American Competitiveness and Workforce Improvement Act

Last updated April 23, 2023

The American Competitiveness and Workforce Improvement Act (ACWIA) was an act passed by the government of the United States on October 21, 1998 (while Bill Clinton was President of the United States), pertaining to high-skilled immigration to the United States, particularly immigration through the H-1B visa, and helping improving the capabilities of the domestic workforce in the United States to reduce the need for foreign labor.^[1]

History
Provisions
Section 411: Temporary increase in H-1B cap
Section 412: Protection Against Displacement of United States Workers In Case of H-1B Dependent Employers
Section 413(a): Changes to Enforcement and Penalties
Section 413(b): Arbitration for Disputes Involving the Qualification of U.S. Workers
Other parts of Section 413
Section 414: New fees for scholarships and training
Section 415: Hathaway Prevailing Wage Fix, Athletic Prevailing Wages
Other sections
Reception
References

History

According to a history of the law by Jung Hahm for Cornell Law Review ,^[2] the proximal impetus for the ACWIA was that, for the first time, the H-1B quota was oversubscribed in 1997. Whereas some interests aligned with employers in industries using H-1B workers wanted to increase or even eliminate the caps on number of visas, others, specifically a vocal minority in Congress, as well as labor unions and the White House, were opposed to such expansion due to concerns about the effect on native wages and employment opportunities. ACWIA was a compromise bill hashed out in the Fall of 1998 between these competing interest groups.

One of the ideas considered and rejected during the process was that of imposing a requirement for all H-1Bs to show that efforts had been made to recruit a native worker with the same qualifications.^[3] Senator Spencer Abraham critiqued this requirement by noting that the huge amount of time taken for labor certification (the corresponding recruitment requirement for permanent immigrants) did not make sense for temporary work.^[3]^[4]

ACWIA was followed by the American Competitiveness in the 21st Century Act (AC21) passed in 2000, that significantly restructured the H-1B to allow for a lot more temporary workers without any official changes to the caps, while also giving a few more years' grace period before the cap would become binding again.

Provisions

Section 411: Temporary increase in H-1B cap

The annual cap for H-1B visas is 65,000. Section 411 increased this annual cap to 115,000 for Fiscal Year 1999; 115,000 in Fiscal Year 2000; and 107,500 in Fiscal Year 2001. The cap would return to 65,000 starting with Fiscal Year 2002.

Section 412: Protection Against Displacement of United States Workers In Case of H-1B Dependent Employers

This section introduced the concept of H-1B-dependent employers, defined as employers who crossed a particular threshold in terms of both the absolute number and proportion of their workforce on H-1Bs. Both H-1B-dependent employers and employers who had been found to commit a willful misrepresentation of material fact in a recent application were required to submit additional attestations in their Labor Condition Applications. These attestations continue to be required as of 2015.

Section 413(a): Changes to Enforcement and Penalties

Historically, one of the criticisms of the H-1B regime had been that, even though applicants were required to make particular attestations in their Labor Condition Applications, there were very few penalties for those who lied or misrepresented facts in their attestations. ACWIA sought to correct their perceived problem by laying out explicit penalties, in addition to the extra attestations required by Section 412.

Below are the various provisions of this section:

Basic Penalties: $1,000 fine and not less than 1 year debarment for failure to meet the no strike or lockout or layoff attestations .
Willful Penalties: $5,000 fine and not less than 2 year debarment for any willful failure to meet any attestation condition, or willful misrepresentation of a material fact, or violation of the whistleblower clause.
Heightened Penalties for Severe Violations: $35,000 fine and no less than 3 year debarment for willful failure or willful misrepresentation of a material fact in the course of which an employer displaced a U.S. worker within the 90 days before and 90 days after the filing of a visa petition based on the application.
Whistleblower protection: Protection for employees who may expose or report employers for violations of H-1B rules in their companies.
New penalty for “unconscionable contract provisions": Employer may be fined $1000 per violation for requiring an H-1B nonimmigrant to pay a penalty for leaving the employer's employ prior to a date agreed to by the nonimmigrant and the employer.
No "benching" rule: Employers must pay H-1B nonimmigrants the required wage for the full hours specified on the H-1B visa petition even if the beneficiary is in nonproductive status due to a decision by the employer, or based on the nonimmigrant's lack of a permit of license, i.e., full-time employees must be paid full-time wages, and part-time employees must be paid for the minimum hours stated on the petition. Further, employers must pay H-1B nonimmigrants the required wage beginning no later than 30 days after the date the nonimmigrant is admitted to the United States pursuant to the petition, or 60 days after the nonimmigrant becomes eligible to work for the employer. However, this provision does not apply for nonproductive time due to non-work-related factors, such as voluntary absence (at the request of the nonimmigrant) or circumstances rendering the individual unable to work. Schools or other educational institutions may apply established salary practices to H-1B nonimmigrants, including payment for less than 12 months, as long as such payment schedule is agreed to by the H-1B nonimmigrant. Violation of this provision is considered a violation of the wage requirement and subject to the same penalties.
New Benefits Requirement: Employers must offer H-1B nonimmigrants benefits and eligibility for benefits (including participation in health, life, disability, and other insurance plans, retirement and savings plans, bonuses and stock options) on the same basis, and in accordance with the same criteria as are offered to U.S. workers. Violations of this provision are treated as violations of the wage requirement and subject to the same penalties.

Section 413(b): Arbitration for Disputes Involving the Qualification of U.S. Workers

Guidelines were set up for the receipt and review of complaints regarding an employer's failure to offer a job opportunity to a qualified U.S. worker (if required to so attest) or misrepresentation of material facts with regard to such condition. Note that not all employers were required to make such attestations. Rather, only those who were deemed to be H-1B-dependent or had committed willful violations of the law were required to attest to good-faith efforts to recruit American workers.

Other parts of Section 413

Section 413(c) said that an employer who placed a worker with another employer was liable for any displacement of US workers at the other employer's worksite. Therefore, if required to make additional attestations due to being H-1B-dependent or having committed a past willful misrepresentation of material fact, it was the employer's responsibility to make sure that the other employer was not firing a US worker between 90 days before and after the placement.
Section 413(d) gave the United States Department of Labor the authority to commit (random, on-site) spot investigations into employers who had committed a willful violation in the last five years.
Section 413(e) gave the United States Department of Labor "new investigative authority" to investigate an employer for H-1B compliance if it receives “specific, credible information” from a source likely to have knowledge of the employer's practices, employment conditions or compliance. Such information must provide “reasonable cause” to believe that a violation of the LCA requirements (excepting the posting requirement) has been committed. DOL may conduct a 30-day investigation upon obtaining the personal signature of the Secretary of Labor (or the Acting Secretary).

Section 414: New fees for scholarships and training

This section specified an additional $500 fee (over and above filing fees) for H-1B applicants, that would be used to fund scholarship and training programs, and to fund United States Department of Labor administration and enforcement activities for the program. The fee would be collected by the Attorney General at the time of filing an initial petition to grant a foreign national H-1B status, upon the first petition to extend the stay of an H-1B nonimmigrant, and upon a petition by a different employer for concurrent or new employment. It is not required when filing for extensions of stay after the initial extension by the same employer, nor for amended petitions that do not request extension of stay. The employer was not allowed to recoup the fee from the alien worker through any means (such as a salary or benefit cut).

Colleges, universities and non-profit research institutions would be exempt from this fee.

Section 415: Hathaway Prevailing Wage Fix, Athletic Prevailing Wages

For institutions of higher education, related or affiliated nonprofit entities or nonprofit or governmental research organizations, the prevailing wage (for both LCAs and Permanent Labor Certifications) shall only take into account employees at such institutions and organizations in the area of employment. The prevailing wage for professional athletes in professional sports leagues is that set forth in the league regulations. Both changes are effective as of the date of enactment.

Other sections

Section 416: The Immigration and Naturalization Service (the predecessor to what is now the United States Citizenship and Immigration Service) was required to maintain accurate numbers of H-1B and H-2B nonimmigrants who are issued visas or otherwise provided status, including revising petition forms, and shall make quarterly reports to Congress on the numbers. Some more reporting requirements were also instituted.
Section 417: Report on Age Discrimination in the Information Technology Field: The joint report by the National Science Foundation and National Academy of Sciences is due October 1, 2000.
Section 418: Report on H-1B usage:
- A study by the National Science Foundation on the labor market needs for workers with high technology skills during the next 10 years is due to the House and Senate Judiciary Committees on October 1, 2000.
- Any member of the Cabinet, the Chairman of the Federal Reserve, the Director of the Office of Management and Budget, or the Chair of the Council of Economic Advisors is required to promptly report to Congress the results of any reliable study that suggests that the increase in H-1B visas has affected any national economic indicator (such as inflation or unemployment) that warrants action by Congress.
Section 421: Special Immigrant Status for Certain NATO Civilian Employees
Section 431: Academic Honoraria for people on short term B visa trips to academic institutions.

Reception

A paper by Jung Hahm in Cornell Law Review in 2000 reviewed the ACWIA as an attempt at balancing economic and labor interests, and proposed doing away with the caps entirely, instead moving all enforcement functions to the United States Department of Labor.^[2]

A paper by Lindsay Lowell at the Center for Comparative Immigration Studies in May 2000 attempted to estimate the population of H-1B temporary workers and how it was likely to change with the passage of ACWIA.^[5]

A paper by Carl Lin in 2011 reviewed the effect of immigration policy changes for high-skilled immigration on employers and shareholders in the United States. The paper considered the Immigration Act of 1990, ACWIA, and the American Competitiveness in the 21st Century Act (of 2000).^[6] Lin's work was cited in Bloomberg by Charles Kenny.^[7]

A paper by the Brookings Institution in 2013 proposed changes to the ACWIA to better align H-1 visa fee revenues to local workforce needs.^[8]

Related Research Articles

The H-1B is a visa in the United States under the Immigration and Nationality Act, section 101(a)(15)(H) that allows U.S. employers to employ foreign workers in specialty occupations. A specialty occupation requires the application of specialized knowledge and a bachelor's degree or the equivalent of work experience. The duration of stay is three years, extendable to six years, after which the visa holder may need to reapply. Laws limit the number of H-1B visas that are issued each year. There exist congressionally mandated caps limiting the number of H-1B visas that can be issued each fiscal year, which is 65,000 visas, and an additional 20,000 set aside for those graduating with master’s degrees or higher from a U.S. college or university. Individuals cannot apply for H-1B visas on their own to allow them to work in the U.S. An employer must sponsor them for the visa. There were 206,002 new and initial H-1B visas were issued in 2022.

An L-1 visa is a visa document used to enter the United States for the purpose of work in L-1 status. It is a non-immigrant visa, and is valid for a relatively short amount of time, from three months to five years, based on a reciprocity schedule. With extensions, the maximum stay is seven years.

TN status is a special non-immigrant classification of foreign nationals in the United States, which offers expedited work authorization to a citizen of Canada or a national of Mexico. It was created as a result of provisions of the North American Free Trade Agreement that mandated simplified entry and employment permission for certain professionals from each of the three NAFTA member states in the other member states. The provisions of NAFTA relevant to TN status were then carried over almost verbatim to the United States–Mexico–Canada Agreement that replaced NAFTA in 2020.

An H-2A visa allows a foreign national worker into the United States for temporary agricultural work. There are several requirements of the employer in regard to this visa. The H-2A temporary agricultural program establishes a means for agricultural employers who anticipate a shortage of domestic workers to bring non-immigrant foreign workers to the U.S. to perform agricultural labor or services of a temporary or seasonal nature. In 2015 there were approximately 140,000 total temporary agricultural workers under this visa program. Terms of work can be as short as a month or two or as long as 10 months in most cases, although there are some special procedures that allow workers to stay longer than 10 months. All of these workers are covered by U.S. wage laws, workers' compensation and other standards; additionally, temporary workers and their employers are subject to the employer and/or individual mandates under the Affordable Care Act. Because of concern that guest workers might be unfairly exploited the U.S. Department of Labor Wage and Hour Division is especially vigilant in auditing and inspecting H-2A employers. H-2A employers are the only group of employers who are required to pay inbound and outbound transportation, free housing, and provide meals for their workers. H-2A agricultural employers are among the most heavily regulated and monitored employers in the United States. Unlike other guest worker programs, there is no cap on the number of H-2A visas allocated each year.

The Security Through Regularized Immigration and a Vibrant Economy Act of 2007 or STRIVE Act of 2007 is proposed United States legislation designed to address the problem of illegal immigration, introduced into the United States House of Representatives. Its supporters claim it would toughen border security, increase enforcement of and criminal penalties for illegal immigration, and establish an employment verification system to identify illegal aliens working in the United States. It would also establish new programs for both illegal aliens and new immigrant workers to achieve legal citizenship. Critics allege that the bill would turn law enforcement agencies into social welfare agencies as it would not allow CBP to detain illegal immigrants that are eligible for Z-visas and would grant amnesty to millions of illegal aliens with very few restrictions.

The Wage and Hour Division (WHD) of the United States Department of Labor is the federal office responsible for enforcing federal labor laws. The Division was formed with the enactment of the Fair Labor Standards Act of 1938. The Wage and Hour mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce. WHD protects over 144 million workers in more than 9.8 million establishments throughout the United States and its territories. The Wage and Hour Division enforces over 13 laws, most notably the Fair Labor Standards Act and the Family Medical Leave Act. In FY18, WHD recovered $304,000,000 in back wages for over 240,000 workers and followed up FY19, with a record-breaking $322,000,000 for over 300,000 workers.

EB-2 is an immigrant visa preference category for United States employment-based permanent residency, created by the Immigration Act of 1990. The category includes "members of the professions holding advanced degrees or their equivalent", and "individuals who because of their exceptional ability in the sciences, arts, or business will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States, and whose services in the sciences, arts, professions, or business are sought by an employer in the United States". Applicants must generally have an approved labor certification, a job offer, and their employer must have filed an Immigrant Petition for Alien Worker with the USCIS.

The H-2B visa nonimmigrant program permits employers to hire foreign workers to come temporarily to the United States and perform temporary nonagricultural services or labor on a one-time, seasonal, peakload or intermittent basis.

The Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 was a proposed immigration reform bill introduced by Sen. Charles Schumer (D-NY) in the United States Senate. The bill was co-sponsored by the other seven members of the "Gang of Eight", a bipartisan group of U.S. Senators who wrote and negotiated the bill. It was introduced in the Senate on April 16, 2013 during the 113th United States Congress.

The Labor Condition Application (LCA) is an application filed by prospective employers on behalf of workers applying for work authorization for the non-immigrant statuses H-1B, H-1B1 and E-3. The application is submitted to and needs to be approved by the United States Department of Labor Employment and Training Administration (DOLETA)'s Office of Foreign Labor Certification (OFLC). The form used to submit the application is ETA Form 9035.

The American Competitiveness in the 21st Century Act (AC21) was an act passed by the government of the United States in October 2000, pertaining to immigration to the United States. It was a complement to the American Competitiveness and Workforce Improvement Act that had been passed in 1998. The focus of AC21 was to change rules related to portability and caps for the H-1B visa to increase the effective number of visas available and make it easier for workers on those visas to switch jobs. Although the language of the Act references the Immigration and Naturalization Service (INS), the INS would soon be restructured and the functions of the INS referenced in AC21 would be handled by United States Citizenship and Immigration Services.

The H-1B Visa Reform Act of 2004 was a part of Title IV of the Consolidated Appropriations Act, 2005 in the United States that focused on changes to regulations governing H-1B visas. It was a successor to previous legislative changes affecting the H-1B, namely: the Immigration Act of 1990, American Competitiveness and Workforce Improvement Act (ACWIA) of 1998, and the American Competitiveness in the 21st Century Act (AC21) of 2000. The Consolidated Appropriations Act was signed by George W. Bush, then President of the United States, in early December 2004.

The Employ American Workers Act (EAWA) was a component of the American Recovery and Reinvestment Act of 2009 passed by the 111th United States Congress and signed into law by Barack Obama, then President of the United States, on February 17, 2009. The Act had a validity period of two years and was set to expire on February 17, 2011. It was not renewed, hence it sunset on February 17, 2011 and is no longer applicable.

The Legal Immigration Family Equity Act of 2000, also known as the LIFE Act and as the Legal Immigration and Family Equity Act, along with its Amendments, made some changes to laws surrounding immigration for family members of United States citizens and Lawful Permanent Residents, as well as people eligible for employment-based immigrant visas, in the direction of making it easier for family members and immigrant workers to move to and adjust status within the United States. It was passed on December 21, 2000, as title XI of Pub. L. 106–553 (text)(PDF).

Form I-140, Immigrant Petition for Alien Worker is a form submitted to the United States Citizenship and Immigration Service (USCIS) by a prospective employer to petition an alien to work in the US on a permanent basis. This is done in the case when the worker is deemed extraordinary in some sense or when qualified workers do not exist in the US. The employer who files is called the petitioner, and the alien employee is called the beneficiary; these two can coincide in the case of a self-petitioner. The form is 6 pages long with a separate 10-page instructions document as of 2016. It is one of the USCIS immigration forms.

The term H-1B-dependent employer is used by the United States Department of Labor to describe an employer who meets a particular threshold in terms of the fraction of the workforce comprising workers in H-1B status. An employer classified as H-1B-dependent needs to include additional attestations in the Labor Condition Application used for the petition of any H-1B beneficiary being offered an annual compensation of less than $60,000 and without a master's degree. The notion was introduced by the American Competitiveness and Workforce Improvement Act (ACWIA) passed in 1998 and operationalized through the United States Department of Labor's Interim Final H-1B Rule of December 20, 2000. The regulation is found in 20 CFR 655.736 in the Code of Federal Regulations.

In the United States, the most common visa used for short-term trips is the B visa. This is a combination of the B-1 visa and the B-2 visa. People on B visas are generally not allowed to engage in productive work or study activities. However, in some cases, B visas can be issued that allow people to engage in some types of productive work and learning activity, in lieu of another visa. The three visa categories, for which a B visa could be issued instead, are the H-1B visa, H-3 visa, and J-1 visa. The U.S. Department of State recommends that consular officers clearly annotate such B visas to make the scope of the visa clear to the applicant and the U.S. Customs and Border Protection officer at the port of entry.

The H-1C visa was a visa that was previously available to foreign nationals seeking temporary employment in the United States. These visas were made available to foreign nurses coming into the United States to perform services as a registered nurse in areas with a shortage of health professionals as determined by the Department of Labor. The creation of this visa was prompted by a nursing shortage.

A public access file is a file that needs to be maintained by any United States employer hiring people in H-1B, H-1B1, or E-3 temporary nonimmigrant worker statuses. It is intended to include more background information related to the attestations made on the Labor Condition Application used for the Form I-129 and/or visa application that was used to acquire the nonimmigrant worker status. The file may be requested by any member of the public through telephone or email inquiries. Any member of the public requesting access to the documents must be allowed to capture the information through such means as transcription, scanning, or taking photographs, for example. It is distinguished from a private access file that contains more sensitive and confidential employee data that must be shared with the U.S. Department of Labor if they choose to investigate. Regulations governing the public access file can be found in the Code of Federal Regulations, Title 20, or more specifically, in 20 CFR 655.760.

The H-1A visa was a visa that was previously available to foreign nationals seeking temporary employment in the United States. These visas were made available to foreign nurses coming into the United States to perform services as a registered nurse in areas with a shortage of health professionals as determined by the Department of Labor. The creation of this visa was prompted by a nursing shortage.

References

↑ "American Competitiveness and Workforce Improvement Act of 1998". Office of Administrative Law Judges, United States Department of Labor. October 21, 1998. Archived from the original on December 25, 2014. Retrieved March 15, 2015.
1 2 Hahm, Jung (September 1, 2000). "American Competitiveness and Workforce Improvement Act: Balancing Economic and Labor Interest under the New H-1B Visa Program". Cornell Law Review . 85 (6). Retrieved March 15, 2015.
1 2 Bier, David (July 22, 2016). "Why Congress Rejected an H-1B Recruitment Requirement". Cato Institute . Retrieved February 5, 2017.
↑ "Congressional Record Vol. 144-Part 7: Proceedings and Debates of the 105th United States Congress" . Retrieved February 5, 2017.
↑ Lowell, Lindsay (May 2000). "H-1B Temporary Workers: Estimating the Population" . Retrieved March 15, 2015.
↑ Lin, Carl (2011-06-12). Give Me Your Wired and Your Highly Skilled: Measuring the Impact of Immigration Policy on Employers and Shareholders (Report).
↑ "Why More Immigration, Not Less, Is Key to U.S. Economic Growth". Bloomberg. October 28, 2012. Retrieved March 15, 2015.
↑ Ruiz, Neil; Wilson, Jill (March 13, 2013). "Better Align H-1B Visa Fee Revenues to Local Workforce Needs" (PDF). Brookings Institution . Retrieved March 15, 2015.

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.

[1] "American Competitiveness and Workforce Improvement Act of 1998". Office of Administrative Law Judges, United States Department of Labor. October 21, 1998. Archived from the original on December 25, 2014. Retrieved March 15, 2015.

[hahm-2] 1 2 Hahm, Jung (September 1, 2000). "American Competitiveness and Workforce Improvement Act: Balancing Economic and Labor Interest under the New H-1B Visa Program". Cornell Law Review . 85 (6). Retrieved March 15, 2015.

[bier-recruitment-requirement-3] 1 2 Bier, David (July 22, 2016). "Why Congress Rejected an H-1B Recruitment Requirement". Cato Institute . Retrieved February 5, 2017.

[4] "Congressional Record Vol. 144-Part 7: Proceedings and Debates of the 105th United States Congress" . Retrieved February 5, 2017.

[5] Lowell, Lindsay (May 2000). "H-1B Temporary Workers: Estimating the Population" . Retrieved March 15, 2015.

[6] Lin, Carl (2011-06-12). Give Me Your Wired and Your Highly Skilled: Measuring the Impact of Immigration Policy on Employers and Shareholders (Report).

[7] "Why More Immigration, Not Less, Is Key to U.S. Economic Growth". Bloomberg. October 28, 2012. Retrieved March 15, 2015.

[8] Ruiz, Neil; Wilson, Jill (March 13, 2013). "Better Align H-1B Visa Fee Revenues to Local Workforce Needs" (PDF). Brookings Institution . Retrieved March 15, 2015.

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]