HR1044 + S386 Bill Passed in Senate – FULL Summary, H1B Changes, Next Steps?

H.R. 1044 Bill was passed in Senate on December 2, 2020. It included all the amendments that were proposed in the past in S.386 Bill. It was passed in Senate using unanimous consent without any objections. It was sent to House later and the Bill did not make it as there were disagreements on the amendments. You can read the latest update on the top.

For Latest News, Daily updates on HR1044 & S386 Bill, other history check article HR1044, S386 latest news updates, full history.  

In this article, we will cover short background, review all the aspects of the bill HR1044 that was passed and engrossed by Senate with amendments, how it changes the H1B program and next steps for the Bill.

Final Update on HR1044 Passed in Senate

December 21, 2020 : Below is the final status on HR1044. It is essentially not going to be actively pursued in the current Congress session.

• There were hopes that HR 1044 would make it into the Omnibus Spending Bill, but it did not make it in the end.
• There were disagreements between House and Senate due to new clauses added in the last minute, especially related to the “Association with Chinese Military or Communist Party” clause.
• The author & sponsor of the bill Rep. Zoe Lofgren gave a press release confirming that House and Senate could not agree on the last minute additions done to the original HR1044 Bill.
• She is hopeful to work on this Bill in the next congress session that starts in 2021. Below is the official statement.

Background of Bill HR 1044 that was passed in Senate

The US Congress Bill HR 1044 is also called as “Fairness for High-Skilled Immigrants Act of 2019”. It was originally introduced in the House in Feb 2019. It was passed in the House in July 2019 with a majority of 365(Yeas) to 65(Nays). Later it was sent to US Senate in July 2019 itself.  

In parallel, similar Bill S.386 with same title as HR1044 was introduced in Senate in Feb 2019. There were holds on the Bill by Senator Rand Paul, extensive hold & discussions with Senator Durbin, later hold by Senator Scott. In the middle, there were amendments by Senator Chuck Grassley. After a lot of holds back and forth, eventually they all seem to have agreed and HR 1044 was passed on December 2^nd, 2020.  The passed Bill in Senate is nothing but S386 along with all the amendments done due to request by various Senators.

Volume of Amendments in current Passed Bill HR 1044 : The original HR 1044 Bill that was passed in House was exactly 7 Pages. Also, the original S.386 Bill that was introduced in Senate was also 7 pages with pretty much same text. The current Bill HR 1044, that was passed in Senate on Dec 2, 2020 is about 36 Pages (content only, excluded empty pages). You can just get an idea of the amendments that were added to the Bill text. About 29 new pages were added. These are significant amendments.

Now, that you have a background, let’s dive in to the details of the Bill. We have divided them into sections for easy review. Also, we have put the new additions on the top and labelled them for easy reading.

Removing per Country Limits for Employment Based GC Petitions

Every year, as per Immigration and Nationality Act (INA) 140,000 petitions are allocated for all employment based green cards categories. But today, there is a limit of 7% (9,800) per country. The main purpose of the bill is to eliminate the country based limit. The limits of 7% are considered as discrimination based on nationality of origin. The very first clauses in the passed bill has language to remove the text from INA that has this country based limits. So, as per the current HR 1044 Bill that was passed in Senate, per country caps or limits based on country of birth would be eliminated.

Increase in Per Country Limit for Family Sponsored Petitions

The current HR1044 Bill passed in Senate has also provisions that would change the limit of family sponsored Green Card petitions from 7 percent to 15 percent per fiscal year. Also, the limit would be 2 percent for dependent areas (these are not independent countries, but dependent colonies, parts of certain countries like French Polynesia of France. Read on State.gov – Dependent areas ) 

Effective Date, 9 Year Transition Rules for the New Changes(New)

The changes in the current amended and passed Bill would take effect on the “first day of the second fiscal year beginning after the date of enactment of this Act”. Basically, if the bill is passed, then it would be effective from October 1^st, 2022. USCIS fiscal year starts on October 1^st of every year.

There is a 9-year transition period after the effective date, to better transition and not have major two countries (like India, China) take up everything. Below are the transition rules.

• First Fiscal year after effective Date (Oct 2022 – Sep 2023): 30% reserved for rest of the world (ROW) and only 70% to be allocated to major countries like India, China.
• Second Fiscal year after effective Date (Oct 2023 – Sep 2024): 25% reserved for ROW, 75% available for major countries like India, China
• Third Fiscal year after effective Date (Oct 2024 – Sep 2025): 20% reserved for ROW, 80% available for major countries like India, China
• Fourth Fiscal year after effective Date (Oct 2025 – Sep 2026): 15% reserved for ROW, 85% available for major countries like India, China
• Fifth and Sixth Fiscal years after effective Date (Oct 2026 – Sep 2028): 10% reserved for ROW, 90% available for major countries like India, China
• Seventh, Eighth and Ninth Fiscal years after effective Date (Oct 2028 – Sep 2031): 5% reserved for ROW, 95% available for major countries like India, China

Rest of the World – Backlogged with approved I-140

For the first 9 years from the effective date of the Bill, 5.75% of the employment based green cards would be given to the rest of the world (not major countries like India, China), who have an approved immigrant petition (I-140) but waiting in line due to backlog, in the following order.

1. Family members joining primary green card applicant as dependents.  
2. Green Card applicants, who have not lived or worked in US at any point in the previous 4 years since they filed their Green Card petition from outside of US.
3. Any other immigrants from rest of the world countries, who are waiting in line with approved I-140 for their green card slot.

Per Country Levels during 9 Year Transition Period

• Reserved Visas: In the 9-year transition period from effective date for both of above, the number of visas for any foreign country (that is a non-major state) shall not exceeded 25% or 2% for dependent areas (these are not independent countries, but dependent colonies, parts of certain countries like French Polynesia of France) of the total reserved visas. Meaning that any country that is part of the non-major countries list (not like India, China) cannot take up more than 25% of the total reserved visas/green cards.
• Unreserved Visas: In the 9-year transition period from effective date for both of above, for the all the un-reserved visas (basically 70% in Year 1, 75% in Year 2, etc..), not more than 85% of visas should be allocated to single country. Essentially, they are telling that of the un-reserved portion cannot be taken up by one country alone and the maximum they can take is 85% of the quota. E.g. India or China can only take up 85% maximum
• Special Rule to prevent Unused Visas :  During the 9 year transition period, if any of the visas are left over or unused due the clauses as listed above like per country levels, and reservations, then such visas should be given to remaining ones in line without applying such restrictions.

Limit on H1B, H4 holders filing Adjustment of Status to EB Immigrant(New)

As per the current HR1044 that is passed in Senate, a new clause exists that puts a limit on the number of H1B, H4 visa holders, who can file for Adjustment of Status. Below are the limits.

• For the first 9 years, from the effective date of this Bill, no more than 70% of total Employment based Green Cards can be given to H1B & H4 visa holders.
• After 9 years from the effective date of the bill, no more than 50% of the total number of Employment based Green Cards can be given to H1B & H4 visa holders.
• This is applicable to current H1B or H4 visa holder, including anyone who had H1B or H4 status in the previous 2-year period.
• Exclusions: The above restrictions of 70% and 50% does not apply to anyone who has graduated from Medical School and practicing medical profession in US. Also, the same exclusions apply to anyone granted a National Interest Waiver by USCIS.
• Unused Employment Based Green Card Numbers : If there are any unused green card numbers left out from the EB category after all the above clauses, then they may be issued to the H1B visa holders.

Individuals associated with Military or Communist Party in China(New)

As per new provisions, in the current HR 1044 that was passed in Senate, DHS would not approve Adjustment of Status or grant entry to anyone associated with Chinese Communist Party or Chinese Military forces. The decision on association with those parties would be determined by DHS by working with Dept of State, Secretary of Defense, Attorney General, Treasury Secretary and Director of National Intelligence. It is grey area and there is no clear guideline on how they would determine this association.

You may watch the below video that covers the Bill Summary

Nurses(Schedule A Workers) Reserved Numbers – 4,400

As per the current HR1044 that is passed in Senate, for each of the seven fiscal years from the effective date ( Oct 2022 to Sep 2029) not fewer than 4,400 immigrant visas should be made available for Schedule A workers as they are described in Section 656.5(a).

The big catch is that these 4,400 visa numbers should NOT be taken from the reserved pool set aside for rest of the world for first 9 years, including the 5.75% set aside for the same group waiting with approved I-140s.  Also, the dependents joining Schedule A workers would be entitled to get an unreserved visa(not from the reserved 4,400) and considered in same order.

 For example, if let’s say each of the nurses under this 4,400 reserved visas, gets two dependents, they will consume 8,800 from the general pool. The general pool is essentially the quota of large countries like India, China

H1B Program, Labor Condition Application (LCA) Process Changes

There are significant amount of H1B Program and H1B Labor Condition Application (LCA)related changes that are added in the HR1044 Bill passed in Senate. Below is the complete list.

• Post H1B Jobs on Department of Labor :  Within 180 days from the effective date of the Bill, Department of Labor(DOL) should setup a “Searchable Internet website” to post the H1B positions that are available to be viewed by public for free. The job has to be posted for at least 30 days  on the website and has to have all the below information :
  • Job Description, Title, Occupational classification, education, training and experience required.
  • Salary and wage details, employment benefits
  • Location of the employment
  • Process to apply for the position.
  • DOL may work with private companies, non-profit orgs to development and manage the H1B jobs website.  
• H1B Employer Application Requirements for New Applications: Below are the various rules that need to be complied by the employer when they do recruiting for open positions.
  • For new applications, the employer or anyone hiring on behalf of employer should not advertise the position saying that it is available only to H1B holders and there will be priority for H1B applicants.
  • If the employer already has H1B workers, they need to submit the IRS W-2 forms related to H1B workers to the DOL Secretary.
  • The LCA should also have the prevailing wage determining methodology information.
• New H1B Petitions Requirements – Not more than 50% L1 + H1B : If employer has 50 or more employees in US, then sum of H1B and L1 visa holders cannot be more than 50% of total employees. 
  • This is also called the 50-50 clause. This only applies to new H1B filings and does not apply to H1B Extensions or Transfers (change employers)
  • This requirement will be applicable, 180 days after the effective date of the Bill.
  • Any subsidiaries or group related companies, that are part of a one group, are treated as a single employer for the above provision, as long as they are filing tax under one entity with IRS as per Section 414.
• New H1B LCA Fee : Currently, there is no fee for filing LCAs. As per the current passed Bill, for administrative expenses, DOL has to come up with a fee for LCA filing. It will be tracked under an account called  ‘H–1B Administration, Oversight, Investigation, and Enforcement Account’  and used for H1B program by DOL.
• Elimination of B1  visa in lieu ( instead) of H1B : As per the text in Bill passed in Senate, US State department should not issue B-1 visa for short term work contracts, instead of H1B visa. In general, even today B1 should not be used for short term projects. The goal of this clause is to weed out companies trying to eliminate LCA process and H1B for any short term work. This is something that many companies use and abuse as well for short term projects, the trick is in the enforcement.  
• H1B Employers Investigation and enforcement : Below clauses were added in the Bill that was passed in Senate to enforce and tackle violations by employers.

• Additional protections for employees who report violations of employers related to wages or LCA provisions
• Information sharing between USCIS and DOL regarding the H1B petitions that can be used by DOL for enforcement and compliance.
• Additional authority for Dept of Labor (DOL) to review the LCA beyond just the completeness of the LCA form and to look for any fraud or false information by employers.
• H1B Labor Condition Application(LCA) Wages, Compliance :
  • Prevailing wage enforcements to make sure the employers are obligated to pay the actual wages that are there in a particular geographic area for similar experience, job role with similar duties.
  • If there are complaints, DOL may initiate investigations in detail. Also, DOL may conduct surveys and annual audits for LCA compliance.
  • DOL to conduct annual compliance audits for employers with more than 100 employees and have 15% of the workforce as H1B. Annual reports on audit and compliance for public review.
  • The penalties amount paid by employers for violations are increased to $3000, $15000 and $100,000 for anyone who violates any of the rules of LCA.
  • Expansion of DOL’s authority to conduct investigations based on anonymous complaints, where DOL would provide notice and details to respond before investigation. Also, if DOL finds the employer did not comply requirements, such info maybe shared with interested parties, and a hearing with them within 60 days. Also, penalties will be imposed, if found any violations.

Adjustment of Status, Dependents, Work Authorization Provisions

Below are various provisions related dependents, adjustment of status, work authorization, etc. that are part of the Senate Bill HR1044 that was passed in Senate.

• Apply for Adjustment of Status ( I-485 Application ) : You can apply for adjustment of status using I-485, both applicant and eligible dependents, if you have your Immigrant Petition (I-140 application ) approved or pending for more than 2 years. So, you do not have to wait for the Priority date to be current to apply for the Adjustment of Status (I-485).
• Dependent Child Aging out – Adjustment of Status : If you file for adjustment of status as described above, then your dependent child will continue to qualify for the application of green card, irrespective of the age of the child. This is the one that many refer to aging out of children waiting for green card.
• Deceased Principal Applicant: Similar to above, if you file for adjustment of status, then you will continue to be eligible for green card as dependent, even if the principal applicant has died. This provision is to address the situation, where the primary applicant is deceased and spouse, children have to leave the country.
• Work Authorization, Travel Permission: The applicant who files the adjustment of status ( I-485) as per above, will be eligible for work authorization and travel permission as well.
• Approval of Adjustment of Status Application : The approval of adjustment of status (I-485) application filed will not be approved until the priority date becomes current (immigrant visas are available)
• Duties, Hours and Compensation :  The terms and conditions, working hours, compensation, duties, etc. for the applicants who have file adjustment of status application (I-485) has to be similar to US workers working in same area. Even, if the employer does not have anyone employed on similar terms, the employer is obligated and needs to attest that they are providing similar terms and conditions, duties, etc.
• Bona Fide Job Offer (I-485 Supplement J) with EAD Application:  It is required by the principal applicant to file a confirmation of Bona Fide Job Offer or Portability, which is nothing but I-485 Supplement J form, with any Employment Authorization (EAD) Application. The EAD will be valid for 3 years.
  • The applicant needs to file I-485 Supplement J for new and renewal applications of EAD. Also, the applicant needs to provide supporting documentation to show that the terms and conditions of the job role are same as US workers and also include a signed verification letter stating the same from current or prospective employer. If such documentation is not provided, USCIS can deny the I-485 for the applicant and dependents.  
  • Fee for I-485 Supplement J : There will be a fee of $2000 USD collected for each of the I-485 Supplement J that you file.
• Priority Date becomes Current – I485 Supplement J: To adjudicate I-485 application, when Priority date becomes current, USCIS may ask you to file I-485 supplement J, if they do not have your latest I-485 J supplement within previous 12 months.
• Limitation on Work Authorization for Dependents: This is a tricky one…It tells that if the applicant was not eligible for work authorization or did not had work authorization at the time of filing of Adjustment of Status (I-485) application, then they will not be eligible for work authorization during the pending state of application. Example, if H4 EAD rule is revoked, then H4 applicants would technically not have work authorization…so, they may not be eligible for work authorization as they wait for the priority date to be current. See below.  The only exception to get that is to demonstrate compelling circumstances to USCIS to get the EAD.
• Effective Date and Validity: All the above provisions will be applicable after one year from the effective date of the Bill.

Phew! that was a lot of information…

Next Steps for HR 1044 /S386 Bill ?

Update ( Dec 21, 2020 ) : HR 1044 did not get enough support in House and there were disagreements on the bill. Eventually, it was not included in the Omnibus spending Bill or voted separately. The author of the bill confirmed that she plans to work on this in next congress session. You can read the first section, where we have more details.

The original HR 1044 bill that was passed in House is significantly different from the current version that is passed in Senate. There are additional 30 pages of amendments done. For a Bill to Become Law, it has to be passed in same text in both the chambers.  So, as a next step, the current Bill passed in Senate would be sent to House for vote.  If there are some changes to be done in House, there could be a conference committee that comes into picture to reconcile differences and send the agreed copy to both Senate and House.

If the current HR 1044 that was passed in Senate, with all the amendments gets passed without any changes, then it goes to the President for signing. If there are any objections or amendments done in House, then it will again come back to Senate for voting.  Also, President can veto the bill too. So, still there are some hurdles left for the Bill to pass. You can check How a Bill Becomes Law in US to know more.

What are the Chances for the HR 1044 Bill to pass in current state?

This is really a tricky situation with the current HR 1044 Bill passed in Senate with all these changes. While there are many positive points for many people waiting for years in backlog, there are some tricky provisions that are not popular among outsourcing companies like the H1B provisions added to the Bill.  They can have a huge impact on the IT Outsourcing companies big or small.

Many of these IT Outsourcing companies are part of big business groups.  They may try to lobby and try to remove the H1B clauses in House as amendments, as these clauses could impact their hiring of H1B workers. While there is a huge support for this bill in the House and Democrats control the house, these H1B provisions can be tricky…It is hard to say, how the lobbyists would act on this…Also, President is unpredictable, we do not know how he may react and may veto this too. So, it is very much uncertain at this point…

What do you think of the Bill that was passed in Senate? Your thoughts on Chances ?

Reference:  Official Copy of the HR 1044 Passed in Senate.