shop contractor. * * * For five of the 
        six cases, the employer established the same prevailing 
        wage--$27,000--for all jobs even though the jobs were 
        located in four different States. It is highly unlikely 
        that the prevailing wage was the same for this job in 
        all four locations.\27\
---------------------------------------------------------------------------
    \27\ Id. at 25-27.
---------------------------------------------------------------------------
    In 1998, Acting Assistant Secretary of Labor Raymond Uhalde 
stated that:

          In practice * * * employers do not have to 
        demonstrate any type of employment need or domestic 
        recruitment prior to getting a temporary foreign 
        worker. In addition, the Labor Department has limited 
        authority to enforce the minimum standards that 
        employers must adhere to * * *.
          [R]eform of the H-1B program is needed because it 
        does not provide the needed balance between timely 
        access to theinternational labor market and adequate 
protection of U.S. workers' job opportunities, wages and working 
conditions.

          Greater protections for U.S. workers are needed 
        because many employers use the H-1B program to employ 
        not the ``best and brightest,'' but rather entry-level 
        foreign workers. Minimum education and work experience 
        qualifications for H-1B jobs are quite low--a 4-year 
        college degree and no work experience, or the 
        equivalent in terms of combined education and work 
        experience. While some H-1B jobs are high-paying jobs, 
        the education and work qualifications result in nearly 
        80% of H-1B jobs paying less than $50,000 a year.
          The H-1B program is broken in several respects. 
        First, current law does not require any test for the 
        availability of qualified U.S. workers in the domestic 
        labor market. Therefore, many of the visas under the 
        current cap of 65,000 can be used lawfully by employers 
        to hire foreign workers for purposes other than meeting 
        a skills shortage. Second, current law allows a U.S. 
        employer to lay off U.S. workers and replace them with 
        H-1B workers. . . . Third, current law allows employers 
        to retain H-1B workers for up to 6 years to fill a 
        presumably ``temporary'' need.\28\
---------------------------------------------------------------------------
    \28\ Hearings Before the Subcomm. on Immigration of the Senate 
Judiciary Comm., 105th Cong., 2nd Sess. (Feb. 25, 1998) (hereinafter 
cited as ``Senate Hearing'').
---------------------------------------------------------------------------

             D. Media Reports of Abuses in the H-1B Program

    In 1993, correspondent Lesley Stahl of ``60 Minutes'' 
criticized the use of the H-1B program by job contractors:

          When any American company needs programmers, the body 
        shops can often deliver employees all the way from 
        Bombay for rates that are so cheap, Americans just 
        across town can't compete. This is an employment 
        agreement between one foreign programmer and an India-
        based body shop called Blue Star. It tells her she'll 
        be assigned to Hewlett-Packard in California, that her 
        salary of $250 a month will be paid back in India, and 
        that she'll receive $1,300 a month for living expenses 
        in the United States. Total that up and it comes to 
        less than $20,000 a year--nowhere near what Hewlett-
        Packard would have to pay an American. But Hewlett-
        Packard never actually hired her; they merely made a 
        deal with the body shop and paid the body shop a flat 
        hourly rate.
          The companies have a built-in system of deniability. 
        They take a ``see no evil, hear no evil'' approach. 
        It's the body shops that have all the responsibility 
        because the foreign workers remain their employees. 
        It's the body shops that pick the programmers, then get 
        them their visas and assign them to the American 
        companies where they'll work. It's a way of insulating 
        the American firms. As an executive told us, ``We don't 
        want to know what the body shops are doing.'' \29\
---------------------------------------------------------------------------
    \29\ 60 Minutes (CBS television broadcast, Oct. 3, 1993).
---------------------------------------------------------------------------
    Numerous articles in major newspapers have documented 
employers laying off American workers and replacing them with 
H-1B aliens--usually from job contractors or by 
outsourcing.\30\
---------------------------------------------------------------------------
    \30\ See, e.g., Gary Hoffman, Troy Firm in Middle of Jobs Fight, 
Detroit News, Feb. 28, 1996; Jim Landers, Engineers, Programmers Battle 
``Body Shopping,'' Dallas Morning News, Oct. 30, 1995; William 
Branigin, White-Collar Visas: Importing Needed Skills or Cheap Labor?, 
Wash. Post, Oct. 21, 1995.
---------------------------------------------------------------------------

II. The State of the Labor Market for Information Technology Workers

    There is a widespread belief that the United States is 
facing a severe shortage of workers who are qualified to 
perform skilled information technology jobs. This belief has 
been fostered, in part, by a number of studies designed to 
document a shortage of information technology workers, 
including Help Wanted: The IT Workforce Gap at the Dawn of a 
New Century, America's New Deficit: The Shortage of Information 
Technology Workers, and Help Wanted 1998: A Call for 
Collaborative Action for the New Millennium.
    In 1997's Help Wanted, the Information Technology 
Association of America reported the results of a survey it had 
sent to a randomly selected sample of 2,000 large and mid-size 
information technology and non-information technology 
companies, asking ``How many vacancies does your company have 
for employees skilled in information technology?'' \31\ Two 
hundred and seventy one companies responded.\32\ Based on the 
survey results, ITAA estimated that there are approximately 
191,000 vacancies for information technology workers at large 
and mid-size American companies.\33\ The survey found that 82% 
of information technology companies expected to increase (and 
only 2% expected to decrease) the number of information 
technology workers they employed in the coming year; as did 56% 
(and 3%) of non-information technology companies.\34\ Fifty 
percent of responding information technology companies said 
that a lack of skilled/trained workers would represent the 
companies' most significant barrier to growth over the next 12 
month.\35\
---------------------------------------------------------------------------
    \31\ Help Wanted at 9, 15.
    \32\ Id. at 55.
    \33\ Id. at 16, 49.
    \34\ Id.
    \35\ Id. at 21.
---------------------------------------------------------------------------
    Help Wanted also found that ``[t]he rising compensation of 
[information technology] workers indicate the high demand for 
these individuals, as employers are bidding up their wages.'' 
\36\ The study reported increases in annual compensation 
between 1995 and 1996 for various information technology 
professions of from 12 to 19.7%.\37\ The study also noted that 
the number of bachelor degrees awarded in computer science at 
American universities fell by 43% from 1986 to 1994, from 
42,195 to 24,200.\38\
---------------------------------------------------------------------------
    \36\ Id. at 17.
    \37\ Id. at 18-19.
    \38\ Id. at 39 (Eighty-four percent of the information technology 
companies responding to ITAA's study stated that a bachelor's degree 
was the highest level of education completed by most of the information 
technology workers they hired. Id. at 40.)
---------------------------------------------------------------------------
    In conclusion, Help Wanted found that ``[c]lear evidence 
exists that the demand for skilled [information technology] 
workers is far outstripping the current supply of such 
workers.'' \39\ The report worried that, among other things, 
``in the absence of sufficient [information technology] workers 
we can expect to see slower growth in the [information 
technology] industry and in non-[information technology] 
companies that need such workers than we would have seen 
otherwise'' and that ``[a]s companies scale back their plans 
for growth and make related adjustments, we can anticipate 
slower job growth and less wealth creation than we would have 
seen.'' \40\
---------------------------------------------------------------------------
    \39\ Id. at 21.
    \40\ Id. at 5-6.
---------------------------------------------------------------------------
    Also in 1997, the U.S. Department of Commerce's Office of 
Technology Policy issued America's New Deficit. The study first 
noted that the U.S. Department of Labor's Bureau of Labor 
Statistics estimated that between 1994 and 2005, over one 
million new computer scientists and engineers, systems 
analysts, and computer programmers will be needed to fill 
820,000 newly created jobs and replace 227,000 workers leaving 
the fields.\41\ The number of systems analysts will grow from 
483,000 to 928,000, the number of computer engineers and 
scientists will grow from 345,000 to 655,000, and the number of 
computer programmers will grow from 537,000 to 601,000.\42\
---------------------------------------------------------------------------
    \41\ America's New Deficit at 5.
    \42\ Id. The Office of Technology Policy updated the study in 
January 1988 to account for new data from the Bureau of Labor 
Statistics. BLS reported that between 1996 and 2006, the United States 
will need more than 1.3 million new workers in the three occupations to 
fill 1,134,000 newly created jobs and replace 244,000 departing 
workers. Systems analysts are expected to increase from 506,000 to 
1,025,000, computer engineers and scientists are expected to increase 
from 427,000 to 912,000, and computer programmers are expected to 
increase from 567,000 to 697,000.
    The new BLS data also indicates that the computer and data 
processing services industry will have the fastest job growth of any 
industry between 1996 and 2006--108%. U.S. Department of Labor, Bureau 
of Labor Statistics, News (Dec. 3, 1997). In addition, the three 
occupations with the fastest employment growth over these years will be 
(1) database administrators, computer support specialists, and all 
other computer scientists--118%, (2) computer engineers--109%, and (3) 
systems analysts--103%. Id.
---------------------------------------------------------------------------
    The study found that ``there is substantial evidence that 
the United States is having trouble keeping up with the demand 
for new information technology workers.'' \43\ It stated that 
``[t]he strongest evidence that a shortage exists is upward 
pressure on salaries. The competition for skilled [information 
technology] workers has contributed to substantial salary 
increases in many [information technology] professions.'' \44\ 
For example, it cited the salary data cited in Help Wanted and 
noted Computerworld's annual survey findings that in 11 of 26 
positions tracked, average salaries increased more than 10% 
from 1996 to 1997.\45\ The study also noted the findings of 
Help Wanted of 191,000 unfilled information technology jobs and 
a decrease in computer science graduates, and noted that some 
companies are using overseas talent pools to find information 
technology workers.\46\ It did add a caveat, stating that ``the 
information and data [are] inadequate to completely 
characterize the dynamics of the [information technology] labor 
market.'' \47\
---------------------------------------------------------------------------
    \43\ America's New Deficit at 1.
    \44\ Id. at 11.
    \45\ Id.
    \46\ Id. at 1, 11, 15.
    \47\ Id. at 35.
---------------------------------------------------------------------------
    America's New Deficit noted with concern that ``[s]ince 
information technology is an enabling technology that affects 
the entire economy, our failure to meet the growing demand for 
[information technology] professionals could have severe 
consequences for Americacompetitiveness, economic growth, and 
job creation.'' \48\ More specifically:
---------------------------------------------------------------------------
    \48\ Id. at 2.

          [C]omputer-based information systems have become an 
        indispensable part of managing information, workflow, 
        and transactions in both the public and private sector. 
        Therefore, a shortage of [information technology] 
        workers affects directly the ability to develop and 
        implement systems that a wide variety of users need to 
        enhance their performance and control costs. * * *
          High-tech industries, particularly leading-edge 
        electronics and information technology industries, are 
        driving economic growth. * * * These industries are 
        [information technology] worker intensive and shortages 
        of critical skills would inhibit their performance and 
        growth potential.
          Shortages of [information technology] workers could 
        inhibit the nation's ability to develop leading-edge 
        products and services, and raise their costs which, in 
        turn, would reduce U.S. competitiveness and constrain 
        economic growth.
          The shortage of [information technology] workers 
        could undermine U.S. performance in global markets. * * 
        * The United States is both the predominant supplier of 
        and the primary consumer for [computer software and 
        computer services].\49\
---------------------------------------------------------------------------
    \49\ Id. at 19-21.

    Help Wanted 1998 was issued by ITAA and the Virginia 
Polytechnic Institute and State University, with the latter 
having developed and conducted the survey, analyzed the results 
and authored the report.\50\ The report was designed, in part, 
to verify the results of Help Wanted, improve the methodology 
used, and obtain more detailed information.\51\
---------------------------------------------------------------------------
    \50\ Help Wanted 1998 at 6.
    \51\ Id.
---------------------------------------------------------------------------
    The study surveyed a random sample of 1,493 American 
information technology and non-information technology companies 
(of which 532 responded), and included smaller companies than 
did the original Help Wanted.\52\ The study extrapolated the 
response to a question similar to the one asked in Help Wanted 
to find that there are 346,000 vacancies in three core 
information technology professions (systems analysts, computer 
scientists and engineers, and computer programmers)--129,000 in 
information technology companies and 217,000 in non-information 
technology companies.\53\ This represents 10% of total 
employment in these professions.\54\ Of responding companies, 
85% said it was ``very difficult'' or ``somewhat difficult'' to 
hire programmers (78% for systems analysts and 84% for computer 
scientists and engineers).\55\
---------------------------------------------------------------------------
    \52\ Id. at 7.
    \53\ Id. at 9 (If information technology workers were considered 
more broadly, the survey estimated 606,000 vacancies. Id. at 11.). The 
study did state that ``even if 346,000 qualified applicants * * * 
appeared today, in all probability immediate positions would not be 
available--to translate this number to an absolute would be 
misleading.'' Id. at 12.
    \54\ Id. at 9.
    \55\ Id. at 17.
---------------------------------------------------------------------------
    In March of 1998, the U.S. General Accounting Office issued 
a report criticizing the methodology of Help Wanted and 
America'sNew Deficit.\56\ GAO found that ``Commerce's report 
has serious analytical and methodological weaknesses that undermine the 
credibility of its conclusions that a shortage of [information 
technology] workers exits.'' \57\ Specifically, GAO found that:
---------------------------------------------------------------------------
    \56\ U.S. General Accounting Office, Health, Education, and Human 
Services Division, Information Techology: Assessment of the Department 
of Commerce's Report on Workforce Demand and Supply, GAO/HEHS-98-106R 
(March 20, 1998)(hereinafter cites as ``GAO Report'').
    \57\ Id. at 2.
---------------------------------------------------------------------------
          The Commerce report cited four pieces of evidence 
        that an inadequate supply of [information technology] 
        workers is emerging--rising salaries for [information 
        technology] workers, reports of unfilled vacancies for 
        [information technology] workers, offshore sourcing and 
        recruiting, and the fact that the estimated supply of 
        [information technology] workers (based on students 
        graduating with bachelor's degrees in computer and 
        information sciences) is less than its estimate of the 
        demand. However, the report fails to provide clear, 
        complete, and compelling evidence for a shortage or a 
        potential shortage of [information technology] workers 
        with the four sources of evidence presented.\58\
---------------------------------------------------------------------------
    \58\ Id. at 6-7.

    As to rising salaries, GAO found that ``although some data 
show rising salaries for [information technology] workers, 
other data indicate that those increases in earnings have been 
commensurate with the rising earnings of all professional 
specialty occupations.'' \59\ Further:
---------------------------------------------------------------------------
    \59\ Id. at 7.

          [The wage increases cited in America's New Deficit] 
        may not be conclusive evidence of a long-term limited 
        supply of [information technology] workers, but may be 
        an indication of a current tightening of labor market 
        conditions for [information technology] workers. 
        According to BLS data, increases have been less 
        substantial when viewed over a longer period of time. 
        For example, the percentage changes in weekly earnings 
        for workers in computer occupations over the 1983 
        through 1997 period were comparable to or slightly 
        lower, in the case of computer systems analysts and 
        scientists, than the percentage changes for all 
        professional specialty occupations. * * * What is 
        uncertain is whether the recent trend toward higher 
        rates of increase will continue.\60\
---------------------------------------------------------------------------
    \60\ Id. Robert Lerman, Director of the Human Resources Policy 
Center of the Urban Institute, has stated that:
     [The data cited by Help Wanted] are inconsistent with other 
private surveys as well [as] with public data sources. A survey 
conducted by Deloitte & Touche Consulting Group revealed that salaries 
for computer network professionals rose an average of 7.4% between 1996 
and 1997. Coopers and Lybrand found average salary increases at 500 
software companies were 7.7% in 1995 and almost 8% in 1996.
    Senate Hearing.

    As to ITAA vacancy statistics, the ``survey response rate 
of 14 percent is inadequate to form a basis for a nationwide 
estimate of unfilled [information technology] jobs.'' \61\ GAO 
noted that ``[i]n order to make sound generalizations, the 
effective response rate should usually be at least 75 percent. 
* * * Furthermore, ITAA's estimate of the number of unfilled 
[information technology] jobs is based on reported vacancies, 
and adequate information about those vacancies is not provided, 
such as how long positions have been vacant, whether wages 
offered are sufficient to attract qualified applicants, and 
whether companies consider jobs filled by contractors as 
vacancies. These weaknesses tend to undermine the reliability 
of ITAA's survey findings.'' \62\
---------------------------------------------------------------------------
    \61\ GAO Report at 7.
    \62\ Id. at 8. Robert Lerman also criticized ITAA's use of vacancy 
figures. He noted that:
     In any industry with a rising demand and/or high turnover, the 
presence of vacancies does not necessarily demonstrate a shortage of 
workers. A vacancy simply means the firm has an open position it has 
not yet filled. Vacancies as a proportion of employment will depend on 
the employer's turnover rate, how long it takes to fill a vacancy, and 
the extent to which the company is growing.
    Senate Hearing.
---------------------------------------------------------------------------
    As to offshore sourcing, ``although the report cites 
instances of companies drawing upon talent pools outside the 
United States to meet their demands for workers, not enough 
information is provided about the magnitude of this 
phenomenon.'' \63\
---------------------------------------------------------------------------
    \63\ GAO Report at 7.
---------------------------------------------------------------------------
    Finally, the report ``used only the number of students 
earning bachelor's degrees in computer and information sciences 
when it compared the potential supply of workers with the 
magnitude of [information technology] worker demand.'' \64\ 
Further:
---------------------------------------------------------------------------
    \64\ Id.

          Commerce identifies the supply of potential 
        [information technology] workers as the number of 
        students graduating with bachelor's degrees in computer 
        and information sciences. Commerce's analysis of the 
        supply of [information technology] workers . . . did 
        not consider (1) the numerical data for degrees and 
        certifications in computer and information sciences 
        other than at the bachelor's level when they quantify 
        the total available supply; (2) college graduates with 
        degrees in other areas; and (3) workers who have been, 
        or will be, retrained for these occupations. * * *
          [T]here is no universally accepted way to prepare for 
        a career as a computer professional. * * * According to 
        the National Science Foundation, only about 25 percent 
        of those employed in computer or information science 
        jobs in 1993 actually had degrees in computer and 
        information science. Other workers in these fields had 
        degrees in such areas as business, social sciences, 
        mathematics, engineering, psychology, economic, and 
        education. The Commerce report did not take this 
        information into account in any way in estimating the 
        future supply of [information technology] workers.'' 
        \65\
---------------------------------------------------------------------------
    \65\ Id. at 5-6 (footnote omitted).

    GAO concluded by stating that ``the lack of support 
presented in this one report should not necessarily lead to a 
conclusion that there is no shortage. Instead, as the Commerce 
report states, additional information and data are needed to 
more accurately characterize the [information technology] labor 
market now and in the future.'' \66\
---------------------------------------------------------------------------
    \66\ Id. at 2.
---------------------------------------------------------------------------
    Dr. Norman Matloff, professor of computer science at the 
University of California at Davis, argues that if a shortage of 
information technology workers exists, it is of industry's own 
making and that companies often favor foreign workers for 
illegitimate reasons.
    Dr. Matloff first makes the point that information 
technology industry hiring practices are not consistent with a 
worker shortage.Employers currently are able to reject the vast 
majority of applicants for information technology positions. For 
instance, Microsoft only hires 2% of programmer applicants.\67\
---------------------------------------------------------------------------
    \67\ Immigration and America's Workforce for the 21st Century: 
Hearing Before the Subcomm. On Immigration and Claims of the House 
Judiciary Comm., 105th Cong., 2nd Sess. (April 21, 1998) (statement of 
Norman Matloff)(hereinafter cited as ``House Hearing'').
---------------------------------------------------------------------------
    Dr. Matloff then argues that if the information technology 
industry is having any trouble locating sufficient information 
technology workers, it is because it overspecifies hiring 
criteria and passes over most viable candidates:

          Employers are over-defining [programming] jobs, 
        insisting that applicants have skills in X and Y and Z 
        and W and so on. But what really counts in programming 
        jobs is general programming talent, not experience with 
        specific software skills. Even Bill Gates has described 
        Microsoft hiring criteria thusly: ``We re not looking 
        for any specific knowledge because things change so 
        fast, and it's easy to learn stuff. You've got to have 
        an excitement about software, a certain intelligence * 
        * * It's not the specific knowledge that counts.'' 
        Studies show that programmers can become productive in 
        a new software technology in a month or so (this is 
        confirmed by my own personal experience, in 25 years of 
        keeping up with technological change in the industry). 
        Thus employers are (some deliberately, some 
        unwittingly) creating an artificial labor ``shortage.'' 
        \68\
---------------------------------------------------------------------------
    \68\ A Critical Look at Immigration's Role in the U.S. Computer 
Industry (Internet document dated May 19, 1997).

    The group most affected by this phenomenon seems to be 
older workers. Dr. Matloff finds that mid-career programmers 
have great difficulty finding work because they ``often lack 
the most up-to-date software skills'' and employers ``like to 
hire new or recent college graduates, because they work for 
lower salaries, and they generally are single and thus can work 
large amounts of overtime without 
being constrained by family responsibilities.'' \69\ Matloff 
states further that:
---------------------------------------------------------------------------
    \69\ House Hearing.

          Many employers like * * * recent graduates not for 
        their skills, but rather because they are cheaper, with 
        foreign nationals being even cheaper still. * * * If 
        one hires a young graduate because he/she has specific 
        skills, he/she will be cast aside in a few years when 
        those same skills become obsolete. The comments by 
        employers regarding new graduates are tantamount to an 
        admission of rampant age discrimination. * * * \70\
---------------------------------------------------------------------------
    \70\ A Critical Look

    There is much anecdotal evidence to support the contention 
that age discrimination against information technology workers 
is prevalent. Many American workers focused on age 
discrimination when they responded to the San Francisco 
Examiner's solicitation of views regarding the information 
---------------------------------------------------------------------------
technology worker shortage. Two examples follow:

          At job fairs many older people, myself included, are 
        rudely treated by young recruiters. * * * In one 
        blatant case, I saw a recruiter from a major local 
        computer manufacturer and software firm refuse to talk 
        to anyone who looked over 35. Resumes from older people 
        were tossed in one pile. Resumes from younger people 
        were put in another. * * * I watched for a while and 
        wished I'd had a hidden video camera.\71\
---------------------------------------------------------------------------
    \71\ San Francisco Examiner Internet page (April 19, 1998).
---------------------------------------------------------------------------
          I think the general problem is one of there not being 
        enough young, and/or inexpensive workers. I have been 
        having an increasingly difficult time of finding any 
        employment since my late forties. I have many friends 
        who are in their fifties who are well-educated, 
        obviously experienced, and are quite computer literate, 
        who are having similar difficulties. * * * I believe 
        that age discrimination is rampant in this country, 
        especially in the computer industry. It's the dirty 
        little secret that industry won't own up to.\72\
---------------------------------------------------------------------------
    \72\ Id.

    In addition, Dr. Matloff points to two telling statistics. 
First, there is a 17% unemployment rate for computer 
programmers over the age of 50.\73\ Second, only 19% of 
computer science graduates are still working in software 
development 20 years after getting their degrees--compared to 
52% for civil engineers 20 years after graduating.\74\
---------------------------------------------------------------------------
    \73\ House Hearing.
    \74\ Id. Robert Lerman found that ``[n]early 200,000 of the 540,000 
people working as computer programmers in 1989 had left the 
[information technology] area by 1993.'' Senate Hearing.
---------------------------------------------------------------------------
    As to declines in college enrollment in computer science, 
Dr. Matloff notes that if Help Wanted had looked past 1994, it 
would have noted a dramatic increase in computer science 
enrollment--the 27th annual survey of the Computer Research 
Association's Taulbee Survey of Ph.D.-granting departments of 
computer science and computer engineering in the United States 
and Canada reported a 40% increase in 1996-97 in undergraduate 
enrollment and a 39% increase in 1997-98.\75\ This has caused 
its own problems. It was recently reported that ``[l]ured by 
high-tech riches, students are flooding into college computer-
science courses, and Texas universities can't seem to keep up 
with the onslaught.'' \76\
---------------------------------------------------------------------------
    \75\ House Hearing.
    \76\ Freeman, Colleges Scramble to Adjust to Computer Science's 
Rise, Wall St. Journal, July 1, 1998.
---------------------------------------------------------------------------
    Why can foreign workers be cheaper when employers are 
required to pay at least the prevailing wage to H-1B aliens? 
First, as the Department of Labor's Inspector General found, 
many employers do not pay the prevailing wage. Even when the 
prevailing wage is paid, it can often be less than what 
comparable American workers are making. Since H-1B aliens 
typically do not work in unionized fields, there is rarely a 
union contract available to help set the prevailing wage. In 
such circumstances, a ``prevailing wage'' is a very crude 
measure of what comparable American workers actually earn, as 
workers of widely varying skills and circumstances are 
conflated into one or two wage levels. For instance, those H-1B 
aliens visas who do have ``hot'' programming skills only have 
to be paid the prevailing wage for generic programmers.
    In conclusion, after pondering the existence of a shortage, 
Robert Lerman, Director of the Human Resource Policy Center of 
the Urban Institute, wrote that:

          Government policy makers should be cautious about 
        short-term efforts to expand the supply of workers, 
        especially by increasing the number of immigrant visas. 
        Given the boom andbust cycles often observed in these 
fields, by the time the government acts to increase supply, the market 
may have already shifted from an excess demand to excess supply stage. 
Expanded immigration may have another counterproductive impact. It may 
deter prospective students from choosing an information technology 
career when they hear that potential immigrants entering the field will 
gain special access to visas.\77\
---------------------------------------------------------------------------
    \77\ Senate Hearing.
---------------------------------------------------------------------------

III. The Bill

    It is in the nation's interest that the quota for H-1B 
aliens be temporarily raised. First, unless Congress acts, 
employers will not be able to employ new H-1B nonimmigrants 
until the beginning of fiscal year 1999 (October 1, 1998). This 
delay would be extremely detrimental to large numbers of 
employers. If a university wanted to use the H-1B program to 
hire an alien as a professor or a teaching assistant, the alien 
could not start work until October, a month after most academic 
years begin. If a computer software developer wanted to use the 
H-1B program to hire an alien to devise its next generation 
software, it would have to delay the project for months.
    Second, it is possible that there currently exists a 
significant shortage of information technology workers. The 
Committee recognizes that the evidence for such a shortage is 
inconclusive. However, because the success of our economy is so 
indebted to advances in computer technology, the Committee is 
willing to give industry the benefit of the doubt, to accept 
claims that there is a shortage and that it can only be 
alleviated through an increase of foreign workers through the 
H-1B program.
    However, the increase in the H-1B quota should be of 
relatively brief duration. There will be a bumper crop of 
American college graduates skilled in computer science 
beginning in the summer of 2001. These students have been 
enticed into the field in the last two years by the brightening 
opportunities in this boom or bust profession. The law of 
supply and demand is clearly working--the opportunities spawned 
by a tight labor market are bringing fresh entrants into the 
field, just as the profession was shunned by many students 
during the downsizing of the early 1990s. If there is a labor 
shortage justifying an increased number of H-1B nonimmigrants, 
the shortage--and the justification--should not last past the 
graduation dates of these students. Thus, Congress should not 
imperil the future careers of these young Americans by 
expanding the H-1B quota indefinitely.
    The bill expands the H-1B quota for only three years. If a 
shortage exists at the end of this period recommending a 
further increase in the H-1B quota, Congress can then act. The 
bill increases the quota for fiscal year 1998 to 95,000 (a 46% 
increase). This is approximately the figure required to meet 
the need for H-1B nonimmigrants for the entire year based upon 
usage in the first seven months. As demand is expected to rise 
for the next few years, the quota for fiscal year 1999 is 
raised to 105,000 (a 62% increase), and the quota for fiscal 
year 2000 is raised to 115,000 (a 77% increase). The quota then 
reverts back to 65,000.
    The bill requires the GAO to submit to Congress a report on 
the high-technology/information technology labor market by the 
end of fiscal year 2000. It also requires the GAO to submit a 
report on age discrimination against older information 
technology workers. These reports will aid future Congresses in 
their deliberations as to whether increased H-1B quotas will 
still be justified at the beginning of the 21st century.
    The maximum duration of stay for aliens granted H-1B status 
in a fiscal year after the 65,000 level has been reached is 
limited to four years. This provision is another attempt to 
limit the time frame over which the increased H-1B quota 
granted by this bill is played out. Even so, an alien granted 
one of the additional H-1B visas in September 2000 will be able 
to work and affect the labor market until September 2004.
    The bill limits the maximum number of H-1B slots that can 
be granted to non-physician health care workers to 5,000 in any 
fiscal year. The rationale for the bill is a shortage of 
information technology workers. Therefore, it makes sense to 
ensure that the bulk of the new numbers will go to alleviate 
this shortage. In past years, physical and occupational 
therapists made up an extremely high percentage of H-1B aliens. 
Given that there is now no claimed shortage of therapists in 
the domestic labor market, such heavy usage is no longer 
justified.
    Despite the limitations described above, the bill still 
dramatically increases the supply of H-1B nonimmigrants. If 
future Congresses choose to maintain the 115,000 quota, up to 
590,000 H-1B aliens will be working in the United States at any 
one time. This is an increase of 200,000 foreign workers over 
current law. Because the bill is so dramatically increasing the 
supply of foreign workers without there being firm evidence of 
a domestic labor shortage, it is imperative that we build into 
the H-1B program adequate protections for U.S. workers.
    The most simple, most basic protection that can be given to 
an American worker is a guarantee that he or she won't be fired 
by an employer and replaced by a foreign worker. More broadly 
stated, an employer should not in the same instance fire an 
American worker and bring on a foreign worker when the American 
worker is well qualified to do the work intended for the 
foreign worker. The H-1B program currently contains no such 
guarantee.
    The bill contains such a guarantee in the form of a new 
``no-lay off '' attestation. This provision has long been 
sought by the Administration,\78\ and is specifically permitted 
by the General Agreement on Trade in Services,\79\ a 
multilateral agreement negotiated during the Uruguay Round of 
GATT. The bill provides that an employer can not lay-off or 
otherwise displace an American worker and, within a set period 
(stated in GATS) either before or after the layoff, apply for 
or petition for an H-1B nonimmigrant who has substantially 
equivalent qualifications and experience as the American worker 
in the American's specialty occupation and for employment in 
the same geographic area.
---------------------------------------------------------------------------
    \78\ See letter from Robert Reich, Secretary of Labor, to Romano 
Mazzoli, Chairman, Subcomm. on International Law, Immigration and 
Refugees, House Judiciary Comm. at 1 (Sept. 23, 1993).
    \79\ H.R. Doc. No. 316, v. 1, 103rd Cong., 2nd Sess. 1588-1620 
(1994).
---------------------------------------------------------------------------
    The issue of layoffs is not merely theoretical. There has 
been a recent wave of layoff announcements by high-tech firms. 
For example, Motorola has announced it will lay-off 15,000 
workers and Compaq Computer Corporation has announced it will 
lay-off 15,000 at recently acquired Digital Equipment 
Corporation. The Wall Street Journal recently reported that:

          [T]he past couple of weeks have seen a steady 
        drumbeat of layoff announcements in industry sectors 
        that until recently have complained about personnel 
        shortages. In Silicon Valley, layoffs have occurred at 
        Seagate Technology, Inc., Silicon Graphics, Netscape 
        Communications Corp., Apple Computer Inc., Sybase Inc. 
        and others. Some firms have cut hiring plans; help-
        wanted advertising has slumped since the start of this 
        year. Elsewhere, high-tech giants are shedding staff. 
        Last week, Xerox Corp. announced the layoff of 9,000 
        people.\80\
---------------------------------------------------------------------------
    \80\ Bernard Wysocki, The Outlook: Even High Tech Faces Problems 
with Pricing, Wall. St. Journal, April 13, 1998, at A1.

Even more disturbing are the reports that have appeared in many 
major newspapers of employers actually firing American workers 
and going to H-1B ``job shops'' for their replacements. Well-
known employers have been cited for this abuse.
    The bill extends the reach of the no-lay off attestation to 
encompass firms that contract with job shops for H-1B aliens. 
This is necessary because while the job contractor petitions 
for (and is the employer of) the aliens, it is often the firm 
contracting for the aliens (though never ``employing'' them) 
that has laid off American workers. Also, by its very nature, 
the job contractor may never hire any American workers which it 
could lay off. The no-lay off attestation must be designed so 
that it cannot be evaded by an employer who fires American 
workers and replaces them with H-1B aliens who are technically 
employees of the job contractor. The bill thus provides that 
the contracting firm, as well as the job contractor, must 
execute a no-lay off attestation.
    The bill provides an exemption from the no-lay off 
attestation for institutions of higher education to the extent 
that they seek to employ H-1B aliens as professors under 
temporary contracts, or as researchers on projects, a majority 
of whose funding is provided by an outside entity. Universities 
are unique employers. Typically, a university will look for 
researchers--usually doctoral students or post-doctoral 
students--in order to perform research funded by particular 
grants. When the grants are exhausted, the research is 
concluded and the researchers go their separate ways. Depending 
on the other grants secured by the university, other research 
projects with different personnel will commence. In order for 
the H-1B program to be usable by universities, the program has 
to allow for this method of hiring and firing.
    The bill also endeavors to protect American workers by 
ensuring that companies at least make an attempt to locate 
qualified American workers before petitioning for foreign 
workers under the H-1B program. H.R. 3736's recruitment 
attestation requires that a company in good faith recruit 
American workers ``using procedures that meet industry-wide 
standards'' and then offer jobs to those Americans who apply 
and have qualifications equal to or better than the foreign 
worker sought. The primary goal of this attestation is to 
target those companies who totally fail to recruit American 
workers and those who only make a pretense of recruiting 
American workers.
    The attestation is not designed to require an employer to 
duplicate the highly regulated and lengthy recruitment process 
required of a company in order to procure labor certification 
for a prospective permanent resident. All a company wanting to 
petition for H-1B aliens has to do is that which is common 
practice in the company's industry. The Committee envisions 
Department of Labor officials sitting down with leading firms 
and industry associations to learn what are common recruiting 
practices in various industries. The Department is not to 
prescribe its own preferred recruitment techniques. Of course, 
the Department may later be called upon to determine whether a 
particular employer has utilized the accepted recruiting 
practices.
    One reason that there has been so little policing of the H-
1B program is that the federal government can only investigate 
if an aggrieved party has filed a complaint. Foreign workers 
themselves rarely file complaints, most being afraid of losing 
their jobs by reporting abuses. H.R. 3736 allows the government 
to check to see that employers are complying with the program 
without the necessity of first having received complaints. 
However, the bill grants the government this power only in 
situations where abuse is especially likely.
    The bill follows the path taken by H.R. 2202, the 
immigration reform bill passed by the House of Representatives 
in the 104th Congress. H.R. 2202 allowed for government-
initiated investigations only of H-1B-dependent employers. That 
is precisely what H.R. 3736 does. H-1B dependent employers have 
an unusually large percentage of their workforces made up of 
foreign workers--from 15% to 100%. These companies often do 
nothing but contract their foreign workers out to other 
companies--often after the other companies have laid off 
American workers. H-1B-dependent companies have been accused of 
a disproportionate share of H-1B abuses.
    The bill also allows the Department of Labor to conduct 
random inspections of an employer for five years after it has 
determined that the employer has committed a willful violation 
of an attestation or has made a misrepresentation of a material 
fact on an application.
    Penalties for violators of the H-1B program are increased 
under the bill. While current law provides for civil monetary 
penalties of up to $1,000 per violation, the bill increases the 
maximum penalty to $5,000 per violation for willful violations. 
The bill also provides for a penalty of up to $25,000 per 
violation when an employer commits a wilful violation and 
violates the no lay-off attestation.

                                Hearings

    The Committee's Subcommittee on Immigration and Claims held 
one day of hearings on ``Immigration and America's Workforce 
for the 21st Century'' on April 21, 1998. Testifying in regard 
to the H-1B visa program were John Fraser, Acting 
Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor; Carlotta Joyner, 
Director, Education andEmployment Issues, Health, Education, 
and Human Services Division, U.S. General Accounting Office; Harris 
Miller, President, Information Technology Association of America; Dr. 
Norman Matloff, Department of Computer Science, University of 
California at Davis; Daniel Sullivan, Senior Vice President for Human 
Resources, QUALCOMM; William Payson, The Senior Staff; Darryl Hatano, 
Vice President for International Trade and Government Affairs, 
Semiconductor Industry Association; Peggy Taylor, Director, Department 
of Legislation, AFL-CIO; and Dr. Richard Lariviere, Vice President of 
International Programs, University of Texas at Austin.

                        Committee Consideration

    On April 30, 1998, the Subcommittee on Immigration and 
Claims met in open session and ordered reported the bill H.R. 
3736, by a voice vote, a quorum being present. On May 20, 1998, 
the Committee met in open session and ordered reported 
favorably the bill H.R. 3736 with amendment by a recorded vote 
of 23 to 4, a quorum being present.

                         Vote of the Committee

Voice votes

    Eleven amendments were adopted by voice vote. These were: 
(1) an amendment by Mr. Smith of Texas to clarify that in order 
to fulfill the recruitment attestation, an employer would only 
have to offer employment to American workers who had the same 
qualifications as, or better qualifications than, any of the H-
1B aliens sought; (2) an amendment by Mr. Watt to provide that 
the no-lay off attestation does not apply to an institution of 
higher education, or a related or affiliated non-profit entity, 
when applying for H-1B nonimmigrant status for an alien whom 
the employer seeks to employ as a researcher on a project 50% 
or more of which is funded by other entities or as a professor 
or instructor under a time-limited contract; (3) an amendment 
by Mr. Berman penalizing an employer who intimidates or 
otherwise discriminates against an employee because the 
employee disclosed information about, or cooperated in an 
investigation of, the employer's violation of the terms of the 
H-1B program; (4) an amendment by Mr. Gallegly limiting to four 
years the maximum duration of the H-1B visas made available by 
this bill (over and above the 65,000 provided by current law); 
(5) an amendment by Mr. Jenkins reducing the number of H-1B 
visas the bill allocates for non-physician health care workers 
from 7,500 to 5,000; (6) an amendment by Ms. Lofgren requiring 
the Attorney General to maintain an accurate count of aliens 
issued H-1B visas or otherwise provided H-1B status (including 
by revising petition forms) and to issue periodic reports to 
Congress on H-1B nonimmigrants and their characteristics, (7) 
an amendment by Ms. Lofgren requiring the Comptroller General 
to conduct a study assessing age discrimination in the 
information technology field, (8) an amendment by Ms. Lofgren 
requiring the Comptroller General to conduct a study of the 
labor market for information technology workers, (9) an 
amendment by Ms. Lofgren penalizing an employer who requires an 
H-1B alien to sign an employment contract that would be 
considered void against public policy in theState of intended 
employment, (10) an amendment by Ms. Lofgren making offsetting cuts to 
the H-2B nonimmigrant work visa program, and (11) an amendment by Mr. 
Watt to clarify that the H-1B quota would return to 65,000 in fiscal 
year 2001 and subsequent years.

Recorded votes

    There were two recorded votes (one on an amendment and one 
on final passage) during the Committee's consideration of H.R. 
3736, as follows:
    1. Amendment offered by Mr. Rogan to strike the no-lay off 
attestation and the recruitment attestation. Defeated 7-24.
        AYES                          NAYS
Mr. Canady                          Mr. Hyde
Mr. Inglis                          Mr. Sensenbrenner
Mr. Goodlatte                       Mr. McCollum
Mr. Bryant                          Mr. Gekas
Mr. Chabot                          Mr. Coble
Mr. Cannon                          Mr. Smith (TX)
Mr. Rogan                           Mr. Gallegly
                                    Mr. Buyer
                                    Mr. Barr
                                    Mr. Jenkins
                                    Mr. Hutchinson
                                    Mr. Pease
                                    Ms. Bono
                                    Mr. Conyers
                                    Mr. Berman
                                    Mr. Boucher
                                    Mr. Nadler
                                    Mr. Scott
                                    Mr. Watt
                                    Ms. Jackson-Lee
                                    Ms. Waters
                                    Mr. Meehan
                                    Mr. Delahunt
                                    Mr. Rothman

    Mr. Frank received unanimous consent to have the record 
indicate that he would have voted against the Rogan amendment 
had he not been unavoidably detained on the floor of the House 
of Representatives.
    2. Vote on Final Passage: Adopted 23-4.
        AYES                          NAYS
Mr. Hyde                            Mr. Bryant
Mr. McCollum                        Mr. Cannon
Mr. Gekas                           Mr. Rogan
Mr. Coble                           Mr. Rothman
Mr. Smith (TX)
Mr. Gallegly
Mr. Canady
Mr. Goodlatte
Mr. Chabot
Mr. Barr
Mr. Jenkins
Mr. Graham
Ms. Bono
Mr. Conyers
Mr. Frank
Mr. Nadler
Mr. Scott
Mr. Watt
Ms. Lofgren
Ms. Jackson-Lee
Ms. Waters
Mr. Delahunt
Mr. Wexler

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(3)(C) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to H.R. 3736, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 403 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 4, 1998.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3736, the 
Workforce Improvement and Protection Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts for this 
estimate are MarkGrabowicz and Mary Maginniss.
            Sincerely,

                                           June E. O'Neill, Director.  
    Enclosure.

H.R. 3736--Workforce Improvement and Protection Act of 1998

    CBO estimates that implementing this legislation would cost 
less than $1 million over the next two years, assuming the 
appropriation of the necessary amounts. The bill would affect 
direct spending and receipts, so pay-as-you-go procedures would 
apply, but the net effects would be less than $500,000 a year. 
H.R. 3736 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would have no impact on the budgets of state, local, or tribal 
governments.
    H.R. 3736 would change the number of nonimmigrant 
(temporary) visas available for certain workers and make other 
changes to current laws relating to the employment of 
nonimmigrants. The bill also would direct the General 
Accounting Office (GAO) to prepare two reports relating to the 
information technology industry. Finally, H.R. 3736 would 
provide for new and increased civil penalties for employers 
that violate certain laws relating to hiring nonimmigrant 
labor.
    H.R. 3736 would increase the number of nonimmigrant visas 
available for certain skilled workers by 30,000 in fiscal year 
1998, by 40,000 in 1999, and by 50,000 in 2000. By these same 
amounts, the bill would decrease the number of visas available 
for unskilled laborers from 1998 through 2000. CBO expects that 
the number of visas granted to skilled workers would increase 
by the full amounts permitted by the bill over the 1998-2000 
period, but that the number of visas granted to unskilled 
laborers probably would decrease by much smaller amounts or not 
at all because of lower demand for unskilled workers. (The 
current annual cap on unskilled workers is 66,000, but only 
about 20,000 visas will be issued in 1998; thus, the bill's 
1998 cap of 36,000 would not affect the number of visas granted 
to unskilled laborers.)
    Assuming enactment of the bill by the end of July, CBO 
estimates that the net increase in visas issued would average 
about 30,000 a year over the 1998-2000 period. The fee for each 
visa is $85, so enacting the bill would increase fees collected 
by the Immigration and Naturalization Service (INS) by about 
$2.5 million in each of fiscal years 1998 through 2000. (The 
effects on the number of visas issued and INS collections and 
spending in fiscal year 1998 could be significantly smaller if 
the bill is after July 31.) We expect that the INS would spend 
the fees (without appropriation action), mostly in the year in 
which they are collected, so enacting H.R. 3736 would result in 
a negligible impact on net spending by the INS.
    H.R. 3736 would require GAO to prepare, no later than 
October 1, 2000, a report assessing age discrimination in the 
information technology industry and a report on the labor 
market for that field. Based on information from the agency, 
CBO estimates that GAO would spend about $900,000 over the next 
two years to conduct the two studies, assuming appropriation of 
the necessary amounts.
    The bill's provisions relating to new and increased civil 
penalties could result in increased collections of civil fines. 
These fines are classified as revenues (governmental receipts), 
but we estimate that any such increase would be less than 
$500,000 annually.
    The CBO staff contacts for this estimate are Mark Grabowicz 
and Mary Maginniss, both of whom can be reached at 226-2860. 
This estimate was approved by Robert A. Sunshine, Deputy 
Assistant Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to rule XI, clause 2(l)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article 1, section 8, clause 4 of the 
Constitution.

                      Section-By-Section Analysis

Section 1. Short title
    The Act may be cited as the ``Workforce Improvement and 
Protection Act of 1998.''
Section 2. Temporary increase in skilled foreign workers; temporary 
        reduction in H-2B nonimmigrants
    Section 2 of the bill amends section 214(g)(1)(A) of the 
Immigration and Nationality Act to temporarily increase the 
maximum number of aliens who may be issued visas or otherwise 
provided ``H-1B'' nonimmigrant status under section 
101(a)(15)(H)(i)(b) of the INA from the current 65,000 per 
fiscal year. For fiscal year 1998, the maximum number is 
95,000. For fiscal year 1999, it is 105,000, and for fiscal 
year 2000, it is 115,000. In fiscal years 2001 and beyond, the 
maximum number returns to 65,000.
    Section 2 amends section 214(g)(1)(B) of the INA by making 
offsetting cuts in the ``H-2B'' nonimmigrant visa program under 
section 101(a)(15)(H)(ii)(b) of the INA. The bill decreases the 
maximum number of aliens who may be issued visas or otherwise 
provided nonimmigrant status under the H-2B program from the 
current 66,000 per fiscal year to 36,000 in fiscal year 1998, 
26,000 in fiscal year 1999, and 16,000 in fiscal year 2000. In 
fiscal years 2001 and beyond, the maximum number returns to 
66,000.
    Section 2 amends section 214(g)(4) of the INA by providing 
that the period of authorized admission for aliens issued visas 
or otherwise provided nonimmigrant status under the H-1B 
program in fiscal years 1998, 1999, and 2000, after the 65,000 
level has been reached, may not exceed four years. As under 
current law, the period of authorized stay for the first alien 
up to the 65,000th alien may not exceed six years.
    Section 2 adds a new section 214(g)(5) to the INA providing 
that no more than 5,000 aliens who seek to enter the United 
States for the purpose of performing labor as health care 
workers other than physicians (described in section 
212(a)(5)(C) of the INA) may be issued visas or otherwise 
provided nonimmigrant status under the H-1B program in fiscal 
years 1999 and beyond.

Section 3. Protection against displacement of United States workers

    Section 3(a) of the bill adds a new section 212(n)(1)(E) to 
the INA adding a fifth ``attestation'' that an employer must 
make when filing an application with the Secretary of Labor for 
an alien to be admitted or provided status as an H-1B 
nonimmigrant. The employer must state that it has not laid off 
or otherwise displaced and will not lay off or otherwise 
displace, within the period beginning 6 months before and 
ending 90 days following the date of filing of the application 
or during the 90 days immediately preceding and following the 
date of filing of any visa petition (with the Immigration and 
Naturalization Service) supported by the application, any 
United States worker (including a worker whose services are 
obtained by contract, employee leasing, temporary help 
agreement, or other similar means) who has substantially 
equivalent qualifications and experience in the specialty 
occupation, and in the area of employment,\81\ for which H-1B 
nonimmigrants are sought or in which they are employed.
---------------------------------------------------------------------------
    \81\ The term ``area of employment'' has the same meaning as does 
``area of intended employment,'' which is defined in section 655.715 of 
title 29 of the Code of Federal Regulations. The terms mean the area 
within normal commuting distance of the place of employment (worksite 
or physical location where work is actually performed) where the H-1B 
nonimmigrant is or will be employed. If the place of employment is 
within a Metropolitan Statistical Area, any place within the MSA is 
deemed to be within normal commuting distance of the place of 
employment.
---------------------------------------------------------------------------
    The employer must also state that it will not place the 
nonimmigrant with another employer where (1) the nonimmigrant 
performs his or her duties in whole or in part at one or more 
worksites owned, operated, or controlled by such other 
employer, and (2) there are indicia of an employment 
relationship between the nonimmigrant and such other employer, 
unless the other employer has itself executed an attestation 
that it (the other employer) would be considered to have 
satisfied the terms of the ``no-lay off'' attestation described 
in the paragraph immediately preceding this one if the H-1B 
nonimmigrants were considered to be its (the other employers) 
employees.
    An employer that is an institution of higher education or a 
related or affiliated nonprofit entity does not have to agree 
to or comply with this fifth attestation in cases where it 
seeks to employ a nonimmigrant who has attained a master's or 
higher degree (or its equivalent) in a specialty occupation the 
specific knowledge of which is required for the intended 
employment, and where the intended employment is (1) as a 
researcher on a project for which not less than 50% of the 
funding is provided, for a limited period of time, through a 
grant or contract with an entity other than the employer, or 
(2) as a professor or instructor under a contract that expires 
after a limited period of time.
    Section 3(b) of the bill contains definitions applicable to 
section 212(n) of the INA. The term ``layoff or otherwise 
displace'' with respect to an employee, means to cause the 
employee's loss of employment, other than through a discharge 
for cause,\82\ a voluntary departure, or a voluntary 
retirement, and does not include any situation in which 
employment is relocated to a different geographic area and the 
employee is offered a chance to move to the new location, with 
wages and benefits that are not less than those at the old 
location, but elects not to move to the new location.
---------------------------------------------------------------------------
    \82\ Discharge for cause shall be considered to mean discharge for 
either employee misconduct or inadequate performance. See Kohler v. 
Ericsson, Inc., 847 F.2d 499 (9th Cir. 1988). For purposes of this 
attestation, discharge because of business or economic reasons (such as 
pursuant to a reduction in force, a plant closing, or a corporate 
merger or reorganization) should not be considered discharge for cause. 
The preceding two sentences override any definition of the term in any 
employment agreement or contract.
---------------------------------------------------------------------------
    The term ``United States worker'' means a citizen or 
national of the United States, an alien lawfully admitted for 
permanent residence, or an alien authorized to be employed by 
the INA or by the Attorney General.

Section 4. Recruitment of United States workers prior to seeking 
        nonimmigrant workers

    Section 4 of the bill adds a new section 212(n)(1)(F) to 
the INA adding a sixth ``attestation'' that an employer must 
make when filing an application with the Secretary of Labor for 
an alien to be admitted or provided status as an H-1B 
nonimmigrant. The employer must state that prior to filing the 
application, it has taken, in good faith, timely and 
significant steps to recruit and retain sufficient United 
States workers in the specialty occupation for which H-1B 
nonimmigrants are sought. Such steps shall have included 
recruitment in the United States, using procedures that meet 
industry-wide standards and offering compensation that is as 
least as great as that required to be offered to the H-1B 
nonimmigrants sought, and offering employment to any United 
States worker who applies and has the same qualifications as, 
or better qualifications than, any of the H-1B sought.
    An employer does not have to agree to or comply with this 
sixth attestation in cases where it seeks to employ a 
nonimmigrant who is an alien of extraordinary ability, an 
outstanding professor or researcher, or a multinational 
executive and manager (all as described in section 
203(b)(1)(A)-(C) of the INA).

Section 5. Limitation on authority to initiate complaints and conduct 
        investigations for non-H-1B-dependent employers

    Section 212(n)(2)(A) of the INA provides that the Secretary 
of Labor shall investigate complaints respecting an employer's 
violation of (failure to meet the terms of) one or more of the 
attestations it has made in an application or misrepresentation 
of a material fact in an application. Complaints may be filed 
by any aggrieved person or organization (including a bargaining 
representative).
    Section 5(a) of the bill amends section 212(n)(2)(A) by 
specifying that the Secretary of Labor can only file a 
complaint as to an H-1B-dependent employer and only where there 
appears to be a violation of an attestation or a 
misrepresentation of a material fact in an application. In 
addition, the Secretary of Labor can only conduct an 
investigation of an employer in response to a complaint (except 
as provided in section 6(c) of the bill).
    Section 5(b) of the bill defines the term ``H-1B-dependent 
employer.'' An employer is H-1B-dependent if it (1) has fewer 
than 21 full-time equivalent employees in the United States and 
employsfour or more H-1B nonimmigrants, (2) has between 21-150 
full-time equivalent employees in the United States and employs H-1B 
nonimmigrants in a number that is equal to at least 20% of the number 
of such full-time equivalent employees, or (3), has 151 or more full-
time equivalent employees in the United States and employs H-1B 
nonimmigrants in a number that is equal to at least 15% of the number 
of such full-time equivalent employees. Any group treated as a single 
employer under subsection (b), (c), (m), or (o) of section 414 of the 
Internal Revenue Code of 1986 shall be treated as a single employer. 
Aliens employed under an H-1B petition shall be treated as employees of 
an employer.

Section 6. Increased enforcement and penalties

    Section 212(n)(2)(C) of the INA provides for penalties for 
an employer of H-1B nonimmigrants who has willfully failed to 
meet a condition of the first attestation (payment to H-1B 
nonimmigrants of the required wage), failed to meet a condition 
of the second attestation (no strike or lockout taking place), 
substantially failed to meet a condition of the third (proper 
notice provided) or fourth (application contains specified 
information) attestations, or has made a misrepresentation of a 
material fact in an application. If the Secretary of Labor, 
after notice and opportunity for a hearing, has found such a 
violation, (1) the Secretary shall notify the Attorney General 
and may, in addition, impose such other administrative remedies 
(including civil monetary penalties in an amount not to exceed 
$1,000 per violation) as the Secretary determines to be 
appropriate, and (2) the Attorney General shall not approve 
petitions filed with respect to that employer under section 204 
of the INA (petitions for permanent resident status) or section 
214(c) of the INA (petitions for status as nonimmigrant under 
section 101(a)(15)(H) of the INA--including status as H-1B 
nonimmigrant--and under sections 101(a)(15)(L), (O), or (P)(i) 
of the INA) during a period of at least one year for aliens to 
be employed by that employer.
    Section 6(a) of the bill amends section 212(n)(2)(C) to 
provide for three levels of violations and related penalties. 
The first level is similar to the violations and penalties 
described above, except that there is no penalty for willful 
failure to meet a condition of the first attestation, and 
penalties are added for a failure to meet a condition of the 
fifth attestation (no-lay off) and for substantial failure to 
meet a condition of the sixth attestation (recruitment).
    The second level of penalties applies to an employer who 
has willfully failed to meet a condition of any of the six 
attestations, has made a willful misrepresentation of a 
material fact in an application, or has intimidated, 
threatened, restrained, coerced, blacklisted, discharged, or in 
any other manner discriminated against an employee (or former 
employee or applicant for employment) because the employee has 
disclosed information to the employer or to any other person 
that the employee reasonably believes evidences a violation of 
section 212(n) of the INA, or any rule or regulation pertaining 
to section 212(n), or because the employee cooperates or seeks 
to cooperate in an investigation or other proceeding concerning 
the employer's compliance with the requirements of section 
212(n) or any rule or regulation pertaining to section 212(n). 
In any such case, (1) the Secretary of Labor shall notify the 
Attorney General of such finding and may, in addition, impose 
such other administrative remedies (including civil monetary 
penalties in an amount not to exceed $5,000 per violation) as 
the Secretary determines to be appropriate, and (2) the 
Attorney General shall not approve petitions filed with respect 
to that employer under section 204 or 214(c) of the INA during 
a period of at least one year for aliens to be employed by the 
employer.
    The third level of penalties applies to an employer who has 
willfully failed to meet a condition of any of the six 
attestations or has made a willful misrepresentation of a 
material fact in an application, in the course of which failure 
or misrepresentation the employer has also failed to meet a 
condition of the fifth attestation (no-lay off). In any such 
case, (1) the Secretary of Labor shall notify the Attorney 
General of such finding and may, in addition, impose such other 
administrative remedies (including civil monetary penalties in 
an amount not to exceed $25,000 per violation) as the Secretary 
determines to be appropriate, and (2) the Attorney General 
shall not approve petitions filed with respect to that employer 
under section 204 or 214(c) of the INA during a period of at 
least two years for aliens to be employed by the employer.
    Section 6(b) of the bill adds a section 212(n)(2)(E) of the 
INA providing that the provisions of section 212(n)(2)--
including the penalties contained in subparagraph (C)--apply to 
a failure of an ``other'' employer to comply with the (no-lay 
off) attestation required of it. See section 3 of the bill.
    Section 6(c) of the bill adds a section 212(n)(2)(F) of the 
INA providing that the Secretary of Labor may, on a case-by-
case basis, subject an employer--whether or not H-1B-
dependent--to random investigations for a period of up to five 
years, beginning on the date that the employer is found by the 
Secretary to have committed a willful failure to meet a 
condition of any of the six attestations or to have made a 
misrepresentation of material fact in an application. In such 
an instance, no complaint needs to have been filed. See section 
5 of the bill.

Section 7. Prohibition on imposition by importing employers of 
        employment contract provisions violating public policy

    Section 7 of the bill adds a section 212(n)(2)(G) of the 
INA providing that if the Secretary of Labor finds, after 
notice and opportunity for a hearing, that an employer who has 
submitted an application for an H-1B nonimmigrant has requested 
or required an alien admitted or provided status as a 
nonimmigrant pursuant to the application, as a condition of the 
employment, to execute a contract containing a provision that 
would be considered void as against public policy in the State 
of intended employment, (1) the Secretary shall notify the 
Attorney General of such finding, and may, in addition, impose 
such other administrative remedies (including civil monetary 
penalties in an amount not to exceed $25,000 per violation) as 
the Secretary determines to be appropriate, and (2) the 
Attorney General shall not approve petitions filed by the 
employer for H-1B nonimmigrants to be employed by the employer 
during a period of not more than 10 years.

Section 8. Improving count of H-1B and H-2B nonimmigrants

    Section 8(a) of the bill provides that the Attorney General 
shall take such steps as are necessary to maintain an accurate 
count of the number of aliens who are issued H-1B or H-2B visas 
or otherwise provided H-1B or H-2B status.
    Section 8(b) of the bill provides that the Attorney General 
shall take such steps as are necessary to revise the forms used 
for petitions for visas or nonimmigrant status under the H-1B 
and H-2B programs so as to ensure that the forms provide the 
Attorney General with sufficient information to permit the 
Attorney General accurately to count the number of aliens who 
are issued H-1B or H-2B visas or otherwise provided H-1B or H-
2B status.
    Section 8(c) of the bill provides that the Attorney General 
shall provide to the Congress not less than four times per year 
(beginning in fiscal year 1999) a report on (1) the number of 
aliens who were issued H-1B visas or otherwise provided H-1B 
status during the preceding three month period, (2) the number 
of aliens who were issued H-2B visas or otherwise provided H-2B 
status during the preceding three month period, and (3) the 
countries of origin and occupations of, educational levels 
attained by, and total compensation (including the value of all 
wages, salary, bonuses, stock, stock options, and any other 
similar forms of remuneration) paid to, aliens issued H-1B or 
H-2B visas or otherwise provided H-1B or H-2B status during the 
preceding three month period.

Section 9. GAO study and report on age discrimination in the 
        information technology field

    Section 9(a) of the bill provides that the Comptroller 
General of the United States shall conduct a study assessing 
various aspects of age discrimination in the information 
technology industry and by employers of information technology 
workers including (1) the prevalence of age discrimination, (2) 
the extent to which there is a difference, based on age, in 
promotion and advancement, working hours, telecommuting, 
salary, and stock options, bonuses and other benefits, (3) the 
relationship between rates of advancement, promotion, and 
compensation to experience, skill level, education, and age, 
and (4) differences in skill level on the basis of age.
    Section 9(b) of the bill provides that not later than 
October 1, 2000, the Comptroller General shall submit to the 
House and Senate Judiciary Committees a report containing the 
results of the study, including any recommendations as to how 
to reduce age discrimination.

Section 10. GAO labor market study and report

    Section 10(a) of the bill provides that the Comptroller 
General shall conduct a labor market study investigating and 
analyzing (1) the overall shortage of available workers in 
high-technology, rapid-growth industries, (2) the multiplier 
effect of growth in high-technology industry on growth in low-
technology jobs, (3) the relative achievement rates of United 
States and foreign students in secondary school in a variety of 
subjects, (4) the relative performance, by subject area, of 
Untied States and foreign students in postsecondary and 
graduate schools as compared to secondary schools, (5) the 
labor market need for workers with information technology 
skills and the extent of the deficit of such workers to fill 
high-technology jobs during the 10 year period beginning on the 
date of enactment of the bill, (6) future training and 
education needs of companies in the high-technology sector, (7) 
future training and education needs of United States students 
to ensure that their skills at various levels match the needs 
of the high-technology and information technology sectors, (8) 
an analysis of which particular skill sets are in demand, (9) 
the needs of the high-technology sector for foreign workers 
with specific skills, (10) the potential benefits to 
postsecondary educational institutions, employers, and the 
United States economy from the entry of skilled professionals 
in the fields of engineering and science, and (11) the effect 
on the high-technology labor market of the downsizing of the 
defense sector, the increase in productivity in the computer 
industry, and the deployment of workers dedicated to the Year 
2000 Project.
    Section 10(b) provides that no later than October 1, 2000, 
the Comptroller General shall submit to the House and Senate 
Judiciary Committees a report containing the results of the 
study.

Section 11. Effective date

    The amendments made by this bill shall take effect on the 
date of enactment and shall apply to applications filed with 
the Secretary of Labor on or after 30 days after the date of 
enactment, except that the amendments made by section 2 of the 
bill shall apply to applications filed with the Secretary 
before, on, or after the date of enactment.

                              Agency Views

                                           The White House,
                                   Washington, DC., April 30, 1998.
Hon. Lamar Smith, Chairman, Subcommittee on Immigration, Judiciary 
    Committee,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: Today, your Subcommittee will mark-up 
H.R. 3736, the ``Workforce Improvement and Protection Act of 
1998'' which is intended to address the growing demand for 
skilled workers in the information technology (IT) industry by 
enacting a temporary increase in the annual cap on the number 
of visas for temporary foreign ``specialty'' workers under the 
H-1B program, while also effecting reforms to the H-1B program 
that would help target their usage to industries and employers 
that are actually experiencing skill shortages.
    The Administration believes that the first step in 
increasing the availability of skilled workers must be raising 
the skills of U.S. workers and helping the labor market work 
better to match employers with U.S. workers. Therefore, 
substantial additional efforts by industry to increase the 
skill level of U.S. workers and needed improvements in the H-1B 
visa program are necessary prerequisites for the Administration 
to support any short-term increases in the number of visas for 
temporary foreign workers.
    We are pleased that H.R. 3736 is consistent with one of our 
primary objectives, insofar as it conditions a temporary 
increase in the H-1B cap on the enactment of meaningful reforms 
to the H-1B visa program. Your bill would help ensure that U.S. 
workers would not lose their jobs to a temporary foreign worker 
and that qualified U.S. workers would have the opportunity to 
fill a job before a temporary foreign worker is hired. 
Moreover, your bill modestly expands enforcement authority to 
help prevent employer abuses of the H-1B program. These reforms 
will effectively target H-1B visas to industries experiencing 
skill shortages.
    Unfortunately, H.R. 3736 does not contain any provision for 
additional training opportunities for U.S. workers. Training is 
a vital component of our strategy to address the longterm 
demand for highly skilled U.S. workers and to enhance the 
international competitiveness of important U.S. industries. An 
effective training strategy would also work to reduce the 
demand for H-1B visas. We are also concerned that the increase 
in the annual number of H-1B visas reflected in this bill is 
too large, although we agree that the increase should last for 
only three years.
    For these reasons, the Administration believes that this 
legislation would substantially improve the current H-1B 
program and, with the addition of meaningful training 
provisions and a modest reduction in the level of increase in 
the annual H-1B visa cap, would garner the Administration's 
support. Modifications to the H-1B program that appropriately 
protect U.S. workers will also reinforce the Administration's 
strong support for legal immigration. We look forward to 
working with the Congress on these and other specific 
provisions in the bill.
    The Office of Management and Budget advises that there is 
no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                          Bruce Reed,      
                  Assistant to the President for Domestic Policy.  

                                    Gene B. Sperling,      
                  Assistant to the President for Economic Policy.  

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

IMMIGRATION AND NATIONALITY ACT

           *       *       *       *       *       *       *


                         TITLE II--IMMIGRATION

Chapter 1--Selection System

           *       *       *       *       *       *       *


 general classes of aliens ineligible to receive visas and ineligible 
               for admission; waivers of inadmissibility

    Sec. 212. (a) * * *

           *       *       *       *       *       *       *

    (n)(1) No alien may be admitted or provided status as [a 
nonimmigrant described in section 101(a)(15)(H)(i)(b)] an H-1B 
nonimmigrant in an occupational classification unless the 
employer has filed with the Secretary of Labor an application 
stating the following:
          (A) The employer--
                  (i) is offering and will offer during the 
                period of authorized employment to aliens 
                admitted or provided status as [a nonimmigrant 
                described in section 101(a)(15)(H)(i)(b)] an H-
                1B nonimmigrant wages that are at least--
                          (I) * * *

           *       *       *       *       *       *       *

          (E)(i) Except as provided in clause (iv), the 
        employer has not laid off or otherwise displaced and 
        will not lay off or otherwise displace, within the 
        period beginning 6 months before and ending 90 days 
        following the date of filing of the application or 
        during the 90 days immediately preceding and following 
        the date of filing of any visa petition supported by 
        the application, any United States worker (as defined 
        in paragraph (3)) (including a worker whose services 
        are obtained by contract, employee leasing, temporary 
        help agreement, or other similar means) who has 
        substantially equivalent qualifications and experience 
        in the specialty occupation, and in the area of 
        employment, for which H-1B nonimmigrants are sought or 
        in which they are employed.
          (ii) Except as provided in clause (iii), in the case 
        of an employer that employs an H-1B nonimmigrant, the 
        employer shall not place the nonimmigrant with another 
        employer where--
                  (I) the nonimmigrant performs his or her 
                duties in whole or in part at one or more 
                worksites owned, operated, or controlled by 
                such other employer; and
                  (II) there are indicia of an employment 
                relationship between the nonimmigrant and such 
                other employer.
          (iii) Clause (ii) shall not apply to an employer's 
        placement of an H-1B nonimmigrant with another employer 
        if the other employer has executed an attestation that 
        it satisfies and will satisfy the conditions described 
        in clause (i) during the period described in such 
        clause.
          (iv) This subparagraph shall not apply to an 
        application filed by an employer that is an institution 
        of higher education (as defined in section 1201(a) of 
        the Higher Education Act of 1965), or a related or 
        affiliated nonprofit entity, if the application relates 
        solely to aliens who--
                  (I) the employer seeks to employ--
                          (aa) as a researcher on a project for 
                        which not less than 50 percent of the 
                        funding is provided, for a limited 
                        period of time, through a grant or 
                        contract with an entity other than the 
                        employer; or
                          (bb) as a professor or instructor 
                        under a contract that expires after a 
                        limited period of time; and
                  (II) have attained a master's or higher 
                degree (or its equivalent) in a specialty the 
                specific knowledge of which is required for the 
                intended employment.
          (F)(i) The employer, prior to filing the application, 
        has taken, in good faith, timely and significant steps 
        to recruit and retain sufficient United States workers 
        in the specialty occupation for which H-1B 
        nonimmigrants are sought. Such steps shall have 
        included recruitment in the United States, using 
        procedures that meet industry-wide standards and 
        offering compensation that is at least as great as that 
        required to be offered to H-1B nonimmigrants under 
        subparagraph (A), and offering employment to any United 
        States worker who applies and has the same 
        qualifications as, or better qualifications than, any 
        of the H-1B nonimmigrants sought.
          (ii) The conditions described in clause (i) shall not 
        apply to an employer with respect to the employment of 
        an H-1B nonimmigrant who is described in subparagraph 
        (A), (B), or (C) of section 203(b)(1).

           *       *       *       *       *       *       *

    (2)(A) The Secretary shall establish a process for the 
receipt, investigation, and disposition of complaints 
respecting a petitioner's failure to meet a condition specified 
in an application submitted under paragraph (1) or a 
petitioner's misrepresentation of material facts in such an 
application. Complaints may be filed by any aggrieved person or 
organization (including bargaining representatives)[.], except 
that the Secretary may only file such a complaint respecting an 
H-1B-dependent employer (as defined in paragraph (3)), and only 
if there appears to be a violation of an attestation or a 
misrepresentation of a material fact in an application. Except 
as provided in subparagraph (F) (relating to spot 
investigations during probationary period), no investigation or 
hearing shall be conducted with respect to an employer except 
in response to a complaint filed under the previous sentence. 
No investigation or hearing shall be conducted on a complaint 
concerning such a failure or misrepresentation unless the 
complaint was filed not later than 12 months after the date of 
the failure or misrepresentation, respectively. The Secretary 
shall conduct an investigation under this paragraph if there is 
reasonable cause to believe that such a failure or 
misrepresentation has occurred.

           *       *       *       *       *       *       *

    [(C) If the Secretary finds, after notice and opportunity 
for a hearing, a failure to meet a condition of paragraph 
(1)(B), a substantial failure to meet a condition of paragraphs 
(1)(C) or (1)(D),a willful failure to meet a condition of 
paragraph (1)(A), or a misrepresentation of material fact in an 
application--
          [(i) the Secretary shall notify the Attorney General 
        of such finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $1,000 per 
        violation) as the Secretary determines to be 
        appropriate, and
          [(ii) the Attorney General shall not approve 
        petitions filed with respect to that employer under 
        section 204 or 214(c) during a period of at least 1 
        year for aliens to be employed by the employer.]
  (C)(i) If the Secretary finds, after notice and opportunity 
for a hearing, a failure to meet a condition of paragraph 
(1)(B) or (1)(E), a substantial failure to meet a condition of 
paragraph (1)(C), (1)(D), or (1)(F), or a misrepresentation of 
material fact in an application--
          (I) the Secretary shall notify the Attorney General 
        of such finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $1,000 per 
        violation) as the Secretary determines to be 
        appropriate; and
          (II) the Attorney General shall not approve petitions 
        filed with respect to that employer under section 204 
        or 214(c) during a period of at least 1 year for aliens 
        to be employed by the employer.
  (ii) If the Secretary finds, after notice and opportunity for 
a hearing, a willful failure to meet a condition of paragraph 
(1), a willful misrepresentation of material fact in an 
application, or a violation of clause (iv)--
          (I) the Secretary shall notify the Attorney General 
        of such finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $5,000 per 
        violation) as the Secretary determines to be 
        appropriate; and
          (II) the Attorney General shall not approve petitions 
        filed with respect to that employer under section 204 
        or 214(c) during a period of at least 1 year for aliens 
        to be employed by the employer.
  (iii) If the Secretary finds, after notice and opportunity 
for a hearing, a willful failure to meet a condition of 
paragraph (1) or a willful misrepresentation of material fact 
in an application, in the course of which failure or 
misrepresentation the employer also has failed to meet a 
condition of paragraph (1)(E)--
          (I) the Secretary shall notify the Attorney General 
        of such finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $25,000 per 
        violation) as the Secretary determines to be 
        appropriate; and
          (II) the Attorney General shall not approve petitions 
        filed with respect to that employer under section 204 
        or 214(c) during a period of at least 2 years for 
        aliens to be employed by the employer.
  (iv) It is a violation of this clause for an employer who has 
filed an application under this subsection to intimidate, 
threaten, restrain, coerce, blacklist, discharge, or in any 
other manner discriminate against an employee (which term, for 
purposes of this clause, includes a former employee and an 
applicant for employment) because the employee has disclosed 
information to the employer, or to any other person, that the 
employee reasonably believes evidences a violation of this 
subsection, or any rule or regulation pertaining to this 
subsection, or because the employee cooperates or seeks to 
cooperate in an investigation or other proceeding concerning 
the employer's compliance with the requirements of this 
subsection or any rule or regulation pertaining to this 
subsection.
    (D) If the Secretary finds, after notice and opportunity 
for a hearing, that an employer has not paid wages at the wage 
level specified under the application and required under 
paragraph (1), the Secretary shall order the employer to 
provide for payment of such amounts of back pay as may be 
required to comply with the requirements of paragraph (1), 
whether or not a penalty under subparagraph (C) has been 
imposed.
  (E) Under regulations of the Secretary, the previous 
provisions of this paragraph shall apply to a failure of 
another employer to comply with an attestation described in 
paragraph (1)(E)(iii) in the same manner as they apply to a 
failure to comply with a condition described in paragraph 
(1)(E)(i).
  (F) The Secretary may, on a case-by-case basis, subject an 
employer to random investigations for a period of up to 5 
years, beginning on the date that the employer is found by the 
Secretary to have committed a willful failure to meet a 
condition of paragraph (1) or to have made a misrepresentation 
of material fact in an application. The preceding sentence 
shall apply to an employer regardless of whether the employer 
is an H-1B-dependent employer or a non-H-1B-dependent employer. 
The authority of the Secretary under this subparagraph shall 
not be construed to be subject to, or limited by, the 
requirements of subparagraph (A).
  (G) If the Secretary finds, after notice and opportunity for 
a hearing, that an employer who has submitted an application 
under paragraph (1) has requested or required an alien admitted 
or provided status as a nonimmigrant pursuant to the 
application, as a condition of the employment, to execute a 
contract containing a provision that would be considered void 
as against public policy in the State of intended employment--
          (i) the Secretary shall notify the Attorney General 
        of such finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $25,000 per 
        violation) as the Secretary determines to be 
        appropriate; and
          (ii) the Attorney General shall not approve petitions 
        filed by the employer under section 214(c) during a 
        period of not more than 10 years for H-1B nonimmigrants 
        to be employed by the employer.
  (3) For purposes of this subsection:
          (A) The term ``H-1B-dependent employer'' means an 
        employer that--
                  (i)(I) has fewer than 21 full-time equivalent 
                employees who are employed in the United 
                States; and (II) employs 4 or more H-1B 
                nonimmigrants; or
                  (ii)(I) has at least 21 but not more than 150 
                full-time equivalent employees who are employed 
                in the United States; and (II) employs H-1B 
                nonimmigrants in a number that is equal to at 
                least 20 percent of the number of such full-
                time equivalent employees; or
                  (iii)(I) has at least 151 full-time 
                equivalent employees who are employed in the 
                United States; and (II) employs H-1B 
                nonimmigrants in a number that is equal to at 
                least 15 percent of the number of such full-
                time equivalent employees.
        In applying this subparagraph, any group treated as a 
        single employer under subsection (b), (c), (m), or (o) 
        of section 414 of the Internal Revenue Code of 1986 
        shall be treated as a single employer. Aliens employed 
        under a petition for H-1B nonimmigrants shall be 
        treated as employees, and counted as nonimmigrants 
        under section 101(a)(15)(H)(i)(b) under this 
        subparagraph.
          (B) The term ``H-1B nonimmigrant'' means an alien 
        admitted or provided status as a nonimmigrant described 
        in section 101(a)(15)(H)(i)(b).
          (C) The term ``lay off or otherwise displace'', with 
        respect to an employee--
                  (i) means to cause the employee's loss of 
                employment, other than through a discharge for 
                cause, a voluntary departure, or a voluntary 
                retirement; and
                  (ii) does not include any situation in which 
                employment is relocated to a different 
                geographic area and the employee is offered a 
                chance to move to the new location, with wages 
                and benefits that are not less than those at 
                the old location, but elects not to move to the 
                new location.
          (D) The term ``non-H-1B-dependent employer'' means an 
        employer that is not an H-1B-dependent employer.
          (E) The term ``United States worker'' means--
                  (i) a citizen or national of the United 
                States;
                  (ii) an alien lawfully admitted for permanent 
                residence; or
                  (iii) an alien authorized to be employed by 
                this Act or by the Attorney General.

           *       *       *       *       *       *       *


                       admission of nonimmigrants

    Sec. 214. (a) * * *

           *       *       *       *       *       *       *

    (g)(1) The total number of aliens who may be issued visas 
or otherwise provided nonimmigrant status during any fiscal 
year (beginning with fiscal year 1992)--
          [(A) under section 101(a)(15)(H)(i)(b) may not exceed 
        65,000, or
          [(B) under section 101(a)(15)(H)(ii)(b) may not 
        exceed 66,000.]
          (A) under section 101(a)(15)(H)(i)(b), subject to 
        paragraph (5), may not exceed--
                  (i) 95,000 in fiscal year 1998;
                  (ii) 105,000 in fiscal year 1999;
                  (iii) 115,000 in fiscal year 2000; and
                  (iv) 65,000 in fiscal year 2001 and any 
                subsequent fiscal year; or
          (B) under section 101(a)(15)(H)(ii)(b) may not 
        exceed--
                  (i) 36,000 in fiscal year 1998;
                  (ii) 26,000 in fiscal year 1999;
                  (iii) 16,000 in fiscal year 2000; and
                  (iv) 66,000 in fiscal year 2001 and any 
                subsequent fiscal year.

           *       *       *       *       *       *       *

    (4) In the case of a nonimmigrant described in section 
101(a)(15)(H)(i)(b), the period of authorized admission as such 
a nonimmigrant may not exceed 6 [years.] years, except that, 
with respect to each such nonimmigrant issued a visa or 
otherwise provided nonimmigrant status in each of fiscal years 
1998, 1999, and 2000 in excess of 65,000 (per fiscal year), the 
period of authorized admission as such a nonimmigrant may not 
exceed 4 years.
  (5) The total number of aliens described in section 
212(a)(5)(C) who may be issued visas or otherwise provided 
nonimmigrant status during any fiscal year (beginning with 
fiscal year 1999) under section 101(a)(15)(H)(i)(b) may not 
exceed 5,000.

           *       *       *       *       *       *       *


                            ADDITIONAL VIEWS

    We thank the Chairman of the Committee and the Chairman of 
the Subcommittee on Immigration and Claims for their work in 
addressing a serious concern for U.S. employers: the ability to 
continue to have access to skilled foreign professionals. The 
increased need for skilled foreign professionals needs to be 
viewed in the context of a robust U.S. economy and the lowest 
U.S. unemployment rate in 40 years. Specifically, the expanding 
economy, and the tremendous growth in the high-technology 
industry, combined with declining enrollment by U.S. students 
(BA, MA and grad students) in high-tech fields (65,000 in 1983 
v. 35,000 in 1997) has resulted in an increased need for 
foreign professionals in certain specialty occupations.
    The ``Workforce Improvement and Protection Act of 1998'' 
will raise the cap on the number of H-1B employment visas 
issued to highly skilled foreign professionals hired by 
American businesses. High technology businesses and research 
universities vitally need this program to recruit foreign 
talent, especially where an insufficient number of highly 
skilled Americans is available to fill current job openings. 
One recent report states that the computer industry has 340,000 
unfilled jobs, while American universities produce only 130,000 
computer science graduates a year. In order to compete 
globally, American businesses and universities need the ability 
to freely hire foreign talent to fill some of these positions. 
As the committee knows, the problem is that the current cap of 
65,000 H-1B visas was reached in May 1998, five months before 
the end of the fiscal year. Consequently, the Immigration and 
Naturalization Service (INS) will no longer issue H-1B visas 
for the remainder of this year.
    H-1B professionals are often key employees in companies and 
organizations engaged in new and exciting development, 
expansion and discovery projects. These projects, when brought 
to fruition, have the potential to create many new jobs for 
American workers. Business groups have stated that for every 
position held by an H-1B professional there may be five or more 
new jobs created that will be held by U.S. workers, thereby 
generating a net gain to the United States. However, if H-1B 
workers are not allowed to enter the United States, or the 
program becomes too burdensome for employers to undertake, the 
jobs created by H-1B workers will be sent abroad where the 
foreign professional can work, resulting in a net loss to the 
U.S. economy.
    American businesses often use H-1B professionals in 
positions that utilize their unique skill and experience to 
develop new products, embark on new research and development 
projects and share their knowledge with other employees. Often, 
many other jobs held by U.S. workers, and sometimes the entire 
success of a small start-up company, are dependent upon H-1B 
professionals. For example:
    A manufacturer of test equipment for the data storage 
industry in Fremont, California, had been recruiting 
internationally for a staff scientist with expertise in 
magnetic recording technology. This person would be responsible 
for developing state-of-the-art research for the company to 
develop new technologies and products to grow. They eventually 
found a foreign Ph.D. physicist with this expertise. However, 
delays in the H-1B process caused him to decline the offer. 
Shortly thereafter, due to a severe financial loss, the company 
had to lay off 50 U.S. workers. Further, because the community 
of scientists in this field is small, the company believes that 
its inability to obtain a visa in a timely manner will hurt 
their chances of bringing in other key physicists.
    In Colorado, a government contractor hired several H-1B 
engineers with expertise in the decommissioning and 
decontamination of former nuclear weapons facilities. Their 
expertise is being used in the cleanup of several Department of 
Energy facilities that formerly were used in this nation's 
nuclear weapons complex.
    Agouron Pharmaceuticals Inc., in La Jolla, California, is a 
rapidly growing pharmaceutical company whose first major 
product, VIRACEPT, is a potent drug in the treatment of HIV and 
AIDS. The company currently employs 473 researchers, and 25 of 
them are H-1Bs. Agouron also has plans to offer employment to 
several other researchers who will require H-1Bs, in order to 
continue to extend their research and development programs for 
new drugs in the fight against AIDS.
    Ingersoll-Rand's Torrington Manufacturing Development 
Center in Connecticut employs ten Ph.D. researchers on H-1Bs 
who perform critical research on heat distortion control and 
the optimization of heat treatment processes for the 
manufacture of a bearing product line. Torrington is the 
largest supplier of bearings to Ford Motor Company.
    Smiths Industries in Grand Rapids, Michigan, an aerospace 
and defense systems engineering company, conducted a nationwide 
search for a senior software engineer and received only one 
application. The company hired an H-1B professional to 
undertake critical work on the Airbus 320 Flight Management 
System project, so that other Smiths engineers can focus on 
U.S. government defense projects.
    Two schools in Manhattan and California, devoted to working 
with children with cerebral palsy, have used the H-1B category 
to bring in several teachers from Hungary who have been trained 
in a special technique called ``conductive therapy'' that 
currently is unavailable in the United States. Parents of U.S. 
children helped by these teachers call their children's 
progress ``miraculous.''
    Often, H-1B professionals already are here. They are 
graduates of our colleges and universities who are undergoing 
periods of ``practical training'' in their specialties in the 
United States. If unable to get H-1B visas, these individuals 
would be required to go abroad, and would be unable to 
contribute their talents to U.S. companies. Instead, they would 
be hired by those companies' competitors outside of the United 
States. Or, the U.S. companies that need their skills will move 
their operations or projects abroad, including the jobs that go 
with them, where the individual can work.
    H.R. 3736 properly raises the cap on the number of H-1B 
visas available to American businesses expanding their ability 
to compete globally. We support raising the present cap from 
65,000 to 95,000 for 1998, and to 115,000 by the year 2000.
    H.R. 3736 also directs tough enforcement action where it is 
needed--against those who abuse the program at the expense of 
American workers. Under the bill, employers who willfully 
violate the H-1B program face fines that are five times higher 
than current law. Furthermore, it authorizes additional 
penalties up to $25,000 on top of those penalties. It also 
permits the Department of Labor to engage in spot inspections 
of known violators for a period of up to five years. These 
important enforcement provisions are necessary and appropriate.
    However, we want to voice our opposition to other 
provisions in the bill. Given the agreement among the committee 
that at least a temporary increase in the number of H-1B 
professionals is desirable, our difference of opinion arises as 
to whether other, permanent changes, should also be made to 
this program. What H.R. 3736 purports to give with one hand it 
takes away with the other by imposing a new regulatory 
structure on businesses that hire H-1B employees. We have 
serious concerns that these new regulatory requirements may 
render the program unusable to a large number of American 
businesses.
    H.R. 3736 in its present form increases the Labor 
Department's authority to initiate investigations on its own. 
Currently, a complaint surrounding any business is required to 
commence a Department of Labor investigation. This present 
system of enforcement gives any ``aggrieved party'' including 
government representatives, competitors and the H-1B employees 
themselves, authorization to file a complaint with the 
Department of Labor. Giving the Labor Department free reign 
absent any complaint is unwise and potentially unworkable 
because it would discourage businesses from employing H-1B 
professionals. Business groups oppose this provision because it 
would subject those with a higher percentage of H-1B 
professionals to significantly increased investigations and 
costs without requiring the Labor Department to implement 
clearer enforcement guidelines. Further, the Labor Department 
has a historyof not promulgating clear and consistent 
regulations in this area. Eight years after Congress instituted Labor 
Department involvement in the H-1B program, there are still no final 
regulations.
    Even more troubling, this bill adds two new regulatory 
requirements in the form of layoff and recruitment attestation 
clauses. At first blush, these attestation clauses appear to be 
reasonable safeguards that provide protection for American 
workers so they will not lose their jobs to H-1B employees. In 
reality, these new requirements will add onerous and 
unnecessary burdens on American businesses. A vast array of 
employers oppose the layoff attestation because it would place 
them under the scrutiny of the Department of Labor every time 
they have to make decisions regarding their personnel. This 
alone would effectively eliminate the use of H-1Bs by many 
employers. We believe that these added attestations and 
increased Department of Labor authority are overly burdensome 
and unnecessary.
    The first attestation, the ``no layoff'' provision, would 
require employers to attest that they have not laid-off or 
otherwise displaced a U.S. worker, including a worker employed 
under a third-party contract, employee leasing arrangement or 
temporary help arrangement, before hiring an H-1B worker with 
``substantially equivalent'' qualifications in the same 
occupation as the laid-off worker.
    Such an attestation on its face seems reasonable. Employers 
should not be able to lay off U.S. workers and replace them 
with H-1B nonimmigrants who will work for less. But the fact is 
that current law in the H-1B program, as enacted by Congress in 
1990, already prohibits an employer from paying an H-1B 
nonimmigrant less than it pays its U.S. workers. Therefore, 
current law already is designed to prevent ``cheap foreign 
labor'' from depressing the wages of U.S. workers. Thus the 
incentive to lay off a U.S. worker is absent.
    Further, there is a lack of evidence that there are 
widespread cases of companies laying off U.S. workers and 
hiring H-1B replacements. In fact, in the past seven years the 
Department of Labor has cited only one specific example of a 
U.S. company laying off Americans and replacing them with 
individual H-1B visa-holders. And even in this case, the 
Department of Labor did not have specific evidence that it 
involved a deliberate one-for-one replacement by the original 
employer. Although anecdotes abound, often it is the same cases 
that are reported over and over, making the problem seem much 
larger than it actually is.
    The bigger issue, however, is the new intrusion of the 
government into the personnel decisions of American employers. 
The provisions in this bill would have a substantial impact on 
American employers with regard to major decisions such as 
terminating unprofitable projects, undertaking or ending 
contractual arrangements or mergers and acquisition, that would 
have an impact on their personnel, for fear that such actions 
may prohibit their ability to obtain H-1B workers for projects 
whose skills would create new American jobs. The language of 
the ``no layoff'' clause does not relate to direct replacement 
of American workers. Rather, it relates broadly to layoffs, 
effectively preventing companies who have laid off workers for 
valid business reasons, from hiring H-1B workers on new 
projects if they are in the same ``occupation'' (to be defined 
by the Department of Labor) as any of the U.S. workers.
    American employers who would have a difficult time 
complying with such provisions include universities and 
research institutions (both non-profit and for-profit) whose 
projects are often dependent on grant funds. They would be 
limited in their flexibility in choosing and ending research 
projects. When these grants expire or a research avenue proves 
ineffective, professors and researchers are often ``laid off,'' 
until new projects are designed and funded.
    With the broad occupational categories used under this 
provision, a cancer researcher studying a particular aspect of 
the disease whose job position is terminated because his or her 
project has ended would prevent an organization from hiring 
another cancer researcher on an H-1B visa for another, 
completely different project.
    The motion picture industry, whose work is by its very 
nature temporary, also would be severely affected by this 
provision. In order to continue to provide the world with the 
highest standards in entertainment, the movie industry must be 
able to recruit the best talent in the world. This includes 
such supporting positions as digital animators, computer 
programmers and software engineers who enable some of the 
unbelievable technical achievements in today's motion pictures. 
With this layoff attestation, production companies that finish 
work on one film and discharge those workers would be prevented 
from hiring an H-1B professional to work on the next film.
    For large companies that operate multiple independent 
divisions, all of those divisions would be treated as a single 
employer under this provision. This would mean that the 
decision of one division to layoff U.S. workers at a facility 
in a metropolitan area, could prevent another division from 
hiring an H-1B worker at another facility in the same area. 
Given that often these divisions do not have human resources 
offices that are coordinated, or even that communicate with one 
another, the manager signing the Department of Labor's form may 
not even be aware of the layoff in the other division, thus 
leading to an unintentional misrepresentation and potential 
penalties. To deal with this problem, such large companies 
would have to invest large sums in generating the 
infrastructure to track all personnel movements among all of 
their various divisions, a cost that not many companies will be 
willing to undertake.
    As stated above, many employers could not in good 
conscience sign this attestation, because of the uncertainties 
of future activities. They would simply be locked out of the H-
1B program.
    To the extent that the layoff attestation provisions are 
unworkable for American employers, the recruitment attestation 
provisions in this bill are an anathema. H-1B professionals are 
not just filling shortage occupations. The H-1B category was 
created to allow the United States to recruit and retain in the 
United States foreign-born individuals with specific, unique, 
rare or otherwise needed skills whose presence would help U.S. 
employers develop new ideas, projects, research or markets, 
create new jobs and expand our economy. By requiring U.S. 
employers to first attempt to recruit in the U.S. for persons 
to fill a job created to utilize thetalents of someone foreign 
born, would at best be pointless, and at worst be a sham. Further, the 
time required to undergo that recruitment would create significant 
delays, extending over several months, in the ability of employers to 
utilize the skills of these individuals in a timely manner.
    This provision could force employers wishing to hire an H-
1B worker to undertake a recruitment program that would meet 
the satisfaction of the Department of Labor, and prove, again, 
to the satisfaction of the Department of Labor, that it has not 
improperly rejected any equally qualified U.S. workers for the 
position to be offered to the H-1B individual. This provision 
would further inject the government's judgement in the hiring 
decisions of American employers. It would require employers to 
attempt, prior to filing any application for an H-1B, to 
determine its compliance with a set of regulations, yet to be 
proposed, that would lay out what the Department of Labor 
believes are ``timely and significant steps'' to recruit and 
retain U.S. workers, and whether those steps met ``industry 
standards,'' and whether any ``qualified'' U.S. workers had 
applied.
    Many employers have indicated that they would rather forego 
the H-1B program altogether, than submit to such government 
dictated scrutiny of their hiring practices. Since employers 
will have no way of knowing what the Department of Labor's 
definitions of these terms will be, nor whether they have 
actually complied, most companies could not confidently sign 
this attestation not knowing whether the Department of Labor 
will, in six months time assess a fine based upon totally 
inappropriate criteria to the industry, or their company.
    This attestation will further remove the H-1B program from 
the real world. In the real world, employers have project 
deadlines. They often suffer lost revenues because of the 
current timing of the H-1B process. What if an employer has 
only recruited for one or two weeks, but there is an urgent 
need for a particular individual? Also in the real world, 
employers have specific criteria for their job openings, which 
often are company-specific. How can the Department of Labor 
know the intricacies of an individual business to make this 
kind of determination?
    These attestation provisions require much more than merely 
``checking off a box.'' To ensure compliance, the government 
would be allowed to micro-manage the human resource policies of 
American businesses. These additional attestations would 
seriously harm American employers ability to recruit the best-
qualified people and seek out the talent necessary to maintain 
American superiority against foreign competitors, and could 
force U.S. companies to move jobs overseas where high tech 
workers are available.
    Current law already contains safeguards to protect American 
workers. Presently all H-1B employers must attest that:
          They are paying the foreign professional a wage that 
        is the higher of what is typically paid in the region 
        for that type of work (``prevailing wage''), or what 
        the employer pays its existing employees with similar 
        experience and duties;
          The working conditions of its American workers are 
        not adversely affected;
          There is no strike/lockout at the worksite, or in the 
        occupation for which the foreign professional is 
        sought;
          It has posted notice to current employees that it is 
        seeking to hire an H-1B professional.
    H.R. 3736 would properly increase the cap on H-1B 
professionals. However, the added attestations and Department 
of Labor-initiated investigation provisions will not benefit 
American businesses and universities. It will not protect the 
American workforce: it will hurt the global competitiveness of 
American employers. Finally, we are most concerned that in the 
end these added regulations will cost American jobs instead of 
protecting them.

                                   James E. Rogan.
                                   Chris Cannon.

                        FURTHER ADDITIONAL VIEWS

    On May 20, 1998, the House Judiciary Committee favorably 
reported H.R. 3736, as amended, by a vote of 27-4. The bill 
would increase the number of H1-B visas available for the next 
three fiscal years, thereby responding to the concern raised by 
the information technology industry that there is a critical 
shortage of highly skilled workers. At the same time, the bill 
would add important reforms to the H1-B visa program, including 
requiring employers to attest that they have made good faith 
efforts to recruit U.S. workers and have not laid off qualified 
U.S. workers prior to applying for H1-B visas. By adding these 
reforms, the bill addresses the concerns raised by U.S. workers 
who fear being displaced by temporary foreign workers. The 
strong bi-partisan vote in favor of the bill reflects the 
belief by most members of the Committee that the bill strikes 
the appropriate balance between these competing concerns.
    Although the new reforms go a long way towards protecting 
U.S. workers, the bill does not complete the task. We believe 
that it is essential that the final version of H.R. 3736 
include provisions to enable U.S. workers to be trained and 
educated to meet the needs which would be temporarily addressed 
by passage of H.R. 3736. During consideration of H.R. 3736, 
Rep. Zoe Lofgren was prepared to offer an amendment which would 
have assessed a $250 user fee each time an employer filed an 
H1-B application. Sixty percent of the funds collected from 
application of this new fee would have been used to increase 
funding for the Mathematics, Engineering and Science 
Achievement (``MESA'') Program administered by the National 
Science Foundation (42 U.S.C. 1861 et seq.). The remaining 40% 
of collected funds would have been used to increase funding for 
training and related activities under the Job Training 
Partnership Act (29 U.S.C. 1501 et seq.). These existing 
federal programs have excellent records of success and we 
believe that increasing funding for them through an H1-B user 
fee account is an appropriate approach to training and 
educating U.S. workers.
    Because Rep. Lofgren's amendment would have been subject to 
a point of order, Rep. Lofgren could not offer her amendment in 
Committee. However, it became clear during the discussions 
about Rep. Lofgren's proposed amendment that there was nearly 
unanimous, bi-partisan support for inclusion of a training and 
education provision in the final version of H.R. 3736. 
Accordingly, we would urge the adoption of an amendment on the 
House Floor which establishes a user fee funded program to 
educate and train U.S. workers to meet industry demands and to 
reduce dependency on temporary foreign workers in the future.

                                   John Conyers, Jr.
                                   Howard L. Berman.
                                   Rick Boucher.
                                   Jerrold Nadler.
                                   Melvin L. Watt.
                                   Sheila Jackson Lee.
                                   Marty Meehan.
                                   William D. Delahunt.
                                   Robert Wexler.

                        FURTHER ADDITIONAL VIEWS

    I am appreciative of the efforts of my colleagues to work 
on a bipartisan basis on H.R. 3736, The Workforce Improvement 
and Protection Act. While I voted to report this legislation 
favorably out of the Judiciary Committee, I continue to be 
concerned, as I expressed during the Judiciary Committee mark-
up, that the language as drafted in the bill relative to 
recruitment and layoff will prove to be unworkable. I remain 
confident that reasonable persons working in good faith will be 
able to create sound, practical and useful refinements to this 
language as the legislative process goes forward. I look 
forward to playing a productive role in that process.

                                                       Zoe Lofgren.