Firms sue over new H-1B visa mandates

A group of technology staffing companies that heavily use H-1B work visas filed a lawsuit against U.S. Citizenship and Immigration Services on Tuesday over a memo it says could render the visa program unusable to them.

The policy memo, quietly issued by the agency in February with immediate effect, places additional requirements on companies that subcontract their employees. The immigration agency argues that violations to the H-1B program — such as paying less than the federally required wage — are more likely when a visa holder works for a third party.

The lawsuit, filed in a federal district court in New Jersey, seeks a temporary restraining order blocking enforcement of the memo.

The February memo is another move by the Trump administration to crack down on the H-1B program, which it and other critics have said is often abused.

Bay Area tech companies more typically use H-1B visas to employ foreign citizens directly. While the visa was originally intended for hiring people in “specialty occupations” — jobs that require unique skills to perform — critics say that bar has been lowered over the years.

In order to restore the integrity of the pro-

gram, the immigration agency said in the February memo, subcontracting companies will have to outline specific work requirements for the H-1B holder, prove that the visa holder will be performing a specialty occupation and show that the employee will have the same contract for the duration of the H-1B visa.

The plaintiffs in the suit, which include New Jersey tech staffing firms NAM Info and Derex Technologies as well as a trade organization called the Small and Medium Enterprise Consortium, say the requirements laid out in the memo are impossible to comply with, and have already led to denials of extensions to H-1B visas.

The lead attorney for the plaintiffs, Jonathan Wasden, said the companies view the memo as an “existential threat.” The contracts through which they earn money often last months, not years, they argue.

“They see that this policy has the really real likelihood of ending their business model — it is do or die,” Wasden said.

Silicon Valley companies that tend to directly employ H-1B visa holders, such as Facebook, Apple and Google, will be largely unaffected.

The plaintiffs argue that the immigration agency overstepped its authority with the February memo. Instead, their suit says, the Labor Department should determine who counts as an “employer” under the H-1B program.

But the immigration agency says this is just another measured step it is taking to protect American jobs. A spokeswoman for USCIS declined to comment on the lawsuit.

While this memo will affect smaller tech staffing companies, larger companies that have been known to file for large numbers of H-1B visas — such as Tata Consultancy Services and Infosys — are unlikely to see as much impact, according to Sam Adair, an immigration attorney at the San Jose law firm Graham Adair.

Smaller companies with business models built around subcontracting, on the other hand, are likely to run into major issues, Adair said.

“I wouldn’t want to file a subcontractor case right now,” he said.