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President Obama has proposed unilateral changes in the L-1B visa program that would bring in hundreds of thousands of new foreign guest workers that would compete with or displace American tech workers. Obama claims his proposal will “benefit our entire economy and spur additional investment,” but it could add to the unemployment lines while doing little to increase foreign investment.

Under the existing L-1B program, a foreign company with offices in the United States, or a U.S. company with offices abroad, can move workers in other countries to the U.S. for up to five years. Under this “intra-company transfer” a company can pay L-1B workers much less than American or even H-1B workers because no wage constraints exist. The company is not required to protect American workers, and there is no cap on the number of L-1B workers that can be transferred. The worker must just demonstrate a “specialized knowledge” of the company’s operations.

The president’s proposal would relax the definition of “specialized knowledge.” It would no longer have to be unique to the company and could in fact be generally available within an industry. The proposal also tells U.S. Citizenship and Immigration Services (USCIS) adjudicators how to evaluate L-1B applications. For example, adjudicators will not be able to ask if American workers are available to do the job. The proposal says "A petitioner is not required to demonstrate the lack of readily available workers to perform the relevant duties in the United States."

The proposal also lowers the bar for determining the need for the worker: "A petitioner seeking L-1B classification for an employee must establish that it meets each eligibility requirement of the classification by a preponderance of the evidence. In other words, the petitioner must show that what it claims is more likely the case than not. This is a lower standard of proof than that of “clear and convincing evidence” or the “beyond a reasonable doubt” standard. The petitioner does not need to remove all doubt from the adjudication. Even if an officer has some doubt about a claim, the petitioner will have satisfied the standard of proof if it submits relevant, probative, and credible evidence, considered “individually and within the context of the totality of the evidence,” that leads to the conclusion that the claim is “more likely than not” or “probably” true.

Howard University professor Ron Hira, an expert in L-1B and H-1B visa programs, says the president’s proposal will make an already-abused program worse. "The L-1B is much worse than the H-1B program in terms of its impacts on American workers and the American economy," Hira told the Washington Examiner. "There are no wage standards — foreign workers can be paid home country wages, which is $6,000 a year for an IT worker in India. American workers can be displaced by L-1B workers. There are no recruitment requirements and no educational requirements….[Plus the program is] "subject to virtually no federal scrutiny or oversight. We have no idea how many L-1 visa holders are here at any time. The only reason the L-1B hasn't received any scrutiny from the press is because the government collects virtually no data on who is awarded an L-1B and who they work for."

The proposal could induce companies to switch from the H-1B visa to the L-1B. Immigration attorney Susan Pai told the Examiner “Instead of bringing people in on Hs, they’re going to start bringing them in droves on the L-1s, so that’s bad news for Americans.” She thinks it will lead to much more visa fraud as well.

Companies that use L-1B visas claim, like the president, that they add to foreign direct investment (FDI) in the United States. But a 2010 study by Daniel Costa shows there is little relationship between use of the L-1B and FDI. Investment from India was miniscule compared to that from Japan and the U.K. even though Indian nationals received far more L-1 visas. In 2009, USCIS granted 45 percent of all L-1 visas to Indian nationals.

President Obama’s proposal is not a regulatory action. It is outlined in a memorandum for which USCIS is accepting comments through May 8th. The memorandum will become effective on August 31, 2015.

Read more in the Washington Examiner or the National Review.

Updated: Wed, Apr 15th 2015 @ 6:50pm EDT