DOJ Letter to Sen. Abraham Re H-1B Count
The Honorable Spencer Abraham
United States Senate
Washington, DC 20510
Dear Senator Abraham:
Thank you for your letter of December 22, 1999, to the Attorney General in which you express your concerns about the Immigration and Naturalization Service (INS) administration of the cap on the H-1B temporary visa program. You indicate particular interest in how many H-1B visas INS issued during Fiscal Year (FY) 1999 that should have counted against the cap and identified areas in which you believe improvement is needed. To develop appropriate answers to these questions, you urge the INS to re-examine the scope of the independent audit of the H-1B program that is now underway by KPMG Peat Marwick (KPMG).
We appreciate your interest as indicated by such a lengthy and detailed letter describing your concerns. We believe that in response to these concerns it is most useful to provide a thorough explanation of how the INS has administered the H-1B cap since the inception of the program and the steps we are now taking to make meaningful improvements.
A retrospective look: Which H-1B aliens are counted and how does the INS maintain this count?
First, we will explain which aliens the INS counts against the H-1B cap.
As you know, the H-1B nonimmigrant classification, for specialty occupation workers and fashion models of distinguished ability, was established with passage of the Immigration Act of 1990 (IMMACT 90). Among other controls and protections of the domestic labor market, the IMMACT 90 established a numeric limit, or "cap," each fiscal year on the H-1B nonimmigrant classification. Section 214(g) of the immigration and Nationality Act (the Act), as amended, provides the statutory basis for the H1B cap.
The INS promulgated implementing regulations in 1991 after notice and public comment. See 56 Fed. Reg. 61111. These regulations set forth procedures to allocate the available H-1B numbers under the annual cap. The implementing regulations are still in effect, and no substantive amendments have been made since 1991.
These regulations indicate that the cap is based on approved petitions filed by a U.S. employer on behalf of an H-1B nonimmigrant alien. By law, each U.S. employer must petition the INS to sponsor an H-1B alien. In developing the implementing regulations, the INS consulted with the Department of State (DOS) before determining that the approved petition, a universal requirement in H-1B proceedings, should be counted for purposes of maintaining the annual cap. Although DOS has sole authority under law to issue visas, it does not have authority to provide status to an alien. Conversely, the INS has no authority to issue visas, but is the agency with sole authority to determine immigration status.
The regulations explicitly set forth several requirements regarding which aliens are counted against the H-1B cap.
First, the regulations state that the spouse and children of H-1B nonimmigrants will not be counted against the cap. This conforms to the statutory language at section 214(g) (2) of the Act.
The regulations also state that only petitions approved for new employment will be counted against the cap. The INS does not count petitions approved to extend the temporary employment of the H-1B nonimmigrant.
The INS does not count petitions for H-1B employment that are denied. Similarly, INS does not count petitions that are pending adjudication or those requiring additional information or investigation for suspected fraud.
The regulations also provide that when an approved petition is not used because the alien does not apply for admission to the United States, the employer shall notify the INS so the petition approval can be revoked and the unused number returned to the fiscal year allocation.
With specific reference to your concern that INS procedures result in incorrect counting because an H-1B nonimmigrant may be counted in more than one fiscal year, the current regulations are silent. As you are aware, the statute, too, is silent on this particular point. The current procedures may result in the counting of an individual H-1B nonimmigrant in more than one fiscal year. An alien may be counted in more than one fiscal year if, after admission as an H-1B nonimmigrant to work for a specific employer, a second employer files a new petition on behalf of the alien who will again seek admission as an H-1B nonimmigrant. Included in the discussion of the many steps we are taking to improve the current procedures is an explanation of our rulemaking activities that, among other issues, will address this particular counting issue.
To carry out its responsibility to allocate the available H1B numbers, the INS promulgated the regulations discussed above, prescribed Form I-129 as the petition for employer use, and modified its Computer Linked Adjudication Information Management System (CLAIMS) to maintain the information on approved petitions for new H-1B employment.
As you may know, the U.S. employer initiates proceedings to sponsor an H-1B nonimmigrant by submitting Form I-129, Petition for a Nonimmigrant Worker. A copy of the Form I-129 is attached for your reference. Part 2 of Form I-129 collects from the petitioner information about the requested employment and whether the alien beneficiary will need to obtain a visa for admission to the United States or otherwise regularize immigration status. if the INS approves the petitioner's request, the information from Part 2 of the Form I-129 will determine whether the petition is recorded against the cap in a particular fiscal year. An approved H-1B petition may be recorded against the cap only if boxes 2a and 4a or boxes 2a and 4b are checked in Part 2 of the Form I-129, a copy of which is enclosed for your review. The information from the approved petition is entered into CLAlMS.
The CLAIMS is developed on two platforms: mainframe and Local Area Network (LAN). The four INS Service Centers responsible for processing H‑1B petitions maintain petition information an their respective LANs. The INS requires LAN data to be uploaded to the CLAIMS mainframe, which is maintained and operated by contractor support. To monitor the H-1B cap, the INS provided instructions to its contractor to create a report of H1B petition data from CLAIMS. The report is derived from Part 2 of the Form I-129.
In 1996, you and several Members of Congress expressed concern over the potential for double counting alien beneficiaries. In response to those concerns and to ensure the most accurate H-1B count, the INS modified the contractor's instructions for preparation of the CLAIMS report to include a list of alien beneficiary names. Since more than one employer may hire the same H-1B worker for new employment during a particular fiscal year, the INS subtracts multiple occurrences of an alien beneficiary's name.
In conformity with the regulations, the INS subtracts H-1B petition approvals that have been revoked for reuse by another qualifying petitioner. Subtraction of these revoked petition approvals was not an issue until FY 1996, the first year in which the number of petition approvals approached the (then) cap of 65,000. The subtraction of the revocations took on more significance to the INS and to the users of the H-1B program from that time forward. In FY 1997, the INS reported that the cap was reached a few weeks before the end of the fiscal year. At that time, you and other interested parties again inquired about the procedures the INS was following to administer the cap. In response, the INS took careful steps to review the CLAIMS H-1B reports to ensure that all appropriate subtraction procedures had been followed. Additionally, the INS considered whether an employer's request for an H-1B worker constitutes new or sequential employment if the alien had previously been in the United States as an H-1B worker.
Given the importance of the H-1B cap, the INS instituted a critical, strengthening step in the process to ensure greater accountability. Beginning with FY 1998, the INS developed a regular role for the Office of statistics, requiring that it validate the CLAIMS H-1B report provided by the contractor. It was through this enhanced process of checks and balances that, beginning in June 1999, the INS discovered data anomalies in our systems and a potential overage of cap cases in FY 1999.
As previously explained to your staff, the INS has not yet been able to determine the full extent of these system problems but has taken corrective action for the problems identified already. These systems problems include: (1) a manual error resulting in the double subtraction of petition approvals revoked during fiscal year 1999; (2) faulty communications between the CLAIMS LANs and the mainframe resulting in lost and incomplete data; and (3) test records in the CLAIMS mainframe that are not distinguishable from actual records of H-1B petition approvals.
As you are aware, on November 10, 1999, the Justice Management Division, of the Department of Justice, with funding from the INS, amended an existing contract and authorized the consulting firm of KPMG to audit the H-1B program. This audit will complement preliminary agency efforts to determine the number of petitions approved against the cap in FY 1999, identify the systems problems that led to the miscount, and recommend corrective actions necessary to eliminate these problems in FY 2000 and the future. Currently, we expect KPMG to deliver its findings on its count analysis by the beginning of March. KPMG will continue its review of the entire process to identify specific problems. we expect KPMG to complete this analysis and provide recommendation for improvement by mid-April.
We are committed to having the KPMG audit identify all potential problems associated with the FY 1999 H-1B count. As you are aware, your staff met with INS and KPMG on December 9, 1999, to share with them your concerns. The INS has given KPMG access to the full range of INS systems, procedures, regulations, and staff in order to perform the audit and develop final recommendations.
A prospective look: What measures is the INS taking to improve the H‑1B count?
The INS is a staunch supporter of ongoing liaison with stakeholders, including Members of both Houses of the Congress, employers, industry groups, trade associations and the private bar, who provide valuable recommendations for increased effectiveness of the H-1B and other legal immigration programs. As you know, we have met with your staff several times throughout the year to discuss these very issues. Although many of these stakeholders participated, pursuant to the notice and comment provisions of the Administrative Procedures Act, in the original development of the implementing regulations and the Form I-129, we recognize that an agency's rules and procedures must evolve over time to meet changing circumstances and benefit from improving technology. Accordingly, the INS agrees with these stakeholders that clarification and change is now necessary in the procedures and rules governing the H-1B cap.
Effective and fair management of the H-1B cap must involve public participation. This spring, the INS plans to propose amended regulations and revised public use forms to administer the H-1B program. We will continue to consult with you and your staff as well as the public at large during the comment period for these proposals prior to any changes going into effect.
We have already begun to move forward with this process to effect necessary change with public participation.
First, in October 1999, the INS requested emergency review procedures for approval to revise its Form I-129W, H-1B Data Collection and Filing Fee Exemption. The INS developed Form I-129W to collect information necessary to comply with the annual reporting requirements on H-1B nonimmigrants that were enacted in the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). Approval of the revised Form I-129W was granted after consideration and incorporation of your views and other public comments.
Second, as mentioned above, the INS will propose for public comment in the Federal Register comprehensive procedures and rules governing which aliens are subject to the H-1B cap. An important part of this initiative will focus on whether an alien should be subject to the cap in more than one fiscal year. The INS will also propose procedures to ensure fair and timely access by all U.S. employers to H-1B numbers allocated in a particular fiscal year. These proposals are consistent with the provisions of section 416(a) of the ACWIA.
Last, the INS will revise the petition prescribed for use by the U.S. employer who seeks to import an H-1B nonimmigrant. This form revision is a necessary step to ensure greater employer understanding of whether the alien beneficiary will be subject to the H-1B cap. The INS aims to minimize confusion to the petitioner and to comply with section 416(b) of the ACWIA.
In addition to considering revisions of the regulations controlling which H-1B aliens are counted, we are taking steps to ensure the integrity of current systems. This will entail careful consideration of the KPMG audit results that complement ongoing INS efforts to correct the CLAIMS problems we have already identified.
We believe that solid management controls form the critical underpinning of an effective H-1B program. We have taken a number of internal steps to increase attention to uniform processing of H-1B petitions among the four Service Centers as well as strengthen oversight of the H-1B program. Key among these efforts is the INS's commitment to ensuring that all qualified employers have fair and consistent access to the yearly allotment of H-1B numbers, regardless of the employer's geographic location or place of filing with the INS.
Appropriate access to highly skilled employees in the global labor market is of unquestionable importance to the interests of the United States. The H-1B program figures prominently in this issue, and we recognize the importance of our responsibility to administer it fairly and effectively. We understand the critical importance of the issues you raise in your letter and are confident that we have embarked on a sound course to effect necessary change in the H-1B program.
We will continue to consult you regarding KPMG's progress with the audit. If you require additional information about our efforts to improve the H-1B program, please let me know.
Sincerely,
Robert Raben
Assistant Attorney General
Enclosure (s)
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